ANALYSIS OF INDONESIAN STUDENTS ONLINE PURCHASE BEHAVIOR

IN WUHAN
Evelyn Pertiwi PhD Candidate, Wuhan University of Technology

1. Introduction
Over the last few years, the development of Internet in Southeast Asia has been phenomenal
(Nielsen 2011a). In Indonesia alone, the number of Internet users has grown from 25 million
in 2008 (APJII 2012) to 74.6 million users in October 2013 (Lukman 2013). This represent a
198 percent in 6 years. According to APJIII forecast, this number will reach 100 million by
2015. Although the internet penetration only account for 30% of total population, the number
of new users has seen an increase of more than 10 million every year since 2010 (Lukman
2013).
Along with the development of Internet, the e-commerce market has also seen an important
growth in Indonesia (VelaAsia, 2013). Over the years, B2C, C2C, group buying, and ranking
e-commerce website have grown in popularity in Indonesia (Utomo, 2012). More and more
people find convenient to purchase from home or office rather than moving from one shop to
another for a particular item and wait in long lines to pay.
However, the e-commerce development is facing important challenges. Various researches
have pointed out the socio-technological limitations resulting from the disparity of Internet
access (Veritrans & DailySocial, 2012; Utomo, 2012). Furthermore, a study made by Susanto,
Lee, & Zo (2011) pointed out that Indonesian online shoppers still have a limited trust in
Internet banking mainly due to the dimensionality of trust in mediating the use of
technological system.
In comparison, China is currently on the right track to become the largest e-commerce market
in the world (Chong, 2014). While price is still the primary motivator for shopping online,
Chinese shoppers are shifting online for other reasons, too. In a survey made by Hoffmann,
Lannes and Dai (2012), the authors found out that convenience and variety have gained
ground and are now major considerations for a surprising number of online shoppers: 19% of
survey respondents said convenience is the primary reason for shopping online, while 15%
pointed to variety as the major reason. Another trend is that Chinas e-commerce ecosystem
including sourcing, payment and delivery has developed to a point where customers are
trusting more and more online transactions (Hoffmann, Lannes and Dai, 2012).
We conducted this research to analyze whether accessing more reliable e-commerce
environment can influence Indonesian middle-class to purchase online. In our case, we used
an online survey to analyze Indonesian students online purchase behavior in Wuhan. Because
all of the students coming to China belong to the middle-class, our survey is providing an
interesting analyze on the influence of China e-commerce environment on Indonesian online
purchase behavior. The study is composed of three parts: a presentation of the research
contents and methodology, the research findings, and the conclusions of our research.
2. Research Contents and Methodology
2.1. Objectives
1. Determinate whether Indonesian students who come to china tend purchase online due to
the easy Internet access.
2. Determinate whether the students demographic factors have an impact on their online
purchase behavior.
3. Determinate whether the income, funding sources and major have an impact on the
students online purchase behavior.
4. Determinate which Chinese e-commerce platform is popular among Indonesian students.
5. Determinate which products Indonesians students are more likely to purchase online.

2.2. Research Questions
Q
1
: Is there any difference between Indonesian online purchase behavior before and after
coming to Wuhan?
Q
2
: Do the gender Indonesian students have an impact on their online shopping frequency in
Wuhan?
Q
3
: Do the students major have an impact on their monthly income?
Q
4
: Do student funding source has an impact on their monthly income?
Q
5
: Do Indonesian students online purchase frequency in Wuhan influenced by their monthly
income?
Q
6
: Which e-commerce platform is popular among Indonesian students?
Q
7
: What kind of products do Indonesian students like to purchase online?

2.3. Hypothesis
H
I
: There is no difference between Indonesian students online purchase experience before
coming to Wuhan and after.
H
II
: There is no difference between the gender of Indonesian students and their online
purchase frequency in Wuhan.
H
III
: There is no difference between Indonesian students major and monthly income.
H
IV
: The funding source doesnt have any impact on the students monthly income.
H
V
: The monthly income of Indonesian students doesnt have any impact on their online
purchase frequency.

2.4. Methodology
For this research, we used a questionnaire to collect primary data. The questionnaire was
distributed randomly among Indonesian students in Wuhan through Social Media Group. It
was composed of two parts: demographic information and questions related patterns of
internet shopping behavior. The first part of the questionnaire measured respondents
demographic information asking for the participants sex, age, current major, and monthly
income. The second part of the questionnaire had questions related patterns of actual internet
shopping behavior, also looked in detail at preferred products, and which e-commerce
platforms they visit in Wuhan.
The data collection was initiated from March 19
th
, 2014 and terminated in March 30
th
, 2014
covering a period of 11 days. The study surveyed 52 respondents in Wuhan, but during the
process of data analysis, questionnaires of 7 respondents were omitted due to paucity of
information, reducing the numbers of usable responses to 45 respondents.
3. Research Findings
3.1 Demographic Analysis of the respondents

Graph 1 Genders of Indonesian students in Wuhan

Among the respondents, 40 percent were female and 60 percent of male. The sample is
representative of Indonesian students since the number of males in China is higher compare to
female.

Graph 2 Age of Indonesian students in Wuhan
60%
40%
Male
Female
26.7
35.6
20.0
8.9 8.9
0.0
10.0
20.0
30.0
40.0
18 to 21 22 to 25 26 to 29 30 to 33 >34

The majority of respondents were aged between 22 to 25 years old (35.6 percent) followed by
those aged between 18 to 21 years old (26.7 percent). The results show that most Indonesian
students coming to China are freshly graduate from high school or university, and eager to
pursue better academic education from abroad.


Graph 3 Indonesians students majors in Wuhan

According to our questionnaire results, most of the Indonesian students in Wuhan are Bachelor
(35.6 percent) and Master (35.6 percent). The number of students who study mainly Chinese is
quite low which relatively low (15.6 percent). If before, most student who came to China were for
learning Chinese language, it is no more the case now. Similarly to other developed country, China
has become a country with a high level of education.
Although less students learn Chinese as primary subject of study, it doesnt mean that others are
unable to speak Chinese. Knowing Chinese is a primary condition to purchase online as most
Chinese e-commerce platform are all in Chinese. One limitation of our questionnaire is the lack of
precision about the study language of the Bachelor and Masters students. But in this research, we
assume that all the respondents have sufficient knowledge of the Chinese language in order to
purchasing online since all students receive 6 months of mandatory Chinese course.

Graph 4 Indonesian students funding source to study in China

One important aspect of studying in China is the source of the income for tuition fee and daily
expenses. From our survey, the majority of the respondents were students who received a
scholarship either from the Chinese government or from the Indonesian government (64.4 percent).
This has an important impact of the students monthly incomes since their expenses are directly
15.6
35.6 35.6
13.3
0.0
10.0
20.0
30.0
40.0
Language Bachelor Master PhD
[VALUE
]%
[VALUE
]%
Scholarship
Self-Support
linked with the constant amount of money they receive monthly from their scholarship. In
comparison with the self-support students (35.6 percent) their monthly budget is less restricted
since depend on their parents or previous job (for the case of Master and PhD students).

3.2 Online Purchase Experience of Indonesian Students
Based on our hypothesis H
I
, we want analyze the difference of Indonesian student online purchase
experience prior and after coming to China. The results help us to know whether Indonesians were
likely to purchase online in Indonesia, and if the convenient access to Internet, Internet banking
security and logistics safety tend to affect their willing to experience online purchase in China.
Since we want to explore the relationship between two categorical variables, we run a Chi-Square
test. It is based on a cross-tabulation table, with cases classified according to the categories in each
variable. But because we are analyzing repeated measures designs (pre-test/post-test), we cannot
use the usual chi-square test. Instead, we need to use McNemars Test. Here we have two variables,
the first recorded at Time 1 (prior to Wuhan) and the second recorded at Time 2 (after coming to
Wuhan). Both of these variables are categorical (with only two response options) and assess the
same information. This test compares the observed frequencies or proportions of cases that occur
in each of the categories, with the values that would be expected if there were no association
between the two variables being measured.

The hypothesis for the McNemars Test are:
H
0
: There is no difference between Indonesian students online purchase experience before coming
to Wuhan and after.
H
1
: There is a significant difference between students online purchase experience when they were
in Indonesia, and after coming to Wuhan.

In order to run this test with SPSS, we need to follow the below steps:
1. From the menu at the top of the screen, click on Analyze, then Descriptive Statistics, and
then Crosstabs.


2. Click on one the variable Online Shopping Experience (Indonesia) and click on the arrow to
move it into the box marked Row.
3. Click on the other variable Online Shopping Experience (Wuhan) and click on the arrow to
move it into the box marked Column.


4. Click on the Statistics button. Tick McNemar. Click on Continue.


5. Click on the Cells button.
6. In the Counts box, make sure there is a tick for Observed.
7. In the Percentage section, click on the Row,Column boxes.
8. Click on Continue and then OK (or on Paste to save to Syntax Editor).



On the table obtained from SPSS, we can see that the output the p value (listed as Exact Sig.)
is .000, which is less than p<.05. This suggests that there is a significant change in the
proportion of student who purchase online (82.2%) compared with the proportion prior to
coming to China (33.3%). The null hypothesis H
0
is rejected.

3.3 Influence of Genders in Online Purchase Behavior
Based on previous studies about online purchase behavior, researchers have demonstrated a
significant difference of online purchase behavior between male and female (Veritrans &
DailySocial, 2012; Utomo, 2012). In order to verify our hypothesis H
II
, we run an
Independent Samples Test to compare the mean scores of online purchase frequencies for
Indonesian male and female students in Wuhan. This test tell us whether there is a statistically
significant difference in the mean scores for the two students gender.
The hypothesis for the Independent Samples Test are:
H
0
: There is no difference between the gender of Indonesian students and their online purchase
frequency in Wuhan.
H
1
: There is a significant difference between the gender and online purchase frequency in Wuhan.


In order to run this test with SPSS, we need to follow the below steps:
1. From the menu at the top of the screen, click on Analyze, then select Compare means,
then Independent Samples T test.


2. Move the dependent (continuous) variable (Online Shopping Frequency) into the Test
variable box.
3. Move the independent variable (categorical) variable (Gender) into the section labelled
Grouping variable.


4. Click on Define groups and type in the numbers used in the data set to code each group.
In the current data file, 0=males, 1=females. This list the codes and labels.
5. Click on Continue and then OK.


The first section of the Independent Samples Test output box gives us the results of Levenes
test for equality of variances. This tests whether the variance (variation) of scores for the two
groups (males and females) is the same. The outcome of this test determines which of the
t-values that SPSS provided is the correct one that we need to use.
Since the Sig. value for Levenes test is larger than .05, we didnt violate the assumption of
equal variance. This means that we can use the first line in the table, which refers to Equal
variances assumed.
To find out whether there is a significant difference between the males and females, we need
to refer now to the column labelled Sig. (2-tailed), which appears under the section labelled
t-test for Equality of Means. From the results, we can see that the value in the Sig. (2-tailed)
column is less than .05. This means that there was a significant difference in scores for males
(M = 2.00, SD = 1.00) and females (M = 3.00, SD = 1.188; t (45) = -3.048, p =.004,
two-tailed). Although females only represent 40% of the respondents, they are purchasing far
more compare to the male counterpart. The null hypothesis H
0
is rejected.

3.4 Income Analysis of Indonesian Students in Wuhan
In this part of our data analysis, we want to analyze the validity of our hypothesis H
III
and H
IV

which are comparing the influence of the students majors and funding sources on their
monthly income. The results help us to have a better understanding on the purchase power of
Indonesians students in Wuhan.

3.4.1 Comparison Between I ndonesian Students Majors and Monthly I ncome
Since the purchase power is directly linked to the income, our hypothesis H
III
seek to reveal
whether there is a difference between the students major and their monthly income. Since we want
to analyze one categorical independent variable (Language, Bachelor, Master, PhD) with one
continuous dependent variable (Monthly Income), we need to use a one-way between-groups
ANOVA. The one-way part of the title indicates there is only one independent variable, and
between-groups means that we have different participants in each of the groups. The one-way
ANOVA is going to tell us whether there are significant differences in the mean scores on the
dependent variable across the four groups. We also use a post-hoc tests to find out where these
differences lie.

The hypothesis for the One-Way Between-Groups ANOVA with Post-Hoc Test are:
H
0
: There is no difference between Indonesian students major and monthly income.
H
1
: There is a significant difference between students major and monthly income.
In order to run this test with SPSS, we need to follow the below steps:
1. From the menu at the top of the screen, click on Analyze, then select Compare Means, then
One-way ANOVA.


2. Click on the dependent (continuous) variable (Monthly Income). Move this into the box
marked Dependent List by clicking on the arrow button.
3. Click on the independent, categorical variable (Major). Move this into the box labelled
Factor.


4. Click the Options button and click on Descriptive, Homogeneity of variance test, Brown-Forsythe,
Welch and Means Plot.


5. For Missing values, make sure there is a dot in the option marked Exclude cases analysis by
analysis. Click on Continue.
6. Click on the button marked Post Hoc. Click on Tukey.


7. Click on Continue and then OK (or on Paste to save to Syntax Editor).


The homogeneity of variance option gives us Levenes test for homogeneity of variances, which
tests whether the variance in scores is the same for each of the four groups. Since the significance
value (Sig.) for Levenes test is greater than .05, we didnt violated the assumption of
homogeneity of variance. We can therefore move to the following table.

This table gives both between-groups and within-groups sums of squares, degrees of freedom etc.
Based on this table, the Sig. value is less than .05, which means that there is a significant
difference somewhere among the mean scores of the monthly income for the four groups.
However, this does not tell us which group is different from which other group. The statistical
significance of the differences between each pair of groups is provided in the table labelled
Multiple Comparisons, which gives the results of the post-hoc tests (described below).

The post-hoc tests in this table tell us exactly where the differences among the groups occur. From
the column labelled Mean Difference, we can see several asterisks (*) next to the values listed.
This means that the groups being compared are significantly different from one another at the p
<.05 level. The exact significance value is given in the column labelled Sig. In the results
presented above, we can see that each group are statistically significantly different from one
another. We can therefore conclude that the null hypothesis H
0
is rejected.

3.4.2 Comparison Between I ndonesian Students Funding Source and Monthly I ncome
As we have seen above, the source of monthly income differ between the Indonesian students in
Wuhan: 64.4 percent of the students receive their monthly income from scholarship, while 35.6
percent of the students are paying their study by themselves or from their parents. Based on these
results, our hypothesis H
IV
is aiming to analyze whether there is a difference between the income
of scholarship and self-support students. In order to test our hypothesis, we run an Independent
Samples Test to compare the mean scores of the monthly income between the two different
Indonesian students funding sources.
The hypothesis for the Independent Samples Test are:
H
0
: The funding source doesnt have any impact on the students monthly income.
H
1
: There is a significant difference between the student funding source and their monthly income.

In comparison to the hypothesis H
II
, the significance level of Levenes test p is less than .05. This
means that the variances for the two groups (scholarship/self-support) are not the same. Therefore
our data violate the assumption of equal variance. Fortunately, SPSS provides an alternative
t-value which compensates for the fact that our variances are not the same. In this case, we need to
use the information in the second line of the t-test table, which refers to Equal variances not
assumed.
From the column labelled Sig. (2-tailed), we can see that the p value is less than .05. This
means that there was a significant difference in scores for scholarship (M = 1600, SD =
232.993) and self-support students (M = 2293.75, SD = 534.751; t (45) = -4.937, p =.000,
two-tailed). In other words, self-support students are more likely to receive a higher monthly
income compare to their counterparts scholarship. The null hypothesis H
0
is rejected.

3.5 Income Impacts on Indonesian Online Purchase
After having highlighted the significant differences between Indonesians students majors and
funding sources in terms of income, our next hypothesis H
V
seeks to reveal whether the amount of
their incomes has an influence in their online purchase frequency. However, after running a
One-Way Between-Groups ANOVA with Post-Hoc Tests, the results showed than we violated the
assumption of homogeneity of variance. We decided to use a non-parametric analysis since our
sample is very small and when our data do not meet the stringent assumptions of the parametric
techniques.
Although the non-parametric techniques have less stringent assumptions, there are some general
assumptions that should be checked:
Random samples.
Independent observations. Each person or case can be counted only once, they cannot appear
in more than one category or group, and the data from one subject cannot influence the data
from another.
The hypothesis for the Kruskal-Wallis Test are:
H
0
: The monthly income of Indonesian students doesnt have any impact on their online purchase
frequency.
H
1
: The monthly income of Indonesian students influence their frequency to purchase online.
In order to run this test with SPSS, we need to follow the below steps:
1. From the menu at the top of the screen, click on Analyze, select Non-parametric Tests, then
Legacy Dialogs and then K Independent Samples.


2. Click on the continuous, dependent variable (Monthly Income) and move it into the Test
Variable List box.
3. Click on the categorical, independent variable (Online Purchase Frequency) and move it into
the Grouping Variable box.


4. Click on the Define Range button. Type in the first value of the categorical variable (1) in the
Minimum box. Type the largest value for your categorical variable (4) in the Maximum box.
Click on Continue.


5. In the Test Type section, make sure that the Kruskal-Wallis H box is ticked.
6. Click on Continue and then on OK (or on Paste to save to Syntax Editor).


A Kruskal-Wallis Test revealed statistically that there is no significant difference in monthly
income across the four different groups (Gp1, n = 13: 1 to 3 time a Semester, Gp2, n = 13: 1
to 3 time a Trimester, Gp3, n = 7: 1 to 3 time a Month, Gp4, n = 12: 1 to 3 time a Week), 2 (2,
n = 455) = 4.462, p =.216. We can conclude that the Indonesian students monthly income
doesnt have any influence on their online purchase frequency. The hypothesis H
0
is
accepted.
4. Conclusion
During the last 5 years, we have seen a rapid development of the Internet and e-commerce
activities in Indonesia. From 25 million Internet users in 2008, this number is estimated to
reach 100 million by 2015. However, even if the number of Internet users has increase due to
a development and easier of Internet, the number of e-shoppers is still relatively low. In
comparison to China, Indonesia is still at an early stage.
After having made a survey on Indonesian students online purchase behavior, our analysis
seeks to reveal whether accessing a more trustable and convenient e-commerce environment
were likely to influence Indonesians to purchase online. The results of our hypothesis H
I
revealed a significant difference between students online purchase experience when they were
in Indonesia, and after coming to Wuhan. We can therefore conclude that Indonesians are
more likely to purchase online if all the conditions are safe and favorable.
With our next hypothesis H
2,
our results showed that a significant differences between males
and females who shop online. This represent an important measure for companies willing to
target e-shoppers since their main marketing strategies should be mostly focusing on targeting
women.
Since in most case, the purchase power is directly correlated with the income, our analysis
aimed to determinate the characteristics of Indonesian students income in Wuhan. Our results
showed a significant differences between the students income and their major and funding
sources. Higher is the major, higher is the income of the students. However, this is the case
mainly for scholarship students since self-support students were likely to earn more.
Finally, after having enlighten the differences of incomes between the different groups of
Indonesians students, our last analysis aimed to determinate whether there is a link between
the students income and their online purchase frequency. The results of the Kruskal-Wallis
Test revealed that the amount of monthly was not a factor affecting the students willingness
to purchase online.
Since this research has been conducted within 9 days, the results of our research is still
subject to many time and accuracy limitation. We hope that this research will be able to
provide a better understanding on the Indonesian online shopping behavior, which clearly
show a strong willing to adopt e-commerce has a important part of their daily life.


References
APJII. 2012. "Laporan Pengurus Periode 2009-2012." Asosiasi Penyelenggara Jasa Internet
Indonesia (APJII). December 19. Accessed January 23, 2013.
http://www.apjii.or.id/v2/index.php/read/content/laporan-publik/140/laporan-pengurus-peri
ode-20092012.html.
Mary Chong. 2014. "E-commerce in China: Driving a New Consumer Culture." KMPG Global
China Practice. Research Report.
. Lukman, Enricko. 2013. "Report: Indonesia now has 74.6 Million Internet Users: this is What
They Do Online." Techinasia. October 30. Accessed December 2, 2013.
http://www.techinasia.com/indonesia-internet-users-markplus-insight/.
Deloitte. 2011. The role of the Internet in Indonesia's Economic Development. Deloitte Access
Economics Pty Ltd.
Serge Hoffmann, Bruno Lannes & Jessica Dai. 2012. "China e-commerce: Heading toward RMB
1.5 trillion." Report Bain & Company.
Utomo, S. B. (2012). Customer's Online Buying Behavior in Indonesia. 2nd International
Conference on Management, 40-53.
VelaAsia, 2013. "Indonesia the most E-Commerce Ready Country in ASEAN Followed Closely
by Singapore." Vela Asia. September 23. Accessed December 2, 2013.
http://velaasia.com/indonesia-the-most-ecommerce-ready-country-in-asean-followed-closel
y-by-singapore/
Veritrans & DailySocial. (2012). E-Commerce in Indonesia. Veritrans & DailySocial.



APPENDIX
Question 1: What is your gender?
Male Female

Question 2: How old are you?
18 to 21 30 to 33
22 to 25
26 to 29
>34

Question 3: Are you scholarship or self-support?
Scholarship Self-support

Question 4: What is your Major?
Language
Master
Bachelor
PhD

Question 5: How much is your monthly income (in RMB)?
.
Question 6: Have you already purchased online in Indonesia?
No Yes

Question 7: Have you already purchased online since you came in China?
No Yes

Question 8: How often do you purchase online?
None
1-3 time per semester
1-3 time per trimester
1-3 time per month
1 to 3 time per week

Question 9: What Chinese platform do you use to buy online?
None
Taobao
Group Buying
Other

Question 10: What product do you usually buy online?
None
Fashion
Electronic
Collection & Art
Home & Decoration
Sport Equipment
Jewelry
Toys & Hobbies
Health & Beauty
Others