BEEB1013 PRINCIPLE OF ECONOMIC (GROUP H)

SECOND SEMESTER SESSION 2020/2021 (A202)

FIRST DRAFT GROUP ASSIGNMENT
TOPIC: ONLINE SHOPPING DURING PANDEMIC COVID-19

BIL. NAME MATRIC

NUMBER

1. MUHAMMAD AIMAN ZAKWAN BIN MOHD BASRI 280963

2. MUHAMMAD SHAHMI HAZIM BIN MOHAMAD 281156

SHAHFINAZ

3. FATHYNE NABIELA BINTI ABDULLAH 281858

4. NUR ALIA NAJIHAH BINTI AHAMAD DENAL 280602

5. NUR NAJAH NADIAH BINTI AZMI 280356

6. MIMI NAZIRAH BINTI CHE AZIZ 277918

7. VELISA SALWA KEYSHANI 274919

8. AINNUR FATIN BINTI MOHD ANUAR 276927

LECTURER’S NAME: DR. NOREHAN BINTI ABDULLAH

DATE OF SUBMISSION:

20 MAY 2021

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 TABLE OF CONTENTS

TITLE PAGES

CHAPTER 1: INTRODUCTION

1.1 Background of studies and problem statement 1

1.2 To study impact of online shopping during covid-19 2

1.2.1 Research Objectives 3

1.2.2 Investigate why online shopping become a trend in Malaysia 4

during pandemic Covid-19

1.2.3 Investigate advantages and disadvantages of online shopping 5-8

during covid-19

1.2.4 To make research how to overcome online shopping trends 9 - 11

during covid-19

1.3 Importance of Study 12

CHAPTER 2: ANALYSIS AND REVIEW

2.1 Online shopping trend 13

2.2 Advantages of online shopping trends 14

2.3 Disadvantages of shopping trends 15 - 16

2.4 Impact of online shopping trends 17 - 19

CHAPTER 3

3.1 Conclusions 20
3.2 Suggestions 20

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1.1 BACKGROUND OF STUDIES AND PROBLEM STATEMENT

The World Health Organization has stated that Covid-19 disease or better
known as Coronavirus. A novel coronavirus (nCoV) was identified on 7 January
2020 and was temporarily named “2019-nCoV”. It is a type of disease that
causes symptoms of fever and difficulty breathing. Respiratory disorders can
vary from common colds to more severe illnesses. This covid-19 is named
based on what is seen under a microscope. Covid-19 virus consists of a core of
genetic material surrounded by an envelope of protein spikes. That gives the
look of a crown to it. In Latin, the word Corona means "crown."

PROBLEM STATEMENT

Due to this disease, many businesses are unable to open as usual. This is
causing them to lose profit and sales. Other than that, consumers also are afraid
to shop physically at shopping malls because they are afraid of getting infected
by the Covid-19 virus. Thus, many businesses have to move their business
strategies into online business to make profit.

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1.2 TO STUDY THE IMPACT OF ONLINE SHOPPING DURING
PANDEMIC COVID-19

Introduction

Businesses have been forced to make significant changes as a result of the

COVID-19 pandemic, and many workplace activities have gone interactive.
During this pandemic, online shopping is the most common and preferred
method of buying various goods and services. The effect of digitalization on
productivity and corporate culture has been extensively researched. Meanwhile,
little attention has been paid to how COVID-19 has affected consumers and
consumption culture. During the COVID-19 pandemic, online shopping became
dominant, and retailers put a lot of effort into creating, upgrading, and
promoting their online stores. Some small retailers that did not have online
stores prior to the closure devised temporary ways to sell their goods online,
such as sharing products on social media platforms and providing order pick-up
or delivery. Others also launched social media promotion campaigns and
offered discounts for their online platforms.

Research Background

This research aims to find out how COVID-19 impacts online shopping
business and changes in demand and buying behaviour of consumers all of a
sudden. In this research we also want to know the reason why people switch
from offline shopping to online shopping during this pandemic and we want to
know the benefits that they get from online shopping. This paper also studies
some challenges that online shopping faces which are not expected before. Not
only that, this paper studies the challenges faced by the buyer as well.

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Research Questions

1) Why did "online shopping" become a trend during the covid-19 pandemic?

2) What are the benefits of "online shopping" during the covid-19 pandemic?

3) What are the disadvantages of “online shopping” during the covid-19

pandemic?

4) What platform was always used for "online shopping" during the covid-19
pandemic?

5) "Online shopping" during covid-19 has many good effects or bad effects?

1.2.1 RESEARCH OBJECTIVES

The objectives of present study are:

1. To understand the present status and trends of Online Shopping

2. To reveal the key variables influencing the increased usage of Online

Shopping

3. To analyze the impact of COVID-19 on Online Shopping

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1.2.2 TO INVESTIGATE WHY ONLINE SHOPPING BEING A TREND
IN MALAYSIA DURING PANDEMIC COVID-19

The growth of internet technology development has enabled consumers to

purchase products or services from the retailers’ websites. Any product
information can be easily searched and accessed over the internet as everything
is just at your fingertip. Due to the Movement Control Order (MCO) that has been
announced by the government during pandemic Covid-19, online shopping has
become a popular business trend not only for customers but also the traders.
Therefore, we conducted a survey to identify the reasons for online shopping
being a trend in Malaysia during Pandemic Covid-19. The survey was conducted
using an open-ended questionnaire called google form and distributed online to
the public for the feedback. From the questionnaires, the result of 68 responses
has obtained with a percentage of 86.8% of the respondents were female while
the remaining 13.2% were male.

Figure 1: The percentage of gender responses to Online Shopping during

Pandemic Covid-19 survey.

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 1.2.3 TO IDENTIFY THE ADVANTAGES AND DISADVANTAGES OF
ONLINE SHOPPING DURING COVID-19

ADVANTAGES OF ONLINE SHOPPING DURING COVID-19

Figure 2: The percentage of three advantages of online shopping during Covid-

19.

Figure 2 shows 83.8% which is 57 respondents agree that online shopping is more
convenient way of shopping. Next, 10.3% which is 7 people saying that online
shopping can improve the delivery courier financial sector during Covid-19.
While 5.9% which 4 people saying that online shopping can save more money.

• More convenient way of shopping

Online shopping is more convenient compared to physical store shopping.

Customers may shop from the convenience of their own homes or workplaces.
The internet allows customers to shop more easily and conveniently. Since this
pandemic requires all people to follow health guidelines such as social distancing,
so online shopping is a huge aid in putting this into practice. Online shopping is
a more convenient way of shopping during this pandemic Covid-19 as customers
can buy virtually anything they want without ever having to leave their homes.
This is because online stores are open 24 hours a day, seven days a week, and can

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 be accessed from anywhere with an Internet connection. The transfers can also
be easily canceled.

• Improve the delivery courier financial sector

Customers can now buy their necessities online from online stores and get them
delivered to their doorstep by courier. Couriers are implementing more rigorous
cleaning procedures and contactless distribution solutions in response to the
Covid-19 pandemic. For example, drivers are no longer considering signatures as
evidence of distribution in order to minimize drivers and clients' interaction.
Customers will also get delivery forecasts, arrange pick-ups, make safe payments,
and track deliveries to any location in the world, all by sending a text message.
The increase in courier and shipping companies’ services would also improve the
delivery of courier financial services as customers prefer online store to purchase
their needs.

• Save more money

One of the advantages of online shopping during the Covid-19 is that customers
can save more money. This is because when customers purchase online, they can
save their money by simply comparing the prices of the goods they choose to buy
from different retailers. Furthermore, it is much easier to compare prices from
various stores online, which means customers can save both time and money
while looking for a good discount on their orders. Besides, customers can save
more money when shop online by turning to cash back, which can earn via credit
cards or through apps. When customers use cash back credit cards, they just use
the card to make transactions, and they can get cash back on their card for every
dollar earned.

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 DISADVANTAGES OF ONLINE SHOPPING DURING COVID-19

Figure 3: The percentage of three disadvantages of online shopping during

Covid-19.

The highest responses were 50% which is 34 people agree that online shopping
leads to impulse buying. While 29.4% which is 20 respondents saying that
deterioration among small business is the disadvantages of online shopping
during Covid-19. Next, 20.6% which is 14 people state that more wastage occurs
during online shopping.

• More wastage occurs

Although the ability to make purchases anywhere and anytime may seem like a
good idea especially during Covid-19, but online shopping can cause more
wastage occurs such as waste of money and time. Online shopping will persuade
shoppers to spend more money than they planned to. For instance, when a
customer buys online, the products to be delivered must be paid. Besides that,
online shopping is a waste of time. Shoppers expend a longer timeframe in
checking the proposed items and distracting themselves from the need to discover
as many suggestions as possible.

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• Deterioration among small business

As online retail shopping becomes more common during Covid-19, more small
businesses may need to focus on their online reputation and marketplace.
Sometimes a small business's lack of an online storefront, or the availability of
online shopping that is subpar, may often cause problems. Besides, small
companies must spend more in their online marketing capabilities and how they
perform their daily operations. This includes shipping options for those that have
never previously delivered to the customer. Furthermore, one bad experience
from customer can cause a severe blow to one’s reputation, even though they
have a decent repertoire otherwise. A single bad online shopping trip can often
be enough to derail a business.

• Lead to impulse buying

When we buy something on the spur of the moment, this is known as impulse
buying. Online shopping during Covid-19 will also lead to impulse buying which
customers feel compelled to buy items they like, regardless of whether they need
the items or not. Besides, impulse purchase will damage our pockets if we are not
careful about items we purchase. It can also contribute to excessive credit card
debt if it spirals out of reach. Customers need to be careful when shop online
especially during Covid-19 as it will cause to impulse buying.

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1.2.4 TO MAKE RESEARCH HOW TO OVERCOME ONLINE
SHOPPING TRENDS DURING PANDEMIC COVID-19

Online shopping has become commonplace in modern society today. It makes it

easier for consumers to buy things without having to physically head to the store.
Meaning, you no longer have to drive, park, and pay at the counter which is quite
a bit of a hassle. All items purchased will also be delivered directly to the location
of your choice over a set time. Items sold online are also often offered at lower
prices than in physical stores. It can be done because the seller does not have to
pay store rent which often reaches the price of thousands ringgit. Sellers also do
not have to incur high operating costs, such as electricity and labor, when they
open a store through this platform. However, all the facilities present still have
some issues, especially in terms of security. We have certainly heard of several
cases of fraud that have occurred which resulted in goods and money not being
given to the buyer. But it can be prevented if you are proficient with the ins and
outs of buying goods online. In fact, we can get even greater benefits than buying
conventional items. But we have to find the way to overcome online shopping
during pandemic Covid-19.

• Uninstall apps shopping

Retailers often promise a one-time discount when we sign up for their shopping
app. To overcome making online purchases we need to uninstall shopping apps
such as Shopee, Lazada, Zalora, and so on. With that, we won’t hear about special
sales or their customers ’appreciation days. Not knowing about sales can also
reduce our desire to compete to buy goods online. We are afraid of missing out
on opportunities and often feel compelled to buy something they consider “rare”,
such as an item for sale. If we don’t know about the upcoming sale, you won’t
feel a loss.

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 • Think many times before shopping online

Many online shoppers make unplanned purchases when they see an item has been
sold or something catches their eye when they are "just browsing." And even if
we have to treat ourselves occasionally, making unplanned purchases regularly
can affect our budgets and result in high credit card debt. To slow down,
implement a mandatory waiting period before we buy something online. Some
people make themselves wait at least 24 hours when they see something they
want, while others hold on for 72 hours or more. We can also try this short-term
waiting strategy: When we see something we want, put it in your shopping cart
and then take a walk outside or call a friend and tell them about it. Often, this will
clear our heads and help us realize that we don’t need it

• Save for what really matters

Identify the life goals we want to achieve and then put a picture of whatever is on
your desk, in bed, or on our phone wallpaper. This picture will remind us that we
are saving and trying to find something more important, and more satisfying, than
any other new pair of shoes. .Next, calculate how much money we spend each
month on online shopping. We can do this by looking at credit card statements
from the last few months or using a service like Mint to track your spending.
When you know how much we spend online, the determination to put 75% of that
amount into a special savings account each month; this money will go to the
purpose of our lives. The remaining 25% is “fun money” online that we can spend
as we please. Every time we are tempted to buy something online, take the time
and think about our life goal.

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Figure 4: Shows 73% which is 49 respondents choose to uninstall shopping apps
to overcome online shopping, Next, 14% which is 10 respondents choose to think
many times before shopping online. While 13% which is 9 respondents choose to
save for what really matters to overcome online shopping.

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1.3 IMPORTANCE OF THE STUDY

We argue that studying e-commerce consumption during the COVID-19 crisis

is relevant for three reasons. To begin, we believe that the pandemic's
circumstances will have a long-term impact on consumer behaviour, and that e-
commerce companies will need to thoroughly understand consumer behaviour
trends during this period to retain a competitive advantage. As a result, during a
global crisis like the COVID-19 pandemic, the position of existing drivers of e-
commerce purchasing behaviour must be explained. Second, there is an intense
public discussion on how to deal with the pandemic on a global, national, and
personal level.

However, whether external factors such as media coverage on the current

economic situation and demands for concerted action during this crisis affect
consumer behaviour remains unknown. Third, social distancing strategies such
as quarantining must be studied to see if they impact behavioural trends.
Consumer behaviour during the COVID-19 pandemic has been studied recently,
and it has been shown that the pandemic affects consumer decision-making and
behaviour. Consumer behaviour in the early stages of the pandemic mirrored
those seen in previous historic shocks, leading to panic buying, for instance.

In the long run, however, the pandemic's continuing uncertainty may contribute
to transformative consumption patterns. Because of government regulations and
concerns about infection, consumers are hesitant to buy products from
stationary retailers. Another study discovered a connection between the desire
to isolate oneself and unusual purchasing behaviour. Hence, this research
explores hedonic and utilitarian antecedents of actions and accounts for
subjective standards as an additional determinant, based on a review of the
current literature in the field of e-commerce adoption. Behavioural motives are
used as a proxy for purchasing behaviour in this analysis.

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2.0 ANALYSIS AND REVIEW

2.1 ONLINE SHOPPING TREND DURING COVID-19

The Internet has become one of essential things needed for many Malaysian in
their daily lives. Especially during Movement Control Order (MCO). Online
shopping has become one of the trends during MCO. Online shopping trend
during Covid-19 is rapidly increasing while visits are physically decreasing.
The social distancing that has been stressed in MCO required consumers to wait
for a long time to buy any goods physically. This causes consumers to feel more
convenient to carry out online shopping.

Figure 5:The Percentage of ‘Why online shopping being a trend during

Pandemic Covid-19’.

In figure 5, it shows the reason why online shopping has become a trend during
covid-19. The highest responses were 47.4% saying that buying on online stores
is much cheaper than physical stores. Also, 42.1% agree that they are just bored
and spend their time online shopping. While 10.5% of people say that they
cannot go out during a pandemic to buy things they need.

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2.2 ADVANTAGES OF ONLINE SHOPPING TREND DURING COVID-
19

2.2.1 Societal Responsibility

Fulfilling their societal duties such as producing high demand products like face
masks, hand sanitizer and organizing donations for people in need.

2.2.2 E-commerce push

Pandemic is a catalyst for e-commerce activities. Many consumers are now

purchasing products online which they would never consider before (e.g
groceries). Companies react accordingly and invest in their digital commerce
capabilities to keep up with their competitors.

2.2.3 Agile Beyond Technology

The fast-changing context in which companies are currently operating yields

new markets for those who are able to quickly re-invent and adapt to the new
situation. Such as offering online shopping or digital service consulting instead
of physically visiting stores.

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2.3 DISADVANTAGES OF ONLINE SHOPPING DURING COVID-19

The popularity of e-commerce is not a new thing in Malaysia. In this Covid-19

situation, e-commerce has become an option for most consumers to fulfil their
wants and needs. People tend to change their new shopping habits from going to
a physical store for shopping to online shopping as this transition is considerably
easier. On the other hand, shopping online also has some disadvantages. Based
on the pie chart below, it shows 11.8% of respondents agreed that online shopping
during Pandemic Covid-19 has many bad effects. While 88.2% of respondents
agreed online shopping during Pandemic Covid-19 has many good effects.

Figure 6: The Percentage of the Good or Bad Effects of Online Shopping

during Pandemic Covid-19

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 Figure 7: The Percentage of Disadvantages of Online Shopping during
Pandemic Covid-19

Based on figure 7, 50% of the respondents said that online shopping made people
more likely to buy the things they like than their needs. Followed by 29.4% of
respondents who agree online shopping causes deterioration among the small
traders. The remaining 20.6% of them state that the disadvantages of online
shopping during Covid-19 causes a lot of wastage.

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2.4 THE IMPACTS OF ONLINE SHOPPING DURING COVID-19

Nowadays in the new era of technology, the internet has become part of our life.
As the Internet is becoming more widely used, we can find or do everything via
the internet. In fact, many businesses are creating web pages in addition to their
retail stores, and many start their businesses with online stores. Online shopping
websites are built to allow people to sell and advertise their item or buy any things
that they need via the internet. The first businesses to really make shopping online
popular are Amazon and eBay which launched in 1995 and 1996. However, as
we can see, now there are a lot of online shopping platforms such as Shopee,
Lazada, GoShop and Ezbuy. However, the implications of online shopping during
Covid-19 towards economic, environment and society also have positives and
negatives.

First and foremost, based on questionnaires that we have made, the positive
implication of online shopping during Pandemic Covid-19 is that it’s convenient.
Nowadays, consumers need to buy things so that they can just buy everything or
the web, which means it helps them to save their time and energy. Convenience
is the main positive implication for online shopping during pandemic Covid-19
because it gives consumers a chance to shop anywhere and anytime with just only
their gadget with an internet access. Consumers also will save their time and
energy to walk-in to retail stores just to buy things. Moreover, convenience
includes all the overall ease of finding a product, time spent on shopping and post
purchase service.

Secondly and even more importantly, online shopping offers a lower price than
physical shopping. Consumers are able to compare many different products with
different prices and quality at the same time. Most online shopping gives cheaper
prices compared with retail stores, because online stores do not have to pay the

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costs of running a shop and wages to salespeople, and all of the other costs of
running businesses such as taxes. From this point of view, consumers can save
more money to buy necessaries during Pandemic Covid-19.

Next, the negative implication of online shopping during Pandemic Covid-19 is

it will be misused by the public like through credit cards or it may be identity
fraud. Most consumers who want to purchase something from a website, they
need to use a credit card or debit card to make payment. According to this action,
hackers will take advantage to steal debit card or credit card information via
online shopping websites. In fact, because online shopping requires only a credit
card or debit card number, identity fraud is increasingly favoured by criminals. It
will put some consumers in danger and the probability of them losing money is
higher.

Lastly, online shopping during Pandemic Covid-19 also brings negative

implications like it takes away taxes from local companies. This is because some
online traders did not charge the appropriate or any kind of local tax and other
taxes for an item that consumers purchase from their online stores. Normally,
they would have paid taxes if they made the same purchase in a store but the
residents of a state may not pay sales taxes for their online purchases. This may
give benefits to consumers but it is definitely affect the local economy in a
negative way.

We make an analysis about the implication of online shopping during pandemic

covid-19 through trusted websites. In addition, we also make questionnaires
about this kind of topic to support our analysis. Here are the results from
respondents about the positive and negative implications of online shopping
during Pandemic Covid-19.

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Figure 8: The percentage between two positive implications of online shopping
during Pandemic Covid-19
Figure 8 shows that out of 100% there are 42.9% of people who agree that the
positive implication of online shopping during Pandemic Covid-19 is more
convenient than physical shopping. Next, 57.1% state that the lower price is
also being a positive implication to online shopping during Pandemic Covid-19.

Figure 9: The percentage between two negative implications of online shopping

during Pandemic Covid-19
Figure 9 shows that out of 100% there are 42.9% of people who say that the
negative implication of online shopping during Pandemic Covid-19 is that the
information will be misused by the public. Next, 57.1% state that the negative
implication of online shopping during Pandemic Covid-19 is that online
shoppers will take aways taxes from local companies.

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3.1 CONCLUSION

This pandemic actually gives too many impacts to its country. The biggest
impact that we can see clearly is causing a collapse to the country’s economy.
Every country that is infected is facing the same challenge as well. People must
obey the government’s instructions and also obey preventative measures to
protect against the pandemic to stop the spread of Covid-19 to recover from the
economy's collapse.

3.2 SUGGESTIONS

There is some way to rescue our economy from the impact of this
terrible pandemic. Firstly, governments have to develop the first thing is sound
money and secondly is sound cash. Governments must prioritize resuming
economic growth from 2021 onwards. Governments have taken action by
raising taxes and decrease spending quickly to decrease the liabilities of the
country. Besides, the government also has to focus on public investment to
boost and develop productivity to support its country's economy's growth.
Furthermore, governments must create trust in people towards the economy. To
regain economic faith, a consistent plan must be implemented. For example, the
government should convince people on how the pandemic and its economy is
being managed. It is to make sure that economic activities can go on as usual
with consumer consumed products to boost the productivity of the business
sector. This is the ways how government can protect the company.

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