MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------ PHAN THANH LONG FACTORS INFLUENCING CUSTOMER SATISFACTION: A STUDY OF ONLINE SHOPPING IN VIETNAM MASTER THESIS OF BUSINESS ADMINISTRATION HO CHI MINH CITY – 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY ------------ PHAN THANH LONG FACTORS INFLUENCING CUSTOMER SATISFACTION: A STUDY OF ONLINE SHOPPING IN VIETNAM Subject: Master of Business Administration Code: 60.02 MASTER THESIS OF BUSINESS ADMINISTRATION SUPERVISOR: DR. NGUYỄN THỊ MAI TRANG HO CHI MINH CITY – 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com I ACKNOWLEDGEMENT For the successful completion of this thesis, I would like to extend my sincere thanks to: Respectful lecturers of University of Economics Ho Chi Minh City, who have empowered me with considerably useful knowledge during the time I studied in the University, especially Dr. Nguyễn Thị Mai Trang, who have whole-heartedly instructed me to approach relevant matters in reality, research methods, as well as the contents of the thesis. Students of the eMBA course, University of Economics Ho Chi Minh City for kindly helping me to collect information necessary for the study.
My special thanks also go to Mr. Cao Quốc Việt for his strong support in the implementation of the data analysis and the completion of the thesis. Although the author has tried the best to complete the thesis, but errors could not be comprehensively avoided. Therefore, the author is looking forward to receiving the inputs and comments from respectful lecturers and friends, so that the thesis could be more and more improved.
Phan Thanh Long Ho Chi Minh, 28 October 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com II COMMITMENT I would like to commit that this thesis, “Factors influencing customer satisfaction: a study of online shopping in Vietnam”, was accomplished based on my independent and serious studies and researches. The data was collected in reality and it has clear origins. In addition to that, the data was trust- worthily handled by author and it has never been released in any menu. Ho Chi Minh, 28 October 2012 Phan Thanh Long Signature: __________________ LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com III TABLE OF CONTENT ACKNOWLEDGEMENT.
II TABLE OF CONTENT. III LIST OF TABLE. V LIST OF FIGURE. Internet development and application of e-commerce in Vietnam.
Advantages of Vietnam online shopping environment. Difficulties and challenges in Vietnam online market. Significances of the research. Structure of the research.9 CHAPTER 2: LITERATURE REVIEW.
Online shopping customer satisfaction (e-satisfaction). Proposed conceptual model and hypotheses .18 CHAPTER 3: RESEARCH METHODOLOGY. Dependent variable Online shopping customer satisfaction .27 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Qualitative pilot study.
Quantitative pilot study. Methods of data analysis. Reliability assessment of measurement scales (Cronbach alpha). Validity assessment of measurement scales (EFA).
Multi Linear Regression (MLR).33 CHAPTER 4: DATA ANALYSIS. Descriptions of sample. Reliability and validity of the measurement scale. Exploratory factor analysis (EFA).
Testing the research model and the hypotheses. Testing correlations of constructs. Checking regression assumptions. Multi-Linear regression analysis .53 CHAPTER 5: CONCLUSION AND IMPLICATION.
Discussion of findings. Limitations and recommendations .58 LIST OF REFERENCE .86 GRAPHIC ANALYSIS OF REGRESSION ASSUMPTIONS .88 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com V LIST OF TABLE Table 2. Summary of existing researches in e-satisfaction. Survey items used in the study.
Statistical report of socio-demographic variables. Cronbach alpha coefficients. Details of five unqualified observation variables. EFA results of independent variables.
EFA results of dependent variable. MLR results using Enter technique. MLR variables coefficients. Results of testing the hypotheses.
51 LIST OF FIGURE Figure 2. Proposed conceptual framework. Research process in the study. The updated research model.
53 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 ABSTRACT Vietnam has witnessed rapid development of Internet, in terms of infrastructure, users and internet-based services. As for Vietnamese people, Internet gradually becomes a very important channel for shopping, introducing products and services, characterized by the surging numbers of online transactions. It inspired the need to study the issues related to the satisfaction of customers for online shopping. The purpose of the thesis is to study the main factors influencing the satisfaction of customers when they carry out the online shopping.
The study is based on the data related to online shopping customers of the website ebay.vn over the past 6 months. Information quality, Website design, Delivery method, Customer service, Merchandise attribute were identified as five important factors influencing Vietnamese customer satisfaction as they purchase online. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 CHAPTER 1 INTRODUCTION This chapter will present overview introduction on the development of Internet, as well as e-commerce applications in Vietnam recently. Research problem, research objectives, research questions, extent and method of research will also be presented.
Research background The coming into being of Internet has been changing the traditional ways of purchasing goods of human being. The users have no longer been restricted by time and geographical factors. They could actively buy the products and goods regardless of any time and location factors. Internet has brought about new methods of communication and new ways of exchanging everyday information between peoples.
The ever increasing number of Internet users would also coincide with the development of online purchasing (Joines, Schere & Scheufele, 2003). The fast development of Internet would be explained by the combination of broadband technology and the change of customer behaviour (Oppenheim & Ward, 2006). Online shopping is a process when users decide to buy products or services in the Internet economy. Internet was developed as a new channel of distribution (Hollensen, 2004) and e-commerce was identified by Smith and Rupp (2003) as a very important factor contributing to Internet revolution.
Online shopping is one of the main reasons for using Internet and looking for goods, as well as information related to the goods (Joines et al. Smith and Rupp (2003) also said that thanks to Internet, users could find many providers and reference information, as well as reviews of products they need to buy. That is the reason why Internet has become a very competitive environment, when the fights are very tough to attract and keep the customers. To influence and keep the customers in a competitive LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 market, Constantinides (2004) found it would be very necessary to identify the factors or issues influencing customers when they carry out their online shopping.
Internet development and application of e-commerce in Vietnam According to Vietnam NetCitizens report (Chimigo Vietnam, 2011), in 2010, the number of Internet users in Vietnam accounted for 31% of the total population. The percentage is similar to some other countries like China, the Philippines and Thailand. Over the past few years, in comparison with other countries in the region, we have witnessed rapid development of Internet in Vietnam and Vietnam becomes a country whose Internet development ranked top of the world. In the urban areas (including 12 cities mentioned in Chimigo Vietnam, (2011)), over 50% of urban population had their Internet connections.
The percentage was even higher in Ha Noi and Ho Chi Minh city. Online shopping and auction websites were not regularly used. However, we have witnessed strongest development of online shopping activities over the past 3 years. According to information publicized in the Vietnam E-commerce report 2011 by Ministry of Industry and Commerce, 100% of surveyed enterprises were equipped with computers, 98% were connected with Internet with different ways, in which 89% had their broadband technology connections (ADSL).
Over 81% of enterprises used e-mails in their business and manufacturing activities, the number was 96% for big enterprises and 80% for small and medium enterprises. The application of specialized software was prioritized by enterprises to enhance the efficiency of their activities, such as accounting (88%), human resource management (48%)… Most of enterprises accepted the bookings or made the bookings via electronic devices, in which the number of enterprises accepted the bookings or made the bookings via Internet was ever increasing. According to the survey, the percentage of enterprises accepted the bookings via e-mails accounted for 52% and the number was 15% for website-based bookings, the percentage of enterprises made the bookings via e-mails accounted for 53% and the number was LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 21% for website-based bookings. The enterprises were also aware and paid much more attention to particular issues related to e-commerce, such as the security of information and individual information.
In addition to that, enterprises paid very much attention to the development and promotion of their images and products in the Internet environment by developing their own websites; participating in e- commerce portals, social networks; advertising in e-newspapers and famous searching engines like google.com… Statistics showed that 38% of enterprises developed their own websites, 14% participated in e-commerce portals. Advantages of Vietnam online shopping environment Thanks to the rapid development of Internet in Vietnam, both in terms of infrastructure and number of users, e-commerce of Vietnam becomes very potential, attracting many enterprises and individuals selling their services and products to participate in the market for online shopping. In addition, Vietnamese users are becoming more familiar with online shopping activities provided by domestic and oversea websites. Over the past few years, online shopping enjoys strongest growth rate in comparison with other businesses.
According to the report carried out by Chimigo Vietnam (2011) in Vietnam NetCitizens report, online shopping volume was doubled since 2007. Vietnamese customers are also more familiar with electronic payment systems, which is a very important factor of online shopping. At the present moment, customers have many options to choose the electronic payment gateways when they purchase online. Some payment gateways are highly trusted becoming popular, such as NganLuong, BaoKim, VNPay, Payoo, OnePay… Thanks to the development of these electronic payment gateways, Vietnamese individuals and enterprises could easily develop Internet-based websites selling and buying products and services.
The selling process is automated in a higher level as transactions could be totally completed online, replacing the previous method in which the products are introduced in the Internet and the cash is collected after the delivery of product. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 Many big foreign companies are looking for business opportunities in the e- commerce market of Vietnam. Some of the big names in the world, such as Google, Alibaba, Rakuten, eBay and Amazon, quickly promote their appearance in the market. In June 2012, Google became member of Vietnam E-commerce Association and had their plans to develop online shopping activities with other members.
They expected that they could earn 30 millions USD per year in Vietnam market, in which their potential customers are small and medium-sized enterprises. The official representative of Alibaba was announced while eBay just bought 20% of Peacesoft Solution’s shares, who is the owner of the website chodientu. Amazon already approached domestic e-commerce service providers to explore the opportunities to buy the shares or become their partners. This would be the catalyst for the development of Vietnam e-commerce.
Difficulties and challenges in Vietnam online market Although the number of Internet users is huge and ever increasing, the majority of them only use Internet to look for information and communications (Vietnam NetCitizens, 2011). Internet plays an important role in choosing and buying the products, but the trust is still low for online payment methods, because only a small proportion number thinks that online shopping is secured. Also according to this study, buying Internet-based products is still not popular in Vietnam. Only a small number of Internet users regularly log in to online shopping and auction websites.
Most of them agree that “it is possible to buy numerous products in the Internet”, but many do not think that “online shopping is secured”.