FACTORS INFLUENCING THE SALE OF LUXURY GOODS ON

E-COMMERCE PLATFORMS IN NAIROBI, KENYA

BY

URVASHI KIRAN CHAVDA

UNITED STATES INTERNATIONAL UNIVERSITY- AFRICA

SUMMER 2023
 FACTORS INFLUENCING THE SALE OF LUXURY GOODS ON E-
COMMERCE PLATFORMS IN NAIROBI, KENYA

BY

URVASHI KIRAN CHAVDA

A Research Project Report Submitted to The Chandaria School of Business in

Partial Fulfillment of The Requirement for the Degree Masters in Business
Administration (MBA).

UNITED STATES INTERNATIONAL UNIVERSITY- AFRICA

SUMMER 2023
 STUDENT'S DECLARATION

I , Urvashi Chavda declare that this is my original work, and this work has not been
submitted to any other institution apart from United States International university Africa.

Signed: ^ Date:...56josj..2,023

Urvashi Chavda- 651182

The project has been presented for examination with my approval as the appointed
supervisor.

Signed:

Dr. Kepha Njenga

.ate: 0^1^
Signed: dirallSa^...
V
Date: S^. '
Dean, Chandaria School of Business

ii
 COPYRIGHT

All rights reserved. No part of this document may be recorded or transmitted in any way
whether electronically or mechanically if permission is not obtained from the author. Every
text, image or table is protected by copyright.

iii
 ABSTRACT

Luxury goods are a want or need that are not essential for the basic survival of a human
being and e-commerce platforms in Nairobi, Kenya desire to increase the sales of the luxury
goods online. There are 64 e-commerce platforms in Nairobi, Kenya. This implies that the
e-commerce industry in Kenya is faced with increased competition and hence it is important
to establish what factors affect the sale of luxury goods in Nairobi, Kenya.

The general objective of the study was to establish the factors affecting the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya. The specific objectives of the study
were: to determine the extent to which the promotion strategy influences the sale of luxury
goods on e-commerce platforms in Nairobi. To evaluate the extent to which Technology
adapted influences the sale of luxury goods on e-commerce platforms in Nairobi and to
examine the extent to which the nature of the product influences the sale of luxury goods
on e-commerce platforms in Nairobi.

The study adopted a descriptive research design. The main focus of the study were the
general managers and the marketing managers of the e-commerce platforms in Nairobi,
Kenya that are globally listed by the website Statista that is regulated by the German
teleservices act. The study used a census approach and collected primary data which was
obtained through questionnaires. Pre-testing of the questionnaires was done in order to
determine how reliable it is. Data was then analyzed using quantitative techniques which
included mean, standard deviation, frequency and percentages. A correlation analysis was
done to establish the strength of the influence the independent variable has on the dependent
variable. Multiple regression analysis was done to determine the factors that influence the
sale of luxury goods on e-commerce platforms in Nairobi, Kenya. SPSS version 27 was
used to analyze the data which was then presented in tables, pie charts and bar graphs.

The study found that the promotion strategy implemented has a strong positive correlation
with the increase in the sale of luxury goods on e-commerce platforms in Nairobi, Kenya.
The regression results revealed that adequate funds allocated on the promotion strategy has
a significant relationship on the increase in sales of the luxury goods on the e-commerce
platforms (traditional media β=0.108, P=0.014=) (digital media β=0.153, p=0.075). It was
also established that e-commerce platforms in Nairobi, Kenya focus on high impact
advertisement to increase the sales of luxury goods and that they are neutral about trying
new promotion strategies to reach their target audience.

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It was also established that technological adaptation has a strong positive correlation to
increase the sale of luxury goods in Nairobi, Kenya. From the regression equation, it was
determined that the use of 3D models to virtually demonstrate the products online on e-
commerce platforms increases platform usage (β=0.413, p=<0.001) and the relationship
between the using 3D virtual models and the usage of the platform is statistically
significant. it was also established that 95% of the platforms have not been hacked currently
and the majority of the payment on the platforms is done via m-pesa, debit and credit card.

Additionally, product attributes and increase in the sale of luxury goods had a strong
positive relationship as this was shown by (β=0.410, p=<0.001). It was observed that there
is a significant relationship between offering products with high brand equity and an
increase in revenue. It was also noted that the relationship between providing delivery
services to obtain more revenue and aligning with the company budget has a statistically
significant relationship.

The findings of the study recommend that e-commerce platforms should continue to use
digital promotion tools such as Instagram and Facebook and can invest in those social
media categories to increase their sales on the platform. They should also focus on
traditional media tools such as billboards and posters more to better promote their platform.
It is also recommended that they incorporate the use of 3D virtual models of the products
online to provide a detailed and tangible feel of the product online as this would enable a
larger platforms usage and furthermore increase the sales of luxury goods online. The
findings also recommend that platforms should offer products with high brand equity to
increase their sales and companies should focus on increasing their budget to accommodate
delivery and after sales services as this has a positive significant impact on the increase of
sales of luxury goods on e-commerce platforms in Nairobi, Kenya.

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 ACKNOWLEDGEMENT

I would like to acknowledge God, the Almighty, for guiding me and providing strength to
complete this thesis. Special gratitude goes to my professor Dr. Kefah Njenga for providing
me with guidance in the right direction.

I would also like to acknowledge my family for continuously supporting me throughout the
research study.

vi
 DEDICATION

This work is dedicated to my mother and father and lecturer Dr. Maureen Kangu for their
great support and guidance.

vii
 TABLE OF CONTENTS

STUDENT’S DECLARATION ........................................................................................ ii

COPYRIGHT .................................................................................................................... iii
ABSTRACT ....................................................................................................................... iv
ACKNOWLEDGEMENT ................................................................................................ vi
DEDICATION.................................................................................................................. vii
TABLE OF CONTENTS ............................................................................................... viii
LIST OF TABLES ............................................................................................................. x
LIST OF FIGURES. ......................................................................................................... xi
CHAPTER ONE ................................................................................................................ 1
1.0 INTRODUCTION ........................................................................................................ 1
1.1 Background of the Study ..................................................................................... 1
1.2 Statement of The Problem ................................................................................... 5
1.3 General Objective ................................................................................................ 6
1.4 Specific Objectives .............................................................................................. 6
1.5 Significance of the Study ..................................................................................... 7
1.6 Scope of the Study ............................................................................................... 7
1.7 Definition Of Terms ............................................................................................. 7
1.8 Chapter Summary ................................................................................................ 8
CHAPTER TWO ............................................................................................................... 9
2.0 LITERATURE REVIEW............................................................................................ 9
2.1 Introduction .......................................................................................................... 9
2.2 The Extent to Which Promotion Strategy Influences the Sale of Luxury Goods
on E-Commerce Platforms ............................................................................................... 9
2.3 The Extent To Which The Technology Adapted Influences The Sale Of Luxury
Goods On E-Commerce Platforms ................................................................................ 15
2.4 The Extent To Which The Product Attributes Influence The Sale Of Luxury
Goods On E-Commerce Platforms ................................................................................ 20
2.5 Conceptual Framework ...................................................................................... 26
2.6 Chapter Summary .............................................................................................. 27
CHAPTER THREE ......................................................................................................... 28
3.0 RESEARCH METHODOLOGY ............................................................................. 28
3.1 Introduction ........................................................................................................ 28

viii
 3.2 Research Design................................................................................................. 28
3.3 Population and Sampling Design ....................................................................... 28
3.4 Data Collection Method ..................................................................................... 29
3.5 Research Procedure ............................................................................................ 30
3.6 Data Analysis Methods ...................................................................................... 30
3.7 Chapter Summary .............................................................................................. 31
CHAPTER FOUR............................................................................................................ 32
4.0 RESULTS AND FINDINGS ..................................................................................... 32
4.1 Introduction ........................................................................................................ 32
4.2 Demographic Information .................................................................................. 32
4.3 The Extent to Which Promotion Strategy Affects the Sale Of Luxury Goods On
E-Commerce Platforms in Nairobi, Kenya .................................................................... 34
4.4 The Extent to Which The Technology Adapted Affects The Sales of Luxury
Goods on E-Commerce Platforms In Nairobi, Kenya. .................................................. 40
4.5 The Extent To Which The Product Attributes Affect The Sale Of Luxury Goods
On E-Commerce Platforms In Nairobi, Kenya. ............................................................. 45
4.6 Chapter Summary .............................................................................................. 49
CHAPTER FIVE ............................................................................................................. 50
5.0 DISCUSSION, CONCLUSION AND RECOMMENDATION ............................. 50
5.1 INTRODUCTION ............................................................................................. 50
5.2 Summary ............................................................................................................ 50
5.3 Discussion .......................................................................................................... 52
5.4 Conclusions ........................................................................................................ 59
5.5 Recommendations .............................................................................................. 60
References ......................................................................................................................... 62
APPENDICES .................................................................................................................. 80
Appendix I: Introduction Letter ..................................................................................... 80
Appendix II: IRB Approval Letter ................................................................................. 81
Appendix III: Respondents Consent Form .................................................................... 82
Appendix IV: Questionnaire .......................................................................................... 83
Appendix V: Debrief form ............................................................................................. 87
Appendix VI: NACOSTI Permit ................................................................................... 88
Appendix VII: List of ecommerce platforms in Nairobi, Kenya ................................... 90

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 LIST OF TABLES

Table 3.1: Pilot Test Results .............................................................................................. 30

Table 4 1:Level of Education ............................................................................................. 33

Table 4 2 Length of Operation ........................................................................................... 34

Table 4 3: Influence of Promotional Strategy on The Sale of Luxury Goods on E-Commerce

Platforms in Nairobi, Kenya .............................................................................................. 36

Table 4 4: Correlation for Promotion on Traditional media and Alignment with Company
Budget ................................................................................................................................ 37

Table 4 5: Coefficients for Digital Promotion and Aligning with Budget ........................ 38

Table 4 6:Model Summary for Promotion Spend and Aligning with Budget Allocation . 39

Table 4 7: ANOVA for Promotion Spend and Aligning with Budget Allocation ............. 40

Table 4 8: Type of Payment Method Used ........................................................................ 42

Table 4 9: Influence of Technology Adapted on The Sale of Luxury Goods on E-Commerce

Platforms in Nairobi, Kenya .............................................................................................. 43

Table 4.10: Correlation of Using 3D Models and Increase in Website Usage .................. 44

Table 4 11 Model Summary for Use of 3D Models to Demonstrate Increase Website Usage
............................................................................................................................................ 44

Table 4 12 ANOVA for Use of 3D Models to Demonstrate Increase of Website Usage .. 45

Table 4 13: Influence of Product Attributes on The Sale of Luxury Goods on E-Commerce
Platforms in Nairobi, Kenya .............................................................................................. 47

Table 4 14 Correlation for Providing Delivery to Enable the Company to Obtain More Sales
and Allocating with Budget ............................................................................................... 47

Table 4 15: Model Summary for Platform Offering High Brand Equity and Increase in
Revenue.............................................................................................................................. 48

Table 4 16: ANOVA for Platform Offering High brand equity and Increase inRevenue . 48

x
 LIST OF FIGURES

Figure 4. 1 Years Worked in the Organization .................................................................. 34

Figure 4. 2 Digital Media Tools Usage .............................................................................. 35

Figure 4. 3 Traditional Media Tools Usage ....................................................................... 35

Figure 4. 4: Frequency of Campaign ................................................................................. 36

Figure 4. 5: Payment Required Prior to Sale ..................................................................... 40

Figure 4. 6 Status on Hacking of E-Commerce Platform .................................................. 41

Figure 4. 7: 3D Virtual Modelling ..................................................................................... 41

Figure 4. 8 Providing Delivery Upon Sale of Goods ......................................................... 45

Figure 4. 9 Provision of After Sales Services (Repair and Maintenance) ......................... 46

xi
 CHAPTER ONE

1.0 INTRODUCTION

1.1 Background of the Study

E-commerce is classified as the buying and selling of goods over the internet (Turban,
Outland, King, Lee, & Liang, 2018). Luxury goods are goods that are not necessary to
survive but are products that are desired, in other words, it is a want and not a need
(Pettinger, 2019). They include items such as designer handbags, perfumes, accessories,
cars, jewelry, designer clothing and shoes.

From a global perspective, E-commerce platforms have become a trend all over the world
as they serve the purpose of being the primary channel to reach customers. This trend is
ignited by the adoption of digitalization as many luxury brands are heavily investing on e-
commerce platforms and aiming to make it better by the day to ensure they reach as many
customers as possible and customers are able to use their platforms with utmost ease and
comfort (Thakur, 2021). Turban et al. (2018) stated that globally, firms decieded to adopt
to e-commerce to sell their products as it gave them a competitive edge.

However, this is facilitated by an omni-channel approach as luxury brand producers

integrate into the online world they still have not left their physical world as they do have
retail outlets and they currently are said to enjoy the benefits of both the worlds (Venkat et
al., 2022). To facilitate this, Ozuem & Willis (2022) state that a marketing strategy widely
adopted by luxury brands globally is influencer marketing, since influencers use their vast
online followership to promote brands, this has become ideal for most marketers who work
for luxury brands as this provides a faster rate of penetration for the products into the market
while doing collaborations with influencers.

Hoque & Bashaw (2020) state that on a global level, some of the challenges still faced by
luxury brands are with customer experience as they now have to compete with the physical
world to provide a seamless and engaging experience to their customers through a digital
e-commerce platform. Fiala (2021) believes that although online platforms have their own
advantage, they will never be able to compete with the street style selling where salesperson
speak with potential customers and engage them in a conversation to purchase the products
as this makes the customers feel heard and online platforms would not be able to match
that.

1
Due to counterfeit products that are circulated in the market, gaining consumer trust still
remains a global issue as all firms would want to establish that their product is of the best
quality and is assured to be authentic (Sal’nikova & Kudimova, 2021). On the other hand,
One of the other concerns with the global luxury market is that there is still a portion that
cannot afford the luxury goods and hence this brings economic disparity globally, Shewani
& Chan (2022) say that it has been done intentionally in order to ensure exclusivity and
fulfill the luxury brand function which is in simple terms to make more money by selling
less items.

In the African continent, there has been said to be a rise in demand for luxury goods
products, this has been a result of the emerging middle class; many middle-class consumers
are now able to afford the brands both online and offline as many luxury goods brands have
expanded to this continent (Moreno & Jiménez, 2019). There has also been one more reason
for this increase in demand, which is the use of technology. Online sales of luxury goods
increased as Africa experience a rapid digital transformation with an increased smartphone
usage and a rapid internet penetration, This has also enabled a lot of companies to look
forward to investing in Africa as they would like to expand and grow their market and
customer base (Africa Union Commission[AUC], 2021).

Africa is quite rich in culture and resources and therefore local craftsmen are now
leveraging over this opportunity by creating unique luxury artisanal products and selling
them on e-commerce platforms and in local shops (Shih & Agrafiotis, 2020). However, in
some regions in Africa, Luke & Mageto, (2023) believe that infrastructure challenges
appear to be a limitation as when it comes to the transport and logistics of the product as in
some African countries there are no adequate facilities to facilitate proper transport of
luxury goods from one place to another.

Payment systems in some African countries may still be a challenge for e-commerce
platforms selling luxury items as there is limited access to secure online payments. In
addition to that, for items such as clothing and accessories, there is a massive challenge for
counterfeit products in the African market and this has affected the trust of consumers.
There is also a rising concern of economic inequality as state that in the African region the
wealth distribution ratio is uneven and this leads to increasing economic disparity
(Shvandar & Khomyakova, 2022).

2
Socio culturally, in Africa, cultural heritage is of high value and meaning and therefore it
is believed that luxury brands looking into investing in Africa must do so while protecting
and promoting African identity (Hinson et al., 2022). They state that for some brands it is
still a challenge as they are trying to find the right balance of making a global appeal of the
brand while still ensuring to have a polycentric cultural orientation towards the African
continent and therefore brands would therefore have to structure their marketing strategy
accordingly for some countries so that they be in alignment with how the consumers want
to appeal to.

As the luxury brands aim to further penetrate into the African continent, the East African
region has witnessed a tremendous increase in the sale of luxury goods within the market
especially online, this may be due to the fact that the region is home to many tech startups
which fosters the growth of e-commerce platforms and increases the accessibility that
individuals have to purchase luxury goods (Daniels et al., 2021).

To our surprise, the tourism industry has also contributed quite a lot in the growing demand
of luxury goods in East Africa as the region attracts affluent tourists from various places
around the world who seek a unique experience when it comes to purchasing luxury items
and therefore they have also initiated the growth of online purchases of luxury goods items
from e-commerce platforms by demonstrating how they do so back in their home country
(Amuhaya & Degterev, 2022).

As East Africa embraces sustainability, there is a rising demand for sustainable luxury as
consumers are drawn towards eco-friendly and ethically sourced authentic products. E-
commerce platforms must use this information as this would enable them to further grow
their market into the region (Demena & Bergeijk, 2022). Marketing communication and
promotion strategies can also be centered towards this so as this would enable the customers
to be informed and aware of the practices of e-commerce platforms on how demonstrate
authenticity and sustainability if at all they do so(Wilson Ozuem & Willis, 2022).

Despite the advancements in the sale of luxury good items in East Africa, logistics and
infrastructure still pose to be a challenge in this region as ( International Trade Centre [ITC],
2020) is of the opinion that in regard to the delivery of luxury items there has to be better
facilities in the region so that goods are not damaged and e-commerce platforms do not
incur losses. Along with this, the region bears complex customs and import regulations to

3
protect against dumping may cause luxury goods items to be even more expensive as this
would add a cost towards the luxury goods e-commerce supply chain (Bickel, 2021).

As this may be a challenge Kenya also faces as a country, It being a pioneer in championing
and facilitating and providing online payment solutions such as M-pesa has become a great
advantage for the country (Kusimba, 2021). This has attracted many foreign direct investors
of which many of them deal in selling luxury items on e-commerce platforms as it is
noticeable that they can receive their income from the sales much quicker and faster and
the ratio of a safe payment gateway is highly guaranteed (Ndemo & Weiss, 2016).

Kenya also champions in building a vast digital hub for tech startups and the countries love
for embracing digitalization has firmly aided the growth of e-commerce platforms in Kenya
making this an ideal ecosystem to facilitate the sale of luxury good items in Kenya
increasing the lifespan of these platforms enabling them to harness more growth (Muathe
et al., 2022).

A key driver of success in enabling the increase in sale of luxury goods on e-commerce
platforms in Kenya is the rise in the middle class as they now have a higher spending power
and more disposable income which enables them to purchase more from e-commerce
platforms in Kenya (Ndemo & Weiss, 2016). In Addition to that, they also believe that
Kenyans are more receptive towards innovation and change and therefore there is a growing
culture that is created to utilize e-commerce platforms majority of the times to purchase
products.

However, there is a rise in cybercrime in Kenya which has led to various cyber security
issues and this has caused a lot of fear in the minds of consumers and has affected the usage
of e-commerce platforms to purchase luxury items. Customers are now not able to build
that trust on whether they will receive the items they have placed an order for and therefore
this is a major challenge e-commerce platforms must mitigate in order to not inhibit their
platforms from growing (Leonard et al., 2020).

Despite the cyber security concerns in Kenya, Nairobi city has seen a steady growth in the
usage of e-commerce platforms in Nairobi, this may be attributed to the face paced culture
Nairobians have and how receptive they are towards technology as this has enabled them
to build that level of trust with not only e-commerce platforms in Nairobi but also social
commerce (Anyang & Maina, 2019). Although they may face a sense of concern towards
the purchase, they are still highly inclined to purchase luxury goods from e-commerce

4
platforms as this may be an advantage to e-commerce platforms and demonstrate to them
that there is still scope of growth and expansion (Kusimba, 2021).

Due to the taxes imposed which further led to an increase in prices faced within the supply
chain, the prices of luxury good items tend to rise and as this may be a concern for some,
Iqani, (2022) believes that luxury good consumer are not price sensitive and therefore the
e-commerce platforms may have some leeway in increasing their prices and still being able
to make sales.

Nairobi is also faced with a high economic disparity making it a niche market for the sale
of luxury goods on e-commerce platforms says Anyang & Maina, (2019). Though there
has been an increase in a lot of new technology in Nairobi, one of them being 3D virtual
modelling (Leonard et al., 2020), Many e-commerce platforms have attempted to adapt this
technology but specifically in Nairobi, there is no research conducted to understand the
penetration of this technology in e-commerce platforms.

Schoeman et al. (2021) argue that it is essential to establish a trustworthy relationship with
an online consumer by promoting higher consumer privacy so that they are able to purchase
items with ease that their data (such as; mode of payment, amount paid and items chosen)
is safe and cannot be tampered with. Bai et al., (2022) ascertain that some products cannot
be sold online since they require a lot more verification and validation as customers seek
to obtain the look and feel of the product before paying a premium price for it. Hence, this
implies that e-commerce platforms must comprehend the dynamics that the product
attributes have towards their sale on e-commerce platforms.

Given the importance of luxury goods being sold online through e-commerce platforms
and Kenya’s growing conscious of the luxury market, there is a need to understand the role
played by the marketing strategy, the technology factors and the product attribute factors
in selling luxury goods on e-commerce platforms. This study seeks to establish the factors
influencing the sale of luxury goods on e-commerce platforms in Nairobi, Kenya.

1.2 Statement of The Problem

On a global level, Organizations such as tesla which is a company that dominates the
rapidly growing electric car market is able to sell their cars directly to consumers online
through their website. (Stenquist, 2022). The American fashion brand Michael Kors is able
to generate an increasing amount in revenue from online sales through e-commerce
according to the Ecommerce Data Base (2021). According to (Mckinsey, 2021), fashion

5
brands in the United Kingdom have been able to anchor their space into the online market
by experiencing a rise in the usage of e-commerce platforms to purchase fashion designer
items.

Nimo (2019) ascertains that there is a drawback on the growth of luxury fashions brands to
sell goods online which could be denominated by the prevalence of weak brand value. In
Kenya, e-commerce platforms have strived to tap into the luxury market and sell the
branded and designer products online, but they have not been able to capture the market as
luxury brands have brought minimal revenue from online platforms based on the
Ecommerce Data Base (2021).

Organizations such as Inchcape which is a global automotive distributor of luxury cars such
as Jaguar and Land rover tried to sell cars online in Kenya but have been unsuccessful
stated by Sharpe (2021). The CEO of Salute I-world which is an authorized seller of apple
products in Kenya mentioned that the technological infrastructure does not allow luxury
goods to be sold online since some of the e-commerce platforms cannot be trusted (Kivuva,
2021).

However, it is not known what factors drive the sale of luxury goods on e-commerce
platforms in Nairobi, Kenya and whether the e-commerce platforms in should invest in
improving their technology to facilitate the sale of luxury goods. Therefore, this study seeks
to determine the effectiveness of the current technology employed, promotion strategy and
the ratio to which it facilitates the sale of luxury goods.

1.3 General Objective

The main objective of this study was to explore the factors that influence the sale of luxury
goods on e-commerce platforms in Nairobi.

1.4 Specific Objectives

The specific objectives that guided the study include the following:

1.4.1 To determine the extent to which Promotion strategy influences the sale of luxury
goods on e-commerce platforms in Nairobi.
1.4.2 To evaluate the extent to which the Technology adapted influences the sale of luxury
goods on e-commerce platforms in Nairobi.
1.4.3 To examine the extent to which the Product attributes influences the sale of luxury
goods on e-commerce platforms in Nairobi.

6
1.5 Significance of the Study

1.5.1 Owners of E-commerce Platforms

This study provides the owners of the e-commerce platforms with information that would
guide them to understand how they can structure themselves accordingly to better facilitate
the sales in the luxury segment which in their better interest allows them to make more
profit for the firm and expand their market.

1.5.2 Managers of E-commerce Platforms

Managers would be able to gauge the dynamics of e-commerce platforms as they can
leverage this research by understanding whether to invest in digital or traditional media
when it comes to choosing an advertisement promotional strategy or which payment
solution to apply in their ecommerce platform enabling them to formulate, implement and
execute key strategic plans on how to approach their target consumers.

1.5.3 Students

Marketing students would also be able to benefit from the study as they can expand their
knowledge and understanding on how to market the product and apply an appropriate
solution to specifically e-commerce marketing related problems

1.6 Scope of the Study

The objective of the study was to establish Factors influencing the sale of luxury goods on
e-commerce platforms in Nairobi, Kenya. The study was conducted on the e-commerce
platforms operational in Nairobi County, Kenya. The study target population will be the
marketing managers and employees at e-commerce firms. A questionnaire was used for
data collection. The study was conducted between September 2022 and December 2022.
The study was prone to the limitation of reluctancy to provide information, however this
was mitigated by informing the target population on the benefit of this survey and further
complying to their decision to participate.

1.7 Definition Of Terms

1.7.1 E-commerce

E-commerce (electronic commerce) refers to the purchasing and selling of goods and
services, as well as the transmission of payments and data, over an electronic network, most
commonly the internet (Turban, Outland, King, Lee, & Liang, 2018).

7
1.7.2 E-commerce Platforms

An e-commerce platform is a software application that allows both the seller and the
customer to participate (Bloomenthal, 2021).

1.7.3 Luxury Goods

A luxury good (or upmarket good) is defined as a want and a desire. it is a good that is not
essential for a humans basic standard of living (Kim, 2019).

1.7.4 Nairobi

Nairobi is the capital city of Kenya and it is located in the south-central part of the country,
The coordinates of the Nairobi are: latitude -1.2863 and longitude 36.81723 (Country
Coordinate, 2022).

1.8 Chapter Summary

The chapter has reviewed the research introduction. The sections that have been discussed
in the introduction are background information, statement of the problem, the major goal
of the study, the specific goals of the study, study significance, study scope and definition
of key terms. The literature review is covered in chapter two which includes the influence
of marketing strategy, technology and product attributes on the sale of luxury goods on e-
commerce platforms in Nairobi, Kenya. Chapter three covers the research methodology
which consists of the research design, population and sampling design, data collection
methods, data collection procedure and data analysis method. Chapter four covers the data
analysis, interpretation and presentation and chapter five covers the summary of key
findings, discussion, conclusion and recommendations.

8
 CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

This chapter is a review of literature on factors that influence the sale of luxury goods on
e-commerce platforms in Nairobi County, Kenya. The study reviews literature on the
influence of Promotion strategy, technology adapted and product attributes on the sale of
luxury goods on e-commerce platforms Nairobi County, Kenya

2.2 The Extent to Which Promotion Strategy Influences the Sale of Luxury Goods
on E-Commerce Platforms

Promotion is essential to generating sales as it enables customers to be aware of the product

which then facilitates the sales funnel from awareness to conversion (Tracy, 2019). Chaffey
& Chadwick (2019) add that promotion enables potential customers to know about the
product which will further encourage and influence them to buy the product.

While selling goods online, firms need to structure their promotion strategy in order to
make it lucrative to purchase goods. Siepmann et al. (2022) determined that conducting
active promotion on social media influences customers to purchase the products from
websites. In addition to that, Ayman & Kaya (2020) state that consumers spend their time
heavily on social media platforms making them probable to actively purchase goods online.

Luxury goods merchants have begun to harness the power of advertising on social media
platforms as they believe that they can be able to quantify their promotion campaigns
(Mulyono et al., 2022). They further state that advertising plays a major role in reaching
out to potential customers as it includes informing and persuading individuals which can
enable them to purchase luxury goods online.

In order to create the promotional strategy which is the coordination of the seller initiated
efforts to create awareness about a product, the promotional mix is orchestrated with
elements which include: Advertising, direct marketing, sales promotion, interactive/
internet marketing, public relations, personal selling, sponsorship and event management
(Luck et al., 2020).

One of promotion tactic used to promote the sale of luxury goods involves email marketing,
it is a powerful tool as it bridges the consumers from traditional sales to online sales
(Kothand, 2019).Ang (2021) adds that it can be facilitated by obtaining the customer data

9
and further communicating to them using e-mails so that they can click on the link to
purchase goods online, he also believes that this is a powerful strategy in re-targeting
consumers so that they can purchase the luxury items since the trust is well formed in the
first place.

Jain (2022) states that promotional tactics such as price discounts have proven to be
somewhat ineffective as usually luxury consumers are said not to be price sensitive, due to
their lifestyle and standards of living they are able to afford expensive luxury items and
hence this strategy may not work for them. However, Zhou et al. (2022) oppose this
ideology since they believe that it also depends on the personality of the luxury good
consumer as they may have the disposable income to purchase the goods but they may still
opt to go for the luxury goods items that are discounted. Jain (2022) affirms that the
percentage of these individuals is quite minimal as luxury goods consumers are largely
classified not to be price conscious.

Personal selling is a promotion strategy where a sales representative would try to persuade
a customer face to face to purchase a product (Sahagun & Inc, 2019). Kumar et al. (2021)
believe that since e-commerce platforms are located online, personal selling cannot take
place. However within modern marketing theories, personal selling can now take place
virtually where representatives can virtually engage customers and sell the products online.
Luck et al. (2020) state that this would require an integrated marketing communication
approach where the advertisement of the personal selling would have to be conducted in
order to facilitate the virtual demos to promote the e-commerce platforms.

Another method where the personal selling approach could work for the ecommerce
platforms is where there is an event or exhibition where the representatives can then
physically demonstrate the website to customers and the products that it consists of. This
can also improve and strengthen the relationship with the customer which can further
promote brand loyalty (Kumar et al., 2021).

According to Njanja (2022), sky garden, which is an upcoming leader in the Kenyan e-
commerce space has appeared to be facing challenges while promoting their products.
Despite all the efforts that was put into fueling the brand awareness through optimizing
billboard advertisements, the company was only able to increase sales by a low margin,
however the platform is facing funding crisis, but the CEO affirms that there is still hope
and they are looking for a solution and strategy to market the platform.

10
In Kenya there is a rise in the marketing of e-commerce platforms since there is a huge
transition into selling products online (Uzo et al., 2018), Marketing strategists have applied
various promotional strategies with an omni channel approach which include traditional
media where they have urged consumers to use e-commerce platforms through Television,
radio, billboards, posters and flyers and digital media methods such as social media
integration, search engine optimization, email marketing and Bulk SMS’s (Soundaian,
2019).

Robert (2020) believes that It is essential to analyze the most effective promotional strategy
to be optimized and employed as the right strategy employed in the right direction will
enable marketers to generate recurring sales and further make profit. Ayman & Kaya (2020)
further ascertain that it is essential to understand our audience first which includes
determining their income segment profiles, their lifestyles and daily habits so that we can
align the promotional strategy directly towards them as well as use the media where the
audience is more likely to be found.

Chaffey & Ellis-Chadwick (2019) suggest that during the development of a promotional
strategy, one must select their target audience carefully as high-income segment and low
income segment consumers respond to promotion campaigns very differently. Soundaian,
(2019) further affirms that one must determine the objective of their promotion strategy
and campaign fundamentally as it provides the foundational layer and the base of what the
campaign seeks to achieve, this could be whether they want to inform, persuade, remind or
reinforce the target audience to convert them from potential customers to buyers.

Izadi et al., (2022) firmly believe that sales promotions is about communicating to the
audience through the use of selecting a media channel where the format of which media is
suitable for the message is chosen and the message is strategically and relatively developed
to align with the campaign goals and objectives. The media chosen is quite subjective to
the amount of audience that is to be communicated to as Below the line media channels is
used for highly customized messages to target the niche while above the line media
channels are used for a mass audience where there is a message that is sent to a larger group
(Quesenberry, 2020).

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2.2.1 Advertisement

Advertising is described as any form of non-personal communication about the product or

the service that is paid for, it is widely dependent on the use of mass media. It is a substantial
part of the promotion mix (Luck et al., 2020).

Advertisement is a primary function of the promotion mix which is said to widely influence
luxury goods customers to purchase the products from e-commerce platforms (Carlitz,
2020). For example, advertisement works for Jumia Kenya since when they place paid
advertisements or even through organic lead generation, they are able to gather many
luxury good consumers who purchase expensive items such as mobile phone, TV’s and
laptops (Itimu, 2020).

Advertisements have to be structured in a manner where the target audience is kept in mind
and the channels chosen to reach them and the media chosen which could either be
traditional or digital are optimally and carefully selected as they would determine the initial
contact the customer makes to the information provided (Robert, 2020). Quesenberry
(2020) affirms that advertisements can either make or break the lead generation process
and therefore it is essential to place the right advertisements with the right structure so that
it can reach the right people and the buying process can then take place.

Luxury good consumers are said to respond quite heavily to digital media advertisements
as it is less time consuming to scroll through the advertisements and read what the
advertisements have to say (Siepmann et al., 2022). However, this phenomenon is said to
be quite restrictive since Parker & Brennan (2020) claim that there is a lot of information
overload that is caused by digital media advertisements and since consumers are now
moving to obtaining technological detox, this medium of advertisement is being utilized in
a controlled manner. This, however, affects the advertisements being placed online as the
customers are not always as active digitally.

Digital advertisements are said to be the most preferred method by marketers since the
metrics of whether the advertisement was liked and the comments on what people think
about the advertisements can be measured and this can provide a more articulate illustration
on what consumers feel about the advertisement which is a determining factor of whether
the customers will purchase the products or not (McGruer, 2020).

Advertisements are classified as a one-way communication since the reader or viewer may
not be able to provide feedback on what they feel about the advertisement, this issue is

12
relative to the media; whether traditional or digital (Esiyok, 2020). Since digital media has
been able to counter this challenge as it allows individuals to write feedback on the posts
for social media or write in the comment section of a website, traditional media still follows
this declaration (Mankad, 2019).

Ozuem & Ranfagni (2021) believe that luxury goods consumers are more brand conscious
and therefore when the advertisement conducted in a manner that exhibits brand visibility
and brand enhancement, customers are more likely to purchase the product since they have
created this association and connection with the brand and the good.

It is imperative that during an advertisement campaign, the situation must be considered as

it would enable the marketers to align their advertisement along with the current situation
as Deiss & Henneberry (2020) say that using the situational factors to advertise a product
would enable marketers to be able to revitalize a brand and showcase that the company is
able to keep up with the market trends and external factors that influence purchase
decisions.

Soundaian (2019) firmly affirms that marketers who allocate a high advertising budget are
able to receive a higher number of potential customers as they believe that the more the
amount spent, the more the return rate of individuals being aware of the product and the
more the chances of making a sale become.

It is important to remain ethical and maintain moral standards while advertising as

according to the data protection act in Kenya, all the information regarding the quality,
quantity, standards, and ingredients of the product must be stated and must be told to the
customer prior to the product being consumed (Kenya Gazette Supplement, 2019).
Advertisers must then advertise all information about the product and no information can
be hidden. Alcohol companies in Kenya like East African breweries limited would endorse
the brand tusker with a statement that says that “Excessive consumption of alcohol is
harmful to your health. Do not sell to persons under the age of 18” (Kubai, 2019).

2.2.1.1 Social Media

Social media as a digital tool has enabled a greater reach for brands to expand their
audience. The platform has provided various features where customers and brands are able
to interact with each other and customers can form a much deeper connection with the
brand. There are various social media platforms such as Instagram, TikTok, Facebook,
YouTube and WhatsApp (Zhong, 2021).

13
Appel et al. (2020) states that social media has enabled businesses to increase revenue by
74% with the growing users of social media. Luxury brands have targeted social media
users to sell their products as they have access to technology, and they can be able to
purchase more items by viewing them on the social media handles. Luxury brands believe
in creating a long-term relation with the customers through the social media platforms as
they can get direct access to the customers.

Social media has enabled luxury brands to track the customers likes and dislikes and the
ratio at which they view a post so that they can profile the customer and target the right
customers who would actually be interested in what they have to offer (Dave Evans, 2021).
From an international perspective, luxury swimwear apparel brand called skims have set
foot to sell their articles on Instagram by using re-targeted advertisements on the customers
that liked the post and this has shown over a 50% increase in sales (Mondalek, 2022).

It is expected that a third of global luxury sales to take place online(Yan et al., 2022). Social
media has acted as a catalyst to sell these products online while not only integrating the
website but selling from the social media platforms directly (Duling, 2021). Social media
platforms such as Instagram and Tiktok have already began to implement the social
commerce which allows brands to navigate, explore, select and purchase the items they are
interested in (Chiu et al., 2022).

E-commerce platforms in Kenya have also implemented social commerce in order to sell
their goods online (Grzeslo, 2020). This would bridge the social media platforms to the
websites which has details and specifics in the item description on the various luxury
products that the platforms offers. Lazar (2021) recommends that while selling luxury
goods online, one must create a customer profile which consists of the age, their lifestyle,
their likes and dislikes so that the right people who match the profile can be targeted to
promote and sell the goods to.

The sales funnel includes awareness, consideration, conversion, loyalty and retention and
through promoting goods on social media, luxury brands can integrate all the functions of
the sales funnel in order to make consumers aware of the product, enable them to convert
to purchasing the product by incorporating the “buy now” function as well as promote
loyalty and retention as consumers can be kept up-to-date with items that are trending (Luck
et al., 2020).

14
Gupta & Singh (2021) have shown that luxury consumers would love to purchase goods
that are trending on social media as they would like to keep up with the latest fashion and
trends and social media aids the process of keeping the customers updated and demonstrates
to them the items where customers can choose what they want to align themselves with and
further purchase.

In Kenya, goods such as jewelry, accessories have been able to be sold from an end-to-end
social commerce process where the customers would like the products and pay for it from
the platform directly. Second to the jewelry items are the luxury skincare items which have
also been able to be sold online completely through the social commerce process. Items
such as cars, travel bags and perfumes have only attained 40% of the sales funnel as social
media is mostly used to get information and not to make a purchase (Twiva, 2022).

2.3 The Extent to Which the Technology Adapted Influences the Sale of Luxury
Goods on E-Commerce Platforms

Technology is a prime factor that facilitates the sale of luxury goods on e-commerce
platforms since the sale of the goods takes place online. It is an external factor to a business
environment which heavily influences the functions of the buying selling process (Suparta,
2021). Technology is a key enabler of businesses across the globe as it facilitates and
enables systems to be established within a business (Bartoli et al., 2022).

Turban et al. (2021) believe that luxury brands must focus heavily on applying advanced
technology since that is where the customer segment for luxury brand consumers are
migrating. Luxury goods consumers are more literate and conversant with technology
therefore they know how to use basic applications on a mobile phone and can be able to
navigate through websites which makes it easier for them to purchase a product (Jain,
2022).

The use of technology widely indicates the sale of luxury goods, as the website needs to
incorporate various features and technological advancements in order to better sell their
product online (W Ozuem & Ranfagni, 2021). As the internet becomes a fundamental
element of shopping habits, this generational transition leads to a noticeable acceleration
of sales through connective technologies (Parra-Sánchez et al., 2021).

Technology provides a more modern appeal to luxury brand consumers and the easier that
the platform is made to be used; be it an application or a website, the more the luxury brand
consumers find it easy to use and can comfortably keep on using it on a long term basis

15
(Sondhi & Basu, 2022). The key function of technology is to make the platforms more user
friendly to customers which then eliminates a barrier of the customers not being able to
scroll through or use the platform to its maximum capacity in which it is supposed to used
(Marmat, 2022).

Larsen-Disney (2022) states that a customer seeks a simple and easy to navigate platform
so that they can search for what they want with ease and comfort. Semerádová & Weinlich
(2019) affirm that the ability of the website to adequate showcase the product acts as an
added advantage to sell the goods as believes that since more money is spent on purchasing
luxury goods, customers would want to see the product so that they can gain enough
information about the product to understand it.

(Targowski, 2021) believes that technology has made it possible to multiply sales for the
business which is a core criterion that e-commerce organizations seek to achieve as after
all they are in the profit-making business. Misra & Muhammad-Bello (2021) adds that
technology has quite firmly enhanced and extended the business functions and enabled
organizations to improve their business model and re-structure and re-engineer various
business processes which are tailor-made to better suit the requirements and are less time
consuming, this makes it quite efficient for the e-commerce organizations as they can
process information in real time and make complex decisions for the organizations.

E-commerce platforms contain quite a lot of consumer data such as: buyers preferred
choices of products, what product page has the highest website traffic and how the
consumers navigated from page of the website to another (Pani et al., 2021). This
information is quite valuable and through the use of technology, it can provide useful
consumer insights that further aid in marketing plans and campaigns as well as gaining an
understanding of what the preferred brand of a product is, it can also enable e-commerce
organizations to consistently improve their performance and change their tactics
accordingly (Lazar, 2021).

Bernstein (2021) states that technology is an element that must be constantly updated to
make it relevant to where it is used and therefore e-commerce platforms must constantly
update their software, the front-end of their website, embed any plugins that aid in
consumer navigation and update the payment systems within the fintech element of the
website. These additions allow the technical elements to remain valid and current to keep

16
up with various advancements in technology which enable to better facilitate the sale on e-
commerce platforms.

In Nairobi, Kenya, e-commerce firms have been able to widely adopt technology features
which include decision making systems, inventory management systems, customer
interaction models, social media monitoring plugins, chatbots within a website or mobile
phone application, payment gateway systems and search engine optimizations (Michieka
et al., 2021). However, despite these features are individually selected and adopted, it is not
known to what degree this may aid in facilitating the sales of the luxury goods and what
portfolio of technology elements are best suited to encourage the sale of the luxury goods
products on e-commerce platforms (Too, 2022).

Stadler et al. (2021) firmly affirm that it is essential to adopt and utilize as many technology
features as possible as they all intensively contribute to creating a compact and powerful
digital strategy and superiorly enhance consumer sales. Since the entire existence and
foundation of e-commerce platforms is based on the ecosystem of technology, Pettit (2021)
further affirms that it is imperative to invest in technology as the relationship of the
advancement of the use of e-commerce platforms is directly proportional to the
advancement in technology.

Inducing digital advancements and optimizing latest technology such as automation,

artificial intelligence and analytics can enable a business to highly progress and streamline
the methods and the manner in which customers interact with the platforms. Automation
such as inventory management systems can enable e-commerce platforms to update the
customers on what is left for the product that they are interested in (Marr & Ward, 2019).

Technology has been incorporated with finance which involves payment gateways that
provide seamless paying options, they have been created to facilitate the purchasing
function where the customers have already placed an order on the website and they want to
make a payment (Montasari & Jahankhani, 2021). Srivastava et al. (2021) provide an
insight that payment gateways allow the e-commerce platforms to perform various tasks
such as: billing the customers digitally, provide them with an e-invoice, collectively
obtaining the money through processing the different types of card payments and providing
customized alternative payment solution.

In Kenya, the fintech solution known as Mpesa, which is a virtual banking system where
individuals can place monetary transactions through the use of a sim card and can be widely

17
used to facilitate online sales of luxury goods on e-commerce platforms (Kahome, 2022).
Njoki (2019) is of the opinion that since Mpesa is a combination of using the right
technology at the right time, a lot of luxury goods merchants have been able to make their
transition to accept it as a channel to receive payments and this has increased their sales
and brought them profits since customers are happy about the convenience they have.

Since money is involved through the process of digital payments, trust is a vital factor that
influences the use of technology to purchase luxury goods online. Liyanaarachchi et al.
(2021) demonstrated that consumers are reluctant to purchase goods online due to
apprehensiveness towards cyber security. Hacking has become a crucial point of concern
and organizations must embrace anti-hacking technology to prevent loss of data and
facilitate selling goods online. Murthy & Gopalkrishnan,(2022) show that customers are
more likely to purchase goods from a trusted website and hence e-commerce platform.

2.3.1 Digital Strategy

It is essential to find the right balance of technological features to be able to meet customer
expectations as the customers would want exclusivity and accessibility. Bytyci (2020)
states that change is inevitable and luxury brands have to be tech savvy as customers want
to have access to information with just the touch of a button. Having access to information
is a key factor in the customer being aware about the product which is essential for the
buying and selling process to take place (W Ozuem & Ranfagni, 2021).

E-commerce platforms must formulate a strong digital strategy that will augment the core
functions of the platform and lay a firm foundation on what the platform can provide and
carry out to make it easier for both parties involved (Srivastava et al., 2021). Luxury goods
consumers enjoy purchasing items on a fast-paced basis where procedures are carried out
with high speed (Chiu et al., 2022). Wirtz et al. (2020) establish that when customers have
made their decision to purchase a product from the e-commerce platform, they expect very
high website and application performance especially when it comes to the payment stage
as they tend to get frustrated or disappointed when technology is lagging, and they cannot
quickly purchase; this also sometimes discourages the customer and they tend to drop off
and end up not purchasing the product.

A digital strategy to encourage the customers to complete the purchasing procedure from
start to finish mut be implemented to ensure that at every stage all the customer needs are

18
catered for. Bytyci (2020) observes that the digital revolution has enforced luxury brands
to heavily consider risk along with the digital benefits as well.

Strategies that induce technology as the key factor are mostly customer centric as all the
essential goals that are determined and planned are based on meeting the set criteria of
customers having a unique and outstanding shopping experience (Poeling, 2021). He also
believes that formulating a digital strategy includes implementing and adopting the latest
technology such as artificial intelligence, 3D product virtual modelling allows the platforms
to be at par with the trends and advancements of modern technology.

2.3.1.1 Artificial intelligence

Artificial intelligence is the current latest technology which is said to improve and perform
tasks in a manner which replicates and mimics the human intelligent way of carrying out
activities (Zerilli et al., 2021). E-commerce platforms can be able to make widely use of
this technology both internally and externally, especially when it comes to interacting with
the customers to deepen their experience and enable them to go beyond their shopping
journey by virtualizing core elements of the platform (Laudon et al., 2020).

Artificial intelligence such as the use of chatbots within an e-commerce platform facilitates
the way in which a customer can interact by asking questions which are responded to via
artificial intelligence, and this assists the e-commerce platform as it supplements the
function of online sales which enables the customers to interact at any time they prefer
(Kempt, 2020). Maar et al. (2022) state that a lot of customers have been able to ask
questions through the use of this technological feature and place their orders on the e-
commerce platform.

In Nairobi, Kenya, the e-commerce platform Kilimall uses a chatbot where one can speak
to an agent live in real time and can ask any questions that they have regarding the product.
This live chatbot is automated in a way where the frequently asked questions are pre-set
and therefore when a customer asks a question, the chatbot is able to pick the phrase and
provide a solution to the customer’s query. This enables platforms to communicate with
the customers rapidly which enhances their experience and evokes the customer to purchase
the product (Njimu, 2022).

Platforms mostly use product recommendations as a technological tactic to engage the

customer, This is an artificial intelligence technique where the e-commerce platform uses
an algorithm to check the customers previous engagements with products, how long they

19
looked at it, whether they liked it or not and what other products they proceeded to viewing
Dube, (2021). It customizes and personalizes the shopping experience as customers can
view related products of what they are interested in. Bhargava & Sharma (2021) believe
that this creates a strong urge within customers as they are highly stimulated to purchase
an item that they are interested in.

2.3.1.2 3D Product Virtual Modelling

E-commerce platforms have initiated creating a virtual model of the product on the platform
where the product is demonstrated in 3 dimensions (Marr & Ward, 2019). This showcases
the product from all sides and perspectives and allows customers to get a better idea of the
product, this in turn improves the look and feel of the product as well.

Bhagat et al. (2022) have shown an increase in sales when this feature is installed and
applied as it also alleviates the customers to perceive the modern technology of the website
and creates an impact in the consumers mind about how good the product is from the very
first stage.

This digital optimization of the products on the e-commerce platform allows the customers
to interact with the product virtually and zoom in and out of the product as well as look at
a specific part of the product. It strives to demonstrate the product in every manner in order
to meet customer expectations and create a visual image of the product in the customer’s
mind (Sinoeurn & Panuwatwanich, 2022).

Since Covid had a huge impact in the way businesses conduct their operations, various
businesses had to migrate to digitalizing their products and having to find a way to boost
them online so that their products can have an extended location to sell. Amidst this
migration, this technique of virtual modelling of products was applied which enabled
companies to virtualize the product and since its inception, this has been a successful
attribute to the e-commerce platforms as customers have quite an appreciation for this
technology (Billewar et al., 2022).

2.4 The Extent to Which the Product Attributes Influence the Sale of Luxury Goods
on E-Commerce Platforms

Product attributes are an essential part to selling luxury goods online as they widely
influence the consumers taste and preferences and their wish to purchase goods online
(Chaffey & Chadwick, 2019). Product attributes can be divided into two, the actual product
which includes: the brand, styling and packaging and quality and features of the product
20
and the augmented product which includes the after sales services, delivery, warranty,
return policy (Metcalfe, 2019).

In a competitive environment, e-commerce platforms bank on the augmented product

attributes in order to enhance their opportunity to sale their products (Bai et al., 2022). They
further Show that when consumers were provided with a 21-day return policy and a 1-year
warranty on the product, they are more inclined to purchasing goods online.

E-commerce platforms must demonstrate the packaging and styling of the product more
elaborately online as believes that when consumers are attracted to the product they are
highly motivated to buy the product (Rediske, 2021). A strong brand creates a perceived
value for the product and therefore it is essential that e-commerce platforms provide
products with a higher brand equity as this will enable customers to trust the platform
(Deneffe & Vantrappen, 2022).

E-commerce platforms must have a strong fundamental product attribute strategy and
modus operandi so that they can be able to satisfy consumer needs in an overall manner
and be able to retain customers (Laudon et al., 2020) . Luck et al. (2020) believe that this
enables customers to avoid cognitive dissonance which is where the customers are confused
and have unclarity of their decisions as ideally products are supposed to satisfy customer
expectations and when this is not achieved and customers are unsure of the product, they
have a phenomena called cognitive dissonance which is what customers would want to
avoid.

2.4.1 Brand

Mogaji (2021) believes that a brand is a fundamental in the manner people perceive the
product or service. Brands form a huge part of how individuals associate with a product,
which is how they recognize the product and how they distinguish it from other products.
A brand has the ability to provide a company with a high competitive advantage as it has
the stamina to create long lasting impressions which can stick in the consumers mind and
further promote loyalty to that brand (Sarkar & Kotler, 2021).

E-commerce platforms have to place brand strategy as a core element to build and structure
as it has the potential to make or break an organization (Miles, 2021). Klepek & Kvíčala
(2022) believe that branding e-commerce platforms enable the company to boost sales as
well as enable the company to run efficiently on the way forward as they would have
already created the foundational layer in customers minds and then in the long run, they are

21
able to re-allocate their resources to investing in modern technology to continuously
improve their offering to their customers.

A brand is a powerful tool in being able to create awareness about a product, it has various
long-lasting effects where people would remember a product by the color of it or just the
logo. E-commerce platforms utilize this tool to be at the top of customers minds and be at
the forefront of leading platforms (Verstraete, 2021).

When a platform is branded, it has the ability to create trust within individuals over a period
of time which acts as a catalyst for e-commerce platforms (Klepek & Kvíčala, 2022). Since
e-commerce platforms are online and lack human interface to some extent as you are not
physically present at the outlet, it becomes difficult for customers to trust online e-
commerce platforms, however, Beverland (2021) affirms that this can be curbed by
establishing a strong brand which is re-known to be trusted for quality products.

E-commerce platforms are able to create a robust value proposition in showing people the
worth of the brand by engaging in various brand transforming activities such as creating
visibility and brand activations. This is majorly supported with high impact advertisement
as that is the vehicle that transports and communicates this out to the public (Luck et al.,
2020). Dzogbenuku et al. (2022) believe that e-commerce platforms must invest heavily
in brand awareness activities as they give a business the meaningful boost that it needs to
convert leads into consumers and create loyalty.

Through branding activities, the core product of the business is heightened and a culture of
association is formed (Verstraete, 2021). E-commerce use this strategy to create a
community pool of people who will love to be part of this culture and further promote their
products by being an unofficial ambassador of the product(Srivastava et al., 2021).

E-commerce platforms are aiming to be a personality where they try to humanize the brand
and create a persona of the brand (Beverland, 2021). For example: The e-commerce
platform in Kenya which is called mamacita is posing itself to be a young feminine brand
which is friendly and targets the higher end segment, this enables the brand to carve out a
niche and target their audience who specifically can relate to the brand (Amani, 2022).

Jiji Kenya has positioned their brand to specifically pose as affordable and easy to use
where they are providing a simple platform for the public to buy and sell their product. This
has enabled them to create sales as many Kenyans are able to be in accordance with the

22
brand purchase products from them since they feel as if they are understood by the brand
(Golubev, 2021).

2.4.2 After Sales Service

From the core service that the e-commerce platform has to offer, the after sales service
works as a method of creating customer delight where the customers are happy to receive
the extra benefits that come along with purchasing a product from the e-commerce platform
(Idrakisyah, 2021). Since there are various ecommerce platforms in Kenya, a report in
(Statista, 2021) states that competition has been on the rise and this has enabled e-
commerce platforms to be at the top of their game and provide quality support services
where the customer can rely on the platform and can continue to purchase products.

(Oh, 2022) strongly affirms that customers purchase products because of the after sales
services that the e-commerce platform offers as according to him, this enables customers
to be rest assured that they will receive sufficient care and support that will enrich their
customer experience while purchasing the product. In Kenya, various after sales services
are provided; such as: money back guarantees, warrantees of up to 2 years for a product,
installation, free repairs, new product guarantee where a customer receives a brand new
product if the one they ordered from the e-commerce platform is defective, return policy in
case the customer doesn’t like the product and free consultations and guides on the usage
of the product (Bhasin, 2019).

After sales services are crucial to a business as it forms part of the package that the customer
is purchasing and completes the buying process making it an important part of the product
since it is an augmentation of it (Priyadarshi, 2021). Adds that since customers are paying
a huge price for the luxury products, they would want full value of their money and
providing after sales services of any kind enables them to feel that they have achieved the
best worth for the price they have paid (Ockert, 2021).

E-commerce platforms should be keen on ensuring they have amalgamated the best after
sales services as this can be quite a defining factor and acts as a making or breaking point
for a customer to purchase the item from the e-commerce platform (Idrakisyah, 2021).
Poeling, (2021) states that investing in after sales services can be a great strategy to retain
a customer as the goal is not only to obtain new customers but also retain the current ones
and this can only be done after the customer is satisfied with what they have received as a
whole.

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An e-commerce platform must communicate their after sales service policies transparently
to the customers clearly outlining what shall be entailed within a return policy or
installation policy as this reduces the confusion on the way forward as well as enables the
customers to acknowledge what benefits and perks they shall receive by purchasing the
product (Murthy & Gopalkrishnan, 2022). Wang et al. (2022) add that Timeliness customer
care is really important as the customers time is valuable and when they reach out regarding
any query they may have, they should be reverted to in a short span of time so that
information is gotten to them much faster.

After sales services has the potential to represent the brand and it can be a reflection of the
brand identity and therefore the technique it is provided in must have a clear and a more
engaging approach towards the customers (Miles, 2021). Oliveira et al., (2022) believe that
customers wish to purchase from the e-commerce platforms because of the services
provided after and not the core product that was offered mainly.

Within a competitive space, the variety of after sales services provided to the customer can
give quite an edge to a business as a customer would purchase from the e-commerce
platform that provides the most support services and therefore platforms should work
towards providing as many after sales services as possible (Priyadarshi, 2021).

Ockert (2021) established that the biggest value one can receive from quality after sales
services that fulfill the support a client needs in all manners can be sought from the return
customers one may get which is primarily important for a business. Luo et al. (2022)
concluded that various customers need assistance and guidance in using luxury goods
products especially when we focus on electronics such as fridges and televisions and many
e-commerce platforms would charge extra for providing installation support, however,
believes that it could be a great strategy to provide them for free as it elevates customer
experience and enables them to feel satisfied with the purchase.

2.4.3 Delivery

This is the section which is the physical element for the e-commerce platform where the
logistic company representatives or the in-house e-commerce platform logistic agents meet
the customers directly and have a human interface with them. Ideally this is part of the after
sales services however it has now formed an independent part of the selling process due to
the business models in which the e-commerce platforms are structured in the modern world
today (Y. Wang & Pettit, 2021).

24
Delivery, as the name suggests, is the process of taking the goods that the customers have
purchased directly to where they wish for them to be dropped. Since the process of
purchasing the goods is online for the customers, the aspect of delivering it to them is
physical and it is a compulsory part of the process which must be fulfilled by the e-
commerce platform (Mangiaracina et al., 2019).

Logistics is a concept that is planned for and is purposeful as it is not an item that can just
happen, one must plan for this process concisely in order to fulfil the purchase the customer
has placed via the platform (Oliveira et al., 2022). The delivery of the goods is also an
important element of the product attributes as it enables the e-commerce platforms to
combine these services into one package which is lucrative to the customers.

A survey conducted in India showed that 38% of customers have declined to purchase items
from the same e-commerce vendor if they have come across a bad delivery experience. The
survey also showed that customers would opt for a more convenient delivery option e-
commerce platform to purchase their products from and 74% consumers prefer free
shipping while choosing the alternatives between the e-commerce platforms (Kamath &
Pawar, 2022).

Ha et al. (2022) believes that e-commerce platforms need a dependable logistics service
where the delivery is seamless and is ensured to be on-time. Time is of the key essence and
value in this process as customers want their products almost immediately and therefore
the logistics agents have to be quite swift in taking the items to the customers delivery
location.

Most e-commerce platforms outsource this service, which has proven to be quite efficient
for their business as they can focus on their core competency which is providing the product
and providing the best after sales services. Having a third party agent benefits the e-
commerce platform in ensuring that the delivery aspect of the process has been dutifully
taken care of with expertise (Kumar & Ganguly, 2022).

Due to the nature of the luxury goods and the superior quality of these products, a trusted
and reliable source of delivery becomes very essential as it would disappoint customers if
they receive a damaged good after spending quite a lot for the product (Wirtz et al., 2020).
Njuma, (2022) States that the e-commerce platform Jumia in Kenya does not outsource a
third party to fulfil the process as they conduct the logistics segment it in-house by the
company.

25
E-commerce platforms have shown an increase in conversion when they provide a same
day delivery, ascertains that this is due to customers looking for a product when they are in
need of it and the fact that they can receive it the same day pushes them to purchase the
product (Yu et al., 2022). E-commerce platforms such as samara sports in Kenya is able to
deliver nationwide and this has enabled them to boost their sales and gain competitive
advantage from their rivals and high market share which has allowed them to become a
leader within their niche (Murebe, 2021).

E-commerce platforms must ensure that all deliveries are tracked this is to ensure them
from theft or any loss or misplaced products (Kabashkin et al., 2021). Competition has
increased the expectations of customers in the market, previously, customers were not able
to track their order but currently customers are able to track where their order is and they
can also contact the delivery person if they have any queries or change of location
(Kabashkin et al., 2021).

2.5 Conceptual Framework

Promotion strategy

- Advertising
- Social media integration
- Email marketing

Technology Adapted Sale of luxury good on e-commerce

platforms
- Mode of e-payment(card/Mpesa)
- Cyber security -revenue
- Website performance -Rate of platform usage
-conversion rate

Product strategy

- Brand
- After sales service
- Delivery

26
2.6 Chapter Summary

The chapter explored reviews the literature by various writers on the research objectives.
Precisely, literature review covers the influence of promotion strategy, technology adapted
and product attributes on the sale of luxury goods on e-commerce platforms in Nairobi,
Kenya. Chapter three is research methodology. It covers research design, population and
sampling design, data collection methods, data collection procedure and data analysis
method.

27
 CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

This chapter discusses the overall methodology of the research project. It consists of the
research design, population, sampling design, data collection methods, research procedures
and the techniques of data analysis which are employed.

3.2 Research Design

Research design comprises of the blueprint for the collection, measurement, and analysis
of data (Hague, 2021).This study used a descriptive research design. Descriptive research
emphasizes on shedding light on current issues or problems by employing a data collection
approach that allows respondents to explain the situation more thoroughly than they would
be able to previously (McGivern, 2021). McDaniel & Gates (2020) add that the main
purposes of descriptive studies can be explained as describing, explaining and validating
research findings. Hence, this research design enables us to get a better detailed approach
to understanding the factors that influence the sale of luxury goods on e-commerce
platforms in Nairobi, Kenya.

3.3 Population and Sampling Design

3.3.1 Population

A population refers to the total amount of elements that one would like to study (Esiyok,
2020) It is a group of individuals that a researcher would choose to conduct research from
in order to draw conclusions from the specific target that would be studied (Hague, 2021).
The population of the study is the e-commerce platforms in Nairobi. According to the
Global Ecommerce Data base (2022) that is registered with the German teleservices act
there are 64 e-commerce platforms in different categories in Nairobi, Kenya in the quarter
2 report. The study targeted the General managers and the marketing managers of the e-
commerce platforms. Therefore, the study target population will be 128 respondents.

3.3.2 Sampling Design

3.3.2.1 Sampling Frame

A sampling frame is a list of elements from which a probability sample is selected (Sastry,
2020). It is further described to be a list or other device used to define a set of elements

28
from which the researcher can select a sample of the target population by Blokdyk (2019).
In this study the sampling frame was the list of the e-commerce platforms in Nairobi County
by (Statista, 2021).

3.3.2.2 Sampling Technique

Sampling is the statistical process of obtaining a subgroup or a representative of a

population of interest in order to make observations and statistical conclusions about the
population (D’Alessandro et al., 2020). This study used a census technique, Biggam (2021)
describes the census technique as the statistical exploration of each and every element in
the unit population.

3.3.2.3 Sample Size

The study used a census approach and therefore the sample size of this study are the 128
managers of the e-commerce platforms in Nairobi, Kenya. A census approach was adopted
as the size of the population is small and accurate data can be ensured as a result of no
sampling error.

3.4 Data Collection Method

The data collected in this study is primary data. The method used to collect the primary
data is the survey method. The instruments employed during the collection method are
questionnaires. The questionnaire was structured into open ended and close ended
questions. The open-ended questions gave room for the participant to display their thoughts
in a broader perspective while the close ended questions included multiple choice
questions, yes-no questions and Likert scale questions, this enables us to obtain all the
information necessary to conduct the study.

The questionnaire had four parts. Part one covered the background information of the
respondents, part two covered questions on promotion strategy, part three covered
questions on technology adapted and part four will cover questions on the product
attributes. Questionnaires were administered by the researcher through the use of e-mails.
Lavrakas et al. (2019) believe that the use of mail surveys enables the researcher to track
progress as well as ensure data is not lost and information can be obtained in a more
interpretable manner.

29
3.5 Research Procedure

The researcher obtained a research permit from National Commission for Science,
Technology and Innovation (NACOSTI). Authorization from the Internal Review Board
was also provided. The researcher informed the participants about the study goal and those
who took part in the survey did so voluntarily after successfully completing the consent
form. Data was obtained through questionnaires that were individually administered. The
questionnaires were evaluated prior to the study which involved doing a soft pilot of the
questionnaire.

In the pre-testing of the questionnaire, Schouten et al., (2021) recommend that a minimum
of 5 individuals can be used to pre-test a questionnaire varying on how big the study is.
Therefore, 5 respondents were picked and approached to so as to ensure the questionnaire
is viable. The 5 respondents were exempt from participating in the survey. Validity was
tested using a content analysis method which involved seeking the opinions of lecturers
and the participants and their feedback helped to facilitate the revision of the questionnaire.

The study used a Cronbach’s alpha in SPSS version 27 to measure consistency and
reliability of the questionnaire. Abu-Bader, S. & Abu-Bader, P. (2021) believe that if the
Cronbach’s alpha is above 0.7, then the instrument is shown to be reliable. It was expected
that the questionnaire would take about 10 minutes to answer. The results from the pilot
study are as below:

Scale Cronbach’s Alpha Items

Promotion Strategy 0.819 9
Technology adapted 0.827 9
Product attributes 0.811 7

Table 3.1 Pilot test Results

The results show that Promotion strategy had an alpha of 0.819, Technology adapted had
an alpha of 0.827 and product attributes had an alpha of 0.811. This demonstrates that all
the variables are reliable.

3.6 Data Analysis Methods

Data obtained from the field was checked, cleaned, ensured for completeness and edited.
The strategy employed to analyze data in this study was qualitative and quantitative.
According to Hacker & Sommers (2021) quantitative analysis is the manipulation of

30
numerical data which reflects the findings of the study, while qualitative data analysis is
the process of interpreting conceptual data The Statistical Package for Social
Sciences(SPSS) version 27 was used to analyze the data.

Quantitative data was analyzed using descriptive statistics which included frequency,
percentages, mean and standard deviations. Data was presented in the form of tables and
figures. Qualitative data was analyzed using the content analysis method. Correlation
analysis was conducted in order to establish the strength of the relationship between the
variables and multiple regression analysis was conducted in order to identify the
relationship between the dependent and independent variable. The regression model was as
follows:

Y= β0 + β1X1+β2X2 + β3X3 + ε

Where Y= sale of luxury goods on e-commerce platforms in Nairobi, Kenya.

β0=intercept
X1= promotion strategy
X2= technology adapted
X3=product attributes
β0= Constant, β1, β2, β3= regression coefficients X1, X2, X3 respectively
ε= error term

3.7 Chapter Summary

This chapter covered the research strategy and methodology for the study. A descriptive
research design was employed, and a structured questionnaire was used to collect the data.
The study used a census approach targeting 64 e-commerce platforms according to the
ecommerce worldwide database registered by the German teleservices act. The Statistical
Packages for Social Sciences (SPSS) version 27 was used to analyse the data. Chapter four
discusses the outcomes and the findings of the study which was established after data had
been collected. In the next chapter, the results are demonstrated using tables and figures.

31
 CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction

This chapter discusses the background information of the participants and the analysis of
findings based on the study objectives. Descriptive analysis and inferential statistics were
used to analyse and discuss the statistics. The study targeted 128 respondents which include
the general managers and the marketing managers of the e-commerce platforms in Nairobi,
Kenya.
Demographic Information

In this section, the general information of the participants is discussed. It includes the
gender of the respondents, their level of education, how long they have worked in the
organization and how long the e-commerce platform has been operation for.

4.1.1 Response Rate

The study attained a 75% response rate as 96 out of 128 respondents were able to fill out
the questionnaire. This is demonstrated from the table shown below:

Response Rate Frequency Percentage

Filled and returned 96 75
Unreturned 32 25
Total 128 100
Table 4.1: Response Rate
4.1.2 Gender of the Respondents

The study sought to determine the gender of the respondents. The study showed that 60.
% were women, 39% were women and 1% were non-binary. This demonstrates that all
genders participated in this study hence the study was not biased against any gender. It
also shows that all genders participated in the study in different proportions and from the
survey population, women are higher than men by 20%. The results are shown below.

32
Table 4.2.1: Gender of Respondents

Respondents Frequency Percentage

Male 58 39
Female 37 60
Non-Binary 1 1
Total 96 100

4.1.3 Level of Education

The study sought to determine what the highest level of education of the respondents who
are the general managers and the marketing managers is. The respondents with a
certificate/diploma were 16.67%, the respondents with a bachelor’s degree were 29.17%,
and the respondents with a master’s degree was the highest with 54.17% and there were no
respondents with a doctorate degree. This demonstrates that more than half of the
respondents had a master’s degree. This is shown in the table below.

Respondents Frequency Percentage

Certificate/diploma 16 16.67
Bachelors 28 29.17
Masters 52 54.17
Doctorate 0 0
Total 96 100

Table 4 1:Level of Education

4.1.4 Years Worked in The Organization.

The study sought to determine how many years the respondents worked in the e-commerce
platform. The findings show that 27% of the respondents worked in the organization for 1-
2 years, 2.08% of the respondents worked in the organization for 10 years and above,
40.63% of the respondents worked in the organization for 3-4 years, 23.96% worked in the
organization for 5-6 years and 6.25% of the respondents worked in the organization from
7-9 years. This showed that the respondents have stayed in the organization for a sufficient
time in order to provide information about the e-commerce platform. This is shown in the
pie chart below.

33
Figure 4. 1 Years Worked in the Organization
4.1.5 Length of Operation

The study sought to establish how long the e-commerce platform has been in operation.
According to the findings, 39% of the respondents indicated that the e-commerce platform
has been in operation for 10 years and above, 33% of the respondents indicated that the e-
commerce platform has been in operation for 7-9 years, 17.7% of the respondents indicated
that the e-commerce platform has been in operation for 5-6 years and 7% for 3-4 years.
This implies that the e-commerce platforms have been in operation for long enough and
this would enable the study to obtain the information it requires. This is shown in the table
below:

Length of operation Frequency Percentage

10 years and above 39 40.6%
3-4 years 7 7.3%
5-7 years 17 17.7%
7-9 years 33 34.4%
Total 96 100
Table 4 2 Length of Operation
4.2 The Extent to Which Promotion Strategy Affects the Sale of Luxury Goods on
E-Commerce Platforms in Nairobi, Kenya

4.2.1 Digital Tools Used

The respondents were asked what digital tools the organization uses to promote the e-
commerce platform and the results indicate that the tool most used to promote the e-
commerce platform is Facebook as 96.9% of the respondents agreed to using this platform,
this was closely followed by Instagram as 95.8% of the respondents use Instagram to
promote their e-commerce platform. Google and e-mail marketing are digital tools widely
34
used as indicated by 78.1% and 74% respectively, followed by Twitter (26%), Linked in
(24%), Tiktok (21.9%) and lastly snapchat which is not widely used to promote e-
commerce platforms as shown by 3.1%. The results are showed in the figure below.

Digital Tools used for promotion

120.0
100.0
USAGE %

80.0 95.8 96.9

60.0 74.0 78.1
40.0
20.0 26.0 24.0 3.1 21.9
0.0

DIGITAL TOOLS

Figure 4. 2 Digital Media Tools Usage

4.2.2 Traditional Tools Used

The respondents indicated that Posters is the highest used traditional media tool to with a
usage of 78%, this was followed by billboards with a usage of 45% and flyers with a usage
of 39%. Radio, Television and other had the least percentage of 10%, 13% and 11%
respectively. 11% of the respondents indicated as part of the other section that events and
sponsorships is a traditional media tool that they use to promote their product. The results
are shown in figure 4.3 below.

Usage of Traditional Media Tools

Other 11
Traditional Media Tools

Flyers 39
Posters 78
Billboards 45
Television 13
Radio 10
0 20 40 60 80 100
Usage Percentage (%)

Figure 4. 3 Traditional Media Tools Usage

35
4.2.3 Frequency of Campaigns

The study sought to determine how often the e-commerce platforms conduct campaigns
and as demonstrated in figure --- below, the results demonstrate that majority of the
platforms conduct campaigns quarterly with the highest percentage at 51%, 36% conduct
campaigns monthly, 2% every 2 and 3 weeks, 3% conduct campaigns two times a week,
2% once a week and 3% conduct campaigns daily.

Frequency of Campaign
60
50
40
30
20
10
0
Daily Once a week Two times a Every 2 weeks Every 3 weeks Monthly quarterly
week

Figure 4. 4: Frequency of Campaign

4.2.4 Influence of Promotion Strategy on E-Commerce Platforms

The respondents were asked to indicate the extent to which they agree to the following
statements about the extent to which the promotion strategy affects the sale of luxury goods
on e-commerce platforms. This was done using the scale 1- strongly disagree, 2 – disagree,
3- moderate, 4 -agree, 5 – strongly agree.

Table 4 3: Influence of Promotional Strategy on The Sale of Luxury Goods on E-

Commerce Platforms in Nairobi, Kenya
Statements 1 2 3 4 5 Mean Std.Dev
Promotion on digital media has 4 4 44 41 3 3.36 0.796
increased the sale of luxury goods on
my e-commerce platform
Promotion on Traditional media has 14 16 21 7 38 3.41 1.505
increased the sale of luxury goods on
my e-commerce platform
High impact advertisement is a key 7 23 48 13 5 2.85 0.929
element we focus on
The company must align the promotion 1 25 31 32 7 3.20 0.947
strategy with the budget allocated

36
 There are adequate funds to facilitate 14 17 30 9 26 3.17 1.389
the promotional strategy chosen
We try new promotional strategies to 4 31 38 13 10 2.94 1.024
reach our target audience

The respondents agreed that promotion on digital media has increased the sale of luxury
goods on their e-commerce platforms and this is demonstrated by (mean=3.36 and standard
deviation 0.796), The respondents also agreed that promotion on traditional media has
increased the sale of luxury goods on their e-commerce platforms and this is demonstrated
by (mean=3.41 and standard deviation =1.505), The respondents moderately agree that high
impact advertisement is a key element they focus on and this is shown by (mean=3.36 and
standard deviation 0.929), The company must align the promotion strategy with the budget
allocated as shown by (mean=3.20 and standard deviation 0.947), the respondents
moderately agreed that there are adequate funds to facilitate the promotional strategy
chosen this was demonstrated by (mean=3.17 and standard deviation 1.389) and the
respondents were neutral about trying new promotional strategies to reach their target
audience, this was shown by (mean=2.94 and standard deviation 1.024).

4.2.4.1 Correlation Analysis

A correlational analysis is conducted to check the strength of a linear relationship between

two variables (Bader Abu & Bader, 2021). Pearson Moment corelation was used to
determine the association of the digital promotion of luxury goods and the budget allocated
by the organization.

Model Unstandardized Standardized t Sig.

Coefficients Coefficients
Beta
B Std, Error
1 (Constant) 2.551 .374 6.824 .000
Company to align .270 .108 .249 2.495 .014
with budget
allocated
a. Dependent Variable: Promotion on traditional media have increased the sale of luxury
goods on the e-commerce platform
Table 4 4: Correlation for Promotion on Traditional media and Alignment with
Company Budget

37
From the table above, it can be derived that:

Y=βX1+c+ε

Y=0.27X1 +2.551+ ε

Y= increase in the sales of luxury goods through promotion on traditional media;

X1=adequate funds to facilitate promotional strategy; ɛ=error term

From the regression equation, when the budget allocated is held constant at zero, the
promotion by traditional media would be at a constant value of 2.551 on the Likert scale.
The regression results also demonstrate that adequate funding on traditional media
promotional strategies has a positive and significant relationship with increase in the sales
of luxury goods through promotion on traditional media (β=0.108, P=0.014). This suggests
that a one unit increase in adequate funding will cause the volume of sales to increase by
0.27 units implying that adequate funding on traditional media promotional activities has a
positive influence on the sales of luxury goods on e-commerce platforms.

Table 4 5: Coefficients for Digital Promotion and Aligning with Budget

Model Unstandardized Standardized t Sig.

Coefficients Coefficients
Beta
B Std, Error
1 (Constant) 2.874 .284 10.112 .000
Company to align .153 .085 .182 1.799 .075
with budget
allocated
b. Dependent Variable: Promotion on digital media have increased the sale of luxury
goods on e-commerce platforms

4.2.4.2 Regression Analysis

Regression analysis showcases the relationship between two variables (Govindan et al.,
2020). Regression analysis was conducted in order to demonstrate the relationship between
digital media promotion of the luxury goods and the organization aligning with the budget
allocated.

38
From the beta coefficients table, the following regression equation was fitted.

Y=βX1+c+ε

Y=0.153 X1+2.874+ ε

Y= promotion on digital media; X1= align with budget allocated; ɛ=error term

From the regression equation, when the budget allocated is held constant at zero, the
promotion by digital media would be at a constant value of 2.874 on the Likert scale. The
regression results also demonstrate that alignment with budget allocation has a positive and
non-significant relationship with promotion on digital media (β=0.153, P=0.075). This
suggests that one unit increase in budget allocation will cause promotion on digital media
to increase by 0.153 units implying that budget allocation has a positive influence on
promotion by digital media.

Table 4 6:Model Summary for Promotion Spend and Aligning with Budget Allocation

Model R R Square Adjusted R Square Std. Error of the

Estimate
1 .249a .062 .052 1.465
a. Predictors: (constant), Align Promotion strategy with the budget allocated

From the table above, the R squared 0.062 indicates that a 0.6% variation in increased
sales can be explained by the promotional strategy chosen. From the model, the
correlation coefficient is a fairly moderate positive of 0.249 indicating that as the level of
funding on promotional strategy increases, the volume of sales on luxury goods is also
expected to increase.
ANOVA was used to test if the model is significant. From table 4.1.7, the critical value of
F is 6.824 which is greater than the F statistic 6.226 by 0.6. The result is statistically
significant at α=0.05 as the p value is 0.014 which is less than 0.05. It is illustrated that as
the level of funding in promotional activities increases, the volume of sales of luxury goods
is also expected to increase across the various e-commerce platforms.

39
Table 4 7: ANOVA for Promotion Spend and Aligning with Budget Allocation

Model Sum of Df Mean F Sig.

Squares Square
1 Regression 13.365 1 13.365 6.226 0.14
Residual 201.791 94 .620
Total 215.156 95
a. Dependent Variable: Promotion on traditional media has increased the sale of
luxury goods
b. Predictors: (Constant): There are adequate funds to facilitate the promotional
strategy

4.3 The Extent to Which the Technology Adapted Affects the Sales of Luxury Goods
on E-Commerce Platforms in Nairobi, Kenya.

4.3.1 Requirement of Payment before Sale

The respondents were asked to indicate whether the platform requires customers to make
an online payment before they purchase the goods online. 29% of the respondents indicated
that customers are not required to pay prior to purchasing the luxury goods from the e-
commerce platform while 68% of the respondents indicated that their platform requires
individuals to pay on the e-commerce platform for them to complete the purchase and 3%
of individuals indicated maybe. The results are illustrated in the figure below.

3%

29%

68%

Yes No Maybe

Figure 4. 5: Payment Required Prior to Sale

40
4.3.2 Status on Platform Being Hacked

The respondents were asked to indicate whether the platform has been previously hacked
and from the results demonstrated in figure 4.6 below, 95% of the respondents indicated
that their platform has not been hacked previously, 2% indicated that their platform has
been hacked previously and 2% of the respondents indicated that their platform may have
been hacked. The results are shown in figure 4.6 below.

3%
2%

95%

Yes No Maybe

Figure 4. 6 Status on Hacking of E-Commerce Platform

4.3.3 3D Virtual Modelling of the Products

Participants were asked whether the platform displays the products on the platform in the
form of a 3D virtual model. 75% of the respondents agreed that their e-commerce platform
does not display the products in 3D while 25% agreed that their platform does display the
products in 3D. This demonstrates that majority of the respondents do not use 3D to display
their products on the e-commerce platform. The results are demonstrated below.

80
75
60

40

20
25
0
Yes No

Figure 4. 7: 3D Virtual Modelling

41
4.3.4 Type of Payment Methods Used

Participants were asked to select all the payment methods applicable within the e-
commerce platform uses to facilitate online sales. From the table below, it can be noted that
the most used payment method is Mpesa with a usage rate of 95.83, followed by credit and
debit card with a usage rate of 89.58% and 86.46% respectively. The usage rate for PayPal
was 43.75%, Cash on delivery 32.79% Airtel money 17.71%, electronic fund transfer had
the least usage rate with 13.54% and there were no other modes of payment used.

Type of Payment Method Frequency Percentage

Mpesa 92 95.83
Airtel Money 17 17.71
Debit Card 86 89.58
Credit Card 83 86.46
Electronic funds transfer 13 13.54
PayPal 42 43.75
Cash on delivery 31 32.79
Other 0 0
Table 4 8: Type of Payment Method Used

4.3.5 Influence of technology adapted on the sales of luxury goods on e-commerce

platforms in Nairobi, Kenya.

The respondents were asked to indicate the extent to which they agree to the following
statements about the extent to which the technology adapted influences the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya. This was done using the scale 1-
strongly disagree, 2 – disagree, 3- moderate, 4 -agree, 5 – strongly agree.

Statements 1 2 3 4 5 Mean Std.

Dev
The e-commerce platform has safe 6 1 3 41 45 4.23 1.031
payment gateways to facilitate sales
The e-commerce platform uses 3D models 24 27 10 18 7 2.45 1.255
to showcase luxury goods
The platform has increased its website 5 15 33 36 7 3.26 0.987
usage

42
 We constantly improve the look and feel 3 31 32 24 6 2.99 0.979
of the website
The organization actively takes measures 1 25 38 24 8 3.14 0.936
to prevent hacking/fraud
Table 4 9: Influence of Technology Adapted on The Sale of Luxury Goods on E-
Commerce Platforms in Nairobi, Kenya
The respondents agreed that their e-commerce platform has a safe payment gateway system
to facilitate sales, this is shown by (mean=4.23 and standard deviation=1.031). The
respondents somewhat agreed that their e-commerce platform uses 3D models to showcase
luxury goods on their platform which is demonstrated by (mean=2.45 and standard
deviation=1.255). The respondents moderately agreed that their platform has an increased
website usage indicated by (mean=3.26 and standard deviation=0.987). The respondents
somewhat agreed that they constantly improve the look and feel of the website as shown
by (mean=2.99 and standard deviation=0.979). The respondents moderately agreed that
their organization actively takes measures to prevent the e-commerce platform from
hacking and fraud and this is demonstrated by (mean=3.14 and standard deviation=0.936).
This implies that the technology adapted influences the sale of luxury goods on e-commerce
platforms.

4.3.5.1 Correlation Analysis

From the table below, the results of the correlational analysis can be demonstrated as the
following: the constant is statistically significant as the p value is <0.001 and beta
β=0.525 which suggests that it has a significant effect on the website usage, the t-value of
5.983 indicates that the relationship between the usage of 3D models and the usage of the
platform is statistically significant.

43
 Model Unstandardized Standardized t Sig.
Coefficients Coefficients
Beta
B Std, Error
1 (Constant) 2.250 .190 11.869 .000
Using 3D models .413 .069 .525 5.983 .00
to showcase
Luxury goods
c. Dependent Variable: The platform has increased its website usage
Table 4.10: Correlation of Using 3D Models and Increase in Website Usage
4.3.5.2 Regression Analysis

From the regression coefficients, the fitted model in form of:

Y=βX1+c+ε

It is illustrated that Y=0.525x1+2.25+ε

With both coefficients significant at α=0.05. The relationship is considered significant

because the P value =<0.0001 When adoption of 3D virtual Models is kept at 0, we expect
website usage to be a constant 2.25, similarly an increase in one unit in the adoption of 3D
models leads to an increase in 0.413 units in the volume of website usage. Implying that
there is a significantly positive relationship between the adoption of 3D models and the
increase in platform usage.

Model R R Square Adjusted R Square Std. Error of the

Estimate
1 .525a .276 .268 .844
b. Predictors: (constant), Use of 3D models to showcase Luxury Goods

Table 4 11 Model Summary for Use of 3D Models to Demonstrate Increase Website

Usage

From the ANOVA table below, The F statistic 35.796 is greater than the F critical value
11.869 indicating that there is a strong significant association between the platform using
3D virtual modelling to showcase the luxury goods and increased website usage.

At α=0.05, P=<0.0001 demonstrating strong statistical significance of the model as

reaffirmed by the regression coefficients.

44
Table 4 12 ANOVA for Use of 3D Models to Demonstrate Increase of Website Usage

Model Sum of df Mean F Sig.

Squares Square
1 Regression 25.508 1 25.508 35.796 .000
Residual 66.982 94 .713
Total 92.490 95
a. Dependent Variable: The platform has increased its website usage
b. Predictors: (Constant): The e-commerce platform uses 3D models to showcase
the luxury goods

4.4 The Extent to Which the Product Attributes Affect the Sale of Luxury Goods on
E-Commerce Platforms in Nairobi, Kenya.

4.4.1 Provision of Delivery

The participants were asked to indicate whether their e-commerce platform offers delivery
services after the product has been sold online and from figure below, it is demonstrated
that 94% of respondents agree that their e-commerce platform offers delivery has been done
and 6% disagree to delivery services being provided after the luxury good is sold online.

6%

94%

Yes No

Figure 4. 8 Providing Delivery Upon Sale of Goods

4.4.2 Provision of After Sales Services

The respondents were asked whether their platform provides after sales services such as
repairs and maintenance after the luxury good has been sold online. From the results shown
in figure… It is demonstrated that 66% of the participants agreed that their e-commerce

45
platform offers after sales services, 29% of the participants disagreed while 5% responded
maybe. This demonstrates that majority e-commerce platforms offer after sales services in
particular repair and maintenance once the good has been sold online.
Yes No Maybe
5%

29%
66%

Figure 4. 9 Provision of After Sales Services (Repair and Maintenance)

4.4.3 Influence of Product Attributes on The Sale of Luxury Goods on E-Commerce
Platforms in Nairobi, Kenya

The respondents were asked to indicate the extent to which they agree to the following
statements about the extent to which the product attributes affect the sale of luxury goods
on e-commerce platforms in Nairobi, Kenya. This was done using the scale: 1- strongly
disagree, 2 – disagree, 3- moderate, 4 -agree, 5 – strongly agree.

From table below, it is demonstrated that the respondents agreed that providing delivery
once the good is sold has enabled the e-commerce platform to obtain more sales and this is
illustrated by (mean=3.78 and standard deviation=0.873). The participants somewhat agree
that sufficient funds are provided to facilitate after sales services as indicated by
(mean=2.74 and standard deviation=1.145). The respondents moderately agreed that the
rate of purchased goods returned by the customers is high as indicated by (mean=2.74 and
standard deviation=1.069). The participants agreed that the features of the product are
adequately mentioned as demonstrated by (mean=3.51 and standard deviation=1.005). The
respondents also agreed that the platform offers products with high brand equity as shown
by (mean=3.44 and standard deviation=0.737).

46
 Statements 1 2 3 4 5 Mean Std.
Dev
Providing delivery has enabled the 1 6 25 45 19 3.78 0.873
company to obtain more sales
Sufficient funds are provided to facilitate 12 36 19 23 6 2.74 1.145
after sales services
The rate of purchased goods returned by 16 22 29 29 0 2.74 1.069
the customers is high
The features of the product are adequately 1 13 38 24 20 3.51 1.005
mentioned
The platform offers products with high 0 7 47 35 7 3.44 0.737
brand equity
Table 4 13: Influence of Product Attributes on The Sale of Luxury Goods on E-
Commerce Platforms in Nairobi, Kenya
4.4.3.1 Correlation Analysis
From the model, the correlation coefficient 0.347 is a strong positive indicating a strong
increasing relationship between offering products with high brand equity and an increase
in revenue. From the R squared, we can conclude that 12% variation in increase in
revenue can be demonstrated by offering products with high brand equity.
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
Beta
B Std, Error
1 (Constant) 2.370 .403 5.886 .000
Company to align .410 .115 .347 3.582 .0701
with budget
allocated
d. Dependent Variable: Providing delivery has enabled the company to obtain more sales
Table 4 14 Correlation for Providing Delivery to Enable the Company to Obtain More
Sales and Allocating with Budget

47
4.4.3.2 Regression Analysis

From the regression coefficients, the equation can be fitted from the model as shown below:

Y=βX1+c+ε,

Which can be showcased as Y=0.410X1+2.37+ε,

Both coefficients are significant at α=0.05. The relationship is considered significant

because the P value =0.001 When adoption of products offering high brand equity is kept
at 0, we expect the revenue to be a constant 2.37, similarly an increase in one unit in the
products offering high brand equity leads to an increase in 0.41 units in the revenue.
Implying that there is a significantly positive relationship between offering products with
high brand equity and revenue.

Model R R Square Adjusted R Square Std. Error of the

Estimate
1 .347a .120 .111 .823
c. Predictors: (constant), The platform offers products with high brand equity
Table 4 15: Model Summary for Platform Offering High Brand Equity and Increase
in Revenue
From the ANOVA output coefficients below, the F statistic 12.830 is greater than the F
critical value which is 5.886 indicating that the model is statistically significant, with
P=0.001 which is less than α=0.05. We can therefore deduce a strong positive relationship
between high brand equity product offering and an increase in the volume of revenue.

Table 4 16: ANOVA for Platform Offering High brand equity and Increase in
Revenue

Model Sum of df Mean F Sig.

Squares Square
1 Regression 8.696 .1 8.696 12.830 .001
Residual 63.711 94 .678
Total 72.406 95
a. Dependent Variable: providing delivery has enabled the company to obtain
more sales
b. Predictors: (Constant): The platform offers products with high brand equity

48
4.5 Chapter Summary

Chapter Four displayed the results of the study. The Findings of the Study included the
background information obtained, the effect of the promotion strategy on the sale of Luxury
goods on e-commerce platforms, the effect of Technology adapted on the sale of luxury
goods on e-commerce platforms and the effect of the Product attributes on the sale of luxury
goods on e-commerce platforms. The study found that the promotion strategy, The
technology adapted, and the product attributes had a positive significant relationship on the
sale of luxury goods on e-commerce platforms in Nairobi, Kenya. Chapter 5 will cover the
discussion, conclusion and the recommendations of the study.

49
 CHAPTER FIVE

5.0 DISCUSSION, CONCLUSION AND RECOMMENDATION

5.1 INTRODUCTION

The chapter summarizes all the contents of the study and includes the discussion of the
major data results obtained from the study and provides the conclusions and
recommendations based on the analysis of the information collected. The study intended to
explore the effect of promotion strategy on the sale of luxury goods on e-commerce
platforms in Nairobi, Kenya. Also, to examine the effect of technology adapted on sale of
luxury goods on e-commerce platforms in Nairobi Kenya and furthermore to examine the
effect of product attributes on the sale of luxury goods on e-commerce platforms in Nairobi,
Kenya.

5.2 Summary

The main objective of the study was to explore the factors that influence the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya. The specific objectives were to
determine the effect of promotion strategy on the sale of luxury goods on e-commerce
platforms in Nairobi, Kenya, to evaluate the effect of technology adapted on the sale of
luxury goods on e-commerce platforms in Nairobi, Kenya and to examine the effect of the
product attributes on the sale of luxury goods on e-commerce platforms in Nairobi, Kenya.
Literature was also reviewed to provide a further comprehensive approach to the study. A
conceptual framework was developed to orchestrate the multiple relationships between the
dependent and the independent variable.

The Research design adopted was a descriptive research design. The study mainly focused
on the e-commerce platforms in Nairobi, Kenya. There are 64 e-commerce platforms in
Kenya as listed by ecommerce data base that is registered with the German teleservices act.
The study used a census approach and therefore the population were the general managers
and the marketing managers which totaled to 128 targeted respondents for the study. The
data obtained by primary data through the use of questionnaires. Quantitative techniques
were used to analyze data which include mean, standard deviations, frequency and
percentages. Correlation analysis was conducted to enable the establishment of the strength
between the dependent and the independent variable. Multiple regression analysis was also
conducted in order to explore the type of relationship the factors influencing the sale of

50
luxury goods have over the ecommerce platforms in Nairobi, Kenya. Pie charts, frequency
tables, and figures were used to demonstrate the data that was analyzed.

The first objective of the study was to determine the effect of promotion strategy on the
sale of luxury goods on e-commerce platforms in Nairobi, Kenya. The study found that
Instagram and Facebook are the most used digital tools by e-commerce platforms to
promote their products (shown by response rate 95.8% and 96.9% respectively.) The most
used traditional media tool is posters (response rate 78%). About more than half of the
respondents stated that conduct promotion campaigns quarterly (response rate 51%). The
respondents agreed that promotion on digital media has increased the sale of luxury goods
on their e-commerce platform (mean=3.36, std. dev= 0.796), they also agreed that the use
of traditional media has increased the sale of luxury goods on their e-commerce platform
(mean= 3.41, std. dev= 1.505), They agreed that high impact advertisement is a key element
they focus on (mean= 2.85, std. dev=0.929), it was also noted that they must align the
company budget with the promotion strategy (mean=3.20, std. dev=0.947), and they
disagreed that there are adequate funds allocated for the promotion strategy (mean= 3.17,
std. dev=1.389), The respondents were neutral about them trying new promotional
strategies to reach their target audience (mean=2.94 std. dev=1.024).

The second objective was to evaluate the effect of technology adapted on the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya. It was found that majority of the e-
commerce platforms require payment of luxury goods to be made prior to purchase (this is
shown by the response rate=68%), The respondents indicated that their platform has not
been hacked yet (response rate= 95%), The platforms do not use 3D virtual modeling to
display their products on the e-commerce platforms (response rate= 75%), The most used
platform to facilitate the payment of the sale is Mpesa and debit and credit card (response
rate= 95.83%, 89.58% and 86.46% respectively), The respondents agreed that the e-
commerce platform has a safe payment gateway to facilitate the sale of luxury goods
(mean= 4.23, std. dev=1.031), The platform has an increased website usage (mean= 3.26,
std. dev=0.987), The respondents somewhat agreed that they constantly improve the look
and feel of the website (mean= 2.99, std. dev=0.979), The respondents also agreed that they
take measures to prevent hacking/ fraud (mean=3.14 , std. dev=0.9.36).

The third objective of the study was to examine the effect of the product attributes on the
sale of luxury goods on e-commerce platforms in Nairobi, Kenya. It was determined that
94% of the respondents agree to providing delivery services to the customers. 66% of the

51
participants agreed that they provide after-sales services. The respondents agreed that
providing delivery services has enabled the company to make more sales (mean= 2.99, std.
dev=0.979), The respondents were neutral about obtaining sufficient funds to facilitate after
sales services (mean=2.74, std. dev=1.145), The respondents disagreed that the rate of the
goods returned by the customers is high (mean=2.74, std. dev=1.069), The customers
agreed that the features of the products are adequately mentioned (mean=3.51, std.
dev=1.005) and it was established that the platforms of products with high brand equity
(mean=3.44, std. dev= 0.737).

5.3 Discussion

5.3.1 The Extent to which the Promotion Strategy influences the Sale of Luxury
Goods on E-Commerce Platforms in Nairobi, Kenya.

It was established that having a promotion strategy is extremely essential to enhancing the
sale of luxury goods on e-commerce platforms in Nairobi, Kenya. There are various tools
that contribute to the success of a promotion strategy which could be digital or traditional;
the study found that the digital media tools that predominantly contribute to the promotion
strategy on e-commerce platforms in Nairobi, Kenya are Instagram, Facebook and Email
Marketing and Google, whereas the traditional media tools used most were posters,
billboards, and flyers. These findings are in agreement with a study done by Kaur & Kumar
(2022) where it was stated that Instagram and Facebook are the most appealing digital
marketing tools as their measurability and high usage rate by the Gen Z allows it to be a
successful tool to use within a promotion strategy to target luxury good consumers. A study
done by Choi et al. (2020) also shows that the use of traditional media tools such as
billboards enable luxury goods consumers to psychologically establish a relationship
between the advertisement and the brand where they associate the advertisement with a
high brand power luring them to believe that the product is worth purchasing from that e-
commerce platform. This implies that e-commerce platforms should continue to further
utilize the traditional and digital media tools in pursuit of increasing sale of luxury goods
on their e-commerce platform.

The study found that the frequency of the promotion campaigns conducted in Nairobi,
Kenya are mostly quarterly which concurs to the study done by Xiao et al. (2022) where
they state that campaigns conducted on a quarterly basis are the most appropriate as they
provide optimum time to implement the formulated strategy and assess the customers

52
response and deviate their strategy accordingly, hence the e-commerce platforms in
Nairobi, Kenya should continue to implement their promotion strategy on a quarterly basis.

The study also found that the promotion on digital media has a strong positive co-relation
on the increase in sales of luxury goods on e-commerce platforms in Nairobi, Kenya. The
outcomes concur with those of Jahn et al.(2013) where they stated that a well-executed
promotion strategy can strongly enable e-commerce platforms to get an increase in sales
since the luxury goods market is very niche and specific and therefore the promotion
strategy enables e-commerce platforms to incentivize purchases as they can be made it be
more appealing and implicit the desire to be attained, it also enables them to create a sense
of exclusivity by strategically positioning yourself as a premium brand and attract like-
minded customers enabling them to feel special and driving them to further purchase more
items.

The study found that high impact advertisement is a moderately a key element that e-
commerce platforms focus on. According to Wang (2023), it is stated that when
organizations focus on high impact advertisement as part of a promotion strategy, it enables
them to amplify their reach and increase their chances of obtaining new customers. Hao &
Yang (2022) also mentioned that it enables them to differentiate themselves from their
competitors which is a key element that e-commerce platforms should focus on as they can
showcase their unique selling points, their values and their core offering to the customers
in a distinct manner that allows themselves to be remembered by their customers. A study
conducted by Toteva, (2021) also states that high impact advertisement elicits high
emotions by the customer as it stimulates curiosity which in turn creates a mystery and
enables the audience to be highly engaged with the brand creating a connection of the brand
with the audience. They also state that a high impact advertisement generates a higher rate
of return as you are able to maximize on more numbers of the customers you wish to reach.

The study found that the company must align the promotion strategy with the budget
allocated. A study conducted by Rahmawati & Aprianingsih (2023) found that it is essential
to have a higher promotion budget as the more numbers of audience you reach the higher
the return in terms of engagement you are likely to receive. It is wise to opt for a more cost-
effective budget for a promotion strategy as all businesses would want to eliminate costs
as much as they can, however, a study conducted by Chao (2022) states that when it comes
to the promotion strategy, it is important that the strategy obtains its goals effectively as
opposed to saving the cost and not obtaining the goals of the promotion strategy intended

53
to be achieved. A study done by Dan (2023) revealed that a thorough analysis must be done
in order to understand the budget that will be allocated for the promotion strategy as this
would then further enable the right amount of resources to be put towards the promotion
strategy allowing the organization to ensure that they do not over-utilize or under- utilize
the budget.

It was also revealed adequate funds are being allocated to facilitate the promotion strategy
chosen. These findings concur with Wang ( 2023) who indicated that an e-commerce
platform must focus on injecting capital in the promotion strategy as this empowers them
to fund the intended plan and expand to new markets, reach a broader target audience, it
enables them to respond and adapt to changes immediately as they can have sufficient funds
to conduct A/B testing which means that if the first version of their plan does not work,
they are at liberty to fund a different version of the plan in order to achieve the goal that
they intended to achieve. When adequate funds are allocated, the e-commerce platform can
now design various promotional strategies for luxury goods which can stimulate consumer
demand and drive-up sales or even aid in converting leads into customers who then would
pay for the product and in turn appreciate it (Ding, 2023).

It was noted that the e-commerce platforms would try new promotional strategies in order
to reach their target audience. This concurs with the finds of the study by Kilian & Hacopian
(2023) as they mentioned that trying new promotional strategies provides a strong
competitive advantage which could be beneficial both internally and externally; The e-
commerce platforms would be able to leverage this as they will be able to play with the
dynamics of the different strategies and how they are affecting the demand by trying a new
one over a time period allowing them to test for the organizational scope, resistance to
change and pivoting styles and suitability. Externally, they would be able to win over their
competitors as they would have the stamina to respond to the changes in the market and
adapt to the market needs and methods of reaching new customers and enticing existing
customers.

5.3.2 The extent to which Technology adapted on the sale of Luxury goods on e-
commerce platforms in Nairobi, Kenya

The study revealed that technology has a positive significant relationship on the sale of
luxury goods on ecommerce platforms in Nairobi, Kenya. It also revealed that the e-
commerce platforms require payment of the luxury goods to be placed prior to the

54
customers receiving the goods. A study done by Luong et al. (2022) showed that e-
commerce platforms should ensure that the payment of the luxury goods should be done
upfront as enables the e-commerce platforms to obtain confirmation of intent where the e-
commerce platforms are able to manage their inventory appropriately and plan their
schedules in a timely and efficient manner. Also, when the payment is received it allows
customers to have a satisfactory experience by receiving their goods on time as the payment
will demonstrate confirmation of sale and the goods to be delivered can be released as early
as possible.

The study established that the e-commerce platforms have a safe payment gateway to
facilitate sales. This concurs with a study done by Lal et al. (2023) as they states that it is
essential to integrate the platform with a safe payment gateway system that adheres to the
payment card Industry data security standard to facilitate sales as this allows them to
demonstrate to the customers that they are a reliable source of e-retail as they comply with
all the requirements and also show the customers that they have a secure mode of payment
where all sensitive information of the customers is kept absolutely confidential. The
personal data of the customer such as their credit/debit card details are end-to-end
encrypted, and this would invoke a sense of trust from the customers that the transactions
that they will initiate will be conducted without any risk of a data breach. A study conducted
by Fajrin et al. (2022) also brought out that when an e-commerce platform has a safe
payment gateway system, it enables the customer to have a smooth and seamless process
to make the payment of the items they have bought as it minimizes the chances of any
failures or errors occurring or any delays and therefore e-commerce platforms should
always ensure that they use a safe payment gateway system as it has demonstrated to highly
contribute to facilitating sales through the platforms.

It was established that the e-commerce platforms in Nairobi, Kenya moderately agreed to
using 3D models to showcase luxury goods. From the study conducted by Ambikapathy
(2023), he outlines the importance of adapting to modern technology and using 3D virtual
models to showcase the luxury items as it helps the customers to make purchasing decisions
by providing them with a comprehensive illustration of the product such that the customer
can get a realistic feel of how the product will be when the actually buy it. It enables
customers to interact with the product where they can rotate it and enlarge it to view the
specifications and the features ensuring the customers make a choice after thoroughly
looking at the product, this level of engagement provided to the customers through the

55
virtual modeling leads to higher customer satisfaction and also reduced the number of
goods returned back to the organization because of dislike towards the product or due to a
misunderstanding of what the product it. This feature reduces the expectation and reality
gap that customers usually face while purchasing goods from an e-commerce platform
given that the stakes are usually very high as luxury items are often highly priced.

The study also brought out that the platform has increased website usage which implies that
various customers would purchase luxury goods from the website. A study done by Chahar
et al. (2022) shows that when there is increased usage of the website, it demonstrates that
there are more potential customers and hence a broader reach as sales can be facilitated
from remote locations primarily giving customers the convenience of shopping at the
comfort of their homes. When a platform has an increased website usage, search engines
are able to rank the website higher as the algorithms are configures to believe that the more
visitors a website gets, the more relevant the content the website has therefore attracting
more customers.

The study found that the e-commerce platforms constantly improve the look and feel of the
website to facilitate sale of luxury goods. This is in agreement with a study conducted by
Sudarsan et al.(2022) as they established that consistently improving the look and feel of
the website has a positive significant correlation to facilitating sales as the more visually
appealing the site is made to be, the more impactful the first impression is created as it
makes the browsing process more intuitive. It was also established that an aesthetic appeal
has a clear and direct reflection on the brand perception which is a huge decision-making
factor as it has the power to generate a positive perception and enhance the credibility of
the platform which attributes to attaining more sales. a study conducted by Chahar et
al.(2022) stated that when a platform is made to have an appealing look and feel it increases
social sharing and virality enabling them to make more sales as customers are more likely
to share their positive experience with others and this drives a lot of word-of-mouth
recommendations and attracts more people to use the platform and drive traffic amplifying
their chances to increase sales. Improving the look and feel also entails ensuring the
platforms are compatible with all devices and a suitable design is adopted to enable higher
user responsiveness and seamless optimal user experience with improved accessibility.

It was also established that the organizations actively take measures to prevent hacking and
fraud to facilitate sales of luxury goods. This concurs with a study done by Chen et al.(2021)
where he outlines the importance of accrediting the platform to be a trustworthy avenue of

56
purchasing goods. The study predominantly mentioned that trusting the platform is a one
of the highest determining factor that influences customers to purchase goods and once
customers are aware that the organization takes the security of its clients very seriously it
increases their chances of repeat customers which helps the organization grow
exponentially in regards to customers as well as profits, it is also said to have a higher rate
at improved stakeholder management as the stakeholders involved would want to associate
themselves with a credible source where they know they face no reputational risk or
financial risk that would jeopardize the company.

5.3.3 The Extent to Which the Product Attributes Influence the Sale of Luxury
Goods on E-Commerce Platforms in Nairobi, Kenya.

The study found that providing delivery has enabled the organization to achieve more sales.
It was also revealed that the organization provides sufficient funds to facilitate after-sales
services to the customers. The study showed that the rate of goods returned by the
customers is not high. It was noted that the organizations adequately mention the features
of the product in order to facilitate the sale of luxury goods on the e-commerce platforms.
Offering products with high brand equity has enabled organizations to increase the sale of
luxury goods on e-commerce platforms. This implies that product attributes have a positive
significant relationship on the sale of luxury goods on e-commerce platforms in Nairobi,
Kenya.

The study established that providing products with a high brand equity have a strong
positive correlation with the sale of luxury goods in Nairobi, Kenya. The findings concur
with Daya et al.(2022) who revealed that luxury goods often tend to be associated with
prestige and reputation which promotes exclusivity, and this results in customers feeling
inclined to purchase the product. When e-commerce platforms offer products with a high
brand equity it cultivates an aspirational appeal initiating desire where the customers want
to purchase the product because they perceive it to be a status symbol and a success in their
personal identity and this makes it an ideal for e-commerce platforms to leverage on.

It was noted that the rate of goods returned by customers on the e-commerce platform is
high. Li & Nuangjamnong, (2022) believes that when an organization has a high rate of
goods returned, it demonstrates a gap between what they expected they would receive and
what they actually receive and the reason they would return the goods is because they are
dissatisfied with the product and therefore, they would opt to return it back to the e-

57
commerce platform. The results also brought out that there is a significant relationship
between the goods returned by the customers and the sale of the goods as the return of
goods highly impact sales of the luxury goods. A study conducted by Givan et al.,(2021)
also states that there is a huge trust factor involved and when consumers keep on returning
the goods, it escalates untrustworthiness and results in a drop in sales Benz et al. (2023)
also state that e-commerce platforms should ensure that the products that they have to offer
meet utmost quality requirements such that the goods delivered to the clients are precisely
how they appear to be so that there is no breach of trust amidst the buying and selling
process.

The study found that the features of the product are adequately mentioned on the e-
commerce platform. These findings are in agreement with a study conducted by Liu et al.
(2023) where he mentions that when the features of the luxury goods products are
mentioned, it equips the customers with all the knowledge and information necessary to
make decisions and therefore customers are able to understand what they need to know
about a product. The data points of a product are extremely vital to contribute to why the
product should be considered and Marketers use this approach so that they can inform and
persuade the customers on why they should buy the product. They can also leverage on it
by building credibility and demonstrating what the products functionality is and how it can
be useful. Benz et al. (2023) also establishes that when there is transparent communication
about the product where its limitations are mentioned, it enhances customer experience by
enabling them to make informed customer decisions and furthermore facilitate sales.

It was also established that the provision of after-sales services such as repair and
maintenance have a strong positive correlation with an increase in sales. The results concur
with a study done by Maksimov & Rogovaya (2021). It was determined that when an e-
commerce platform is providing after sales services to the customers, it provides them with
a safety net they can rely on when the product is faulty or does not function as it was
intended to and when a customer is aware that they can obtain a tangible benefit of relying
on the platform to repair or maintain the product for them customers are highly inclined to
then purchasing from the e-commerce platform. A study done by Ferraz et al., (2023) states
that customers are more likely to be loyal to platforms that offer to them after sales services
as they associate the experience of the service to the overall brand and initiate more word-
of-mouth marketing as the customers are highly likely to recommend something that has
met their satisfactory criteria.

58
5.4 Conclusions

5.4.1 The extent to which the promotion strategy affects the sale of luxury goods on
e-commerce platforms in Nairobi, Kenya

The study found that promotion strategy has a strong positive correlation to sale of luxury
goods on e-commerce platforms in Nairobi, Kenya. The study also found that promotion
strategy has a positive and significant relationship with the sale of luxury goods on e-
commerce platforms in Nairobi, Kenya. This suggests that a unit increase in promotion
strategy would cause the sale of luxury goods on e-commerce platforms to increase. Based
on the findings, the study concludes that promotion strategy has a positive effect on the sale
of luxury goods on e-commerce platforms in Nairobi, Kenya.

5.4.2 The extent to which the technology adapted affects the sale of luxury goods on
e-commerce platforms in Nairobi, Kenya

The study found that the relationship between the technology adapted and the sale of luxury
goods on e-commerce platforms has a strong and significant association. It was also
revealed that the technology adapted had a positive relationship with the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya. The results show that a unit increase in
technology adapted will cause a unit increase in the sale of luxury goods on e-commerce
platforms in Nairobi, Kenya. The study concludes that based on the findings, the
technology adapted has a positive influence on the sale of luxury goods on e-commerce
platforms in Nairobi, Kenya.

5.4.3 The extent to which the product attributes affect the sale of luxury goods on e-
commerce platforms in Nairobi, Kenya

The study found that product attributes and the sale of luxury goods sold in e-commerce
platforms are strongly and positively related. It was also established that product attributes
had a positive and significant relationship with the sale of luxury goods on e-commerce
platforms where a unit increase in the product attributes will cause a unit increase in the
sale of luxury goods on e-commerce platforms in Nairobi, Kenya. Based on the findings,
the study concludes that product attributes have a strong and positive effect on the sale of
luxury goods on e-commerce platforms in Nairobi, Kenya.

59
5.5 Recommendations

5.5.1 Recommendations for Improvement

5.5.1.1 The extent to which the promotion strategy influences the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya.

The study found that the promotion strategy has a positive and significant relationship on
the sale of luxury goods on e-commerce platforms in Nairobi, Kenya. Therefore, the study
recommends that e-commerce platforms should invest in digital and traditional media as it
was noted that digital and traditional media have a positive influence on the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya. It was also noted that high impact
advertisement as facilitated by the promotion strategy enables increase in sales of luxury
goods on e-commerce platforms in Nairobi, Kenya. Hence, the study recommends that e-
commerce platforms should consider high impact advertising to enhance chances at
increasing sales. It was established that providing adequate funds enables the company to
facilitate sales of luxury goods and therefore ecommerce platforms must aim to obtain a
provision of adequate funds in order to increase the sale of luxury goods on their e-
commerce platforms in Nairobi, Kenya.

5.5.1.2 The extent to which the technology adapted influences the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya.

The study found that technology adapted has a positive and significant relationship on the
sale of luxury goods on e-commerce platforms in Nairobi, Kenya and therefore the study
recommends that e-commerce platforms must adapt to technology constantly in order to
increase the sale of luxury goods on their e-commerce platforms in Nairobi, Kenya.

It was determined that virtually Modelling the products in 3D enhances the usability of the
e-commerce platform which then aids in increasing sales and therefore the study
recommends that e-commerce platforms should adapt the use of 3D virtual modelling to
display the Luxury goods on e-commerce platforms in order to increase the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya.

It was also noted that using a safe payment gateway has a positive and significant
relationship in increasing sales and enables customers to trust the platform hence
facilitating more sales through the platform and therefore the study recommends safe
payment gateways to be adapted by e-commerce platforms in Nairobi, Kenya to increase
the sale of luxury goods.
60
It was established that constantly improving the look and feel of the e-commerce platforms
improves customer navigation and user experience and therefore the study recommends
that e-commerce platforms should invest in constantly improving the look and feel of the
website which would contribute to increasing the sale of luxury goods on e-commerce
platforms in Nairobi, Kenya.

5.5.1.3 The extent to which the Product attributes influences the sale of luxury goods
on e-commerce platforms in Nairobi, Kenya.

The study established that product attributes have a strong, positive and significant
influence on the sale of luxury goods on e-commerce platforms in Nairobi, Kenya. It was
also noted that providing delivery to the customers has enabled the e-commerce platform
to obtain more sales and therefore the study recommends that the e-commerce platforms
should continue to provide delivery of the goods upon the sale.

It was noted that offering products with high brand equity increases the sale of luxury goods
on e-commerce platforms and therefore the study recommends that e-commerce platforms
in Nairobi, Kenya. Therefore, the study recommends that e-commerce platforms should
continue to offer products with high brand equity in order to increase the sale of luxury
goods on e-commerce platforms in Nairobi, Kenya.

5.5.2 Recommendations for Further Research

The main objective of the study was to determine the factors that influence the sale of
luxury goods on e-commerce platforms in Nairobi, Kenya. Therefore, the study
recommends that further research should be conducted on the factors that influence the
consumer decision making in order to purchase luxury goods on e-commerce platforms on
Nairobi, Kenya. It is also recommended that that studies should use other variables than the
ones discussed in this study.

61
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 APPENDICES

Appendix I: Introduction Letter

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Appendix II: IRB Approval Letter

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Appendix III: Respondents Consent Form

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Appendix IV: Questionnaire

Kindly tick appropriately on the provided spaces

Part One: Background Information

1. Gender

[ ] Male [ ] Female [ ] other

2. What is your highest level of education?

Certificate/diploma [ ] Bachelor’s degree [ ] Master’s degree [ ] Doctorate [ ]

Others: please specify________________

3. How many years have you worked with the organization?

1-2 years [ ] 3-4 years [ ] 5-6 years [ ] 7-9 years [ ] 10 years and above [ ]

4. How many years has the e-commerce platform been operational?

1-2 years [ ] 3-4 years [ ] 5-6 years [ ] 7-9 years [ ] 10 years and above [ ]

Part Two: The Extent to Which Promotion strategy Influences the Sale of Luxury
Goods on e-commerce platforms

1. From the list below, what tools are used by the organization for promotion of the e-
commerce platform? (Please tick where appropriate).
[ ] Instagram [ ] Radio
[ ] Facebook [ ] Television
[ ] Twitter [ ] Billboards
[ ] Linked in [ ] Posters
[ ] Snapchat [ ] Flyers
[ ] Tiktok [ ] others: please specify___________
[ ] Google
[ ] Email

2. How often does the organization conduct promotion campaigns?

[ ] daily [ ] once a week [ ] twice a week
[ ] Every 2 weeks [ ] Every 3 weeks [ ] Monthly

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3. Please Indicate your level of agreement on the following statements, where 1-strongly
disagree, 2-disagree, 3-moderate, 4-agree, and 5-strongly agree

Statements 1 2 3 4 5
Promotion on digital media has increased the sale of luxury
goods on e-commerce platforms

Promotion on traditional media has increased the sale of

luxury goods on e-commerce platforms
High impact advertisement is a key element we focus on
The company must align the promotion strategy with the
budget allocated
There are adequate funds to facilitate the promotional
strategy chosen
We try new promotional strategies to reach our target
audience
4. In your view, what are the challenges you face while implementing the promotion
strategy?

………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………..

Part Three: The Extent to which the Technology Adapted Influences the Sale of
Luxury Goods Online.

1. Does the platform require the customer to pay beforehand using an online payment
method?

[ ] yes [ ] No

2. Has the e-commerce platform been hacked previously?

[ ] yes [ ] No
3. Does the e-commerce platform provide product recommendations?
[ ] yes [ ] No

4. Does the e-commerce platform virtually model the products in 3D?

[ ] yes [ ] No

5. What mode of payment is used to facilitate the sale of goods on the e-commerce
platform? (Please tick where appropriate).

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 [ ] m-pesa [ ] Airtel money [ ] debit card
[ ] credit card [ ] electronic bank transfer [ ] cash on
delivery

6. Please Indicate your level of agreement on the following statements, where 1-strongly
disagree, 2-disagree, 3-moderate, 4-agree, and 5-strongly agree

Statements 1 2 3 4 5
The e-commerce platform has safe payment gateways to
facilitate sales

The e-commerce platform uses 3D models to showcase the

luxury goods
The platform has increased its website usage
We constantly improve the look and feel of the website
The organization actively takes measures to prevent
hacking/fraud
7. In your view, what are the challenges you have faced while adapting technology to sell
the luxury goods on e-commerce platforms?

………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………..

Part Four: The extent to which the product attributes influence the sale of luxury
goods online.

1. Does the company provide delivery once the product is sold online?

[ ] yes [ ] No

2. Does the company provide after sales services when the product is sold online?

[ ] yes [ ] No [ ] Maybe

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3. Please Indicate your level of agreement on the following statements, where 1-strongly
disagree, 2-disagree, 3-moderate, 4-agree, and 5-strongly agree

Statements 1 2 3 4 5
Providing delivery has enabled the company to obtain more
sales

Sufficient funds are provided to facilitate after sales

services
The rate of purchased goods returned by customers is high
The features of the product are adequately displayed on the
website
The platform offers products with high brand equity

4. In your view, how do the product attributes affect the sale of luxury goods on e-
commerce platforms?

………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………

THANK YOU FOR YOUR PARTICIPATION

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Appendix V: Debrief form

Thank you for participating in this study. The purpose of this study is to gain an
understanding of the factors that influence the sale of luxury goods on e-commerce
platforms in Nairobi, Kenya. Your participation will enable researchers to gain insights in
decision making and funds allocation.

In the event that you experience any distressful reactions and concerns regarding any
questions that are presented to you in this study, feel free to seek support through the
Counselling Centre at USIU-A.

If you have any questions regarding the research, you may contact the research through the
following phone number +254745225910 or the following email address
uchavda@usiu.ac.ke.
Once again, Thank you for your participation.

Regards,

Urvashi Chavda

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Appendix VI: NACOSTI Permit

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89
Appendix VII: List of ecommerce platforms in Nairobi, Kenya

1. Jumia
2. Kilimall
3. Carrefour
4. Masoko
5. Amazon
6. Alibaba
7. Avechi
8. Jiji
9. Pigiame
10. My big order
11. Saruk digital
12. Naivas
13. Sky garden
14. Chandarana
15. Anisuma
16. Patabay
17. Artcafe
18. Best sellers Africa
19. Duka direct
20. Inchcape
21. Marketplace Kenya
22. Kilimani Mums
23. Jambo Shoppe
24. Mamacita
25. Sensations
26. My dawa
27. Phone Place Kenya
28. Autocheck
29. Sangyug
30. Salute i-world
31. Kasha Kenya
32. Western cosmetics

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33. Lintons
34. Vituzote
35. Kenya car bazaar
36. Gadzone
37. Buyuology
38. Vitumob
39. Kiddie world
40. Toys r us
41. Textbook centre
42. Farfetch Kenya
43. Fazal
44. xanadu
45. luxury network Kenya
46. Sandstorm
47. Banana Box
48. Accesorize
49. Vivo
50. Enda
51. Kitu Kali
52. Adelphi
53. Icojn
54. Lestyle parfait
55. Wazawazi
56. True cosmetics
57. Joannakcosetics
58. Supercosmetics
59. Mango Kenya
60. JokaJok
61. Kikiromeo
62. Max Kenya
63. Lcwaikiki
64. Nairobisportshouse

91