Research paper

Immoral tactics of ecommerce companies

promoting customer mistrust

Submitted by:

Md. Faisal Ibna Awal ID# 093 0590 030

Pratik Majumdar ID# 101 0163 030

Joy Saha ID# 103 0687 030

Saahir Mahbub ID# 111 0091 030

Ahnaf Tahmed Faiz ID# 111 0174 530

Submitted to:

Dilara Afroz Khan (DAK)

Course: Bus401, Section: 02

Date of Submission: 27.04.2014

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 Letter of Transmittal
27th April, 2014
Dilara Afroz Khan
Course Instructor
School of Business
North South University
Dhaka 1229

Subject: Submission of the Group Research for Bus401

Dear Maam:

Following is the group research project on the Immoral tactics of online companies
promote customer mistrust that we were asked to prepare as a part of our Bus401 course for
spring 2014.

We gained some priceless experience and developed our writing & communicating skills while
preparing this report. Weve learned some fascinating new things and also were able to apply our
knowledge that we gained from the business ethics course. Please let us know if you have any
kind of questions or queries, well be glad to help anytime.

Thank you for presenting us the opportunity to work together and show our unity as a team. Itll
be a pleasure to work under your direction & guidance again in the future.

Sincerely,

Name: ID:
Md. Faisal Ibna Awal 093 0590 030

Pratik Majumdar 101 0163 030

Joy Saha 103 0687 030

Saahir Mahbub 111 0091 030

Ahnaf Tahmed Faiz 111 0174 530

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 TABLE OF CONTENTS

SL # CONTENTS PAGE #

i. Introduction: 4-5

ii. Objectives & Significance of the Study 6

iii. Hypotheses 7

iv. Description of the variables 8-9

v. Methodology 10

vi. Industry Overview 11-21

vii. Data Analysis 22-35

viii. Statistical Analysis using SPSS 36-45

ix. Findings 46-47

x. Recommendations 48-49

xi. Limitations 50

xii. Conclusion 51

xiii. References 52

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 Introduction
When you buy a product or a service over the internet, instead of going to a traditional brick-and-
mortar store, it is called online shopping. Globally, an increasing number of people are buying
over the Internet because it is more convenient. Last year, holiday shopping for Christmas and
New Year is estimated to be over $20 billion. Now it is possible to purchase everything online.
Throughout the world online buying has grown exponentially. The money Australians spend
online is projected to increase by about $10 billion within the next five years. Consumers may
still be concerned about the security of online shopping, but more and more of them are prepared
to buy on the web. Faster delivery, easier return policies, and many sites offering free shipping
have also increased the desirability of online buying. IBIS World research forecasts an 8.6% per
year increase in online revenues over the next five years.

Growth of online shopping has been characterized by strong consumer demands and the
increasing number and type of goods available. An 11% annual increase in parcel volume is
likely to continue according to Australia's Postal Chief Executive. Physical stores are moving at
least part of their companies online in order to cut costs.

In Nigeria and other African countries, a growing generation of young, internet-savvy

individuals has embraced new, online technology. The International Telecommunication Union
(ITU) has documented an increased internet penetration in sub-Saharan Africa. The numbers of
users are still far below the world average of around 30%, but are increasing as Africans become
more familiar and proficient with online shopping. E-commerce activities have expanded in
Nigeria, South Africa and Kenya both due to the proliferation of mobile phones and availability
of faster internet networks.

In South Africa, 51% of individuals with internet access shop online. In Kenya, 18-24% makes
online purchases. In Nigeria approximately 28% of the population has internet access according
to ITU figures. The number of mobile cell phone subscriptions has topped 87 million. A new
group of internet developers are eager to increase buying options by providing discounted deals
on a wide range of products and services. Analysts indicate that a lack of convenient and reliable

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electronic payment services for online shoppers is a major problem confronted throughout
Africa.

In the U.S., Forrester Research shows that $248.7 billion online sales are expected by 2014. A
compounded growth of 10% is forecast for the next five years. In Western Europe sales are
expected to reach 14 billion euros ($155.7 billion), a growth of 11% percent annually. Apparel,
computers and consumer electronics will continue to be dominant purchases; these three areas
make up 40% of the current online sales which won't change in the near future.

However, threats always persist when it comes to online shopping. Nowadays, many ecommerce
companies are not conforming to rules & regulations. As a result consumers are still finding it
difficult to purchase everything online.

Government and industry organizations have declared information privacy and security to be
major obstacles in the development of consumer-related e-commerce. Risk perceptions regarding
Internet privacy and security have been identified as issues for both new and experienced users
of Internet technology. This paper explores risk perceptions among consumers of varying levels
of Internet experience and how these perceptions relate to online shopping activity. In this paper,
the tactics the companies use as well as the consumer welfare are also discussed.

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 Objectives
This topic will address the tactics of online companies (both local and international) that raises
serious concern among public. In our research we will try to find out whether the online
ecommerce companies comply with the rules and regulations, if they are providing the product
or service as promised and whether the customers feel if a given company is trustworthy & their
method of measuring it. Additionally, the report would aim to find out exactly which tactics or
strategies raise doubts in the minds of customers. Lastly, this report would try to discover if the
customers feel safe in revealing their private information (especially credit card materials) to the
online companies which is yet to be popular among people of Bangladesh.

Significance of the study:

Nowadays, online shopping is the latest trend because everything can be purchased online.
However, ecommerce companies are taking advantage of this latest trend and are not carrying
out their service properly. Therefore this paper will find out what are the tactics the companies
are using that is seriously resulting in customer mistrust. Also this paper will also try to find out
how this immoral tactics the companies use will affect the future of online shopping, and how
will this affect the relationship between the customers and e-commerce companies. The findings
from this research will also determine whether any law or policy should be made to take any
action against these ecommerce companies.

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 Hypotheses:
Dependent Variable: Customer Mistrust; Independent Variable(s): Advance Payment, Credit
Card Details, No trial system, No protection of privacy, Product or Service overemphasis.

Ho: Immoral tactics of online companies promote customer mistrust

Ha: Immoral tactics of online companies dont promote customer mistrust.

Precise hypotheses

Ho: Advance Payment causes customers to lose trust of online companies

Ha: Advance Payment doesnt cause consumers to lose trust of line companies

Ho: Providing credit card details is the basis of customer mistrust.

Ha: Providing credit card details doesnt result to consumer mistrust.

Ho: No-trial system causes customers to misplace the trust on online companies.

Ha: No-trial system doesnt lead to customers misplace the trust on online companies.

Ho: Online companies dont protect privacy information of customers

Ha: Online companies protect the privacy information of customers

Ho: Ecommerce companies overemphasize the product or service offered to consumers.

Ha: Ecommerce companies properly represent the products or services offered.

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 Description of the Variables:
In this report, the dependent variable is the customer mistrust, that is, the loss of trust of
consumers about the ecommerce companies. This is a dependent variable due to the fact that it is
directly reliant on the immoral strategies of online companies to cheat their consumers. Many
individuals had been the victims of fraud from many renowned companies such as eBay as they
ordered items such as monitors and made their payments in advance but didnt receive their
products; when they contact Paypal through which payments are conducted, they only received
less than half the money they initially paid (Pirillo, n.d.). These are regular occurrences now-a-
days & as the online shopping is a widespread movement, it is vital to take steps to remove all
these fraudulent activities of ecommerce companies and/or its users and make it a safe
transactional place.

As for the independent variables, five points have been chosen which directly affect the
dependent variable which is customer mistrust. Firstly, advance payment is a major issue and is
even more important in Bangladesh. An advance payment, or simply an advance, is the part of a
contractually due sum that is paid or received in advance for goods or services, while the balance
included in the invoice will only follow the delivery (Advance Payment, n.d.). Here in
Bangladesh, most of the ecommerce companies do their business in the capital city and they take
advance payments from the customers through bKash or bank transactions. However, as the
products are to be taken through courier services such as the likes of SA Paribahan or
Continental, many products get lost and the customers often blame the online companies.
Similarly, many companies dont actually send the products once they get the advance payments,
and as their identity is hidden due to having no physical presence, serious problem occurs. Thus,
this issue needs to be resolved.

Secondly, providing credit card details had proved to be a hazardous decision for many
individuals shopping worldwide. It is especially true for those people who tend to shop in
websites such as Amazon or eBay. Credit card fraud is a hotly debated topic around the world
whose purpose may be to obtain goods without paying, or to obtain unauthorized funds from an
account. Credit card fraud is also an adjunct to identity theft (Credit card fraud, n.d).

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Providing no trial systems for the customer is another concerning issue, especially if the product
subject to the exchange relates to clothing. If a person wants a XL sized t-shirt but the company
in question provides him with an L or XXL sized t-shirt, the person wont be able to know about
that before trying it out; however, he had already paid for the t-shirt and wouldnt be able to
swap it for the right sized tee.

Many ecommerce companies force their customers to provide personal details such as the cell
phone number, email address, TIN number, PIN number etc. These details can be used wrongly
if lands to an individual with wicked purposes. Information privacy, or data privacy (or data
protection), is the relationship between collection and dissemination of data, technology, the
public expectation of privacy, and the legal and political issues surrounding them. Privacy
concerns exist wherever personally identifiable information is collected and stored in digital
form or otherwise. Improper or non-existent disclosure control can be the root cause for privacy
issues (Information privacy, n.d)

Lastly, product or service overemphasis can be a major constraint for individuals engaging in
online shopping. For instance, if we focus on the clothing industry again and if a particular
company online shop focusing mainly on WWE t-shirts offer their customers original t-shirts of
wrestlers (which cost up to $26 dollars in USA) but provide them with modified low-quality
shirts with a price range of BDT 300-500, people wouldnt be amused.

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 Methodology:
Data would be collected via a direct survey and secondary information from various resources.
The survey would be completed by 50 individuals who will represent as the sample of the entire
population. In order to get a more informed feedback, the questionnaires would be manually
filled up by only those people who have engaged in online shopping through local and
international dedicated websites. The survey questions provided subsequent insight about the
immoral tactics that most ecommerce companies use to cause mistrust among even the most
loyal of customers. Additionally, a personal interview will be taken from few regular users of
ecommerce websites to find out the main problems and get the recommendations or solutions
needed to improve the online shopping process in Bangladesh. For the secondary research, data
was collected through journals, articles, weblogs and standard search engines like Google. The
information is well cited for in the report.

After all the data is gathered, it will be prepared to investigate in relation to the hypotheses
presented above using the renowned statistical software Statistical Package for Social Sciences
(SPSS). Various topics such as the regression analysis, t-test, f-test, ANOVA etc. will be
conducted with proper tables, diagrams, visual aids and interpretations. All these would help in
accepting or declining both the overall and precise hypotheses that is set up above& to get a
more focused perspective about the related topic.

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 Industry Overview
An online marketplace (or online e-commerce marketplace) is a sort of e-commerce site where
product and inventory information is provided by multiple third parties, whereas transactions are
processed by the marketplace operator. Online marketplaces are the primary type of
multichannel ecommerce. In an online marketplace, consumer transactions are processed by the
marketplace operator and then delivered and fulfilled by the participating retailers or wholesalers
(often called drop shipping). In general, because marketplaces aggregate products from a wide
array of providers, selection is usually wider, availability is higher, and prices are more
competitive than in vendor-specific online retail stores (Online Marketplace, n.d).

The emergence of social networks such as facebook and twitter coupled with the expansion e-
commerce has gifted the materialization of online shopping. Online shopping operates
principally in a secondary market of merchandise swap among clients. This potential market
dome has offered the businesses an opening to sell and deliver goods and services to their
customers. Moreover, a variety of mediators are also acting as a medium between either
businesses to businesses or businesses and consumers to trade and exchange goods.

Electronic commerce is normally considered to be the sales part of e-business. Frequently known
as e-commerce, this is defined as a type of industry where the buying and selling of products or
services is conducted over electronic systems such as the Internet and other computer networks
such as the Intranet. The progress of the internet marketplace along with the ground-breaking
and user-friendly payment systems by financial institutions and other businesses (such as mobile
operators and Internet companies) has helped to support rapid growth in e-commerce has
resulted in e-business to be an effectual and efficient way of communicating within an
organization and one of the most effective and useful ways of conducting business. It has also
brought about more usefulness, convenience and secured ways to purchase an expanding variety
of products, including digital goods and services. The system also offers consumers many
advantages in terms of choice and access to goods and services. Online transactions have
increased significantly over the last few years with $4 billion spent in 2002 compared to $1.9
billion in 2001. Service firms are increasingly moving towards one-to-one marketing and service

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delivery to millions of customers on the internet, enabling them to deliver cost-effective
customized service delivery processes and loyalty programs.
Despite the obvious advantages of e-commerce, it also presents consumers with a number of
risks which are not evident in the conventional retail surroundings. Some of these challenges are
similar to those presented in other forms of distance selling, for example payment in advanced
for the product or service, providing crucial credit card information, product or service
overemphasis, ambiguity about the location and identity of the vendor, an incapability to
examine goods prior to purchase (no trial system), and uncertainty about delivery. These vague
market dynamics bring about many uncertainties and the consumers are often cheated. Policies
imposed by vendors like no refunds also create opportunity for the consumers to be deceived.
Such capricious relationships are unfavorable to the growth of the online shopping market and
often crumble the benefits of e-business.

Today, the Web offers consumers universally more alternatives and easier ways to acquire goods
and services, but the electronic marketplace has still yet to reach its full potential. One reason
frequently given is consumer concern about fraud, ranging from product misrepresentation or
overemphasis to fake seller information to even identity theft through misuse of credit cards. The
write-up will address these issues and identify consumers alarm and pledge by the parties in
online marketplace over privacy of information. Consumers are often required to provide credit
card information, email address, telephone numbers and home addresses. Such private
information can easily be used in harmful manners, especially in the absence of any strict and
exhaustive cyber laws in Bangladesh.

The swift fruition of the Internet has created both positive and negative consequences. The
technological advancements that have made it practicable to obtain easy access to information
and commercial goods, have also made it all too pragmatic for online companies to gather,
amass, shift, and vend huge amounts of private data from and about the individuals who visit
their web sites. The collection of personal information by companies from web site visitors is a
growing concern for the people who are engaging in online shopping worldwide. Thus, it is vital
that strict cyber laws are implemented to assure the growth of the online marketplace.

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There are many popular and user-friendly online websites that is available for Bangladeshi
citizens to engage in online shopping. Amazon.com is the most renowned website in terms of
online marketplace. It is an American international electronic commerce company with
headquarters in Seattle, Washington, United States. It is the world's largest online retailer.
Amazon.com started as an online bookstore, but soon diversified, selling DVDs, VHSs, CDs,
video and MP3 downloads/streaming, software, video games, electronics, apparel, furniture,
food, toys, and jewelry. The company also produces consumer electronicsnotably the Amazon
Kindle e-book reader and the Kindle Fire tablet computerand is a major provider of cloud
computing services. Jeff Bezos incorporated the company (as Cadabra) in July 1994 and the site
went online as Amazon.com in 1995. The company was renamed after the Amazon River, one of
the largest rivers in the world which in turn was named after the Amazons, the legendary nation
of female warriors in Greek mythology. Amazon has separate retail websites for United States,
United Kingdom, France, Canada, Germany, Italy, Spain, Australia, Brazil, Japan, China, India
and Mexico, with international shipping to certain other countries for some of its products. In
2011, it had professed an intention to launch its websites in Poland, Netherlands, and Sweden, as
well.
As mentioned above, the company was founded in 1994, spurred by what Bezos called his
"regret minimization framework", which described his efforts to fend off any regrets for not
participating sooner in the Internet business boom during that time. After reading a report about
the future of the Internet which projected annual Web commerce growth at 2,300%, Bezos
created a list of 20 products which could be marketed online. He narrowed the list to what he felt
were the five most promising products which included: compact discs, computer hardware,
computer software, videos, and books. Bezos finally decided that his new business would sell
books online, due to the large world-wide demand for literature, the low price points for books,
along with the huge number of titles available in print. Amazon was originally founded in Bezos'
garage in Bellevue, Washington. The company began as an online bookstore, an idea spurred off
with discussion with John Ingram of Ingram Book (now called Ingram Content Group), along
with Keyur Patel who still holds a stake in Amazon. In the first two months of business, Amazon
sold to all 50 states and over 45 countries. Within two months, Amazon's sales were up to
$20,000/week. While the largest brick and mortar bookstores and mail order catalogs might offer

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200,000 titles, an online bookstore could "carry" several times more, since they had an almost
unlimited virtual (not actual) warehouse: those of the actual product makers/suppliers. Bezos
wanted a name for his company that began with "A" so that it would appear early in alphabetic
order. He began looking through the dictionary and settled on "Amazon" because it was a place
that was "exotic and different" just as he planned for his store to be, and he believed it was the
biggest river in the world, and he planned to make his store the biggest in the world. Since 2000,
Amazon's logotype has featured a curved arrow leading from A to Z, representing that they carry
every product from A to Z, with the arrow shaped like a smile.

Amazon's initial business plan was unusual; it did not expect to make a profit for four to five
years. This "slow" growth caused stockholders to complain about the company not reaching
profitability fast enough to justify investing in or to even survive in the long-term. When the dot-
com bubble burst at the start of the 21st Century, destroying many e-companies in the process,
Amazon survived, and grew on past the bubble burst to become a huge player in online sales. It
finally turned its first profit in the fourth quarter of 2001: $5 million on revenues of more than $1
billion. This profit margin, though extremely modest, proved to skeptics that Bezos'
unconventional business model could succeed. In 1999, Time magazine named Bezos the Person
of the Year, recognizing the company's success in popularizing online shopping.

Amazon.com operates retail websites for Sears Canada, bebe Stores, Marks & Spencer,
Mothercare, and Lacoste. For a growing number of enterprise clients, currently including the UK
merchants Marks & Spencer, Benefit Cosmetics' UK entity, edeals.com, and Mothercare,
Amazon provides a unified multichannel platform where a customer can interact with some
people they call the retail website, standalone in-store terminals, or phone-based customer
service agents. On October 18, 2011, Amazon.com announced a partnership with DC Comics
for the exclusive digital rights to many popular comics, including Superman, Batman, Green
Lantern, The Sandman, and Watchmen. The partnership has caused well-known bookstores like
Barnes & Noble to remove these titles from their shelves. In November 2013, Amazon.com
announced a partnership with the United States Postal Service to begin delivering orders on
Sundays. The service, included with Amazons standard shipping rates, initiated in metropolitan

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areas of Los Angeles and New York, with plans to expand into Dallas, Houston, New Orleans,
and Phoenix by 2014.

Amazon has offices, fulfillment centers, warehouses, customer service centers and software
development centers across North America, Latin America, Europe, Africa, and Asia. The
company's global headquarters are in 14 buildings in Seattle's South Lake Union neighborhood.
The European headquarters are in Luxembourg's capital, Luxembourg City. In Seattle, as of
2013, a 3-tower headquarters near Amazon's existing buildings with a capacity of 12,000
employees was under construction.

Fulfillment centers are located in the following cities, often near airports. These centers also
provide warehousing and order-fulfillment for third-party sellers. Warehouses are large and each
has hundreds of employees. Employees are responsible for four basic tasks: unpacking and
inspecting incoming goods; placing goods in storage and recording their location; picking goods
from their computer recorded locations to make up an individual shipment; and shipping. A
central computer which records the location of goods and maps out routes for pickers plays a
central role; employees carry hand-held computers which communicate with the central
computer and monitor their rate of progress. A picker with their cart may walk 10 or more miles
a day. In the United Kingdom initial staffing was provided by Randstad Holding and other
temporary employment agencies.

Amazon.com lobbies the United States federal government and state governments on issues such
as the enforcement of sales taxes on online sales, transportation safety, privacy and data
protection, and intellectual property. According to regulatory filings, Amazon.com focuses its
lobbying on the US Congress, the Federal Communications Commission, and the Federal
Reserve. Amazon.com spent $500,000 on lobbying in the second quarter of 2010, $630,000 in
the first quarter of 2011, and $450,000 in the second quarter of that year. It was a corporate
member of the American Legislative Exchange Council (ALEC) until it dropped membership
following protests at its shareholders' meeting May 24, 2012. The initiative Choice in
ecommerce was founded on May 8, 2013 by several online retailers in Berlin, Germany. The
cause was, in the view of the initiative, sales bans and online restrictions by individual
manufacturers. The dealers felt cut off from their main sales channel and thus deprived them the
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opportunity to use online platforms like Amazon, eBay or Rakuten in a competitive market for
the benefit of their customers (Amazon.com, n.d).

The Company offers its customers the lowest prices possible through low everyday product
pricing and shipping offers, including through membership in Amazon Prime, and to improve its
operating efficiencies so that it can continue to lower prices for its customers. The Company also
provides easy-to-use functionality, fast and reliable fulfillment, and timely customer service. It
offers programs that enable sellers to sell their products on its websites and their own branded
websites and to fulfill orders through them. The Company serves developers and enterprises of
all sizes through Amazon Web Services (AWS), which provides access to technology
infrastructure that enables virtually any type of business. The Company serves serve authors and
independent publishers with Kindle Direct Publishing. It also offers programs that allow authors,
musicians, filmmakers, app developers, and others to publish and sell content (Amazon, n.d).

Another rapidly growing company here in Bangladesh is Akhoni.com. It is an online

marketplace featuring discount deals with popular businesses like Internet services, Luxurious
restaurants, Hotels, Transports, Beauty parlors, Fashion houses, Theme parks, Gymnasiums,
Furniture shops, Sports & Recreation centers, etc. Their merchant partners offer discounts, date
and time specific, on their products, and promote that offer through activation campaigns, emails
and sms and obviously their dedicated website. They currently have a database of around 1.5 lac
consumers which is growing every moment. End of the day, they provide consumers with quality
and demandable products in cheap, and the businesses with a ton of customers. Their mission is
to increase sales of their merchants and create wonderful buying experience for their consumers;
they also try to create happiness for both their merchants and consumers (About us, n.d).

Another very popular website here in Bangladesh is Bikroy.com. It is a website where you can
buy and sell almost everything. The best deals are often done with people who live in their own
city or on their own street, so on Bikroy.com it's easy to buy and sell locally. All the customers
have to do is select their region & engage in online shopping. It's completely free to publish a
classified ad on Bikroy.com, and it takes less than 2 minutes! A customer can sign up for a free
account and post ads easily every time. Or, if they don't want to register, they can just go to Post
Your Ad & fill in the form. Bikroy.com has the widest selection of popular second hand items all
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over Bangladesh, which makes it easy to find exactly what customers are looking for. So if
consumers are looking for a car, mobile phone, house, computer or maybe a pet, they will find
the best deal on Bikroy.com. The company does not specialize in any specific category - here
clients can buy and sell items in more than 30 different categories. The website also carefully
review all ads that are being published, to make sure the quality is up to our standards & that
theres no product misrepresentation (About, n.d)

In terms of foreign marketplace, another very well-liked website is eBay. The company eBay
Inc. is an American multinational Internet consumer-to-consumer corporation, headquartered in
San Jose, California. It was founded by Pierre Omidyar in 1995, and became a notable success
story of the dot-com bubble; it is now a multi-billion dollar business with operations localized in
over thirty countries. The company manages eBay.com, an online auction and shopping website
in which people and businesses buy and sell a broad variety of goods and services worldwide. In
addition to its auction-style sellings, the website has since expanded to include "Buy It Now"
standard shopping; shopping by UPC, ISBN, or other kind of SKU (via Half.com); online
classified advertisements (via Kijiji or eBay Classifieds); online event ticket trading (via
StubHub); online money transfers (via PayPal) and other services.

AuctionWeb was founded in San Jose, California, on September 3, 1995, by French-born

Iranian-American computer programmer Pierre Omidyar (born June 21, 1967) as part of a larger
personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the
Ebola virus. One of the first items sold on AuctionWeb was a broken laser pointer for $14.83.
Astonished, Omidyar contacted the winning bidder to ask if he understood that the laser pointer
was broken. In his responding email, the buyer explained: "I'm a collector of broken laser
pointers." Reportedly, eBay was simply a side hobby for Omidyar until his Internet service
provider informed him he would need to upgrade to a business account due to the high volume of
traffic to his website. The resulting price increase (from $30/month to $250) forced him to start
charging those who used eBay, and was not met with any animosity. In fact it resulted in the
hiring of Chris Agarpao as eBay's first employee to handle the number of cheques coming in for
fees. Jeffrey Skoll was hired as the first president of the company in early 1996. In November
1996, eBay entered into its first third-party licensing deal, with a company called Electronic

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Travel Auction to use SmartMarket Technology to sell plane tickets and other travel products.
Growth was phenomenal; in January 1997 the site hosted 2,000,000 auctions, compared with
250,000 during the whole of 1996. The company officially changed the name of its service from
AuctionWeb to eBay in September 1997. Originally, the site belonged to Echo Bay Technology
Group, Omidyar's consulting firm. Omidyar had tried to register the domain name echobay.com,
but found it already taken by the Echo Bay Mines, a gold mining company, so he shortened it to
his second choice, eBay.com. In 1997, the company received $6.7 million in funding from the
venture capital firm Benchmark Capital. Meg Whitman was hired as eBay President and CEO in
March 1998. At the time, the company had 30 employees, half a million users and revenues of
$4.7 million in the United States. EBay went public on September 21, 1998 and both Omidyar
and Skoll became instant billionaires. EBays target share price of $18 was all but ignored as the
price went to $53.50 on the first day of trading. As the company expanded product categories
beyond collectibles into almost any saleable item, business grew quickly. In February 2002, the
company purchased iBazar, a similar European auction web site founded in 1998 and then
bought PayPal on October 14, 2002. By early 2008, the company had expanded worldwide,
counted hundreds of millions of registered users, 15,000+ employees and revenues of almost
$7.7 billion. After nearly ten years at eBay, Whitman decided to enter politics. On January 23,
2008 the company announced that Whitman would step down on March 31, 2008 and John
Donahoe was selected to become President and CEO. Whitman remained on the Board of
Directors and continued to advise Donahoe through 2008. In late 2009, eBay completed the sale
of Skype for $2.75 billion, but will still own 30% equity in the company. In September 2012,
eBay introduced a new logo set in Univers. The logo was introduced to the main website on
October 10, 2012.

EBay generates revenue from various fees. The eBay fee system is quite complex; there are fees
to list a product and fees when the product sells (Final Value Fee), plus several optional
adornment fees, all based on various factors and scales. As of November 2012, the U.S. based
eBay.com takes $0.10 to $2 (based on the opening or reserve price) as an insertion fee for a basic
auction-style listing without any adornments, and 10% of the total amount of the sale (price of
the item plus shipping charges) as a final value fee. Fixed-price listings have an insertion fee of
$0.30, and the final value fee varies based on category and total amount of the sale (e.g. 13% for
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DVDs & Movies up to $50). The UK based ebay.co.uk takes from 0.15 to a maximum rate of
3 per 100 for an ordinary listing and from 0.75% to 10% (writing as of June 2009) of the final
price. Reduced Final Value Fees are available to business registered customers. In addition, eBay
owns the PayPal payment system that has fees of its own. Under current U.S. law, a state cannot
require sellers located outside the state to collect a sales tax, making deals more attractive to
buyers. Although some state laws require purchasers to pay sales tax to their own states on out-
of-state purchases, it is not a common practice. However, most sellers that operate as a full-time
business do follow state tax regulations on their eBay transactions. However Value Added Tax
(VAT), a form of sales tax in EU countries, is different. eBay requires sellers to include the VAT
element in their listing price and not as an add-on and thus profits by collecting fees based on
what governments tax for VAT; it not only receives fees as a percentage of the sale price "ex
VAT" but also the same percentage on the VAT itself. The company's current business strategy
includes increasing international trade. eBay has already expanded to over two dozen countries
including China and India. Strategic international expansion has failed in Taiwan and Japan,
where Yahoo! had a head start, and New Zealand where TradeMe, owned by the Fairfax media
group is the dominant online auction website. EBay also notably failed in China due to
competition from local rival Taobao. EBay entered the Chinese market in 2002 and shut down its
Chinese site in 2007.

On May 8, 2008, eBay announced the opening of its newest building on the company's North
Campus in San Jose, which is the first structure in the city to be built from the ground up to
LEED Gold standards. The building, the first the company had built in its 13-year existence, uses
an array of 3,248 solar panels, spanning 60,000 square feet (5,600 m2), and providing 650
kilowatts of power to eBay's campus. The array can supply 15%18% of the company's total
energy requirements, reducing the amount of greenhouse gases that would be produced to create
that energy by other means. SolarCity, the company responsible for designing the array,
estimates that the solar panels installed on eBay's campus will prevent 37 million pounds of
carbon dioxide from being released into the environment as a result of replaced power
production over the next three decades. Creating an equivalent impact to remove the same
amount of carbon dioxide from the atmosphere would require planting 322 acres (1.30 km2) of
trees. The design of the building also incorporates other elements to reduce its impact on the
Page | 19
environment. The building is equipped with a lighting system that detects natural ambient light
sources and automatically dims artificial lighting to save 39% of the power usually required to
light an office building. eBay's newest building also reduces demand on local water supplies by
incorporating an eco-friendly irrigation system, and low-flow shower heads and faucets. Even
during construction, more than 75% of the waste from construction was recycled. EBay also runs
buses between San Francisco and the San Jose campus to reduce the number of commuting
vehicles. A more recent strategy involves the company increasingly leveraging the relationship
between the eBay auction site and PayPal: The impact of driving buyers and sellers to use PayPal
means not only does eBay turn buyers into clients (as a pure auction venue its clients used to be
predominantly sellers) but for each new PayPal registration it achieves via the eBay auction site
it also earns offsite revenue when the resulting PayPal account is used in non-eBay transactions.
In its Q1 2008 results, total payment volume via PayPal increased 17%, but off the eBay auction
site it was up 61%. For most listing categories, eBay sellers are permitted to offer a variety of
payment systems such as Escrow.com, PayPal, Paymate, ProPay, and Moneybookers.
Escrow.com is eBay's approved escrow site. The transactions processed through Escrow.com
largely are in relation to eBay Motors; they are not restricted to this type of listing however.
EBay runs an affiliate program under the name eBay Partner Network. EBay affiliate marketers
were originally paid a percentage of the eBay seller's transaction fees, with commissions ranging
from 50% to 75% of the fees paid for an item purchased. In October 2009, eBay changed to an
affiliate payout system that it calls Quality Click Pricing, in which affiliates are paid an amount
determined by an undisclosed algorithm. The total earnings amount is then divided by the
number of clicks the affiliate sent to eBay and is reported as Earnings per Click, or EPC. In
October 2013, ePN launched a new pricing model. The new model is more transparent, and is
based on category-level base commission rates with bonuses available for referring new and
reactivated buyers. On April 18, 2012 eBay reported a 29% Q1 revenue increase to $3.3 billion
compared to their Q1 in 2011. Net income was reported to be at $570 million for the quarter.

The above mentioned companies are the focal point of the analysis conducted in the paper and
the dependent and independent variables are set up with the activities of customers and vendors
of these companies. Although many businesses are acknowledging the importance of e-
commerce and online retailing activities, little attention has been given to the business
Page | 20
communitys perceptions of the ethicality of these new mediums (Nardal & Sahin, 2011). The
electronic hypermedia environment poses new challenges for relationship retailing, where it is in
the interest of retailers to establish and maintain long-term bonds with customers. This new
marketing medium and channel is now an integral part of the multi-channel strategy for most
retailers. However, the physical separation of the buyer and the seller, and that of the buyers and
the merchandise, and the overall environment of perceived insecurity on the internet provide
unique challenges to online retailers to find ways in which to initiate and develop e-business
relationships. The popular press is stuffed with news on high-profile lapses in online security,
increased incidence of spamming, hacking, and phishing, and figures suggesting that a large
proportion of online business is fraudulent. Consumer concerns include a range of possibilities
from fraud through the hacking of credit card numbers to leaking of personal information,
resulting in excessive spam to identity theft. In spite of these challenges, the retailer must
develop a trustworthy relationship in order to increase sales on the internet and foster customer
loyalty. The lack of physical presence of the product and the lack of physical interaction between
the buyer and the seller renders online retailing a unique environment, in which trust is of
paramount importance.

Page | 21
 Data Analysis
Q1. What is your frequency of shopping online?

Interpretation: The above bar chart represents the replies of the 50 people surveyed when they
were asked about their regularity of shopping online, with the y-axis representing the number of
people who gave their valuable responses and the X-axis representing their respective responses.
From the diagram it can be seen that 17 people are fairly regular in online shopping whereas 7
individuals are very regular engaging in shopping online. These results show that online
shopping is slowly becoming a very popular trend in Bangladesh and with proper care and
implementations can become a major marketplace in our country. However, 7 people responded
that they never shop online, whereas 5 of them suggested they seldom take part in online
shopping. Lastly, 14 individuals suggested they engage in online shopping once a month. So it
can also be deduced that many potential customers are not really comfortable in online shopping.

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Q2. Which websites do you usually use to shop online?

Interpretation: The above pie chart represents the responses of the 50 individuals surveyed
about which websites they mostly use to do online shopping. The blue area represents the share
of people who shopped online from Facebook, the red area represents those who shopped from
Twitter, The green area represents the customers of Akhoni.com, the purple area suggests the
customers of Bikroy.com, The light blue area represents the proportion of individuals engaging
in online shopping from OLX and the orange area represents Other websites. Out of 50
respondents, 27 individuals suggested that they usually shop online from Facebook, which isnt
any surprise considering the popularity of the social website here in Bangladesh. Similarly, none
of the individuals surveyed went for Twitter (suggested by an absence of the red area in the pie
chart) as it is still not very popular among us. A total of 18 people voted for the dedicated
websites of OLX, Bikroy.com & Akhoni.com, which suggests that these websites have to improve
significantly to increase their share of customers. Lastly, 5 people voted for others. From the 27
people who engaged in online shopping from Facebook, the pages like Graffiti, Playr
Clothing & SRK Showtime Hollywood were the most popular choices of them all.

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Q3: Why do you engage in online shopping?

Interpretation: The above bar chart represents the responses of the individuals surveyed when
they were asked about the reason of why exactly they engage in online shopping. The Y-axis
represents the number of people who gave their responses and the X-axis symbolizes their
respective responses. The majority of the respondents engage in online shopping due to the free
delivery system put in by most of the ecommerce companies. In this way, they can just sit behind
the computer screens and order whatever they like. Also, 12 people went for the option low-
priced products, which suggests that they receive significant discounts when getting products
online. 8 individuals engage in online shopping due to the fact that they can shop anywhere in
the world through Amazon.com or eBay with the use of credit cards. 7 people went for the fact
that they can compare different items of same kind very easily which is effectively impossible in
a normal store or clothing shop. Lastly, 6 people reasoned the unavailability of products in our
market as they think most ecommerce companies or facebook pages engaging in online business
are importing products from abroad which are simply absent in Bangladeshi markets. Thus, it
can be seen that the answers are somewhat mixed in terms of why people in Bangladesh engage
in online shopping.

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Q4: What method of payment do you usually use during online shopping?

Interpretation: The above bar chart represents the surveyed individuals responses about the
method they use to pay off when engaging in online shopping. The Y-axis represents the options
put forward to them and the x-axis represents the responses they came up with. A grand total of
36 individuals suggested that they use the cash-on-delivery system for transactions, which is
more than expected as both parties are comfortable with it. However, some of these 36 people
complained about the place the companies choose to deliver the products. 7 individuals voted for
the option of credit cards and most of them suggested that they engage in shopping worldwide
using websites like amazon and ebay where credit cards and paypal accounts are a must. 6 of
them go through the hassle of advance payment with bkash and 2 of those 6 individuals
complained that their product never arrived after clearing the payment in advance; so it clearly
shows that this is a very risky process and involves a lot of trust and security factors. Only 1 of
the respondents went with the option of Others.

Page | 25
Q5: Do you think your method of payment is safe?

Interpretation: The above pyramid is used to present the responses of the 50 people surveyed
when they were asked if their method of payment is safe enough and is consistent with the rules
and regulations in relation to online shopping. The lower pyramid suggests the responses of
those people who think the method of payment they use is more than safe; the middle one
represents the responses of those persons who dont think that they are using a safe method
payment and the higher pyramid represents the responses of those who answered Cant tell. 28
people think their method of payment isnt safe and most of the 28 people suggested that they
had been the subject of fraud when engaging in online shopping. Furthermore, they suggested
that some more payment methods must be implemented to lighten the situation. On the other
hand, 19 people think their method of payment is safe. They think they shop from trusted sources
online which enable them to believe that those companies wouldnt cheat and lose the loyal
customers. Only 3 people went with the option of Cant tell.
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Q6. Which do you think creates a significant problem during a particular
transaction?

Interpretation: The above diagram represents the answer of the 50 people surveyed to the
question that which of the given options create problems during transactions related to online
shopping. As seen above, all the five options provided to the respondents gained significant
votes. The most popular choice is the product misrepresentation, as 12 people think that the
pictures provided by the vendors are artificial whereas in reality the quality turns out to be pretty
bad. Similarly, 11 people each went for the options of providing the credit card details and no
trial system, with the first group thinking that their credit card information is not safe and is
subject to manipulation, whereas the second group complained that the no trial system provides
the ecommerce companies the opportunity to give away products of different sizes and types
than ordered (it is especially true when the transactions are related to clothing as customers tend
to get t-shirts of different sizes to the one ordered). 9 people think advance payment is not
trustable and creates problems and security issues whereas 7 people ticked the option of product
and service overemphasis which is very close related to the third option of product
misrepresentation.
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Q7. Do you provide personal information during online shopping?

Interpretation: The above pie chart represents the responses of the 50 respondents about
whether they provide information of the personal kind during online shopping. None of the
respondents provide sensitive information every time when engaging in online shopping,
whereas 2 of them rarely provide personal information due to security purposes. 8% of the
people never disclose their personal information for shopping purposes. However, 26% of the
people surveyed often provide their personal information & 62% of them provide them whenever
it is necessary. According to the method of payments used in Bangladesh, customers must
provide their cell phone numbers, residential address & similar information whereas those who
shop worldwide must provide significant credit details in websites like ebay and Amazon. Those
websites are filled up with fraudsters and it is a very risky process giving up credit card
information as they may suffer significant losses. Also, those who provide their cell phone
numbers during shopping in Facebook got several calls of harassing nature from unknown
numbers. Thus, the 88% people who often give up personal details can have severe privacy
issues as the privacy policies arent strong enough here in Bangladesh.

Page | 28
Q8. Do you think companies can use your personal information for wrong
purposes?

Interpretation: The above bar chart depicts a simple yes/no question of whether each of the 50
respondents thinks that their personal information can be used for wrong or malicious purposes
by the companies in question. 29 of the respondents (symbolized by the green bar) think theres a
huge possibility that the information can be used for wicked purposes and it is especially true for
females. They think they often deal with new online companies (both dedicated or within
facebook) and they dont know anything about those companies; thus, theres a significant
chance that those companies may end up cheating their customers for profit-making purposes. It
is also very true in international websites such as ebay as fraudulent activities are something
which the authorities are working very hard to correct. 21 of the respondents think the companies
they shop with are honest enough and their main purpose is to provide quality products and
services to establish a set of loyal customers. However, majority of the 21 people shop with the
same companies over and over again and thus they have got accustomed with these companies;
their experience may become worse if they try new companies online which they dont know
anything about.

Page | 29
Q9. Did you ever get the wrong item or the same item of low quality after
ordering?

Interpretation: The above bar chart shows the responses of the respondents when they were
asked whether they ever got the wrong item or the same item of low quality after ordering. As
symbolized by the blue bar, an unprecedented 46 out of 50 people answered yes. It clearly
suggests that online shopping in Bangladesh is still a long way away from the quality of service
deserved by the customers. This question is also consistent with one of the precise hypotheses of
the write up and the answers clearly support the null hypothesis. The responses suggest that the
vendors always tend to advertise or promote their products in an unfair away which results to the
overemphasis of the products, where as some of them pack away wrong items to their customers
as there is no trial system for the customers to check. This way by deceiving their customers, the
vendors are undermining a booming industry of online marketplace in Bangladesh and increasing
the mistrust and security issues of the consumers. The policies must be changed and applied
professionally to avoid these mishaps and to increase the trust of consumers. Only 4 people
suggested that they never got the wrong or low-quality item when shopping online.
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Q10. Do you think the no-trial/no return system is fair enough for
customers?

Interpretation: The above pie chart represents the responses of the 50 respondents when asked
if the absence of trial and return system is unfair for them. The red area stands for those
responses which said No where as the blue area signifies those who think it is fair enough. 86%
people surveyed said its absolutely unfair that they cant try out or return the products when
theres clearly a problem with the product. As most vendors now-a-days come up with so many
immoral and unethical activities when dealing with customers with little information about the
policies and procedures of online shopping, it is vital that customers get their fair share of
opportunities. They suggested that they must have the chance to try out the product especially
when the product is related to clothing and that they should have the chance to return back the
product if it is the wrong item or a low-quality product. The government too must act up to
secure the rights of the customers involved in shopping online and they must stop the unethical
tactics put up by the vendors in Bangladesh without significant restrictions. Only 7 people said it
is alright even if theres no trial system or no return system.
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Q11. Are you aware of the rules and regulations involved regarding online
buying and selling?

Interpretation: The above bar chart represents the answers of the 50 people surveyed to the
question of whether each of them is aware of the rules and regulations involved regarding online
shopping. 31 people, shown by the light green bar, answered that they dont have the slightest of
ideas about the rules, regulations and the policies involved in relation to the online marketplace
in Bangladesh. Thats a very catastrophic issue as this gives enormous room for ecommerce
companies to manipulate the customers and con them to their advantage. And actually they are
already at it as it is already presented above that most of the 50 people surveyed were subject to
fraud or scam when engaged in online shopping. That must be a worrying matter for those
potential customers of vendors who might think that it is too unsafe to shop online and they may
end up opting for regular shopping instead. Only 19 people think that they know a couple of the
rules or policies at the very least, but these online customers must be educated in a proper way so
that they are not subject of any rip-off anymore. Who would provide this education or training is
another issue, as both the government and the ecommerce companies would lose out a lot of
revenues and both must act swiftly to avoid it.

Page | 32
Q12. Should there be separate regulatory bodies or laws for online
marketplace in Bangladesh?

Interpretation: The above bar chart signifies the replies of the 50 respondents when asked
whether there should be separate regulatory bodies or laws for online marketplace in Bangladesh.
As symbolized by the dark blue and purple bars on the left, 31 people agreed that there must be
separate regulatory bodies in Bangladesh so that this rapidly developing industry can have a
good base when it reaches its growth and eventually maturity stage of PLC in Bangladesh. 12
people dont have any significant comment on this as they just want to ensure a proper system of
online shopping in Bangladesh. 9 people disagreed as they think that Bangladesh should rather
use the same rules, regulations, policies, statutes and laws that are currently present in foreign
countries where online shopping is a norm. They think that developing a separate regulatory
body wont do any good to Bangladesh as it would become bureaucratic and corrupted and wont
contribute significantly for the improvements desired by the customers or even the ecommerce
online companies. However, all of the 50 individuals think there must be some kind of
regulations in Bangladesh as its absence is severely hurting the trust and security issues of the
customers.

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Q13. What do you think about the strength of privacy program associated
with different companies?

Interpretation: The above pie chart represents the perceptions of the 50 individuals surveyed
about the privacy policy associated with different companies. 58% of the respondents think the
current privacy policy is very weak and needs noteworthy shake-up. They suggested that the
vendors must give careful attention to the cell phone numbers and residential addresses and that
they must make sure this information arent shared with any third person. Those who use
Facebook as their main site for online shopping; they wanted the vendors use to take all this
information in inbox rather than in the comment section where everyone can see the comments
provided. Additionally, those who shop internationally wanted specialist personnel to take
control of their credit card information so that theres no case of identity theft. 21 people went
with either high or moderate privacy programs, and most of them use Amazon and/or ebay. They
suggested that the privacy policies are pretty strong and trustworthy which is the reason why the
delivery systems are expensive comparing to the Bangladeshi online companies. Thus, even if
the costs may rise up to increase the privacy policies, the ecommerce companies must take
necessary steps to ensure customer security or confidentiality.

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Q14. How accurate do you think are the product or service assurances of the
online companies?

Interpretation: The above bar chart symbolizes whether the 50 respondents think if the product
or service assurances are accurate enough after the ordered products reach their hands. Taking
the black and red bars on the left, the customers mistrust of the online companies is pretty clear
as only 7 people think that the assurances provided by the vendors are highly accurate.
Additionally, 22 people think those assurances are kind of moderate, as sometimes they are
pretty precise whereas on other times they dont match. However, 21 people think those
assurances arent consistent as the products or services they end up with rarely satisfied them.
Thus, this answer produced a mix bag of results but overall it can be deduced that theres a lot of
trust issues among the customers about the online companies vendors.

Page | 35
 Statistical Analysis using SPSS
Frequencies

Statistics
Variables Frequency

N Valid 5 5
Missing 0 0
Mean 10.00
Std. Error of Mean 1.517
Median 12.00
Mode 12

Std. Deviation 3.391

Skewness -.962
Std. Error of Skewness .913

Variables

Frequency Percent Valid Percent Cumulative

Percent

Valid Advance payment 1 20.0 20.0 20.0

No-trial system 1 20.0 20.0 40.0

Product misrepresentation 1 20.0 20.0 60.0
Product or service 1 20.0 20.0 80.0
overemphasis
Providing credit card details 1 20.0 20.0 100.0
Total 5 100.0 100.0

Page | 36
Frequency

Frequency Percent Valid Percent Cumulative Percent

5 1 20.0 20.0 20.0

8 1 20.0 20.0 40.0

Valid 12 2 40.0 40.0 80.0

13 1 20.0 20.0 100.0

Total 5 100.0 100.0

Descriptive Statistics

Among the descriptive statistics, we will firstly look at the frequencies of the ordinal variables to
get a better understanding of the data.

From the above table we can see that 80% of the sample had chosen product and service
overemphasis that creates significant problem while doing any particular transaction. 40% of the
sample has chosen no trial system that cause severe problems while doing online transaction.
Having a no trial system has resulted in a huge customer mistrust regarding the ecommerce
companies. In our analysis the highest mode was 12 that are representing the product and service
overemphasis. The average mean regarding this frequency was 10 with a standard deviation of
3.39

Correlations

Correlations
Customer Providing
mistrust credit card
details
Customer mistrust Pearson Correlation 1 .737

Sig. (2-tailed) .095

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 N 6 6
Providing credit card Pearson Correlation .737 1
details
Sig. (2-tailed) .095
N 6 6

Interpretation: This means that there is a strong relationship between your two variables. This
means that changes in one variable are strongly correlated with changes in the second variable.
In our example, Pearsons r is 0.737. This number is very close to 1. For this reason, we can
conclude that there is a strong relationship between our customer mistrust and providing credit
card details variables. However, we cannot make any other conclusions about this relationship,
based on this number.

Correlations
Customer Product
mistrust misrepresentatio
n
Customer mistrust Pearson Correlation 1 .866
Sig. (2-tailed) .058
N 5 5
Product misrepresentation Pearson Correlation .866 1
Sig. (2-tailed) .058
N 5 5

Interpretation: This means that there is a strong relationship between your two variables. This
means that changes in one variable are strongly correlated with changes in the second variable.
In our example, Pearsons r is 0.866. This number is very close to 1. For this reason, we can
conclude that there is a strong relationship between our customer mistrust and product
misrepresentation. However, we cannot make any other conclusions about this relationship,
based on this number.

Page | 38
 Correlations
Customer No trial system
mistrust
Customer mistrust Pearson Correlation 1 -.292
Sig. (2-tailed) .634
N 5 5
No trial system Pearson Correlation -.292 1
Sig. (2-tailed) .634
N 5 5

Interpretation: This means that there is a weak relationship between your two variables. This
means that changes in one variable are not correlated with changes in the second variable. If our
Pearsons r were -0.292, we could conclude that our variables were not strongly correlated.

Correlations

Customer Advance
mistrust payment

Pearson Correlation 1 -.458

Customer mistrust Sig. (2-tailed) .437

N 5 5
Pearson Correlation -.458 1

Advance payment Sig. (2-tailed) .437

N 5 5

Interpretation: This means that there is a weak relationship between your two variables. This
means that changes in one variable are not correlated with changes in the second variable. If our
Pearsons r were -0.458, we could conclude that our variables were not strongly correlated.

Page | 39
 Regression

Variables Entered/Removeda
Mode Variables Variables Method
l Entered Removed
Advance
payment,
Product
misrepresent
1 ation, . Enter
Providing
credit card
details, No
trial systemb
a. Dependent Variable: Customer mistrust
b. All requested variables entered.

Model Summary
Model R R Square Adjusted R Std. Error of
Square the Estimate
1 1.000
a
1.000 . .
a. Predictors: (Constant), Advance payment, Product
misrepresentation, Providing credit card details, No
trial system

Page | 40
ANOVAa
Model Sum of df Mean F Sig.
Squares Square
Regression 21.200 4 5.300 . .b
1 Residual .000 0 .
Total 21.200 4
a. Dependent Variable: Customer mistrust
b. Predictors: (Constant), Advance payment, Product misrepresentation,
Providing credit card details, No trial system

Coefficientsa
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
(Constant) 13.195 .000 . .
Providing credit card
.859 .000 .553 . .
details
1 Product
-.395 .000 -.535 . .
misrepresentation
No trial system -.107 .000 -.278 . .
Advance payment -.080 .000 -.232 . .
a. Dependent Variable: Customer mistrust

Interpretation: The first table of interest is the Model Summary table. This table provides the R
and R2 value. The R value is almost 1, which represents the simple correlation. It indicates a high
degree of correlation. The R2 value indicates how much of the dependent variable i.e. customer
mistrust can be explained by the independent variable i.e. providing credit card details, product
misrepresentation, no trial system & advance payment. In this case, 100% can be explained,
which is very large. The next table is the ANOVA table. This table indicates that the regression

Page | 41
model predicts the outcome variable significantly well. This indicates the statistical significance
of the regression model that was applied. Overall, the model applied can statistically
significantly predict the outcome variable. The table called Coefficients, provides us with
information on each predictor variable.
By looking at the B column under the Unstandardized Coefficients column, we can present the
regression equation as:
Customer mistrust= 13.195 + 0.859 ( providing credit card details)
Customer mistrust = 13.195 -0.394 (product misrepresentation)
Customer mistrust = 13.195-0.107 ( no trial system)
Customer mistrust = 13.195-0.080 ( advance payment)

T-Test

One-Sample Statistics
N Mean Std. Std. Error
Deviation Mean
Customer mistrust 5 15.6000 2.30217 1.02956
Providing credit card
5 11.8000 1.48324 .66332
details

One-Sample Test
Test Value = 0
t df Sig. (2- Mean 95% Confidence Interval of
tailed) Difference the Difference
Lower Upper
Customer mistrust 15.152 4 .000 15.60000 12.7415 18.4585
Providing credit card
17.789 4 .000 11.80000 9.9583 13.6417
details

Interpretation: This t-test was carried out to determine the relationship between customer
mistrust and providing credit card details. In this t-test the t is 15.152 & 17.789 for customer
mistrust and providing credit card details respectively. SPSS state that the "Sig. (2-tailed)" value
Page | 42
is ".000", this actually means that p <.0005. Thus we can state that mean customer mistrust
score was higher than the normal score of 0, thus we accept the null hypotheses and reject the
alternative hypotheses. We can say that providing credit card details is the basis of customer
mistrust.

One-Sample Statistics
N Mean Std. Std. Error
Deviation Mean
Customer mistrust 5 15.6000 2.30217 1.02956
Product
5 14.8000 3.11448 1.39284
misrepresentation

One-Sample Test
Test Value = 0
t df Sig. (2- Mean 95% Confidence Interval of
tailed) Difference the Difference
Lower Upper
Customer mistrust 15.152 4 .000 15.60000 12.7415 18.4585
Product
10.626 4 .000 14.80000 10.9329 18.6671
misrepresentation

Interpretation: This t-test was carried out to determine the relationship between customer
mistrust and product misrepresentation. In this t-test the t is 15.152 & 10.626 for customer
mistrust and providing credit card details respectively. SPSS state that the "Sig. (2-tailed)" value
is ".000", this actually means that p <.0005. Thus we can state that mean customer mistrust
score was higher than the normal score of 0, thus we accept the null hypotheses and reject the

Page | 43
alternative hypotheses. We can say that customer mistrust is a result of product
misrepresentation.

One-Sample Statistics
N Mean Std. Std. Error
Deviation Mean
Customer
5 15.6000 2.30217 1.02956
mistrust
No trial system 5 10.0000 5.95819 2.66458

One-Sample Test
Test Value = 0
t df Sig. (2- Mean 95% Confidence Interval of
tailed) Difference the Difference
Lower Upper
Customer
15.152 4 .000 15.60000 12.7415 18.4585
mistrust
No trial system 3.753 4 .020 10.00000 2.6019 17.3981

Interpretation: This t-test was carried out to determine the relationship between customer
mistrust and no-trial system. In this t-test the t is 15.152 & 3.75 for customer mistrust and
providing credit card details respectively. SPSS states that the "Sig. (2-tailed)" value is ".000",
this actually means that p <.0005. Thus we can state that mean customer mistrust score was
higher than the normal score of 0, thus we accept the null hypotheses and reject the alternative
hypotheses. We can say that no-trial system causes customers to misplace the trust on online
companies.

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 One-Sample Statistics
N Mean Std. Std. Error
Deviation Mean
Customer
5 15.6000 2.30217 1.02956
mistrust
Advance
5 10.0000 6.63325 2.96648
payment

One-Sample Test
Test Value = 0
t df Sig. (2- Mean 95% Confidence Interval of
tailed) Difference the Difference
Lower Upper
Customer
15.152 4 .000 15.60000 12.7415 18.4585
mistrust
Advance
3.371 4 .028 10.00000 1.7637 18.2363
payment

Interpretation: This t-test was carried out to determine the relationship between customer
mistrust and advance payment. In this t-test the t is 15.152 & 3.37 for customer mistrust and
providing credit card details respectively. SPSS state that the "Sig. (2-tailed)" value is ".000",
this actually means that p <.0005. Thus we can state that mean customer mistrust score was
higher than the normal score of 0, thus we accept the null hypotheses and reject the alternative
hypotheses. We can say that advance Payment causes customers to lose trust of online
companies.

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 Findings
The results gained from the data analysis through primary data collected from the survey of 50
people clearly parallel both the overall hypothesis and the precise hypotheses. The main
hypothesis of this report was that the immoral tactics of online companies promote customer
mistrust, and there were significant presence of mistrust among those surveyed. The immoral
tactics in this paper were the independent variables, which are the Advance Payment, Credit
Card Details, No trial system, No protection of privacy, Product or Service overemphasis.

It was certainly clear that all the immoral tactics concerned with the ecommerce companies
proved to be true. Firstly, taking up the factor of advance payment, many customers complained
that they didnt receive their product after they have paid in advance the full amount through
bkash and other similar tools. So it clearly causes consumers to lose trust of online companies.
Thus, the 1st precise hypothesis is proved.

Providing the credit card details too had a negative impact during transactions. Some of the
customers who used credit cards during shopping in Amazon or ebay.com complained that they
received several scam mails in their email account which would lead to abandonment of their
credit cards. It is a very trendy issue worldwide as many people are losing their credit cards and
the money in it due to them giving up personal details to online companies.

No-trial system is another immoral tactic that online companies force upon customers. This is
especially true during a transaction of clothing as many of the respondents grumbled that they
received different sizes of t-shirts or jeans pants. If they wanted to change the product, the online
companies wanted a fee of nearly BDT 100 to send another product. Thus, there has been severe
manipulation of customers due to the absence of the no-trial system in Bangladesh and it is fair
to say that it leads to customers misplace the trust on online companies.

Next up is the privacy issue and with the recent Wikileaks scandal, there has been a worldwide
debate about this topic. The respondents too think the personal information they have provided
can be used for wrong purposes and can hamper their daily life. A couple of them already
mentioned phone calls or text messages from unknown numbers and suspected that it may came
from someone who got their numbers during the transaction process with the ecommerce
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companies. Thus, an individuals personal life can be hampered due to this & it is safe to say that
currently the online companies dont protect privacy information of customers.

Last one is the product or service overemphasis. Most consumers complained that the online
companies put up very unauthentic and artificial pictures of products with attractive captions but
the quality of the products arent half of what was advertised. There is a general discontent
among those surveyed about this very fact and it is especially a problematic affair when someone
buys a product or service of a larger amount. Thus, the last precise hypothesis is also proved
since the ecommerce companies overemphasize the product or service offered to consumers.

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 Recommendations

The online marketplace in Bangladesh is a rapidly developing industry and is expected to be

booming in the near future. There are several problems attached to the current system which is
already discussed above, so now its time for some recommendations to offer so that the system
can improve and a better online marketplace can be implemented in Bangladesh.

The process of advance payment must be cleaned up and only free cash-on-delivery
system must be implemented. There are several companies which are specializing in
delivering products of ecommerce companies such as the like of Graffiti Express here in
the capital city of Dhaka, and there are also several companies such as SA Paribahan,
Sundarban Courier & Continental which delivers products to different places in
Bangladesh. Thus, there are enough opportunities to cancel out the advance payment
method and the proper application of the cash-on-delivery system would increase the
faith of customers over the online shops.
The handling of credit cards must be done more carefully. To improve this, there must be
a worldwide decision to change the current process, as whomever uses credit cards in
Bangladesh use it for purposes related to foreign matters. Amazon.com already has taken
radical steps to tone down the amount of information that a specific customer needs to
provide and other websites like ebay.com too is working hard to follow the footsteps of
their competitors.
A proper trial system must be implemented so that online companies dont get the
opportunity to deceive the customers. If the payment method is home delivery system,
then a customer must have an option to try it instantly to see whether it is the right type.
To be fair on both sides, there must be a slip from online companies confirming the exact
sizes that the customer had ordered. In this way, the apparels business would improve
substantially and as RMG is the biggest industry in Bangladesh both in terms of knitwear
and shirts, it is important that the operations are transparent during the online shopping of
clothing.
There also must be a system of return system if the product is of wrong size or is
damaged. There are many instances in Bangladesh where the delivery man uses the Bus

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 to deliver the goods, and judging by the quality of our local buses theres a high
probability that the products can be spoiled. Thus, a customer must have the opportunity
to get a new one without paying any subsequent penalty as he or she has paid the price of
the product. Same is true if the quality isnt same; if a customer ordered a 190 GSM t-
shirt but receives a tee of 130 GSM, he must have every right to return it and get a new
one.
Privacy System has to be improved and it has to come from the government or at least the
governing bodies. A separate regulatory body must be there in Bangladesh to protect the
privacy of those customers who engage in online shopping. They must keep of every
transaction that is being placed at every second and they must ensure that the information
providing by the customers are kept safe by the online companies. Additionally, they
must have good coordination with police stations so that customers can instantly file a
case or a GD when their personal information is used in illegal or wrong purposes.
Lastly, online companies should be required to provide only authentic and real time
images of their products. They cant use the pictures of other websites to mislead their
customers. The governing bodies must ensure proper pictures and even social networking
sites like Facebook can take measures to ensure that the selling pages put up authentic
pictures of their own products rather than the images of non-natural ones. This way, the
online companies can regain the trust of their customers and can build customer loyalty
which can be a competitive advantage in Bangladesh.

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 Limitations:

Online Shopping is a very popular concept internationally, but in Bangladesh its a

slowly emerging industry & information was very hard to find and it somewhat limit

some of the research findings as the sample might not properly reflect the opinions of the

society.

It was very difficult to complete the whole research paper within a very short space of

time.

The individuals associated with the ecommerce companies in Bangladesh were reluctant

in sharing their confidential data.

Not everyone from the society would feel the same, and hence if a different sample of 50

individuals were taken, the findings would have been different.

The topic itself was a bit controversial and indirect and it was very difficult to get the true

response from those surveyed.

The sample was limited to only 50 questionnaires, and due to the fact that the online

marketplace is a trendy phenomenon, more opinions could have come in handy to get a

more informed feedback.

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Conclusion

The research findings (both the primary and the secondary analysis) have shown a positive
relationship between the immoral tactics used by the online ecommerce companies (.Advance
Payment, Credit Card Details, No trial system, No protection of privacy, Product or Service
overemphasis) and the matter of consumer mistrust. Thus, it becomes essential to guarantee that
these factors are sufficiently contented in order to maintain consumer interest & trust and for the
sustainability of the industry. This positive connection goes on further to stress that existing
conditions need to be improved. The market has not exceeded the consumers area in many areas
thus, it is important for the market to look into those aspects. Additionally, as it is an extremely
popular phenomenon worldwide and is rapidly growing in Bangladesh, it is absolutely
imperative that the situation is improved so that customers can freely get access to the virtual
world of shopping. Furthermore, the government needs to intervene and introduce, manage &
implement laws in order to maintain security and the trust of the parties involved in online
shopping.

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 References
Online Marketplace. (n.d.). Retrieved from Wikipedia:
http://en.wikipedia.org/wiki/Online_Marketplace

Amazon.com. (n.d.). Retrieved from Wikipedia:

http://en.wikipedia.org/wiki/Amazon.com

Ebay. (n.d.). Retrieved from Wikipedia:

http://en.wikipedia.org/wiki/eBay

Nardal, S., & Sahin, A. (2011). Ethical Issues in E-Commerce on the Basis of Online Retailing.
Journal of Social Sciences, pp. 1-9

About us. (n.d.). Retrieved from bikroy.com:

http://bikroy.com/en/help/about

About. (n.d.). Retrieved from akhoni.com:

http://www.akhoni.com/about

Pirillo. A. (2009). Top 7 online companies. Retrieved from Reuters:

http://www.reuters.com/finance/stocks/companyProfile?symbol=AMZN.O

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