Determinants of consumers intention toward online purchasing in ho chi minh

Through implementing process, it found 4 factors which affect the consumers’ intention toward online purchasing as: 1 The convenience that e-commerce brings to consumers; 2 E-commerce he

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Advisor’s signature

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BMBR5103_MBAOUM K15A_NGUYEN THI HANG Page 1

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LISTS OF TABLES

Table 1: a set of Dependent and Independent Variables 30

Table 2: Demographics of respondants (n=107) 37

Table 3: Cronbach’s Alpha of variable “Convenience” 38

Table 4: Cronbach’s Alpha of variable “Time saving” 39

Table 5: Cronbach’s Alpha of variable “Website design” 40

Table 6: Cronbach’s Alpha of variable “Security” 41

Table 7: Cronbach’s Alpha of variable “Intention” 42

Table 8: Cronbach’s Alpha summary 42

Table 9: Total Variance Explained 44

Table 10: Summary of Loading Factor and Cronbach’s Alpha second time 50

Table 11: Summarizes Pearson statistical correlation between the explanatory variables 52

Table 12: Relevance of the model 54

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CONTENT

ACKNOWLEDGEMENT 5

ABSTRACT 6

PART 1: INTRODUCTION 8

1 Reason to choose the thesis: 8

2 E-commerce actual situation of Vietnam 9

3 Problem statement 10

4 Research objectives 11

5 Research questions 11

6 Contribution 12

7 Structure 12

PART II: LITERATURE REVIEW 14

1 Understanding of e-commerce 14

1.1 Forms of e-commerce: 15

1.2 Role of e-commerce: 16

2 Theoretical literature 16

2.1 Consumers buying behavior process 17

2.2 Theory of Reasoned Action (TRA) 17

2.3 Theory of Perceived Risk (TPR) 18

2.4 Technology Acceptance Model (TAM) 20

3 Previous researches: 21

3.1 Domestic researches: 21

3.2 International researches: 22

4 Summary 22

PART III: METHODOLOGY 23

1 Conceptual model and hypothesis: 23

1.1 Convenience 24

1.2 Time saving 24

1.3 Website design/features 25

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1.4 Security 26

1.5 Demographics 27

2 Research Method 28

3 Measuring scale: 28

5 Data collection 32

6 Sampling 32

7 Sample designing and size 33

8 Questionnaire designing 33

PART IV: DATA ANALYSIS AND RESULTS 35

1 Data analysis methods 35

2 Demographics description 36

3 Analysis 37

3.1 Cronbach Alpha: 37

3.2 Exploratory Factor Analysis (EFA) 43

3.3 Correlation analysis using Pearson correlation coefficient 52

3.4 Regression analysis 53

3.5 Hypothesis testing 56

3.6 Homogeneity of variances testing: 57

3.7 Summary 62

PART V: CONCLUSION AND RECOMMENDATION 63

1 Conclusion 63

2 Recommendation 64

3 Research limitation 64

REFERENCE 65

APPENDIX 1 68

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ACKNOWLEDGEMENT

Firstly, I would like to express my gratitude to Assoc.Prof,Dr, Phan Dinh Nguyen,

my supervisor, for his guidance and help during my process of finishing this thesis

Secondly, I would like to thank my friends for their support in collecting sample

for this thesis

Last but not least, I would like to express my appreciation to my family who are

always besides me to give me the inspiration to achieve my goal

Sincerely

Nguyen Thi Hang

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ABSTRACT

This research is about the determinants of consumers’ intention toward online

purchasing in Hochiminh City It aims to: (1) clarifying which are determinants

of consumers’ intention toward online purchasing; (2) Giving recommendation

for e-retailers to improve their service for attracting more customers and

developing e-commerce to take advantage of this industry as other countries did

This research is a descriptive research and mainly processed according to the

quantitative method in order to get precise results Through implementing

process, it found 4 factors which affect the consumers’ intention toward online

purchasing as: (1) The convenience that e-commerce brings to consumers; (2)

E-commerce help consumers save time for shopping; (3) The good e-E-commerce

website design attracts consumers to make buying; (4) The security of

e-commerce website also attracts consumers to use Besides, the research model is

considered the effect of demographics of consumers including: Age, Gender,

Income, and Education to their intention of buying online

The quantitative method is implemented through pre-designed surveying

questionnaires There are 107 samples of questionnaires were collected and

processed by SPSS 22.0 software

Multiple regression analysis results showed that the model was met with collected

data and the accepted hypothesis was that the security has positive effect on

consumer’s intention toward buying online However, there is only 23,9% of the

effect comes from the security factors

The results of this study will help e-retailers understand deeply which factors has

the most effect on consumer’s intention So they can improve the function of their

website to ensure the safe for customers when making transaction And they must

pay attention to the products they provide and customers service including

delivery service and after sale service to reduce the feeling of risk perceiving for

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customers in making transaction online, customers then have more intend to buy

online

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PART 1: INTRODUCTION

1 Reason to choose the thesis:

E-commerce (electronic commerce or EC) is the buying and selling of goods

and services on the internet, especially the World Wide Web (Tech target,

2007-2012) And online shopping is a form of E-commerce whereby consumers

directly buy goods or services from the seller through internet Online shopping

is done through an online shops which are called: e-shops, e-store All the

products of online shops are showed in text with photo and other type of

multimedia files In some case, the extra information of products is provided

through link on online shops According to Cuneyt & Gautam, 2004, online

shopping allows customers to buy faster, more alternatives

Nowadays, internet has developed and become the base for developing defaults

applications which change the way of communicating and doing business In

this context, many e-commerce websites have built and merged as the fast,

effective transaction method that utilizing all resources In fact, the e-commerce

activities have changed the whole economy not only in the way of supplying

goods, but in the spending habits as well

However, e-commerce in Vietnam has not still been developed and taken its

advantages as it creates in many other countries in the world During the past

17 years, Vietnam has always ranked in the top 20 countries with the fastest

growth rates of Internet in the world According to many experts judgement, the

longer time online of consumers the more opportunities for e-commerce or

online services to grow

In urban areas, about 50% of the population has Internet access This percentage

is even higher in the two major cities of Hanoi and Ho Chi Minh City

Two-thirds of them use the Internet every day, with nearly 50 hours on the Internet

every month Internet users are in the fairly young age, a higher percentage of

men 40% of users are presented with the office staff

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So the main objective of this research is to analyze determinants of consumers’

intention toward purchasing online This study may contribute not only to a

better understanding on what and how strongly the factors are involved in online

consumer purchasing decisions, but also provides some recommendations for

e-commerce businesses in Hochiminh City But e-e-commerce businesses should

keep in mind that consumer behavior might change by time, especially in online

market

2 E-commerce actual situation of Vietnam

There are many researches in Vietnam shown that, there has been more than 90%

internet users for the purpose of information searching In which, about 30% -

40% of users accessed the e-commerce website This number gives us many

meaning about the potential of e-commerce According to market research of

NetCitizens, there are more than 50% internet users agree that they can find all

kinds of Goods through commerce However, their belief in the safe of

e-commerce is quite low There are only 14% among those trust in online shopping

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So, how to recognize the determinants of customers’ intention toward online

purchasing, especially the potential risks of e-commerce? This is the questions

that all retailers must clearly clarify to attract and retain their customers

3 Problem statement

In recent years, the development of internet in Vietnam is quite fast According to

the recent survey, Vietnam’s internet growth rate is at 9% annual, rank the 15th

globally However, the using internet of almost people in Vietnam now is for

news, listening music, chatting, gaming or searching information There is only

35% of using internet for purchasing online This percentage is quite low This

means that the potential for developing e-commerce in Vietnam is still

tremendous Enterprises who want to expand their business online must think

about how to attract the left percentage of consumers toward purchasing online

But, the more opportunities to develop for e-commerce have, the more competitors

have Especially, there are many global e-commerce giant finding chance to

penetrate into the emerging market like Vietnam And some of them have their

own position and image up till now such as: Lazada The way they did was to raise

customer’s satisfaction through trust improvement in order to attract customers’

attention According to Adams 1963, p.347, 1965: “One approach online

companies can do is to ensure distributive fairness and procedural fairness

Distributive and procedural fairness will trigger the feelings of equity of outputs

(what is received) departed from inputs (what is invested)”, “and of

outcome-determining procedures” (Folger & Greenberg, 1985) So that, “trust and customer

satisfaction will be maintained” (Chiu, Lin, Sun, & Hsu, 2009)

On the other hand, the customer interface quality, perceived security and

perceived usefulness are also important In the offline commerce, face-to-face

interaction may directly satisfy buyers through supporting services In

e-commerce, salespeople interact via interface of the websites The online sellers

must face with many challenges, they are to alleviate the uncertainty and

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incomplete or distorted information (Ba & Pavlou, 2002) as well as ensure the

security for sensitive contents and transactions

In fact, according to a survey of BMI Research Group 2015 on Investors Bank On

Asian e-commerce Prospects, Vietnam has the smallest Asian e-Commerce

market At 0.1% of the total retail sales, Vietnam E-Commerce market was valued

less than USD0.1bn in 2014 even though PWC News brief Strategy Function of

2013 predicted that the market to reach USD2.8bn by 2015 This means that, the

future of e-commerce in Vietnam is very bright but there still have barriers and

problem to solve

So this research tries to find out why almost people are not interested in purchasing

online even when this transaction channel provide them more convenient such as:

reducing shopping time with competitive discount price and variety of sellers

Then giving some recommendation for online sellers to improve their business

4 Research objectives

Even when e-commerce provides its customers more convenient such as: reducing

shopping time with competitive discount price and variety of sellers This

distribution channel still attracts little concern from customers So, with the

purpose of improving intention of customers toward buying online in Hochiminh

City, the overall objectives of this thesis is:

- To identify determinants influencing consumers’ intention toward

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In order to clarify the research objectives, this research aims to cover the following

questions to find the exact answer for e-retailers to improve their business

- What should retailers do to improve their business to increase opportunities

of purchasing from users?

6 Contribution

The results from this research will make a positive contribution to the online

consumer attention literature by providing a deeper understanding of consumer

beliefs about online shopping and how these impact attitude and intention to shop

online Besides, the information from the research is also useful for retailers to

adapt their strategies to fit customers’ needs and attract & retain customers

From marketing viewpoint, the research brings useful insight into customer

attention to create marketing plan which quickly responds to online customers’

specific requirement and needs

7 Structure

This research is divided into seven sections as in the chart below:

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PART II: LITERATURE REVIEW

In this part, the definition of e-commerce will be given The previous research and

some key theories that are relevant for understanding more about determinants of

online purchasing intention of customers

1 Understanding of e-commerce

E-commerce is a tool for reducing administrative costs and improving relationship

among business partners and customers In fact, the development of internet and

e-commerce has changed the way customer transact and their decision making

process Through internet, online customers can get all cues which help them to

decide to purchase or not These cues are the perception, motivation, learning,

attitudes and beliefs The perception is the way customer select, organize and

interpret information to form knowledge The motivation is the customers’ desire

to meet their needs Learning is reflected to customers’ behavior experience rising

Attitudes are reflected to customers’ steadily favorable or unfavorable

assessments, feelings, and inclinations towards object or ideal

Normally, each buyer has a limited income, a certain level of knowledge about the

products and purchasing experience In such conditions, the buyer will have to

decide what products to buy, of whom, with what quantities and selected purchase

method in a way that they can maximize the total satisfaction or their interests of

those products

The total customers’ benefits is the benefits that customers expect on every

product or certain services, which may include the core benefits of the product,

benefit from the services related to the product, quality and the ability of the

manufacturer's reputation and image of brand,

To appreciate the intention toward online purchasing of consumers, in addition to

consider the extent that a product can satisfy the wishes of the buyer, or the

benefits that such products can bring to them, customers can assess through

convenience level of online purchasing; categories/model of online products; the

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level of consumer confidence when shopping online; level of attention on prices,

an assessment of the promotion when buying online

High convenience is capable, polite attitude and how quickly the purchasing

online is Buyers without extra effort, time travel, can buy anytime, anywhere;

products are easy to find; purchases quickly and easily; do not disturb by shop

staff and are not afraid to not purchase or cancel an order

Rich in designs, diversity in model, full products, clear origin & brand obviously

attract consumers, so this is one of the basic methods for retailers enhance

competitiveness in the e-commerce market

Not only that the retailers must pay attention to build trust with customers, so that

customers can trust and make online purchasing decision The belief rate is also

the ability to make the payment, commitment to product quality, security of

customer information properly and exactly as promised

Price is the monetary expression of the products value Price is an important factor

affecting the selection of consumer toward online purchasing or direct purchasing:

online shopping is cheaper than buying directly or to compare prices between

different vendors, the selling prices is consistent with the quality of goods and

have been clearly marked

Promotional activities are promotion of businesses to push products trading and

provision of services to customers for certain benefits Promotion is used by

businesses flexibly They often combine multiple forms at once, such as both gifts

and price discount, reduces price & lottery prizes, discounts or gifts in the "golden

hour purchase "of the day (usually the peak hour to stimulate consumer)

Discount is usually the popular using form

1.1 Forms of e-commerce:

The business transactions on the Internet today is in the most popular form of B2B

(business-to-business) and B2C (business-to-consumer) B2B is the kind of

transactions between businesses and organizations together B2C is the kind

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transactions between businesses and consumers directly B2B Sales were

evaluated over 90% of total sales e-commerce, meanwhile B2C counted only

about 10% of E-commerce sales This is understandable, because consumers are

still not familiar with this kind of online shopping On the other hand, consumers

are still very concerned that the issue of ensuring their privacy on the Internet,

where there is currently no effective form of controlling Besides, the legal

framework for electronic commerce is still not fully developed and synchronized

In addition to the above two models, there are also another form of businesses on

the Internet such as:

 C2C (consumer-to-consumer) personal direct sales to individuals Major

applications such as real estate, cars and other consumer goods, exchange

music, software, auction, consulting, sharing experiences etc

 C2B (consumer-to-business): Individuals can search for a business for sale

(goods, software) for businesses There are many software companies rent

people write software online Individuals everywhere can participate in

getting contracts of writing software online as required, and then sent over

the network to the company The company will check the quality of the

product and make payment for individual through bank accounts

Ecommerce has positive impact on society and the economy It opens to the

economy of the new development It created more new industries, more jobs,

reduce unnecessary costs, make faster capital turnover, stimulate competition,

stimulate social demand and stimulate the development of products aimed at

maximum satisfaction of consumer needs It stimulates businesses to be active in

managing and creative search for new business ideas In summary, Ecommerce is

perfect motivation and promote the development of the economy

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In the field of Consumer behavior research the classical model of consumer

buying behavior is of utmost important We as persons take actions in purchasing

and using products and services and actions are derived by mental and social

process Behavioral science helps us to better understand why we go for a certain

product and why not, why we set priories while making decision

Consumer decision process carries five stages, starting with Problem recognition

and following Information search, Evaluation of alternatives Purchase decision

and finally Post Purchase behavior Problem recognition starts with the perception

of need and moves towards information search where consumer uses internal and

external sources to analyze given information and use that information in the next

step of evaluation of alternatives While evaluating alternatives one assessing

values of the products by giving weights Once you have successfully evaluated

alternatives you will move towards purchase decision where you may encounter

three possibilities, from whom to buy, when to buy and do not buy

Theory of reasoned action was built by Ajzen Fishbein in late 60s of the 20th

century, and was extended in the70s According to TRA, behavior intention is the

most important factor predicting consumer behavior Behavior intention is

affected by two factors: Attitude and Subjective Norm In which, the attitude is

individual factors expressed positive or negative confidence of consumers toward

products Subjective norm reflects the influence of social networks on consumers

When buying a product or a service, consumers often consider their reason of

purchasing to maximize user value based on their payment cost They could

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consider the type of product purchased including interest and risk (if any), why to

buy, when and where to buy? The purchasing intention of consumers comes as a

result of impact from environment on their consciousness The characteristics and

decision making process of buyers led to their certain purchase decisions

Online shoppers are the one who have less time, so they use the internet for

shopping to save time; the one who do not like shopping in stores, they use the

internet to avoid noisy places, queuing or waiting; the one who knows technology

like shopping online because it fits their works Online shopping behavior is

affected by many factors such as personal characteristics (gender, age, marriage,

education, religion, occupation, income, personality and lifestyle); Environmental

factors (family, social and community); Impact factor from the sellers including:

pricing, advertising, promotion, brand, operations and technical support via the

website, delivery, payment and customer service These factors directly and

indirectly impact the purchasing intention of customers

In the theory of perceived risk, Bauer (1960) suggested that consumer behavior

through online website have awareness of risk, which includes two elements: (1)

perception of products/service risk and (2) perceived risks related to online

transactions

- Composition risk perceptions relating to products and services: lost

functionality, financial loss, take time, lost opportunities and risk

perceptions towards the entire products/service

- Composition risk perceptions related to online transactions: the risk can

occur when consumers conduct transactions on electronic media: as a

secret, safety and risk awareness throughout the transaction

Online shopping is a process where the customer directly buy goods or services

from a vendor in a time authentication through internet Online sales benefit for

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both buyers and sellers in terms of looking for customers, searching product

information, interactive process and product distribution For the seller, they can

receive payment from buyers quickly through the internet and cut down

investment cost in distribution system For buyers, they can purchase anywhere,

regardless of the time, even when at home and access distance vendors

According to research results of Xiang Yan & Shiliang Dai (2009), online

purchasing decisions are influenced by two groups of factors: perceived benefits

and perceived risks Cognition of benefits positively influence online purchasing

decisions and perceived risks negatively impact on online shopping decisions

Before making a purchase, consumers often feel a certain level of risk related to

their choice of a particular brand and how to buy Bauer (1960) was the first to

introduce the concept of awareness of risks in the purchasing process, which is

considered as the decisive uncertainty of consumers when purchasing And they

have to accept the consequences of this decision Cox and Rich (1964) refers to

the concept of perceived risk is the perception level of risk of consumers when

deciding to buy There is another introduction about the concept of risk awareness

involving uncertainty about the loss of a sale transaction, including six factors:

financial, performance (product not properly in right quality/function), social,

psychological, safety, time Mitchell (1999) suggests that risk perceptions are

subjective thoughts about determining losses, with two implications are the

uncertainty and negative consequences

For online shopping, the perceived level of risk is often higher than traditional

shopping, this happens due to the reason that buyers do not see the real picture of

the product and do not directly contact with the salesman (Park & Stoel, 2005)

According Bhatnagar & Ghose (2004), concerning risk factors, there have three

negative impact to online shopping decisions: product risk, financial risk, security

risk about personal information Axel (2006) showed that compared with product

risks, consumer awareness of the risk of disclosure of personal information have

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a larger impact on the decision to purchase on the internet McCorkle (1990)

pointed out the risks of online shopping is the seller's fraud, transferred to the

buyer the product unreliable, demonstrating the dishonesty of the seller

The Technology Acceptance Mode - TAM given by Davis (1989), refers to the

elements of cognitive usefulness, ease of use, the attitude and intention to use

Based on this model, Davis said that the interests of customers for the gain and

the loss can be understood as customer awareness of the benefits and risks And

as Rauniar et al., 2014, the TAM predicts individual adoption and attitude of

customers willing use technology Zeithaml (1988) suggested that customers will

have the choice to realize the highest benefits when they make a purchase

decision In Mitchell (1999) points out that consumers tend to consider the risk

perception rather than maximizing cognitive benefit when they make purchasing

decisions

Especially TAM-model was simulated based on TRA- model which was widely

recognized as a model of trust and basic modeling acceptance of information

technology (IT) from users

There are five main variables:

(1) External variable (exogenous), also known as the variables of the previous

experiments: These are the variables affecting the perception of the

usefulness (usefulness perceive-PU) and perceived usability (ease of

use-PEU perceive)

Examples of external variables such as: training, or different concept in

using the system

(2) Recognizing the usefulness: Users certainly recognize that the use of a

separate application system will increase the efficiency / productivity of

their work on a specific task

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(3) Recognizing the ease of use: The easy level that users expect when using

the system

(4) The attitude towards using: As attitudes towards the use of a system created

by the trust on the usefulness and ease of use

(5) Intention of using: The user intends to use the system The intention to use

has the tight relationship with the real use

According to Davis’s research, perception of usefulness is the main factor that

people determine to use computer and cognition of usability is the second unique

determinants led to the using computer decision

TAM is considered as typical models for application in the study of the use of a

system for measuring TAM model and predict the use of information systems (IS)

Thus, E-commerce is also a product of the development of information

technology, so the surveyed models of the factor impact in the acceptance of IT is

also applied to research the compatibility issues in e-commerce

There were many researches about intention of consumers toward buying

online up to now This research inherits the model and hypothesis from

those including:

3.1 Domestic researches:

- Research about determinants of e-commerce’s willing by Mr Pham Ba

Huy, MBA thesis in 2004 According to Mr Huy, the determinants of

e-commerce’s willing based on the E-CAM model were:

 From internal effect, they were: the perceived of usefulness, the

perceived of ease of use, the action of intention

 From external effect, they were: website design, advantageous

conditions, and security

- Research about perceiving risk of e-commerce toward consumers’

intention of buying online buy Mr Bui Thanh Trang, University of

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Economics Hochiminh City From the research results, the perceiving risk

has negative impact on consumes’ intention of buying online which

includes 4 factors: Financial risk; products risk; Information security risk;

and risk from the fraud of sellers

3.2 International researches:

- Research about the satisfaction of consumers in online purchasing by

Matthew K O Lee and Christy M K Cheung (2005) In this research, author used

TRA and TPB model to clarify the satisfaction of consumers when making online

purchasing due to the following three factors: Information quality; System quality

and Service quality In which, the accuracy and content of information, the

displaying information way and the updating situation were the main factors

affecting the information quality The system quality referred to the perceived ease

of use and security Lastly, the service quality was about customers’ support, and

customers’ care

The research only pays attention to factors affect consumers’ intention toward

online purchasing If the user has a positive attitude toward e-commerce, they will

have a positive using behavior respectively

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PART III: METHODOLOGY

This part presents the research methodology including the conceptual model &

hypothesis; research method; and then the variables, the sources of data will be

identified and described

The development of e-commerce activities are reflected through attitudes and

buying behavior on the Internet If the user has a positive attitude towards trading

activity on the Internet, they will have a positive behavior for such operations

There are many determinants influence a customer’s decision to adopt online

shopping as a way of purchasing In this research, we propose some hypotheses

regarding customers’ adoption of online shopping which derived from the

previous literature So the model of this research is:

Figure 1: Proposed model for determinants affect customers’ intention toward

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1.1 Convenience

Convenience factor refers that it is easy to browse or search the information

through online is easier than the traditional retail shopping Through online,

consumers can easily search product catalog but if the consumer look generally

for the same product or item in a traditional store manually it is difficult to visit

physically and time consuming also Convenience has always been a prime factor

for consumers to shop online Darian (1987) mention that online shoppers carry

multiple benefits in terms of convenience, such as less time consuming, flexibility,

very less physical effort etc Bhatnagar and Ghose (2004) claims for convenience

as one of the most important advantage for online shopping According to the

Robinson, Riley, Rettie and Wilsonz (2007) the major motivation for online

purchasing is convince in terms of shop at any time and having bundles of items

delivered at door step

Rohm and Swaminathan’s (2004) claims in “typology of online shoppers into”:

Convenience shoppers, balanced buyers, variety seekers and store-oriented

shoppers, based upon their preset shopping motivation Rohm and Swaminathan’s

(2004) findings about ’convenience and variety seeking’ are major motivating

factors of online shopping and this study is consistent with Morganosky and

Cude’s (2000) research findings Webcheck’s (1999) study shows that

convenience factor is one of the biggest advantages of online shopping Through

online purchase consumers can easily compare the price than the traditional

purchase So price comparison is also another convenience factor of online

shopping

H1: Convenience (C) positively influences customer’s intention in online

shopping

1.2 Time saving

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Time savings is one of most influencing factors of online shopping Browse or

search an online catalogue can save time and patience People can save time and

can reduce effort by shopping online According to Rohm and Swaminathan’s

(2004), one possible explanation that online shopping saves time during the

purchasing of goods and it can eliminate the traveling time required to go to the

traditional store On the other side, some respondent think that it is also time taken

for delivery of goods or services over online shopping

Unexpectedly time saving is not the motivating factor for the consumers to shop

online (Corbett, 2001) because it takes time receiving goods or delivery But time

saving factor can be seen through different dimensions i.e “person living in

Florida can shop at Harod’s in London (through the web) in less time than it takes

to visit the local Burdines department store” (Alba et al 1997, p 41,emphasis

added) Morganosky and Cude (2000) have concluded that time saving factor was

reported to be primary reason among those consumers who have already

experienced the online grocery buying So the importance of the time saving factor

cannot be neglected as motivation behind online purchasing Additionally

Goldsmith and Bridges (2000) emphasize that there is a discrimination between

online shopper and non-online shoppers, online shoppers are more worried about

convenience, time saving and selection whereas non online shoppers are worried

about security, privacy and on time delivery A study by Kamariah and Salwani

(2005) shows higher website quality can highly influence customers to shop

online

H2: Time saving (TS) both positively and negatively influences customer’s

intention in online shopping

1.3 Website design/features

Website design and online shopping activity is one of the vital influencing factors

of online shopping Website design, website reliability/fulfillment, website

customer service and website security/privacy are the most attractive features

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which influence the perception of the consumer of online buying Shergill & Chen

(2005) Kamariah and Salwani (2005) claims the higher website quality, the higher

consumer intends to shop from internet Web design quality has important impacts

on consumer choice of electronic stores, stated by Liang and Lai (2000) Website

design one of the important factor motivating consumers for online shopping

Almost 100,000 on-line shopper’s surveyed by (Reibstein, 2000) shows that web

site design was rated as important factor for online shopping Another study

conducted by Zhang, Dran, Small, and Barcellos (1999, 2000), and Zhang and

Dran (2000) indicated that website design features of the website are important

and influencing factors that leads consumer’s satisfaction and dissatisfaction with

a specific website

A study conducted by Yasmin and Nik (2010) shows a significant relationship

between online shopping activity and website features Website design features

can be considered as a motivational factor that can create positive or negative

feelings with a website (Zhang, et al 1999) A study by Li and Zhang (2002), if

website is designed with quality features it can guide the customers for successful

transactions and attract the customers to revisit the website again However, worse

quality website features can also hamper online shopping According to Liang and

Lai (2000), web design quality or website features has direct impact on user to

shop online

Moreover researchers such as Belanger, Hiller and Smith (2002) concluded that a

large segment of internet users have serious concerns of security

H3: Website design/feature positively influences customer’s intention in online

shopping

1.4 Security

Security is another dominant factor which affects consumers to shop online

However many internet users avoid online shopping because of credit card fraud,

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privacy factors, non-delivery risk, post purchase service and so on But transaction

security on the online shopping has received attention Safe and secured

transaction of money and credit card information increases trust and decreases

transaction risk In 1995, UK has introduced Fraud free electronic shopping and

later on Europe and Singapore introduced secured electronic transaction (SET)

According to Bhatnagar and Ghose (2004) Security is one of the attribute which

limits buying on the web as they claim that there is a large segment of internet

shoppers who don’t like to buy online because of their thinking about the security

of their sensitive information

Cuneyt and Gautam (2004) claims trust in the internet shopping with advanced

technology, and frequent online shopping to the internet being secured as a

trustworthy shopping channel

H4: Security (S) both positively and negatively influences customers’ intention

in online shopping

1.5 Demographics

Online shoppers in terms of demography are another important aspect We would

like to study demography in terms of age, gender, income and education as are

there any differences while consumers shop online, differences within the age

groups such as does online shopping attracts elder people or younger people

Studies have shown that online shoppers mainly consist of people with Higher

education and income and working in middle to senior management or

professionals (Kehoe et al., 1998; Hoffman et al., 1996) Locally, a report in the

Business Times and an online survey showed that demographically, a typical Net

shopper is mainly male, aged between 18 and 40, had attended at least secondary

school and belongs to a family with average income of at least $5000 The online

survey also showed that cyber-buyers were also mainly Chinese below 36 years

old with diplomas or degrees and drawing a monthly salary of less than $3500

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Another study by Miller (1996) claims cyberspace is the domain of young people

Bhatnagar and Ghose (2004)

Sim and Koi, (2002) states as main discriminating factors appeared to be gender

and income Customer segmentation is important for electronic commerce

success, Berry (1999) Miller (1996) has focused on demographics to show the

profile of Internet users, Bhatnagar and Ghose (2004)

H5: Demographics has also impact on the intention of using online purchases

2 Research Method

This study is a descriptive research, because I just want to draw a picture about

how these determinants affect the intention of customers toward online

purchasing In order to have final result, two type of research methods are used

including: quantitative and qualitative method I would prefer more the

quantitative method in this study as it is a precise way In fact, time is vital

attribution for decision making process According to Saunders, Lewis, and

Thornhil (2000), the quantitative method can be faster in comparison with

qualitative method because it is possible to forecast the time schedule The

qualitative method can be relatively long in duration

In order to comprehend conceptual and make sure the reliability in conduct the

research, the items in the previous research were adapted All items should be

come from the existing literature, and have been proved strong content validity

repeatedly through different researches Hence, the measurement scales were used

popular in various studies related to intention toward online purchasing

3 Measuring scale:

The measuring scale is built and adjusted based on the scale form previous

researches mentioned in part II

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In this research, the concept of “Convenience”; “Time saving”; “Website design”;

“Security” and “Intention of using” will be analyzed according to the above

mentioned hypothesis

A list of questionnaires was designed to collect data for quantitative The scales

used in questionnaire were largely built upon the scope and structure of previous

research Constructs were measure based on five-point Likers-scales ranging from

strongly disagree (1) to strongly agree (5) as:

In fact, online shopping in recent years are at higher risk for the buyer, as some

group purchasing website has sold unknown origin, counterfeit goods, or posted

pictures on the website different with the real products which makes confusion for

customers, or increased the price higher then offered discount or sales off up to

50-70% to hit the cheap psychology of customers, causing many people gullible

to buy more expensive products than the market price Some unusual

circumstances occur as late delivery and no customer care service These reasons

make consumers hesitate before buying online

The thesis presents the variables used to analyze the determinants of customers’

intention toward online purchasing The set of dependent and independent

variables is summarized in Table 1 below

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Table 1: a set of Dependent and Independent Variables

Variables Dependent variable

Customers’ intention toward purchasing online

Independent variables

Convenience (C)

Time saving (TS) Website design/features (WF) Security (S)

Demographics

There are total 18 observed variables to clarify four factors of customers’ decision

to shop online as below

 Observed variable for factor “Convenience”: includes 4 variables as:

Conve 1, Conve 2, Conve 3, Conve 4

Conve 1 I get on-time delivery by shopping on-line Conve 2 Detail information is available while shopping

online Conve 3 I can buy the products anytime 24 hours a day while

shopping online Conve 4 It is easy to choose and make comparison with other

products while shopping online

 Observed variable for factor “Time Saving”: includes 3 variables as: Time

1, Time 2, Time 3

Time 1 Online shopping takes less time to purchase

Time 2 Online shopping doesn’t waste time

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Time 3 I feel that it takes less time in evaluating and

selecting a product while shopping online

 Observed variable for factor ‘Website Design/Feature”: includes 5

variables as: Web 1, Web 2, Web 3, Web 4, Web 5

Web 1 The website design helps me in searching the

products easily Web 2 While shopping online, I prefer to purchase from a

website that provides safety and ease of navigation and order

Web 3 The website layout helps me in searching and

selecting the right product while shopping online Web 4 I believe that familiarity with the website before

making actual purchase reduce the risk of shopping online

Web 5 I prefer to buy from website that provides me with

 The dependent factor “Intention”: includes 3 variable as: Intend 1, Intend

economic context

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5 Data collection

There are two methods of data collection in general used by researchers

including: primary and secondary method If we talk about primary data it

includes observation method, Interview/ questionnaire method, case study

method, projective techniques and socio-metry Whereas, secondary data is the

data which already collected by some other researcher not for the reason for

particular study or research

We would like to go for primary data collection method that will include

questionnaire from consumers as what are the factors that influence consumers to

purchase online

As our respondents are geographically scattered and Kumar (1999) suggests that

use of questionnaire may be the only choice of data collection as if respondents

are geographically scattered

6 Sampling

According to Bryman and Bell (2007), there are generally two types of sampling

techniques probability sampling and non-probability sampling In probability

sample there is a nonzero equal chance for each population element to be

selected There are four types of probability sampling including: simple random

sample, systematic sample, stratified random sampling and multi stage cluster

sampling Whereas, in non-probability sampling there is no random sampling

There are three types of non-probability sampling including: convenience

sampling, snowball sampling and quota sampling In which, convenience sample

is one that is conveniently available to the researcher with its goodness of

accessibility The problematic facet of this type of non-probability sampling is

that it is impracticable to generalize the results but at the same time convenience

sampling more remarkable role than supposed

And as Bryman and Bell (2007) explains in business and management field

this technique is more worthy as compare to sample based on probability

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sampling By keeping in view the limitations of time, resources and population

writers have decided to apply convenience sampling technique for the purpose of

collecting empirical material As time and resources are one the constraints faced

by the researchers convenience sampling is helpful, and it seemed suitable for our

research purpose and besides this we could not get the list of online shoppers so I

decided not to draw a random sample I have decided to distribute the

questionnaire among people in Hochiminh City which are mostly the office staffs

and students from the beginning of October, 2015 to the end of November, 2015

So convenience sampling would be helpful for me to approach the

respondents and collect the data on time and also to avoid low response rate, as

we are expecting at least 100 % response rate

7 Sample designing and size

The procedure that is being followed for selecting a sampling unit in a research is

called sample designing In this study, I go to coffee shops in Hochiminh to select

population for researching through the prepared questionnaires The purpose of

using this process is to collect empirical data conveniently and on time, as

time

I decided to take the sample of 107 people in all the coffee shops I visited And

questionnaires were distributed by hand to respondents and let them time to fill

the questionnaire to reduce sampling error Questionnaires were constructed in

simple language to reduce the risk of ambiguity

8 Questionnaire designing

In order to meet the requirements of the research, the questionnaire is carefully

designed The questions are taken from previous literature on Consumer’s

attitudes towards online shopping with a view to validate the research more and

some of the questions are self-structured to cover the diversity of research

problems The questionnaire consists of two main parts and one sub part as

following:

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- The first part is mainly focused on questions pertaining to factors that

influence consumers to shop online There are 4 main factors that this

research mentions, including:

With the aim at clarifying how the four factors affect customers to shop

online, I designed questions for each factors as:

 Convenience factor includes four questions

 Time saving factor includes three questions

 Website design/features factor includes five questions

 Security factor includes three questions

 Intention to use online purchasing includes three questions

- The second part of the questionnaire will cover one of our research question

that is who are online shoppers in terms of demography and to see are there

any difference in relation to factors that influence consumers to shop online

This section includes questions pertaining to Gender, Age, Income and

Education

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PART IV: DATA ANALYSIS AND RESULTS

1 Data analysis methods

The Survey questionnaires after collecting is processed by software SPSS 22.0

statistical analysis results The data set collected will be filtered, tested, and coded

Then they will be analyzed according to the following analysis:

- Reliability coefficient analysis (Cronbach Alpha): Cronbach Alpha is used

to assess internal consistency, since it provides an estimate for the reliability

based on the indicator inter-correlations (Henseler et al., 2009) Alpha

coefficients range from 0 to 1 where higher coefficients indicate higher

reliability The accepted value of Cronbach Alpha is 0.6, whereas a value

below 0.6 indicates a lack of reliability

Besides, the Cronbach’s Alpha model will eliminate observed variable

which has item-total correlation < 0.4

- Factor analysis (EFA analysis): the variables with the weight less than 0.5

will be removed and the total variance extracted must be greater than 50%

In EFA analysis, the Principle axis factoring with Varimax rotations is used,

and the stops of variables of Eigenvalue is 1, this method allows to draw the

weight of factor loading to make comparing in order to remove or retain in

research

- Pearson analysis: to test the relationship between the elements for

satisfaction, and the interrelation between the elements together in a

research model, we use Statistics system called the Pearson correlation

coefficients (Pearson Correlation Coefficient), denoted with the letter "r"

R values between -1 ≤ r ≤ +1

 If R is positive, indicating correlated

 If R is negative, indicating inverse correlation

 If r = 0 indicates that the two variables are not related linearly

| r | =1: The relationship between the two variables as tightly

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