Factors influence on customers repurchase intention in customer to customer e marketplace the case of shopee vietnam

This study thus proposes the following hypothesis:H1: Satisfaction with seller has a positive effect on Repurchaseintention Perceived Product Quality In previous studies, product quality

Factors Influence on Customers Repurchase Intention in Customer-To-Customer E-Marketplace The Case of Shopee

Vietnam

Huynh Thi Vi Na Nguyen Van Phuong

International University, Vietnam National University HCMC, Vietnam

in 2015 If in the past, the C2C model in Vietnam is an only personal business model that sells toindividuals and most only appears on forums and social networks Individuals and small shops willpost product information, all the remaining procedures such as contact, payment, delivery are donemanually This method does not have much performance and scale Nowadays, the C2C model isbecoming more professional Although it is defined as a marketplace, it is not similar to traditionalmarket Transactions are mainly conducted between buyer and seller; all orders have beencompleted, automatically implemented through the electronic system By this way, sellers canbenefit from higher sales, while buyers have more options for lower prices (Tian, Y et al 2015)

Founded in July 2015, Shopee is a Singapore-based mobile shopping platform Shopee'sstrategy focuses on the Southeast Asian market, including Singapore, Malaysia, Indonesia,Thailand, the Philippines, Taiwan and Vietnam In Vietnam, there are no promotional activities,but Shopee is ranked in top 3 online shopping sites Shopee develops based on the C2C model(customers to customers), the online platform service that provides a place and opportunity forthe sale of goods between the buyer and the seller Shopee has successfully integrated socialnetworking like Facebook, Zalo, Twitter in their e-commerce platform in order

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to enhance the effectiveness in communication between parties Buyers and Sellers areconnected, exchanged directly through the features: Chat, Bid, Comment, Rating, ProductSharing and Tracking These features help buyers gather more information about the productand seller before they really feel confident for order Particularly, in recent times, Lazada.vn,Adayroi.vn, Tiki.vn, taking largest market share in Vietnam e-commerce market have shiftedfrom B2C platform to C2C platform, which has shown the potential of C2C development inVietnam e-commerce market.

The increasing number of Vietnam e-marketplaces has broken down the entry barriers forthe new businesses in e-commerce market The consequence is forming the intense marketcompetition which is very low profitability and survival rate for online businesses It is notedthat the expense for developing a new customer in the e-marketplace is considered higherthan in traditional one But repurchased online buyers have tendencies to spend more thanthey do in the first time, once buyer-seller relationship exists, profits will grow faster and faster(Reichheld and Schefter, 2000) Therefore, in order to survive in the C2C e-marketplace likeShopee, online sellers must have effective ways to attract previous customers to make anotherpurchase (Chen et al., 2017) Chiu et al (2009) also indicated that in order to gain profits from

a buyer, that buyer must purchase at least four times at one same seller’s store However, in marketplace, only half of them have intention to repeat purchases This leads to the followingquestion: What factors impact online buyers’ repurchase intention to a particular seller? Themain objective of this study is to examine the potential factors affecting the decision torepurchase in C2C e-marketplace, thereby suggesting appropriate solutions to sellers andwebsite developers

e-Numerous empirical studies have attempted to examine factors leading to online repurchaseintention, focus on defined buying factors buying (Kim et al 2013); information systems (IS)success (Wang 2008); customer satisfaction (Khalifa and Liu 2007); website quality (Shin et al.,2013); website identification (King et al., 2016) and computer-mediated communication tools(Bao et al 2017, Ou et al 2014) However, these factors above had not been integrated into acomprehensive model yet This integrated approach is also lacking in Vietnamese online buyersresearches Moreover, most of the e-commerce studies have examined primarily on thebusiness-to-customer (B2C) context, largely ignoring the C2C context In order to fulfill the gap

of previous researchers and accomplish the comprehensive model of repurchase intention; thisresearch will explore more relevant literature about customer loyalty and from that develops

an integrated model of repurchase intention in C2C e-marketplace

Based on the above argument, this paper aims to answer: 1) what factors impact oncustomer satisfaction and repurchase intention towards one particular seller in the C2C e-marketplace? and 2) How do computer-mediated communication (CMC) tools influenceinteraction between buyers and sellers?

2 Literature review

Repurchase Intention

Fornell (1992) defined repurchase intention as a “consumer behavioral intention” using a serviceprovider again in the future, based on his or her previous experiences In the online context,repurchase intention is defined as revisiting intention in the future of online buyers at one sameshop (Kim et al., 2012) Gruen et al (2006) find that customer repurchase intention is used tomeasure the customer loyalty in C2C online context Enhancing loyalty from customers, sellers cangain lots of competitive benefits because loyal customers tend to buy and spend more, search morefor information and willing to give positive word-of-mouth than first-time customers (Jiang &Rosenbllom, 2005) Thus, the identification of determinants of intention to repeat purchasing in theC2C e-commerce is important for both sellers and practitioners in predicting customer behavior inthe future (Kim et al 2013; Khalifa and Liu 2007; Shin 2013; Bao et al 2017, Ou et al 2014)

Satisfaction with seller

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Customer satisfaction is viewed as a psychological state created from post-purchaseevaluation when customers’ needs are met or exceed the pre-purchase expectations (Oliver,1980) According to Shankar, Smith, and Rangaswamy (2003), online customer satisfaction isconsidered be formed from the customer evaluation about previous experiences includingsearching, buying, and using a product Bhattacherjee (2001) and Oliver (1980), in hisExpectation Confirmation Theory, suggested that satisfied customers will form repurchaseintention; because a dissatisfied buyer is more likely to search for alternative products andmove to a competitor than a satisfied buyer Past studies were consistent with the findings thatsupported the positive relationship between satisfaction with behavioral retention (Wang,2008; Shin et al., 2013; Hsu et al., 2014) This study thus proposes the following hypothesis:H1: Satisfaction with seller has a positive effect on Repurchase

intention Perceived Product Quality

In previous studies, product quality perception is defined as the way consumers evaluate orperceive about the product’s overall performance (Chen, 2003) Keeney (1999) suggested that

to survive in the online business, it is required that sellers must maximize product quality alongwith minimize product cost Patterson (1993) figured out that perceived product quality is themost significant factor impacting customer satisfaction Multiple researches have similarfinding that supported a correlation between perceived product quality with customersatisfaction (Sweeney, Soutar, & Johnson 1999; Tsiotsou, R 2006, Lin; C C et al 2011) In thecontext of consumers’ satisfaction, Tsiotsou (2005) further showed that there is a strongrelationship between product quality perception and intention to purchase, including predictingrepurchase intention Many studies have provided the empirical evidence to support a positivedirect effect of customer perceived product quality on purchasing behavior including intention

to repeat (Bei & Chiao, 2006; Tsiotsou, R 2006; King et al., 2016) Based on the abovearguments, this study thus proposes the following hypotheses:

H2a: Perceived product quality has a positive effect on Repurchase intention

H2b: Perceived product quality has a positive effect on Satisfaction with seller

Perceived Information Quality

DeLone & McLean (1992) defined information quality as desired characteristics of theproduct information Online information quality is the buyer’s evaluation of the quality ofinformation about products displayed on the seller website (McKinney et al., 2002) According

to previous papers, information quality has been measured by following subconstructs:information accuracy; timeliness; format; relevancy; completeness; clarity andunderstandability; timeliness; ease of understanding personalization; and reliability (Brown &Jayakody, 2008; DeLone & McLean, 2003; Chen et al., 2017; Wang, 2016)

When sellers provide buyers with complete and helpful information, the buyers will take lesseffort to conduct additional searches for diminished information (Liang and Chen 2009) This impliesthat high-quality information displayed on the seller website demonstrates the sellers’ capabilityand their honest interest in customers; which will influence consumers’ satisfaction towards thisseller website (Chen et al 2017) Hence, according to Chen et al (2017), the more customersperceived that the accuracy, format, reliability, and completeness of the information displayed onbuyer’s website, the more they will be satisfied with the sellers What is more? Information qualityalso enables customers to make comparisons among products, enhance transaction security as well

as understand purchasing procedures (Liu & Arnett, 2000) Thus, information quality can be aconsiderable factor when online shoppers revisit seller website in future intentions to make anotherpurchase (Shin et al., 2013; Kim and Niehm 2009) This study thus proposes the followinghypotheses:

H3a: Perceived information quality has a positive effect on Repurchase intention

H3b: Perceived information quality has a positive effect on Satisfaction with the seller

Perceived Price Fairness

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Zeithaml, (1988) defines the perception of the price is a monetary sacrifice that customermust take to obtain a product For online shopping, product price fairness perception tends to

be comparisons between vendors Herrmann et al (2007) stated that price fairness perception

is a consumer’s assessment and associated emotions of whether their monetary sacrifice ismore than or the same as competitors Pingjun Jiang (2005) indicated that in uncertaintyperformance as online shopping, a favorable price perception tenda to play a significant part inincreasing both online satisfaction and intention to return Peatti & Peters (1997) also statedthat when price perception matches with customers expectation, the customers will make arepeat purchase In contrast, if customers perceive a monetary loss on price, they will switch toanother online vendor (Keaveney, 1995) According to Fornell, et al (1992), price perceptiontakes an important impact on customer satisfaction since customers tend to concern on pricewhen evaluating product and service value Many studies have provided the finding thatsupported an influence of fairness perception on customer satisfaction and repurchaseintention towards online shopping (Jiang & Rosenbloom, 2005; Grewal et al 2004; Martin 2009,Suhaily, L., & Soelasih, Y 2017) This study thus proposes the following hypotheses:

H4a: Perceived price fairness has a positive effect on Repurchase intention

H4b: Perceived price fairness has a positive effect on Satisfaction with the seller

Perceived Interactivity

Newhagen et al (1995) suggested interactivity including two dimensions: “(1) viewers’psychological sense of efficacy and (2) viewers’ sense of the media system’s interactivity” Inonline context, interactivity is defined as ability for a member in the website communicate withother members (Hoffman and Novak, 1996) Perceived high interactivity may allow consumers

to communicate with other members to access information from the website, which results togreater control of their shopping experience (Ballantine, 2005) Thus, it is suggested thatperceived interactivity is understood as an antecedent of satisfaction (Shankar & Rangaswamy,2003; Ballantine, 2005) In C2C markets, Chen et al (2009) found that the core competitiveadvantage of a C2C platform comes from members communication This is explained byinteractivity is significant determinant for enhancing e-commerce loyalty because it enablescustomer to collect more information than searching experiences so that it increases theamount of information available to the customer (Ha et al., 2010) Thanks to communication,buyer and seller have more chance to understand each other which will create a long-termbuyer-seller relationship in online context (Ou et al 2014) There are many studies havedemonstrated that interactivity is the significant determinant of repurchase decisions (Song &Zinkhan, 2008; Ha et al., 2010) The following hypotheses are suggested:

H5a: Perceived interactivity has a positive effect on Repurchase intention

H5b: Perceived interactivity has a positive effect on Satisfaction with the seller

Computer-Mediated Communication Tools

According to Kaplan and Haenlein (2010), Computer-Mediated Communication Tools (CMC)are considered as a mediator that connects buyer and seller as well as facilitates thecommunication effectively In C2C platform, typical CMC tools consist of the feedback &comment system and instant messenger (Ou et al 2014) Thanks to these tools, buyers andsellers have opportunities to share information, experiences and interact with each other (Cho

et al 2005)

Instant messenger is an “online private communication channel” which can mimic traditionalinteractive face-to-face communications Thus, customers easily exchange information by attachingpictures, get advice from buyer, adjust the order information as well as negotiate for lower price(Bao et al 2016) On Shopee, Instant messenger tool is embedded on the website and customers use

it to communicate with buyers Instant messenger also combines picture or photo taking feature sothat pictures of products can be sent directly to seller to check the related information Besides,Instant messenger is similar to well-known chat tools such as Facebook messenger, Apple I-message, by which customers can use avatars and emoticons (such as smileys,

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flashing icons) in diagrams which results in enhancing a buyer-seller relationship In sum, theeffective use of Instant messenger in C2C e-marketplaces like Shopee facilitate communicationand negotiation processes in online shopping experience, as the result, it enhancesinteractivity perception from customers (Bao et al, 2016, Ou et al, 2014).

Feedback & comment system plays a role of evaluation tool that allows customers evaluate

to a specific product after purchasing and the seller is also able to respond to customer’sfeedback (Pavlou & Dimoka, 2006) In C2C platform, feedback & comment system can beviewed as a “two-way communication” tool in term of ratings and evaluations In details, whencustomers finish a transaction, both buyers and sellers can rate and write detailed textcomments about that transaction Shopee encourages customers to give feedback, comments

by providing a promotion that for each feedback, customers will receive 5 points value as 5VND Following Ou et al.’s (2014) study, feedback & comment system allows two-way andsynchronized communication in interaction between seller and buyer for both pre-purchase andpost-purchase, so that the interactivity is influenced by feedback & comment system (Bao et

al 2016) This study thus suggests the following hypotheses:

H6: Effective use of Instant Messenger has a positive effect on Perceived interactivity

H7: Effective use of feedback & comment system has a positive effect on

Perceived interactivity Conceptual Framework

Base on previous studies (Kim et al., 2013; King et al., 2016; Bao et al., 2016), theconceptual model is developed to illustrate relationships among variables mentioned in thehypotheses Figure 1 illustrates the research framework [see Figure 1]

3 Methodology

Research methodology

This study employs a casual research design with quantitative approach The reason whychoosing this method is that quantitative analysis is considered an appropriate method tomeasure the degree and extent of attitudes, ideas, performance, and other variables(Ledgerwood & White, 2006)

This study collects data through using online surveys Target population that is appropriate

to the topic is online customers who have already used Shopee online shopping service.Moreover, the study focuses on collecting data form university students including InternationalUniversity The reasons for this is that students are considered as large-scale internet users aswell as represent a potential segment of online shoppers Thus, they can reflect the behaviors

of online shoppers deeply (Li et al., 2006)

Research Design and Data Collection

The questionnaire must be designed in easy, clear and easy sentences for participants tounderstanding It consists of three main parts The first part includes screen question toclassify respondents to find the right one The second part includes questions that determineobservations of factors mentioned in conceptual model The final part includes questions tocollect demographic information such as: gender, age, career, income per month, how longhave respondent engaged in shopping online

The pilot test is conducted test the questionnaire effectiveness, and then make moreappropriate adjustments in terms of content and language so that respondents can easilyunderstand as well as access the study The suggestions and feedback from the pilot areincluded in the final version of the questionnaire The final questionnaire is used to test largersamples for the study

The questionnaire for observations in Table 1 [see Table 1] is designed based on previouspapers and pilot test adjustments with the Likert scale of 5 points: (1) totally disagree; (2)

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Collecting data activity is spread out for nearly 8 weeks (including pilot tests) Thequestionnaire is send private on Shopee and Facebook through Instant Messenger system to

400 people 330 answers were returned to the system due to invalid addresses, and so on 11

of the surveys are eliminated from the study due to missing data and random, resulting in atotal of 319 valid responses which are used for further analysis in this study

Survey response

Table 2 illustrates proportion of respondents’ demographic information [see Table 2] Thenumber of female respondents is greater than number of male respondents (69.6% > 30.4%) Themajority of the customers are from 18 to 24 with 73.4 % Students and officers are familiar with theonline shopping on Shopee account for 77.7% and 11.9%, that is why most of respondents in surveyearn less than 3 million VND (62.4%) Moreover, people have more experienced and keep onlineshopping habit for 2 years rate 46.7% has highest value, while number of people have under sixmonths experiences less enjoy shopping online on Shopee account for 25.4%

4 Results

Statistical Product and Services Solutions 20.0 (SPSS) software and Analysis of MomentStructure 22.0 (AMOS) are used to analyze responses from participants The data analysis isconducted with several tests; the results of these tests are presented as below:

Exploratory Factor Analysis (EFA) and Confirmatory factor analysis (CFA)

First, EFA is conducted to reduce data into a smaller set of variables and then measure thenumber of factor and the factor structure as a set of variables After finalizing the number of factors,CFA is conduced to test whether the measurement model fits with the data from survey, which EFAtechnique is not meant to measure

At the first round of EFA test [see Table 3a], variables whose factor loading are greater than0.5 grouped into eight factors as expected in the proposed theoretical model Item RI2 have apositive value of loading value less than the recommended 0.5, while Item PP3 and PQ5 have apositive value of loading value minus crossing value is less than 0.3, which does not satisfywith the threshold of EFA test (Hair et al., 2010) Thus RI2, PP3, and PQ5 are deleted After PQ5,RI2 and PP3 are dropped, the new adjusted EFA test has remain items grouped into eightfactors as expected in the proposed theoretical model [see Table 3b] The value loadings andcross-loadings of the remaining items are displayed in Table 3b All items have factor loadinggreater than 0.5 as well as the value of loading value minus crossing value greater than 0.3,which is consistent with criteria for Exploratory Factor Analysis (Hair et al., 2010)

In order to evaluate model fit in CFA, the following indexes are applied: Chi-square/df ratio,Comparative Fit Index (CFI), Standardized Root Mean Square Residual (SRMR), Residual MeanSquare Error of Approximation (RMSEA) and p of Close Fit (PCLOSE)(Gaskin, J & Lim, J 2016)

In the CFA model fit results, almost goodness-of-fit indices of measurement model are verygood: CMIN/df= 1.914 (≤3); SRMR= 0.059 (<0.08), RMSEA= 0.054 (≤0.06) and PClose= 0.154(>0.05) However, CFI of measurement model did not meet the required value of 0.95 with thevalue of 0.930 but still in acceptable scale (Gaskin, J & Lim, J., 2016) Therefore, the low value

of CFI does not distort the results of the study

Reliability and validity

To test the reliability and validity, three indexes are used: (1) Cronbach’s alpha; (2)composite reliability (CR) and (3) average variance extracted (AVE)

Composite Reliability (CR) and Cronbach’s Alpha are two important tests to evaluate theinternal consistency reliability The rules for Cronbach’s Alpha and Composite Reliability asfollow: the overall Cronback’s Alpha > 0.6, Item-total correlation > 0.3., Composite reliability >0.70 (Nunnally and Bernstein, 1994; Chin, 1998) Tables 4 presents the Cronbach’s Alpha andComposite Reliability (CR) of all items of all

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factors after running SPSS 20.0 software The table presents that Cronbach’s Alpha issignificant showing that most items are effectively measuring the same factor All items whichare over 0.3 satisfy the Item-total correlation Moreover, the CR results obviously satisfy theconditions of the test with the values are greater 0.7 Therefore, the internal consistencyreliability is confirmed with confidence.

Average Variance Extracted (AVE) is the important tests in testing the construct validity anddiscriminant validity to guarantee the fitness of measured model The thresholds for this valueare: the AVE value must greater than 0.5, the correlations between two constructs are allsmaller than the square root of the construct’s AVE (Fornell and Larcker, 1981; Hair et al.,2014) In the first test (results are showed in the table 4), there is a Convergent Validityconcern in terms of factor “Effective use of Feedback & comment system” (FB) because theAVE less than 0,5, which does not satisfy the conditions of the test To solve the ConvergentValidity problem, the item FB4 is eliminated in order to improve the value of AVE Afteradjustment, the results of AVE value are showed in the table 5 All the value obviously satisfythe validity measure thresholds with the AVE values are greater 0.5, and the square root ofAVE values are larger than the inter-construct correlations; Hence, the results the validity testsatisfy to move the next steps

Testing the hypotheses and discussion:

Structural Equation Modeling (SEM) test is used to test the hypothesized relationships in theproposed conceptual model Table 6 shows the results of SEM by AMOS 22.0 software

The effects of perception factors on customer satisfaction with seller (H2b, H3b, H4b, H5b):

Based on SEM’s results [see Table 6], all these hypotheses are supported because their values are less than 0.05 This implies that all factors of perception including Product quality(PQ), Information quality (IQ), Price Fairness (PP) and Interactivity (IT) have significant positiveimpacts on satisfaction with seller (SA) with their standardized regression weight of thedirection are 0.293, 0.314, 0.222 and 0.134 This finding is similar to the argument ofBallantine’s (2005), Lin C C et al.’s (2011) and Kim et al.’s (2013) studies which highlightedthat consumer satisfaction is significantly impacted by the quality of product, informationinteraction and price fairness This shows that even though the current study examines inVietnam C2C context instead of B2C platform, and it still find that Vietnamese buyers in both e-commerce platform consider perceptions of Product quality, Information quality, Price Fairnessand Interactivity are important determinants in building online customer satisfaction

p-The effects of perception factors on customer repurchase intention (H1, H2a, H3a, H4a, H5a):

Based on SEM’s results [see Table 6], only three hypotheses are H1; H3a and H5a aresupported because their p-values are less than 0.05 In details, there are only three out of 5factors namely Satisfaction with seller (SA), Perceived Information quality (IQ), and PerceivedInteractivity (IT) have directly significant influences on customer repurchase intention (RI) withtheir standardized regression weight of the direction are 0.605, 0.194 and 0.204 This provesthat Satisfaction with seller (SA) is the factor has the most influence on repurchase intention(RI) The result of this study is appropriate with Hsu et al.’s (2013), Wang (2008)’s, Kim andNiehm’s (2009) and Ha et al.’s (2010) findings suggesting a positive influence of customersatisfaction, perceived information quality and perceived interactivity to repurchase intentions.Thus, seller in e-marketplace should develop appropriate business strategies and methods tomeet customers’ expectation, especially improve the quality of information and interaction tomaintain long term relationship with customers This can be achieved by developing the rightmix of website content and services, especially after-sale service In details, sellers shouldproactively display important information such as a pop-up discount, hot deal or FAQs(frequently asked questions) on their front sites Ensuring information quality by providingrelevant, sufficient, accurate, and up-to-date information makes comparisons amongalternative sellers easier for customers, so that they are likely to remain their satisfaction andloyalty to that seller

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