An investigation of the use of social media

for e-commerce amongst small businesses in

Saudi Arabia

W
IE
Maha Helal
EV
PR

Ph.D. Thesis 2017

 An investigation of the use of social media
for e-commerce amongst small businesses in
Saudi Arabia

W
IE
Maha Helal
EV

Centre for Digital Business

Salford Business School
PR

The University of Salford

Salford, UK

Submitted in Partial Fulfilment of the Requirements of the Degree of

Doctor of Philosophy
May 2017
Table of Contents
LIST OF TABLES ............................................................................................................................... VI

LIST OF FIGURES .......................................................................................................................... VIII

ABBREVIATIONS ............................................................................................................................. IX

KEY DEFINITIONS ............................................................................................................................. X

PRESENTED WORK........................................................................................................................ XII

ACKNOWLEDGMENTS ................................................................................................................ XIII

ABSTRACT ....................................................................................................................................... XIV

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1 INTRODUCTION ....................................................................................................................... 1
1.1 CHAPTER INTRODUCTION ............................................................................................................... 1
1.2 RESEARCH BACKGROUND ............................................................................................................... 1
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1.3 RESEARCH CONTEXT........................................................................................................................ 3
1.3.1 Saudi Arabia..................................................................................................................................... 3
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1.3.2 Small and Medium Sized Enterprises (SMEs) ................................................................... 4

1.3.3 Social Media Shopping Phenomenon.................................................................................... 5
1.3.4 Instagram .......................................................................................................................................... 6
1.4 RESEARCH AIM ................................................................................................................................. 7
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1.5 RESEARCH QUESTIONS .................................................................................................................... 7

1.6 RESEARCH METHOD ........................................................................................................................ 7
1.7 RESEARCH CONTRIBUTIONS ........................................................................................................... 8
1.7.1 Contribution to Knowledge ....................................................................................................... 8
1.7.2 Contribution to Theory ............................................................................................................... 9
1.7.3 Contribution to Method .............................................................................................................. 9
1.8 THESIS STRUCTURE....................................................................................................................... 10
1.9 CHAPTER SUMMARY ..................................................................................................................... 12

2 LITERATURE REVIEW ..........................................................................................................13

2.1 CHAPTER INTRODUCTION ............................................................................................................ 13
2.2 ELECTRONIC COMMERCE ............................................................................................................. 13
2.2.1 Defining Electronic Commerce .............................................................................................. 13
2.2.2 E-commerce Business Benefits .............................................................................................. 15
2.2.3 E-commerce Risks and Limitations .....................................................................................17

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 2.2.4 E-commerce in Saudi Arabia ..................................................................................................18
2.2.5 Limitations of E-commerce in Saudi Arabia ...................................................................20
2.3 SOCIAL MEDIA................................................................................................................................ 26
2.3.1 Evolution of Web 2.0 and Social Media .............................................................................26
2.3.2 Defining Web 2.0 and Social Media .....................................................................................27
2.3.3 Social Media Platforms .............................................................................................................28
2.3.4 Social Media Business Impact ................................................................................................ 31
2.3.5 The State of Social Media in Saudi Arabia .......................................................................32
2.4 SOCIAL COMMERCE ....................................................................................................................... 34
2.4.1 The Evolution of Social Commerce ......................................................................................34
2.4.2 Defining Social Commerce .......................................................................................................36
2.4.3 Social Commerce Business Benefits.....................................................................................38
2.4.4 Social Commerce in Saudi Arabia ........................................................................................44

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2.5 TRUST .............................................................................................................................................. 46
2.5.1 Defining Trust................................................................................................................................ 46
2.5.2 Trust in E-commerce and Social Commerce ...................................................................47
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2.6 WORD OF MOUTH ......................................................................................................................... 50
2.7 CHAPTER SUMMARY ..................................................................................................................... 53
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3 THEORETICAL FRAMEWORK ............................................................................................57

3.1 CHAPTER INTRODUCTION ............................................................................................................ 57
3.2 SOCIAL CAPITAL THEORY ............................................................................................................ 58
3.2.1 The Evolution of Social Capital Theory .............................................................................58
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3.2.2 Pierre Bourdieu: ...........................................................................................................................59

3.2.3 James Coleman:............................................................................................................................. 60
3.2.4 Robert Putnam: ............................................................................................................................62
3.2.5 Alternative Configurations of Social Capital Theory ..................................................65
3.3 CRITICISM AND JUSTIFICATION ................................................................................................... 68
3.4 SOCIAL CAPITAL IN THE CONTEXT OF INFORMATION SYSTEMS AND THE INTERNET ....... 70
3.4.1 Social Capital in Information Systems ...............................................................................70
3.4.2 Social Capital and the Internet ............................................................................................. 70
3.5 SOCIAL CAPITAL IN THE CONTEXT OF SOCIAL MEDIA, SOCIAL COMMERCE AND WORD OF
MOUTH.. .......................................................................................................................................................... 72
3.6 CHAPTER SUMMARY ..................................................................................................................... 74

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4 RESEARCH METHODOLOGY...............................................................................................77
4.1 CHAPTER INTRODUCTION ............................................................................................................ 77
4.2 PHILOSOPHICAL PERSPECTIVE .................................................................................................... 78
4.2.1 Positivist Research ......................................................................................................................79
4.2.2 Interpretive Research ................................................................................................................81
4.2.3 Critical Research ..........................................................................................................................86
4.3 RESEARCH APPROACH .................................................................................................................. 87
4.4 QUANTITATIVE AND QUALITATIVE RESEARCH ........................................................................ 87
4.5 RESEARCH STRATEGIES................................................................................................................ 88
4.6 ADOPTED RESEARCH STRATEGY ................................................................................................ 91
4.7 DATA COLLECTION METHODS .................................................................................................... 94
4.7.1 Stage 1: Interviews ......................................................................................................................95
4.7.2 Sampling Strategy .......................................................................................................................96

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4.7.3 Sample Size and Research Participants’ Details ...........................................................98
4.7.4 Translation Process ....................................................................................................................99
4.7.5 Candidates’ Invitation Preparation ................................................................................. 100
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4.7.6 Participants Invitation Process .......................................................................................... 102
4.7.7 Interview Question Guide ...................................................................................................... 102
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4.7.8 Stage 2: Online Observation................................................................................................. 104

4.8 ETHICAL CONSIDERATIONS ....................................................................................................... 109
4.9 MODES OF ANALYSIS .................................................................................................................. 110
4.10 INTRODUCING THE CASE STUDIES ............................................................................................ 113
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4.10.1 Case Study 1: Alpha ............................................................................................................ 114

4.10.2 Case Study 2: Beta............................................................................................................... 114
4.10.3 Case Study 3: Gamma ........................................................................................................ 115
4.10.4 Case Study 4: Delta ............................................................................................................. 115
4.11 CHAPTER SUMMARY ................................................................................................................... 117

5 DATA ANALYSIS AND RESEARCH FINDINGS ............................................................. 118

5.1 CHAPTER INTRODUCTION .......................................................................................................... 118
5.2 INTERVIEW QUESTIONS ............................................................................................................. 118
5.3 THEMES DEVELOPMENT FROM INTERVIEWS AND ONLINE OBSERVATION ....................... 120
5.3.1 Benefits of using social media as an e-commerce platform .................................. 122
5.3.2 Credit card issues ...................................................................................................................... 129
5.3.3 Bank transfers as a means of payment........................................................................... 133
5.3.4 Business to customer relationship overcoming trust issues ................................. 138
5.3.5 Limitations of using social media as an e-commerce platform........................... 151

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 5.3.6 Problematic issues faced by businesses when adopting traditional e-
commerce websites ................................................................................................................................... 156
5.3.7 Business related features that distinguish certain social media platforms from
others…........................................................................................................................................................... 160
5.3.8 The common process of conducting business using social media platforms 166
5.3.9 Previous experiences of customers using traditional e-commerce websites 175
5.3.10 The social media shopping experience encountered by customers ............. 179
5.3.11 Future intentions of customers to purchase through traditional e-
commerce websites ................................................................................................................................... 181
5.4 SUMMARY OF THEMES ................................................................................................................ 185
5.5 RESEARCH FINDINGS .................................................................................................................. 189
5.6 CHAPTER SUMMARY .................................................................................................................... 191

6 DISCUSSION .......................................................................................................................... 192

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6.1 CHAPTER INTRODUCTION .......................................................................................................... 192
6.2 CORRELATING THE RESEARCH FINDINGS WITH RELEVANT LITERATURE ........................ 192
6.2.1 Traditional e-commerce has many inhibiters constraining its adoption and
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diffusion in Saudi Arabia........................................................................................................................ 195
6.2.2 Building trustworthy relationships between businesses and customers is the
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key factor for the success of the social media shopping phenomenon in Saudi
Arabia….......................................................................................................................................................... 199
6.2.3 The new social media shopping phenomenon has directly contributed to
overcoming many traditional e-commerce issues in Saudi Arabia.................................... 202
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6.2.4 The new social media shopping phenomenon in Saudi Arabia embeds within
its success some constraints and limitations ................................................................................ 207
6.3 DISCUSSING THE FINDINGS THROUGH THE LENS OF SOCIAL CAPITAL THEORY ............... 208
6.3.1 The Relationship between Social Capital and Word of Mouth ............................ 209
6.3.2 The Relationship between Word of Mouth and Trust .............................................. 212
6.3.3 The Relationship Between Trust and Social Capital ................................................ 214
6.4 THE DEVELOPMENT OF THE CONCEPTUAL MODEL............................................................... 215
6.4.1 The Influencing Factors on the Evolvement of the Social Media Business
Phenomenon ................................................................................................................................................ 215
6.4.2 The SC-SC Model ........................................................................................................................ 218
6.5 CHAPTER SUMMARY ................................................................................................................... 221

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7 CONCLUSION ........................................................................................................................ 222
7.1 CHAPTER INTRODUCTION .......................................................................................................... 222
7.2 THE ACHIEVEMENT OF THE RESEARCH AIM AND RESEARCH QUESTIONS........................... 222
7.3 RESEARCH CONTRIBUTIONS ...................................................................................................... 226
7.3.1 Contribution to Knowledge .................................................................................................. 226
7.3.2 Contribution to Theory .......................................................................................................... 227
7.3.3 Contribution to Method ......................................................................................................... 228
7.4 EVALUATING THE RESEARCH..................................................................................................... 229
7.4.1 Reflection on the appropriateness of adopting interpretive research ............. 229
7.4.2 Reflection on the appropriateness of the adopted methodological choices .. 234
7.5 LIMITATIONS AND RECOMMENDATIONS FOR FUTURE WORK .............................................. 236
7.6 CHAPTER SUMMARY ................................................................................................................... 236

REFERENCES .................................................................................................................................. 238

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APPENDIX 1: SAMPLE TRANSLATION OF RESEARCHER & COLLEAGUE..... 272

APPENDIX 2: PARTICIPANT INVITATION LETTER ......................................................... 275

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APPENDIX 3: PARTICIPANT INFORMATION SHEET ....................................................... 276

APPENDIX 4: PARTICIPANT CONSENT FORM ................................................................... 277

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APPENDIX 5: RESEARCH ETHICAL APPROVAL ................................................................. 278

APPENDIX 6: ONLINE OBSERVATION .................................................................................. 279

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APPENDIX 7: THE ELEVEN THEMES EXTRACTED FROM NVIVO ................................ 305

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List of Tables

Table 2.1 Comparing business benefits between traditional

e-commerce and social commerce 43
Table 2.2 Key issues arising from the literature review mapped to
the research questions 55-56
Table 3.1 Key issues arising from the literature review and
theoretical framework mapped to the research questions 75-76
Table 4.1 Epistemological assumptions of positivism and
interpretivism 83
Table 4.2 The seven principles for evaluating interpretive field

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research 85
Table 4.3 List of research participants and their identification
codes 99
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Table 4.4 Mapping of the research questions with business
owners’ interview questions 103
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Table 4.5 Mapping of the research questions with customers’

interview questions 104
Table 5.1 Business owners’ interview question guide 119
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Table 5.2 Customers’ interview question guide 120

Table 5.3 Summary of the eleven themes 121
Table 5.4 Summary of the first theme – Benefits of using social
media as an e-commerce platform 122
Table 5.5 Summary of the second theme – Credit card issues 129
Table 5.6 Summary of the third theme – Bank transfers as a means
of payment 133
Table 5.7 Summary of the fourth theme – Business to customer
relationship overcoming trust issues 139
Table 5.8 Summary of the fifth theme – Limitations of using
social media as an e commerce platform 151

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Table 5.9 Summary of the sixth theme – Problematic issues faced
by businesses when adopting traditional e-commerce
websites 157
Table 5.10 Summary of the seventh theme – Business related
features that distinguish certain social media platforms
from other 161
Table 5.11 Summary of the eighth theme – The common process of
conducting business using social media platforms 167
Table 5.12 Summary of the ninth theme – Previous experiences of
customers using traditional e-commerce websites 175
Table 5.13 Summary of the tenth theme – The social media
shopping experience encountered by customers 179
Table 5.14 Summary of the eleventh theme – Future intentions of

websites
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customers to purchase through traditional e-commerce
181
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Table 7.1 The seven principles for evaluating interpretive field
research 229
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List of Figures

Figure 3.1 The notion of Putnam’s Social Capital Theory 64

Figure 4.1 Example of an extracted, encrypted, and translated
product post 108
Figure 4.2 An example of formulating an online observation
interpretation 113
Figure 6.1 The research findings with the corresponding social
commerce business benefits 194
Figure 6.2 The first influencing factor of the social media
shopping phenomenon 216

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Figure 6.3 The second influencing factor of the social media
shopping phenomenon 217
Figure 6.4 The SC-SC Model: The Social Capital – Social
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Commerce Model 220
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Abbreviations

B2B Business to Business

B2C Business to Customer
C2C Customer to Customer
CITC Communication and Information Technology Commission
COD Cash On Delivery
DSL Digital Subscriber Line
E-business Electronic Business
E-commerce Electronic Commerce
E-mail Electronic Mail

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EWOM Electronic Word Of Mouth
FTTx Fibre to the x (Fibre optics Internet broadband)
GCC Gulf Cooperation Council
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GPS Global Positioning System
IT Information Technology
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MCI Ministry of Commerce and Industry

MCIT Ministry of Communication and Information Technology
MENA Middle East and North Africa Region
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SAGIA Saudi Arabian General Investment Authority

SAMA Saudi Arabian Monetary Agency
SC-SC Model Social Capital – Social Commerce Model
SMEs Small and Medium Enterprises
SMS Short Message Service
SR Saudi Arabian Riyals (Currency)
WiMAX Worldwide Interoperability for Microwave Access
WOM Word Of Mouth
US United States of America

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Key Definitions

E-commerce
The overall process of selling and buying products and services over the Internet. This
includes pre-sales activities such as marketing and brand awareness, the transaction
process such as inventory control, pricing and delivery, processing the payment, and
finally post-sales activities such as warranty registration and customer service (Cater-
Steel & Grist, 2008).

Web 2.0
The second generation of Internet-based services, tools and applications that allow

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users to create, publish, share and reproduce many types of information on different
types of social media platforms (Turban et al., 2015; Laudon & Traver, 2015).
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Social Media
“A group of Internet-based applications that build on the ideological and
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technological foundations of Web 2.0, and that allow the creation and exchange of
User Generated Content” (Kaplan & Haenlein, 2010, p.60).
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Social Commerce
Social commerce is considered to be a type of e-commerce and is defined as “the use
of Internet-based media that allow people to participate in the marketing, selling,
comparing, curating, buying, and sharing of products and services in both online and
offline marketplaces” (Zhou et al., 2013, p.61).

Trust
“The willingness of a party to be vulnerable to the actions of another party based on
the expectation that the other will perform a particular action important to the
trustor, irrespective of the ability to monitor or control that other party” (Mayer et
al., 1995, p.712).

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Word of Mouth (WOM)
“Any positive or negative statements made by potential, actual, or former customers
about a product or company, which is made available to a multitude of people and
institutions via the Internet” (Henning-Thurau et al., 2004, p.39).

Social Capital
“Refers to connections among individuals – social networks and the norms of
reciprocity and trustworthiness that arise from them” (Putnam, 2000, p.19).

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Presented Work

Helal, M. & Procter, C. (2014) The development of e-commerce in Saudi Arabia

through social media, Paper presented at the Institute for Small Businesses
and Entrepreneurship Conference (ISBE 2014), Manchester, United
Kingdom.

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Acknowledgments

I would first like to thank God for blessing and giving me the strength needed to
finish this challenging PhD journey. I would then like to express my sincere gratitude
to my supervisor, Chris Procter, for his generous and continuous support throughout
the years. It has been a pleasure being his student. I would also like to thank my
husband, Tariq, for his on-going support, patience, and motivation. It has been a long
journey and he has been there for me every step of the way. I dedicate this thesis to
him and to my two precious children, Judy and Ameen. I also dedicate it to my dear
parents, brothers and sisters. They have all helped me reach my goal and I am forever
thankful.

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ABSTRACT

While the literature on e-commerce in Saudi Arabia covers the limitations of its
adoption in the country, it does not identify and discuss the business phenomenon
witnessed in recent times in Saudi Arabia. As businesses around the world have taken
advantage of the power of social media by adopting the best strategies to incorporate
it into their business models, small businesses in Saudi Arabia have been using social
media platforms to conduct most of their e-commerce activities. This research
contributes to knowledge by exploring a new business phenomenon that investigates
the use of social media to overcome the limitations of e-commerce amongst small
businesses in Saudi Arabia. The research adopts a qualitative, interpretive
philosophical perspective using a multiple case study strategy. Using four small

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businesses in Saudi Arabia to investigate the phenomenon, it was found that
traditional e-commerce has many inhibiters constraining its adoption and diffusion in
Saudi Arabia. It was also found that social media provided these small businesses
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with many social commerce benefits that contributed in overcoming most of the e-
commerce inhibiters. Such benefits enabled small business to build trustworthy
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relationships with customers that proved to be the key factor for the success of the
social media shopping phenomenon. In addition, it was found that customers
perceived the use of social media platforms for purchasing purposes as a more
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enjoyable and social alternative to traditional e-commerce. Through the lens of Social
Capital Theory, the findings were analysed and a conceptual model was developed,
‘The SC-SC Model’. The conceptual model illustrates the impact of social capital on
social commerce for small businesses in Saudi Arabia that used social media as their
trading platform. The model suggests that there is a direct relationship between social
capital, word of mouth and trust in the context of small businesses in Saudi Arabia.
The concept is capable of providing small businesses in Saudi Arabia with an
understanding of the importance of the relationship between word of mouth, trust and
social capital. This research also contributes to knowledge by developing a
methodological technique for extracting data from online social media platforms.
Such technique would be beneficial to researchers that wish to examine and study
social media platforms.

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1 Introduction

1.1 Chapter Introduction

This chapter is devoted to providing the reader with the necessary introduction for this
research. The research background is first presented followed by the research context.
This includes briefing the reader with the context of the country that this research took
place in, the size of businesses involved, the business phenomenon under study, and
the social media platform that was used. The research aim and research questions are
then provided. This is followed by a brief discussion of the research method, which

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includes the research process used to conduct the research. Subsequently, the
research contributions are highlighted. Finally, the structure of the thesis is presented.
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1.2 Research Background

As the Internet evolved and matured, it brought with it new forms of communication
technologies where users can almost instantly exchange messages amongst one
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another. It also created pools of knowledge sharing and trading online. Trading over
the Internet or what is usually referred to as Electronic Commerce (e-commerce)
involves making financial transactions over the Internet, the Web and/or mobile
applications in exchange for products or services (Qin et al., 2014; Jackson, 2015). In
the context of this research e-commerce is used in its broadest sense where it includes
the overall process of selling and buying products and services over the Internet. This
includes pre-sales activities such as marketing and brand awareness, the transaction
process such as inventory control, pricing and delivery, and finally post-sales
activities such as warranty registration and customer service (Cater-Steel & Grist,
2008).

New technologies have paved the way for businesses to introduce alternative sales
channels in the form of e-commerce websites (Rose et al., 2011). This resulted in

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benefits to businesses and customers alike (Olatokun & Kebonye, 2010). Customers
have benefited from e-commerce in many ways such as the convenience of shopping
without any time or location restrictions (Delafrooz et al., 2010; Rose et al., 2011),
extensive product information (Jiang et al., 2015; Fang, 2011), product versatility and
availability (Soscia et al., 2010), and the advantage of easily comparing prices from
different websites (Aydemir, 2013; Kacen et al., 2013).

Businesses have also benefited from e-commerce in many aspects. Some of these
benefits include new worldwide accessible sales channels (Aydemir, 2013; Sullivan,
2010), acquiring direct savings from the reduction of costs throughout the business
(White et al., 2014), improved customer service (Tan et al., 2010; Osmonbekov,
2010), gaining competitive advantage by reducing the time between production and
selling (Olatokun & Kebonye, 2010), and popularising the business brand or
corporate image (Wanyoike et al., 2012).

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Although there has been substantial global growth in e-commerce, the adoption of e-
commerce in Saudi Arabia has been limited (Makki & Chang, 2014). Research has
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demonstrated a low adoption rate of e-commerce from businesses and customers alike
(Bahaddad et al., 2014). Even though the number of Internet users in Saudi Arabia
has been growing substantially, the majority of businesses in Saudi Arabia have not
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adopted e-commerce into their business strategies (Orlov, 2014). This has been due
to many barriers which include the absence of Internet and e-commerce laws and
regulations (Bahaddad et al., 2014; Ahmed & Agrawal, 2012), the lack of privacy and
security (Alghamdi et al., 2014; Brdesee et al., 2012), poor logistics operations
(Makki & Chang, 2014; Bahaddad et al., 2014), and the widespread fear of credit card
fraud (Abed et al., 2015; Alghamdi et al., 2015).

The low e-commerce adoption rate in Saudi Arabia is inconsistent with the country’s
economic growth rate and Internet penetration (Makki & Chang, 2015a). It is also
inconsistent with the country’s social media usage as the young population of users in
Saudi Arabia embraced the use of social media in many aspects of their daily lives
(Orlov, 2014). In the year 2015, Saudi Arabia was ranked at tenth place worldwide
with an average daily social media usage of 3 hours per user (Statista, 2015a).

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Regardless of the low adoption rate of e-commerce in the country, the evolution of
social media has facilitated new opportunities for small businesses in Saudi Arabia to
overcome the barriers and limitations of e-commerce. As businesses around the
world have taken advantage of the power of social media and started to investigate
and adopt the best strategies to incorporate it into their business models (Coelho et al.,
2016; Enginkaya & Yilmaz, 2014; Rathore et al., 2016), small businesses in Saudi
Arabia have been using social media platforms to conduct most of their e-commerce
activities. Rather than having social media act as just one of the channels of
communicating with customers, recently a new business phenomenon has been
witnessed where small businesses in Saudi Arabia have been using social media
platforms as the main platform to conduct their e-commerce activities.

1.3 Research Context

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This research is concerned with small businesses in Saudi Arabia that have utilised
social media platforms for trading purposes. Therefore, it is essential to provide the
context of this research in terms of the country it took place in, the size of businesses
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involved, the business phenomenon under study, and the social media platform used.
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1.3.1 Saudi Arabia

Saudi Arabia controls one of the largest lands in the Middle East as it spreads out in
an area of around 2.25 million square kilometres (World Bank, 2016). It has a total
population of 32 million, where 47% are under the age of 25 (SAGIA, 2016). Its
population is a mixture of tribal and diversified immigrant communities, who have
jointly created a common indigenous culture (Alsomali et al., 2015). This culture is
deeply rooted in Islamic and traditional values of the region (Alghamdi et al., 2015).
Saudi Arabia is a member of the G20 countries as well as a member of the Gulf
Corporation Council (GCC) (Alsomali et al., 2015). It is ranked amongst the top 20
largest economies in the world and is considered to be a rapidly developing country
(StatisticsTimes, 2016; World Bank, 2016).

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Saudi Arabia is rich in natural resources, which consist of petroleum, natural gas,
gold, copper and iron (CIA, 2015). The economy of Saudi Arabia depends mainly on
four major sectors; oil, banking, telecommunication and retail. However, the oil
sector is by far its largest exporting sector as Saudi Arabia is one of the largest oil
exporting countries in the world (Alsomali et al., 2015). The revenue generated from
oil exports has situated the country in a reliable financial position to invest heavily in
its information technology (IT) infrastructure.

1.3.2 Small and Medium Sized Enterprises (SMEs)

The definition of small and medium sized enterprises (SMEs) differs from one
country to another. In the Saudi Arabian context, there is not a unified authority that
deals with SME related affairs and therefore a clear-cut definition of the term SME

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has not been established (Al-Saleh, 2012). Different institutions in the country have
their own definition of what constitutes an SME. There are three main criteria used
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by institutions to classify SMEs: the number of employees, the size of annual turnover
and the business assets (Hertog, 2010). This research adopts the SME definition
identified by The Saudi Ministry of Commerce and Investment, which is based on the
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number of employees. Businesses with less than 50 employees are classified as

small-sized enterprises whereas businesses with less than 200 employees are
classified as medium-sized enterprises (JCCI, 2015).
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The economy of a country is largely dependent on the development and the growth of
SMEs. SMEs directly contribute to improving employment rates and the generation
of income for a specific economy (Ates et al., 2013). SMEs in Saudi Arabia are key
contributors to the country’s economy as they occupy 99% of establishments and 62%
of the employment rate (SAGIA, 2015). According to SAGIA (2015), SMEs in
Saudi Arabia also contribute to enhancing some of the major national economic
objectives such as: 1) their role of diversifying the national economy through the
inclusion of the private sector in shaping the economy, 2) their role of promoting
locally sourced innovative products or services by championing global competition,
and 3) their inclusion provides a more balanced economy growth.

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In line with these national economic objectives, the government of Saudi Arabia has
implemented several programmes to encourage and support SMEs financially and
logistically. One of those programmes is called the Kafalah programme, which is
aimed to provide financial support to SMEs (Bokhari, 2013). With regards to this
research, small businesses were the main concern as the research investigated small
businesses in Saudi Arabia that used social media as their main trading platform.

1.3.3 Social Media Shopping Phenomenon

In Saudi Arabia, there has been a growth in a new way of conducting business over
the Internet. E-commerce has taken a new form whereby small businesses have been
using social media as their only platform for conducting business. This process
begins by setting up an account on one or more social media platforms such as

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Instagram and Twitter. Business owners provide their name, mobile number and any
relevant information on their account page. They then advertise for products by
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uploading a post, which contains a photo of the product along with the product
description. When customers are interested in purchasing a product, they contact the
business owner through the direct messages embedded in the social media platform,
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or through mobile instant messaging services such as WhatsApp (a widely used

mobile instant messaging application in Saudi Arabia).
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Potential customers would then contact the business to either ask questions or to
express their desire to make a purchase. Upon agreement of a sale, the business
owner would then provide the customer with their bank account details asking them to
make a bank transfer of the total amount required for completing the sale. Upon
receipt of payment and the delivery address, the business owner ships out the products
using independent reliable courier services such as DHL and FedEx. Sometimes,
customers go back to the social media platform and write satisfaction or
dissatisfaction comments and reviews. By doing so, other potential customers have
the chance to read and trust the business.

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1.3.4 Instagram
As this research sampled small businesses that used Instagram as their main trading
platform, it is necessary to provide the reader with an overview of this specific social
media platform. Instagram was developed in 2010 as a mobile photo and short video
capturing and sharing platform (Coelho et al., 2016). It enables its users to instantly
capture, edit, post and share photos and short videos with friends on its platform as
well as on other similar social media platforms such as Facebook and Twitter (Hu et
al., 2014). Instagram shares similar social features to Facebook and Twitter in the
form of liking, commenting and following other users (Jarvinen et al., 2016; Bakhshi
et al., 2014). However, Instagram has been recognised as a simpler social media
platform to use in comparison to Facebook as its users are satisfied with only sharing
images and/or short videos with short descriptions, whereas Facebook includes many
other social features that require intensive participation from its users (Miles, 2013).

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In addition, Instagram enables its users to use the ‘hashtag’ feature which allows users
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to describe or name an image or photo with a tag by adding the ‘#’ symbol before the
tag (ex. #example). The ‘hashtag’ feature enables users to use Instagram not only for
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sharing images and videos, but also to search for their desired relevant content
(Costill, 2013). Users could also use the ‘mention’ feature by using the ‘@’ symbol
before a user’s name which automatically sends a link of the post to the other user’s
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account (ex. @username) (Hu et al., 2014).

Previous scholars have called for more extensive research to be carried out in the
context of Instagram, as businesses of all sizes have been utilising its benefits (Hu et
al., 2014; Coelho et al., 2016). They believe that there is a gap of knowledge worth
addressing, due to the already extensive research that has been conducted on the use
of other social media platforms such as Twitter and Facebook. In addition, they
argued that research should take into consideration the trend of small businesses that
utilised Instagram for the purpose of low cost advertising and selling (Coelho et al.,
2016).

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1.4 Research Aim
While the literature covers the limitations of e-commerce in Saudi Arabia, it does not
identify and cover the new business phenomenon witnessed in recent times in Saudi
Arabia. Therefore, the aim of this research is to investigate the use of social media to
overcome the limitations of e-commerce for small businesses in Saudi Arabia.

1.5 Research Questions

Four research questions were formed to collectively contribute to achieving the aim of
this research. These questions are as follows:
1) What are the limitations of e-commerce in Saudi Arabia?
2) Why do small businesses in Saudi Arabia use social media platforms as their

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main trading platform?
3) How do the customers involved perceive using social media for purchasing
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purposes?
4) How does social capital help small businesses in Saudi Arabia, which use
social media as their trading platform, to improve their business?
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PR

1.6 Research Method

This research adopted a qualitative, interpretive research perspective that had been
approached inductively. In order to fully understand the new business phenomenon
witnessed in small businesses in Saudi Arabia, multiple case studies were used as the
research strategy. This is because case studies are best used when a deep
investigation of a phenomenon within its real context is needed, especially when it is
hard to distinguish between the boundaries of the phenomenon and the context (Yin,
2014; Symon & Cassell, 2012). In addition, multiple case studies allow the
researcher to discover and explore similarities and differences between and within
cases, where facts are collected from numerous sources to draw conclusions (Darke et
al., 1998; Yin, 2014).

The data collection was carried out in two stages. First, 20 in-depth interviews were
conducted with business owners and customers in order to fully understand why and

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 how this businesses phenomenon was achieved from the perspective of both the
business owners and the customers. Second, online observations were carried out in
order to examine the platform where the business owners communicated with
customers and performed most of their business activities. This was done to
strengthen and triangulate the data as evidence was being collected from three
different sources: the business owners, the customers, and the online social media
platform. Finding a repetition in the findings demonstrated that each case study was
corroborating the other. Therefore, as a result of using four case studies and a
combination of data collection methods, the researcher was able to gain a clear in-
depth understanding of the phenomenon under study.

The data was analysed through the lens of Social Capital Theory. Using Putnam’s
(2000) bonding and bridging forms of social capital, this research was able to develop

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a conceptual model, ‘The SC-SC Model’, which illustrates the impact of social capital
on social commerce for small businesses that used social media as their trading
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platform. This model suggests that there is a direct relationship between social
capital, word of mouth and trust in the context of small businesses in Saudi Arabia.
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1.7 Research Contributions

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The research aim and questions have led this research to make three significant
contributions to knowledge, which are explained throughout the thesis but outlined
briefly below. These contributions are classified under contributions to knowledge,
theory and method.

1.7.1 Contribution to Knowledge

The first contribution of this research was to investigate how small businesses in
Saudi Arabia utilised social media platforms to conduct most of their e-commerce
activities.

This research was able to address a gap in knowledge. While the literature on e-
commerce in Saudi Arabia covers the limitations of its adoption in the country (Abed
et al., 2015; Makki & Chang, 2014; Alghamdi et al., 2015; Bahaddad et al., 2014;

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