Factors affecting customer trust in e-commerce in Vietnam

After pilot study, the research model had 4 factors affecting customer’s trust, as: Affiliation, Existence, Policy, and Website Design.. The research questions of this study are as follo

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Tran Huy Anh Duc

FACTORS AFFECTING CUSTOMER’S TRUST IN E-COMMERCE IN VIETNAM

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2012

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Tran Huy Anh Duc

FACTORS AFFECTING CUSTOMER’S TRUST IN E-COMMERCE IN VIETNAM

ID: 60340102

MASTER OF BUSINESS (Honours)

SUPERVISOR: Tran Ha Minh Quan

Ho Chi Minh City – Year 2012

ABSTRACT

No one can deny that internet and websites are the most important tools of electronic commerce (e-commerce), to help e-commerce develop effectively The internet has been widely used from 1994 and e-commerce had been contributing to the growth in many countries Although there are opportunities for e- commerce growth, it did not achieve its full potential What did reasons prevent the development of electronic commerce? Having many reason, but an important reason

is customer’s trust The necessary to do is that identify what factors affecting customer trust in the online environment Based on the research of Cuiping Chen (2007) and F Meziane & Kasiran (2008), this study combine the research model of two studies to form the research model The main survey was launched on October

2012 For main survey was collected in a month, 272 responses were received in both methods, email and hard copies, in which 32 were rejected because of incomplete responses After all, 240 samples were usable After pilot study, the research model had 4 factors affecting customer’s trust, as: Affiliation, Existence, Policy, and Website Design The results show support for Hypothesis 2, 3, and 4, mean that Affiliation of website, Policy of website, and Website design attitude of company, all emerged as significant predictors of Customer’s Trust

Key word: e-commerce, trust, B2C, customer, factors affecting

ACKNOWLEDGMENTS

It is my pleasure to express my sincere gratitude to my supervisor Dr Tran Ha Minh Quan for his support throughout the research process He had devoted his valuable time and efforts in patiently guiding me to complete this study I would like to convey my special thanks to him for his assistance and encouragement

I would like to thank the faculty of International School of Business (ISB) – University of Economic Ho Chi Minh City And my special thanks to Professor Nguyen Dinh Tho PhD., who has instructed me how to do a research clearly and simply

Besides, I would like to express my thanks to the ones who have helped me to distribute the questionnaires Also, I would like to thanks all respondents, who spent their valuable time in filling out the questionnaire

I thank my friends and colleagues who provided much needed inspiration and support during this time

Finally, no words of thanks are ever enough for the dedication of my parents and younger brother who pushed me through each step of my academic journey and wanted to see me get the Master’s degree

December 20, 2012

Tran Huy Anh Duc

TABLE OF CONTENTS

ABSTRACT……… …………i

ACKNOWLEDGMENTS……… ………… ii

TABLE OF CONTENTS……….………… iii

LIST OF TABLES……….……….……….v

LIST OF FIGURES………vi

CHAPTER I: INTRODUCTION……… ……….………… 1

1.1 BACKGROUND……… …….…… … 1

1.2 RESEARCH PROBLEMS ……… ….… ……… 2

1.3 RESEARCH OBJECTIVES……… … ………….3

1.4 RESEARCH SCOPE……… ……… 4

1.5 OUTLINE OF STUDY……….…… ……… 4

CHAPTER II: LITERATURE REVIEW……… ……… 5

2.1.MODEL OF CUIPING CHEN (2007)……… ……… 5

2.2.MODEL OF F MEZIANE (2008)……… …… 6

2.3.BUILDING THE RESEARCH MODEL……… 6

2.4.RESEARCH MODEL……… …….7

2.5.DEFINITION OF TRUST……… … 8

2.6.ELECTRONIC COMMERCE (E-COMMERCE)……… …… 9

2.7.CONSUMER TRUST IN E-COMMERCE.……….……… 10

2.8.HYPOTHESES……….……… 12

CHAPTER SUMMARY……… 16

CHAPTER III: RESEARCH METHOD……… 18

3.1.RESEARCH APPROACH……… 18

3.2.RESEARCH PROCESS……… 18

3.3.MEASUREMENT SCALES……… 20

3.4.SAMPLING & DATA COLLECTION……… 25

3.5.MAIN SURVEY……… 25

CHAPTER IV: DATA ANALYSIS & RESULT……….26

4.1.DESCRIPTIVE STATISTICS SURVEY RESULTS……….26

4.2.THE RATING SCALE………28

4.2.1 CRONBACH’S ALPHA COEFFICIENT……… … 28

4.2.2 EXPLORETORY FACTOR ANALYSIS………32

4.2.3 REGRESSION ANALYSIS……….36

CHAPTER V: DISCUSSION, IMPLICATIONS, RECOMMENDATIONS……… 39

5.1.CONCLUSION……… …… 39

5.2.MANAGERIAL IMPLICATIONS……… ……… 39

5.3.IMPLICATIONS FOR FURTHER RESEARCH……… 41

REFERENCE ……….……… 42

APPENDIX: QUESTIONNAIRE……….……… 47

APPENDIX: RESULT OF DATA ANALYSIS………53

LIST OF TABLES

Table 3.1: Measurement scales of research 20-22 Table 4.1: Descriptive Statistics 26-27 Table 4.2: Cronbach’s alpha of EXIS 28-29

Table 4.3: Cronbach’s alpha of AFFI 29

Table 4.4: Cronbach’s alpha of POLI 30

Table 4.5: Cronbach’s alpha of WEDE 31

Table 4.6: Cronbach’s alpha of TRUS 32

Table 4.7: KOM and Pattern Matrix result of final 33-34 Table 4.8: Total Variance Explained 35

Table 4.9: Summarized EFA analysis 35

Table 4.10: Correlations 36

Table 4.11: Coefficients 37

Table 4.12: Model Summary 38

LIST OF FIGURES

Figure 2.1: Research model of Cuiping Chen 5

Figure 2.2: Research model of F Meziane 6

Figure 2.3: Research model of Customer Trust in e-commerce 7

Figure 3.1: Research model after revised 24

Figure 4.1: The correlations of the research model 38

CHAPTER 1 INTRODUCTION

In the first chapter, the overview of e-commerce and its importance for the growth

of economy will be introduced Moreover, the causes that restrict the development

of e-commerce will be found out in order to find effective solutions to overcome such limitations It can be seen that these issues are also the research problems and research objectives for this study

1.1 Background

The development of information technology and internet has formed a new form of transaction in the business environment It is called as online transactions No one can deny that internet and websites are the most important tools of electronic commerce (e-commerce), to help e-commerce develop effectively The internet has been widely used from 1994 and e-commerce had been contributing to the growth

in many countries Amongst emerging economies, China's e-commerce presence continues to expand For example, with 384 million internet users, China's online shopping sales rose to $36.6 billion in 2009 (Olsen, Robert, 2010) In US e-commerce and Online Retail sales projected to reach $226 billion, an increasing of

12 percent over 2011 ( Mulpuru, 2012) Clearly, the e-commerce has an important

role in the development of economy in many countries

Although occurrence of internet in Vietnam later than other developed countries (from 2003), it also had a positive contribution to the national economy More specifically, revenue from e-commerce in Vietnam reached nearly 2 billion USD, equivalent to 2.5% of GDP, and it is forecasted that the revenue will be 6 billion USD in 2015 (A sleeping e-commerce giant, 2012) These numbers, though still relatively modest compared with many countries, it shows the potential of e-commerce development in Vietnam Especially, when the percentage of the population using the internet in Vietnam reached 35.49% in September 2012 (report

on internet statistics of Vietnam, 2012), the growth potential of e-commerce is based

In many studies about customer’s behavior in e-commerce, they also showed that customer’s trust is as a key factor, which impacts customer’s behavior in e-commerce Liu, T Marchewka, Ku (2004) compared American and Taiwanese perceptions concerning online privacy and how it relates to the level of trust with a company's electronic commerce website Their study suggested that trust is an important intermediary variable that influences behavioral intentions for online transactions Ling (2010) also mentioned in his study that impulse purchase intention, quality orientation, brand orientation, online trust and prior online purchase experience were positively related to the customer online purchase intention

Through the review of previous studies and the actual interview, we can conclude that trust is an important factor affecting customers in online activities So to help online activities develop more, we need to increase the trust of customers However,

to increase the trust of customers, what is necessary to do?

The necessary to do is to identify the factors affecting customer trust in the online environment This issue has been explored in numerous studies in many countries, many different areas Flick (2009) has found that perceived site quality was

confirmed to be positively related to trust in the website It was confirmed as important factor In other research of C Chen (2007), it mentioned that the trust of online customers for the seller derives not only from their website experience but also from their experience outside the website Specifically, the components: website design, fulfillment/ reliability, privacy/ security, and customer service are the basis of forming the trust of customers The study also indicates that trust is intrinsically beneficial and if a consumer trusts an e-retailer, he/she will come back

in the future or even become loyal to the e-retailer Earlier, in the study on the subject of “Consumers' attitudes towards online shopping in New Zealand”, Shergill and Z Chen (2005) also mentioned these factors: website design, website reliability/fulfilment, website’s customer service and website security/privacy are the four dominant factors which influence consumer perceptions of online purchasing in New Zealand

Generally, some of many studies about factors that affect customer’s trust in online environment were defined However, in Vietnam, what do factors affect customer’s trust, those are also similarly or not With this study, I would like to clarify that issues

1.3 Research objectives

In the previous section, research problem has been identified There are opportunities for electronic commerce growth, but it did not achieve its full potential So, what reasons do prevent the development of electronic commerce? The research questions of this study are as follows:

- What factors that affect customers' trust in e-commerce in Vietnam?

- How is the relationship between these factors and customer’s trust in commerce? Which will influence customer’s trust the most?

e-Therefore, the objectives of this research are as follows:

- To identify the factors that affect customers' trust in e-commerce in Vietnam

- To determine the influence of each factor on the customer's trust

1.4 Research scope:

Due to the limitations of research funds and time, the scope of this research is therefore limited to all Vietnamese customers in the Southern Area of Vietnam, specific in Ho Chi Minh City and Binh Duong province Respondents of this research include all of customer whom their own procurement decisions

1.5 Outline of study:

This research will be composed of 5 Chapters:

 Chapter 1: Introduction to give research background, research problem, research question as well as research objective

 Chapter 2: Literature review This chapter reviews theories and previous studies, then formulates the research hypothesis and model

 Chapter 3: Research methodology This chapter provides general idea how the research will be designed and implemented

 Chapter 4: Data analysis and result This chapter translates data collected from survey, analyses data and discusses the result finding in connection with theory

 Chapter 5: Conclusion, implication, limitation This Chapter concludes the research finding; provide further suggestion as well as research limitation

CHAPER 2 LITERATURE REVIEW

This chapter will review e-commerce literature involving the emergence of ecommerce, customer trust Based on the review of literature, customer trust in e-commerce context is identified From that the research model was built for this study

2.1 Model of Cuiping Chen (2007)

Consumer trust in an e-retailer derives not only from a consumer’s website experience but also from his/her experience outside the website (C Chen, 2007) Specifically, a consumer’s attitudes toward the key components of his/her entire online purchase experiences constitute the key drivers of consumer trust The key components that Cuiping Chen has listed in research are: website design, fulfillment/reliability, privacy/security, and customer service Findings also indicate that trust is intrinsically beneficial If a consumer trusts an e-retailer, he/she will come back in the future or even become loyal to the e-retailer Further, findings suggest that though trust has a direct effect on future intentions and loyalty, part of its effect is conditional on its ability to reduce transaction costs

In his research, the customer trust was studied as an intermediate variable, it was influenced by the customer’s attitude components, and it also affected customer loyal A part of the factors was suggested by C Chen (2007) would be used in this research

Website Design Attitudes

Fulfillment/ Reliability

Satisfaction

Security/ Privacy Attitudes

Customer Service Satisfaction

Trust in an E-Retailer

Figure 2.1: Research model of C Chen

2.2 Model of F Meziane and Kasiran (2008)

In other study, Maziane (2008) suggest “the trust information model” with 4 components: existence component, affiliation component, policy component, fulfillment component An information extraction system is developed to help users find information But before that the study found which variables is factor that affects the trust of customers The use of variables defined on a sample of the e-commerce website In study, Meziane and Kasiran present the development of information extraction systems and its evaluation

This research would base on model of Meziane and Kasiran (2008) to develop a research model about factors affecting customers’ trust in e-commerce in Vietnam

2.3 Building the research model:

The research model in this study based on C Chen (2007) and F Maziane (2008), combining factors of two studies to form a model of the factors affecting customer trust in e-commerce

Research model has dependent variable that is “Customer Trust”, and five independent variables The first-four independent variables are based on the model

of F Maziane (2008), which are variables: “Existence”, “Affiliation”, “Policy”, and

“Fulfillment” The fifth variable in the model is the “Website Design”, this variable

is added to the model of this study based on the model of C Chen (2007) C Chen develops an integrative model of consumer trust in an e-retailer The model includes the antecedents of consumer trust in an e-retailer, the central variable in the model, the outcomes of trust, and the mediator and moderators of the influence of trust on its outcomes In the model, “Customer Trust” is the central variable, when considered in relation with the antecedents, "Customer Trust" be influenced by these factors So in the model of this study will be based on that relationship to determine the factors affecting customer trust “Fulfillment” variable mentioned in the model of F Maziane (2008), “Security” and “Customer service” has been included in the “Policy” variables in the model of F Maziane (2008)

2.4 Research model

In this research, dependent variable was Customer Trust Factors affecting customer trust are independent variables There are five independent variables in this research, those are: Existence, Affiliation, Policy, Fulfillment, and Website Design

H1

H2

H3 H4

In this research the term ‘Trust’ is always used, so its meaning should be completely and properly understood Before the explanation of each hypothesis, let’s define what Trust is first

2.5 Definition Of Trust

The studies about the concept of “Trust” have derived from economics, sociology, and psychology The trust also has been studied deeply in the different areas (Williamson 1993; Rotter 1967; Zuker 1986), and in each area have different assumptions about “Trust”, so there are many different ways to talk about “Trust”

As the analysis by Laeequddin, B.S Sahay, V Sahay, and Waheed, (2010), Trust relationship involves at least two parties: the trustor and trustee With two parties, there are two streams of concepts of trust:

 The first stream: Trust is embedded within the trustor (feelings, emotions and cognition) not in the trustee For example, in a study by Rotter (1967), he defined: Trust as a belief or feeling is derived from the character and the formation and development during childhood

 The second stream: Trust is embedded within trustee For example, Rousseau

et al (1998) explains that intellectuals in the economy, the trust authority, ability, and expertise is becoming increasingly important, demonstrating its ability to act as expected

In this study, the concept of "Trust" is seen from the perspective of those engaged in economic activities, the “Trust” is considered in a commercial environment Therefore, this research prefer the second stream, a widely definition of trust by Rousseau et al (1998) said that: “Trust is a psychological state comprising the intention to accept vulnerability based on positive expectations of the intentions or behavior of another” (p 395)

2.6 Electronic commerce (E-commerce):

Electronic commerce or e-commerce refers to a wide range of online business activities for products and services It also pertains to “Any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.” B Andam (2003)

E-commerce is the combination of buying and selling activities through the Internet,

or any of the transactions with purpose of transferring ownership or rights to use goods or services through computer mediated There are many different definitions

of e-commerce, but there is no one definition is comprehensive, although this concept has been commonly used for a long time A definition is said to be more comprehensive and reflect recent trends happening in the business environment has defined e-commerce as follows: “E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation

between or among organizations, and between organizations and individuals” B Andam (2003, p 6)

The major different types of e-commerce are: Business-to-Business (B2B); Business-to- Consumer (B2C); Business-to-Government (B2G); Consumer-to-Consumer (C2C); and Mobile commerce (m-commerce)

 Business-to-Business (B2B) e-commerce is a kind of e-commerce between

businesses together This is kind of up to 80% of the current e-commerce activities, and experts predict that the form of B2B e-commerce will continue

to grow even faster

 Business-to-consumer (B2C) e-commerce is a form of commercial

transactions between companies and consumers, including customers looking for product information, purchase and sale of physical products ( tangible products, such as laptops, mobile phones) or product information ( that is electronic material goods or digital content such as e-books, software, game), and delivery operations This is the form the 2nd largest e-commerce, but is

the earliest form of e-commerce, the original source of it is derived from the online retailing (e-tailing) B2C models have become popular through major online retailers such as amazon.com, ebay.com

 Business-to-government (B2G) e-commerce is a form of electronic

commerce between companies and the public sector Public procurement, legal procedures, licensing or other activities related to the government that they are through internet

 Consumer-to-Consumer (C2C) e-commerce is a form of trade through the

Internet between individuals or customers This is a form of birth thanks to the growth of electronic marketplaces and online auction This mode is suitable for project bidding and procurement industry, where a buyer can pay for what they want from many different vendors There is also a form of development potential

 M-commerce (mobile commerce) is the buying and selling of goods and

services through wireless technology, handheld devices such as mobile phones, PDA Japan is considered the leader in the field of M-commerce in the world

2.7 Consumer Trust In E-Commerce

As mentioned above, many studies have identified trust as a multi-dimensional structure, and the complexity of the concept was to create different ideas about how

to develop trust in commercial relationships, and the literature now must cope with the issue of how trust is altered by the e-commerce context (Braynov & Sandholm, 2002; Egger, 2003; Gefen & Straub, 2004; Komiak & Benbasat, 2006; McKnight & Choudhury, et al., 2001; Meng, 2004; Papadopoulou & Kanellis, et al., 2001; Peszynski & Thanasankit, 2002; Rappa, 2002; Rutter, 2001; Shepherd & Dhonde, et al., 2001; Stahl, 2005; Yuan & Sung, 2004) In the e-commerce, there is a definite need for customer’s trust (Urban, Sultan, and Qualls 2000) There are two reasons:

 First, for the customer, there are high risks involved in transactions with commerce

e- Second, an online consumer is dependent on the online-seller to secure the goods or services he/she needs in the way he/she wants

The high risks involved in transactions with e-commerce for a customer come from two sources

 First, there is the uncertainty involved in the online transaction environment

 Secondly, there is the uncertainty regarding whether the online-seller intends

to and will be able to perform appropriately

The online transaction environment is highly uncertain because it carries the following characteristics:

 It uses an open technological infrastructure for transactions

 The technological structures it relies on are unstable because the Internet and Internet-related technologies are still new

 The protective institutional (legal, governmental, contractual, and regulatory) structures supporting it are still slowly arriving

 It is impersonal in nature, as opposed to the face-to-face transactions that consumers are familiar with

Establishing relationships is a necessary condition for the formation of the trust, face-to-face contact between buyer and seller “cannot easily be replaced” (Papadopoulou et al., 2001, p 195) The first attempt to compensate for the lack of interpersonal contact in e-commerce is that developing a one-way communication methods Meaning only receive information from the website that cannot be returned to their own information, which makes the trust of customers is difficult to develop Recent efforts into to create "two-way, one-to-one personalized interactive dialogues" on websites is more in tune with trust theory, and holds out promise in creating trust (Papadopoulou et al., 2001, p 195) Some studies suggest that the best way to overcome the disadvantages of e-commerce in the direct interaction between buyers and sellers is to convert websites into “customer-centric servicescapes

offering a digital experience that can contribute towards the development of an indelible relationship between the business and the customer” (Papadopoulou et al.,

p 195) If customers get good service for a time, they will form your own confidence in e-commerce

Follow the definition of trust developed by Rousseau, Sitkin, Burt, and Camerer (1998) to the customer and online-seller relationship, in the current study, defining: Customer trust in e-commerce as a consumer’s psychological state comprising the consumer’s intention to accept vulnerability based upon their positive expectations

c of the intentions or behavior of online-seller As an underlying psychological

state, customer trust in e-commerce can affect customer’s risk-taking behavior in their relationship with online-seller

2.8 Hypotheses

2.8.1 The existence component

In e-commerce, risk to customers is higher, because of the communication gap between the seller and the buyer (the transaction to go through intermediate computers and internet so the buyer does not opportunity to see how the seller is), the fake phenomenon due to the lack of physical interaction can occur in online transactions In the real world, when customers purchase can reduce those risks through the interaction between customers and sellers through face-to-face contact The physical presence of the business to ensure customers know of its existence, and when necessary, customers can go there, this will make customer trust for the seller (Cazier et al, 2006) In another aspect, to communicate more reliable, company need to provide more information about themselves and how the information is easily found by customers (Nielsen et al, 2000) This was later confirmed by a study carried out by Araujo and Araujo (2003), a study arguing about building customer trust in e-commerce In e-commerce, sellers need to have communication with the client, which means that they have officially exist behind their website

Providing information to prove the existence of companies such as addresses and phone numbers can convey the message that the company maybe outside the actual transactions, which can help consumers control and use communications when necessary In addition, providing information on registration with the government will increase the trust Information such as company registration and the registry will help consumers easily verify the validity of the company

H1: Existence of company behind website has a positive impact on customer trust

in e-commerce

2.8.2 The affiliation component

A website was recognized trust-mark seal will raise awareness of consumers on a trusted website (Cheskin, 1999; Gritzalis and Gritzalis, 2001) A seal of trust-mark has been developed to provide a guarantee of the actual sale of their business, sales policies provided on the website interface For example, a website registered to become an e-commerce website, they must meet the requirements, standard cells that are issued by the government, and websites that meet these criteria, and they will be recognized seal of trust-mark A seal of trust-mark or a certification as "trusted websites" will be essential and important for the website, especially the new one in the area of electronic commerce The new website usually use a third-party certification to be able to provide assurance about their behavior or quality of products or services they provide (Araujo and Araujo, 2003)

Customers can have durable relationships with suppliers through their own experience However, for new consumers, trust can be used to establish the initial trust relationship Several methods can be used by electronic commerce links and the most popular third-party certification, registration and associated member portal There is more risk than other well-known companies such as amazon.com and ebay.com Registration with the agency or organization can be used to create the trust Merchants Trust can also be caused

by links or digital recruitment portal

H2: Affiliation of website has a positive impact on customer trust in e- commerce

2.8.3 The policy component

Online privacy policy is understood as the seller's statement about the privacy of customers and the customers are protected when engaged in e-commerce websites Interviewing directly with clients has shown that privacy is a major concern for those who use the internet (Cavoukian and Crompton, 2000) There are many privacy-related complaints, which are related to customer complaints to receive unwanted e-mail (junk mail, spam), or their complaints about being harassed by the calls, and their complaints about the sale of private information to a third party or dangerous than they stolen information and posing in undesirable transactions (Mithal, 2000) Important requirement for e-commerce security is the need to protect customer information during the transaction, confirm the transaction is not a faker, or ensure that no one can interrupt the process of dealing to steal transaction information, generally prevent the time of the transaction (Patton and Josang, 2004)

In electronic commerce, policies such as privacy, customer satisfaction and guarantee can help consumers evaluate the trustworthiness of a company These policies can influence the level of risk involved in the transaction Company policy such as money back guarantee can lower consumers’ risk by giving more control to the user towards the output of the transaction since they can return the product without total loss if they are not satisfied

H3: Policy of website has a positive impact on customer trust in e- commerce

2.8.4 The fulfillment component

The sellers on the website need to understand that their transactions with customers can be successful only if they can ensure the goods are delivered to the customer and payment security for customers About 9 in 10 people using online shopping method like the seller to explain the problems as soon as order items can be delivered to customers, sales order confirmation with customers or a clear statement about the warranty policy, change, return the product if the product is incorrect as

the original information (Patton and Josang, 2004) In the bill should provide clear information on how the transaction, the company's name, payment method Make sure the seller's reputation on customer care as delivery issues, billing issues and it creates a reliable environment for e-commerce transactions (Järvenpää et al, 2000) Reputation conveys information about the performance of companies as well as behavior in past A positive reputation can create the basic building blocks of the trust business and make some guarantee that the merchant will perform and behave

in a similar way in the future

H4: Fulfillment of seller has positive impact on customer trust in e- commerce

2.8.5 Website design attitude component

Feng, Lazar, and Preece (2004) argues that the website has the trust of consumers if they show the actual contact of the company’s office, or interactive environment of the organization to strengthen personal beliefs, and allow the exchange between customers and the company In the study of Feng et al, 2004, the conclusion of the study is to develop evidence to help customers determine what other customers like them or who have experience may be useful for promoting sympathetic attitude and build the trust of individuals for "online seller" As a result of these findings, website design has become one of the central areas of interest in making e-commerce more reliable Studies have shown that website design elements affect how consumers evaluate the site, and whether or not they will believe it

Other studies continue to debate about the role of website design in building trust Lanford (2004) found that "consumers place less importance on website design and usability and more on other aspects of online shopping, such as product details, Contact information and prices" Repeated testimony of the user that they can develop trust in a website despite the fact that they do not like the look or layout of the site As a consumer noted, "if it is something I need or want, it does not matter if the website looks good" Some consumers even expressed confidence in the poor design of a shop rare items, more well-designed graphics of the official website

(Lanford, 2004) Moreover, "if an online store to make consumers happy for the first time, consumers have the ability to come back" In other cases, usability becomes an important basis for building trust over looked

Through the quick interview, the real of the Vietnam market, this research proposed one more component: website design attitude, this is the fifth component Website design attitudes assess a consumer’s satisfaction with all elements of his/her experience at an e-commerce’s website, including: navigation, information search, level of personalization, and merchandise selection

H5: Website design attitude of company has positive impact on customer trust in

e-commerce

Chapter Summary

In summary, this chapter presents the research model of this article, based on 2 models Meneze research (2008) and Chen (2007).Research model "Factors affecting customer trust in e-commerce in Vietnam" identified five main factors: Existence, Affiliation Policy, Fulfillment and Website design, they will affect the trust of customers

The next section of the chapter presents the key concepts to grasp in the study, which is the concept of trust There have been many concepts of trust been studied before, but the content in the field of economic research, this study will use concept

of Rosserce, that is: Trust is a psychological state comprising the intention to accept vulnerability based on positive expectations of the intentions or behavior of another The next concept to be mentioned is the concept of electronic commerce, in the writing of B Andam (2003), the concept of e-commerce are: “Any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.” Final section of the chapter refers to the concept of the factors mentioned in the model, and the hypothesis of this study In the research has 5 research hypothesis, those are:

 H1: Existence of company behind website has a positive impact on customer

CHAPTER 3 RESEARCH METHOD

This chapter discusses the methodology that was used in this study, the source of data, the collection of data and the analysis of data items A mixed methodology was used in this study The goal of this study is to identify critical factors that affect customer trust in e-commerce

3.1 Research approach

The mixed method has recently become a popular method of research (Creswell, 2002) Even though the mixing of quantitative and qualitative methods presents an ongoing problem recent developments in the philosophy of science have argued that the two traditions should not have a separate-but-equal status, and should instead interact The researcher may use mixed methodology to enrich the study result in a way that a single method cannot achieve (Brewer & Hunter, 1989; Tashakkori & Teddlie, 1998) Using both quantitative and qualitative analysis of data allows researchers to simultaneously generalize results from a sample to a population and

to gain a deeper understanding of the phenomenon of interest It also allows researchers to test theoretical models and to modify them based on participant feedback

3.2 Research process

After the research problem, the research questions and research objectives were defined The literature review was conducted to review all relevant theories and model to find a suitable conceptual model for the factors affecting customer’s trust

in e-commerce in Vietnam and thereby develop its hypothesizes The draft questionnaire was developed from the consolidation of various questionnaires used

in some previous studies Then research got a stage of research design where the research in this study was designed in two phases: a pilot study and a main survey

A pilot study was conducted with two rounds: a qualitative study and a quantitative

study to refine the questionnaire before launching a main survey A main survey was conducted by means of online survey invitations to be sent by emails and survey by direct interviews (face-to-face) through hard copies of questionnaires The research procedure in this study consists of five steps:

 Step 1: Based on the literature review, conceptual model of the factors affecting customer trust in e-commerce developed With the conceptual model, the research hypothesis is also given The draft questionnaire was incorporated from the different measurement scales in previous studies

 Step 2: Perform a qualitative pilot study to revise the questionnaire First, a series of in-depth individual interviews were conducted to identify for them the important factors that will affect their trust in e-commerce Based on the results

of interviews, questionnaires are set properly with the research environment is the e-commerce market in Vietnam

 Step 3: Conduct a pilot quantitative survey to test the clarity of the survey questions This survey with a small sample of about 20 interviewees to ensure that the content of the questions to be understood literally, the contents of the study The feedback and response from customers has been used to adjust again Data was collected from pilot study, by the way the measures were assessed by Cronbach’s Alpha reliability and Exploratory Factor Analysis to explore the inter-relationships among a set of variables Then refine the questionnaire that was the final version to be launched in the following main survey

 Step 4: Launch a main survey and collect data A main survey was conducted

by means of online survey invitations to be sent 150 customers by emails and survey by direct interviews (face-to-face) to 200 customers through hard copies

of questionnaires Out of them, Data with the main survey was collected in four weeks with result received 110 feedbacks by emails and 162 answers by hard copies after the main survey was launched

 Step 5: Analysis of data collected through the following analysis:

o Cronbach’s Alpha Analysis: Cronbach Alpha was defined to assess the measurement scale reliability by testing the internal consistency among variables of the same construct The scale was considered reliable when the Cronbach alpha coefficient is above 0.7

o Exploratory Factor Analysis (EFA) and modify the research model accordingly The measures were assessed by EFA to explore the inter-relationships among a set of variables The inter-relationships among the variables were considered strong when the correlation matrix for evidence

of coefficients was greater than 0.3, Bartlett’s test was significant (p<0.5) and the KMO index was greater than 0.6 Based on this outcome, the hypothesized conceptual model was modified

o Linear regression analysis: after the reliability was confirmed, multiple regression analysis was employed to test the hypotheses

3.3 Measurement scales:

3.3.1 Measurement scales:

There are five factors being examined in this study, based on the measurement scales adapted from previous studies Questionnaire was been used in the quantitative study with Likert scale: Responses were scored on a 5-point scale from (1) strongly disagree to (5) strongly agree The measurement scales are listed in Table 1 as below:

Table 3.1: Measurement scales of research

EXISTENCE

EXIS1 Website have clear address to contact Adapted

from Meziane and Kasiran,

commerce services

AFFILIATION

AFFI1 Website is introduced by a reputable

third-party

Adapted from Meziane and Kasiran,

2008

AFFI2 Website high ranking in the list of

reputable websites AFFI3 Website allows users to register as a

member

AFFI4 Website always updated with new

information for members AFFI5 Website joins in sharing on the online

trading community

AFFI6 Website shared many useful articles on

the community site

POLICY

POLI1 Staff of website always ready to help

you

Adapted from Joseph-Vaidyan,

2008

POLI2 Staff of website looked into the

problem to help you solve it POLI3 The login process of website is secure POLI4

Website not disclose your personal information to other parties without your acceptable

POLI5 Website has clear warranty policy for

their products POLI6 Website committed that the time for

2007 & Ranganathan

& Ganapathy,

FULF6 Has a lot of positive feedback from the

WEDE2 Product image is real and is shown

from many angles

2007 & Ranganathan

& Ganapathy,

2002

WEDE3 Website technology allows you to

easily switch to access other products WEDE4 Website does not take time to visit

WEDE5 Information and articles about products

are updated on the website WEDE6

The layout and organization of the website makes it easy to search products

WEDE7 The search function helps you find

exactly what you want quickly WEDE8 Website saved information products

that you came across

WEDE9 Website allows you to easily compare

with other products to choose WEDE10

This site allows you to know about the availability of the product in the search process

TRUST

TRUS1 You have trust with e-commerce

website

Adapted from Man,

2006 TRUS2 You have trust that website will keep

commitments TRUS3 You will use this website when have

3.3.2 Pilot study:

The above measurement scales were a result from the in-depth in the qualitative pilot study, based on the consolidated draft questionnaire which worked as a guide for the in-depth interview

Round 1, the focus group method was used with 2 group, 10 interviewees in each

group Base on the draft questionnaire, interviewees were guided to answer questions The result of this round:

 The first suggestion on modifications to the questionnaire was to change “this website” to “website X” and added the question about name an electronic commerce website which customers have used or have known, in order to make

it more specific and clear to the interviewees

 Have 15 in total 20 interviewees agree remove FULFILLMENT factor, they said that the question of the observed variables in this factor can only be answered if the user has been buying and selling online, mean that the customer must have experience However, this study want to find out what factors affect the trust of customers for e-commerce to whether he or she had ever experienced in e-commerce or not yet With 15 interviewees, more than 2/3 of interviewees agreed to remove FULFILLMENT factor, so the research model will be revised against Thus the model will only 4 factors affecting Customer’s TRUST, as: AFFILIATION, EXISTENCE, POLICY, and WEBSITE DESIGN

 Most of interviewees agreed on the measurement scale of other factors: AFFILIATION, EXISTENCE, POLICY, WEBSITE DESIGN, and TRUST

Round 2, the questionnaire was then formed after the qualitative Pilot Study and its

clarity was tested and confirmed through the focus group method with 20 customers

in two groups Data was collected from pilot study, then through Cronbach’s Alpha reliability and Exploratory Factor Analysis, the interrelationships among of variables was explored The result, variable AFFI1 and AFFI6 were removed because the factor loading of: AFFI1 =0.426 <0.5, and AFFI6 =0.380 <0.5 After

refining the questionnaire, it was the final version and would be launched in the main survey

3.3.3 Revised research model and Hypotheses:

From the pilot results, the theoretical research model was revised with one of five factors was removed The revised research model and Hypotheses are described in Figure 3.1

Figure 3.1: Research model after revised

And Hypothesis of this research were revised:

 H1: Existence of company behind website has a positive impact on customer