UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Thanh Tuyen ANTENCEDENTS AND MEDIATORS OF CONSUMER’S ONLINE PURCHASE INTENTION MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2015 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Thanh Tuyen ANTENCEDENTS AND MEDIATORS OF CONSUMER’S ONLINE PURCHASE INTENTION ID: 22120036 SUPERVISOR: Nguyen Quynh Mai Ho Chi Minh City – Year 2015 i ANTENCEDENTS AND MEDIATORS OF CONSUMER’S ONLINE PURCHASE INTENTION Nguyen Thi Thanh Tuyen UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ii ACKNOWLEDGEMENTS I am deeply grateful to my advisors, Dr Nguyen Quynh Mai for the guidance and comments through the process of completing this thesis Without the support and encouragement from Dr Nguyen Quynh Mai, the thesis might not be completed in meeting the requirements and expectation of the research I also want to say thanks to my classmates and others who complete the surveys and share knowledge with me Nguyen Thi Thanh Tuyen July 4th, 2015 iii ABSTRACT Many e-vendors have been investigated in Vietnam but not all of them are successful In order to be successes, e-vendors need to know how to attract consumers by understanding consumers’ purchase intention In this study, five factors that were proposed to have influence on purchase intention Those were technology characteristics, trust, social influence, perceived ease of use, perceived usefulness A survey was launched in August, 2014 and 180 responses was collected in Ho Chi Minh City, Vietnam for analyzing The findings showed that perceived usefulness is not a factor that influences purchase intention Perceived ease of use is found to be a key factor that influence purchase intention directly Technology characteristics, trust, and social influence are three factors that influence purchase intention indirectly via mediator perceived ease of use To gain consumers online purchase intention, e-vendors should provide products and services that gain consumers’ perceived ease of use Besides that, their websites need to be easy to read and easy to understand by improving technology characteristics E-vendors also need to gain trust and social influence to increase consumers’ purchase intention The results of this study provide a valuable insight on the direct impact of perceived ease of use and the indirect impact of trust, social influence, and technology characteristics towards online purchase intention iv TABLE OF CONTENTS ACKNOWLEDGEMENTS II ABSTRACT III CHAPTER 1: INTRODUCTION 1.1 BACKGROUND 1.2 PROBLEM STATEMENT 1.3 RESEARCH OBJECTIVES 1.4 RESEARCH QUESTIONS 1.5 RESEARCH SCOPE AND LEMITATION 1.6 THESIS STRUCTURE CHAPTER 2: LITERATURE REVIEW 2.1 CONCEPTS 2.1.1 E-Retailing 2.1.2 Online Purchase Intention 2.1.3 Consumer Behavior 2.2 THEORIES OF CONSUMER BEHAVIOR 2.2.1 Theory of Reason Action - TRA 2.2.2 Theory of Planned Behavior – TPB 2.2.3 Theory of Acceptance Model – TAM 2.3 ATTENCEDENTS OF ONLINE PURCHASE INTENTION 11 2.3.1 Perceived Usefulness 11 2.3.2 Perceived Ease of Use 13 2.3.3 Trust 14 2.3.4 Social Influence 16 2.3.5 Technology Characteristics 17 2.4 CONCEPTUAL MODEL 18 v 2.5 CHAPTER SUMMARY .19 CHAPTER 3: REASECH METHODOLOGY 20 3.1 RESEARCH PROCESS 20 3.2 MEASUREMENT SCALES 22 3.3 DATA COLLECTION METHOD 25 3.3.1 Sample and Sample Size 25 3.3.2 Data Collection Process 25 3.4 DATA ANALYSIS METHOD 25 3.4.1 Descriptive Analysis 26 3.4.2 Reliability Analysis 26 3.4.3 Exploratory Factor Analysis 26 3.4.4 Multiple Regression Analysis 27 3.4.5 Testing Mediation with Regression Analysis 28 3.5 CHAPTER SUMMARY 28 CHAPTER 4: DATA ANALYSIS 29 4.1 DESCRIPTIVE ANALYSIS 29 4.1.1 Gender 31 4.1.2 Age 31 4.1.3 Education 31 4.1.4 Income 31 4.1.5 Career 32 4.1.6 Frequency of Online Purchasing 32 4.1.7 Most Recent Purchase 32 4.2 RELIABILITY ANALYSIS 32 4.3 EXPLORATORY FACTOR ANALYSIS 35 4.4 HYPOTHESES TESTING 39 vii 4.4.1 Assumption Test .39 4.4.2 Testing Mediation with Regression Analysis 42 4.5 CHAPTER SUMMARY 49 CHAPTER 5: CONCLUSION AND IMPLICATION 50 5.1 DISCUSSION 50 5.2 MANAGERIAL IMPLICATIONS 52 5.3 LIMITATION OF STUDY AND FUTURE RESEARCH 53 5.4 CONCLUSION 54 REFERENCES 56 APPENDICES 61 LIST OF FIGURES Figure 2.1: Theory of Reasoned Action model Figure 2.2: Theory of Planned Behavior – TPB Figure 2.3: Original TAM 10 Figure 2.4: Final version of TAM 11 Figure 2.5: E-retailing purchase intention model 18 Figure 3.1: Research Process 21 Figure 4.1: Revised e-retailing purchase intention model 38 Figure 4.2: Histogram 40 Figure 4.3: P-P Plot 41 Figure 4.4: Scatter Plot 41 Figure 4.5: Diagram of description step 1-3 44 Figure 4.6: Diagram of description step 45 Figure 4.5: Model Tested Result 46 vii LIST OF TABLES Table 3.1: Results of the Reliability Test (Pilot) 24 Table 4.1: Descriptive Analysis 29 Table 4.2: Results of Reliability Test 33 Table 4.3: KMO and Bartlelt’s Test 35 Table 4.4: Total Variance Explained 36 Table 4.5: Rotated Factor Matrix 37 Table 4.6: Collinearity Statistics 39 Table 4.7: Coefficients of TC, T, and SI Predicting PI 42 Table 4.8: Coefficients of TC, T, and SI Predicting TB 43 Table 4.9: Coefficients of TB Predicting PI 43 Table 4.10: Coefficients of TC, T, SI, and TB Predicting PI 44 Table 4.11: Testing with Regression Analysis Result 48 CHAPTER INTRODUCTION 1.1 Background Internet has been very popular for a networking media It also created a new form of retail which is known as e-retailing or web shopping It is a necessary medium for global market transaction Developing of e-retailing allows shoppers to purchase products or services from the web-retailers and search products information over the Internet E-retailers don’t have to spend money for space (Keeney, 1999; Turban and King, 2003) Consumers can buy products on e-retailing websites by making transaction via virtual interface It’s more convenient than traditional shopping which usually causes anxious crowded, traffic jam, limited time, and parking space However, web shopping is perceived to be more risky than traditional way, so trust play a crucial role for consumers making online transaction (Pavlou, 2003) E-retailing has arisen in Vietnam from 2001 Together with the event joining WTO in 2006, Vietnam becomes a promising environment for e-retailing in next five years A recent study Irwin and Nguyen (2013) showed that Vietnam’s e-retailing market value achieved approximately $300 million in 2011 and is expected to gain $2.8 billion by 2015 with growth rate at 75% from 2011 to 2015 (Irwin and Nguyen, 2013) In 2013, German Rocket Internet invested $250 million in Lazada Group, an online eretailing group, to five countries in Southeast Asia including Vietnam Observers commented that it is the right time for foreign investors to gear up their investment plans in Vietnam Many market reports have predicted that an online boom will happen in near future Tran TrongTuyen, the director of DKT, forecasted that the Vietnamese e-commerce market in 20142015 will be doubled that of 2013 In 2013, Epinion, a market survey firm reported that 50% of Vietnamese internet users use online shopping Lazada’s CEO, Alexandre Dardy, believes that shopping online through smartphones will be the tendency in near furure which will be favored by young consumers Vietnam Net Bridge, a market survey firm, has reported that Vietnam 52 easily and provide understandable and consistent information Similar to any other businesses, e-retailers need to create trust to attract consumers by improving their reputation Consumers feel more comfortable when making transaction with e-retailer with high reputation than low reputation Besides, relatives, friends, colleagues, and social media can influence consumers making any transaction with businesses 5.2 Managerial Implication This research has implications for researchers and practitioners Implications for researchers: This study makes important contributions to research in eretailing field It addresses the limitation of prior researches which only studies direct influencing factors of purchase intention This study pointed out direct and indirect influencing factors of purchase intention Many prior studies point out perceived ease of use and perceived usefulness are the factors that influences purchase intention but not many researches find out factors that affect those factors In this study, trust, technology characteristics, and social influence are three factors that influence technology beliefs which in turn influence purchase intention Implications for practitioners: the result of this research provides important implications for practitioners to prepare strategic plans and implement tools or their performance This study helps e-vendors to fully understand crucial factors that influence consumers’ purchase intention which will help them to improve their managerial and develop their strategies to increase profits The result shows that technology beliefs influence purchase intention directly That means e-vendors need to make consumers feel shopping online is a very easy things to and very helpful In order to increase consumers’ technology beliefs, e-vendors need to improve technology characteristics, consumers’ trust, and social influence since those are factors that influence purchase intention indirectly via mediator technology beliefs To improve technology characteristics, e-vendors need to provide a good website quality to retain existed consumers and attract new consumers E-vendors need to differentiate their websites to make a distinction among top-tier websites especially focusing on factors that 53 influence consumers’ feeling or experience while engaging with the websites In order to that, mangers need to maintain system operation well and make e-retailing websites to be used easily and quickly When shopping online, consumers are afraid of losing privacy information, so providing secure system and securing payment mechanism is very important Besides that, e-retailing websites need to provide a websites with an excellent content quality Consumers prefer to use websites which provide more information with highly reliability and accuracy Investing in content quality will increase quality of website and will attract more consumers in competitive market In modern society, e-retailing companies are very excited about using internet as a key marketing tool and sales vehicle for their products and services but many people not trust in e-commerce security Especially, in Vietnam, people are reluctant to release their personal information to a website because institutions and infrastructure conductive to trust has not been well developed Therefore, e-vendor needs to gain consumers’ trust for Vietnamese making online transaction Ho and Chen (2013) stated that the higher the reputation, the higher gain in case of favorable behavior and the more certain online consumers about the e-vendor will not act opportunistically Hence, in order to gain consumers’ trust, e-vendors need to have good reputation This study also pointed out that social influence can affect purchase intention indirectly via mediator, technology beliefs Friends, relative, family, colleague’s plays very important role in influencing consumers’ purchase intention E-vendors need to treat every consumers well not just to keep current consumers but to attract their friends, relative, family, colleagues to their businesses Another way to attract new consumers is social media They can use social media to make great impression about their company When consumers impress, then they will want to make transaction with those e-vendors 5.3 Limitation and Future Study This study has some limitations that need to be acknowledged 54 Firstly, the empirical study was conducted in Ho Chi Minh City Thus, the data did not cover all class of people in Vietnam In future study, time is allowed, data should be collected in several popular city where consumers are familiar with e-retailing to have broad view of Vietnamese purchase intention Secondly, respondents answered questionnaires based on various e-retailing websites rather than specific ones, so business type of the website and the distinctive designs that may affect customers’ experience and perception about online shopping In future study, it would be better if author identified specific e-retailing type to get in deep understanding about consumers’ purchase intention of that business The study should be narrower but deeper Thirdly, this study uses measurement scales from prior studies These scales were used in other countries, not in Vietnam Due to limited time, this study did not implement qualitative research to test scale, hence perceived usefulness was removed from the model due to having low loading factor In the future, the measurement scales should be tested by qualitative research for modifying to fit with Vietnamese environment 5.4 Conclusion E-commerce arises has changed shopping habit of consumers Recently, consumers no longer relies on physical cue for their purchase decision Technology beliefs, technology characteristics, trust, and social influence are found to be critical factors that influence purchase intention This study reveals that technology beliefs is the important factor that influence purchase intention positively and directly Trust, social influence, and technology characteristics influence purchase intention positively and indirectly via mediator technology beliefs In order to be successes in competitive market, e-vendors should pay more attention to technology characteristics of their website in the form of improving the website usability, design, and information quality Besides that, they need to gain consumers’ trust toward their services by searching for ways to enhance their consumers’ relationship management that earn consumer trust Friends, relatives, and social media also play very important roles 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(How many time have you purchase online last year?) o o 1–2 o 3–5 o Trên (Above 5) Hàng hóa anh ch mua qua m ng g n nh t cách bao lâu? (How long did you make the most recent online purchase?) o Du i tháng (Under months) o Trên tháng – tháng (Above months – months) o Trên tháng – 12 tháng (Above months – 12 months) o Trên 12 tháng (Above 12 months) Ph n C (Part C): Kinh nghi m mua hàng qua m ng (Online purchasing experience) D a kinh nghi m c a vi c xem/mua hàng qua m ng Anh/ch vui long tr l i nh ng câu h id i (Based on your experience about online purchasing Please answer following questions.) Anh/Ch vui lòng khoanh tròn m t l a ch n (Please circle your choice) = r t không đ ng ́ (strongly disagree); = không đ ng ́(disagree); = phân vân(neutral); = đ ng ́ (agree) = r t đ ng ́ (strongly agree) 64 Technology Characteristics Trang Web cho phép d dàng quay tr l i nh ng trang tr 5 5 5 5 5 c (Web allows easy to return to previous display pages) Tôi có th xác đ nh v trí c a trang Web (I can determine my position within Web) Trang Web d đ nh h ng (Web is easy to navigate) Trang Web s d ng nh ng thu t ng nh t quán (Web uses understandable terms) Trang Web liên k t đ n nh ng trang hi n th thông tin chi ti t h n (Web display page provide links to more detailed information) Trang Web hi n th nh ng thông tin d đ c (The Web displays pages are easy to read) Trang Web s d ng nh ng th t ng d hi u (Web uses understandable terms) Social Influence Tôi b nh h ng b i ng i thân quy t đ nh(I’m influenced by friends, relative, colleagues, etc when making decision) Tôi có th xác đ nh v trí c a trang Web (I can determine my position within Web) Trust Mua hàng qua m ng cho c m giác tin t (The OP gives me a feeling of trust) ng 65 Tôi tin t ng vào nhà cung c p hàng hoá, d ch v 5 5 Th t d dàng đ tr nên thu n th c vi c s d ng 5 5 qua m ng (I have trust in OP vendors) Nh ng trang bán l m ng cung c p cho khách hàng nh ng thông tin đáng tin c y v s n ph m (E-retailers always provide trustworthy information about products for consumers.) Perceived Ease of Use S d ng d ch v mua hàng qua m ng d dàng đ i v i (It is easy for me to become skillful in the use of the OP services) Tôi nh n th y vi c giao d ch mua hàng qua m ng rõ ràng, d hi u (I find my interaction with the OP service clear and understandable) d ch v mua hàng qua m ng (I find my interaction with the OP service clear and understandable) Nhìn chung, nh n th y s d ng d ch v mua hàng qua m ng d dàng (Overall, I find the use of the OP service easy) Perceived Usefulness Mua hàng qua m ng cho phép ti t ki m ti n (The online purchasing (OP) enables me to save money) Mua hàng qua m ng làm cho d dàng có đ c hàng hóa (The OP makes it easier for me to obtain goods) 66 Tôi nh n th y mua hàng qua m ng h u d ng vi c 5 5 th c hi n toán (I find OP useful in conducting purchase transactions) Nhìn chung, nh n th y mua hàng qua m ng m t l i th (Overall, I find OP to be advantageous) Purchase Intention Tôi s ti p t c mua hàng qua m ng t ng lai (I will return to online purchasing site in the future) Tôi s th ng xuyên s d ng mua hàng qua m ng (I would use online purchasing for my needs) Tôi s tích c c gi i thi u vi c mua hàng qua m ng cho nh ng ng i khác (I will suggest others to make online purchasing) Thank You for Your Cooperation !!! Chân thành c m n s giúp đ c a anh/ch !!! [...]... ease of use has great influence on purchase intention Ngo (2013) studies about factors influencing consumer online purchase intention of fashion in Vietnam – the case of Zalora and found out that perceived ease of use is the strongest factors influence purchase intention directly among product and company attributes, and perceived usefulness factors Ho and Chen (2013) considers perceived ease of use... Nguyen Kim, and The Gioi Di Dong last year began to expand their investments to develop online retailing (VietNamNet Bridge) In order to be successful, e-retailers need to learn about Vietnamese consumer’s characteristics to understand consumers’ purchase intention Purchase intention refers to willingness of consumers when buying products and services online (Kimery and McCord, 2002) The purchase intention. .. usefulness and perceived ease of use influence purchase intention directly Social influence and trust influence purchase intention indirectly via mediator perceived usefulness Technology characteristics influence purchase intention indirectly via mediator perceived ease of use Following section will discuss about why those factors should be chosen to be the main antecedents of online purchase intention. .. influence perceived ease of use Technology Characteristics H5 Perceived ease of use H1 Purchase intention H3 Trust Perceived usefulness Social Influence H4 Figure 2.5: Online purchase intention model H2 19 H1: Perceived usefulness has a positive relationship with consumers’ online purchase intention H2: Perceived ease of use has a positive relationship with consumers’ online purchase intention H3: Trust... selling and buying of goods and services through computer by using internet The developing of e-retailing has led businesses to online market E-retailing gives opportunities for sellers and potential buyers to interact with each other 6 fromdistance by just one click Saving time and money are a key success for e-retailing (Awais and Samin, 2012) 2.1.2 Online Purchase Intention Customer purchase intention. .. According to Day (1969), consumer intention can be measured more effective than consumer behavior because consumer may make a purchase due to constraints rather than real preference when purchase is considered Purchase intention is one of the components of consumer behavior on how individuals want to purchase a specific brand Laroche, Kim, and Zhou (1996) suggested that purchase intention can be measured by... strong impact on purchase intension (Ngo, 2013; Ho and Chen, 2013) Ngo (2013) prove that perceived usefulness influences purchase intention directly studying about factors influencing consumer online purchase intention of fashion in Vietnam – the case of Zalora In another study, Ho and Chen (2014) proved that technology beliefs, which are represented by perceived usefulness affect purchase intention indirectly... a specific brand According to Pavlou (2003), he defined online purchase intention as a situation when consumers are willing and intend to involve in an online transaction The online transaction is defined as an activity in which information retrieval, information transfer, and product purchase are processed (Pavlou, 2003) Information retrieval and information transfer are considered as intentions to... is the sum of product of person’s normative beliefs and his or her motivation to comply The normative beliefs are perceived expectations of other individuals or groups Thus, Theory of Reasoned Action is an appropriate model for explaining and predicting personal behavioral intention or consumers’ purchase intentions Belief and Evaluations Attitude toward Behaviors (A) Behavioral Actual Intention Behavior... use influenced behavioral intention directly Thus the final version of TAM model eliminated the need for the attitude construct from the model 11 Perceived Usefulness External Variables Behavioral Intention Actual System Use Perceived Ease of Use Figure 2.4: Final version of TAM(Venkatesh&Davis,1996,p.453) 2.3 Antecedents of Online Purchase Intention Based on TRA, TPB, TAM, and prior studies, this study ... characteristics to understand consumers’ purchase intention Purchase intention refers to willingness of consumers when buying products and services online (Kimery and McCord, 2002) The purchase intention is... City – Year 2015 i ANTENCEDENTS AND MEDIATORS OF CONSUMER’S ONLINE PURCHASE INTENTION Nguyen Thi Thanh Tuyen UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ii ACKNOWLEDGEMENTS...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Thanh Tuyen ANTENCEDENTS AND MEDIATORS OF CONSUMER’S ONLINE PURCHASE INTENTION ID: 22120036