Identifying the factors affecting the adoption of E-Commerce in Sri Lanka : internet users' perspective

Abstract

Electronic commerce brings world economic market into a common portal where buyers and sellers could meet overcoming their economic and geographic barriers. Despite being one of the earliest adopters of the Internet in the region and several initiatives by stakeholders to promote e-commerce, e-commerce adaptation in Sri Lanka appears to be relatively low. Maturity level of e-commerce adoption in Sri Lanka, as well as any obstacles and hindrances preventing the widespread adoption are not clear. The objective of this research is to identify barriers that prevent Internet users from wide-spread adoption of e-commerce in Sri Lanka. We adopted a mix-method research methodology to identify Internet user related adoption factors and to understand e-commerce merchants‟ view on those factors. First, a preliminary survey was carried out by interviewing stakeholders to identify barriers affecting the adoption of e-commerce. Next, a survey was used to identify customer adoption factors. Survey data were analyzed using Structural Equation Modeling to identify key factors and their relationships. Finally, interviews were conducted with e-commerce merchants to identify their view on those factors and what actions had been taken to enhance the adoption level. Factors such as affordability, knowledge and awareness, and facilities expected from retailers were identified as the most significant factors contributing to the success of e-commerce adoption in Sri Lanka. Government and legal factors, consumer perception, and digital infrastructure are the least significant factors. Smoothening the delivery process, introducing convenient return policies, and enhancing government involvement to promote e-commerce are the key recommendations to enhance the e-commerce adoption.