The influence of using social media toward online selling and the formation of online community in indonesia

THE INFLUENCE OF USING SOCIAL MEDIA
TOWARD ONLINE SELLING AND THE FORMATION
OF ONLINE COMMUNITY IN INDONESIA
E. Nuur’aini, I. Muttaqien, R.T. Hutama

KUALA LUMPUR INTERNATIONAL BUSINESS, ECONOMICS AND LAW CONFERENCE (KLIBEL)
8-9 April, 2013

INTRODUCTION
• As a digital goods, social media can be considered as satisfying the needs of its users.
That pride may be joined forever, and make friends with fellow social media lover. They
form a community which is based on the needs or motives that can be met by social
media.
• By using social media, we can reach it with a near-zero marginal cost. This applies to
the social media lover with business motives. Purposes and motives of social media
also seems different with variety of reasons and arguments.

THE INFLUENCE OF USING SOCIAL MEDIA TOWARD ONLINE SELLING AND THE FORMATION OF ONLINE COMMUNITY IN INDONESIA
E. NUUR’AINI, I. MUTTAQIEN, R.T. HUTAMA

8-9 April, 2013

RESEARCH QUESTION
• Purposes and motives of social media also seems different with variety of reasons and
arguments.
• Thus, this study aims to answer following research questions:
RQ1. What is the impact of the use of social media as a means to promote commodity
sold by online sellers?
RQ2. What is the most powerful factor in excuse someone to join in formation of online
community through social media?


8-9 April, 2013

LITERATURE REVIEW
+ Profile of internet user in Indonesia
• At the end of the year 2012, the number of Internet users in Indonesia reached
61.08 million people.
• 40% of Internet users in Indonesia (24.2 million people) access the internet more
than 3 hours per day.
• 58 million people (95%) access the Internet from notebook, netbook, tablet and
mobile devices.
• 56.4% of them include "bargain hunters" - who willingly to spend for hours surfing
the Internet to find the best deals and information about their needs.
• The highest internet users are in the age group of 20-24 years which reach 15.1%
of the population


8-9 April, 2013

LITERATURE REVIEW
• + Psychographic characters in Indonesia

• Negative group. People in this group think that internet has more negative
side and is not good for the family.
• Moderate group, who uses the internet just to get information and
entertainment for them.
• Positive group. For them, internet is everything. They are inseparable from
the internet.


8-9 April, 2013

LITERATURE REVIEW
• + Socio-technographic/ behavior and habit internet user in Indonesia

• Passive group. People in this group are new internet users who use internet
limited to read online news, listen to podcasts, and watch videos on
Youtube.
• Moderate group, These are internet users who already had an account and
update the status on social networking accounts such as Facebook, Twitter,
and many more.
• Active group, These are internet users who are active, more than having an
account in social media and update status, but they also write article on
their blogs, write reviews of product they just used.


8-9 April, 2013

LITERATURE REVIEW
+ Social Media
• Social Media is an online media, with its users could easily participate, share, and
create content including blogs, social networking, wikis, forums and a virtual world. Blog,
wiki and social networking is a form of social media is the most commonly used by
people around the world.
• Social Media invites anyone interested to participated by giving contributions and
feedback openly, make comments, and share information in a rapid way and
unrestricted.


8-9 April, 2013

LITERATURE REVIEW
+ Online marketing
• According to Kotler (2004), E-Business is the use of electronic devices and programs in
the company for running the company's business activities.
• Marketing through the internet, selling products or services through the internet, using
the internet for market research, using the internet to hire people, using the internet for
the promotion of products and services, and so on.


8-9 April, 2013

LITERATURE REVIEW
+ Online Community
• According to Ferguson et al. (2004), the online community is a place where a bunch of
people getting together for a wide sense of community (SOOC) as people who do not
know each other, have common interests, in an internet site that offers some online
services, including: access to the social environment, community services, legal
information, and e-commerce services.


8-9 April, 2013

METHODOLOGY
+ Framework

Online
Social media:
Selling
Psychography
Sociotechnology
9 categories
internet user Formation
of online
community

• The analysis will be developed in terms of direct general significant influence of
social media to online selling and formation of online community.


8-9 April, 2013

METHODOLOGY
+ Measurement and Sampling Design
• For measurement, the tool of this study is a questionnaire that uses four point
Likert scale, to identify respondent profile as internet user and the usefulness of
social media for them.
• The samples that used in this study is the online sellers who use social media as
tools for promotion and member of KasKus Community in Indonesia.
• A survey is distributed via online questionnaire and a random sampling is used
for this study.


8-9 April, 2013

METHODOLOGY
+ Analysis Method
• The data of participant in this study were analyzed by IBM SPSS Statistics 20.
Descriptive statistic was used to analyze the participants characteristics. The
reliability and validity in this study also verified, and the correlation between
variables was analyzed by Pearson correlation.


8-9 April, 2013

RESULT
+ Sample Description
• For this study, there are 2 groups of respondents.
• First, online sellers who used social media for promoting their commodity.
• The majority of the samples sex is female (60%),
• the age ranged between 15-30 years old (86.7%),
• being online seller for 1-3 years (86.67%),
• live in Jakarta (50%),
• the most common commodity is clothing (53.33%),
• duration in access social network for more than 3 hours (80%)
• and they use smartphone to access social media (36.7%).


8-9 April, 2013

RESULT
+ Sample Description
• Second, people who used social media to form online community in
KasKus.
• The majority of the samples sex is male (78,95%),
• the age ranged between 15-30 years old (89,5%),
• they join in online community for 1-3 years (57.9%)
• most of respondent come from ‘computer stuff’ forum (47.4%),
• live in Jakarta (57,9%),
• duration in access KasKus for more than 3 hours (84,2%)
• and they use smartphone to access KasKus (52,63%).


8-9 April, 2013

RESULT
+ Reliability analysis

Item Cronbach’s α value

Social Media 0.799

Online Seller 0.88

Online Community 0.937

• Based on this result, we can conclude that both variables in this questionnaire reaching
high level of reliabitly, which means the high consistency of questionnaire for this study.


8-9 April, 2013

RESULT
+ Validity analysis

r numbers
Item
of Pearson correlation

Social Media 0.144 to 0.706

Online Selling 0,395 to 0,831

Online Community 0,339 to 0,821

• From this data, we can conclude that the questionnaire of social media, online selling and
formation of online community in this study have valid items.


8-9 April, 2013

RESULT
+ The impact of social media toward online selling


8-9 April, 2013

RESULT

Square root Cronbachs
AVE R Square Communality Redundancy
of AVE Alpha
OL SELLING 0,567 0,753 0,555 0,567794 0,239212 0,857
SOCIAL MEDIA 0,471 0,687 0,471675 0,874

• The squareroot of AVE value of online selling construct is larger than the
latent variable correlation, which means that all construct in model meet the
criteria of discriminant validity.


8-9 April, 2013

RESULT

Construct Parameter coefficient t-stat value Explanation

Social media to online selling 0,745 21,64 > 1,96 Have a positive impact and significant

Construct Alpha cronbach Composite reliability Explanation

Online selling 0,857 > 0,70 0,886 > 0,70 The construct has a good realibility

• Based on result of data processing in this study, personal branding in social media is
the most significant variable that can increase number of purchases in online selling.
An increase in the number of purchases come from the addition of a reseller of
commodities.


8-9 April, 2013

RESULT
+ The impact of social media toward formation of online community (in KasKus)


8-9 April, 2013

RESULT

Square root Composite Cronbachs
AVE R Square Communality Redundancy
Of AVE Reliability Alpha
OL COM 0,510 0.7145 0,942 0,582 0,511 0,254669 0,936
social media 0,487 0.698 0,933 0,487 0,922

• The squareroot of AVE value of online community construct is larger than the
latent variable correlation, which means that all construct in model meet the
criteria of discriminant validity.


8-9 April, 2013

RESULT

Construct Parameter coefficient t-stat value Explanation

Social media to formation of online
0,763 36,13 > 1,96 Have a positive impact and significant
community

Construct Alpha cronbach Composite reliability Explanation

formation of online
0,936 > 0,70 0,933 > 0,70 The construct has a good realibility
community

• The need for self-actualization through social media is the biggest factor that drives
someone to join in the formation of an online community.


8-9 April, 2013

CONCLUSION
• It is clear that social media and its indicators have direct influences to online
selling and formation of online community
• This study concludes that personal branding in social media can increase the
number of selling product by adding more resellers.
• Self-actualization through social media is the biggest factor that drives someone
to join in the formation of an online community


8-9 April, 2013

The influence of using social media toward online selling and the formation of online community in indonesia

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