Trust Issues

There is an argument that Saudis do not trust online trading. Eid (2011) studied trust among students and staff of King Fahd University of Petroleum and Minerals in the Eastern province. Eid finds that perceived security and privacy risks indirectly influence trust. Website quality with a greater level of integrity, reliability and credibility reduces consumers’ concerns and builds online trust toward e-commerce websites. In studying online risk perceptions of young Saudis shopping for apparel online, Almousa (2011) finds that time (receiving goods from overseas) and performance risks outweigh concerns regarding privacy and social (disapproval) risks. These recent studies may lead to a greater acceptance of e-commerce emerging; arguably, less technological-oriented sectors of Saudi society may not be aware of this trend. In this study, participants P2, P4 and P5 viewed greater acceptance of online trading if the government introduces the concept and offers reassurance to the population in using it. In this case, these participants preferred that the government provide the industry with a portal, risk-free, to

164 market tourism services online. Participant P3 was of the opinion that payment online was a perceived barrier to online trading by the public and that government support for the concept would enhance citizen’s trust. It was noteworthy that the private sector depended on the public sector to provide ‘trust’ (security) for potential customers, as the firms themselves promoted trust in their services to clients for repeat business.

5.11.4.Marketing Strategies

In a study of risk-taking among Saudi executives, Sadi and Al-Dubaisi (2008) found that self-confidence is a barrier to creativity in marketing. The authors advocate for training to improve self-confidence among executives in positive behavioural factors such as self-image and optimism and to minimise negative elements such as fear of evaluation and status consciousness.

Following on the trust sub-theme, participants explained that their ongoing business was based on clients’ recommendations of the firm’s Hajj and other tourism

packages, and their professionalism in service delivery. Given the lack of interest in e- commerce, this somewhat surprisingly was obtained not only from friends and relatives, but from Internet social sites. P5 said:

“Most of our customers initially find out about our services from the forums on the Internet. Then they visit our website and choose from the packages we offer. They would trust our offers without any guarantees because they found recommendations for our services” [P5].

Whilst direct knowledge of the person recommending a firm improves trust, it is problematic that a stranger recommending a service would be more trustworthy than the firm itself or its website. A more relevant example was made by P6, who stated that potential customers prefer to discuss their travel arrangements face-to-face, and negotiate for the best price:

“Selling and marketing is all about word of mouth. From my experience, most of our customers like to discuss their preferences at length, asking many questions and getting reasonable answers about their concerns. Actually, offering an e- commerce website selling our Hajj packages would help but still we need to

make face to face contact with our customers because of the personal touch and that’s the way we like it” [P6].

Participant P4 supported this view. Therefore, Saudis decision-making behaviour when making a purchase is clearly influenced by personal recommendation and an opportunity to discuss their tourism purchases (cf. Rahadian 2007). These matters should

165 be taken into account when building a website, whether or not for e-commerce, so that there is sufficient information for a potential purchaser to make the correct decision. In this case, participants’ online marketing strategies arguably reflected their printed advertising, with insufficient information, which then must be elaborated by an employee.

5.11.5.Family

As discussed in previous, Saudi women are likely to make the family decisions on travel arrangements. The majority of Saudi men are not concerned with negotiating details of travel, as they generally lack time (P6). Participants P5 and P6 considered that websites offered women opportunities for browsing and comparing travel content and prices. Indeed, P5 had a booking website and considered this an effective form of marketing for families.

5.11.6.Commitment

Participant P9 said that Saudis lacked initiative to seek new experiences unless they were encouraged to try, giving the example of banks’ attempts to move their clients online (cf. Al-Somali et al. 2009). They reduced staff and closed branches, forcing long queues. Further, they closed down services such as bill-paying to force the use of online payment and the use of automatic teller machines for cash and other services. Similarly, P5 does not now produce printed material for promotional purposes, referring all enquiries online, although this had not been well received. Participant P10 also commented on time spent from enquiries that do not result in sales:

“About 70 per cent of enquirers contacting our call centres make reservations, but they don’t confirm and pay for their reservations. Also some of the 30 per cent who finalise the transaction do not take the flight they booked” [P10].

There is therefore an issue with online booking, as it requires immediate payment and thus a decision by the purchaser that must be carried through. This is a commitment that most Saudis are not prepared to make, and it is this reticence that may influence executive decisions to build e-commerce capacity.

166 5.11.7.Religion

One successful Saudi online purchasing site required that the potential customer makes a commitment to God (ىلاعت —اب مسقلا , in the form of a sentence with a tick option ) to ensure that payment for site use is made. Participant P3 commented on the ethics of this example, which appears to force a decision more in keeping with a life-threatening situation, and is highly opportunistic. Invoking God’s name in a minor transaction should not be condoned and was considered by P3 to have an effect.

5.11.8.Cooperation

The concept of shared ventures is part of Saudi culture as well; similar to the notion of the government providing a portal platform for e-commerce (Kayed & Hassan 2011). Participant P11 elaborated on the concept: the interviewee and a number of tourism executives in Jeddah formed a business group to promote tourism within their market. They met several times, set goals, constructed travel packages using their combined resources, offering facilities and services around price groups. One goal was to produce an online portal to place their marketing information on one website. However, some of the group were not interested in e-commerce, so the whole idea faded. This example may be at odds with Hofstede’s collectivism dimension, at least in business. Also, weak cooperation between industry stakeholders would lead to a lower level of technology adoption and implementation.

5.11.9.Systems Evolution

Several comments by the participants showed management allowed change to occur without intervention. Participant P10 noted that an Internet booking facility was undertaken in-house, but there was no plan to make it available to the firms’ customers. It was not management’s decision to implement the technology, although the executives were unaware of the information systems used in their firms. Therefore, it is part of the Saudi culture that systems evolve through their own impetus so that executives, if not operational as this section shows, cannot expect to be in a position to make an informed decision. If there are innovators in the firm who are driving their own successful project, and they leave, the capacity of the original firm is reduced, and the ex-employee can use the knowledge elsewhere.

167

5.12.

Summary

From the analysis, the advantages of e-commerce are evident to Saudi tourism industry firms. The analysis of the data from a series of interviews with tourism operators found that the factors motivating and/or barriers affecting e-commerce use depend on a range of internal and external variables (see Table 5.4).

168 Table 5.4: Factors Affecting E-commerce Adoption

Factors Impact on E-commerce Adoption Frequency during the interviews

Perceived Relative Advantage

Cost management trivial 3

Time management motivator 12

Productivity motivator 27

Customer service motivator 20

New profit centre trivial 5

Perceived Ease of Use trivial 8

Social Influence

High Customer Demand motivator 19

High Customer Awareness motivator 19

Low Customer Trust Barrier 18

Organisational E-readiness

Organisation Size trivial 3

Business Restrictions Barrier 7

Lack of Commitment Barrier 5

Owner or Presidency Force Barrier 7

Priority & Proper Time motivator 15

Organisational Awareness motivator 14

Previous Experiences trivial 5

Human Resources availability motivator 19

Business Resources trivial 5

Lack of Technology Resources Barrier 20

External E-readiness

Market Force trivial 4

Competition motivator 17

Impact of Major Companies trivial 3

Size of Targeted Market motivator 9

Fear of Losing Business trivial 6

Government Support motivator 18

Government Force motivator 9

Lack of Infrastructure Barrier 7

Lack of Supporting Industries Barrier 32

Perceive Service Quality trivial 2

Trusting Supporting Industries medium 6

Customized Solution trivial 5

Marketing information trivial 4

E-commerce Set up Cost motivator 19

Organisational Cultural Dimensions

Developmental Cultural Dimension motivator NC*

Team Cultural Dimension medium NC

Hierarchal Cultural Dimension medium NC

Rational Cultural Dimension trivial NC

(ational Cultural Influence _NC

Leadership and Management Competency motivator NC

Family trivial NC

Commitment medium NC

Religion trivial NC

Cooperation medium NC

169 External Factors: Government initiative is one of the critical issues influencing usage of e-commerce in the industry, and indeed, government intervention through creation of mandatory e-business portal, Makha’a and Yosr, has been a key factor behind

the shift to ICT use by Hajj/ Umrah operators. Competitiveness in the travel industry as

a whole could also prove to be a potential factor motivating individual firms to adopt e- commerce. However, problems in accessing ICT resources and the relative backwardness of the local ICT industry have discouraged some operators from adopting online business systems like e-commerce. None of the tourism organisations used global payment methods such as credit cards which are essential to conducting business online, as these methods of payment charge interest which is prohibited in Islam. This appears to be a factor impeding the adoption of e-commerce in the Saudi tourism industry.

Organisational E-readiness: Apart from these broader systemic factors in the Saudi industry at large, the individual business model of the company and its e-readiness had a significant effect on e-commerce adoption. There are several factors negatively affecting e-commerce adoption; however the quality of ICT supporting industries were of the most concern. The Saudi tourism industry needs efficient support from ICT providers to practice e-commerce. Whilst the respondents from the Saudi tourism industry professed their indifference whether the ICT providers were local or global, there was a prevailing perception that the quality of service in local providers was less than international ICT support firms. Furthermore, even though local ICT providers, particularly website developers, were considered substandard, their costs were significantly higher than those prevailing in the global market for a particular service. Cost of e-commerce implementation was an issue for the tourism industry, which was resisting government encouragement to move Hajj and Umrah bookings online.

Relative Advantage and Ease of Use: The analysis of the participants’ responses shows that the perceived ease of use did not appear to have a major effect on the issue of adoption of e-commerce in the context of this research. The participants considered ease of use as part of e-commerce planning and implementation but the website or user-computer interface was seen as a matter for competency training. Many studies have also shown that perceived relative advantage of e-commerce utilisation and not perceived ease of use, is positively related to behavioural intentions to use ICT (Hu et al. 1999, Chau 2002).

170 On the other hand, the analysis shows that relative advantage of e-commerce is an important factor. Relative advantage of e-commerce is predicated on the advantages it provides in terms of cost benefits, productivity increase, time-savings, profit generation and improved customer service. It must, however, be noted that as the majority of firms did not have an online strategy, and cost effectiveness and profit generation were only mentioned by the minority whose business model included, or depended on, online sales. Market Forces: The findings showed that external factors of market forces can make a significant impact on a firm’s intention to use e-commerce in the Saudi tourism industry. The results of this research confirm the extant literature on technology acceptance on the importance of social influence on technology adoption, particularly in the case of Arab–based studies (cf. Al-Ghatani et al. 2007, Baker et al. 2010). The adoption of e-commerce also depends on the nature of clientele of the individual firm. Firms normally use a traditional shopfront business approach which is preferred by local customers and only firms with a larger client base of foreign customers take the trouble of investing in e-commerce apparatus. In addition, their perceptions about customer service also negatively impacted e-commerce use as most participants generally felt sceptical about e-commerce, preferring a brochure approach rather than the onerous work of instituting e-commerce. The discussion also identified three main variables of customer attitudes that may encourage Saudi firms to adopt and use e-commerce customer demand, customer trust and customer awareness. The analysis shows that the issues of online payment and trust should be supported by legal initiatives created by organisational policies as well as government intervention.

Organisation Cultural Dimensions: The research also identified organisational values to explain why certain organisations made the decision to use integrated systems and e-commerce in their marketing. The Competing Values Framework was used to classify the firm’s culture. While firms that exhibited a developmental culture had the highest level of adoption or intention to adopt e-commerce, there appears to be little relationship between executive education level and interest in e-commerce, but executives personality and attitude plays an important role. Arab conservatism particularly in religious matters was a significant issue in online marketing for religious tourism in Saudi Arabia. There are significant structural impediments for firms in Hajj or Umrah tourism to modernise or expand due to trade controls as well as the nature of the

171 country impede the drive to technological innovation like e-commerce as the management was often averse to risk-taking and a family-business model often preferred to stick to the status quo.

Cultural Values: This study has identified a host of contextual factors in the Saudi market that impede the uptake of e-commerce. Low levels of customer trust and awareness particularly for a relatively novel service like e-commerce can indirectly dissuade organisations to adopt e-commerce systems. Also, respondents felt that Saudi customers would not be comfortable with e-commerce systems as they lacked human interaction and required prompt purchase. However, this does not necessarily mean that e-commerce has no avenue for future growth in the country. As some of the participants in the survey indicated, the awareness level of e-commerce is growing, particularly with the youth population of the country. While all the characteristics of Saudi society, such as emphasis on human interaction, low education level, seem to conflict with e- commerce at this point in time, online business in the country could flourish with proper marketing and acculturation over time. In fact, participant P5 in this study, who had been running a business without a physical shop for some time, argued that the perception of customer apathy to e-commerce was not only greatly exaggerated but it was possible to recruit customers through good networking. Saudi Arabia can be designated as a collectivist culture in Hofstede’s (1980, 2000) model and Saudis decision-making behaviour is clearly influenced by personal recommendations, so good networking and social influence from friends, family or peers can help promote e-commerce. As Saudi women are likely to make decisions about domestic matters like travel arrangements, online business could be marketed as a safe and comfortable medium for women to make their purchases without having to venture outside or talk to strangers.

The next chapter (Chapter 6: Survey Development) explains the possible