1 ABSTRACT Online group-buying has emerged as a new e-commerce model and received attention in both academics and practice. Prior researches focused on investigating online group-buying mainly from the marketing perspective, such as the transaction process, price mechanism, and benefits (Li & Liu, 2012). Few of studies have investigated the relation between consumer’s acceptance and their purchasing behavior. Hence, this study focuses in measuring relationship between cognitive factors – trust, satisfaction and perceived usefulness – and online group-buying repurchase intention. Simultaneous, this study also integrates website quality - a direct and indirect variable – to measure its impact on customer repurchase behavior. To examine research model, information and data is accessed by using questionnaire for respondents more than 18 years old and have ever purchased on online group-buying websites. Sample size of this quantitative research is 365 respondents. Confirmatory factor analysis (CFA) is used to test measurement scale and the structural equation modeling (SEM) is used as the main method for analyzing research model and hypotheses. Results in this study show that individual user’ intention to repurchase in online group-buying websites is motivated by trust, satisfaction and website quality. Among three impact factors, website quality has the strongest direct influence, followed by trust and satisfaction. Besides direct influence, website quality also has indirect impact on customer repurchase intention through both of trust and satisfaction. Trust also has strong impact on customer satisfaction, thus, affect indirectly to customer retention. With these results, research framework can be seen fitted with data market. Study results also suggest that in order to increase customer retention should not only consider about their strategies of increasing trust and satisfaction, they should also take consideration of increasing website quality, especially in content quality and technical adequacy. 2 CHAPTER 1 INTRODUCTION This chapter is starting point of this study. In this chapter, the research interest of thesis is first introduced. Subsequently, the motivation of this research is discussed. Research objectives are presented in the next section. Then, methodology and scope of this research is introduced summarily. Final, structure of this study is presented. This chapter aims at specifying the purpose of this research and the research content. 1.1 Research interest: In recent decades, science and technology develops surprisingly. Achievements of these progresses create more opportunities as well as challenges for development of economies. Forms of transactions become more diversified; suppliers have more approach ways to interact with customers. Traditional markets have not caught up with higher demands of consumers. Buyers become more and more busy and have so many choices that make their buying decisions more difficult. Hence, to satisfy customers, electronic commerce appears and grows extraordinarily with widespread Internet usage. Electronic commerce, commonly known as e-commerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. A form of e-commerce is online shopping which is the process whereby consumers directly buy goods or services from a seller in real time, without an intermediary service, over the Internet. This form of shopping are attracting more buyers, suppliers and researchers because it offers a lot of benefits such as convenience, speed, time, a 24-hour opening, information on products and reviews. To nowadays, online shopping continues their rapid spread and gains many increasing importance in the lives of a wider range of the population. Group-buying is seen as an effective form of online shopping and a promising field for applying agent technologies. Group-buying is a model in which multiple buyers cooperate and buy goods at a discount price (Matsuo, 2009). Innovative group-buying sites offer bargains on everything from meals to travel packages. Customers can make 3 comparison of product/service prices and choose the supplier with the lowest price (Gounaris et al., as cited in Li & Liu, 2012) when using this new model. With the tremendous growth, online group-buying attracted more and more attention of practitioners as well as researchers. However, most previous online group- buying studies focus mainly on the pricing mechanisms, coalition formation, benefits of bidder cooperation, uncertain demand, incentive mechanisms and consumer adoption (Fan et al., 2010). There are not many studies investigated the relationship between customers’ acceptance of online group-buying and their purchasing behavior. In recent years, this topic begins become a hot issue, especially, continuance behavior receives more attention because this issue at an individual level has been regarded as crucial for sustainable web-based services (Premkumar & Bhattacherjee, 2008). Besides that, many online group-buying websites as well as others online websites are facing strong competition due to the evolution and proliferation of web-based services. Moreover, web-based services have low entry barriers by its nature, if one service is created, then a number of comparable alternative web-based services follow, resulting in a high switching rate between those services by users (Vatanasombut et al., as cited in Lee & Kwon, 2011). Thus, many online group- buying providers are struggling to find strategies to exist in this difficult period. Retaining their existing customers becomes a strategic way to ensure the company's success and overall sustainability. Exploring and analyzing which factors influence customer retention have significant meaning to online providers. Research on continuance intention in both online shopping and online group- buying is still in its infancy. Prior researches on consumer online repurchase placed more emphasis on the impact of psychological factors such as trust, satisfaction formation, loyalty (Cheung et al., 2003). These researches primarily base on expectation-confirmation theory and information system (IS) continuance intention model. Very few studies have attempted to investigate the impact of product/service characteristics as well as website quality on online consumer continuance. 4 Website quality nowadays is assumed to have the potential to influence the future behavior of service users and have an impact on the profits of IS investment (Cronin and Taylor; Zeithaml, Berry and Parasunaman, as cited in Li, 2010). Several studies on website quality in physical encounters have concluded that some factors of website quality are responsible for customers’ perception which is likely to lead to behavioral intentions to purchase. However, in online group-buying context, according mentioned above, there are a few of studies attempted to measure the direct and indirect impact of website quality to repurchase behavior. In particular, research on taking an integrated perspective to examine the predictors of website quality and investigate the relationship between website quality and repurchase intention is still lacking. This is a promising topic for future research in this context of e-commerce. 1.2 Motivation of the study: In Vietnam, group-buying model was introduced in 2010 and after a short time, group-buying model and daily deal sites increased very quickly. With a win-win-win model for three parties: enterprises can sell their products, group-on companies profit from commission and customers can get good deals, group-ons or group vouchers have become popular among Vietnamese students and white-collar workers due to attractive discounts and a wide range of services and products 1 . To the end of 2011, there are almost 100 group-on sites in Vietnam with more than 6700 deals and 4.2 millions sold out vouchers 2 . Four leading group-buying websites include: Nhommua, Hotdeal, Cungmua and Muachung. Ho Chi Minh City is the strongest competition market with about 74% transaction deals and many followers 2 . Other markets such as Da Nang, Binh Duong, Can Tho… begin introduce this new model, however, amount of transaction is still limited. Along with development of group-buying market, perceived risk and competition between rivals also increase very strongly. The biggest challenge for group-buying 1 http://news.smh.com.au/breaking-news-technology/group-buying-sites-boost-ecommerce-in-asia- 20110502-1e3l1.html 2 http://www.slideshare.net/TaiTran/groupon-clones-in-vietnam-2752011 5 sites is method of payment and privacy. In Vietnam, many people are still not familiar with online transaction. With weak privacy security system, customer beliefs have trend of reducing when purchasing vouchers by money transfer or cash on delivery method. Besides, there are many partners who do not follow the contract, provide bad service or treat group-on customers differently. Many vouchers are delivered late or lost, customers cannot dictate the time to receive vouchers and have to book in advance to use the service. With many problems, online-group buying websites in Vietnam are facing many difficulties in attracting customers as well as keeping existing customers. Base on operational experiences in vouchers transaction, many group-buying businesses begin selecting other ways to limit their obstacles. Firstly, they can become distributors, delivery directly products to customers, instead of delivering vouchers. Second, group-buying company can become e-commerce exchange. They can buy and manage deals by themselves. They also provide some flexible solutions for suppliers such as: create own websites, provide orders management system, and provide customers management system… However, according to many experts the key to success for this kind of business is still to ensure service quality and price to keep customer trust. Do (2012) – who is interested in Vietnam’s start-up, social media and technology scenes – cites that: An increased skepticism of the online space is low on the list of dangers though. With the internet penetration at 34 percent and an increasing portion of them moving into social media, the online market is getting bigger and bigger. Although companies and people may not be trusting of web content, they are learning more and more to be dependent on it. In general, Vietnam is still a promising market for online group-buying model. Companies in this market need to learn and develop more and more to succeed. Customer retention is a necessary topic for helping group-buying businesses increase their competitive advantages and maintain their market. Simultaneously, online group-buying model is really an interesting research field for practitioners and researchers in developing way of e-commerce in Vietnam. 6 1.3 Research objectives: As discussion in section 1.1, information system (IS) retention has been one of the most recently explored topics in the IS research field. Many theoretical perspectives, to nowadays, have been advanced in order to understand what motivates individuals to repurchase in online group-buying websites. Thus, based on literature covering the concept of IS continuance model and circumstance of online group-buying market in Vietnam, this paper aims:  To propose a model predicting customers’ repurchase intention in online group-buying context in Vietnam.  To investigate impact of website quality on customers’ repurchase intention in online group-buying context.  To examine impact of cognitive factors (trust, satisfaction and perceived usefulness) on online group-buying repurchase intention. This study is necessary for development of group-buying market in Vietnam. It also demonstrates that website quality is a noteworthy factor affect repurchase intention of customers in using online group-buying. 1.4 Methodology and scope of research: Collecting data process of this study is designed into two stages. First is a pilot test, second is main survey to collect data for examining research model. Pilot test is quantitative research with sample 57 respondents to examine reliability and validity of observed variables. Main study is also quantitative research with sample size 365 respondents. Author accesses information and collect data by using questionnaire. Respondents are more than 18 years old and have ever purchased on online group-buying websites. Sample is selected by using non-probability sampling method – convenience sample. Research is studied from September 2012 to December 2012. Purpose of this research is to confirm and examine conceptual model. The measurement scales are estimated using confirmatory factor analysis (CFA) to test 7 reliability and validity. The structural equation modeling (SEM) is used as the main method for analyzing the research model and hypotheses. 1.5 Research structure: This thesis is organized into five chapters. It begins with introduction chapter which presents an outline of this research, including the motivation, objectives and scope of this research. The next chapter describes online group buying model, literature of IS repurchase behavior model and website quality concept. This chapter also describes research model and hypotheses. The third chapter is research methodology used to empirically test the research model. The fourth chapter presents the results of data analysis. The final chapter discusses summarizes the study’s core findings, its contributions and its limitations. 8 CHAPTER 2 LITERATURE REVIEW AND HYPOTHESES 2.1 Introduction: This chapter mainly introduces theoretical background and research model of the study. First, online group-buying model is introduced to clarify more clearly about advantages and disadvantages of this new model. Second, literatures of IS repurchase models in online shopping and online group-buying context are discussed. Next, concepts and instruments of website quality are reviewed systematically. Finally, research model, its constructs and relationship hypothesized among the constructs are discussed. 2.2 Theoretical background: 2.2.1 Online group-buying model: Group-buying, also known as collective buying, introduced in 1999 by a few of companies. After introducing time, this model have been facilitated by the internet and the easy, fast group coalition process brought by social networks (Xiong & Hu, as cited in Erdogmus & Cicek, 2011). It is seen as a part of an innovative wave of online market-based pricing mechanisms, includes traditional auctions, non-traditional auctions, price-reduction models and group-buying models. There are mainly two different types of online group-buying systems (Fei et al., as cited in Erdogmus & Cicek, 2011). First type of this system is structured based on a dynamic pricing mechanism. In this first type, masses of consumers are aggregated, and perform collective buying to enjoy price discounts online. In the second type of the online group-buying, the group-buying company offers a certain product or service at a static large discount price. This price required the total number of the buyers must be greater than the predetermined limit of the minimum required number of buyers. Today, many online websites are using group-buying models and have got great success. These websites usually offers a large of products and services at significantly 9 reduced prices. These websites claim they can negotiate low prices with manufacturers and suppliers, and then pass these savings on to their customers (Kauffman & Wang, 2001). However, group-buying websites, like other online shopping websites, are facing the problem of obtaining market attention. With group-buying models, online group-buying websites need not only a critical mass of consumer patronage and interest, but also a significant amount of transaction volume so as to be able to profitably deliver on their low price guarantee. Thus, if they cannot reach a critical mass of users and sales volume, then it will be difficult for the group-buying business model to bring the customers of the firms that adopt it the savings they expect (Kauffman & Wang, 2001). Moreover, Cook (as cited in Kauffman & Wang, 2001) points out that the group- buying business model is too difficult for the general consumer to understand. The author also argues that the mechanics of group-buying on the Internet also prevent impulse buying, due to the lengthy periods consumers have to wait until the end of auction cycles. With these problems, amount of customers of online group-buying websites begin increasing slower; in some markets, there are reducing signs of customers as well as transactions. In order to overcome obstacles, some online group-buying websites focus website quality and service quality. For instance, Mobshop – a San Francisco, California- based group-buying service provider- increased from 37.00 to 132.000 registered users in a three month period from January to April 2000 (as cited in Kauffman & Wang, 2001). Its early success attributed by its careful design, increasing technical adequacy and saving delivery time. Focusing on quality is a good strategy for online group-buying websites in highly competition market at current time and in the future. 2.2.2 IS repurchasing behavior model: Online buying behavior can be understood in two stages: the first stage is primarily concerned with the encouraging people to purchase online and the second is to encourage them to repurchase, which is critical if the e-commerce vendor is to succeed (Zang et al., 2011). In these two stages, second stage is an important subject 10 of study because customer retention is often seen as a means to gaining competitive advantage. Researchers have studied online customer retention in different contexts, such as “online repurchase intention”, “continue to shop online”, “customer intention to return”, “web site stickiness”, and “continued information systems/IT intention” (Wen et al., 2011). 2.2.2.1 Online customer retention: Online customer retention in recent years, become a hot issue in both the IT and marketing areas. Studies of this topic have been mainly divided into two streams consisted of studies based on static-type models and process-type models (Lin & Ong, 2010). (1) Static-type researches are derivation from concepts such as theory of planned behavior (TPB), Fishbein and Ajzen's theory of reasoned action (TRA) or technology acceptance model (TAM). The theory of Reasoned Action assumes that if people view a behavior as positive (attitude), and if they believe that others would prefer them to perform the behavior (subjective norm), there will be a greater intention (motivation) to behave in that manner and they are thus more likely to do so (Udo et al., 2010). TPB adds one major predictor – perceived behavioral control – “to account for times when people have intention of carrying out a behavior, but the actual behavior is thwarted because they lack confident or control over behavior” (Miller, as cited in Udo et al., 2010). Along with these theories, TAM has been confirmed as the most popular parsimonious framework used to explain customers’ behavioral intention. TAM is model that explains user intention and behavior based on forward-looking or prospective expectations about IT usage. This model found perceived usefulness and perceived ease of use as salient beliefs influencing IS acceptance behaviors across a broad range of end-user computing technologies and user populations (Davis et al.; Mathieson; Taylor and Todd, as cited in Bhattacherjee, 2001). However, many empirical studies also comparing the [...]... enjoyment as new factors Limayen and Cheung Based on ECM: adds IS habit as a new factor Internet-based (2008) learning Atcharuyachanvanich et Based on ECM: adds customer loyalty as a new factor E-commerce al (2006) Min and Shenghua Based on ECM: adds perceived enjoyment as a new E- learning (2007) factor Roca et al.(2006) An integrated study that combines EDT model and TAM E- learning model, adds perceived... researchers have integrated many other factors to create new framework that will improve the explanatory and predictive power for explaining online customer retention 2.2.2.2 Online group-buying repurchase model: Few studies have tested online repurchase intention in online group-buying context In 2010, Fan et al has used model of Bhattacherjee adapted expectationconfirmation theory (ECT) and integrates... analyzing the research model by testing the assumed causation among a set of dependent and independent variables Bootstrapping with N = 1000 resamples was also used to assess the path significance Literature Review Pilot test Quantitative research (n=57) Draft Scale Cronbach Alpha EFA- Exploratory factor analysis Final Scale Main survey Quantitative research (n=365) Cronbach Alpha EFA- Exploratory factor... technology acceptance model (TAM) to theorize a post-acceptance model of IS continuance In this study, relationship between customer satisfaction, perceived usefulness and online group-buying repurchase intention are confirmed Simultaneously, role of price expectation is also measured In 2012, Tien et al also do research about repurchase intention in online groupbuying context They examine repurchase intention. .. 2011) although in online environment, both continuance intention and repurchase intention are influenced by the initial use/purchase experience and sometimes used as the same Continuance intention emphasizes the continued usage of e-commercial websites to shop instead of the use of physical stores while online repurchase intention is a construct combining information system theory and marketing theory... online repurchases intention Trust in sellers is a vital key to maintaining 18 continuity in the buyer relationship An individual level of trust may increase gradually based on positive outcomes from repeated behavior, although its important in determining repeat purchase intention may decrease over time (Chiu et al., 2012) Especially, in Viet Nam market, when some online group-buying websites faced... eliminated because respondents indicated that they had never use online group-buying before or they had no intention to repurchase Finally, 365 responses were used as a valid data for this research In this main study, exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used to assess measurement scales The structural equation model (SEM) had been used as the main method for analyzing... between attitude and behavior, and is appropriate to test consumers’ behavior (Wen et al., 2011) Online repurchase intention was one of context of customer retention In many prior researches, online repurchase intention and IS continuance intention were used exchangeable In this study, repurchase intention was used instead of continuance intention because these concepts were still different (Wen et al.,... perceived value and perceived quality are important antecedents of satisfaction Among these factors, perceived quality is highly influential determinant of perceived value and indirectly affecting repeat purchase intention through satisfaction In the same year, Liu and Wu also study relationship between service quality, word -of mouth, customer satisfaction, promotional incentive, and customer 14 satisfaction... structural equation model and bootstrap estimate in AMOS software package Finally, results of hypotheses testing are discussed 4.2 Respondents demographic: The collected data were analyzed using the SPSS – Statistical software package The results of the demographic analysis were shown in table 4.1 Initial analysis of data indicated that gender was relatively equally represented with 59.2% of respondents . repurchase intention in online group-buying context in Vietnam.  To investigate impact of website quality on customers’ repurchase intention in online group-buying context.  To examine impact. many prior researches, online repurchase intention and IS continuance intention were used exchangeable. In this study, repurchase intention was used instead of continuance intention because. ABSTRACT Online group-buying has emerged as a new e-commerce model and received attention in both academics and practice. Prior researches focused on investigating online group-buying mainly