PROBLEM IDENTIFICATION
Overview of The Company
Online shopping has emerged as a modern trend globally due to its convenience and speed, leading to rapid growth in both developed and developing countries According to VECITA – Vietnam E-commerce and Information, this surge reflects a significant shift in consumer behavior towards digital platforms for purchasing goods and services.
In 2014, Vietnam, with a population of 90.73 million, saw 58% of its citizens engaging in online shopping, highlighting the country's emerging growth in e-commerce.
Main address : Floor 15th, Empress Tower, 138-142 Hai Ba Trung, Dakao ward, District
1, Ho Chi Minh City Phone number : (08) 3942 1188 Fax: (08) 38 3941 4223
Founded in early 2012 in Vietnam, Lazada aimed to serve over five million consumers and is backed by Rocket Internet, a German international technology group Expanding its presence across six Asian countries, including the Philippines, Indonesia, Singapore, Malaysia, Thailand, and Vietnam, Lazada experienced remarkable growth in 2014, achieving a 500% increase in traffic and a 550% rise in revenue within Vietnam's e-commerce market.
Lazada has possessed 26% of market share and keep the first position in Vietnamese e- commerce market (Table 1.1)
Figure 1.1 – The growth of traffic and revenue in Lazada Vietnam YOY in 2014
Source: Lazada Marketing Regional analysis
Table 1.1 - Market share of Vietnam e-commerce in 2014
Between March and October 2015, Lazada experienced a significant decline in traffic, dropping from 49.9% to 33% of the total e-commerce market share from July to August Daily average traffic to the Lazada website fell from approximately 500,000 sessions to around 300,000 to 350,000 This decline was mirrored in the number of orders, which decreased from 1.5 million in July, with an average basket size of $50, to 1.2 million in August, where the average basket size dropped to $35 to $40.
March April May June July August September October
Table 1.2 – Market share of Lazada from March to August 2015
Source: Lazada Marketing Regional analysis
Figure 1.2 – Market share of Vietnam e-commerce in July and August 2015
Source: Lazada Marketing Regional analysis
Customer complaints regarding product quality have risen, negatively impacting Lazada's reputation In response, Lazada has consistently maintained or even increased its marketing expenditure, ranging from 100% to 121%, to mitigate social media backlash and drive traffic, orders, and net merchandise value (NMV) back to previous levels.
Table 1.3– Marketing expense and NMV rate of Lazada Vietnam from Jun and August 2015
Source: Lazada Marketing Regional analysis
Lazada Vietnam is currently facing significant challenges, evidenced by a decline in traffic, orders, and net merchandise value (NMV), alongside an increase in customer complaints and negative press To address this crisis, it is crucial to identify the underlying issues within the organization that are driving customers away Resolving these problems is essential for restoring customer trust and boosting NMV, ultimately enabling Lazada to maintain its leading position in the competitive e-commerce market.
Problem Situation Analysis
To gain insight into how internal departments at Lazada recognize organizational issues, the author conducted interviews with nine employees across various teams, including Sales, Operations, LEX, Commercial, Customer Service, Finance Accounting, and Marketing Additionally, three managers—Head of Marketing, Head of Campaign, and Head of Partnership—were interviewed to assess how the C-level group identifies and consolidates company problems The findings are illustrated in Figure 1.3, which presents the initial cause and effect map.
The article identifies three key factors affecting Lazada: increased competition, ineffective marketing investments, and declining purchase intentions Among these, the author emphasizes that heightened competition is an external challenge inherent to the rapidly evolving e-commerce landscape in Vietnam, impacting all companies, not just Lazada Addressing this issue requires comprehensive data collection on the overall e-commerce environment rather than a short-term solution Additionally, the author notes that the ineffective allocation of marketing expenses is a complex issue that extends beyond the Partnership Manager's role, involving the company's leadership and the broader strategy of Rocket Internet A thorough analysis and detailed planning are essential for improving marketing investments, which will ultimately hinge on the current investment climate.
The author has chosen to focus on the factors contributing to decreasing purchase intentions and behaviors among Lazada customers, with a particular emphasis on the issue of low customer trust This central problem is a key concern for many Lazada shoppers, highlighting the need for research aimed at addressing and resolving these trust-related challenges.
Figure 1.3– Initial cause-and-effect map
(Detail of Figure 1.3 are explained in chapter 4)
Drop down traffic and NMV
Don’t have VIP Loyalty Program
Orders were canceled because of resellers and out of stock Fake products
Customer trust refers to the confidence in the honesty, integrity, and reliability of a company's products or services, significantly influencing customer loyalty Research by D’Ambra and Xiao (2010) highlights that trust is a crucial determinant of loyalty, while the Edelman Trust Barometer (2005) reveals that 80% of consumers will stop purchasing from companies they find untrustworthy Additionally, Strader and Ramaswami (2002) found that customers are willing to pay 7% to 10% more for products from sellers they trust.
Customer Trust online is defined by the security of the website (Schneiderman, 2000) and the intention of decision purchasing (McKnight et al., 2002) There are three causes affect to
Customer Trust on e-commerce such as company reputation, service quality and website quality (Kim and Tadisina, 2007)
In Chapter 4, the analysis of 92 customer survey responses revealed that among the 64 customers who frequently shop online, only 29 have purchased from the Lazada website Notably, 48.28% of respondents expressed a lack of trust in Lazada due to unrealistic product images, while 34.48% remained neutral, and 17.24% disagreed with the notion of distrust This indicates that nearly half of the surveyed customers who have shopped on Lazada do not feel confident in their purchasing decisions, highlighting a significant issue of low customer trust that Lazada needs to address.
The author conducted interviews with five online shoppers to highlight Customer Trust as a central issue for Lazada, as detailed in Table 4.7 of Chapter 4 The findings revealed that four out of five interviewees expressed distrust in Lazada's service delivery In contrast, Adayroi, despite being a newer platform, successfully built customer trust by promising delivery within six hours, with three out of five interviewees expressing doubts about its reliability Similarly, Tiki, which focuses on the book category, gained customer trust, although three out of five interviewees were unsure about what to purchase on the site These insights indicate that Lazada must enhance its customer trust, as competitors like Adayroi and Tiki are effectively addressing this critical factor.
A literature review indicates that trust significantly influences customers' purchasing intentions and behaviors in e-commerce (Meng-Hsiang Hsu et al., 2013) Reichheld and Schefter (2000) highlight that a mere 5% increase in customer retention can lead to a profit increase of 25-95% Therefore, addressing customer trust issues in the case of Lazada is crucial to prevent potential profit loss and maintain the company's net merchandise value (NMV).
Customer trust significantly impacts Word of Mouth (WOM) intention, as highlighted by Achmad Nizar Hidayanto et al (2014) Online shoppers, being active internet users, frequently share their experiences and opinions about products or services Positive experiences can enhance a company's reputation, while negative feedback can lead to a loss of customers and deter potential new ones If Lazada fails to address customer issues promptly, it risks losing not only customers and traffic but also net merchandise value (NMV), profits, and its overall reputation.
Figure 1.4 - Effects and Consequences of Low Customer Trust
Drop down traffic and NMV.
Lowpurchasing behaviors, attitude and intention (Meng-Hsiang Hsu et al.,
2013), (Mohammad Al-Nasser et al., 2014).
Decrease profit (Reichheld and Schefter , 2010)
Word of Mouth will affect to the reputation of website (Achmad Nizar Hidayanto et al., 2014).
ALTERNATIVE SOLUTIONS
Exploration of potential causes
There are many causes influence to Customer Trust in Literature review However, summarily, author categorized these causes into three main groups – Organization Influence, Website quality, Knowledge and Experiences (Figure 2.1)
Organizational influence is shaped by four key factors: product choices, vendor reputation, company scale, and institutional influences, including policies on assurance, returns, and purchases (Achmad Nizar Hidayanto et al., 2014) Poor product quality, especially with numerous counterfeit SKUs, can negatively impact Lazada's reputation and overall performance.
Customer trust is crucial for the success of e-commerce platforms like Lazada If vendors have a poor reputation, it significantly undermines customer confidence Additionally, complex company policies regarding purchases and returns can deter potential buyers, further eroding trust These factors contribute to low customer trust, which can have serious repercussions for the platform's overall performance.
Website quality is crucial for attracting, engaging, and retaining customers over time Various metrics have been developed to assess website quality, including E-SERQUAL, WEBQUAL, SITEQUAL, and eTailQ, which provide frameworks for evaluating different aspects of online user experience.
A high-quality website significantly influences customers' purchase intentions, whether they choose to buy online or not (Liao et al., 2006) As highlighted by Achmad Nizar Hidayanto (2014), the quality of a website directly impacts customer trust, making it essential to prioritize the quality of the Lazada website The four key factors that contribute to website quality include ease of use, aesthetic design, processing speed, and security/privacy.
Perceived ease of use, as defined by Davis (1989), is the extent to which an individual believes that utilizing a specific system requires minimal effort According to Eleanor T Loiacono et al (2002), this concept encompasses not only the simplicity of operation but also the clarity of understanding when interacting with a website Consequently, it is essential for website content to be easily readable and comprehensible for users Additionally, intuitive navigation and operation are crucial; the more straightforward a website is in facilitating user tasks, the higher the likelihood of user acceptance.
Aesthetic design has been categorized into various groups in literature reviews; however, this research presents it as a distinct category based on insights gathered from interviews According to Eleanor T Loiacono et al (2002), the aesthetic aspect of a website falls under Visual Entertainment, as illustrated in Figure 4.1 of Chapter 4 Additionally, aesthetic design plays a crucial role in the usability of a website, significantly enhancing its appeal to customers, as detailed in Table 4.4 of WebQual 4.0.
Instrument in chapter 4) Before that in 1999, Shand believed that aesthetic design included design, interaction, response time and technology
Processing speed, as outlined in the Usefulness concept (see Table 4.5 – Initial WebQual dimensions in chapter 4), refers to the time taken to process interactions on a website A faster processing speed enhances customer satisfaction with WebQual, highlighting the importance of quick response times in improving user experience.
WebQual enhances customer confidence by ensuring the security and privacy of their personal information during online transactions As highlighted in Table 4.4 of Chapter 4, this trust is a critical factor for users Eleanor T Loiacono (2002) further emphasizes this point, noting that the term "Trust" effectively encapsulates the concepts of security and privacy, as seen in Table 4.5 of Chapter 4.
The Knowledge and Experiences group emphasizes the significance of price and information in e-commerce, particularly for customers familiar with purchasing on Lazada These customers possess a clear understanding of product prices and services they typically buy If Lazada engages in exaggerated advertising for promotions, customers are likely to perceive this as deceitful, which can negatively impact their trust in the platform (Eugenia Huang et al., 2004).
2.2 Cause and Effect Map of Low Customer Trust
According to the questionnaire results presented in Chapter 4, out of one hundred survey respondents, fourteen out of twenty-nine Lazada customers (48.28%) expressed a lack of trust in purchasing from the e-commerce platform Additionally, Table 2.1 illustrates the author's rationale for selecting WebQual as the primary factor in this research Among the three potential causes of customer trust, only the WebQual group achieved over 50% agreement across all four dimensions, while the other groups fell below this threshold.
To gain a deeper understanding of Lazada's issues, the author conducted in-depth interviews with four Lazada shoppers, focusing on the WebQual factor group, particularly the Security/Privacy dimension The results revealed that while all respondents were satisfied with Lazada's organizational influence, two expressed negative experiences with the platform's knowledge and experience, and all four expressed uncertainty about Lazada's WebQual, especially regarding Security/Privacy Consequently, the author identified Low Customer Trust, specifically related to Security/Privacy, as the primary concern affecting Lazada's reputation.
A decline in customer trust towards Lazada can lead to several negative consequences, including decreased sales, reduced customer loyalty, and a tarnished brand reputation Various factors contribute to this erosion of trust, such as poor customer service, delivery issues, and inadequate product quality The relationship between these causes and their effects is illustrated in the causes and effects map below (Figure 2.2).
Figure 2.1 - Causes of Low Customer Trust
Organizational influence (Achmad Nizar Hidayanto et al., 2014)
Webqual (Achmad Nizar Hidayanto et al., 2014)
(Eugenia Huang et al., 2004), (Achmad Nizar Hidayanto et al., 2014) Price
Figure 2.2 - The cause-and-effect map of Low Customer Trust
Organizational influence (Achmad Nizar Hidayanto et al., 2014)
WebQual (Achmad Nizar Hidayanto et al.,
Knowledge and experiences (Eugenia Huang et al.,
2004), (Achmad Nizar Hidayanto et al., 2014)
Low purchasing behaviors, attitude and intention (Meng- Hsiang Hsu et al., 2013), (Mohammad Al-Nasser et al., 2014)
Decreasing profit (Reichheld and Schefter ,
Word of Mouth will affect to the reputation of website (Achmad Nizar Hidayanto et al., 2014)
Drop down traffic and NMV
Table 2.1 – The result of each cause group of Customer Trust
Source: Customer Trust survey questionnaires
Customer Trust Questionnaire in chapter 4)
Product choices Q18, Q31 Over 70% agree Vendor reputation Q30 Over 59% agree
Company scale Q21, Q22, Q26 About 40% agree and completed agree
About 55% agree and completed agree
About 74% agree and completed agree
About 50% average, agree and completed agree
Over 50% agree and completed agree
Over 50% agree and completed agree
Price Q14, Q20 Over 50% agree and completed agree
Over 48% agree and completed agree
To address the core issue of low customer trust on Lazada, it is essential to improve the WebQual metrics, particularly focusing on the Security and Privacy factors Implementing alternative solutions, as illustrated in Figure 2.3, can significantly enhance user confidence and overall satisfaction.
Figure 2.3 – The alternative solutions of Low WebQual – Low Security / Privacy
In a study by Eleanor T Loiacono (2000), data were gathered from 510 undergraduate students at a large southeastern university, with participants averaging twenty years of age and an equal gender distribution This demographic closely aligns with Lazada's target customer base, which consists of individuals aged eighteen to twenty-nine, comprising 43% females and 57% males, as illustrated in Tables 4.1 and 4.2 of Chapter 4 The reliability of the variables was confirmed through Cronbach's alpha, as detailed in Table 2.2, supporting the author's recommendations for improvement.
Table 2.2– The summary results of variables influenced to WebQual
Source: A Website Quality Instrument research
A significant 65% of web users believe that revealing personal information online poses too great a risk (Hoffman, Novak et al., 1999), while 87% assert they should maintain full control over their demographic data collected by websites (Eleanor T Loiacono, 2000) Numerous companies have faced lawsuits for selling customer information without consent or user awareness, highlighting the critical responsibility of businesses to transparently inform web users about how their personal data is utilized and secured.
Alternative solutions
To address the core issue of low customer trust at Lazada, it is essential to improve the WebQual metrics, particularly focusing on the Security and Privacy factors The author recommends exploring alternative solutions, as illustrated in Figure 2.3, to enhance these critical aspects and foster greater customer confidence.
Figure 2.3 – The alternative solutions of Low WebQual – Low Security / Privacy
In a study conducted by Eleanor T Loiacono in 2000, data was gathered from 510 undergraduate students at a large southeastern university, with participants averaging twenty years of age and an equal gender distribution This demographic closely aligns with Lazada's target customers, who are aged eighteen to twenty-nine, consisting of 43% females and 57% males, as detailed in Tables 4.1 and 4.2 of Chapter 4 The study's findings, supported by the Cronbach alpha values presented in Table 2.2, provided valuable insights for enhancing the author's solutions.
Table 2.2– The summary results of variables influenced to WebQual
Source: A Website Quality Instrument research
A significant 65% of web users believe that the risk of revealing personal information on websites is not worth it (Hoffman, Novak et al., 1999), while 87% feel they should have complete control over their demographic information collected by these sites (Eleanor T Loiacono, 2000) Numerous companies have faced lawsuits for selling customer information without consent or user awareness, highlighting the importance of transparency Consequently, companies have a responsibility to inform web users about how they utilize and secure personal information.
When shopping on Lazada, customers must create accounts and provide personal information for delivery and payment purposes It is crucial for the company to ensure the security of this sensitive data, as customers enter details such as their names, card numbers, expiration dates, and CVV codes Safeguarding this information is vital, especially given the financial implications, to prevent any potential breaches that could compromise customer privacy.
To enhance the security of Lazada's e-commerce platform, a brief discussion with the CEOs of Citimart and Visa highlighted the importance of safeguarding payment information Implementing coding systems, such as obscuring customer data with numbers or dark spots, can protect sensitive information from external visibility Additionally, limiting the information shared with third parties during transactions—where customers only provide their card number and name while a third party handles the final confirmation—can further ensure safety These measures not only bolster customer trust but also align with the recommendations from Visa to improve system quality.
Lazada's personal information data is highly sought after by various companies, including marketing firms, banks, and telecom organizations, which are willing to exchange or pay for access To enhance their WebQual score, Lazada must prioritize the security of customer personal information and transparently communicate how and why they utilize this data This approach will help alleviate customer discomfort regarding potential spam It is crucial for Lazada to use customer data strictly for business purposes and implement robust coding systems in their database to safeguard private information effectively.
According to Wang and Strong (1996) and Strong (1997), information quality suggests four dimensions below
- Intrinsic information quality refers to the accuracy of the information, including content and the navigation of system and hyperlinks
- Contextual information quality depends on the amount of author information provided which is adequate, updated, appropriate, and including contact information
- Representational information quality includes if the information is interpretable, easy to understand, concise, and consistently represented
- Accessibility information quality is determined by the navigation of system and traversing through the site (Huang Lee, 1999)
Lazada must ensure the quality of information presented in their daily deals and marketing content to maintain customer trust However, some marketing banners have exaggerated images and claims that do not accurately reflect the campaign, leading to customer disappointment When users perceive a lack of authenticity, it negatively impacts their trust in Lazada's WebQual, potentially deterring them from making purchases To address this issue, Lazada needs to enhance the quality of the information provided on their platform.
Interactivity enables direct communication between individuals and companies, eliminating barriers of distance and time (Blattberg and Deighton, 1991) As noted by Philport (1997), this shift transforms advertising from mere persuasion into a relationship-building tool By fostering communication among stakeholders on a platform, customer engagement can lead to increased return visits (Hoffman and Novak, 1995) To enhance WebQual, it is essential to improve customer interactivity with the platform Currently, Lazada employs various interactivity tools, such as email feedback, questionnaires, user groups, software downloads, and online order forms (Emerick, 1995; Marrelli, 1996) By facilitating easy communication for customers to share their opinions, Lazada can better understand their needs and enhance satisfaction, thereby avoiding potential crises from customer dissatisfaction Furthermore, as customers see their desires met and inquiries answered, their trust in Lazada is likely to grow.
SELECTED SOLUTIONS AND CHANGE PLAN
Justification of The Best Solution
In Chapter 2, the author identifies three alternative solutions for Lazada, ultimately selecting solution (1) as the most effective option for the fourth quarter of 2015 To inform this decision, the author conducted interviews with two key managers involved in the projects: the Head of Product and the Local Development Manager Both leaders play crucial roles in guiding the WebQual initiative and the overall strategy for Lazada, ensuring they possess the insights needed to determine the best path forward for the company.
- For matching with strategy in near future
Lazada Vietnam aims to increase card payment orders from 10% to 20% within the next year, enhancing control over cash-on-delivery risks and simplifying post-sale money collection This shift is expected to reduce operational costs and boost customer trust in online card payments To successfully encourage card transactions, Lazada must demonstrate the safety of its payment system, making the development of a secure coding program a top priority in its strategy, with a completion deadline set for the end of this year.
Lazada faces challenges in implementing solutions (2) and (3) for market strategy development, as these approaches may hinder their marketing efforts aimed at boosting sales To mitigate the drawbacks of customer interaction, Lazada continues to utilize effective advertising techniques However, if Lazada adopts these solutions, it risks an immediate decline in its Net Merchandise Value (NMV) and may struggle to sustain long-term implementation.
Summarily, author chose solution (1) as the most effective solution to solve Lazada problem recently – Low Security/ Privacy in WebQual and Low Customer Trust
- For timing and budget of solutions
Lazada initiated its first solution in October 2015, demonstrating that planning and execution can be done efficiently With support from cooperative organizations like Visa and banks, Lazada is well-equipped to implement changes without extensive delays Additionally, their in-house product team and regional tech hub allow them to manage resources effectively, reducing the need for outsourcing and helping to minimize timing costs.
If Lazada implement solution (2) and (3), they have to take more time to plan
Implementing solutions at Lazada requires navigating multiple approval steps, and there is uncertainty regarding managerial support for these initiatives Managers may perceive that the proposed solutions could negatively impact sales in the short term, especially given the urgent circumstances As a result, they may hesitate to adopt these strategies, considering not only the costs associated with human resources but also the potential loss of revenue during the implementation phase.
Solutions (2) and (3) face constraints related to cost, time, budget, and strategy, making them less immediate and effective compared to solution (1) As a result, solution (1) emerges as the most appropriate and timely resolution to Lazada's current challenges.
Change Plan
To implement the solution (1) - Improve security, we need to set plan for five steps such as (Van Aken, J., Berends, H., and Van der Bij, H., 2012)
- Actions are activities to conduct planned changes and timing
- People is who execute and who get involved in the change process
- Change organization in temporary structure
- Communication plan to inform to relevant party
The coding information system will secure customer private information Therefore, it will help to improve Lazada Security/ Privacy in WebQual and also Lazada Customer Trust
Actions are activities to conduct planned changes and timing
The coding information system on Lazada ensures that all customer private information is securely encoded using numbers or dark spots However, this obscured display prevents customers from easily verifying their entered information To enhance user experience, a toggle button should be introduced, allowing customers to view their information when needed Additionally, all data will be encrypted for security, both internally and with third parties Access to the raw data will be restricted to key personnel responsible for managing the customer database.
The implementation of this plan will span a total of twelve weeks: two weeks for processing and planning, followed by six weeks for the Products team to develop and test the system An additional four weeks will be dedicated to addressing any issues and making necessary adjustments By February next year, we will be able to determine whether this solution can be sustained for the long term.
People is who execute and who get involved in the change process
Lazada must establish clear processes and responsibilities for each department, ensuring that authorized personnel have access to accurate information and can effectively implement the coding information system before its real-world application.
Process order Main task P.I.C (People in contact)
1 Plan in detail for executing new system Local Development team
2 Write the coding information system Product team
Team raise this solution with detail
Process and Plan in 2 weeks
Product team design system in
Run pivot system and CS team to listen response from customers to adjust system later in 4 weeks
Customers buy -! Website run new system
Third party + Customer Service (Payment gate) to finish -! Sale + Commercial + Marketing team to take necessary information -! Product team check and review
Visa / Master / Smartlink, etc., Customer Service team
Sale team, Commercial team, Marketing team
4 Review and justice from each team report
(which team involve and have requirement to use new system)
Each person in each team
5 Fix and check again Product team
6 Implement in real All team
7 Justify if continuously execute or stop in yearly
Implementing this solution requires minimal budget, primarily covering the salaries of the company's human resources In cases of increased workload, the company can hire internship staff at a monthly salary of $250 to $350 for execution and support tasks This approach ensures that the overall budget remains low, making it a cost-effective solution for the company.
Change organization in temporary structure
The proposed solution will minimally impact Lazada's system processes, primarily altering how customers enter their information for account registration and payment transactions Furthermore, collaboration with third-party services like Visa, MasterCard, and Smartlink is essential for transaction confirmation It is also crucial for internal teams, including Customer Service, Sales, Commercial, and Marketing, to clearly define their responsibilities and implementation strategies while operating within Lazada.
Communication plan to inform to relevant party
To implement the new solution effectively, Lazada must organize meetings with all current payment gateway partners to discuss collaboration and potential exchanges It is essential to ensure that all stakeholders, including internal staff and third-party partners, are informed about the upcoming pivot test through an internal email announcement.
To enhance customer trust, Lazada must issue an official announcement through public channels regarding the implementation of its new system This communication is essential for effectively informing and reassuring customers about the changes.
SUPPORTING INFORMATION
Interview Transcripts and Explanation in detail
The purpose of this interview segment was to identify the issues faced by Lazada, as outlined in Chapter 1 The author conducted individual interviews with staff members from various teams at Lazada, meticulously recording their responses This process marked the initial phase of the research and required two weeks to complete the interviews and compile the transcripts.
Finding reputable sellers who provide quality products on the Lazada platform is challenging, especially with increasing competition from other marketplaces like Adayroi, Deca, Tiki, and Zalora Many sellers are opting for exclusive contracts with these competitors, attracted by lower commission fees ranging from 0% to less than 8% As a result, Lazada is facing difficulties in maintaining traffic and experiencing a decline in net merchandise value (NMV).
Lazada's diverse marketplace, featuring over 1,500 sellers, faces challenges in maintaining consistent policies for purchasing, returns, and customer assurance Major sellers like Dien may cho lon and FPT, each generating over $500,000 monthly, do not accept credit or debit card payments, complicating the transaction process Additionally, smaller sellers in cities like Hanoi and Ho Chi Minh lack nationwide coverage, leaving customers uncertain about product assurance This uncertainty can lead to distrust among buyers, ultimately discouraging them from making purchases on the platform.
LEX – Lazada Express plays a crucial role in managing the delivery process for the entire Lazada platform However, the team faces the significant challenge of long delivery times, especially when handling up to one million orders daily across Vietnam This extensive logistics operation can feel like an impossible task Customers expect fast delivery, and failure to meet these expectations can lead to disappointment, influencing their decision to shop on Lazada.
Key Account Managers (KAM) play a crucial role in managing relationships with merchants on Lazada, ensuring they maintain or boost their sales volume, which directly impacts the commission fees paid to Lazada However, KAMs face challenges in stabilizing or increasing sales, as they must thoroughly understand both the products and marketing strategies Since the marketing team is not part of their group, KAMs often rely on collaboration with the marketing department to implement promotions and drive sales through various channels.
Two employees in team Customer Service
Effective customer service relies on actively listening to customer feedback, which helps ensure that their opinions are accurately captured and addressed Many customers express concerns about product quality, the costs associated with marketing campaigns, the absence of a VIP loyalty program, and unrealistic vendor representations These issues contribute to a decline in customer trust, leading to decreased willingness to shop on the Lazada website.
A employee in team Finance Accounting
The money transfer and refund process can take seven to fourteen days to complete, leading to customer frustration and anger This delay can hinder their ability to make other purchases, causing them to lose confidence in future transactions.
Two employees in team Marketing
The Marketing team at Lazada conducted research to understand customer targeting and buying intentions, revealing concerns about privacy and security Many customers hesitated to create accounts due to fears that their personal information might not be adequately protected, leading to apprehensions about potential breaches of their privacy.
Marketing advertising will spam them later It makes customers avoid purchasing
To effectively attract customers, companies implement various marketing campaigns with specific targets and KPIs, often utilizing discounts or free gifts However, even with discounts, maintaining profitability is essential, leading to ambiguous communication regarding pricing, as the discounted rates may not always reflect the lowest prices available Additionally, Lazada's policy against selling to resellers means that bulk orders from customers suspected of reselling may be canceled, which can negatively impact purchasing decisions.
The Head of Marketing has been given the authority to engage with international hubs and regional teams to gain a comprehensive understanding of Lazada Vietnam's overall landscape.
He knew that for strategic Marketing, Lazada Vietnam has not expensed effectively The reason is wrong target customers and it came from Lazada Marketing Regional analysis
The Head of Campaign recognized that to meet the substantial weekly and monthly targets, his team needed to launch multiple campaigns to attract customers This approach implied that pricing would be closely linked to product quality Consequently, they encountered numerous customer complaints regarding the quality of their products.
The Head of Partnership identifies the lack of a consumer loyalty program and the presence of numerous competitors as significant challenges These factors hinder our ability to maintain a competitive edge and fail to encourage repeat purchases on the Lazada website after the initial transaction.
The objective of this interview is selecting the best solutions for Lazada problem in chapter 3 Author interviewed one by one with Head of Product and Local Development
The manager of Lazada conducted interviews, meticulously recording the responses of the interviewees to create a comprehensive record This process, initiated in Chapter 3, aimed to identify the most effective solution for Lazada's challenges It took five days to complete the interviews and gather all the transcripts.
The individual responsible for WebQual at Lazada.vn is tasked with identifying effective solutions to enhance the platform's WebQual He has decided to implement the first solution outlined in Chapter 2 for the upcoming quarter, emphasizing the need for safer payment methods to align with the regional strategy The Regional team has tasked him with improving the card payment system in Lazada Vietnam from 2015 to 2016 Currently, he is focused on executing this solution, while other proposed solutions have not been discussed with the Local Lazada Vietnam team, leaving their feasibility uncertain Additionally, he has not received any updates regarding the second and third solutions suggested in Chapter 2.
He is responsible for developing Lazada Vietnam, with a goal of increasing card payment orders from 10% to 20% To achieve this, he analyzes customer behavior to encourage the preference for card payments over cash on delivery Additionally, he proposes ideas to the Regional team for implementing a coding information system, leveraging his experience with various payment organizations He understands that ensuring customer safety is crucial in motivating them to choose card payments.
Moreover, he would like to apply it as soon as possible
Explanation in detail for Figure 1.3
More competitors in Vietnamese e-commerce recently
Customer Trust and WebQual Questionnaire
The objective of this questionnaire is defining the real problem of Lazada at the end of chapter
1 Author sent out 100 questionnaires to interviewees (who are customers in different demographic group) and use quantitative method to collect and group these answers It was implemented at the beginning of this research It took six weeks to sent out questionnaire and collect answers.
Several key factors influence consumers' purchasing decisions in online e-commerce in Ho Chi Minh City, Vietnam These include the quality and variety of products offered, pricing strategies, and the overall user experience of the website Additionally, trust in the e-commerce platform, influenced by customer reviews and ratings, plays a crucial role Social media presence and marketing strategies also significantly impact consumer behavior, as they enhance brand visibility and engagement Lastly, convenience factors such as payment options and delivery services are essential in shaping consumers' online shopping intentions.
Currently I am doing my thesis “Impacting factors to purchaser’s decisions on online e-commerce Vietnam” I really would like to receive your support by answer these questionnaires I commitment that all information you supply will be keep secret and only apply for this research Thank you!
Hiện tôi đang tiến hành nghiên cứu về "Những yếu tố ảnh hưởng đến ý định mua hàng của người tiêu dùng trên các trang mạng điện tử tại thành phố Hồ Chí Minh" Tôi rất mong nhận được sự hỗ trợ từ anh/chị bằng cách trả lời các câu hỏi dưới đây Tôi xin cam kết rằng mọi thông tin mà anh/chị cung cấp sẽ được bảo mật và chỉ sử dụng cho mục đích nghiên cứu của tôi Xin chân thành cảm ơn anh/chị.
Please indicate your age group by selecting one of the following options: 1 Under 18 years old; 2 Aged 18 to 20; 3 Aged 21 to 25; 4 Aged 26 to 30; 5 Aged 31 to 35; 6 Aged 36 to 40; 7 Aged 41 to 44; 8 Over 44 years old.
Q2 Please inform your gender? Vui lòng cho biết giới tính của anh/ chị? o Male / Nam o Female / Nữ
Please indicate your monthly income by selecting one of the following options: 1 Under 5 million Vietnam Dong, 2 Between 5 and 10 million Vietnam Dong, 3 Between 10 and 15 million Vietnam Dong, 4 Between 15 and 20 million Vietnam Dong, or 5 Over 20 million Vietnam Dong.
The survey question asks respondents to specify their education level, providing three options: 1) Before university, 2) University, and 3) Postgraduate, which includes MBUS or MBA.
Trong cuộc khảo sát, câu hỏi Q5 yêu cầu người tham gia cung cấp thông tin về nghề nghiệp hiện tại của họ Các lựa chọn bao gồm: 1 Sinh viên/Học sinh; 2 Đang tìm việc; 3 Nội trợ; 4 Nhân viên văn phòng; 5 Nhân viên bán hàng (Sales)/Nhân viên thường phải làm việc ngoài thị trường; 6 Công nhân làm việc trong các nhà máy, xí nghiệp; 7 Tự kinh doanh/buôn bán; 8 Luật sư/Kỹ sư/Giáo viên/Bác sĩ Ngoài ra, có thể chọn mục khác nếu không thuộc vào các danh mục trên.
Vui lòng cho biết địa điểm sinh sống hiện tại của bạn, lựa chọn từ các thành phố như: Thành phố Hồ Chí Minh, Hà Nội, Hải Phòng, Đà Nẵng, Cần Thơ hoặc ghi rõ địa điểm khác.
Câu hỏi Q7 yêu cầu người tham gia cho biết liệu họ đã từng mua hàng trên trang thương mại điện tử hay chưa Người trả lời có hai lựa chọn: "Có" nếu họ đã từng mua hàng, hoặc "Không" nếu chưa, và nếu chọn "Không", họ sẽ được chuyển đến câu hỏi 32.
Please indicate which online e-commerce platforms you have purchased products from, including Lazada, Zalora, Tiki, Hotdeals, Vat Gia, Nhom Mua, Cung Mua, and Adayroi.
When considering a purchase on website X, you may feel uncertain about your decision before finalizing it This uncertainty can range from complete disagreement with the idea of buying to total agreement Your feelings may fluctuate between disagreeing, feeling neutral, or agreeing with the choice to buy.
Many users express skepticism regarding the accuracy of product images and details presented on website X This sentiment is reflected in a range of opinions, from complete disagreement to full agreement with the trustworthiness of the information provided The varying levels of confidence suggest a need for enhanced transparency and reliability in online product representations.
Concerns about the privacy and security of personal information are prevalent, with individuals fearing that their data may be disclosed and lead to harassment Responses to this concern range from complete disagreement to total agreement, reflecting varying levels of anxiety regarding data protection.
Many individuals express concerns about the safety of their online payment information, particularly regarding the potential exposure of their bank account details Responses to this issue vary, with options ranging from complete disagreement to total agreement This highlights the importance of addressing security measures in online transactions to alleviate fears and enhance user confidence.
Other information
Table 4.4 - THE WEBQUAL 4.0 INSTRUMENT ( Gazal Punyani et al., 2015 ) Category WebQual 4.0 Questions
1 I find the site easy to learn to operate
2 My interaction with the site is clear and understandable
3 I find the site easy to navigate
4 I find the site easy to use
5 The site has an attractive appearance
6 The design is appropriate to the type of site
7 The site conveys a sense of competency
8 The site creates a positive experience for me
13 Provides easy to understand information
14 Provides information at the right level of detail
15 Presents the information in an appropriate format
17 It feels safe to complete transactions
18 My personal information feels secure
21 Makes it easy to communicate with the organization
22 I feel confident that goods/services will be delivered as promised Overall Impression 23 Overall view of the Website
Table 4.5 - Initial WebQual dimensions ( Eleanor T.Loiacono et al., 2002 )
In a study by Eleanor T Loiacono (2002), 307 undergraduates were surveyed using a thirty-six question questionnaire to evaluate twelve key concepts of WebQual The reliability of the questionnaire was confirmed with a Cronbach alpha ranging from 0.72 to 0.93 The predictive validity of WebQual in relation to visitors' purchasing intentions on websites was found to be 0.56 and 0.53 (both with p