A study on the impact of logistics service quality on the loyalty of young Eshoppers in Vietnam

This study is aim to explore how logistics service quality of ecommerce can be measured in Vietnam context, especially targeted group of young consumers who are going to be fundamental purchasing power in the upcoming era. Đề tài Hoàn thiện công tác quản trị nhân sự tại Công ty TNHH Mộc Khải Tuyên được nghiên cứu nhằm giúp công ty TNHH Mộc Khải Tuyên làm rõ được thực trạng công tác quản trị nhân sự trong công ty như thế nào từ đó đề ra các giải pháp giúp công ty hoàn thiện công tác quản trị nhân sự tốt hơn trong thời gian tới.

A STUDY ON THE IMPACT OF LOGISTICS SERVICE QUALITY ON THE LOYALTY OF YOUNG E-SHOPPERS

IN VIETNAM

Vu Phuong Thao Thuongmai University Email: thaovp@tmu.edu.vn

Abstract: This study is aim to explore how logistics service quality of

e-commerce can be measured in Vietnam context, especially targeted group of young

consumers who are going to be fundamental purchasing power in the upcoming era

Besides, relationship between variables of logistics service quality in e-commerce

(timeliness, availability, condition) and customer loyalty is also examined since

young consumers are concerned less brand loyalty than previous generation After

validated the proposed measurement scale, this study applied regression analysis

on the sample of 388 qualified responses Condition and availability demonstrated

their promoting impact on loyalty while this link was not proved between timeliness

and loyalty Suggestions in terms of further scale development and managerial

improvement were made based on the study’s findings

Keywords: logistics service quality, customer loyalty, e-commerce, young

customers, Vietnam

NGHIÊN CỨU VỀ TÁC ĐỘNG CỦA DỊCH VỤ LOGISTICS TRONG THƯƠNG MẠI ĐIỆN TỬ ĐỐI VỚI LÒNG TRUNG THÀNH CỦA

KHÁCH HÀNG TRẺ VIỆT NAM

Tóm tắt: Nghiên cứu được thực hiện nhằm khám phá tiêu thức đo lường chất

lượng dịch vụ logistics trong thương mại điện tử tại Việt Nam, đặc biệt nhắm tới

nhóm người tiêu dùng trẻ có tiềm năng mua lớn trong hiện tại và tương lai Bên

cạnh đó, nghiên cứu cũng xem xét mối quan hệ giữa các yếu tố chất lượng dịch vụ

logistics thương mại điện tử với lòng trung thành của nhóm khách hàng trẻ Sau

khi kiểm định, nghiên cứu này áp dụng phương pháp hồi quy để phân tích dữ liệu

thu thập từ 388 phiếu khảo sát Tình trạng đơn hàng và Tính sẵn có được chứng

minh có khả năng thúc đẩy lòng trung thành của khách hàng, nhưng mối liên hệ

giữa Tính đúng thời điểm và lòng trung thành được chỉ ra là không rõ ràng Dựa

trên các kết quả phân tích, nghiên cứu đã đưa ra một số đề xuất về lý thuyết và

hàm ý quản trị để cải thiện chất lượng dịch vụ logistics trong thương mại điện tử

tại thị trường Việt Nam

Từ khóa: chất lượng dịch vụ logistics, lòng trung thành khách hàng, thương

mại điện tử, khách hàng trẻ, Việt Nam

1 Introduction

In the last three years, the pandemic Covid-19 has left considerable subsequence on the

activities of the global economy and society In order to limit the infection among the public,

governments had to impose social distancing, lock down and sanitation (Nguyen et al., 2021),

which disrupted the global supply chains and production networks Not only having problems

with market demand, businesses also have to face changes in the way they offer and distribute

goods to customers This situation has stimulated e-commerce to transform into one of the

most popular shopping places in recent years This can be witnessed in the amazing increase

in sales and profits of e-commerce sites (e.g Amazon; Ebay; AliExpress ) compared to the

time before the epidemic (Bhatti et al., 2020) Many governments, before the danger of the

pandemic, have taken many measures to support online shopping activities, and businesses

also actively use this distribution channel to bring goods to consumers Therefore, it can

be recognized that the business environment in recent years presents both opportunities and

challenges for e-commerce

With approximately three quarters of population using the Internet and various incentive

programs offered by the authority, particularly the Ministry of Industry and Trade, e-commerce

is projected to grow substantially in Vietnam (Acclime & Kantar, 2022) Evidently, this

segment’s average growth rate has been 29% over the five-year period from 2020 to 2025

and by 2025, the total value of e-commerce transactions in Vietnam is forecasted to reach

52 billion USD according to Vietnam E-commerce Index 2021 report Currently, in terms

of total value, scale of Vietnam e-commerce ranks the 4th in Southeast Asia, having five out

of ten most visited e-commerce platforms in this region, namely: Tiki, FPT shop, Sendo,

Mobile World, Bach Hoa Xanh These facts have depicted the significant potential for strong

development of Vietnam’s e-commerce market in the near future

Despite a number of advantages such as being based on an online transaction platform,

promoting interaction between parties, eliminating geographical and time distances (He et al.,

2008), studies still show many negative problems that exist in the operation of e-commerce

such as limited perceived trust, technical barriers, cultural differences and limited knowledge

from customers (Aljifri et al., 2003; Leonard & Jones, 2021) and especially the increase in the

complexity of customer behavior Shoppers can access more information easily, are more

tech-savvy and agile and have a wider and increasingly diverse selection of goods on many online

shopping channels As a result, the need for differentiation in service is also increasing such

as the need for fast delivery, high quality but low cost service For this reason, maintaining

a stable and high level of logistics service quality during order fulfillment has been under

concern by e-commerce platform operators They have invested in and operated their own

logistics system, for example, Shopee Express of Shopee, Tiki NOW of Tiki, Lazada Express

of Lazada, to control logistics service Due to the burden of investment and operating costs,

most businesses are operating a mix of in-house and outsourced logistics system Thus, it

can be seen that the control, evaluation and improvement of the quality of logistics services

in the supply chain of goods on the e-commerce platforms is necessary in the context of the

fast-growing e-commerce in Vietnam to help businesses improve satisfaction by meeting the

increasing requirements of customers in Vietnam

Many studies have demonstrated the role of promoting financial performance,

developing markets, and establishing competitive advantages if businesses can improve

customer satisfaction and loyalty (Saeidi et al., 2015, Wieseke et al., 2014) The demand of

end customers for quality logistics services has been revealed by many studies to increase

significantly (Morganti et al., 2014) There have been a number of studies that proposed scale

of factors and criteria to measure logistics service quality (Menzter et al., 2001; Grant, 2004;

Thai, 2013; Le et al., 2020; Vu et al., 2020), which focus on service offered by suppliers or

logistics professionals to their business partners; and to measure e-commerce service quality

(Parasuraman, 2005), which did not specify very much measure logistics service separately

Even though some authors have studied logistics service quality in e-commerce context (Xing

et al., 2010; Murfield et al., 2017), they emphasized on retailers selling online instead of

third-party e-commerce platforms (i.e Shopee, Lazada, etc.), in well-grown e-commerce

markets where level of service has been fully developed and stable, and consumers have

had much awareness and set a different level of expectation towards how their orders are

handled Furthermore, results of relationship between factors of logistics service quality and

customer loyalty in these studies still lack uniformity Not yet mentioning, group of young

consumers was not allocated as targeted surveyed subjects Within the scope of this study at

this current point of time, young consumers who are targeted to be surveyed by the authors

were born from 1995 forward, so are currently 27 and younger These consumers who were

born since mid-1990s are found to be closely related to the Industrial Revolution 4.0, attached

with the growing popularity of the Internet, smart device and social media (Thangavel et

al., 2022) These consumers As changes in politics, culture and social-economics have been

found to leave impact on purchasing behavior (Delafrooz, Paim, & Khatibi, 2010), these

‘Post-Millennials’ have different consuming values and preferences from previous generation

(Desai and Lele, 2017), make buying decision based on deal, product displays and reviews,

and are less brand loyalty (Accenture, 2017) Meanwhile, this group of consumers who are

teach-savvy and high innovativeness, and account for approximately a third of consuming

force in Vietnam by 2025 (Minh Nguyet, 2022), are expected to lead e-commerce purchasing

behavior in the near future (Vieira et al., 2020)

Based on issues that have been raised, this study was conducted towards the following

main objectives: (1) Synthesize and validate a measurement scale for logistics service quality

in e-commerce in Vietnam from perspective of young consumers; (2) Analyze relationship

between logistics service quality and customer loyalty of young consumers; (3) Extract

implication for managers in order to improve young customer experience purchasing on

e-commerce platforms

2 Literature review and Methods

2.1 Literature review

2.1.1 Customer loyalty

Customer loyalty is defined as a pattern of consumer behavior when they commit to

certain products/services that they have used and re-used without switching to another similar

product/service in a long time When customer loyalty toward products/services has been

formed, willingness to purchase regardless of price-related issues can also be found (Oppong

et al., 2014) Customer loyalty has been suggested to be measured through purchasing

probability, purchasing rate, re-purchasing rate, word of mouth (Eid, 2011) Despite being

approached in a variety of ways, most studies emphasize that customer loyalty is the result of

many businesses’ efforts in improving quality, satisfaction, and perceived value (Ganguli &

Roy, 2011; Nguyen et al., 2022)

2.1.2 Logistics service quality in e-commerce

As primary activities in the value chain of every enterprise (Porter, 1985), performance

of logistical activities is the topic of interest in both managerial and academic fields These

logistics activities either in-house or outsourced are performed in the way to fulfil customer

needs, “provide place, time and form utility, by ensuring the product is at the right place, at

the time the customer wants it, and in an undamaged condition” (Emerson & Grimm, 1996)

Later on, this idea has been summarized into 7Rs as factors of logistics service (Rushton et

al., 2014), and fulfilling customers’ expectation is supposed as the output of logistics process

(Grant, 2012) For this nature, the measurement of logistics quality is consequently approached

from perspective of customers who experience the logistical process and perceive its values

To measure service quality in general, Parasuraman et al (1985) suggested to measure via

tangible, responsiveness, reliability, assurance and empathy dimensions which emphasized

more on reflecting process quality and lessened on the aspect of quality outcome The latter

is relatively fundamental in measuring quality of logistics, particularly in ‘to C’ business

like e-commerce where customers are limited in observing the entire process Bienstock et

al (1997) and Mentzer et al (1989) initially measured physical distribution service quality

through timeliness, availability, order delivery accuracy (item and quantity), shipment damage,

which has worked as base for further scale development in both qualitative and empirical

analyses approaching comprehensively to logistics service quality concept (Mentzer et al.,

2001; Grant, 2004; Rafig and Jaafar, 2007) However, these studies were carried out in B2B

context, either between suppliers and their business partners or between logistics service

providers and their clients

The factors to evaluate the quality of logistics services in general from the above studies

are selectively inherited to survey subjects who were individuals placing orders on an electronic

platform, do not directly observe the entire process of logistics activities to perform customer

service Rabinovich and Bailey (2006), Murfield et al (2017) and Jain et al (2020) observed

availability, timeliness and condition to study logistics service quality in the USA and India

Xing et al (2010) also had these three components in their scale of examining distribution

quality of pure e-tailers in the UK Rao et al (2011) selected diversity of delivery options,

availability of products, track and trace ability, on-time delivery in their scale which by nature

could share similar meaning with items explaining timeliness and availability Therefore, it

is theoretically supported that logistics service quality in e-commerce business is possibly

reflected via timeliness, availability and condition

2.1.3 Logistics service quality in e-commerce and customer loyalty

Timeliness variable has been used to evaluate the time aspect of order fulfillment

Customers judge lead time of an order by noticing duration between when the order is placed

and when the goods are delivered (Mentzer et al., 1989), so the ability to deliver quickly is a

common item to explain this variable In addition, customer’s perception in terms of time over

covered ability to select particular date and time for receiving shipments (Cheng & Chang,

2003), the matter whether the shipment is delivered within specified date and time (Trabold et

al., 2006) The positive association of timeliness on customer loyalty when shopping online

is shown in several empirical studies (Rao et al., 2011; Murfield et al., 2017; Jain et al.,

2020) However, these studies were conducted in mature e-commerce markets, focused on

transaction between retailers having online sale platforms, and even targeted specifically to

Omni-channel distribution only (Murfield et al., 2017), and young consumers whose online

purchasing behaviors are certainly different from previous generations were not entirely the

targeted surveyed subjects These have promoted the author to test the following hypothesis

H 1 : Timeliness has a positive impact on young customer loyalty in e-commerce

Availability, first and foremost, is interpreted via the readiness of wanted items for order

fulfillment (Mentzer et al., 1989), the speedy replenishment of out-of-stock searched products

and availability of substitutes (Xing et al., 2010) Moreover, this variable is also explained in

the sense of enabling customers to opt among different customer service options (Rao et al.,

2011) and availability of order track and trace (Xing & Grant, 2006) The positive influence

of this variable on customer loyalty in e-commerce was confirmed in studies of Rao et al

(2011) and Griffis et al (2012), Jain et al (2020), but rejected in Murfield et al (2017)

The inconsistent findings among different related studies initiated the author to examine the

following hypothesis:

H 2 : Availability has a positive impact on young customer loyalty in e-commerce

Condition of delivered shipment variable should be explained thoroughly both form

and composition (Bienstock et al., 1997) Hence, this variable can be interpreted through

completeness of order, level of damage in terms of quantity and quality, accurate order

execution (Rabinovich & Bailey, 2004; Xing et al., 2010; Murfield et al., 2017) That order

condition has a positive influence on customer loyalty was proved in Lin et al (2016) and

Jain et al (2020) However, this relationship was not confirmed in Rao et al (2011), Griffis

et al (2012), Murfield et al (2017) Therefore, it is significant for this study to analyze the

following hypothesis:

H 3 : Condition has a positive impact on young customer loyalty in e-commerce

2.2 Methods

Based on reviewed literatures above, the author initially synthesized theoretical findings

to form a measurement scale for e-commerce logistics service quality and customer loyalty

Afterwards, the author referred to three experts including two Doctors specialized in business

and marketing management and an experienced e-commerce executive for adjustment After

being revised, a scale consisted of four variables with 16 observed items was finalized (Table 2)

In this study, secondary data was in need for reviewing and forming theoretical and

academic assistance and reference for analysis and comparison in discussion part Secondary

data was collected from e-commerce and logistics reports created by Governmental and

trusted organizations, reviewed publications and most current published affairs In addition,

primary data of young customers’ perceived experience while purchasing online is obviously

needed to examine the three proposed hypotheses A three-section questionnaire was applied

for collection Section 1 included study introduction, anonymity assurance and respondent

guidance Section 2 included questions asking respondents’ evaluation according to the

proposed measurement scale, based on their perception with most frequently shopped

e-commerce platform, on 7-point Likert in which 1 represented “Totally disagree” and 7

represented “Totally agree” Section 3 included questions of respondents’ demographics

information which is summarized in Table 1 The questionnaire was made in Vietnamese,

converted to Google Form, distributed on online communities on social network platforms,

online versions of books and discount codes were used as small treat for respondents

Respondents needed to log in their email address in order to answer the questionnaire, which

was for limiting fraud submissions

The author employed a combination of Cronbach’s Alpha testing, Exploratory

Factor Analysis, Descriptive, Correlation and Regression analysis in order to validate the

measurement scale and assess impact of independent variables (Timeliness, Availability,

Condition) on young customer loyalty In order to conduct the mentioned tests and analysis,

SPSS 24 software was used, and thresholds proposed by Hair (2010) were referred

3 Findings

3.1 Demographics of respondents

The study has managed to collect 462 responses After removing submissions with

missing answers, complete bias (e.g all 7), and so on, the study got 388 qualified responses,

which fulfill the minimum sample size of 384 according to Krejcie and Morgan (1970), with

the following demographics:

Table 1 Demographics of study respondents

Gender

Age

Education level

Income per month

Marriage status

Average monthly number of orders

3.2 Common Method Variance

In order to avoid the situation of Common Method Variance (CMV), the study followed

suggestions proposed by Podsakoff et al (2012) Besides, CMV is checked via Harman’s

single factor test, from which single factor explains 41.95% (less than 50%) of total variance

Therefore, CMV issues do not occur in this study (Malhotra et al., 2006)

3.3 Cronbach alpha test and Exploring factor analysis

The correlation values of these 16 items ranged between 0.606 and 0.852, above 0.3

The Cronbach’s alpha values of the four variables were all more than 0.7, and the values of

Cronbach Alpha if item deleted were all smaller than their corresponding factor’s alpha value

According to Hair (2010), these results indicated that the proposed measurement scale is

sufficiently credible

The author conducted KMO & Bartlett’s test, principal component extraction, varimax

rotation The KMO coefficient was 0.895 (between 0.5 and 1) with significance of the test

was 0.000, less than 0.05 There were four components having Initial Eigenvalues greater

than 1, with cumulative percentage of variance of 73.955% (greater than 50%) In addition,

cross-loading values of all items, which converged into the four groups, were greater than

0.5 Therefore, the level of factor convergence can be trusted As can be seen from Table

2, the reviewed 16 items converged respectively into the four factors, namely Timeliness,

Availability, Condition and Loyalty, as the proposed measurement Hence, this scale is reliable

enough for further analysis of testing hypotheses

3.4 Correlation

The author applied Pearson correlation analysis for observed items, and the results

revealed that there is a significant correlation between every two different factors at the 0.01

level (2-tailed) The correlations between each independent variable (timeliness, availability,

condition) and the dependent variable (loyalty) is feasible for analyzing regression (Table

3) For correlations among independent variables, all absolute statistical values are below

0.7 (Table 3), and VIF coefficients of these three items ranges from 1.120 to 1.520 (below 2)

(Table 4), hence the possibility of multicollinearity is not concerned in this study

Table 3 Correlation Analysis Results

TIM Pearson correlation 1

Sig (2-tailed)

-(Source: Author)

3.5 Regression Analysis

The author applied regression analysis to test the research hypotheses and evaluate the

impact of the independent variables on the dependent variable According to reported results

in Table 4, sig of F test and Durbin-Watson value of this study meet thresholds suggested by

Hair et al (2010) The independent variables explain 30.1% of the variation of dependent

variable - loyalty

The p-value of relationship between Timeliness and Loyalty is 0.184, greater than 0.05,

so the relationship between these two variable should be rejected Among the two remaining

independent variables, Condition is revealed to have greater impact on Loyalty with a

standardized coefficient of 0.331, while this figure of Availability variable is obviously less of

0.270 The standardized regression equation can be formed as below:

LOY = 0.331*CON + 0.270*AVA

Table 4 Regression Analysis Results Standardized

Sig of F test = 0.000; R 2 adjusted = 0.301; Durbin-Watson = 1.787

Thresholds (Hair et al., 2010): Sig of F test < 0.05; p-value < 0.05; Durbin-Watson coefficient from 1.5

to 2.5

(Source: Author)

4 Discussion, implications and conclusions

4.1 Discussion

This study has explored and validated the three variables of timeliness, availability

and condition to measure logistics service quality in the context of ‘to-C’ e-commerce in

Vietnam, which contributes to findings of Murfield et al (2017), Jain et al (2020), Xing et al

(2010) in the USA, Indian and the UK market, affirming a geographical extension for criteria

applicability Similarly, to some previous studies, this study also did not find a concurrence

of direct promoting impacts of all three logistical variables on customer loyalty To be more

specific, timeliness did not have an obvious influence on young Vietnamese customer loyalty,

which is quite different from Rao et al., (2011), Murfield et al (2017), Jain et al (2020) In

fact, customer perception towards service in terms of time could be related to their level of

time consciousness (Kleijnen et al., 2007) In Vietnam, at the age of 27 and below and having

enough income to place online orders, young consumers are mainly interns, freshmen, junior

job-holders, university/college students who are not credibly concerned about time matter For

university/college students, they have flexible timetable during the day, and can place their

school address as receiving location, which is not forbidden in Vietnam Then, if the shipment

arrives when they are having class, it is still feasible for them to go out for collecting, and even

if they are not present within the campus then, asking friends or classmate for helping pick-up

is not a big matter For young job holders, they can ask drivers to leave packages at reception

desks of their office block or accommodation buildings, which is common in metropolises

in Vietnam Not yet mentioning, asking the shippers to comeback the second or the third

time within that day or on the next day is still possible widely without any further charge of

which young consumers are much more sensitive (Thangavel et al., 2022) Then, this study

has contributed a statistical support to the fact that whether the order is delivered accurately

within expected date and time and Vietnamese young customers’ intention to repurchase or

introduce an e-commerce platform to others are not clearly linked

For Availability and Condition, this study has found positive impacts of both variables

on customer loyalty, which is similar to findings of Jain et al (2020), while studies in the USA

by Rao et al (2011) and Murfield et al (2017) did not find positive link between Condition

on Customer loyalty To be more precise, Condition, among three proposed LSQ variables,

was found to leave the most significant impact on young Vietnamese E-shoppers loyalty, with

the highest standardized coefficient of 0.331 For Vietnamese young consumers, at the age

no more than 27 at this current time, their income is very limited, as can be depicted from the

demographics, income of the majority was no more than 10,000,000 VND Limited budget

together with the generation-born nature of being price sensitive (Thangavel et al., 2022), the

issues of item missing, damaged goods are likely to worry them more In case these situations

take place, the worry and disappointment possibly change their place of purchasing This

means in case delivered items are broken or mistaken with the placed order frequently, it

possibly contribute to nearly a third of chance that the young consumer consider an online

shopping place switch For Availability whose standardized coefficient is 0.270, it is statistically

supported to have positive influence on loyalty of young Vietnamese e-shoppers This can

be interpreted that e-commerce platforms that are good at sourcing and capable of offering

customer with proper product readiness can consequently retain young customers for further

transactions As the variable Availability is explained via two aspects, namely: availability

of the product-self (product information update, re-fulfilment, substitute) and availability of

means supporting distribution process (delivery mode and tracking), the positive coefficient,

accounting for a proportion of more than a quarter, proves that excellent performance of

logistical activities such as inventory control, a comprehensive and continuously updating

logistics information system and prompt transportation can contribute significantly to keep

young customers re-visiting the sites for shopping

4.2 Implications

According reliability indexes of this study, it can be said that Vietnamese consumers,

particularly the young ones, are quite aware of logistics service concept in e-commerce,

perceive and reflect the service to fulfill their orders Therefore, it is significant for researchers

to continue develop measurement scale of this topic in Vietnam by introducing further criteria

to best fit the local market With two hypotheses were affirmed and the unclear positive

impact of timeliness on customer loyalty, this study suggested further research in the future

to conduct studies of this subject towards other market segments in order to reveal how these

logistical variables influence their loyalty Those findings together with contribution of this

paper may provide managers with more comprehensive implication to improve their logistics

service to meet the need of all customer groups

Based on the above findings, the author suggested several managerial implication as

follow First of all, businesses should pay much attention to initiatives for guaranteeing

shipment condition which should be prioritized first among the three propose LSQ aspects

Therefore, proper packaging and packing are among top concerns in order fulfilment

process so as to ensure the goods condition during delivery period In addition, setting clear

and detail return policies in related to occurrence of product damages should be put into

consideration By this way, firms may enhance secured perception for young consumers when

selecting platforms for purchasing Even though standardized coefficient of Availability is

lower than Condition, the difference between these two number is not really considerable

Hence, e-commerce businesses are suggested to care for practices improving this aspect This

especially significant within Vietnam context where online platforms are quite comparative

in terms shipment condition insurance In addition to conventional suggestion of inventory

control improvement, the author suggested that multiple sourcing for each product category

should be considered, which contribute greatly to product availability on platforms, and also

provide customer with substitutes timely when their searched items from favorite shops are

out-of-stock

4.3 Conclusions

This study is one of a few efforts that have been made to validate a measurement scale

of logistics service quality of e-commerce in Vietnam, based on adaption and adjustment

criteria from research in India, the USA, the UK The paper has also discussed similarity and

difference of logistics service quality variables on customer loyalty between Vietnam and

other markets in the world These findings help to enrich knowledge toward research topic,

particularly of young consumers, on which the author has suggested several implications for

future research and assist e-commerce platforms improve their logistics performance to retain

customer loyalty

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