Online Business in Malaysia

INTRODUCTION

1.0 Background of the study

Today, the internet is a public, cooperative and self sustaining facility accessible to hundreds of millions of people worldwide. (Turban E.,Leidner D.,Mclean E., Wetherbe J. 2006). In some sectors, new and efficient internet business method is done on the web primarily in identical manners as on the physical market. (Anckar B.,Walden P., Tawfik Jelassi; 2002). In Malaysia, E-business has growth well and currently almost of organization looking on it. This proposal mainly study for obstacles, challenges and analysis of mobile commerce (m-commerce) in buying and selling products in Malaysia.

1.1 Problem statements

Online business in Malaysia is still green when compare to other country such as United States, United Kingdom, Canada or other develop country. There is lack of research especially in publish report or journal about e-business development in Malaysia. Recent studies by Ainin Sulaiman et.al (2005) focus about the factors affecting online purchasing in urban area. However, for other countries, some of the report saying that there is a few obstacles facing by the company in using World Wide Web (WWW) in their e-business. The obstacles facing by the entrepreneur such as problem in locating desired information, rising cost of utilizing the internet, security problems, rapid changes and technology advance and long waiting time to access the internet (server problem). (Christina et.al 2007). M-commerce is considered as a theoretical framework adapted from e-commerce. The theoretical frame was set up by Numberger and Rennhak, who built a six-phase environment around the concept of e-commerce. The e-commerce and its environments create the whole ecosystem of particles that most likely correlate to each other. The environments concept is the theoretical background to the questionnaire of this survey and is applied to m-commerce.

This study will focus on certain criteria which are 4P (price, promotion, place and products). It also studies on challenges and analysis six-phase theoretical framework which is societal environment, socio-political environment, market environment, technology environment, retail outlet environment and distribution environment.

1.2 Objective of the research

The objective of the research is to identify the obstacle are facing on m-commerce and also the challenges in doing m-commerce in selling products and services. From both of the objective will be related to six societal environments effecting m-commerce.

1.3 Scope of the research

1. The target of respondents for this research is Malaysia companies/organizations or individual are doing m-commerce and plan to implement m-commerce in Malaysia.
2. The convenience sample of this research is 500 respondents to answer questionnaire.

1.4 Significance of the research

The findings of the research will hopefully be able to help m-commerce successfully in Malaysia are currently most entrepreneur offering mobile services and planning to offer such services.

LITERATURE REVIEW

2.0 Introduction

The literature review handles definitions of m-commerce, the problem of turning the flow of digital information and services into revenues and the customer’s point of view of m-commerce.

2.1. M-Commerce

In this research, the definition of e-commerce follows the definition given by the OECD [1] and it has two criteria:

– Automation of transactions, and

– Spatial separation of transaction and delivery.

The description of the m-commerce solutions lifecycle has been divided into five phases by Kalakota and Robinson [2]:

1. Messaging – m-commerce was in the first phase in 2002 when their division was introduced. Messaging means short message services (SMS)-based m-commerce.
2. Transactions – this means an m-commerce strategy for organisations in order to evolve revenue-generating m-commerce. M-commerce has introduced applications that support phase three to some extent, but end-users, either individuals or organisations, have not found them to any great extent.
3. Transformation – this means that m-commerce is interconnected and implemented into business processes within and between organisations. The largest gains in terms of business value will be found in this phase.
4. Infusion mobility and m-commerce is a normal way todo business – this means a culture change from one, in which technology is occasionally handed over to the other one where technology is an accepted part. During this phase, the m-commerce industry will undergo strong consolidation.

2.2 4P’s features(Price, products, place and promotion)view point of m-commerce.

The criteria that focus in this study are four elements in Marketing Mix Model (also known as 4P‟s) in order to examine the relation between the 4P the obstacles that can cause the failure or success to online business. The main element which is product, price, promotion and place in online business is different for some terms. For example, marketing the product online doesn’t involved any physically product, the customer not able to touch, taste, hold and put it on the rack, but it only can view in the website . The size or product specification only stated in the website, so the customer only has to choose based on the figure displayed.

The function of marketing mix is to help develop a package that will not only satisfy the needs of customers within the target markets, but simultaneously to maximize the performance of the organization. As stated in Arnott D.C and Bridgewater S (2002), based on Dutta and Segev‟s (1999) classification of internet marketing function could describe as below:

1. Customer relation – feedback, online customer service, customer Identification, customer communities (forum) and communication to customer.
2. Product -Online product catalogue (shopping cart), product value added, information of the product, online helps in choosing product, Product customization and customer participation in product design
3. Price- Price information available online, metering pricing, dynamic, customization and customer participating (bargaining)
4. Place – Online order, real time processing of orders, online payment, involvement of other partner and online distribution product.
5. Promotion – Online promotion, customized promotion, links with other firms, customer participation and online advertising.

2.3 Theoretical Frame

The theoretical frame was set up by Numberger and Rennhak [7] who built a six-phase environment around the concept of e-commerce. The e-commerce and its environments create the whole ecosystem of particles that most likely correlate to each other. The environments concept is the theoretical background to the questionnaire of this survey and is applied to m-commerce.

In this research, m-commerce is considered as a theoretical framework adapted from e-commerce. The main assumption is that although m-commerce is different to ecommerce in some ways, the environmental forces around it remain the same. Numberger and Rennhak have created an e-commerce environment according to Jürgen Habermas’ societal evolution and come up with an e-commerce context with six environments [ibid.]:

1. Societal environment
2. Socio-political environment
3. Market environment
4. Technology environment
5. Retail outlet environment
6. Distribution environment

Each of these has factors that affect the m-commerce value chain either from the individual level or from the surroundings. M-commerce is at the heart of the model, containing the demographic, goods-related, subjective views of pricing and everyday life indicators. All of the environments are connected to each other [ibid.].

RESEARCH APPROACH AND METHODOLOGY

The methodology of the research is qualitative and quantitative method. The quantitative were based on the content analysis of six societal environments m-commerce while qualitative method is doing survey by distributing questionnaire and open-ended interviews from both customer side and entrepreneur side in order to get feedback from two way perspective point of view.

CONCLUSION

The research findings hopefully help to enhance and encourage people to using m-commerce. Determine m-commerce services differ from traditional and e-commerce service in terms of time, context and location and a value chain which is identify the obstacle and challenges of m-commerce.