Upsurge of Online Shopping in Malaysia during COVID-19 Pandemic

*Krishna Moorthy,Te Nian Ci, Aufa Amalina Kamarudin, Normala S. Govindarajo and Loh Chun T'ing*

#### **Abstract**

The aim of this study is to assess the factors, perceived usefulness (PU), perceived ease of use (PEOU), subjective norms (SN), perceived risk (PR) and situational influences (SI)) that influence the consumers' behavioral intention to use online shopping during the Coronavirus time. This research has adopted the Technology Acceptance Model (TAM) as its theoretical base. This research is a quantitative research wherein data were collected through online questionnaire using convenience sampling method. A total of 203 valid samples were collected from Malaysian respondents from selected States. Then, single and multiple linear regression analysis were conducted to test the hypotheses. The results concluded that perceived usefulness, perceived ease of use and situational influences have significant influence on Malaysian consumers' behavioral intention to adopt online shopping during pandemic times. However, subjective norms and perceived risk have showed an insignificant relationship with consumers' behavioral intention. The findings have implications for Malaysian government and SME companies in Malaysia in promoting online business.

**Keywords:** online shopping, Covid-19, movement control order, technology acceptance model, Malaysia

#### **1. Introduction**

Covid-19 has accelerated the online shopping trends. With the outbreak of Covid-19, the global economy is facing a big challenge. According to World Health Organization (WHO) [1], 'Covid-19' namely the Coronavirus, is a newly discovered infectious disease on 31 December 2019 in China. This pandemic has brought a shock to every person, every country and even leads to disruptions in the world economy.

There is no exception for Malaysia as well. To prevent the virus spread from getting worst, the government implemented preventative measures, Movement Control Order (MCO) to urge everyone to stay at home [2]. During COVID-19 pandemic, Malaysian government has introduced the Movement Control Order (MCO) from 18 March 2020. This statutory order helped to slow down the transmission rate of the COVID-19 virus and increase social distancing among the public. This Movement

Control Order was extended many times and called in different names like Conditional Movement Control Order (CMCO), the Recovery Movement Control Order (RMCO), or the Enhanced Movement Control Order (EMCO) depending on the type of movement allowed for the people. These measures have restricted the non-essential stores (e.g. clothing shops, accessories shops etc.) from being opened and people are not allowed to cross states and even districts during the MCO period. Hence, to survive through this pandemic, business owners have to adopt a new norm: digitalisation of small and medium enterprises (SMEs) [3]. By this means, the transactions of online shopping up-surged significantly. One of the online shopping platforms in Malaysia, Lazada has experienced an increase of 80% on orders placed compared to the pre-pandemic, said by the CEO, Leo Chow [4]. The same situation goes to Shopee Malaysia as well, where Shopee recorded a boom, not only in volume and traffic but also the adoption of local brands (like Mamee, Hup Seng, etc.). This shows that many brands and sellers have started to digitalise to survive in this epidemic. These statistics have revealed the uptrend of online shopping in Malaysia during Covid-19 pandemic.

#### **1.1 Problem statement**

Covid-19 is a recent virus outbreak since the end of 2019. It has brought a big challenge and vast change to the global business, including Malaysia. Many issues have arisen due to the pandemic outbreak. The MCO imposition resulted in the ramp up of online purchases among consumers due to the closure of most of the physical stores [5]. According to EcommerceDB, Malaysia became the 38th largest online shopping market, with a revenue of US\$4 billion in 2020, placing ahead of Portugal. The online shopping market expansion in Malaysia is expected to continue over the years. Hence, identifying the determinants will be able to sustain the trend for long term.

Whilst there has been a wealth of existing research (before the Covid-19 outbreak) on online shopping trends and prospects, the research might be outdated since the sudden virus epidemic has impacted the economy significantly [6, 7]. Besides that, the previous studies only generally discussed the impact of the pandemic on online shopping [8, 9]. There is also a study related to the factors influencing online purchase of fashionable apparel [10]. However, the study only focused on a specific item of online purchase. Hence, there is a research gap on identifying the factors that contribute to the upsurge of online shopping in Malaysia during Covid-19 situation.

#### **1.2 Research objectives**

The general objective of the study is to determine the factors that contribute to the upsurge of online purchase in Malaysia during Covid-19 pandemic. The specific objectives are as shown below:


### **2. Literature review**

Literature review helps to gain an understanding of the existing findings and research relevant to a particular area of study and topic and to present that information in the form of a summarized report. It also helps the researchers to identify the research gaps to formulate the research questions of the study accordingly.

#### **2.1 Online shopping**

According to Market Business News, one form of electronic commerce is online shopping wherein consumers are allowed to directly buy goods or services from a vendor through the internet, using a mobile app or web browser. Consumers find it very interesting to visit the website of the seller directly or by searching among various available sellers of the same product. They can see the product's availability and prices while searching. Consumers can use laptops, desktop computers, smartphones and tablet computers.

#### **2.2 Technology Acceptance Model (TAM)**

Technology Acceptance Model (TAM) was first introduced by Davis in 1986. Davis proposed the TAM to explain computer usage behavior [11]. This theory could explain the user adoption of technology in organization. Davis explained that TAM is to trace the impact of external factors on internal beliefs, attitudes and intentions. Hence, two key determinants, perceived usefulness and perceived ease of use have been introduced in this model as in **Figure 1**.

Though there are criticisms about its generality, many researchers adopted this theory in their studies [13, 14]. It is widely adopted to study topics related to IT adoption as its purpose is to explain user behavior in technology acceptance. Those studies include examining the use of Learning Management Systems (LMSs) in higher education [15], use of mobile banking apps [16], and use of Moodle [17].

Thus, in this study, TAM model is applied to study the factors that contribute to the upsurge of online shopping in Malaysia during Covid-19 pandemic. Perceived risk, subjective norm and situational influence are also integrated into this research in order to provide a comprehensive understanding of the online shopping in this pandemic time.

### **2.3 Relationship between perceived usefulness (PU) and perceived ease of use (PEOU)**

As pointed by Venkatesh and Davis [18], PU is affected by PEOU. An individual's perceived usefulness on online shopping can be explained by his or her perception of

#### **Figure 1.** *Original technology acceptance model (TAM) [12].*

the technology's simplicity of use. When a technology is easy to use, the consumers will then increase their perceived usefulness. Rattanaburi and Vongurai [19] explained that PEOU of the mobile shopping applications is significantly affected the PU among the Generation Y in Thailand. Additionally, this relationship has also been empirically investigated by several researchers and found to have positive relationship in various contexts [20, 21]. Hence, it is hypothesized that:

**H1:** There is a positive relationship between perceived usefulness and perceived ease of use of using online shopping during the Covid-19 pandemic.

### **2.4 Relationship between perceived usefulness (PU) and behavioral intention (BI)**

As proposed in TAM, PU is defined as an individual believes that using a particular technology would result in his or her improvement in job performance [22]. It is an expectation that the particular technology used will benefit in achieving a valued outcome. Based on the study of Kucukusta et al. [23], the findings suggested that the functionality, efficiency and effectiveness of the Internet make online booking useful. This can imply the PU as the degree to which users believe that if they use the online booking system, they will able to enjoy the convenience of booking through Internet. Hence, the usefulness of online shopping is vital, especially in this pandemic. With the shut-down of brick-and-mortar stores, people have to shop online to purchase goods and services. Apart from this, online purchase can reduce the risk of infection by avoiding contact with people [24]. Numerous studies have found that PU and BI to shop online are related [25–27]. These explanations lead to the following hypothesis:

**H2:** There is a positive relationship between perceived usefulness and behavioral intention of using online shopping during the Covid-19 pandemic.

## **2.5 Relationship between perceived ease of use (PEOU) and behavioral intention (BI)**

PEOU is defined as the degree to which an individual believes that using a particular technology would be free from effort, as stated in the TAM [22]. If a technology is

#### *Upsurge of Online Shopping in Malaysia during COVID-19 Pandemic DOI: http://dx.doi.org/10.5772/intechopen.108049*

easy to use, then the barriers can be eliminated, and individuals will be more willing to adopt that particular technology. A study indicated that the poor design in online shopping sites can lose the buyers' focus on shopping. This is because it reduced the perception of buyers on the ease of use of online shopping [28]. In addition, the ease of navigating through online sites, the ease of placing orders, the ease of conducting transactions, and other ease of use that allow the consumers to purchase online, can increase the interest in online shopping among the users [29]. This can be related to the level of easiness that a user feels when shopping online through online shopping sites or platforms. Individual tends to use online shopping if it is easy to learn and use. Thus, the lower the complexity to use online shopping, the higher the intention of an individual to use online shopping. In the previous studies, there are a surprising number of researchers that showed a positive relationship between these two variables [25, 30, 31]. Thus, the following hypothesis is proposed:

**H3:** There is a positive relationship between perceived ease of use and behavioral intention of using online shopping during the Covid-19 pandemic.

#### **2.6 Relationship between subjective norms (SN) and behavioral intention (BI)**

Based on the study of Fishbein and Ajzen [32], SN is defined as an individual's perception that people who are important to him or her think he/she should or should not engage in certain behavior. In 1985, Ajzen further defined SN as a perception of belief that an individual believes that a specific individuals or groups think he or she should or should not perform the behavior. These individuals or groups can be the family, friends, supervisors or even the society at large. When there is a person or a group of people kept on introducing and praising a particular online shopping platform, the individuals will be influenced and get interested to the online shopping platform too. Hence, SN can influence the BI of an individual towards online shopping. Akar's [33] research paper acknowledged the positive relationship between SN and BI. The online questionnaire was carried out in Turkey and concluded that SN has significant influence on the consumer's BI towards online purchase during pandemic. This relationship is also recognized by the study of Islam et al. [34], in which the data was collected in Bangladesh. The significant relationship between SN and BI of using online shopping has been found by many prior literatures [24, 35, 36]. These resulted in the following hypothesis being proposed:

**H4:** There is a positive relationship between subjective norms and behavioral intention of using online shopping during the Covid-19 pandemic.

#### **2.7 Relationship between perceived risks (PR) and behavioral intention (BI)**

The concept of PR was introduced by Bauer in 1960. He defined PR as 'perceived consequences of an outcome in case of a wrong choice; and subjective probability to make a mistake'. Pham, Nguyen, Do, Tang and Hoai [37] adopted the concepts of PR in their study by separating it into several variables, which include financial risks, product risks, social risks, time risks, distribution risks, and information risks. The study of Iriani and Andjarwati [27] also studied PR by dividing it into several indicators, such as financial risk, performance risk and security risk. Therefore, in this study, the perceived risk will be studied in terms of health risk. This is due to the individual perception of their health hazards that they might be exposed to the Covid-19 virus when shopping in malls and stores physically [26]. Pham et al. [37] has conducted a study related to Vietnamese consumer switching behavior towards online shopping during the pandemic. This study has indicated that PR in terms of products risks, time risks and social risks has significant effect on influencing the Vietnamese customers shopping online during the pandemic. Aside from this, several previous literatures also concluded on this positive relationship [31, 38]. Therefore, this hypothesis is made in this research:

**H5:** There is a positive relationship between perceived risk and behavioral intention of using online shopping during the Covid-19 pandemic.
