Academic journal article Asian Social Science

E-Value Strategies in Internet Retailing: The Case of a Malaysian Leading E-Coupon Retailer

Academic journal article Asian Social Science

E-Value Strategies in Internet Retailing: The Case of a Malaysian Leading E-Coupon Retailer

Article excerpt


Internet retailing industry is considered as an infant industry in Malaysia. Although there has been a rising trend, weak e-commerce infrastructure has resulted consumers to perceive online transaction to be unsafe. This study investigated on e-value strategies adopted by a Malaysian leading Internet retailer in order to change consumer's skepticism. The e-value strategies employed by the case company emphasized on value innovation which include flexible organizational structure, open communications, innovative spirit, and people focus and strong work culture. It is evident that the company has benefited from value creation and innovation where sustainable strategic efforts were combined with entrepreneurial knowledge in designing the deal creation process.

Keywords: e-value strategies, internet retailer, Malaysia, value creation, value innovation

1. Introduction

Internet retailing refers to "the sale of retail goods via online channels, valued at retail selling price" (Datamonitor, 2009). The global Internet retail sector is forecasted to have a value of $613.3 billion in 2013; an increase of 88.6% since 2008. Globally, Internet retailing is expected to post a 13% compound annual growth rate (CAGR) over the period of 2010 - 2015. According to Euromonitor (2012a), Malaysia's Internet retail realized RM842 million in 2011 and will expect to post CAGR of 15% to reach RM1.7 billion in 2016. Despite the growth, Malaysians remain uncomfortable when transacting online due to inadequate retail infrastructure such as thorough distribution networks and secure payment system (Chua et al., 2006; Euromonitor, 2012a). Such frail electronic payment security, weak delivery systems, and low PC penetration affect the level of development of Internet retailing (Euromonitor, 2011). The Malaysian government is actively engaged in advancing telecommunications infrastructure and management, including increasing broadband penetration as well as sustainable mobile Internet coverage nationwide.

Consumers today are prioritizing the aspect of value for money when purchasing goods. This rising trend within the retail industry has fortified the need to understand the e-value strategies that Internet retail companies are using today. E-value strategies are defined as "business re-engineering for e-success" (Reynolds, 2000; Moore & Ruddle, 2000), "new opportunities for strategic marketing" (Evans & Wurster, 2000) and "development of successful e-business plans" (Hooft & Stegwee, 2001).

1.1 Bargain-Hunting Culture

The rising trend of "collective buying phenomenon" appeals to the new bargain-hunting culture that has been sparked by the 2008 recession (Euromonitor, 2012b). This new consumer mind-set has accelerated business migration to e-commerce where it plays the role to move stagnant inventory. In this study, the market segment explored is coupon retailing defined as products and services are transacted through online coupon channels. With regards to the 2008 recession, Hempel (2010) states that affected businesses like restaurants, retailers, and suppliers have built up excess inventory due to reduced level of consumer spending. He further adds that the recession had a positive impact on Internet sales. Consumers and some businesses are reducing implicit and explicit costs by resorting to Internet adoption in bricks-and-mortars.

Today, the role of consumers in the purchasing process has shifted from being passive to active in searching for and obtaining coupons (Fortin, 2000). According to Porter (2001), Internet retail offers added value to consumers by providing extensive product information and services, which facilitates purchase decisions. With a combination of extensive product information and discounted goods on coupon retail websites, consumers now can enjoy facilitated bargain-hunting. Despite higher consumer reach, Porter (2001) and Huizingh (2002) highlight that Internet also introduces new competitors. …

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