Factors That Influence Online Consumer Purchasing Behaviour Of High-value Goods In South Africa

Owing to improved infrastructure and decreasing telecommunications costs, South Africa is experiencing a surge in internet activity. Recent research shows that consumers generally begin making purchases online five years after first adopting the internet. There are currently about four million users who are approaching this milestone in South Africa and thus it is reasonable to expect a significant surge in e-commerce transactions in the near future. Online retailers of high value items in particular have a high propensity to be successful as their relatively low overheads contribute to healthy margins. A solid understanding of the dynamics affecting the high-value online goods market is thus essential for these retailers. Accordingly, the main purpose of this research report was to determine how the online behaviour of high-value product consumers differs from other online commodities in South Africa. Secondly, the report aimed to identify and investigate the various factors which can hinder or promote the buying behaviour of these high-value online shoppers. Lastly, the report aimed to determine the online consumer behaviour differences between purchasers of high-value items and non-purchasers of high-value items. Literature was collated regarding the factors which influence online purchasing behaviour. Propositions were then generated based on these findings. Data was then captured in two distinct phases. Phase One was a qualitative study, in which six high-value online consumers were interviewed for approximately one hour. Phase Two was an online survey which was distributed via email and social media platforms. Out of 315 survey respondents, 166 had purchased high-value goods online in South Africa and 149 had not. These groups were both subjected to confirmatory factor analysis to identify differences in behaviour between purchasers of high-value items and non-purchasers of high-value items. The results of the analysis show that the influencing factors for purchasers of high-value items are Purchasing Logistics, User-Friendliness, Product Returns, Trust, Convenience and High-Quality Experience. FT 2012 - MBA Research Report; Alexander Marjan Leigh Page iii The results for the non-purchasers of high-value items data analysis revealed that the following factors influence their high-value online purchasing behaviour: User-Friendliness, Trust, Payment Security, Convenience, Delivery Infrastructure and Visual Imagery. Finally, recommendations are made to online retailers regarding how to optimise their websites for current purchasers of high-value items and non-purchasers of high-value items.