CHAPTER I: BACKGROUND OF THE STUDY

Introduction

Online shopping has transformed the way we purchase goods and services,

providing convenience, accessibility, and a vast array of products at competitive prices.

This phenomenon has gained significant momentum since its inception in the late 1990s,

becoming a popular method of shopping and an effective marketing tool for businesses.

With the rise of the internet and the proliferation of online platforms, consumers now have

the ability to shop and purchase products from the comfort of their own homes,

eliminating the need for face-to-face interaction.

As the digital marketplace expands its influence, the ways in which students

allocate and manage their budget allowances are undergoing profound transformations.

ABM students, positioned at the nexus of business education and practical financial

decision-making, navigate a complex interplay of academic demands and personal

financial responsibilities. The surge in online shopping behaviors among this demographic

presents a compelling avenue for exploration, as it intertwines with their budgeting

practices, potentially influencing their financial well-being and shaping future financial

habits.

By delving into the impact of online shopping behaviors, this study aims to

contribute nuanced insights into the financial decision-making processes of ABM

students. Understanding the online shopping influences on the allowances of the students

that holds significance not only for educational institutions but also for parents, and

students themselves. This exploration may unravel patterns, challenges, and opportunities

that can inform strategies for financial education, thereby empowering ABM students in

Governor Ferrer Memorial Integrated High School to make informed and sustainable

financial choices in an era characterized by evolving consumption patterns.

Review of Related Literature

Online Shopping and its Behavior

Online shopping has revolutionized the way Filipinos engage in retail, offering

convenience and accessibility to a wide array of products and services. With a few simple

clicks, consumers in the Philippines can explore numerous options, compare prices, and make

purchases from the comfort of their own homes. According to Agift ([Link] 2014) consumers

are influenced to shop online by important features such comprehensive information, comfort

and relaxed purchasing, less time consumption, and simple price comparison. Furthermore,

users prefer online purchasing to traditional shopping due to aspects like variety, quick

service, cheaper costs, and customer feedback.

To back up this citation, Karthikeyan (2016) claims that online shoppers are also

being drawn in by services like free shipping, cash on delivery, exchanges, and refunds. Due

to their convenience and comfort, more and more consumers are choosing internet purchasing

over traditional retail. When making a purchase online, a customer could have both bad and

good experiences. Even though online shopping has numerous advantages, some people do

not like it as primary method of purchasing.

However, as indicated by the study Oniomania: A Phenomenological Study on Online

Shopping Addiction (2022), individuals addicted to online shopping may encounter financial

difficulties and even accumulate debt due to their addictive behavior.

In a study by Sabina Lissitsa and Ofrit Kol (2016), based on extensive annual social

surveys in Israel, Generational Cohort Theory was used as a framework to examine the trends

of internet adoption and online purchasing behavior among Generation X and Generation Y

over the past decade. During this period, both generations witnessed a consistent rise in

internet usage and online shopping, but online shoppers did not fully exploit the online

shopping potential. The findings from their research confirm the effectiveness of
Generational Cohort Theory as a market segmentation tool. Notably, despite Generation Y

having higher internet access rates, Generation X had a higher percentage of individuals

purchasing items like electrical appliances, furniture, or vacations online.

In the Philippines, Toral (2017) indicates a significant number of Filipino online

shoppers making purchases from international websites. In Torres’ (2015) report, they state

that almost nine out of ten Filipino consumers prefer online shopping, based on a study

commissioned by Visa International. The study further reveals that those who favor online

shopping spend an average of 6.2 hours daily engaging in such activities, with 72% of

respondents having shopped online over the past 12 months.

Reyes (2016) highlights the advantages of online stores, not just for sellers but also

for shoppers. These platforms provide a fun and convenient way to shop, unbound by

geographical limitations, thereby bringing international brands and experiences within reach.

The study on Factors Affecting Students' Perception of Online Shopping (2021) identifies

convenience, ease of use, usefulness, privacy and security, as well as saving money, time, and

effort, as key factors influencing students' decisions to engage in online purchases. Hence,

Bellis (2015) states that it is seemingly obvious that people would turn to online shopping.

Not only is it cheap, the wide variety of products make it feel new and exciting.

According to "What Causes E-Commerce to Succeed?" (2017) In order to create the

most prosperous buying and selling websites in the Philippines eleven years ago, RJ David

converted his bedroom into a boardroom. He acknowledged that he was aware that customer

distrust would be the primary barrier to e-commerce since Filipinos would find it unsettling

to think of making payments online and then waiting for their ordered goods to arrive.

As per Manglinong, D. (2018) "Why Online Shopping is Exploding in the

Philippines?". Convenience, lower prices, and special offers are the main factors that

influence why most people choose to purchase online, particularly during the Christmas
season and other special occasions as early as December.

Budgeting Allowances

Financial management is the practice of effectively overseeing one's finances to

achieve monetary objectives and maintain stability. It entails making informed choices about

budgeting, saving, investing, and handling debt to secure a financially secure future. However

Hartney (2020) stated that shopping addicts often spend more time and money on shopping

than they can afford, leading many of them to fall into debt. Additionally, Vien (2015)

highlights that students often lack formal financial education before college, with only 17%

reporting learning budgeting in school, while 42% learn from their parents or relatives, and

37% teach themselves. According to Daud et al. (2018), many students face financial

difficulties due to limited financial resources and high living costs. These challenges include

running budget deficits, failing to prioritize spending, lacking expense tracking, inadequate

planning, and difficulty in repaying debts. Consequently, there is an imbalance in the income-

to-expenditure ratio, leading students to seek alternative financial means such as self-funding,

family support, borrowing from others, or applying for emergency loans from educational

institutions, which can create stress and delays.

In a recent article on financial literacy among students published by Inquirer (2023),

Bangko Sentral ng Pilipinas Governor Benjamin Diokno emphasized the prevalence of

financial distress among Filipino families. He highlighted the significance of saving for

specific goals, such as emergency funds, and avoiding unnecessary expenses that can lead to

excessive debt, as these factors greatly impact family well-being. The article also stressed the

importance of self-control as a fundamental skill for achieving life goals, with the

accompanying parent guide emphasizing the need to curb immediate gratification impulses

and practice delayed gratification to develop and master self-control.

In terms of financial management, Kumok (2015) asserted that budgeting requires

identifying desired expenditure areas. It is easy to exhaust a week's wages on movie outings

and shopping at the mall, but instead, creating a list of planned purchases with corresponding

costs provides a clearer understanding of the implications of spending decisions. Marquit

(2017) adds that the first step to successful money management is discerning priorities and

distinguishing between needs and wants. Ensuring essentials are covered before indulging in

desires is crucial.

Additionally, Stanford University (2018) asserted to reduce expenses by cutting back on

unnecessary purchases and discretionary spending as an effective strategy to address

students' financial challenges. Decluttering and selling unwanted items can also generate

additional income. Exploring legal means of earning money, such as part-time jobs,

freelance work, or campus employment opportunities, is encouraged. Adopting these

practices helps students better manage their finances and alleviate financial burdens. ICICI

(Industrial Credit and Investment Corporation of India) Prudential's management tips for

students (2020) further emphasize essential strategies for effective financial management.

Establishing a budget, prioritizing savings over spending, setting clear financial goals,

initiating early investments, avoiding debt, and cultivating a habit of saving early contribute

to sound financial decision-making and long-term financial stability.

Statement of the Problem

This study aims to assess the following issues and questions regarding impacts of

online shopping behavior on budgeting allowances.

Specifically, it will seek to answer the following questions:

1. The following will be collected for the demographic profile for this study:

a. Grade level

b, Monthly allowance

c. Frequency of usability
 d. Categories

2. What factors influence students' decisions to make online purchases?

a. Price and Discounts

b. Convenience

c. Reviews and Recommendations

d. Trust and Security

3. Which factors related to online shopping behavior significantly impact students' budget

allowances?

a. Impulse buying tendencies

b. Price comparison and bargain hunting

c. Exclusive online deals and limited time offers

d. Influence of social media advertisements

Objective of the Study

This research study aims to contribute a broader understanding of this study.

Specifically:

[Link] ascertain what influences students to buying items in an online shopping app and to

better understand further how significant the factors are towards the chosen participants.

[Link] assess what factors impacts a student’s budget allowances based on their online

shopping behavior to determine how it affects their budgeting allowances.

Research Hypothesis

The researchers predicts the following results of their research study of the impact

of online shopping behavior on budgeting allowances. Following:

1. Null: Online shopping behaviors does not significantly impact the budgeting

allowances of grade 12 ABM students.

2. Alternative: Online shopping behaviors significantly impacts the budgeting allowances

 of grade 12 ABM students.

Conceptual Framework

Input Process Output

1. The following will be

collected for the demographic
profile for this study: The process begins with
a. Grade level analyzing how the
b, Monthly allowance researcher will identify its
c. Frequency of usability locale, respondents, and
d. Categories sampling technique.
Impact of Online
2. The factors that influences Second, after identifying shopping behavior on
students' decisions to make the three factors needed for budgeting allowances.
online purchases. the collection of data. The
a. Price and Discounts researchers have conducted
b. Convenience a pre-survey to calculate
c. Reviews how many respondents
d. Trust and Security they need in order to
conduct the actual survey.
3. The factors related to Third step is to conduct the
online shopping behavior that survey with the chosen
significantly impacts students' instrument to conduct the
budget allowances. study to.
a. Impulse buying tendencies
b. Price comparison and
bargain hunting
c. Exclusive online deals and
limited time offers
d. Influence of social media
advertisements

Figure 1: Paradigm of the Study

The conceptual framework shows the following input-process-output procedure on

the researcher’s study about The Impact of Online Shopping Behavior on Budgeting

Allowances. The in Input is about the frequency of online shopping engagement and

implications for budgeting allowances, causes and effects of financial strain experienced by
student, and the potential role of parental guidance and support. The process involves the

use of questionnaires to come up with the result. The output is the result of the study of the

impact of online shopping behavior on budgeting allowances.

Significance of the Study

This research study may be beneficial to the following audiences:

1. Future Researchers. This study of this may contribute to the existing body of

knowledge and may benefit future researchers in their future studies related to the topic.

2. Educational Institution. They can use the results of this study to enhance their

curriculum that will teach them how to be responsible and make informed decisions when

it comes to budgeting allowances due to spending in online shopping.

3. Students. This study will benefit students to have possible valuable insight and

enabling them to learn how to budget their allowances and enhance their knowledge

regarding online shopping practices.

4. Parents and Guardians. This study may help their children to educate them how to be

responsible about budgeting allowances and make wise and informed decisions when

purchasing goods through online.

Scope and Delimitation

This research study will focus on the impact of online shopping in budgeting

allowances that will include an analysis of the frequency use of online shopping, financial

implications and levels of financial strain for senior high school ABM students, including

the parental guidance in promoting responsible online shopping habits and budgeting.

However, The study will not cover the broader impact of online shopping on businesses or

the economy. On the other hand, the delimitation in the study exclusively targets ABM

(Accountancy and Business Management) students enrolled in Governor Ferrer Memorial

Integrated National High School.

Definition of Terms

To better understand the study, the following terms were defined operationally and

conceptually:

1. Online Shopping - it is the practice of making online purchases of goods or services.

2. Financial Literacy - understanding how to make wise financial decisions in online

shopping.

3. Perceived Usability - reflects the subjective opinions of consumers regarding the use of

products in online shopping.

4. Time - the typical amount of time spent shopping online.

5. Convenience - online shopping allows you to order the good or service without leaving

your home.

6. Cost - all costs associated with acquiring and preparing materials for online shopping.

7. Financial Strain - a perceived inability to meet financial obligations and requirements is

linked to worse health outcomes.

8. Mounting Debt - owed to someone else, particularly money, or the condition of being

indebted to someone else.

9. Stress - The majority of psychological factors that contribute to compulsive purchasing

through online.

10. Parental Guidance - You can block and filter offensive or unsuitable information using

parental controls.

11. Budgeting Allowances - As a student, budgeting can assist you in avoiding debt and

enhancing your credit.

12. E-commerce - a procedure for online purchasing and selling of products and services.

13. ABM - A senior high school strand under the academic track that stands for Accountancy,

Business and Management.