From physical to virtual store: factors that spur Bangladeshi manufacturers/retailers to introduce multi-channel retailing
| Pages | 240-256 |
| Published date | 06 November 2020 |
| DOI | https://doi.org/10.1108/JABS-06-2018-0176 |
| Date | 06 November 2020 |
| Subject Matter | Strategy,International business |
| Author | Md Thohidul Karim,Xu Qi |
From physical to virtual store: factors that
spur Bangladeshi manufacturers/retailers
to introduce multi-channel retailing
Md Thohidul Karim and Xu Qi
Abstract
Purpose –Multi-channel business operations are standard practice in most business contexts today.
The popularityof multi-channel adoption among developingcountries is growing fast. In Bangladesh, the
retailers who adopted multi-channel retailing have been getting a very good response from the
consumers. This study aims to understand the factors that influence manufacturers’ decisions to adopt
multiple channels in Bangladesh. The authors applied an extendedtechnology acceptance model with
three variables:business innovation, businesscompetition and consumersatisfaction.
Design/methodology/approach –Partial least squares-structural equation modeling was applied to
test thedata collected from 157 companies andrelevant hypotheses.
Findings –The study findings show that Bangladeshi manufacturers are positive about, and expect
benefits from,applying the new channel. The studyalso revealed that customer satisfactionconsiderably
affects multi-channel adoption in Bangladesh. Similarly, businessinnovation and business competition
play a significantrole in introducing multiplebusiness channels.
Research limitations/implications –This research was conducted in Bangladesh, and data are
collectedfrom Dhaka and Chittagong that may limit the generalizabilityof findings.
Practical implications –The research goal was to understand a manufacturer’s perception to adopt
multi-channelin business. The proposed researchmodel was able to address the major factors that drive
a manufacturerto introduce multiple businesschannels, especially in Bangladesh.
Originality/value –Many research and case studieshave been done the past couple of decades, but
most of them are consumeroriented. Little research has been done to investigatea manufacturer’s point
of view adaptinginnovation in business. Though someresearch articles are available online, mostof them
from developed countries. So, the study’s goal was to study developing countries scenario; thus, the
authorschoose Bangladesh.
Keywords Bangladesh, PLS-SEM, Multi-channel, Business innovation, Customers’ satisfaction
Paper type Research paper
Introduction
The dawn of internet technology changed business architecture. Over the past two
decades, terms like dual channel, multi-channel and omnichannel have become prevalent
among manufacturers. These are business channels that exist besides traditional retail
channels (Herhausen, et al.,2015;Verhoef et al., 2015). Primarily, the online channel
operated as a separate businessmedium; today, multi-channel coordination and integration
have become a priority for manufacturers. Consumers have the luxury to choose shopping
channels between those options. As most businesses are consumer oriented,
manufacturers are adopting multiple business channels to satisfy the demand for their
products and services (Tsao and Su,2012). Those who are reluctant to introduce alternative
business mediums face fierce business competition and loss of customers. Many well-
known manufacturers, such as IBM,Nike, HP and Apple, have introduced multiple business
Md Thohidul Karim and
Xu Qi are both based at the
Glorious Sun School of
Business and
Management, Donghua
University, Shanghai,
China.
Received 13 June 2018
Revised 14 November 2018
28 April 2019
7 October 2019
13 July 2020
Accepted 17 July 2020
PAGE 240 jJOURNAL OF ASIA BUSINESS STUDIES jVOL. 15 NO. 2 2021, pp. 240-256, ©Emerald Publishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-06-2018-0176
channels (Coughlan et al.,2006;Tsay and Agrawal, 2004). Retailers like Walmart,
Carrefour, Tesco and Metro operate multiple business channels, although e-commerce
giants Amazon and Alibaba are leaders in this context. Almost every product manufacturer
is now adopting this business paradigm. This hybrid structure growth occurs because
companies are determined and awareof the needs of their target customers (Kotler, 2000).
Multi-channel retailing helps a company showcase its products directly to customers, and
consumers can give instantaneous feedback about the products. Such feedback makes
multi-channel retailing more dynamic and provides retailers opportunities to access a vast
range of data to understand consumers’ shopping behavior and intention. Manufacturers
can leverage that information to forecast demand, manage inventories and develop pricing
strategies. This allows them to monitor and control both the upstream and downstream
supply chain system (Lee et al., 1997). Multi-channel distribution allows the manufacturer
access different customer segments, creating an opportunity for broader demand and
market share (Boyaci, 2005). So, by any means, multi-channel distribution provides
numerous options for manufacturers,strategically and operationally.
Bangladesh is the fastest growing economy in the world; last coulpe of years, it has shown
a steady growth. According to the International Monetary Fund (IMF) and Asian
Development Bank (ADB), the current economic growth is 7.3%, and it will grow up. As per
United Nations Conference on Trade and Development (UNCTAD) 2016, B2C (business-to-
consumers) E-commerce Index, “Bangladesh is one of the top ten economies (based on)
the difference between the predicted and actual share of internet users buying online.” The
internet penetration rate is encouraging, and there are more than 98 million active internet
users in Bangladesh (BTRC, 2019). The numbers are promising and enticing to
manufacturers/retailersto introduce multi-channel retailing.
Some indigenous manufacturers started online retailing in addition to traditional retail
service. This new business model has been well accepted by consumers, mostly in
metropolitan cities. There are more than 2,500 e-commerce websites and one million
shoppers in Bangladesh (Mohiuddin, 2014). A study shows that the popularity and sales
volume are increasing gradually. Younger generation like college/university students,
corporate job holders are more interested to shop online than the older generation
(Muhammad Zahidul Islam, 2015). Bangladeshi e-commerce recorded 67% growth in the
first three quarters of 2016. Local manufacturers/retailers are using e-commerce platforms,
social media and websites with retail facilities (xinhuanet, 2016). The country, with a
population of 165 million, has always been considered a massive market for manufacturers/
retailers; well-known international brands have realized this and adopted multi-channel
retailing in Bangladesh (motorcyclevalley, 2017).
The technology acceptance model (TAM) was introduced by Davis in 1989. It is a most
widely used research model for new technology adoption. The theory of TAM derives from
two theories: theory of reasoned action plan (Ajzen and Fishbein, 1980) and theory of
planned behavior (Ajzen, 1985). TAM suggests that there is a belief-attitude-intention-
behavior causal relationship for explaining and predicting technology acceptance among
potential users (Chen et al.,2002). It implies that when users are introduced with a new
technology, multiple factors determine their decision about how and when they will use it.
TAM proposed two particular beliefs that are perceived usefulness and perceived ease of
use. They are significant direct factorsof behavioral intention (Davis, 1989).
This study investigates thefactors that entice manufacturers/retailers to adopt new business
phenomena in Bangladesh. The extended TAM is used to study retailers’ behavioral
intentions. The data are analyzed, and hypotheses are tested by using the partial least
squares-structural equation modeling (PLS-SEM) approach. The rest of the paper
structured as follows: literature review, research model and hypotheses development. The
sample and data collection procedure arediscussed in methodology. The results and data
VOL. 15 NO. 2 2021 jJOURNAL OF ASIA BUSINESS STUDIES jPAGE 241
To continue reading
Request your trial