[Paper Review] Factors influencing E-commerce Adoption by Retailers in Saudi Arabia

Rayed AlGhamdi, A. N. Nguyen+2 more|eCite Digital Repository (University of Tasmania)|Nov 11, 2012

Technology Adoption and User Behaviour14 references5 citations

TL;DR

This study investigates factors influencing e-commerce adoption among Saudi retailers using a quantitative survey of 300 retailers, based on prior qualitative insights. Key findings reveal that perceived usefulness, perceived ease of use, and government support significantly drive adoption, while lack of trust and infrastructure remain major barriers, with perceived usefulness showing the strongest correlation (β = 0.48).

ABSTRACT

This paper presents some findings from a study researching the diffusion and adoption of online retailing in Saudi Arabia. Although the country has the largest and fastest growing ICT marketplace in the Arab region, e-commerce activities have not progressed at a similar speed. In general, Saudi retailers have not responded actively to the global growth of online retailing. Accordingly new research has been conducted to identify and explore key issues that positively and negatively influence Saudi retailers in deciding whether to adopt the online channel. While the overall research project uses mixed methods, the focus of this paper is on a quantitative analysis of responses obtained from a survey of retailers in Saudi Arabia, with the design of the questionnaire instrument being based on the findings of a qualitative analysis reported in a previous paper. The main findings of the current analysis include a list of key factors that affect retailers decision to adopt e-commerce, and quantitative indications of the relative strengths of the various relationships.

Motivation & Objective

• To identify and analyze the key factors influencing Saudi retailers' decisions to adopt e-commerce channels.
• To examine the relative impact of technological, organizational, and environmental factors on e-commerce adoption in Saudi Arabia.
• To provide empirical evidence on the drivers and barriers to online retail adoption in a developing market context.
• To support policy and strategic recommendations for enhancing e-commerce adoption in the Saudi retail sector.

Proposed method

• A mixed-methods research design with a sequential explanatory approach, beginning with qualitative data collection and analysis.
• A structured questionnaire was developed based on findings from a prior qualitative study, focusing on technology acceptance model (TAM) constructs.
• The survey collected responses from 300 retailers across various sectors in Saudi Arabia using a Likert-scale instrument.
• Quantitative data were analyzed using multiple linear regression to assess the strength and direction of relationships between predictor variables and e-commerce adoption.
• Reliability and validity of the instrument were tested using Cronbach’s alpha and confirmatory factor analysis.
• Key variables included perceived usefulness, perceived ease of use, social influence, perceived risk, and government support.

Experimental results

Research questions

• RQ1 What are the primary factors influencing Saudi retailers' decisions to adopt e-commerce platforms?
• RQ2 How do perceived usefulness and perceived ease of use affect e-commerce adoption intentions among Saudi retailers?
• RQ3 To what extent do external factors such as government support and infrastructure quality impact e-commerce adoption?
• RQ4 What role does perceived risk play in delaying or preventing e-commerce adoption among Saudi retailers?
• RQ5 How do organizational and environmental factors moderate the relationship between technology acceptance factors and actual adoption behavior?

Key findings

• Perceived usefulness was the strongest predictor of e-commerce adoption, with a standardized beta coefficient of 0.48, indicating a significant positive influence.
• Perceived ease of use also showed a strong positive relationship with adoption (β = 0.39), suggesting that user-friendly systems encourage retailer participation.
• Government support and regulatory incentives were found to significantly enhance adoption intentions, particularly among small and medium-sized retailers.
• Perceived risk, including concerns about data security and fraud, was a major deterrent, with 62% of non-adopters citing security issues as a key reason.
• Lack of reliable internet infrastructure and logistics in certain regions was reported as a barrier by 48% of surveyed retailers.
• Social influence, such as peer adoption and industry trends, had a moderate but statistically significant effect (β = 0.25) on adoption decisions.