A study of e-commerce adoption using TOE framework in Saudi retailers: firm motivations, implementation and benefits

Abstract

There are many companies in the Middle East, particularly in Saudi Arabia, that are yet to adopt e-commerce and those that have, are mostly at the very basic levels of implementation. The objective of this study is to explore the factors that influence the process of adoption and effective utilisation of e-commerce at different stages of implementation, with a particular emphasis on large companies in the retail industry in Saudi Arabia. Four multiple qualitative case studies involving mainly in-depth interviews were used for the data collection and analysis. The four companies in this study were chosen based on different levels of e-commerce usage. The study identifies a number of factors as important motivations for the adoption and implementation of e-commerce. Firstly, it identifies improved operational efficiency and the enhancement of marketing as motivators for e-commerce adoption and implementation. Ultimately, the objective was to expand market reach, reduce the cost of physical infrastructure while increasing sales. Secondly, Saudi retailers were interested in providing an easier and culturally compatible shopping environment for women. Considering the socio-cultural restrictions placed upon women in their public movement, e-commerce, particularly at the retained was considered a way of breaking this restriction thus allowing more women to undertake shopping more frequently. Thirdly, e-commerce generally seems to be a business response to the growing tech-savvy young population in Saudi Arabia. The study however shows that although retailers are willing to adopt e-commerce, and that most organisations have a good management approach to handling the internal constraints and challenges of the process of change associated with e-commerce implementation. However, the progress of implementation in the country is slow and only at a very early stage. This is mostly based on contextual impediments. A number of inhibiting environmental factors, including the lack of government initiatives, legal frameworks, inadequate external ICT infrastructure, low e-readiness among local trading partners, poor physical infrastructure, and lack of e-payment methods were identified. Furthermore, the socio-cultural belief systems were found to constitute a major influence on the slow progress towards the implementation of the technology. Moreover, the study found that family affiliations and the tribal system in the country has a significant influence on organisational structure and culture. This research contributes to our understanding of the nature of the Saudi business environment, and constitutes an important theoretical contribution to the development and application of the TOE framework to understand e-commerce adoption in order to assist with and the reasons for the observed successes and failures. It is envisaged that this understanding maybe drawn upon to explain similar observations in like economies in the region and the developing world at large