UNIVERSITY OF ECONOMICS AND LAW FACULTY OF BUSINESS ADMINISTRATION --- NGUYEN HOANG KHANH LINH UNDERSTAND FACTORS INFLUENCING CONSUMER SATISFACTION WHEN SHOPPING ON E-COMMERCE: AN EMPIRICAL STUDY ON GEN Z AND MILLENNIALS CONSUMERS IN HO CHI MINH CITY Major: Business Administration Major code: 232DI0103 GRADUATION THESIS INSTRUCTOR MSc. Vu Thi Hong Ngoc TP.HCM, 4/2024 ABSTRACT The e-commerce scene in Vietnam is a dynamic landscape where businesses rise and fall amidst ever-changing consumer behaviors, fierce competition, and technological advancements. As exemplified by the meteoric ascent of platforms like TikTok Shop and the decline of stalwarts such as Tiki, the landscape undergoes constant flux, necessitating ongoing research to comprehend the factors shaping customer satisfaction. Existing studies, while informative, may struggle to keep pace with the rapid evolution of consumer preferences and market dynamics.
Thus, there is a pressing need for updated and continuous investigation to navigate this volatile terrain effectively. This research endeavors to delve into the multifaceted dimensions of customer satisfaction within Vietnam's e-commerce sector. Drawing from established frameworks such as SERVQUAL and E-SERVQUAL, the study aims to construct a nuanced understanding of the factors driving consumer contentment. By analyzing primary data collected from Ho Chi Minh City, the research seeks to unravel the intricacies of customer satisfaction in this vibrant marketplace.
Based on the previous research model, the author conducted a quantitative method with 209 samples to examine factors of e-service quality that affects consumer satisfaction when shopping online. The findings found that these aspects of e-service quality positively correlate with consumer satisfaction: Efficiency, Fulfillment, System Availability, Privacy, and Responsiveness. Through a comprehensive five chapters, this study not only illuminates the current landscape but also provides actionable insights for businesses striving to thrive amidst the e-commerce revolution. In doing so, this research contributes to the body of knowledge surrounding e-commerce in Vietnam, empowering businesses to navigate the complexities of this dynamic ecosystem and foster sustainable growth in the digital age.
i DECLARATION This research is the original work of the authors and has not been previously published elsewhere, carried out under the guidance of instructor MSc. Vu Thi Hong Ngoc. Literature review and other statements for reference are gathered and analyzed with clear citations. The ownership of the survey, data collection, and data analysis lies with the author.
The authors declare no conflict of interest. HCM, March 11, 2024 The author Nguyen Hoang Khanh Linh ii TABLE OF CONTENT LIST OF ABREVIATIONS……………………………………………………….v LIST OF TABLES. vi LIST OF FIGURES. vii CHAPTER 01: INTRODUCTION .2 Definition of key terms.
Overview of the Research Status of the Topic. The structure of the dissertation .4 CHAPTER 02: LITERATURE REVIEW. Overview of e-commerce and customer behaviors .1 Overview of e-commerce .2 The growth of e-commerce in Vietnam .3 The challenges and opportunities of e-commerce. Overview of customer satisfaction and e-service quality.
Overview of customer satisfaction. Overview of service quality and e-service quality. The relationship between service quality and customer satisfaction .3 Overview of Gen Z and Millennials Consumers .1 Traits of Millenials consumers .2 Traits of Gen Z Consumers .3 Comparision of Gen Z and Millennials. SERVQUAL model of Parasuraman et al (1988).
E-SERVQUAL model by Parasuraman et al (2005). Related experimental research .1 Research by Paulo Rita et al.2 Research by Eun Young Kim & Vanessa P.6 Proposed research model and hypothesis .1 Proposed research model .26 CHAPTER 03: RESEARCH METHODOLOGY .3 Conduct preliminary research .36 CHAPTER 04: RESEARCH RESULTS .1 Descriptive analysis of the sample .2 Descriptive analysis of the scale .1 Cronbach’s Alpha coefficient analysis. Exploratory Factor Analysis (EFA). Exploratory Factor Analysis of the dependent variable .4 Pearson correlation analysis .1 Analyze model fit and autocorrelation issues .2 Check the significance of the regression coefficients .3 Analyze regression coefficients.
T-test and ANOVA analysis of variance.57 CHAPTER 05: CONCLUSION AND IMPLICATIONS .3 Limitations and recommendations for future research .71 APPENDIX 1: OFFICIAL QUESTIONARE .71 APPENDIX 2: DATA ANALYSIS RESULTS .76 LIST OF ABREVIATIONS EFA Exploration Factor Analysis KMO Kaiser-Meyer-Olkin Sig. Significant Value SPSS Statistical Package for the Social Sciences v CAGR Compound annual growth rate LIST OF TABLES Table 3.1: Efficiency measurement scale .2: System Availability measurement scale .3: Fulfillment measurement scale .4: Privacy measurement scale .5: Responsiveness measurement scale .6: Compensation measurement scale .7: Contact measurement scale .8: Consumer satisfaction measurement scale .1: Descriptive analysis of the sample.2: Descriptive analysis of the scale .3: Cronbach’s Alpha analysis .4: KMO and Bartlett test. Rotated Component Matrix.6: KMO and Bartlett's Test results for dependent variable .7: Rotated matrix factors the dependent variable .8:Pearson correlation analysis.9 Adjusted R-squared and Durbin-Watson coefficients .10: Analysis of ANOVA Table (ANOVAa) .12: Regression coefficients and final model .13: Summary of analysis method for each variables .14: Leveve statistics and ANOVA results for “Income” and “Frequency of shopping online” .15: Average Monthly Income and Online Shopping Frequency .16: Independent tests results for “Gender” and “Education Levels” .17: Mean results for Gender variable.54 vi LIST OF FIGURES Figure 2.1: Retail e-commerce sales worldwide from 2014 to 2027 .2: Vietnam's e-commerce market value in 2015-2023 .3 SERVQUAL model from Parasuraman et al.5: Research model of Paulo Rita and colleagues (2019) .6: Research model of Kim and colleagues (2009).7: Proposed research model .27 vii CHAPTER 01: INTRODUCTION 1. Overview of the Research Status of the Topic 1.1 International studies A large number of studies have been published on the topic of customer satisfaction with the quality of e-commerce service.
However, there is a lack of research specifically focused on online shopping in the Vietnamese context. The author reviewed the models used in previous research on customer satisfaction with e-commerce service quality. The three most commonly used models are SERVQUAL, E-SERVQUAL, and ETAILQ. The SERVQUAL model was developed and implemented by Valarie Zaithaml, A.
Parasurama, and Leonard Berry in 1988 and is used to measure the quality of service experienced by customers. This model has five service quality dimensions - tangibility (tangible in the original scale), reliability, responsiveness, assurance, and empathy. Many researchers consider SERVQUAL to be a reliable and valid multiple-item scale that allows retailers to understand customers and service expectations better and, as a result, improve service (Sasser et al. 1978; Gronroos 1982; Lehtinen & Lehtinen 1982; Parasuraman et al.
However, with the advent of the Internet and the explosion of the digital economy, Parasuraman and colleagues (2005) addressed the need for a specific e- commerce service quality measurement tool. They developed the Electronic Service Quality (E-SERVQUAL) scale to assess the core dimensions of service quality on online platforms. This scale measures the four e-service quality dimensions: efficiency, system availability, fulfillment, and privacy (Parasuraman et al., 2005) and has two dependent variables: customer satisfaction and customer loyalty. It can also be used to link its dimensions with customer loyalty and purchasing behaviors in an e-commerce context (Marimon et al.
E-S-QUAL can evaluate the smoothness, ease, and speed of an e-commerce website, the implementation of the site’s promises, the correct technical functioning of the site, and the safety of the site and the protection of customer information, respectively (Hao-erl Yang and 1 Feng-Shii Tsai, 2007). The E-Rec-QUAL has a similar function to E-S-QUAL, but it only measures the quality of e-commerce sites through 3 dimensions: responsiveness, compensation, and contacts (Mark Springer and Craig K. Many researchers also use the ETAILQ scale as a research foundation. This scale is used to evaluate the quality of retail websites, indicating 4 aspects that make up online service quality, including design.
website, reliability, security, and customer service. Overall, depending on the study's specific goals and context, researchers can adapt existing models like SERVQUAL, E-SERVQUAL, and ETAILQ or develop new ones for measuring online service quality. Furthermore, some studies go beyond the direct impact of service quality, exploring satisfaction as an intermediary variable affecting customer loyalty towards e-commerce platforms.1 Vietnamese studies Like the worldwide trend, research on customer satisfaction on e-commerce platforms in Vietnam is increasingly growing. First, a study by Le and colleagues (2023) identified five main factors influencing online satisfaction: delivery ability, complaint/return policy, payment costs, shipping costs, and delivery staff factors/methods.
Their findings show these factors significantly explain 60.9% of final delivery service satisfaction. This highlights the importance of optimizing these aspects to enhance the customer experience. Secondly, adding to the growing research on Vietnamese e-commerce satisfaction, Duong Thi Hoai Nhung and Nguyen Thi Ngan (2022) employed the EtailQ scale to assess four key factors influencing online shopping experiences: website design, privacy/security, responsiveness/reliability, and customer service. Analyzing data from 220 Lazada customers, their study revealed a positive correlation between all four factors and customer satisfaction, highlighting their crucial role in fostering positive online shopping experiences.
Thirdly, taking the foundation from previous research, Duong Thi Hoai Nhung and Nguyen Thi Ngan (2022) delved deeper into the online shopping experience at Lazada by applying the EtailQ scale. Their study focused on four key 2 factors: website design, security, customer service, and responsiveness. Surveying 220 Lazada customers found a positive correlation between all four factors and customer satisfaction with the quality of electronic services on the platform. In summary, the number of studies on customer satisfaction when shopping online in Vietnam remains scarce despite the rapid growth of e-commerce.
Recognizing this gap, the author conducted this research to provide valuable insights into the factors affecting customer satisfaction within the Vietnamese e- commerce context. Contributing to a deeper understanding of Vietnam's online market, this research empowers businesses with valuable insights to craft effective competitive strategies and thrive in this dynamic landscape. Research Subject The primary subject of this study is the factors that can influence customer satisfaction when shopping on e-commerce. The survey target is Vietnamese customers who come to e-commerce platforms to purchase goods.
Research Scope With the scope of the research context, this research focuses on factors influencing customer satisfaction when shopping online on e-commerce. The reason for choosing a specific category is for better measurement of customer satisfaction instead of making a general assessment for all products. With the focus area to conduct the research, this study was conducted in Ho Chi Minh City - the country's largest economic center with high population density, modern lifestyle, and high e- commerce usage rate. The primary data collection survey was conducted in Febuary 2024, while secondary data used in the study was extracted from reputable sources published from 1990 to 2023.
The research scope of this study is limited to the e-commerce industry in Vietnam and will not include other sectors or nations. In addition, the study will evaluate factors that can influence customer satisfaction when purchasing products on e-commerce, regardless of which dimensions they belong to, such as service quality, website design, order fulfillment, etc. Research Objective By analyzing and inheriting theories of previous articles and research, this study proposes a research model to measure factors influencing customer satisfaction when shopping on e-commerce platforms, focusing on Gen Z and Millenials commerce customers in Ho Chi Minh City. From the model above, the author determines the impact of each factor on customer satisfaction and then provides recommendations and strategies for e-businesses to enhance their customer satisfaction.6 Research Question This study aims to answer the following questions: ● RQ1: What factors influence customer satisfaction when purchasing products online on e-commerce platforms? ● RQ2: What is the precise impact of each identified factor on customer satisfaction for online purchases in Ho Chi Minh City? ● RQ3: What practical solutions can businesses implement to address specific aspects of customer satisfaction, informed by their understanding of e- service quality? 1.
The structure of the dissertation The research article is structured into 5 chapters, with detailed content: Chapter 1: Introduction. This chapter establishes the pressing need for this research in the current Vietnamese e-commerce context and outlines the study's purpose, methodology, and potential significance for stakeholders. Chapter 2: Literature review. This chapter clarifies concepts, analyzes theoretical foundations, and presents experimental models.
The author will then Formulate well-defined hypotheses to guide the analysis. Chapter 3: Research methodology.