1|Page

Effect of risk factors towards online shopping

Theory

By

Amna Ahmed 20201-27277

Institute of Business Management

Department of Management Sciences

Submitted to
Dr. Muhammad Yasir

Karachi, Pakistan
2022
2|Page

Abstract

Online shopping is associated with technology and convenience, but the acceptance of online
shopping in Pakistan is still very low. The aim of this study is to determine the risk factors that
effects of online shopping in Pakistan. The purpose of this report is to overcome the effect so that
people tend to do more online shopping. The study is based on the quantitative research and it is
descriptive in nature.

The constructs undertaken for hypothesis development in the study as predictors were adopted
from Technology acceptance model with online shopping being the dependent variable and
return policy, after sales service, deceiving reviews, safety and security as independent variables.

Data was collected through a questionnaire, from a sample of 250 respondents mainly from
Karachi, Pakistan. It was analyzed through the use of SPSS, in order to study the relationships in
consideration. Results have confirmed the impact of these factors on the online shopping risk of
Pakistani consumers.

Keywords: Online shopping, return policy, after sales service, deceiving reviews, safety and
security, internet shopping, e-commerce.
3|Page

Contents

Chapter 1: Introduction....................................................................................................................5
1.1 Background of the Study...................................................................................................5
1.2 Problem Statement:................................................................................................................6
1.3 Research Questions:...............................................................................................................7
1.4 Objectives of Study:..............................................................................................................7
1.5 Significance of the Study:......................................................................................................7
1.6 Limitation of the Study:.........................................................................................................7
1.7 Scope of Study:......................................................................................................................8
1.8 Hypothesis.................................................................................................................................8
Chapter 2: Literature review........................................................................................................8
Theoretical framework.................................................................................................................8
Deceiving reviews.......................................................................................................................9
After Sale Service Risk..............................................................................................................10
2.1 Conceptual framework.........................................................................................................11
Chapter 3: Methodology................................................................................................................12
3.1 Data......................................................................................................................................12
3.2 Variables..............................................................................................................................12
3.3 Inclusion Criteria.................................................................................................................12
3.4 Data Collection Instrument..................................................................................................12
3.5 Sample and Sampling Technique........................................................................................12
3.6 Statistical Technique............................................................................................................12
Chapter 4: Result and discussion...............................................................................................12
4.1. Introduction...................................................................................................................12
4.2. Demographic Profile.....................................................................................................13
4.3. Descriptive Statistics Analysis......................................................................................15
4.5. Exploratory Factor Analysis (EFA)............................................................................16
Table 4 Exploratory Factor Analysis (EFA).........................................................................17
4.6. Correlation.....................................................................................................................17
4|Page

4.8. Convergent Validity......................................................................................................19

4.9. Discriminant Validity...................................................................................................20
4.10. Overall Model Regression Test................................................................................21
Table 10 Hypothesis analysis..................................................................................................22
4.12. Individual Regression Analysis................................................................................22
Return policy........................................................................................................................22
After sales service................................................................................................................23
Deceiving reviews.................................................................................................................24
Safety and security...............................................................................................................25
Chapter 5: Conclusion, limitation and recommendation...............................................................27
5.1 Conclusion...........................................................................................................................27
5.2 Limitation............................................................................................................................27
5.3 Recommendation.................................................................................................................27
References......................................................................................................................................28
Appendix........................................................................................................................................31

Table 1 Respondent's demographic profile...............................................................................14

Table 2: Descriptive Statistics Analysis.....................................................................................15
Table 3 Reliability of the constructs...........................................................................................16
Table 4 Exploratory Factor Analysis (EFA).............................................................................17
Table 5 Correlation......................................................................................................................18
Table 6 Reliability of the constructs and Variance Explained................................................20
Table 7 Discriminant Validity....................................................................................................20
Table 8 Model Summary.............................................................................................................21
Table 9 Regression Analysis.......................................................................................................21
Table 10 Hypothesis analysis......................................................................................................22
5|Page

Chapter 1: Introduction
1.1 Background of the Study

Evolution of internet has strongly impacted the worldwide marketing environment. It has
provided companies with the potential and ability to expand. Alnsour, M., Ismael, N., Nsoor, Z.,
& Feidi, M. (2019). It is becoming an increasingly popular medium to facilitate information
search, choice, and purchase. Business-to-consumer electronic commerce involves the use of the
Internet to market and sell products and services to individual consumers. (Alnsour, M.,
Ismael, N., Nsoor, Z., & Feidi, M. (2019)

Despite the optimistic future growth of online shopping, negative aspects are also becoming
more frequently associated with this alternative shopping method. In an online environment as
compared to brick and mortar, greater risk and less trust are expected due to the fact that there is
major difficulty in evaluating a product or service. As there are no visual or tangible indications
about the quality of the product. It does not provide face-to-face interaction with sales staff, and
the purchase is affected by security and privacy issues. (Alnsour, M., Ismael, N., Nsoor, Z., &
Feidi, M. (2019)

Therefore, it is assumed that people may feel a certain degree of risk when purchasing a product
through the internet. Example, consumers are worried that the internet still has very little security
with respect to using their credit cards and disclosing personal information or concerned about
purchasing a product from sellers without physically examining the products. (Alnsour, M.,
Ismael, N., Nsoor, Z., & Feidi, M. (2019)

Pakistan has 55.6% internet users (as per 2021) and is ranked 8th on the list of internet users
globally according to the Wikipedia. As the users are increasing day by day, things are also
moving towards online, in Pakistan. Today, the internet is rapidly changing the consumers
shopping behavior and all the companies have also started using the internet to remain in the
market (Pi & Sangruang, 2011).

People buying behavior is changing from traditional to online shopping. Internet shopping is
purchase of goods and service through internet and E-commerce is an online shopping of buying
and selling of goods and services online via internet (Sattar, 2014).
6|Page

Online shopping give consumers convenience by saving their time and energy to go to the
market but on the other hand consumers also hesitate to do online shopping due to several risk
factors that are involved in it. return policy, after sales service, deceiving reviews safety and
security are some of the risk factors which make consumers cautions about online shopping
(Chanda, 2021). The risk in online buying also affects the consumers purchase likelihood
(Alwafi Ridho Subarkah, 2018).

1.2 Problem Statement:

The usage of internet in Pakistan is increasing rapidly. Everything is shifting to online and
especially during Covid-19 because people were at home and they were not able to go out due to
lockdown so people started buying and selling products online. Through online shopping there
are multiple benefits for not only seller but also the buyer as well in term of convenience, no
crowds, easy price comparisons by just scrolling or switching the tabs and also it is time saving.

However, the problem exists when the consumers were hesitating or facing hurdles in online
shopping because of the risk factor that is associated with online shopping. Consumer feels a risk
in buying online after sale service risk, deceiving reviews, safety and security and return policy.
These risk are discouraging the consumers from shopping online because the risk of getting they
are skeptic about the reviews read online.

1.3 Research Questions:

1. Does return policy have an effect on online shopping?

2. Does after sales service have an impact on online shopping?
3. Does deceiving reviews have an effect on online shopping?
4. Does safety and security have an impact on online shopping?

1.4 Objectives of Study:

1. To determine the effect of return policy on online shopping.

2. To determine the effect of after sales service on online shopping.
3. To determine the effect of deceiving reviews on online shopping.
4. To determine the effect of safety and security on online shopping.
7|Page

1.5 Significance of the Study:

The significance of this study is that it examines the risk factors effecting online shopping in
Pakistan. The study can be beneficial for the e-retailers to understand the risk factors that are
effecting online shopping.

The study will examine the risk factors i.e. return policy, after sales service, deceiving reviews
safety and security that has a major effect on online shopping. By researching and analyzing the
factors that affect online buying. Moreover, by reducing the risk factors it will help the brands
and e-commerce market places to increase online shopping.

1.6 Limitation of the Study:

Limitation of study represent flaw within a study that may have an impact on the study's results
and conclusions. The main limitation was that the main focus is only on return policy, after sales
service, deceiving reviews safety and security however, there are more factors too which may
have an effect on consumers online buying.

The major limitation of the study were that the prior research studies that were related to this
thesis had a limited or insufficient data to the scope of our study topic. Moreover, some of the
respondents might have answer the questions in some sought of stress or pressure. As only
google form was circulated for the purpose of data collection, no physical interview or survey
was done. However, it was ensured that the individual filled out the survey correctly. Because
the research had to be done within a semester's time frame, time was also a crucial restriction.

1.7 Scope of Study:

The study aims to focus on the risk factors that have effect on online shopping. The scope of the
study is limited to online shoppers in Karachi, Pakistan.
8|Page

Literature review

Theoretical framework

Figure 1: Technology Acceptance Model (Tam).

(Wiswanatha Mada & Putri, 2021)

According to the TAM theory, perceptions of convenience and usefulness have an impact on
attitudes, which in turn have an impact on behavior. Many customers will choose an online store
to shop at if they notice that the customers there have a positive attitude (Indarsin & Ali, 2017).
Perceived usefulness, perceived ease, and trust are typically used as three independent variables
to assess someone's attitude (Wiswanatha Mada & Putri, 2021). Accepting the mindset of
customers in online stores is significantly infuenced by perceptions of perceived usefulness and
ease of use (Pavlou, 2003).

Another study found that consumers' perceptions of usefulness have a significant and favorable
impact on their attitudes toward shopping at online retailers (Delafrooz et al., 2011). When
customers choose to purchase goods or services online, they are unable to physically inspect the
items they are purchasing or interact in person with the seller of those goods. As a result, they
cannot be certain that their expectations will be met. (Wiswantha Mada and Putri (2021)
Customers must develop a sense of trust for one another.
9|Page

Trust must be earned over time and can be demonstrated by the seller by delivering goods or
services in accordance with the order; this will encourage customers to shop at online retailers.
When someone wants to make a purchase from an online store, what the customer believes is
that the money sent is not lost immediately but will instead be used to obtain the desired good or
service in line with what is shown and explained in the online store, Karen (Aribowo &
Nugroho, 2013).

Risk is another crucial factor in determining factors that affect how consumers feel about online
shopping (Shu-Hung & Bayarsaikhan, 2012). Risk is an element that shapes consumers' attitudes
toward online shopping and must be taken into account when making such decisions because
there is a risk of online store fraud and other incidents that negatively impact consumers' online
stores (Hsu et al., 2014).

Introduction

As the internet was invented the transformation of conventional into online approaches (Englis,
Solomon, & Danskin, 2005). These changes allowed people to adapt to a life according to
technological advancements. IT has affected the brick and mortar trade as numerous online shops
emerge and accommodate producers in marketing products and serve consumers in shopping
activities (Ueasangkomsate, 2015). Pakistan has potential in e-commerce. The trend of online
shopping is presumably elevated by young generation as the millennial generation that is up to
date with technology (Lim, Osman, Salahuddin, Romle, & Abdullah, 2016).

This generation prefers to shop online because it is dynamic, stylish, and emotional. The
previous generation, known as the Y generation, is likely to engage in online shopping given its
characteristics of having established careers and higher income (Loureiro & Breazeale, 2016).
The dynamic trend of online shopping raises the idea that it would be worthwhile to research
how consumers make decisions about what to buy, especially in the context of e-commerce.

Consumers participate in e-commerce as both buyers and users of web-based technology (Cho &
Park, 2001; Wu, 2013). Therefore, it is crucial to research how consumers used technology as a
medium to address their needs. According to Forsythe, Liu, Shannon, and Gardner (2006), the
use of technological media in business should facilitate two-way communication by giving
10 | P a g e

customers interactive features on websites that go beyond information viewing, such as easing
their post-purchase product anxiety (Hong & Yi, 2012). Consumer risks in online transactions,
such as the security of the online transaction system, must also be taken into account (Taylor &
Strutton, 2010). E-commerce businesses need to comprehend the needs and habits of their
customers (Lee, 2002).

It would be interesting to study consumer behaviour when buying products online. Given how
quickly technology is evolving across all industries, studying an e-commerce website is a
dynamic process. In a series of consumer behavioural models, the primary factor is the
purchasing decision (Kottler & Keller, 2016). How a person makes a purchasing decision, the
likelihood that social factors will influence it, and the likelihood that demographic factors will
influence it are some of the concerns pertaining to consumer purchasing behaviours (Kottler &
Keller, 2012).

Regardless of the circumstances surrounding the purchase, perceived risks typically have a
significant impact on the decision-making process (planned vs. impulse)? Every purchase carries
some level of risk. The concept of perceived risk is first introduced by Bauer, who writes,
"Consumers perceive uncertainty in contemplating a specific purchase intention. Customers may
be disappointed and regret the outcome. Taking risks is something he sees in consumer behavior.
It's possible that consumers are unable to express their intentions clearly or that they have never
considered risk in their subconscious.

Instead, it's possible that consumers' behavior was impacted by the risk they subconsciously
perceived. Consumers have easier access to well-known product information when they have
previous experience buying a particular product. Users of the internet appear to be influenced by
their past shopping experiences when making future purchases. In the evaluations conducted
after purchases, consumers offer insightful psychological reviews. Their decisions today and in
the future will be influenced by these experiences. The cycle of feedback processes that make up
decision-making. Additionally, according to a different study, the online shopping experience
has an impact on the decisions consumers make. Consumers evaluate product information,
purchase payments, services, risks, privacy, and warranty using their personal experiences in the
11 | P a g e

online shopping environment. According to many, consumers shop online because of their prior
online shopping experiences.

Return policy

Reviewing the studies on return policies and purchase intentions against the backdrop of
signaling theory, we propose a baseline hypothesis based on existing research while discussing
lenient return policies. The extent to which consumers buy products from a retailer can be
determined by its return policy, according to studies involving retailers' return policies
(Janakiraman et al., 2016). Additionally, other studies have connected return policies to the
degree of customer loyalty to a store (Verma et al., 2016; Walsh et al., 2016).

For instance, it's been discovered that a retailer's post-purchase guarantee policy (i.e., product
exchange only as opposed to product exchange or money refund allowing a money refund)
increases customer loyalty as well as repeat business and referrals from customers (Minnema et
al., 2018; Petersen and Kumar, 2015).
In turn, purchasing decisions for the current transaction are influenced by the consumer's
perception of a seller's return policy, a costly signal. For example, in order to examine various
categories of return policy, researchers drew conclusions from various theoretical perspectives
and effects on consumer behaviour. In a study of undergraduate students from a major American
university, it was discovered that a lenient return policy shortens the amount of time consumers
think about whether to order products online and increases the likelihood that they will do so
(Janakiraman and Ordóez, 2012).Additionally, when retailers only offer a small number of
recommendations during repurchase phases, customers are found to view products more
favorably under a limited return policy than under a lenient return policy. Customers who have
placed returns with a retailer tend to spend more money and place more orders. A return policy
has also been connected to consumer spending and propensity to buy. According to Shao et al.
(2013), consumers may be more likely to buy from a retailer if they offer return shipping
insurance because they perceive it as a sign of the retailer's credibility and high-quality products.
Therefore, it has been demonstrated that return policies have an impact on consumers' future
purchase intentions as well as their actual decisions.

H1: Return policy has an impact on online shopping risk.

12 | P a g e

After Sale Service Risk

After-sale service is defined as the delivery service that is provided by the seller to a customer
after paying and also technical and information of installation support after selling the product
(Cao & Gruca, 2004). After sale service is a kind of relationship between the retailer and
consumer after online buying (Setyanta et al., 2020). Products that don’t have after sale service
have more problems towards the goods (THAM et al., 2019). (Bhatti, Saad, & Gbadebo, 2019)
stated that the frequency of online shopping is affected when retailers don’t have after sale
service. After sale service can gave an advantage over competitor to the retailer because after
sale service attracts consumers attention (Setyanta et al., 2020).

Most often, the term "after-sales services" refers to services that are provided after the delivery
of a particular good in order to support consumers' use of that good throughout its useful life
(Gaiardelli et al., 2007). The definition and methodology of after-sales service vary. For instance,
after-sales services, according to Rigopoulou et al. (2008), include all activities carried out to
facilitate the purchase of a product. Additionally, this term refers to two broad categories of
activities in the literature on retail (Mouly Potluri and Hawariat, 2010); for service delivery
companies, after-sales services are viewed as supplemental services among the variety of
services that these companies provide to their clients (Oliva and Kallenberg, 2003).

After sale service has two major types: one is service that is anticipated like setup, install,
guidance, maintenance and upgrade while the other type is unanticipated like maintenance of
sold item, returns, refunds and replacements (Sparkle.Pdf, n.d.). The purpose is to find the effect
of after sales service in customer buying behavior in an e-commerce industry. Good after sale-
service quality is the factor of customer satisfaction and directly impact the customer repurchase
intent which make them a loyal customer (Huang, 2019).

It was proposed that the performance of an after-sales support must be assessed in four ways that
are reliability, tangibility, responsiveness and simplicity that are specifically shown in below
figure (Huang, 2019). After sale service can gave an advantage over competitor to the retailer
because after sale service attracts consumer’s attention.

H2: After sales service has an impact on online shopping risk.

13 | P a g e

Deceiving reviews

It has become an epidemic to see fake reviews online (Banerjee, S., & Chua, A. Y,2014).
According to (Banerjee, S., & Chua, A. Y,2014), some fake reviews are written with misleading
reputation to damage the repute of business. For example, employees could post fake positive
reviews to praise offerings of their organizations, and fake negative entries to chastise those of
rival businesses.

Fake reviews are given to sound realistic without proving a point, they can be written in the
beginning of a business. For example, users could write fake reviews to gain status in the
community, or simply to pass time, or shake off frustration. (Banerjee, S., & Chua, A. Y. (2014).

According to (Jain,M. 2021), some sellers try to make reviews which help them in their online
sales. These testimonials has power to influence customer’s purchase intentions.

Researchers are working on how to detect fake reviews (Jain, M., 2021). The reviews presented
are as original however they are deceiving. They lead to making wrong decisions while shopping
online. It is hence crucial to classify fake reviews, and is also a stimulating problem in both
academia and business. In the previous year researchers have projected numerous fake review
discovery methodologies to preserve the accurateness of the results of online opinion mining.
(Hassan, et al., 2019)

Competition is a key driving force behind the posting of fake reviews. Online product reviews
foster fierce competition and cultures of consumer choice. Along with businesses motivated by
profits and competition, individual customers may write false reviews to get benefits. (Hajek et
al., 2020,)

This behavior is largely motivated by psychological needs that have three different sources:
disgruntled customers, brand managers who act on their own, and social status. Online retailers
typically post fictitious reviews, either in support of their own products to boost sales or in
opposition to those of their rivals to hurt sales. To accomplish this, retailers take a variety of
actions, like implementing a praise cashback strategy.

H3: Deceiving review has an impact on online shopping risk.

14 | P a g e

Safety and security

Data protection for Internet users is greatly aided by information security. For any effective and
efficient online shopping site, it is a crucial management and technical requirement
(Niranjanamurthy & Chahar 2013). Youn (2009) contends that the fragility of user personal
information and the uncertainty surrounding how it is handled by online retailers and who has
access to it are intertwined with issues of information security and privacy. According to Milne
and Culnan (2004) and Tsai & Yeh (2010), users cannot vouch for the accuracy of the
information on a shopping website or the intended use of the information. According to
Kayworth and Whitten (2010), consumers steer clear of websites that request personal
information during registration, which encourages some users to provide false or erroneous
information.

Today, emphasis is placed on the importance of website security and privacy, which should
cover information confidentiality, information integrity, and non-repudiation communication,
authentication security, IT effectiveness, and protection of personal privacy (Shin, 2010;
Masoud, 2013).
Online shopping can have unfavorable effects that do not exist in traditional retail, such as the
failure of consumers to personally understand the quality of a product, the lack of personal
interaction with a seller, the induction of anxiety in consumers who are uncomfortable using the
Internet, the lack of interaction and social contact with others, and the protection and security of
transactions. The likelihood that online businesses may use customer information improperly as
a result of which attacking a consumer's privacy is described as perceived privacy risk
(Nyshadham, 2000).
Therefore, the protection aspect is particularly striking for online retailing.
Online security and privacy risks were the subject of research by Miyazaki and Fernandez in
2001. What's most intriguing is that customers with more experience actually had higher privacy
concerns, suggesting that as experience (and possibly information) accumulates, there may be
greater privacy concerns. The purpose of Tasi and Yeh's (2010) research was to examine the
effects of website quality, particularly product quality data, service performance quality, website
design style and features, and transaction and delivery capabilities, on perceived risk of
information security and privacy and its relationship to purchase intention. The findings
15 | P a g e

demonstrated that perceived usefulness and perceived ease-of-use are two aspects of the
perceived risk of information security and privacy.

Additionally, many researchers stress that website security should cover data confidentiality,
data acuity, non-repudiation communication, verification security, IT effectiveness, and security
of personal protection, all of which are related to site characteristics (Shin, 2010; Kayworth &
Whitten, 2010). Online tax filing, according to Lu et al. (2010), is crucial for data privacy and
security.

H4: Safety and security has an impact on online shopping risk

2.1 Conceptual framework

Return policy risk H1

After sales service risk H2

Online Shopping Risk

Deceiving reviews risk H3

Safety and security risk H4

Figure 2: Conceptual Framework

16 | P a g e

Chapter 3: Methodology

Introduction

Prior chapters have discussed the literature, theoretical framework, constructs and theories
forming the theoretical framework. The subsequent section shall cover the research methodology
adopted in the study. Additionally, this section shall cover the techniques of investigations and
the methodology used for analysis of data and result interpretation.

Research Design

Appropriate research design in mandatory to extract correct results (Abutabenjeh & Jaradat,
2018). Research design aids the researcher move from step 1 to next, i.e. it helps follow the
appropriate way of data collection, from the right representatives of population, and reaching
correct conclusions (Robert K. Yin, 2017). The appropriate design for this study is a quantitative
approach. The data collected for this study was primary data collected from respondents of
Pakistan. The questionnaire developed was adopted from reliable constructs found in prevailing
literature.

Population

Population or the population of interest for the study is the entire population upon which the
research is conducted for. However, collection of data from entire population is not viable, which
is why generalizable samples are drawn (Majid, 2018). The target population for this research is
Pakistani online shopping consumers.

Sample & Sampling Technique

The number of questionnaires floated for this research was approximately 250. The customers of
online shopping were approached and were examined the level of effect of our independent
variables have on dependent variable. In the study convenience sampling was used and the
questions were close ended in the questionnaire which were distributed to the customers.

In this study, questionnaire was developed by adapting the already developed constructs in
previous studies. The questionnaire was based on 5-point Likert scale with the options ranging
from Strongly Agree to Strongly Disagree.
17 | P a g e

The reliability of the constructs was already established in the previous studies, however,
reliabilities are re-established again due to the changing demographics in the current research
(Ahmed Sallam & Ali Algammash, 2016; Ling, Piew, & Chai, 2010; Nikolovska, 2016).
Reliability in the previous research, source, and number of items used are provided in the table
below.

Measure Source No of items Reliability

Online shopping Masoud, E. ,2013 06 0.83

Return policy Moshrefjavadi et al., 2012 05 0.89

After sales service (Ahn & Sohn, 2009) 08 0.83

Deceiving reviews Salminen et al., 2022, 07 0.79

Safety and security Masoud, E. ,2013 05 0.81

Data Collection & Analysis

The questionnaire was distributed to 250 online shopping consumers. Analysis section includes
the statistical tests for normality, reliability, and validity. The relationship and effect between the
constructs were tested using multiple linear regression analysis. SPSS was used to conduct the
reliability analysis (Cronbach Alpha), validity analysis (convergent & discriminant), exploratory
factor analysis, correlation and multiple regression analysis.

Chapter 4: Result and discussion

4.1. Introduction
Having covered research design and methodology in chapter 3, this chapter will analyze the

results which is based on data analysis which consist on the results gather by using the

methodology discussed in chapter 3, by SPSS software. This chapter includes respondent’s

18 | P a g e

profiles, analysis of descriptive Statistics, reliability, validity, exploratory factor, correlation and

regression.

4.2. Demographic Profile

Variable   Number Percentage

Gender Female 156 62.4%

Male 106 42%

Age 17 24.8%
18 - 25 years
52.4%
62
26 - 35 years
13.6%
131
36 - 45 years
8.4%
34
45 years or above .8%

21
Under 18 years old

Education Graduate
125 50.0%
Intermediate/A'Levels
12 4.8%
Matric/ O'Levels
3 1.2%
Post-Graduate
24.0%
Under-Graduate 60
20.0%
50

Employment Employed 134 53.6%

Status 3 1.2%
Retired
19 | P a g e

Self-Employed 30 12.0%

31 12.4%
Student
39 15.6%
Unemployed

Payment 70.8%
Cash on delivery 177
method
18.8%
Credit/debit card 47
4.0%
Easy paisa 10
5.6%

Jazz cash 14

Online 243 97.2%

Yes
shopping
7 2.8%
preference No

Total Respondents 250

Table 1 Respondent's demographic profile

The total respondents of this research were 250. Majority were from the age bracket of 26-35

years having a percentage of 52.2%, 25.3% belonged to 18-25 years, 13.4% belonged to 36-45

years age group and the remaining were older.

The males constituted 37.2% of the sample, females constituted of 62.8%. The education levels

of our respondents were mostly Graduates, comprising of 49.8% of the sample, 23.7% having a

Post graduate degree and 20.6 % belonged to under graduate group.

20 | P a g e

97.2% people shopped online while the rest did not. 53% were belonging to employed group,

10% people belonged to unemployed group and the rest 11.9% were self-employed. Cash on

delivery was the highest preferred mode of payment having 71.1%, and the remaining 18.6%

preferred visa transaction.

4.3. Descriptive Statistics Analysis

In order to perform multiple linear regression, we had to ensure that the data followed normality
(George, D. and Mallery, 2003). Hence, descriptive statistics were tested in order to ensure
univariate normality. A range of +3 to -3 is considered as acceptable range for Skewness and
Kurtosis (Habib and Qayyum, 2017).

Constructs Mean Standard deviation Skewness Kurtosis

Return policy 2.462 .724 -.071 -.575

After sales service 3.454 .675 .053 .463

Deceiving reviews 4.008 .731 -.245 -.691

Safety and security 3.706 .738 -.149 -.241

Online shopping 3.766 .640 -.020 -.159

Table 2: Descriptive Statistics Analysis

Table 2 presents the results of mean, standard deviation, skewness and kurtosis. The highest
Skewness value possess by after sales service i.e. 0.053 (Mean = 3.454, SD = .675). The lowest
Skewness value is possessed by Deceiving reviews i.e. -.245 (Mean = 4.008, SD = .731).
21 | P a g e

The highest value of Kurtosis is 0.463 of construct after sales service i.e. 0.053 (Mean = 3.454,
SD = .675). The lowest value of Kurtosis = - 0.04 of construct Deceiving reviews i.e. -. (Mean =
4.008, SD = .731). Thus, all the constructs fulfill the requirement of univariate normality
(George & Mallery, 2003).

4.4. Reliability of the Constructs

Cronbach’s Alpha was assessed to observe the internal consistency of the constructs, i.e. the
constructs were evaluated for reliability. The results in the table below shows the value of
Cronbach Alpha of all constructs of this research as a measure of inter construct reliability,
demonstrates that the model of this research has reliability as all the values of Cronbach Alpha
are above 0.6 which as per (Rahimnia & Hassanzadeh, 2013) is the minimum acceptable value
for measuring reliability.

Constructs Reliability No. of items Mean Standard deviation

Return policy .805 5 2.462 .724

After sales service .811 8 3.454 .675

Deceiving reviews .808 5 4.008 .731

Safety and security .774 5 3.706 .738

Online shopping .774 5 3.706 .738

Table 3 Reliability of the constructs

22 | P a g e

4.5. Exploratory Factor Analysis (EFA)

A KMO value of 0.6 is acceptable while any value that is closer to 1.0 is considered to be the
best. (Lee and Chan, 2011). In extension to this, (Hadi, Abdullah and Santosa, 2016) went on
further to state that the acceptable value for significance in Bartlett’s Test of Sphericity is 0.000
any value grater then this should not be acceptable.

Construct No of KMO Bartlett’s Test of Total Variance

items Sphericity Explained (%)

Return policy 5 0.717 407.390, P=0.000 56.53

After sales service 8 0.818 403.367, P=0.000 44.09

Deceiving reviews 5 0.826 373.062, P= 0.000 56.75

Safety and security 5 0.772 332.505, P= 0.000 52.84

Online shopping 6 0.680 194.647, P= 0.000 37.03

Table 4 Exploratory Factor Analysis (EFA)

4.6. Correlation

Correlations

Online Return After sales Deceiving Safety and

shopping policy service reviews security

Online 1 .
shopping

Return .027 1
policy
23 | P a g e

After sales .345 -.011 1

service

Deceiving .346 .086 .319 1

reviews

Safety .492 -.062 .185 .095 1

security

Table 5 Correlation

Table 5, shows the strength of relationship between variables and the significance. Analyzing the
table, it can be observed that the strongest relationship is between online shopping and safety and
security (0.492), while the weakest relationship is between return policy. Three constructs
relationships remain within the range of 0.3 and 0.9, they can thus be concluded to be without
multicollinearity, as well as distinct from one another.(Ansari et al., 2017)

4.7. Construct Validity

The construct validity is essential in order to understand the hypothesis testing and excremental
measure. For predicting and explain the behavior of theoretical constructs were created by most
of the researchers. Establishing hypothesis and creating a links between the construct of interest
and other relevant behaviors is part of the construct syntactically.

It is divided into two set one is the convergent validity and other is discriminant validity.
(Mohajan, 2017). The Variance explained in (Table 3 EFA), which is greater than 0.60 and
KMO is greater than 0.60 of each variable it means that the variables were meeting the criteria of
convergent validity (Rahimnia & Hassanzadeh, 2013).

Given the adoption of constructs from studies on developed economies, and the western region
of the world, it is essential to examine the construct validity of in this study through analysis of
convergent, as well as discriminant validity.
 24 | P a g e

4.8. Convergent Validity

The measure of determination of how well a measure related to another, given they both evaluate

similar phenomenon, is convergent validity (Cheah et al., 2018). The constructs were established

to follow convergent validity in this study, based on AVE and Cronbach’s alpha, which, both,

satisfy the acceptable criteria of exceeding 0.5 and 0.7 respectively (Ansari et al., 2017).

Construct Cronbach's Total Variance Mean Standard deviation

Alpha Explained (%)

Return policy 0.717 56.53 2.462 .724

After sales service 0.818 44.09 3.454 .675

Deceiving reviews 0.826 56.75 4.008 .731

Safety and security 0.772 52.84 3.706 .738

Online shopping 0.680 37.03 3.706 .738

Table 6 Reliability of the constructs and Variance Explained

4.9. Discriminant Validity

The extent to which the constructs experimentally differ from one another is referred to as
discriminant validity. It also assesses the degree to which the overlapping constructs differ (Ab
Hamid et al., 2017). In light of the acceptable ranges stated previously it can be observed that
discriminant validity exists in this research model as the minimum threshold value of Kaiser-
Meyer-Olkin Measure is greater than 0.60 (Ab Hamid et al., 2017).

The uniqueness of a variable is measured by the statistical test of discriminant validity analysis
(Haier et al. 2010). It is measured by comparing the square of the of each pair of correlation
coefficient with the square root of average variance explained and the later one must be of higher
value (Fornell & Larcker, 1981)
25 | P a g e

Constructs OS RP AS DR SS

Online shopping 0.60

Return Policy 0.004 0.75

After sales service 0.11 0.01 0.66

Deceiving reviews 0.11 0.004 0.10 0.75

Safety and security 0.24 0.008 0.034 0.002 0.73

Table 7 Discriminant Validity

4.10. Overall Model Regression

Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate

1 .603a 0.364 0.354 0.51514

Table 8 Model
Summary

Coefficients

Model Unstandardized Standardized t Sig.

Coefficients Coefficients

B Std. Error Beta

26 | P a g e

1 (Constant) .824 .275 3.000 .003

Return policy .031 .045 .035 .687 .493

After sales service .178 .052 .188 3.441 .001

Deceiving reviews .211 .047 .241 4.459 .000

Safety and .379 .045 .437 8.400 .000

security

Table 9 Regression Analysis

According to (Jafari et al., 2015) if the P-value for the hypothesis is below 0.05, the hypothesis is
accepted which is also further supported by (Pmp, 2021) and (John et al., 2018).

The hypothesis (H1) on return policy has a negative effect on, was rejected (β = 0.031, p-value
0.493). The hypothesis (H2) on after sales service has a positive effect on online shopping risk,
was accepted (β = 0.178, p-value 0.001). The hypothesis (H3) on deceiving reviews has a
positive effect on online shopping risk, was accepted (β = 0.221, p-value 0.000). The hypothesis
(H4) on safety and security has a positive effect on online shopping risk, was accepted (β =
0.379, p-value 0.000).

Since the value for after sales service, deceiving reviews, safety and security are less than 0.05,
as it can be seen in the table above, all these hypotheses stated in the literature of this study are
been accepted. However, return policy has been rejected.

4.11. Hypothesis Analysis

T Statistics P Values Hypothesis

H1 RP  OSR 0.687 0.493 Not Supported

27 | P a g e

H2 AS  OSR 3.441 0.001 Supported

H3 DR  OSR 4.459 0.000 Supported

H4 SS  OSR 8.400 0.000 Supported

Table 10 Hypothesis analysis

Individual Regression Analysis
Return policy
The hypothesis that return policy has a significant positive effect on online shopping, was tested
through simple linear regression and the summarized results are presented below:

Coefficients

Model Unstandardized Standardized T Sig.

Coefficients Coefficients

B Std. Beta
Error

1 (Constant) 3.708 .144 25.724 .000

Return policy .024 .056 .027 .424 .672

Dependent Variable: Online shopping, R2 = .001; Adjusted R2 = -0.003

Table presents regression results of return policy in the online shopping. R2 = .001; Adjusted R2
= -.003. The p-value is > 0.05 hence return policy do not effect on online shopping

After sales service

The hypothesis that after sales service has a significant positive effect on online shopping, was
tested through simple linear regression and the summarized results are presented below:

Coefficients
28 | P a g e

Model Unstandardized Standardized t Sig.

Coefficients Coefficients

B Std. Error Beta

1 (Constant) 2.636 .199 13.239 .000

After sales service .327 .057 .345 5.788 .000

Dependent Variable: Online shopping, R2 = .119; Adjusted R2 = .115

Table presents regression results of after sales service in the online shopping. R2 = .119;
Adjusted R2 = .115. The p-value is < 0.05 hence after sales service has an effect on online
shopping
Deceiving reviews

Coefficients

Model Unstandardized Standardized t Sig.

Coefficients Coefficients

B Std. Error Beta

1 (Constant) 2.553 .213 12.004 .000

Deceiving .303 .052 .346 5.801 .000

reviews

Dependent Variable: Online shopping, R2 = .119; Adjusted R2 = .116

29 | P a g e

Table presents regression results of deceiving reviews in the online shopping. R2 = .119;
Adjusted R2 = .116. The p-value is < 0.05 hence deceiving reviews has an effect on online
shopping

Safety and security

Coefficients

Model Unstandardized Standardized t Sig.

Coefficients Coefficients

B Std. Error Beta

1 (Constant) 2.184 .181 12.054 .000

Safety .427 .048 .492 8.905 .000

security

Dependent Variable: Online shopping, R2 = .242; Adjusted R2 = .239

Table presents regression results of safety and security in the online shopping. R2 = .119;
Adjusted R2 = .116. The p-value is < 0.05 hence safety and security has an effect on online
shopping.

Chapter 5: Conclusion, limitation and recommendation

5.1 Conclusion and discussion

The stock images being used in advertisements are generic, outdated, corny, irrelevant, or
downright confusing for example companies use stock images in their ads showing over-
enthusiastic employees/customers or images depicting the smiley faces during a professional
30 | P a g e

meeting, may communicate a wrong message to the viewers, such images are unconvincing and
cannot be related towards Advertising to the theme of ad (Hall, 2007; Mott-Stenerson, 2008).
The study was conducted to measure the effectiveness of an ad in which stock photography was
used. Results of all the hypotheses were substantiated and discussed as under:

The hypothesis that return policy has an impact on online shopping risk has been rejected.
(Refer to Table 9).

The hypothesis related to the after sales service has an impact on online shopping risk was
substantiated (Refer to Table 9).

The hypothesis related to the deceiving reviews has an impact on online shopping risk was
substantiated (Refer to Table 9).

The hypothesis related to the safety and security has an impact on online shopping risk was
substantiated (Refer to Table 9).

Managerial Implications

Marketers should consider the results of this study important for their advertisements. As results
suggested there is a positive effect of independent variables like entertainment, visual appeal,
information, and credibility on attitude towards advertising. These factors should be considered
while creating an advertisement specifically when they need to select a stock photograph. When
marketers develop a marketing strategy for their brand they must understand which factor is their
strength, and they should select an appropriate stock photograph on the basis of that factor.
Focusing on multiple factors may confuse consumers. Marketers shouldn’t use such photographs
which seem generic or such images which can produce multiple meanings in the minds of
consumers.

Limitation and Future Research

In this study, online shopping consumers were taken from Pakistan mainly Karachi. Five
variables have been, four of them are independent and one is dependent.
31 | P a g e

References
Ahn, J. S., & Sohn, S. Y. (2009). Customer pattern search for after-sales service in
manufacturing. Expert Systems with Applications, 36(3), 5371-
5375. https://doi.org/10.1016/j.eswa.2008.06.061

Ansari, J., Khalid, F., Jalees, D. T., & Ramish, M. S. (2017). Consumer’s Attitude towards
Ramadan Advertising. South Asian Journal of Management Sciences, 11(1), 15–31.
https://doi.org/10.21621/sajms.2017111.02

Banerjee, S., & Chua, A. Y. (2014). Understanding the process of writing fake online
reviews. Ninth International Conference on Digital Information Management (ICDIM
2014). https://doi.org/10.1109/icdim.2014.6991395

Bhatti, A., Saad, S., & Salimon, M. G. (2019). The influence of risks on online shopping
behaviour in Pakistan. International Journal of Innovation, Creativity and Change, 10(9), 310–
327.

Cao, Y., & Gruca, T. S. (2004). The influence of pre- and post-purchase service on prices in the
online book market. Journal of Interactive Marketing, 18(4), 51–62.
https://doi.org/10.1002/dir.20018

Cheah, J. H., Sarstedt, M., Ringle, C. M., Ramayah, T., & Ting, H. (2018). Convergent validity
assessment of formatively measured constructs in PLS-SEM: On using single-item versus
multi-item measures in redundancy analyses. International Journal of Contemporary
Hospitality Management, 30(11), 3192–3210. https://doi.org/10.1108/IJCHM-10-2017-
0649
32 | P a g e

Fornell, C., & Larcker, D. F. (1981). Structural Equation Models with Unobservable Variables
and Measurement Error: Algebra and Statistics. Journal of Marketing Research, 18(3), 382–388.
http://doi.org/10.2307/3150980

George, D., & Mallery, P. (2003). SPSS for Windows Step by Step: A Simple Guide and
Reference, 11.0 Update. Boston, MA: Allyn y Bacon. http://doi.org/10.1177/1073191112446654

Hassan, E. A., & Meziane, F. (2019). A survey on automatic fake news identification techniques
for online and socially produced data. 2019 International Conference on Computer, Control,
Electrical, and Electronics Engineering
(ICCCEEE). https://doi.org/10.1109/iccceee46830.2019.9070857

Hajek, P., Barushka, A., & Munk, M. (2020). Fake consumer review detection using deep neural
networks integrating word embeddings and emotion mining. Neural Computing and
Applications, 32(23), 17259-17274. https://doi.org/10.1007/s00521-020-04757-2

Hadi, N. U., Abdullah, N., & Sentosa, I. (2016). Making sense of mediating analysis: A
marketing perspective. Review of Integrative Business and Economics Research, 5(2), 62-76.

Hair, J. F. J., Black, W. C., Babin, B. J., & Anderson, R. E. (2009). Structural Equation
Modeling Basics. In Multivariate Data Analysis.

Huang, J. (2019). Influence of After-sales Service Quality Offered by E-commerce Enterprises

on Customer Repurchase Intention. Academic Journal of Business & Management ISSN,
1(2), 2–36. https://doi.org/10.25236/AJBM.190118

Jain, M. (2021). Fake news detector: A dynamic approach for detecting fake news using neural
network. https://doi.org/10.36227/techrxiv.15002652.v1

Jayaweera, T. (2015). Impact of Work Environmental Factors on Job Performance, Mediating

Role of Work Motivation: A Study of Hotel Sector in England. International Journal of
Business and Management, 10(3), 271–278. https://doi.org/10.5539/ijbm.v10n3p271
33 | P a g e

Mohajan, H. K. (2017). TWO CRITERIA FOR GOOD MEASUREMENTS IN RESEARCH:

VALIDITY AND RELIABILITY. Annals of Spiru Haret University. Economic Series,
17(4), 59–82. https://doi.org/10.26458/1746

Moshrefjavadi, M. H., Rezaie Dolatabadi, H., Nourbakhsh, M., Poursaeedi, A., & Asadollahi, A.

(2012). undefined. International Journal of Marketing
Studies, 4(5). https://doi.org/10.5539/ijms.v4n5p81

Malbon, J. (2013). Taking fake online consumer reviews seriously. Journal of Consumer

Policy, 36(2), 139-157. https://doi.org/10.1007/s10603-012-9216-7

THAM, K. W., DASTANE, O., JOHARI, Z., & ISMAIL, N. B. (2019). Perceived Risk Factors
Affecting Consumers’ Online Shopping Behaviour. The Journal of Asian Finance, Economics
and Business, 6(4), 246–260. https://doi.org/10.13106/jafeb.2019.vol6.no4.249

Rahimnia, F., & Hassanzadeh, J. F. (2013). The impact of website content dimension and e-trust
on e-marketing effectiveness: The case of Iranian commercial saffron corporations.
Information & Management, 50(5), 240–247. https://doi.org/10.1016/j.im.2013.04.003

Salminen, J., Kandpal, C., Kamel, A. M., Jung, S., & Jansen, B. J. (2022). Creating and detecting
fake reviews of online products. Journal of Retailing and Consumer Services, 64,
102771. https://doi.org/10.1016/j.jretconser.2021.102771

Setyanta, B., Kadi, D. C. A., Wahyudi, D., Kartinah, ., Dwiwinarno, T., & Sarumaha, A. S.
(2020). The Role of After-sales Service for Online Shopping Loyalty. July, 64–69.
https://doi.org/10.5220/0009878100640069

sparkle.pdf. (n.d.).

Wiswanatha Mada, I. G., & Putri, P. (2021). Technology acceptance model (TAM) for analysis
of online banking use in PT bank Rakyat Indonesia, Tbk. Gianyar branch. Proceedings of
the 3nd Warmadewa Research and Development Seminar, WARDS 2020, 21 December
34 | P a g e

2020, Denpasar-Bali, Indonesia. https://doi.org/10.4108/eai.21-12-2020.2305843

Appendix
Questionnaire

Demographics

1. Gender

a. Male b. Female

2. Age

a. Below 20 years b. 21 – 30 years

c. 31 – 45 years d. 45 above

3. Marital Status

a. Single b. Married

c. Separated d. Divorced

4. Education

a Matric/ O-Levels b. Intermediate/ A-Levels

c. Undergraduate/ Bachelors d. Post-graduate/ Masters

5. Employment status

a. Employed b. Un-employed c. Self-employed

35 | P a g e
Serial Variable
1 Online shopping
risk
2 Return policy
3 After sales service
Type Questions
a) Using Internet for online shopping is easy
Dependent
b) I shop online as return policies are
mentioned
c) Online shopping gives facility of easy
payment methods
d) I find online shopping compatible with
my life-style
e) Online shopping provides easy after sales
service
f) I verify reviews on the website
1. I often shop online
Independent
2. I only purchase online if there is
money back guarantee
3. I read the return policy before
purchasing online
4. I purchase online if there is a return
policy without shipment cost involved
5. I find in convenient to return products
when shop online
a. The information and advice available at
Independent
service center is useful
b. The proximity of service center is
suitable
c. The operating hours are convenient
d. The service delivered is as per promise
36 | P a g e

e. Technical services staff is available at

the service center

f. The service quality is consistent

g. Good customer service is provided

during the warranty period

h. The defects are identified immediately

a. I ensure quality while searching for a

4 Deceiving reviews Independent
product
b. Information on product usage is correct

c. I gather more information on similar

products
d. I verify a similar experience

e. I verify the brand reputation among

reviewers

f. I explore the logistic service

g. I view the real pictures of the product

1. The online shop will protect my

5 Safety and security Independent
private information
2. I have security on the online store that
I am visiting
3. This online store make me feel
comfortable
4. I trust online stores for purchasing
products
5. I believe that the online transaction is
safe.
37 | P a g e