Antecedents of Social Media Adoption: A Case Study of Individual Online Retailers in Hanoi and Ho Chi Minh City45292

Antecedents of Social Media Adoption: A Case Study of Individual Online Retailers in Hanoi and Ho Chi Minh City Thi-Minh Ngoc Luu(1), Phuong Mai Nguyen(1)(*), Phu Quy Dao(1) (1) VNU University of Economics and Business, Vietnam National University, Hanoi, Vietnam * Correspondence: mainp@vnu.edu.vn Abstract: This paper empirically examines the antecedents of social media adoption as a business platform by individual retailers in the two biggest cities of Vietnam that are Hanoi and Ho Chi Minh City The conceptual framework for this study based on literature on information technology, ecommerce, technology acceptance model (TAM) and retailing An online questionnaire survey of 512 individuals, who are currently selling products and services through social media sites, was administered in Hanoi and Ho Chi Minh City The results of data analysis showed that perceived ease of use (PEU) has higher impact than that of perceived usefulness (PU) on social media adoption of individual online retailers Keywords: social media adoption, technology acceptance model, online retailers Introduction Social media or social networking has emerged in these recent years as a new information channel through mass interaction among users In business, social media has a significant impact on marketing and customer relationship management by supplying customers with information about sellers, products or services, and enabling real-time interaction between sellers and buyers In recent years, social media has grown immensely popular among individuals, as businesses have started to see the benefits and the full visibility that comes with using social media (Siamagka et al., 2015) In Vietnam, social media has dramatically spread out during recent years, particularly in the retailing sector Due to the increasing use of information technology (IT) applications, the Vietnamese retailing sector is changing rapidly from the traditional brickand-mortar business model to an internet-based one Online retailers are becoming more popular than ever before with the entrance of numerous individuals These retailers have turned nearly one-third of the population, i.e., 30 million people, into online shoppers (Association of Vietnamese Retailers, 2019) More importantly, 48% of Vietnamese consumers are changing from brick-and-mortar retail stores and bazaars to online retailers to buy not only common goods but also luxury ones (Vietnam E-commerce Association, 2019) According to a report by Vietnam E-commerce Association (2019), 36% of surveyed companies in research about e-commerce in Vietnam responded that they were fully aware of online shopping trends and currently implementing social media as a platform in the business Consequently, e-commerce has boosted rapidly The total revenue of e-commerce in Vietnam is shooting to billion USD in 2018, representing a 30% increase compared to 2017 and a double increase than that in 2015 (Association of Vietnamese Retailers, 2019) Regarding the business-to-business (B2B) e-commerce, the rate of online orders for companies has increased quickly In 2018, 49% of the surveyed companies received orders through social network sites Moreover, 45% of e-commerce companies highly appreciated the efficiency of selling products through social networks, while this figure was only 39 percent in 2017 (Vietnam E-commerce Association, 2019) Besides the B2B segment of the retail sector, e-commerce also led to the evolvement of B2C and C2C segments By the end of 2018, Statista (2018) reported that 49.8 million online shoppers in Vietnam Online retailing in Vietnam becomes extremely attractive to not only individuals and small-andmedium-sized enterprises (SMEs) but also the big ones The traditional household retailers, e.g., mother-and-pop stores, and bazaars, started to recognize fierce competition from online rivals when social media is becoming more and more popular The disruptive effects of social media are placing pressure on Vietnamese retailers to adopt or be left behind There is little empirical research, however, regarding how social media are used and experienced by adopting organizations, particularly retailers in an emerging country like Vietnam This paper, therefore, aims to explore and explain factors influencing the social media adoption of individual online retailers in the Vietnamese context to discuss practical implications The rest of this paper is organized as follows Section provides the conceptual background of retailing, social media adoption, and the Technology Acceptance Model (TAM) The conceptual model and hypothesis development based on TAM are briefly proposed in section Section mentions the measurement instruments and sampling method The findings of our empirical study are presented in section with the implications for practices Finally, the limitations of our work are listed, followed by suggestions for future research Conceptual background and hypothesis development 2.1 Retailing Retailing is a set of business activities that add value to the products and services sold to customers by linking the manufacturers to consumers Two distinct models of retailing are the brick-and-mortar model, so-called the traditional one, and the Internet (Enders & Jelassi, 2000) The traditional model is mainly based on a physical store where the vendors interact face to face with the customers While the online model allows the customer to access online information about the products, place an order, make the payment and in case of digital products, e.g., software, music, and video have them delivered instantaneously through the Internet (Enders & Jelassi, 2000) The traditional retailing model is profoundly affected by widespread Internet usage since online retailers or e-retailers are achieving higher economies of scale in serving a few hundred thousand or even millions of customers Moreover, the physical infrastructure absence makes the e-tailing business model highly scalable (Enders & Jelassi, 2000) As the new generation of Internet and social network savvy consumers emerge, it could be assumed that they will be much more inclined to make their purchase through the Internet and social media channel than today’s consumers, who are accustomed to shopping at physical stores (Enders & Jelassi, 2000) Thus, the e-tailing model is obvious to have much room for growth in the future 2.2 Social media adoption in business Social media is described as a modern class of information technologies that facilitate collaboration and interpersonal communication through the use of Internet-based platforms (Kane et al., 2014) Social media simultaneously support one-on-one and mass communications (Vorvoreanu et al., 2013) The most popular social media tools are Facebook, Twitter, YouTube, and LinkedIn (Kane et al., 2014) The term social media has been applied to a range of technologies, including blogs, virtual worlds, and wikis, which facilitate the creation and exchange of information, and build on the Web 2.0 foundation (Akrimi & Khemakhem, 2012; Kaplan & Haenlein, 2010) Despite the heavy use of these social media tools by millions of people around the globe, their application for business is still in the embryonic stages (Kane et al., 2014) Businesses have started to use social media as an effective sales, marketing, and communications tool (Veldeman et al., 2015) In the retailing industry, not only big companies but also individual retailers are widely using social media to attract customers and communicate with them Social media allows retailers to communicate economically and promptly to consumers (Tripopsakul, 2018) An increasing number of researchers agree that social media adoption can significantly benefit organizations Scholarly researchers have indicated that social media have a more significant positive effect on attitudes toward brands and on purchase intentions of consumers than more traditional media (Colliander & Dahlen, 2011) Social media adoption spans industries from manufacturing to healthcare, education, and banking Mitic and Kapoulas (2012) argued that the banking sector is quickly adopting social media tools for marketing and relationship banking Sarah et al (2013) investigated the adoption rate of social media by South African banks 2.3 Technology acceptance model Technology Acceptance Model (TAM) is the first and foremost traditional adoption theory in the field of IT (Awa et al., 2011; Benbasat and Barki, 2007) It provides a basis for unveiling the impacts of external variables on adoption decisions with its basic postulates resting firmly on economic, utilitarian, and attitudinal grounds In the TAM model, the perceived usefulness (PU) and perceived ease of use (PEU) are two primary components that determine the intention and actual adoption of a particular technology-based application The TAM model was also used to study a variety of Internet technologies, such as World Wide Web (Lederer et al., 1998), intranet (Alam, 2009; Alam and Noor, 2009), mobile commerce (Yang, 2005), or electronic commerce adoption (Alam et al., 2011; Lee et al., 2001; Olson and Boyer, 2003), because it was initially developed to study computer-based technologies (Yang, 2005), personal computing (Agarwal and Prasad 1999), and some other software (Venkatesh & Davis, 2000) 2.4 Research model and hypothesis development This study uses the TAM model to explore factors affecting the adoption of social media in businesses of individual online retailers The research model is presented in Figure below Figure Research model Perceived usefulness Perceived usefulness (PU) defines a prospective user’s subjective probability that using a specific application improves operations (Davis, 1989) It provides diagnostic lenses into how actual use and intention to use are influenced Previous research has investigated the link between perceived usefulness and the adoption of technology-based applications (Abed, Dwivedi, & Williams, 2015), (Tripopsakul, 2018), (Heller Baird & Parasnis, 2011) Similarly, we also put the hypothesis to test the positive relationship between perceived usefulness and social media adoption in the context of the Vietnamese retailing industry as follows Hypothesis 1: Perceived usefulness has a positive impact on the social media adoption as a business platform of individual online retailers in Vietnam Perceived ease of use Perceived ease of use (PEU) measures the prospective user’s assessment of the mental efforts required of the use of the target applications (Davis, 1989) Empirical findings confirm the positive relationships between ease of use and attitude towards use (Venkatesh & Davis, 2000) and show that PEU is a crucial proven determinant of users’ intention to adopt IT (Venkatesh & Davis, 2000), e-commerce and social commerce (Alam et al., 2011), social media (Triposakul, 2018) Thus, in this study, the hypothesis about the positive relationship between perceived ease of use and social media adoption in the retailing industry is raised in the new context of an emerging country like Vietnam Hypothesis 2: Perceived ease of use has a positive impact on the social media adoption as a business platform of individual online retailers in Vietnam Methodology 3.1 Measurement The measurement instruments of this study were adopted from the literature on ecommerce and social media adoption The scale of social media adoption (SMA) was adopted from the study of Ramdani, Chevers, & A Williams (2013), measured by four items Meanwhile, the perceived usefulness (PU) scale with five items and perceived ease of use (PEU) scale with three items were adapted from TAM model of Davis (1989) and slightly changed to be more suitable for this study For each questionnaire item, respondents were asked to show their viewpoint about the factors influencing social media adoption as a business platform on a five-point Likert scale, from = “strongly disagree” to = “strongly agree.” 3.2 Sampling The respondents were selected based on two controlling criteria which are the age and revenue of the retailers The estimated sample size was 600 An online Google Form format of the questionnaire was not only sent through email but was also posted on the Facebook account of research team members and sent through Viber and Zalo applications to people on the list After two months, we reached the expected sample size of 600 Five hundred twelve valid responses were used for analysis, while 88 responses were removed due to missing information Regarding the revenue per month of online retailers, 96 respondents reported the revenue of 100 million VND (18.75% of the sample), 215 individuals from 100 to 200 million VND (41.99%), 89 individuals from 200 to 300 million VND (17.38%), and 112 retailers above 300 million VND (21.87%) The age distribution of the survey respondents is 16.99% (87 persons) from 18 to 22 years old, 41.40% (212 persons) from 23 to 31, 31.83% (163 persons) from 32 to 38, and 9.76% (50 persons) over 38 3.3 Data analysis strategy Confirmatory factor analysis (CFA) was run to test the presumed model on the basis of conventional fit indices i.e Chisquare [χ2], Chi-square/df [χ2/df ], Goodness-of-fit index [GFI], incremental fit index [IFI], Tucker-Lewis index [TLI], Comparative fit index [CFI], Root mean square error of approximation [RMSEA] using AMOS-22 Structural equation modeling (SEM) was run to test hypotheses on the relationship among the variables in the research model Results 4.1 Reliability and correlation analysis Table shows that the three measurement scales met the requirements of reliability with Cronbach alpha higher than 0.7, and total variance extracted higher than 40% Besides, Table showed that all variables were positively correlated with the remaining variables as the correlation coefficients range from 0.216 to 0.577 Thus, the measurement model satisfied the conditions for the model fit test in the next step Table Reliability and Correlation Analysis Results Cronbach TVE Mean SD alpha (%) N=512 1.Age 2.39 910 Revenue 1.46 499 215** 2.37 835 281** 216** 2.38 920 262** 200** 469** 3.67 722 297** 211** 451** 577** 3.Social_Media_Adoptio n 4.Perceived_Usefulness 0.913 44.91 0.842 57.14 5.Perceived_Ease_of_Us e 0.886 64.59 1 ** Correlation is significant at the 0.01 level (2-tailed) 4.3 Convergent and discriminant validity test The test of the measurement model includes the estimation of internal consistency, the convergent, and the discrimination validity of the instrument items Firstly, we conduct confirmatory factor analysis (CFA) of the three constructs, employing 12 items in order to assess the uni-dimensionality of each new construct (Anderson & Gerbing, 1988) The measurement model provides a reasonable fit to the data (χ2 = 110.742; Cmin/df = 2.171, IFI = 983, GFI= 964, AGFI = 945, NFI = 970 TLI = 0.978, CFI = 983, RMSEA = 048, RMR = 0.026) Figure Confirmatory Factor Analysis Results In this study, we used the composite reliability index of (Bagozzi & Yi, 1988) and the average variance extracted of (Fornell & Larcker, 1981) to evaluate the reliability of measures Table showed that both of the indexes are higher than the cutoff values (CR> 0.60; AVE> 0.50) Moreover, CFA results of three constructs also indicated that all items had large and significant loadings on their corresponding factor, which provided evidence of convergent validity (Bagozzi & Yi, 1988) Table Construct reliability and convergent validity Items Standardized loading Reliability (CR, AVE) Items Social media adoption SMA1 0.796 SMA2 0.878 SMA3 0.888 SMA4 0.841 CR = 0.913 AVE = 0.725 Standardized loading Reliability (CR, AVE) Perceived ease of use PEU1 0.874 PEU2 0.883 PEU3 0.87 CR = 0.887 AVE = 0.724 Perceived usefulness PU1 0.733 PU2 0.748 PU3 0.732 PU4 0.737 PU5 0.653 CR = 0.844 AVE = 0.520 Note: CR: Composite reliability AVE: Average variance extracted 4.4 Hypothesis test results Results shown in Figure indicated that the Chi-square/degree of freedom ratio statistic (χ2/df=2.5710.05) well achieved the model fit requirements in the model Other indexes also satisfied the requirements such as IFI =0.934, GFI=0.924, AGFI = 0.886, NFI = 0.921 TLI = 0.916, CFI = 0.934, RMSEA = 0.035, RMR = 0.016, proving that the model had a good fit Figure SEM analysis results The detailed results of SEM analysis were presented in Table Table Structural equation modeling results H1 So_Media_Adopt  Per_Ease_Use H2 So_Media_Adopt  Per_Usefulness Estimate β S.E C.R P Result 368 041 7.758 *** Supported 324 051 6.662 *** Supported Estimate β S.E C.R P Result *p < 0.05, **p < 0.01, *** p < 0.001 Hypothesis test showed that perceived ease of use (PEU) has a positive impact on social media adoption as a business platform (β1 = 0.368, se=0.041, p = 0.000 < 0.05) Hypothesis is accepted It means that the more ease of use is perceived, the more willing to adopt social media the retailers are It is also critical to explore how the perceived usefulness affects the decision to adopt social media as a business platform Table showed that perceived usefulness has the positive impact on social media adoption (β2 = 0.324, se=0.051, p = 0.000 < 0.05) Therefore, hypothesis was accepted Furthermore, it is noteworthy in this study that the impact of perceived ease of use is slightly higher than that of the perceived usefulness on social media adoption In the context of globalization and technology change, the application of technology in business has shifted the traditional business model to the e-business model The rising trend of purchasing on social networks and the emergence of e-commerce are bringing threats to traditional retailers Social media content community sites are among the most visited on the web, and they attract millions of visitors from around the world (Fan & Gordon, 2014) It is estimated that 73% of adult Internet users spend more than 20% of their time on social media, and firms are benefitting from utilizing and monitoring these social media platforms (Fan & Gordon, 2014) Thus, retailers need to raise their awareness of social networks and e-commerce to improve their competitiveness Implications, limitations, and suggestions for future research 5.1 Implications In terms of theoretical implications, this study contributes to the existing literature on TAM application in various fields of study by providing evidence from a developing country like Vietnam The measurement scales of perceived ease of use, perceived usefulness, and social media adoption used in other studies in developed countries are tested and confirmed the validity and reliability in a new context of Vietnam Thus, this study implies that comparative studies on the topic of social media adoption in business can use a comprehensive measurement instrument This finding is critical when there is a lack of measurements for the studies of TAM, e-commerce and social media adoption in developing countries Regarding the practical implications, this study provides evidence to confirm the positive impact of perceived ease of use and perceived usefulness in the Vietnamese context Thus, the research model in this study can be expanded in other studies particularly in emerging countries like Vietnam It is known that Vietnam is a developing country with one of the fastest-growing retailing industry in the world According to the Vietnam Retailing and Advertising Forum 2019, the rate of modern retailing in Vietnam is 25% which is rather low compared to the equivalent figure of other countries in the region such as the Philippines (33%), Thailand (34%), Malaysia (60%), Singapore (90%) However, Vietnam is believed to be a very potential market with a growth rate of 30% in 2018 and a projected revenue of 13 billion USD in 2020 (Vietnam E-Commerce Association, 2019) Therefore, it is a must for the individual retailers to have a better knowledge of the perceived ease of use and perceived usefulness of the social media and social networks on their business Changing awareness helps the individual retailers to select and use social network as a tool and a platform to improve their business performance 5.2 Limitations and suggestions for future research The first limitation of this study is that it focuses on Facebook retailers, excluding other social networks Therefore, there may be potentially biased findings Future work should be expanded to other social network retailers Moreover, this study is conducted in a relatively short time, and the sampling method is mainly based on the personal network of the research team members Consequently, the responses may be biased, as the respondents are affected by different factors Most of the respondents are young people of the age under 38, who are very familiar with the Internet and regularly selling and purchasing online Furthermore, the survey was conducted only in Hanoi and Ho Chi Minh city using the snowball sampling method so that the biased sample is a critical issue of this study Hanoi and Ho Chi Minh cities are two busiest markets and highest in Vietnam, so the findings of this study may be more favorable than the actual situation Lastly, this study focuses only on the impact of perceived usefulness and perceived ease of use of individual retailers while more factors, actually, also affect the social media adoption as a business platform such as security, business environment, technology context and personal competency of retailers Therefore, future work may pay more attention to other factors that may have an effect on social media adoption Acknowledgment This research is funded by Vietnam National University, Hanoi (VNU) under project number QG.19.45 and National Foundation for Science and Technology Development References Abed, S S., Dwivedi, Y K., & Williams, M D (2015) SMEs’ adoption of e-commerce using social media in a Saudi Arabian context: A systematic literature review International Journal of Business Information 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https://doi.org/10.1287/mnsc.46.2.186.11926 Veldeman, C., Van Praet, E., Mechant, P (2015), “Social media adoption in businessto-business IT and industrial companies compared”, International Journal of Business Communication, pp 1-23 Vietnam E-Commerce Association (2019), Vietnam E-business Index 2019 Report Vorvoreanu, M., Boisvenue, G A., Portela, F J., Bao, A (2013) Integrating online identity management tools in a complete social media curriculum for engineeringand technology students Retrieved from https://peer.asee.org/19792 Yang, K (2005), Exploring factors affecting the adoption of mobile commerce in Singapore, Telematics and Informatics, 22(3), 257-277  ... was conducted only in Hanoi and Ho Chi Minh city using the snowball sampling method so that the biased sample is a critical issue of this study Hanoi and Ho Chi Minh cities are two busiest markets... education, and banking Mitic and Kapoulas (2012) argued that the banking sector is quickly adopting social media tools for marketing and relationship banking Sarah et al (2013) investigated the adoption... adopting organizations, particularly retailers in an emerging country like Vietnam This paper, therefore, aims to explore and explain factors influencing the social media adoption of individual online