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 TIEU LUAN MOI download : skknchat@gmail.com 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 TIEU LUAN MOI download : skknchat@gmail.com 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 TIEU LUAN MOI download : skknchat@gmail.com 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 TIEU LUAN MOI download : skknchat@gmail.com 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. TIEU LUAN MOI download : skknchat@gmail.com iv TABLE OF CONTENTS ACKNOWLEDGEMENTS. III CHAPTER 1: INTRODUCTION. RESEARCH SCOPE AND LEMITATION.
4 CHAPTER 2: LITERATURE REVIEW .2 Online Purchase Intention .2 THEORIES OF CONSUMER BEHAVIOR .1 Theory of Reason Action - TRA .2 Theory of Planned Behavior – TPB .3 Theory of Acceptance Model – TAM .3 ATTENCEDENTS OF ONLINE PURCHASE INTENTION .2 Perceived Ease of Use .18 TIEU LUAN MOI download : skknchat@gmail.19 CHAPTER 3: REASECH METHODOLOGY .3 DATA COLLECTION METHOD.1 Sample and Sample Size .2 Data Collection Process.4 DATA ANALYSIS METHOD .3 Exploratory Factor Analysis .4 Multiple Regression Analysis.5 Testing Mediation with Regression Analysis. 28 CHAPTER 4: DATA ANALYSIS.6 Frequency of Online Purchasing .7 Most Recent Purchase .3 EXPLORATORY FACTOR ANALYSIS. 39 TIEU LUAN MOI download : skknchat@gmail.2 Testing Mediation with Regression Analysis. 49 CHAPTER 5: CONCLUSION AND IMPLICATION .3 LIMITATION OF STUDY AND FUTURE RESEARCH.
61 LIST OF FIGURES .1: Theory of Reasoned Action model .2: Theory of Planned Behavior – TPB .4: Final version of TAM .5: E-retailing purchase intention model .1: Revised e-retailing purchase intention model .5: Diagram of description step 1-3 .6: Diagram of description step 4 .5: Model Tested Result. 46 TIEU LUAN MOI download : skknchat@gmail.com vii LIST OF TABLES Table 3.1: Results of the Reliability Test (Pilot).2: Results of Reliability Test .3: KMO and Bartlelt’s Test .4: Total Variance Explained.5: Rotated Factor Matrix .7: Coefficients of TC, T, and SI Predicting PI .8: Coefficients of TC, T, and SI Predicting TB .9: Coefficients of TB Predicting PI .10: Coefficients of TC, T, SI, and TB Predicting PI .11: Testing with Regression Analysis Result. 48 TIEU LUAN MOI download : skknchat@gmail.com 1 CHAPTER 1 INTRODUCTION 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 e- retailing 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 2014- 2015 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 TIEU LUAN MOI download : skknchat@gmail.com 2 ranks second in the world in using smartphone. It is the reason for traditional retailers such as FPT Shop, 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 is the key element that leads to make the final decision on buying products. Purchase intention is evaluated base on the consumers’ willingness to purchase and their willingness to purchase again within a period of time. Furthermore, prior studies have showed that purchase intention is a key factor that influences consumers’ buying behavior and their shopping activities in the future (Pi et al., 2011; Pavlou and Gefen, 2004). Different from consumers in developed countries, people search products, play orders, and make payment online, Vietnamese often search on the internet and place order online but making payment by cash in person.
Nguyen Ngoc Dung, chief representative of VECOM’s HCM City Branch, the Vietnam e-commerce association, pointed out that shopping online barrier does not lie in technology solutions but in consumer’s habits (VietNamNet Bridge, 2014). Vietnamese wants to see products in person before buying, so Vietnamese want to make payment after delivery of goods. E-retailing firms now have to accept that. It’s caused a lot of pain for e-retailing firms when many orders are cancelled upon delivery and the companies have to incur the cost of delivery.
This problems need to be solved for e-retailing firms don’t have to bear the pain of canceled order upon delivery. Problem Statement Vietnamese doesn’t believe in the quality of products until they physically touch them, so they prefer to buy products in store after reviewing on the web. It’s critical for companies to win Vietnamese consumers’ trust to against skepticism. While online payment via the bank is a mainly method in developed countries, the kind of method is not widely used in Vietnam.
Online shoppers still pay in cash upon delivery. Payments via bank accounts and intermediate TIEU LUAN MOI download : skknchat@gmail.com 3 payments are accounted for 41% to 8% respectively (Vecita, 2014). It’s because some people don’t have bank account and the others don’t trust banking system. This issue is a great pain for companies since some people cancel order on delivery.
If people trust banking system and product qualities, then they will think making payment online is useful and their perceived usefulness will influence their purchase intention. If social influence such as social media, friends, relative, colleagues, etc. pays online for their shopping cart, then people will think payment online is useful and their perceived usefulness will influence their purchase intention. TAM model has been applied in many technology fields and e-retailing field is not exceptional.
In 1996, Venkatesh and Davis introduced final version of TAM model. When investigating information system using behavioral, they recognized that perceived usefulness and perceived ease of use influence behavioral intention directly. Following pervious studies such as Ramayah and Ignatius (2005), Koufaris (2002), Garwal and Prasad (1999), Chau and Hu (2001), Moon and Kim (2001), Ngo (2013), Ho and Chen (2013), Jun et al. (2004), and Honarbakhsh et al.
(2013), this study will also use TAM as a main theory to develop research framework. In this study, perceived ease of use and perceived usefulness are two keys factors that influence purchase intention directly. External factors that influence purchase intention indirectly via those two key factors that are technology characteristics, social influence, and trust. Trust and social influence are another problem that influence consumers on perceived usefulness which influence purchase intention according to TAM Model.
Besides that, technology characteristics are the problem that influence purchase intention via perceived ease of use. Overall, trust, social influence, technology characteristics, perceived ease of use, perceived usefulness are all problems that preventing consumers from online purchasing. There are many e-retailing studies have been done in Vietnam but e-vendors still have to deal with online transaction problem. Most consumers still use cash payment upon delivery which cause a lot of pain for e-vendor when orders are canceled upon delivery.
This study will investigate indepth about consumers’ purchase intention to help e-vendors solve the problem. TIEU LUAN MOI download : skknchat@gmail. Research Objectives This study aims to apply TAM model to identify if perceived usefulness, perceived ease of use, trust, social influence, and technology characteristics influence consumers’ online purchase intention. Research Questions The research is to answer the following question How do perceived usefulness, perceived ease of use, trust, social influence, and technology characteristics influence purchase intention? 1.
Research Scope and Limitation Research scope: the research takes place in HCMC and data is collected from August 12th, 2014 until September 12th, 2014. Limitation: Most of people I know work in high tech industries, so they are more familiar with internet than the others. Ho Chi Minh City is the biggest city, people live in HCMC will shop online more than people from other cities. Therefore, the result may overestimate Vietnamese consumers purchase intention.
Thesis Structure This thesis have five chapter. The first chapter is introduction which introduces about research background, research problems, research questions, research objectives, research scope and limitation, and thesis structure. The second chapter does the literature review, proposed hypothesis, and then proposed research model. The third chapter introduces about methodology to be conducted.
The chapter fourth represents research results. After having the result, chapter five makes conclusion and gives recommendation. TIEU LUAN MOI download : skknchat@gmail.com 5 CHAPTER 2 LITERATURE REVIEW This chapter will review previous studies to understand main concepts of this studies and identify key factors that influence online purchase intention. Hypotheses are proposed after reviewing key concepts and theories foundation.