Abstract

Internet shopping has become more and more popular nowadays, however, some consumers are still reluctant to purchase online due to some perceived risks. The purpose of this paper is to introduce internet shopping, trying to analyze problems facing it and find corresponding solutions to ensure e-commerce growth. In order to give a concrete picture, the paper will also illustrate measures which have been undertaken by eBay to operate effectively.

Introduction

Due to the popularization of internet usage, people begin to get familiar with this multifunctional tool, which lead to the boom of internet shopping. According to Hsiao (2008), people’s daily lives have dramatically changed in the past ten years, which stems from the application of online shopping, saving the visit to physical shops compared to offline shopping. Such a new kind of shopping style can be called in various ways as e-shopping, network shopping, web-based shopping, online shopping or Internet shopping (Hsiao, 2008).

Identified by Hsiao, internet shopping has lowered transaction and search costs (both in terms of time and money) Compared to other forms of shopping, from which consumers usually can shop faster, choose from a wider selection, and order from the merchant with the lowest price. First of all, with the aspect of shop speed, there is no need to travel to stocks and malls by using online shopping, which obviously saves cost and time that defined as two common consumer resources, leading to the accumulation of buyers’ utility. Nevertheless, it’s the opposite case to the offline shopping. Second, as for the variety of selection, because consumers can access to various information through the Internet by easily clicking the hyperlinks, most of which interlink to other information around the world and some even send out virtual signals. Thus, the information quantity of internet shopping is considered superior to store shopping. Lee et al. (2003) suggested that affected by the increase of internet usage, the economic value on the information will appreciate gradually. Third, in general, consumers can save money by purchasing online, even though they have to afford the shipping fee sometimes. By saving of overhead and maintenance of store fronts, online stores are able to sell products at lower prices than physical stores (Hsiao, 2008).

However, despite internet shopping is helpful, some consumers are still reluctant to purchase online due to apparent barriers, such as financial risk, psychological risk, product performance risk and time/convenience risk identified by Jacoby and Kaplan. The goal of this study is to analyze the risks, suggest corresponding solutions by using the case of eBay, which finally improve the development of e-commerce. The next section will describe the four risks mentioned above, including definitions and solutions. The third section will go through the case of eBay, discussing the measures undertaken by it, comparing them to get the most vital one. The last section will draw conclusions about the problem.