Risks and consumers reluctance to adopt e commerce in vietnam

RisksandConsumer’sReluctancetoadoptE-commerceinVietnam Giang Khanh gmail.com InstructorName:Prof.LeNguyenHauE mail:haulng@yahoo.com... ippingandhandling whenreturningorexchanging the p

RisksandConsumer’sReluctancetoadoptE-commerceinVietnam Giang Khanh

gmail.com

InstructorName:Prof.LeNguyenHauE mail:haulng@yahoo.com

RisksandConsumer’sReluctancetoadoptE-commerceinVietnam

Chapter1.INTRODUCTION

1.1 E-commerceinVietNam

Vietnamesep e o p l e areusedto purchasingp r o d u c t s i n

a traditionalway,whichmeansthatt h e y willgot o s h o w roomso r c o m p a n y representativest

o getp r o d u c t s andservices.Thisbrickandmortarmethodp r o v i d e s greatbenefitst o businesses.Anactualphysicallocationgivescustomersasenseofsecurityandafacetothebrand.Customerscanalsoreceivetheirp u r c h a s e d productso r s e r v i c e s immediately.Thistraditionals h o p

p i n g experience,however,createshighere x p e n d i t u r e s o n businessessincetheyn e e d t o spendm o n e y on shoppinglocations,staff andfacilities

TheInternethasgrowndramaticallyi n recentyearsduet o

t h e developmentofinformationtechnology.Fromourdailyl i v e s tocommercialtransactionsbetweenbusinesses,t h e Internethasp r o f o u n d l y impactedandchangedt h e w a y wed o businesses.Thenumberofpeoplewhogoonlineisbolstering.In2011Vietnam’sE-

commercePenetrationlevelwasonly0.25%atthevalueof154millionUSD.However,theprojectedlevelwilltripleto0.71%withonlineretailsreaching900millionUSDbytheendof2016(T.D.,2014).E-

commercepresentsenormousopportunitiesforb o t h consumersandbusinessesfromallovertheworld,especiallyinVietnam.Withapopulationof90millions,Vietnammarketi s anattractivep l a

c e forb u s i n e s s e s n o matterwhats i z e

Giantbusinessbenefitfromimplementingcommerce.Toplocalbusinessesarethemain contributorsint h e rapidincreaseo f

EcommercePenetration.Thesel o c a l e

-b u s i n e s s e s includeNguyenKim,thegioididong.com,andFPTShopwhichprojecttheironlinesalesvolumetoreach10,5 0 and25millionUSDrespectivelyby2014(T.D.,2014).Forstart-upbrands,orbusinessesthatlackfinancialresourcestoopenvariousstorelocations,thetraditionalmethodofsellingproductsandservicesbecomesachallenge.ByimplementingE-

commerceintotheirbusinessmodel,nonetheless,these

companiescanreachoutfarandwidetoconsumers

Incontrasttotraditionalshoppingexperience,onlinetransactionsencompassesdistinctivefeaturessuchase x t e n s i v e u s e o f t e c h n o l o g y fort r a n s a c t i o n s , t h e distantandi

mpersonalnatureof t h e o n l i n e marketenvironment,andt h e implicituncertaintyofus i n g opennetworkinfrastructuresfortransactions(Naiyi,2004).Webretaileropportunistic

arisewhenthereexistsspatialandtemporalseparationbetweenconsumersandmarketers.Thusl e a

d t o increasingconsumers’fearo f fraudf r o m p r o d u c t andi d e n t i t y u n c e r t a i n t y(Naiyi,2004).Moreover,thirdpartyorhackersmaypostrisksrelatedtoconsumer’spersonalandfinancialinformation

ReportsfrombreachofInternetsecuritycomesuponthenewsmoreoftenthannot.Thei s

s u e becomesmorecriticalwhent h e reportsareaboutl o s s o f customerinformationfromb i g companies.M i t c h e l l andJ a r u p u n p h o l state“thefactthatbreacheso f Internets e c u r i t y arereportedwithgreatfrequency meansthatthereisadangerthatpotentialuserswillbereluctanttoengageinE-commercebecauseoffearsaboutsecurity”(2001).Preferably,perceivedrisksinE-commercetransactionsshouldbethesameorsimilartothato f atraditionaltransaction(Jarupunphol&Mitchell,2001)

Participants,sellerandbuyer,inatraditionaltransactioncanfacetofacethustheree x i s t

s

littledistrustbetweenpeople.ButthisisnotthecaseforE-commerce.Thelocationoft h e businessandgoodsarer e l a t i v e l y unknown.Personalcontacti

s limitedbetweens e l l e r andbuyer.Evenwhenthebuyerinquiresaquestionontheproduct,thereisnoguaranteethatt h e selleri s p r o v i d i n g t h e correctd e t a i l s anditi s l i k e l y fora t i m e

d e l a y i n response.Furthermore,legalframeworkvariesfromdifferentbusinesssitesandisnotveryclean-cuti n E-commerce.Therefore,mutualtrustisanimportantissue

AnotherissuethatbecomesprominentinE-commerceisnetworkattack,whichcanb e associatedwithanyonlinetransactionrisk.Suchriskencompasses:IPspoofingattacks,meaningahackerstealsanauthorizedInternetProtocol(IP)addressandproceedstousethatIPt o inquireb u s i n e s s e s , informationtheftsuchasstealingbusinessors

o m e

importantpersonalinformation(message,suchase-

mailmessages,creditcardnumbers).Anothercommonattackishackinguser’spasswordtoe-mail,bankaccount,etc.Social engineeringattackstargetsInternetuserswhohavelittleunderstandingtheircomputersystem.Atypicale x a m p l e ofthisattackiswhenthehackersendsane-mailmessagetotheusersandasksfortheir password(Yanyan,2014)

Entrepreneursi n Vietnamhavebeentryingt o commerce.Theyh a v e createdwebsitesandstayconnectedthroughe m a i l s t o clientst o

developtheirbusinessthroughE-advertiset h e i r p r o d u c t s T h e y h a v e

evenjoinede-tradingfloorst o r e a c h o u t t o potentialclients.Yetn o t allconsumersarewillingt o experiences

h o p p i n g online.Severalvalidfactorscontributet o s u c h reluctancei n

adoptingE-commerce.Accordingt o Naiyi(2004)“Webshoppinginvolvesanumberofconcernsofconsumers,includingtradefraud,productquality,monetarylosses,privacy,informationqualityandsoon”.Thoseconcernsmaybetheconsequencesofafailedpurchaseonlineorfromtheperceivedrisksthatinvolveinthelacko f personalorphysicalpresenceoftheoppositeend

Risksareobstaclesthatpreventconsumersf r o m willingt o participatei n onlinetransactions.Therefore,anyobstaclet o E-

commerces u c h asperceivedo r realrisksi n financialtransaction,productperformance,delivery,timeetc.needtobeexamineandresolve.W i t h examinationandresolution,E-

commercecanevolvet o a safermarketforconsumers

1.2 ManagementProblem:

WhattypesofrisksshouldfirmbeawareofandreducefrominordertoattractmoreconsumersintoadoptingE-commerceinVietnam?

mail,ando n l y 20% sh o p online.S u r v e y s o f

E-commerceandInformationT e c h n o l o g y Agencyin2013aboutonlineshoppersindicatedthatfromthe20%peoplewhos h o p online,61%ofthempurchaseditemsonlineviasalesE-

commercewebsites.(2013)

Accordingt o t h e s u r v e y results,t h e respondents’perceivedrisksi n v o l v e i n o n l i n e s

h o p p i n g weremany.Att h e t o p i s t h e riskwhichcomprisest h e qualityo f productso r servicesworsethanadvertised(77%).Belowthatarethefollowingtypesofobstaclesstartingp r i c e n o t l

o w e r thanbuyingfromtraditionals h o p s (40%),unprofessionallogisticservices(38%),afraido f personalp r i v a c y disclosure(31%),andcomplicatedo n l i n e orderprocedures(29%)(2013)

Whenfurtheraskedast o w h y respondentsweren o t buyingp r o d u c t s online,t h e answerscorrelatedt o t h e difficultiesi n examiningq u a l i t y ofp r o d u c t s o r t h e featureso f productsnotasadvertised(59%).Therespondentsbelievedthatbuyinginstoreseasierandfaster(45%).Trustrelatedissueswerev e r y h i g h i n considerationasw e l l (41%).Anotheri s s u e wasnothavingenoughinformationtomakepurchasedecisions(38%)ornothavingcreditcardso r otherpa

(2013).However,a m o n g 7 8 1 respondents,8 8 % willcontinuet o p u r c h a s e itemso n l i n e i n

t h e f u t u r e and1 2 % r e m a i n i n g willgob a c k t o

conventionals h o p p i n g ( 2 0 1 3 ) Thiss h o u l d n o t b e overlooked,however,s i n c e theseconsumersweren’th a p p y b u t perhapsd u e t o theirworkschedulea n d d a i l y lifewhichprohibitthemt o gob a c k t o conventionals h o p p i n g style.Thereforemanagements h o u l d e x

a m i n e theseperceivedrisksinordert o improvetheiro n l i n e offeringsofgoodsandservicest

o provideconsumerswithbetters h o p p i n g experienceasw e l l asattractpotentialconsumerstojoinE-commerce

Anorganizationwishtosucceedi n t h i s newbusinesseraneedst o havea clearunderstandingo f h o w consumer’sperceptionsofrisksaffecttheirreluctancet o adoptE-

1.5 ResearchScope:

Thescopeofthis researchis confinedtopeoplewhoarestudentsorofficeworkersfromt h e

a g e between17t o over5 5 yearso l d c u r r e n t l y residei n HoChiMinhCity.Thenumberofparticipantsis 201

Int h i s study,t h e T e c h n o l o g y AcceptanceM o d e l andTheoryofPerceivedRiskareusedast h e theoreticalf o u n d a t i o n Int h e r e v i e w , wewillpresentfourfactorswhicharebelievedtoinfluencecustomer’sintentionstoadoptE-

explainedorpredictedbyusermotivation(M.Y,2009)

TAMe x p l a i n s andpredictsITefforts,p a r t i c u l a r l y effortsi n b u i l d i n g theorie

st o e x a m i n e andpredictt h e determinantfactorsofinformationt e c h n o l o g y (IT)acceptance.Furthermore,TAM facilitatesdesignchangesbeforeusershaveexperiencewitha system.TAMadaptsthebelief-attitude-intention-

behaviorrelationshipuseracceptancebasedontwospecificb e h a v i o r a l beliefs:perceivedeaseo

f u s e (PEU)andperceivedusefulness(PU),whichdetermineanindividual’sbehaviorintentiontouseanIT(Davis,Bagozzi,&Warshaw,1989).PEUisdefinedaspeople’ssubjectiveappraisalofperformanceandeffortwhereasP U i s definedby‘ ‘ t h e degreet o whicha personbelievesthatu s i

n g a particularsystemwouldenhanceh i s o r herj o b performance’’(Davis,B a g o z z i , & Warshaw,1989).Theseperceivedusefulnesswhenbuyingaproductentailcertainrisks.Therefore,perceivedriskhasalwaysbeenassumedtobeapredecessorfactortoPEUandPU.Whatchangesinaconsumer’sperceivedriskdirectlyaffectsbothPEUandPUandconsequentlyaffectsTAM.Thuswefocus

o n examining thecorrelationbetween TAMandperceivedriskratherthanPEUorPU

2.2 PerceivedRisk

Theoretically,perceivedriskisaconsumer’suncertainty beforemaking apurchaseast

o t h e expectedl o s s fromt h e purchaseandu s e o f a product.SinceBauer(1960)firstproposedthatconsumerbehaviorbeseenasrisktaking,valuableempiricalresearcheshaveattemptedtoidentifyvarioustypesofperceivedriskinthecontextofconsumers’purchasebehavior

Themajordimensionsofperceivedrisks,asdefinedbyCunningham,aretheu n c e r t a i

n t y levelandconsequences( 1 9 6 7 ) Consequencesh a v e a totalo f s i x components:financialperformance,s o c i a l , psychological,safety,andtime/

conveniencel o s s Financialriskisdefinedasthechanceoflosingmoneyorotherresourceswhenmakingapurchase.Performancerelatedrisksaret h e p r o b a b i l i t y thata purchasedp r o d

u c t failst o function.W h e n friendsorfamilymembersshowdisapprovalinapurchasedproductisconceptualizedassocialrisk.Psychologicalriskinvolvest h e inconsistency betweenthe productandself-

image.Theprobabilitythatapurchasedproductmaycauseinjurytiesinwithphysicalriskandtheprobabilitythatapurchaseresultsinlossoftimetobuyorretaintheproductreferst o

t i m e risk(Kaplan,Jacoby,&Szybillo,1974)

Withinthecontextofconsumer’sexperienceinonlineshopping,perceivedriskisanevenmorepredominantanddecisivefactor.Assomeofthesixcomponentsarerelated,theyaregroupedi n t

o twocategories,PerceivedRiskwithProductandServices(PRP)andPerceivedRiskintheContextofOnlineTransaction(PRT)

2.2.1 PerceivedRiskwithProductsandServices(PRP)

Wedefineperceivedriskwithproductsandservices(PRP)astheoverallamountofu n c e r

t a i n t y oranxietyperceivedbyaconsumerwhenheorshepurchasesonline.Productsm a y

n o t functionaswellasitappearsonthewebsiteandservicesmaynotbeoftheclaimedquality.Productso r servicesdeliveredt o consumersm a y n o t performasexpectedsincethere’salackofphysicallyseeing,touchingandexaminingwhattheybuy

online(Ahn,J i n s o o , &Lee2001).Inaddition,consumersmayhavetobeartheexpensessuchassh

ippingandhandling whenreturningorexchanging the productsorservices.Furthermore,several

problemsexistconcerningdeliveryrisksuchaslossordamagedproductaswellaswrongdestinationo f delivery.Sometimesi f t h e consumerstaysi n anu n s a f e neighborhooda n additionalproblemmayariseifthedeliveredgoodwasleftunattended.

Werecognizefinanciallossasatypeofriskwhenpeoplepurchaseonline.Thisrisktiesinwithlowerdiscountinonlineshoppingcomparingtotraditionalshoppingandextra chargesofdeliveryandonlinepayment.Furthermore,consumersmay

wastetime,convenience,andeffortsgettingreplacementswhenpurchasedproductsorservicesfail.AnotherproblemmaypotentiallyariseafterpurchasingproductsorservicesovertheInternet.Consumersm a y findothersubstitutionsthata r e o f equalo r higherq u a l i t y ata lowerprice(Sweeney,1999)

mailaddress,andaccountnumberofcredito r debitcards.Thisis understandablesinceanybusinesswouldwanttoknowmoreabouttheircustomersandt h e i r customers’p r e f e r e n c e s Firstly,businessesw o u l d wantt o v e r i f y t h e personpurchasingt h e goodsandservices.Secondly,datacollectioni s cruciali f saidbusinesswantstopitchanothersaletothesamecustomer.Lastly,theywouldwanttokeepthatcustomercomingbackandm a i n t a i n i n g customer’sloyalty.However,p r o v i

d i n g personalinformationt o a vastnetworkm a k e s riskssuchaspiracy,w h e r e someoneh a c k s i

n t o t h e company’snetworkandgetst h e customer’sdata,b e c o m e a nightmaret o b o t h businessesandconsumers.Ifpeopleengageinonlineshoppingwithdishonestmerchantsori f sensitiveinformationisstoredonunsecureddatabases,security threatsexist evenwheredatais

perfectlysecureintransmission(Rose,1999)

Bhimani(1996)s u g g e s t s thatt h e

fundamentalrequirementsforE-commercemusts a t i s f y thefollowingsecurityissues:authentication,authorization,availability,

confidentiality,d a t a integrity,n o n r e p u d i a t i o n , andselectiveapplicationservices.Swaminathanassertsthatconsumersevaluateo n l i n e vendorsb e f o r e t h e y d o o n l i n e transactions(1999).Therefore,vendors’characteristicsplayanimportantroleinfacilitatingt h e transaction(Swaminathan,1999).However,whenvendorsorsellersinformationisonlypartialo r n o n s e x i s tthenconsumersb e c o m e wary.Additionally,ifsellersandp r o d u c t s informationare

disproportionate thenconsumer’sperceptiononsuchriskishigh

2.3 ResearchHypotheses

commercebased onconceptsthatwasderivedfrompreviousliterature

Inthissection,weproposeseveralhypothesesregardingconsumers’adoptionofE-2.3.1 PerceivedRiskintheContextofOnlineTransaction

Whenhavinganyonlinetransaction,consumermustprovideallpersonalinformation.Thi

sp u t s customersatriski n twomajorcategories,s e c u r i t y andpayment.Securityriskoccursfro

m virusandhackerattacks.Damagescausedbytheseattacksv a r y fromdataloss,stoleninformation,anddenialofservicetoacombinationoftheseproblemsatonce.Virusesandhackerattacksdisruptbusinessoperationsthatm a y leadt o l o s s i n customerconfidenceandsalesrevenue.Paymentriskariseswhentransactionsaredoneovert h e Internet,especiallywhenthecustomer’sidentitycannotbeidentifiedorestablished.Thisleadstopaymentdisputesfromgenuinecustomers.SituationslikethisaremorecommonlyfoundintransactionsusingcreditcardovertheInternet.Thisisoneofthecrucialcontributingfactorsthatmayaffectcustomer’sintentionandwillingnesstouseE-

commerce(FeathermanandPavlou,2003)

PrivacyriskLosso r m i s u s e of personalinformation.Ithasb e c o m e morecommonnewswhenonehearsreportthatacompanyhasbeenhackedintotheircustomerdatabase.Thisshouldnotbethenorms,however,aseachtimesuchareportcomesout,onlinebuyersandpotentialbuyerswillfeelreluctantt o p r o v i d e theirinformationo n l i n e t o completea transaction.However,thatistherequirementiftheconsumerwantstopurchasetheproducti f atall.Thereforet h e consumermaychooseton o t adoptE-commerceandstickt o t h e

o beveryrisk-avert

Paymentriskist h e financialconsequencesengenderedbygivingone’screditcardnumberontheInternet.Alongwithprivacyrisk,thistypeofriskisoftenfoundreportedont h e news,notonlyinVietnambutalsoincountriesliketheUSorthoseinEU.InVietnam,m o s t onlinebuyerschoosetheoptiontopaybycashoncetheproductisdelivered.However,t h i s leadstotimerisk,whichwillbediscussedfurtherbelow,whenthepurchasercannotbeh o m e onthedaythedeliverismade.Sometimesbuyerscanonlytransfermoneyfromtheiraccountt o t h e seller’saccount.Thisi s alsoa paymentrisksinceh um an errorc a n alwaysoccurunintentionally(Cases,2001)

Sometimestheriskcomesfromthesideoftheseller’scredibility.Thistypeofriskiscalledsourcerisk.Iftheseller’sinformationandtermsofserviceisdodgy,buyerswillnotwanttoenteratransactionandthusunwillingtopurchaseonline(Cases,2001) tv

2.3.2 PerceivedRiskwithProducts/Services

Onlineconsumersmayalsofeelanxietywhenthey

maketransactionsviatheInternetbecauseoft h e intangiblecharacteristico f o n l i n e shopping.Thischaracteristici s termedfulfillmentrisk.Fulfillmentrisksareassociatedwithphysicalgoods,referringt o problemssuchasdefectivegoods,goodsnotmatchingthegivendescription,anddelaysindelivery.Vietnameseconsumershavenottrustedinonlineshoppingbecausethereareplentyofnon-

prestigiouswebsitesavailablei n markets o i t i s difficultf o r customertofindt h e goodone.Ther

ea r e s e v e r a l typeso f riskt h a t comeu n d e r perceivedriskwithproducts/

servicesthataffectthewillingnesstoadoptE-commerce

Deliveryriski s associatedwitht h e typeso f l o s s o r damagedproductaswellasw r o n gdestinationofdeliveryorlatedelivery.Sincebuyingonlinemeansthatsomeoneelsei s goingtotransportthatproducttotheperson’shome.Thepersonwhoisdeliveringmightn o t knowthecontextofthedelivery,whichmaybesomethingfragile,andthushandlingtheproductrecklessly.Inadditiontothat,thehousingaddressinVietnamcanbeverycomplicatedandconfusingsothedeliverermaydrop thepackageoffatthewrongaddressor

itwouldtakehimorherafewtriestofinallyfindtherightaddress,thusmakesthedeliverycomeslater thanexpected(Case,2001)

Financialriskisdefinedaspotentiallossofcurrentcostaswellasadditionalchargesi n thefuture.ThisisacrucialfactorwhichdeterminesthelikelinessthataconsumerwouldadoptE-

commerce.IngeneralVietnamesep e o p l e e n j o y b a r g a i n i n g b u t buyingp r o d u c t s o n l

i n e r a r e l y providest h e o p p o r t u n i t y t o d o s o Furthermore,aftert h e producthasbeenpurchased,t h e c o n s u m e r m a y findotherphysicalstoresthatsellt h e sameproductata cheaperprice.Ift h e p r o d u c t i s deliveredwithdefects,theconsumerwillhavet o

p a y additionalcostst o geti t f i x e d Allthesehurdlesmakeconsumersreluctant(Cunningham,1967)

Timeriskinvolvest h e losso f t i m e t o b u y orretaint h e product.W h i l e purchasingproductsthetraditionalwaymeansthattheproductisreadilyavailablerightatthetimeofpurchase,buying

itonlinemeansthatthereisatimelapsebetweenthetimeheorsheisfilingt h e orderandt h e actualt i

m e h e o r s h e receivest h e goods.Additionally,i f t h e r e i s aninconsistencybetweentheinstockamountinthesystemandthewarehouse,theconsumerm a y n e e d t o backorder,whichfurtherdelayst h e t i m e t h e productgetst o t h e consumer(Cunningham,1967)

Performanceriskis

thepotentiallossincurredwhenaproduct/servicedoesnotperformasexpected.O n l i n e buyersp u

r c h a s e t h e productbasedo n t h e descriptionfromsellers.However,thedescriptionmaybefraudortheproductisafakeversionofwhatwasshownonline.Thereisnowayfortheconsumertotelluntiltheproductarrives.Evenwhent h e producti s whatt h e sellerdescribes,therei s a chancethatt h

e producti s defectiveo r certaincomponentsa r e malfunctioningd u r i n g t h e firstcoupleo f uses(PeterandRyan,1 9 7 6 )

Sometimest h e buyer’ss o c i a l groupcans h o w disapprovali n a p u r c h a s e d product.Thisistermedsocialrisk.Vietnamisaverycollectivistcountry,meaningthatpeopleprefert o stayingroupandenjoybeingapprovedbytheirsocialgroupaswellasblendinginwitht h e group’spreferences.Thus,anindividual’schoiceisnothisorhersalonebutheorshewillreceivecommentsont h epurchaseditemf r o m everyonei n t h e group.Ift h e ma jo ri ty

showsdisapproval,m a y itb e on thel oo k, functionalaspecto r price,t h e buyerwouldn o t feelha

image.This,again,canbetheresultofbeingdisapprovedbyhisorhergroup.However,itcouldbethatoncethebuyerhaspurchasedtheproductthinkingheorshehadgotagooddeal,heors h e maylaterfoundo u t i t wasn o t t h e c a s e a n d couldfeeld i s a p p o i n t e d towardsh i s o r herself.Moreover,t h e productm a y f a i l t o representh i s o r herimage.Ina c o u n t r y thatamplifiest h e importanceo f socialstatust h r o u g h materialmeans,s u c h asIphoneswhichrepresenta highers o c i

a l class,b u y i n g a c h e a p e r p h o n e o r a fakep h o n e couldresulti n extremeloss esteem(Cunningham,1967)

ofself-commerceasa neww a y o f s h o p p i n g i n contrastt o t h e conventionalbrickandmortar

Allofthesetypesofriskwillhavenegativeimpactontheconsumer’swillingnesstoadoptE-way.Buthowdoes onemeasurethepurchasebehaviorofconsumersonline?

Perceived Risk with Product/Service (PRP)

Figure1:PerceivedRisksonReluctanceofE-commerceAdoptionModel

H-1:Perceivedriskwithproduct/

servicepositivelyaffectsconsumer’sreluctanceinp u r c h a s i n g commerce

H-2:Perceivedriskinthecontextofonlinetransactionpositivelyaffectsconsumer’sreluctanceinpurchasingbehaviorinE-commerce

H-2a:Privacyriskpositivelyaffectsconsumer’sreluctancein purchasingbehavior commerce.

inE-H-2b:Sourcerisknegativelyaffectsconsumer’spurchasingbehaviorinE-commerce

H-2c:S e c u r i t y r i s k n e g a t i v e l y a f f e c t s consumer’sp u r c h a s i n g b e h a v i o r inE

- commerce

b e r e p a i r e d , deliver

Cunningham [1967],Roselius[1971],JacobyandKaplan[1972],PeterandRyan[ 1 9 7 6 ] , S t o n e andGronhaug[1993]

Deliveryrisk Losso r damagedp r o d u c

t asw e l l a s w r o n g destinationofdeliveryo r latedelivery

McCorkle[1990],Cases[2001],ComegysC eta l [2009]

Cases[2001]

Timerisk Losso f timet o buyo r retain

theproduct

Cunningham [1967],Roselius[1971],JacobyandKaplan[1972],PeterandRyan[ 1 9 7 6 ] , S t o n e andGronhaug[1993]

Psychologicalrisk

Potentiallossofself-esteem(egoloss)fromfrustrationatnotachievingabuyinggoalorwhentheproductd o e s n ’ t s u i t o n e ’

s self-image

Cunningham [1967],Roselius[1971],JacobyandKaplan[1972],PeterandRyan[ 1 9 7 6 ] , S t o n e andGronhaug[1993]

PerceivedRiskintheContextofOnlineTransaction(PRT)

formation Jarvenpaaa n d T o d d [1996–1997],Cases

[2001],Feathermana n dPavlou[2003],Scott[2004],ComegysC eta l [2009]

Security risk

throughonlinepayment

FinancialconsequencesEngendered bygivingone’screditcardnumber

McCorkle[1990],JarvenpaaandTodd[1996

–1997],Cases[2001],

ontheInternet Scott[2004],ComegysC.et

al.[2009

01],ComegysC eta l [2009]

Cases[2001]

Source:Cases(2001),FeathermanandPavlou(2003),Crespoetal.(2009)andKoeta l (2010)

Thischapterstartswithanoverviewofthemethodologyusedfortheresearchi n c l u

d i n g t h e r e s e a r c h p r o c e s s , r e s e a r c h measurement,s a m p l e s e l e c t i o nmethods,d a t a collectionanddataanalysismethods.Themethodusedwouldbequantitative

Quantitativemethodw o u l d p r o v i d e t h e r e s e a r c h e r a t o o l t o identifyt h e r

i s k f a c t o r s t h a t havecrucialcontributiontowardsbuyer’sintentionorlackofintentiontoa d o p t E-

commerce.Additionally,itwouldalsoprovideinsightsaswellaspredictionast o

h o w d i f f e r e n t riskf a c t o r s c o n t r i b u t e differentlyt o t h e o v e r a l l

c o n s u m e r ’ s rel uctance

toadoptE-commerce.Tocollectthequantitativedata,thesurveymethodhasbeenusedandeventuallythedatahasbeenanalyzedbyusingstatisticaltechniques

Research ModelPilot ResearchMain researchSamplingData CollectingData AnalysisConclusion and Recommendation

Therearetwomainphasesin

thepresentstudy:pilotstudyandmainstudy.Thep i l o t faceinterviewwith5to10targetparticipants.T h e purposeofthispilotstudyistotestoutthecontentandmeaningofwordsinthem easurement scales,modifyt h e measurementquestions,andverifyt h e internalconsistency andq u a l i t y of r e s p o n s e s T h e m

studyisconductedusingface-to-a i n s t u d y i s c o n d u c t e d u s i n g p r e p studyisconductedusingface-to-a r e d q u e s t i o n n studyisconductedusingface-to-a i r e survey.Thepurposesaretoconfirmthemeasurementscales,examinet h e hypothesesandconfirmtheresearchmodel

Gronhaug(1993)

I'mafraidthatthequalityisnota s de sc r i b e d a s o n website

Cunningham(1967),Roselius(1971),JacobyandKaplan(1972),PeterandRyan(1976),Stoneand

Gronhaug(1993)

I'mafraidthatIwillneedtopayextra tor e pa i r t h e productI'ma f r a i d t h a t i t ' s d i f f i

c u l t t og e t t h e m o n e y b a

c k i f I wanttoreturntheproduct

I'ma f r a i d thatusinganInt

bill-paymentsubjectsmycheckingaccounttofinancialfraud

SourceRisk

I’mafraidthatfalseorfraud

informationcausespurchasedproducttobefake

McCorkle(1990),Cases(2001),ComegysC.etal.(2009)Cases(2001)

I'ma f r a i d thatmissingin f

o r m at io n o n t h e p r o d u c

t willmisrepresentitsqualityI'ma f r a i d t h a t t h e s e l l e r

McCorkle(1990),JarvenpaaandTodd(1996-1997),Cases(2001),Scott(2004),ComegysC.etal.(2009)

I'mafraidt ha tmypersonalinformationwillgethackedI'mafraidthatIwillreceiveunsolicitedc o m m e r c i a l emails

I'mafraidt ha tmypersonalaccountwillgetstolenormisused

DeliveryRisk

I’ma f r a i d o f n o t r e c e i v i

n g theproductontimeorlongdeliverytime McCorkle(1990),

Cases(2001),ComegysC.etal.(2009)Cases(2001)

I'ma f r a i d t h a t t h e p r o d

u c t wil lhavealongdeliverytime

I'ma f r a i d t h a t t h e p r o d

u c t willgetdamagedduringthedelivery

TimeRisk

I’mafraidthatI willwa s t

e timeresearchinginformation

Cunningham(1967),Roselius(1971),Jacobyand

I'ma f r a i d t h a t I w i l l w a s t

e timef r o m h a v i n g t o s e t-

u p andl ea r n h o w t o u s e e

-b i l l paymakesthem

Kaplan(1972),PeterandRyan(1976),StoneandGronhaug(1993)I'mafraidthatthetimeIspen

notyieldgoodpurchasingdecision

SocialRisk

I’mafraidofthepressurefromfriendsandfamilyb e ca

u s etheydon’texpectmepurchasingonline

Cunningham(1967),JacobyandKaplan(1972),PeterandRyan(1976),Stoneand

Gronhaug(1993)

I'mafraidt ha tsw itc hi ng t

o purchasep r o d u c t s o n l i

n e willmakeothersthinklowlyofme

I'ma f r a i d t h a t t h e p r o d

u c t purchased w i l l r e s u l

t t o sociallossbecauseotherswillthinknegativeofme

PsychologicalRisk

I’ma f r a i d t h a t I

w i l l l o s e mys e l f

-e s t -e -e m f o r n o t achi-evingabuyinggoal

Cunningham(1967),Roselius(1971),JacobyandKaplan(1972),PeterandRyan(1976),Stoneand

Gronhaug(1993)

I'mafraidIwillfeeldisappointedf r o m t h e frustrationofbuyingafakepr o d u ct

I'ma f r a i d t h a t t h e p r o d

u c t wil lnotfitinwellwithmyself-imageorself-concept

PrivacyRisk

I’mafraidthatmypersonalinformationwillbecollectedw i t h o u t myconsentw

h e n g i v i n g mycreditcardnumberonline

JarvenpaaandTodd(1996–

1997),Cases(2001),Feathermanand

I’mafraidthatmypersonalinformationwillbecollectedw i t h o u t myconsentwiththeuseofcookiesandwebbugs.

Pavlou(2003),Scott(2004),ComegysC.etal.(2009)

I’ma f r a i d t h a t i n t e r n

e t hackerswilltakecontrolofmycheckingaccountifIpurchaseproductsonline

Customer’s

EvenIhaveaccesstoE-ChenandHe(

commerce,I d o n o t i n t e n dtouseit

commercealthoughthecosta

commerce inthe future

FIN3 I'ma f r a i d t h a t it'sd i f f i c u l t t o g e t t h e m o n e y b a c k i f I w a n t to retu rn theproduct

FIN4 I'mafraid t h a t u s i n g a n I n t e r n e t b i l l -p a y m e n ts u b j e c ts mycheckingaccounttofinancialfraud

SourceRisk

SOU1 I’ma f r a i d t h a t f a l s e o r f r a u d u l e n t o n l i n e i n f o r ma t i o n c a u s e s purchasedproducttobefake

SOU2 I'm afraid that missing information on the product

willmisr epr esent itsquality

SOU3 I'mafraidthatthesellerisnotbeinghonestabouttheproduct

TIME2 I'mafraidthatIwillwastetimefromhavingtoset-upandlearnh owtousee-billpaymakesthem.

TIME3 I'mafraidthatthetimeIspentdoesnotyieldgoodpurchasingdeci si o n

SocialRisk

SOC1 I’mafraidofthepressurefromfriendsandfamilybecausetheyd on ’ t expectmepurchasingonline

SOC2 I'mafraidthatswitchingtopurchaseproductsonlinewillmakeothersthinklowlyofme

SOC3 I'ma f r a i d t h a t t h e p r o d u c t p u r c h a s e d w i l l r e s u l t t o s o c ia l l o s s becauseotherswillthinknegativeofme

isk

PSY1 I’ma f r a i d t h a t I w i l l l o s e mys e l f -e s t e e m f o r n o t a c h i e v i n g a buyinggoal.

PSY2 I'mafraidIwillfeeldisappointedfromthefrustrationofbuyingafakeproduct

PSY3 I'mafraidthattheproductwillnotfitinwellwithmyself-imageorself-concept.

PrivacyRisk

PRI1 I’mafraidthatmypersonalinformationwillbecollectedwithoutmyconsentwhengivingmycreditcardnumberonline.

PRI2 I’mafraidthatmypersonalinformationwillbecollectedwithoutmyconsentwiththeuseofcookiesandwebbugs.

PRI3 I’mafraidthatinternethackerswilltakecontrolofmycheckinga c c ou nt ifIpurchaseproductsonline

3.5 DatacollectionMethod

Theresearchwasundertakenatcompanies,universitiesaroundHoChiMinhCityin2 0 1 4 T h e r es e a r c h o b je c t sa r e 2 0 0 p e o p l e w h o l i v e i n H o C h i Mi n h City,b ot hmalesa n d f e m a l e s w i t h i n t h e a g e b e t w e e n 1 7 t o o v e r 5 5 yearso l d w h

o a r e studentso r o f f i c e w o r k e r s meaningp e o p l e w i t h h i g h e r e d u c a t i o n a

n d e a r n s from

$100t o $ 1 0 0 0 p e r month.T h e a u t h o r u s e d conveniences a m p l i n g toc o n d u c t re

search.De s p i t e th e f a c t t h a t it is an u n g u i d e d selec ti on , b e ca u s e everyonein t

h e p o p u l a t i o n hasanequalchanceofbeingselected,theselectionmaynotberandom.Volunteersw o u l d c o n s t i t u t e a c o n v e n i e n c e sample.T h e s e v o l u n t e e r

s a r e r e c r u i t e d th ro ug hF a c e b o o k , e m a i l s a s w e l l a s t h r o u g h n o t i f i c a t i o n

b o a r d s inu n i v e r s i t y a n d s e l e c t ed companieswhichhaveemployeesthatsatisfytherequirements

Thesamplestatisticsneedstobereliable.Reliablestatisticsshouldrepresentth ew h o l e p o p u l a t i o n parametersa s m u c h asp o s s i b l e H a i r r e c o m m

e n d s t h a t f o r f a c t o r analysis,theminimumsamplesizeshouldbeatleastfivetimesthenumberof

itemsthatare tobe analyzed(2006) Forthisstudy,thereare29items thatneed

tobeanalyzed.Therefore,atleast85completedquestionnairesshouldberequired

As a m p l e r u l e i s t h a t a l a r g e r samples i z e i s b e t t e r ( F i e l d , 2 0 0 5 ) H o w e

v e r , “big”isnotnecessarilyattractiveinsurveydesign(Bell,1991).Furthermore,havingal a r

g e groupofsampleisnotalwayspractical(Field,2005,&Fink,2003).Basedonfindingsandsuggestionsfromthesesources,itisreasonableandreliabletocollectdat afromaround200individualsforthepresentstudyandtheexpectedresponseratei satleast80%

3.6 DataAnalysisMethod

Basedo n t h e q u e s t i o n n a i r e s c o l l e c t e d , t h e d a t a c o l l e c t e d w i l l b e t r a

n s f e r r e d andanalyzed.Thismethodwillprovidesomegeneralinformationanddemographyo f consumerss u c h a s : a g e , e d u c a t i o n , j o b , f a m i l y c h a r a c

t e r i s t i c s , incomer a n g e , m o n t h l y expense,expectationforE-commerce

Afters c r e e n i n g f o r s a t i s f i e d q u e s t i o n n a i r e s , r a w d a t a w o u l d

b e c o d e d a n d i np uttedintoSPSSversion22.ThedataandvariableswouldthenbeanalyzedusingCr o n b a c h’ s A l p h a a n d E x p l o r a t o r y f a c t o r A n a l y s i s toe v a

l u a t e t h e r e l i a b i l i t y a n d v a l i d i t y ofmeasurementscales.Finally,multipleregressionanalysiswouldbec o n d u c t e d toevaluatethecorrelationbetweendependentandindependentvariables

3.6.1Reliability

Cronbach’sAlphaisastatisticalanalysisusedtocomputetheinternalc o n s i

s t e n c y r e l i a b i l i t y f o r multipleitems c a l e s T h e I t e m t o

-t o -t a l C o r r e l a -t i o n C o e f f i c i e n -t s wouldbeused-torejec-t-the unapprecia-teditems.Cronbach’sAlphaof

0.6orgreaterisconsidered“Acceptable”