UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Trinh Minh Long FACTORS AFFECTING CONSUMER’S ONLINE PURCHASE INTENTION: THE MODERATING ROLE OF PRODUCT CATEGORY - AN EMPIRICAL STUDY IN HO CHI MINH CITY MASTER OF BUSINESS (Honors) Ho Chi Minh City – Year 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Trinh Minh Long FACTORS AFFECTING CONSUMER’S ONLINE PURCHASE INTENTION: THE MODERATING ROLE OF PRODUCT CATEGORY - AN EMPIRICAL STUDY IN HO CHI MINH CITY ID: 22120054 MASTER OF BUSINESS (Honors) SUPERVISOR: DR. NGUYEN QUYNH MAI Ho Chi Minh City – Year 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Running head: FACTORS AFFECTING CONSUMER’S ONLINE PURCHASE INTENTION: THE MODERATING ROLE OF PRODUCT CATEGORY - AN EMPIRICAL STUDY IN HCMC Factors Affecting Consumer’s Online Purchase Intention: The Moderating Role of Product Category - An Empirical Study in Ho Chi Minh City Trinh Minh Long long. Nguyen Quynh Mai MBUS 3 Dec, 08th, 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ii ACKNOWLEDGEMENTS I would like to express my deepest gratitude to my advisor, Dr. Mai Nguyen, for her excellent guidance, caring, patience, and providing me with a great atmosphere for doing research.
Her guidance helped me in all the time of research and writing of this thesis. I could not have imagined having a better advisor and mentor for my Master thesis. Besides my advisor, I would like to thank my friends, and other workers in the Engineering Service Department, Software Center of Excellence Department at LogiGear Corporation in Ho Chi Minh City for helping me to collect mussel samples from the field. My research would not have been possible without their helps.
My sincere thanks go to my mom, two elder brothers, and younger sister. They were always supporting me and encouraging me with their best wishes. Last but not the least, I would like to thank my girlfriend, Dao Ninh. She was always there cheering me up and stood by me through the good times and bad.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iii Table of Contents Chapter 1: Introduction. Background of the Study. Scope of the study. Organization of the Study .11 Chapter 2: Literature Review.
Behavioral Intention Models. Theory of Reasoned Action (TRA). Theory of Planned Behavior (TPB). Technology Acceptance Model (TAM).
Overview of the Preliminary Model. Conceptual Framework and Proposed Hypotheses. Perceived ease of use (PEOU) .21 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Prior online purchase experience (POPE) .26 Chapter 3: Research Method.
Measurement and Questionnaire Design. Data Collection Method. Data Analysis Method. Exploratory factor analysis (EFA) .31 Correlation matrix analysis .32 Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy/Bartlett's Test of Sphericity .32 Factor extraction analysis .34 (3) Independence of error term .34 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com v (4) Absence of multicollinearity .34 (5) Absence of heteroscedasticity .34 (6) Absence of outlier and influential observations .35 Chapter 4: Research Results.
Profile of Respondents .39 Perceived ease of use (PEOU) .40 Prior online purchase experience (POPE) .41 Online purchase intention (OPI). Assumption for Multiple Regression. The Moderating Effect. Summary of Model Analysis .56 Chapter 5: Discussion and Conclusion .57 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
Relationship between perceived usefulness and consumer’s online purchase intention. Relationship between perceived ease of use and consumer’s online purchase intention. Relationship between perceived risk and consumer’s online purchase intention. Relationship between brand orientation and consumer’s online purchase intention.
Relationship between prior online purchase experience and consumer’s online purchase intention. The moderating effect of product category. xi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com vii APPENDIX E. xxi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com viii List of tables Table 3.1: Measurements and Sources .1: Respondents’ Demographic Profile .2: Online purchasing characteristics .3: Means and standard deviations of items measuring perceived usefulness .4: Means and standard deviations of items measuring perceived ease of use .5: Means and standard deviations of items measuring perceived risk .6: Means and standard deviations of items measuring brand orientation .7: Means and standard deviations of items measuring prior online purchase experience .8: Means and standard deviations of items measuring online purchase intention .9: KMO and Bartlett's Test .10: Rotated Component Matrix a .11: Total Variance Explained.13: Pearson Correlation Coefficient .16: Result of Multiple Regression Analysisa .17: Correlation between Moderator, Dependent and Independent Variables .18: Model Summaryc with Moderator .19: Result of Regression Analysisa with Moderator .20: Product category differences in online shopping (books: n=89; electronics: n = 106; clothing: n=124) .1: Summary of Hypotheses Results .58 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ix List of figures Figure 1.1: Trends of revenue from electronic means .2: Purposes of accessing Internet .3: Popular online products on e-commerce website purchased .4: The types of products or services introducing on e-commerce websites .1: Theory of reasoned action model .2: Theory of planned behavior .3: Technology acceptance model .1: Final Research Model .55 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com x Lists of abbreviations ANOVA Analysis of Variance B2B Business to Business B2C Business to Consumer BI Behavioral intention BO Brand Orientation C2C Consumer to Consumer DVD Digital Versatile Disc (formerly Digital Video Disc) EFA Exploratory Factor Analysis IS Information System ISB International School of Business IT Information Technology HCMC Ho Chi Minh City HMRA Hierarchical Moderator Regression Analysis OPI Online Purchase Intention PEOU Perceived Ease of Use POPE Prior Online Purchase Experience PR Perceived Risk PU Perceived Usefulness TAM Technology Acceptance Model TPB Theory of Planned Behavior TRA Theory of Reasoned Action UK United Kingdom U.
United States USD United States Dollar VECITA Vietnam E-Commerce and Information Technology Agency LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com xi Abstract E-commerce is recognized for its ability to allow business to communicate and to form transaction anytime and anyplace. Lazada, 5giay are good examples of e-commerce business individuals and businesses are able to post their items and sell them around the nationwide. Despite the potential in Vietnamese consumers, there is still lack of understanding towards online shopping in Vietnam. So, this study explores factors that affect consumers’ intention to purchase online and the moderating role of product category by reviewing prior literatures.
Based on the Technology Acceptance Model (Davis, 1989) extended, six hypotheses were developed in the study using five independent variables of perceived ease of use, perceived usefulness, perceived risk, prior online purchase experience, and brand orientation and the moderator of product category. The data was collected using web-based and fill in on-the-spot questionnaire surveys of Internet users aged between 16 and 45 including both online visitors (non-shoppers) and purchasers (shoppers) with a response rate of 77 percent at sample size of 319. Multiple regression analysis is employed in this study to analyze the data and test the developed hypotheses by using SPSS. The findings showed that all of five factors have a significant impact on consumers’ online purchase intention.
Accordingly, perceived usefulness is found as the most important determinant, followed by prior online purchase experience. In addition, the study confirmed the product type differences in consumers’ online shopping experience, perceptions risks and usefulness, brand orientation associated with online shopping. This research will be not only benefit to e-retailers’ marketers who wish to propose the good marketing strategies in relation to increasingly market of its product, but will be useful to web developers as an input in their design process for websites’ interface, search product engine and payment transactions in various product type. In addition, the findings may help the Vietnamese government a view to facilitate and support this new emerging technology to catch up with world trends, which will ultimately be beneficial to the country as a whole.
Keywords: online purchase intention, perceived usefulness, perceived ease of use, perceived risk, brand orientation, prior online purchase experience, and product category. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 Chapter 1: Introduction 1. Background of the Study The advent of the Internet, along with the development of related technologies, has created a significant impact on the lives of people around the globe. Accordingly, online shopping has grown tremendously all over the world.
This has opened a window and business opportunity for all businesses because of its ability to make viable the conduct of business in cyberspace, or by connecting people worldwide without geographical limitations (Singh, Jayashankar, & Singh, 2001). Meanwhile, consumers can purchase goods and services virtually anywhere, 24 hours a day, 7 days a week without worrying about store hours, time zones, or traffic jams (Li & Gery, 2000). The use of the Internet as a shopping or purchasing medium has been growing with an impressive pace in the past decade. According to ACNielsen (2008), 875 million of the world population had made an online purchase in 2008 compare to 627 million in 2006.
Among internet users, the highest percentage shopping online is found in South Korea, where 99 percent of those with internet access have used it to shop, followed by the United Kingdom (97%), Germany (97%), Japan (97%) with the United States eight, at 94 percent. A study by Indvik (2013) reported that e-commerce market would grow from $857 billion in 2011 to $1,860 billion in 2016 and the online retail sales in US amounted to $308 billion in 2011, and this would likely reach $546 billion in 2016. Online shopping in Vietnam is still a new technology breakthrough since it has just begun to assault the Vietnamese retailing sector with online shopping services. The Vietnam E-commerce Report 2013 published by Vietnam E-Commerce and Information Technology Agency (VECITA) showed that in term of the business sectors, the rate of enterprises in wholesale, retail sector joining e-marketplaces stayed in the moderate rate of 15% (VECITA, 2014).
The finance, estate and industry sectors were in the highest rate to participate in e-marketplace with 28% and 20% respectively. 85% of surveyed enterprises answered the efficiencies of participating e-marketplaces were moderate or good levels, LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 15% respondents evaluated these efficiencies in low levels. According to 2013 VECITA’s survey results, 41% of businesses said their revenue increased throughout e-commerce channel, 13% decreased and 46% almost unchanged. Particularly, the effectiveness of e- commerce review is relatively stable in the past few years (VECITA, 2014).
Source: Survey of Vecita in 2013 Figure 1.1: Trends of revenue from electronic means As reported by Vietnam E-commerce and Information Technology Agency, in 2013, the numbers of internet users in Vietnam, accounted for 36% of the population and 57% of them have done online transactions. In particular, the e-commerce sales per online buyer are approximately $120 and the most popular items purchased on the internet are clothes, shoes and cosmetics, followed by technology, air ticket, food and book (Quantrimang, 2013). The e-commerce market in Vietnam amounted to $2. Forecasting by 2015, Vietnam will have 40-45% of Internet users.
Goes along with the increase of Internet user in 2015 as well as the economic growth rate, the e-commerce legal framework will be completed; the development trend of logistic infrastructure and payments will increasingly be concerned. Pursuant to the findings, the rate of Internet users purchasing items online is predicted to increase by 2015. Based on the above-mentioned figures and an estimated increase of 30 USD in each online consumer’s spending in 2015 in comparison with 2013, Vietnam B2C e-commerce sales will reach around 4 billion USD (VECITA, 2014). In LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 comparison with the major powers in the world of e-commerce as the U.
Appropriately, although sales of products from the Internet account for only a small percentage of total retail sales, millions of consumers shop and buy on the Internet.