Investigating the effects of Social Media on Customer Purchase Intention A Study in Vietnam

Investigating the effects of Social Media on Customer Purchase Intention: A Study in Vietnam Student: Nguyen Ngoc Thuy Advisor: Dr Chun-Hui Wu Department of Information Management National Formosa University Abstract The rapid rise of social media in the 21st century allows users to connect with each other and participate in the brand in general Because of facility and easy to use, more and more business and consumers choose using social media for marketing and shopping needs The aims of this study is to investigate the role of trust, electrical word of mouth (EWOM) and the factors of social media on customer purchasing intention The framework of this study based on previous literature and two theories including the technology acceptance model (TAM) and social cognitive theory (SCT) Data was collected from 208 respondents in Vietnam This study indicated that trust and EWOM had directly impacts on purchase intention and plays an important role for increasing consumers’ purchase intention The research implications on the finding and recommendation for future study were discussed Key words: Social media, Trust, EWOM, Technology acceptance model, Social cognitive theory, Purchase intention Chinese abstract 社社社社社社社社社社社社社社社社社社社社 社社社社社社社 學學學學學學學學 學學學學學Chun-Hui Wu 學學 學學學學學學學學學學學學學 學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學 學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學 學學學學學學學學學學學學 (Electrical Word of Mouth - EWOM)學學學學學學學學學學學學 學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學 (Technology Acceptance Model - TAM) 學學學學學學 (Social Cognitive Theory SCT)學學學學學學學學學 208 學學學學學學學 學學學學學學學學學(EWOM)學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學 學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學學 社社社學學學學學學學學學學學學學(EWOM)學學學學學學學學學學學學學學學學學學學 Acknowledgements I would like to take this opportunity to express my sincere gratitude to all those people who have made this dissertation possible and because of whom my graduate experience has been one that I will esteem forever Firstly, I would like to thank my advisor, Dr Wu for all time and effort she has dedicated to guiding me through the studying process Her constructive feedback, support, and several discussions enlightened this course It is my honor to have her as my supervisor I also would like to give a special thanks to Department of Information Management of National Formosa University Thanks for giving me the opportunity and their financial support during period of two years I have to acknowledge all my classmate in the research room, for their assistance in many aspects that I cannot list them because of limit space Also I would like to thank all the respondents of the questionnaires for helping me to distribute the survey online Huwei, January 2018 Sincerely Nguyen Ngoc Thuy Table of contents Abstract i Chinese abstract ii Acknowledgements iii Table of contents iv List of Table vi List of Figures vii Symbols viii Chapter Introduction 1.1 Background .1 1.2 Research motivation 1.3 Research question 1.4 Purpose 1.5 The structure of this study Chapter Literature Review 2.1 The overview of social media 2.1.1 An introduction of social media 2.1.2 Social media usage in Vietnam 2.2 The characteristics of social media .12 2.2.1 Community 12 2.2.2 Connectedness 13 2.2.3 Openness 13 2.2.4 Speed .13 2.2.5 Accessibility 13 2.2.6 Participation 14 2.2.7 Conversation 14 2.3 Purchase intention depend on technology acceptance model .14 2.4 Social cognitive theory 16 2.5 EWOM environment in s-commerce 19 2.6 Trust in social media 19 2.7 Summary of literature review 20 Chapter Research Methodology 22 3.1 Research framework 22 3.2 Research hypotheses 23 3.3 Research method 27 3.4 Data analysis .31 3.4.1 Research reliability and validity 31 3.4.2 Statistical analysis 32 Chapter Results 35 4.1 Respondent’s demographics 35 4.2 Social network usage 37 4.3 Factor analysis .39 4.4 Reliability analysis 40 4.5 Hypothesis testing 44 Chapter Conclusion 48 5.1 Discussion .48 5.2 Conclusion .50 5.3 Limitation and future study 52 Reference 53 Appendix I – English Question 66 Appendix II – Vietnamese Question 76 Extend Abstract 86 Curriculum Vitae (CV) 94 List of Table Table 3.1 Measurement scales 28 Table 3.1 Measurement scales (cont.) 29 Table 3.2 Cronbach’s Alpha Coefficient Consistency 32 Table 3.3 KMO’s Values 33 Table 3.4 Standardized beta values for hypotheses testing 33 Table 4.1 Respondents’ demographic profile 36 Table 4.2 Using experience of social media sites frequently visited 38 Table 4.3 Frequency of activities in social media sites 39 List of Figures Figure 2.1 Technology Acceptance Model .15 Figure 2.2 The framework of social cognitive theory 17 Figure 3.1 Research Framework .22 Figure 4.1 The frequency of social media platforms using by respondents 37 Symbols TAM : Technology Acceptance Model SCT : Social cognitive theory SNSs : Social networking sites WOM : Word of mouth EWOM : Electrical word of mouth U : Usability D : Dependence I : Involvement E : Experience T : Trust PI : Purchasing intention PAF : Principal axis factoring AVE : Average variance extracted CR : Composite reliability CFA : Confirmatory factor analysis β : Path coefficient p : p - value hapter Introduction 1.1 Background The global development of online social networks was build a new space in interacting and communicating among people Individuals can share their understanding, opinions and experiences in online social networks that offer features and benefits, influence on customers’ behavior in terms of communication and shopping In the developing countries like Vietnam, the appearance of online shopping is very new, but there is a breakthrough on understanding consumer’s purchase intention Therefore, this study aimed to investigate the impact of several factors on consumer’s trust and EWOM, thus affecting their purchasing intention In some subjective opinions, social networking sites (SNS) allow users to connect and keep contact with their friends and interact with new people These websites support users to find who have the same interests and background, from that they can make friends and get to know each other Social networking is a place where creativity can be expressed by using built-in tools such as blogs or text messages to write and post ideas on media networks Social networking is not only beneficial to individuals, but also utility for businesses as well These websites allow businesses to carry out promotion ads and marketing services to a numerous customer with the starting cost is free (Gillin, 2008) A lot of companies have built profiles that provide business insights for low cost advertising Businesses will attract more attention through social networks because their information are available to all social network users to view Social commerce allows businesses to reach consumers globally with greater effectiveness than regular retailers by incorporating user generated content into the store Customers can interact online, interchange information, and get suggestion from individuals that they trust (Leitner & Grechenig, 2009) so they can make purchase decisions more exactly Business consultant (Anderson, Sims, Price & Brusa, 2011) reported that “individual on a SNSs are usually connected to other individuals whom they trust and respect” In summary, the development of social media has changed the consumer’s purchasing habit significantly in the way people interact, communicate, refer, organize and purchase From company’s viewpoint, the appearance of social media makes the better condition for marketing and easier to accost customer 1.2 Research motivation Nowadays, Social e-commerce is rapidly evolving as platforms like Facebook, Line, Youtube, Google+ and Instagram become even bigger parts of our lives It is revolutionizing e-commerce and digital marketing as it integrates virtual stores natively into social feeds or profiles, seamlessly connecting companies to their customers wherever they are online As for consumer, they always try to find reliability and honest from online buyers On the other hands, customer also want to refer product recommendation, product reviews, and relationship quality and so on from other customer on social media Therefore, the focus of this topic was to investigate the impact of different factors on consumer’s trust and EWOM, which affects the purchase behavior intention, and actual usage through social commerce Vietnam was purposely chosen to be the scope of this study Statistics from the Ministry of Industry and Trade indicated that e-commerce revenue (total sales made online in Vietnam) in 2015 reach to 4.9 billion USD, up 22.5% from 2014 Since then, e-commerce market in Vietnam has boomed with a steam of 10,000 more websites that offer online sales International e-marketplace platforms such as 20 EW6-Tôi nghĩ tơi hài lịng với thơng tin tơi nhận từ EWOM EW7-Tôi thường xuyên đọc nhận xét 21 khách hàng online để so sánh sản phẩm trước mua hàng 22 EW8-Tôi thường tham khảo EWOM chọn hàng hóa mạng xã hội Trust 23 T1-Tôi nghĩ thông tin từ mạng xã hội đáng tin cậy T2-Tôi nghĩ nhận xét sản phẩm/dịch 24 vụ cung cấp khách hàng mạng xã hội đáng tin cậy 25 26 T3-Tôi tin vào nhận xét sản phẩm dịch vụ từ khách hàng mạng xã hội T4-Tôi nghĩ sản phẩm/dịch vụ bán mạng xã hội tốt Purchase Intention 27 28 29 80 PI3-Tơi sẵn lịng mua sản phẩm gợi ý bạn bè mạng xã hội PI1-Sử dụng mạng xã hội giúp có định xác trước mua sản phẩm PI2-Sử dụng mạng xã hội làm tăng hứng thú việc mua hàng hóa/dịch vụ Phần C: Thơng tin cá nhân 1./ Giới tính bạn? Nam Nữ 2./ Bạn tuổi? < 18 18 - 25 26 – 35 36- 45 > 45 3./ Nghề nghiệp bạn? Kinh doanh Tài chính-Kế tốn Lập trình Cơng chức (giáo viên, quân đội, cảnh sát ) Dịch vụ Khác 4./ Kinh nghiệm làm việc? Ít năm 1- năm –ít năm 81 –ít 10 năm Nhiều 10 năm 5./ Thu nhập banh tháng? Ít 10,000 TWD 10,000 –ít 30,000 TWD 30,000 –ít 50,000 TWD Nhiều 50,000 TWD Cảm ơn bạn hoàn thành khảo sát! Extend Abstract Investigating the impact of social media to customer purchase intention: A study in Vietnam Student: Nguyen Ngoc Thuy Department of Information Management National Formosa University Abstract 82 Advisor: Chun-Hui Wu The rapid rise of social media in the 21st century allows users to connect with each other and participate in the brand in general Because of facility and easy to use, more and more business and consumers choose using social media for marketing and shopping needs The aims of this study is to investigate the role of trust, electrical word of mouth (EWOM) and the factors of social media on customer purchasing intention The framework of this study based on previous literature and two theories including the technology acceptance model (TAM) and social cognitive theory (SCT) Data was collected from 208 respondents in Vietnam This study indicated that trust and EWOM had directly impacts on purchase intention and plays an important role for increasing consumers’ purchase intention The research implications on the finding and recommendation for future study were discussed Key words: Social media, Trust, EWOM, Technology acceptance model, Social cognitive theory, Purchase intention Chapter 1: Introduction The global development of online social networks was build a new space in interacting and communicating among people Individuals can share their understanding, opinions and experiences in online social networks that offer features and benefits, influence on customers’ behavior in terms of communication and shopping In the developing countries like Vietnam, the appearance of online shopping is very new, but there is a breakthrough on understanding consumer’s purchase intention Therefore, this study aimed to investigate the impact of several factors on consumer’s trust and EWOM, thus affecting their purchasing intention 83 Base on SCT and TAM, the aim of this study was to understand and obtain knowledge of Vietnamese consumer purchasing behavior in social media as well as investigate the critical factor of social media that effect on consumers’ purchasing intention Two important research questions were proposed as follows (1) What are the critical elements that affect Vietnamese consumer to purchase goods and possess information through social media? (2) How social media impact the purchasing behavior intention of Vietnamese consumer? Accordingly, the objective of this research are as follow: To study social media as a new tool in shopping online To find out the picture of social media usages in Vietnam To explore important determinants of the tendency of shopping through social media To find out the relationships between the factors and behavior intention To provide managerial suggestion for businesses, online retailers management agencies Chapter 2: Literature review Social media seem to play an imperative part of people's lives around the world The definition of social media is proposed by researchers and media network experts in different directions Kaplan and Haenlein (2010) described that social media is a group of applications, built on the Internet and technologies of Web 2.0 that allow users to create and exchange information Parr (2010) defines social media as the use of electronic tools through Internet to share and discuss information and experiences with others in more effective ways Jantsch (2008) considers social media as the use of technology in conjunction with social 84 interaction to create worth According to Wikipedia, social media is the use of computer technology to encourage the creation and sharing of information, ideas, occupation, hobbies, and other forms of expression through the communities and virtual networks According to previous researches, trust is considered as an essential foundation of both online and offline business relationships Social commerce users use SNSs as the main media channel for sharing their experience and product/service information When purchasing online, the most worried thing they have that is payment They are afraid of being cheated and stolen their personal information when they sending their personal information for payment through Internet Lack of trust is a reason make customers not want to buy online Therefore, social media sites were used as the main channel to share, refer experience, exchange ideas, or trustworthy information about product/service, from that customer can make the better purchasing decision Chapter 3: Research Methodology 85 Based on the literature review in the previous chapter, an integrated research framework was proposed to investigate customer’s behavioral intention toward social media sites Research model includes Usability (U), Dependence (D), Involvement (I), Experience (E), EWOM environment (EW), Trust (T) and Purchase Intention (PI) The following hypothesis are proposed: 86 Hypothesis 1: Usability has a positive impact on EWOM environment in social media Hypothesis 2: Dependence has positive impact on EWOM environment in social media Hypothesis 3: Dependence has positive impact on trust in social media Hypothesis 4: Involvement has a negative impact on EWOM environment in social media Hypothesis 5: Involvement has a positive impact on trust in social media Hypothesis 6: Experience has negative impact on EWOM in social media Hypothesis 7: EWOM environment have a positive impact on customer’s trust in social media Hypothesis 8: EWOM environment has a positive impact on purchasing intention in social media Hypothesis 9: Trust has a positive impact on purchasing intention in social media 87 Chapter 4: Results The respondents (n=208) were distributed regarding gender, male is 58.2% and 41.8% being female The respondent’s ages from 18 years old and older was applied in this study The leading is people who are between the ages of 26-35 years old (36.1%), followed that is group of 18-25 years of ages with 28.8% The third group between the ages of 36-45 is 24.5%, next is group of more than 45 years of ages (8.7%) and the least group is group of under 18 years old with only 1.9% Most of respondents (29.8%) work in the Finance and Accounting sector, and followed by the Public official with 23.6%, Programmer/Computer science is with 16.8%, the next is Business and Economic sector with 14.4%, Service sector is with 12.5% and other is 2.9% Of all respondents, 37.5% have 3-less than years of working experience, the second is group have working experience from 5less than 10 years (28.4%), group of 1- less than year working experience is 17.8%, more than 10 years with 9.1% and less than years is 7.2% With statistics by income, 50% of the respondents have income from 10.000 TWD-less than 30.000 TWD per month, the respondents who have income from 30.000 TWD-less than 50.000 TWD per month are ranked at No.2, followed that is group of less than 10.000 TWD income per month and the lowest monthly income is more than 50.000 TWD with 2.9% The Table 4.1 will show the respondent’s demographic profile 88 Table 4.9 Results of the hypothesis testing No Hypotheses Results H1 Usability is positively associated with EWOM in social media Supported H2 Dependence is positively associated with EWOM in social media Supported H3 Dependence is positively associated with Trust in social media Supported H4 Involvement is positively associated with EWOM in social media Not Supported H5 Involvement is positively associated with Trust in social media Supported H6 Experience is positively associated with EWOM in social media Supported H7 EWOM have a positive effect on Trust to use social media in Supported shopping H8 EWOM have positive effect on Purchase Intention to use social Supported media in shopping H9 Trust have positive effect in Purchase Intention to use social Supported media in shopping 89 Chapter 5: Conclusion The rapid growth of social media usage creates a new trend on the business environment As a supplier, it is changing many activities of some retailers and raise up international product thanks to it geographically limited pattern Regarding consumers, the appearance of social media changed consumers’ buying activities in method, place and time These impacts of social media not only make business change their working method but also drive the purchasing way of customers However, the development of dealing via Internet in Vietnam is still primary, thus it is the reason consumers choose to (or not to) buying product/service online through social media sites Therefore, it is essential for customer to learn which factor affect the purchasing intention when they shop on social commerce The conclusion and limitation of this study will open some new and interesting possible avenues for future investigation Because this study just focuses investigating the factor of social media that have impact to customers purchasing behavior So, future study should examine the other sides of customer in social media that affect to customer behavior, for example, to explore the influence of social media users’ gender or age on customers’ purchasing behavior In addition, some factors such as product or the external environment could be considered as the element in social media scene affect to customer behavior in future research 90 Curriculum Vitae (CV) NGUYEN NGOC THUY Admin Staff Date of birth: Oct 5th, 1990 Gender: Female Nationality: Vietnam Marital status: Single Phone: +844978741913 Email: thuynguyen1005@gmail.com Address: No 64, Wenhua Road, Huwei Township,Yunlin County, Taiwan Website: https://www.facebook.com/thuynguyen1005 EDUCATION Feb 2016 – Feb 2018 National Formosa University Major: Information Management Master Degree Sep 2009 – May 2013 Vietnam Commerce University Major: International Commerce GPA: 2.8/4 Degree: Bachelor Degree 91 WORK EXPERIENCE Jun 2013 – Feb 2016 Jun 2012 - Sep 2012 92 Haiha-Kotobuki Co., Ltd Sales Admin Staff Main responsibilities: - Write and upload product advertising post via Facebook, Forum - Introduce, consult products and answer customers' queries via phone and email - Processing a high volume of product orders - Processing invoices for all sales transactions - Checking prices and contracts are up to date - Reporting monthly sales results to the sales team - Supporting the sales force with general operations to help reach the team’s objectives - Processing staff time sheets - Dealing with and responding to high volumes of emails Recognition and Gains - Be assessed by customers and manager: enthusiastic, active, honest, working flexible, get high efficiency in working - Improve management and negotiation skill - Appreciate by Sales Manager to be one of the best year's staff in 2016 Tuan Linh Co., Ltd Part-time Sales Staff Main responsibilities: - Sell air ticket and travel services for Foreigners and Vietnamese at offices - Promote services of company through Internet such as: website, Facebook, - Arrange and conduct all of office equipment - Manage cash and debt of company, check payment requirements - Make reports of sales every day Achievements and skills gained: - Be assessed positively by manager: active, extremely adaptable - Observe, learn and catch customers’ taste well - Improve English Communication Skill CERTIFICATIONS 2016 TOEIC Certification with score 640 HONORS & AWARDS 2016 National Formosa University Scholarship for years 2013 Vietnam Commerce University Scholarship in 2nd semester 2012-2013 SKILLS 93  -  Admin Skills Coordinated with other departments to ensure proper service to customers Communicated with customers to ensure they received the best service Provided support to Sales Team to ensure customers’ needs were met Coordinated ship dates for all orders from manufacturing, providing sales managers with special considerations when necessary Interfaced with manufacturing, accounting, and shipping, communicating fulfillment of customer delivery requirements according to company's capabilities Monitored backlogged orders, ensuring timely shipments Generated daily, monthly, quarterly and yearly total sales commissions reports Maintained, tracked and managed all demonstrations of product at customer locations, ensuring prompt sale or return of all equipment involved Authorized, tracked and ensured proper credit for returned equipment Ensured shipment/distribution of office materials to sales, marketing, customer service departments Administered special projects when requested for sales and marketing departments Excellent at soft skill such as presentation skill and communication Capable of team work Languages: English Speaking: Good Writing: Excellent, Reading: Excellent Listening: Excellent Chinese Speaking: Excellent Writing: Good Reading: Good Listening: Excellent  Computers - Word, Excel, PowerPoint, Internet Skill 94 ... testing according demographic data and social media characteristics The purpose of this study is to investigate the impact of social media to customer purchase intention in Vietnam To increase the. .. websites that offer online sales International e-marketplace platforms such as Lazada, Zalora, Tiki or Hotdeal are leading the online sales race Another report by Vietnam E-commerce and Information Technology... entertained, study, make friends and shopping Social media is increasingly developing in Vietnam with great changes in the market Second, mention of the characteristics of social media is considered