Drivers of Cash-on-Delivery Method of Payment in E-Commerce Shopping: Evidence From Pakistan

Abstract

The e-commerce market of Pakistan has phenomenally fostered in recent years as a result of cyberspace expansion and launching of various national and international vendors. While country’s e-commerce scenario has significantly reshaped, customers are still reluctant to adopt e-payment methods and cash on delivery (COD) prevails as the method of payments for online shopping. This study was conducted to empirically investigate major factors which influence Pakistani customers to opt for COD while shopping online. A framework was proposed based on seven constructs and the data were collected using 5-point Likert-type scale. Statistical Package for the Social Sciences (SPSS) v. 22 and Amos v. 23 were used for statistical analysis and structural equation modeling (SEM). Cronbach’s alpha values above .85 were found suggesting good internal consistency. The goodness-of-fit index and adjusted goodness-of-fit index values were observed to be 0.933 and 0.866, respectively. In SEM analysis, perceived security against online scams and perceived control over the buying process were observed to be the key role players instigating Pakistani customers to use COD. Interestingly, perceived trust and perceived satisfaction did not show significant impact. Moreover, the moderator of ease of use positively mediated the influence of perceived security on the use of COD. This study presents imperative implications for online businesses as well as government agencies. The investigation provides an insight into purchase behaviors of Pakistani e-customers and has paramount importance for e-commerce retailers and marketing startups in evolving e-commerce scenario of the country.

Analyzing the Influence of Situational Factors on Online Impulse Buying Behavior: A Study of Pakistani Consumers

“…E-commerce activities have recently surged in Pakistan (Khan, 2017). In the last decade, due to the huge population of Pakistan, internet coverage has dramatically expanded as one of the most auspicious locations related to ecommerce (Syed, 2017;Anjum & Chai, 2020).…”

Does Online Ratings Matter? An Integrated Framework to Explain Gratifications Needed for Continuance Shopping Intention in Pakistan

“…This is due to the absence of an effective e-commerce institutional mechanism in Pakistan, which is causing distrust and increasing security concerns in online shopping. Furthermore, it increases consumer's positive concern with COD and accepting it as a primary mode of payment while shopping online [137]. Therefore, our findings reveal a major drawback in Pakistan's e-commerce industry, which makes the online environment suspicious and shows a need for an effective e-commerce institutional mechanism that favors customers' high propensity to consume online shopping.…”

“…Unfortunately, contradicting our assumptions, PEEIM was found insignificant in developing its positive impact on customer satisfaction and convenience in the Pakistan e-commerce market. We intend to explain the possible reasons for this insignificant relationship through a recent study [137], which posits the preference of cash on delivery (COD) over e-payment in Pakistan. Due to the weak and insecure infrastructure of e-payments in Pakistan, COD has become a primary mode of payment while doing online shopping, which plays a dominant role in e-commerce adoption among Pakistani consumers [137].…”

“…We intend to explain the possible reasons for this insignificant relationship through a recent study [137], which posits the preference of cash on delivery (COD) over e-payment in Pakistan. Due to the weak and insecure infrastructure of e-payments in Pakistan, COD has become a primary mode of payment while doing online shopping, which plays a dominant role in e-commerce adoption among Pakistani consumers [137]. The increase in online scams and unavailability of effective e-commerce institutional mechanisms tend to make consumers lose their control over the entire buying process while doing e-payments.…”

“…The increase in online scams and unavailability of effective e-commerce institutional mechanisms tend to make consumers lose their control over the entire buying process while doing e-payments. COD mode particularly increases consumer perceived control over the purchasing process [137]. PEEIM plays a crucial role in building a safe, trustworthy, and legal environment in the online market [138], which is absent in Pakistan's online context.…”