LITERATURE REVIEW Trang 3 ABSTRACTLike other social networking platforms, TikTok has been used to promoteproducts and attract users through various forms, leading to fierce competition
VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND LAW The Influence of TikTok on Consumer Purchase Intention in Asia Lecturer: Chung Từ Bảo Như Student name: Lê Ngọc Nhật Hà - K214080593 Nguyễn Mai Hân - K214080594 Hoàng Diệu Huyền - K214080595 Nguyễn Hà Phương - K214080601 Phan Uyên Phương - K214080602 Lê Gia Hân - K214081851 HO CHI MINH CITY – 12/2022 TABLE OF CONTENTS ABSTRACT 1 1 INTRODUCTION 1 2 LITERATURE REVIEW 2.1 Key concepts and theoretical background 3 2.2 Model development with hypotheses 4 3 METHODOLOGY 3.1 Research design 8 3.2 Research process 9 3.3 Sampling selection 11 3.4 Data collection method 12 3.5 Measurement scale 13 REFERENCES 21 ABSTRACT Like other social networking platforms, TikTok has been used to promote products and attract users through various forms, leading to fierce competition among the number of E-commerce exchanges and the occurrence of TikTok shop This study aims to examine six undiscovered factors affecting customer purchase intention on this platform in Asian countries, which are algorithm, trust, informativeness, customer engagement, irritation, and sales promotion The method used in this paper is a quantitative approach to finding the correlation between customer engagement, customer behaviors, and purchase intention Besides, researchers conducted a survey including the correlation and factors to collect and analyze the data, with open-ended and closed-ended questions, a Likert scale, and a Matrix table Hence, the study shows some suggestions made for firms to increase their profit when doing short video marketing and for TikTok to expand its users Keywords: Purchase intention, TikTok, Asia, TikTok advertising, social media 1 Introduction In the modern era of electronic technology, social networking sites play an extremely important role in everyone's life and one of the most popular social networking sites today is TikTok (Zeng & Schäfer, 2021) The features that TikTok brings to us have been making our lives more convenient and comfortable Moreover, one of those features is allowing users to become consumers, allowing people to buy goods on this social networking site, so most people switch from shopping offline to shopping online (Lestari & Pratomo, 2021) And it is also these features that have partly influenced the shopping intention of TikTok users TikTok is the fastest-growing social network in the world (Martini, Suardhika & Dewi, 2022), and it was also the most downloaded application globally in 2020 and 2021, with over 1056 million downloads in these years, more than Instagram, with 1048 million downloads (Koetsier, 2021a, 2021b) In recent years, the influence of social networking platforms on e-commerce has become more and more popular, namely Facebook, Instagram, Twitter, and 1 Youtube (Kwahk & Ge, 2012) These social networking sites allow users to share content and information in various ways in many fields The research of Setyorini and Rahmawan (2021) showed that there is a relationship between social media and the intention to purchase goods This leads to the occurrence of product promotions to increase purchase intention, such as influencer endorsement, and viral marketing which are often based on customer behaviors (Haryanto, Komariah & Danial, 2022) TikTok is not only out of this trend but also participates and even participates extremely strongly, evidenced by the launch of TikTok shop in early April 2021 in Indonesia and then in Southeast Asia (Pandaily, 2022) Furthermore, Solikah and Kusumaningtyas (2022) stated that one of the big differences between TikTok and other platforms is advertising marketing and the last optimal step for users to perform buying behavior as an E-commerce (Chin Media, 2022) At this time, TikTok in Vietnam still sells display advertising since this is an important source of attraction (NhuaHVT, 2022) Nevertheless, it is easy to see that in Douyin, China, the percentage of paid advertising is not much The future of TikTok is also like that, especially after implementing TikTok shop because most users are familiar with hard-sell advertisements and they are skeptical of them, thus ignoring them (Petty & Andrews, 2008) TikTok wants to retain users through unique and good content, so they encourage brands to make an effort to create creative content instead of paying for display advertising (NhuaHVT, 2022) However, there is little research on how TikTok and TikTok shop influence consumer purchase intentions As such, this research aims to answer the following question: How TikTok and TikTok shop influence consumer purchase intentions With the announcement on TikTok’s newsroom in April 2022, the launch of TikTok shop in Vietnam has marked a significant milestone for itself in the shopping intention of users among other massive platforms (Chin Media, 2022) In particular, even though TikTok shop is the latest E-commerce online trading floor, its revenue growth and a terrific number of orders prove the rapid development of TikTok shop; it also provides perfectly convenient shopping experiences combined with entertainment for users Since this new E-commerce has just been launched in the market not quite 2 long and some features might not be so breakthrough, there will be many problems that need to be solved, this is also the reason why we chose this topic 2 Literature review 2.1 Key concepts and theoretical background 2.1.1 Purchase intention Purchase intention refers to the process of how a customer responds to a product or service It assesses both consumer interest in and likelihood to acquire a good, and is closely tied to the person's potential future purchasing behavior (Waston et al., 2018) When a person is thinking about whether to purchase a product or service, the purchase intention process is going on in their mind This process can be long-term or short-term depending on many other factors In the era of social networking, prior research in the field of influencer marketing contends that consumer perceptions of a particular brand have a direct impact on their desire to make a purchase (Chetioui, 2020) According to Firkes, Zerres, and Israel (2021), positive affective states like arousal, pleasure, positive emotion, and positive mood might boost approach behaviors (purchase intentions and acts) That is, purchase intentions are more likely to materialize when consumers express positive sentiments about a brand such as its products, attitude, images, quality, loyalty, etc as this is what influences their positive sentiments (Mehyar et al., 2020) 2.1.2 TikTok and TikTok Shop Originally as a Chinese community for short videos that focused on internet entertainment, TikTok was interviewed by a government department and criticized by the party-controlled media due to the platform's excessive reliance on algorithms and became a ‘Short Video Empire’ (Zhang, 2020) By offering short-form videos (ranging in length from fifteen seconds to ten minutes) with a variety of cutting-edge editing and touch-up options, TikTok has enhanced the core platform features of YouTube and Instagram (Deng et al., 2022) More than just an entertainment platform, TikTok has taken advantage of its formal influence culture to create a commerce function (TikTok shop) more frequently and successfully than any other rivals With the TikTok app, brands and brand ambassadors can upload videos promoting products, 3 live broadcasts to answer inquiries, and link directly to the selling site This makes the app ideal for consumer-centric marketing and direct selling (Rezek, 2022) 2.1.3 Consumer behavior Consumer behavior is considered essential for product and service providers as it equips them with an insight into what customers need and what the company can do to satisfy their expectations As Kotler and Armstrong (2012) defined, consumer behavior refers to the purchasing habits of consumers - individuals and families who buy products and services for personal use Consumer behavior is the study of a continuous decision-making process about how people choose, acquire, utilize, review, and discard items and services to fulfill their needs and desires (Solomon, 2017) Consumer traits and buyer decision processes, including problem identification, information search, evaluation, decision-making, and post-purchase behavior, influence product selection, brand preference, agent choice, the timing of purchase, and the quantity purchased (Uran, Fanggidae, & Nyoko, 2021) According to Kotler and Armstrong (2012), there are cultural, psychological, social, and personal factors that greatly affect consumer behavior Besides environmental stimuli, buyers’ decision-making process is also influenced by marketing stimuli such as the cost of goods, location, and promotions (Uran et al., 2021) Flatters and Willmott (2009) stated that consumers attempt to maximize their usefulness, pleasure, or delight by acquiring products Consumer behavior to satisfy daily demands can be impacted by numerous elements, both internal and external to the consumer Consumer response to these factors can affect their purchase intention 2.2 Model development with hypotheses 2.2.1 TikTok Algorithms and Consumer Purchase Intention An algorithm is a recommended system that helps users find useful information based on what they are interested in Using a set of rules to be followed in computer calculations, the TikTok algorithm is in charge of choosing which content is given to which viewers based on user involvement through video viewing time, liking, commenting, and sharing (Klug et al., 2021) Users are more likely to initially have a positive first impression of the video and a positive attitude toward their personalized feed because they believe videos are pushed to their “For you” page by other users' 4 Document continues below Discover more fArcoamd:emic Skill Trường Đại học… 22 documents Go to course Communication Skills - chap 4 1 100% (3) Understanding How you learn 1 100% (2) CLC 19DMA03 Marketing Services… 50 Marketing 100% (45) Plan B01031 Chapter 5 Trade Finance 8 Thanh toán 100% (1) quốc tế Problems for commercial bank 16 Ngân hàng 100% (1) thương… THE LAZY MAN - ddd Lịch Sử 100% (13) 3 Đảng involvement (Rezek, 2022) In this way, TikTok appeals to the social-adjustive function of attitude The Engel Kollat Blackwell Model of Consumer Behavior states that before making a decision, the consumer goes through various steps, they are: Inputting, Processing, Evaluating Information and Factorial Influencing (Jisana, 2014) From this model, it can be inferred that the more frequently information about a certain item appears on the “For you” page of TikTok, the more it will have an effect on the process of evaluating information of the consumer, thereby promoting purchasing Therefore, a hypothesis can be formed that: H1 2.2.2 TikTok Informativeness and Consumer Purchase Intention The term "Informativeness" refers to the perception of a shopping interface's ability to give users a wealth of information or product-related knowledge that promotes the accomplishment of a shopping objective and, in turn, inspires trust in users (Kang et al., 2020) The main function of TikTok is to help users learn and share artistic skills through short clips which last from a few seconds to a few minutes (Sharabati et al., 2022) Furthermore, through these short clips, TikTok is able to provide consumers with a large amount of useful information about products being sold, including shape, color, usage and product reviews, and so on In each short clip of the seller, a link to their Tik Tok shop is directly attached, and customers only need to click on that link to purchase and proceed to payment Previously, thanks to taking advantage of the growing entertainment demand, TikTok has gained a huge number of viewers With this available advantage, TikTok has cleverly combined with the convenience of TikTok shop, thereby creating a positive influence on driving viewers to buy more In light of this discussion, we hypothesize that: H2 2.2.3 TikTok Trust and Consumer Purchase Intention Many experts claim that trust has a substantial impact on consumers' buying intentions over social media Trust, on the one hand, is customers' perceptions of the authenticity and trustworthiness of advertising Consumers' level of confidence in the advertising message is referred to as advertising credibility, and it is dependent on 5 faith in the source of the advertisements and the advertiser (MacKenzie & Lutz, 1989) For instance, some reviews of KOLs and celebrities with high reliability, and rating the product correctly will positively impact consumer confidence and increase consumer purchase intention On the other hand, trust also referred to consumers’ attention towards some factors such as the reputation of the sellers, product quality, refund policy, return policy, and system assurance when purchasing products through TikTok E-Commerce, which is TikTok Shop From the perspective of consumers, the reputation of a high-quality online shopping site with verified security will be more valuable (Hidayat, Wijaya, Ishak, & Catyanadika, 2021) According to Chatterjee, Dandona, Mitra, and Giri (2019), the purchase intention of customers is positively influenced by trust and is mediated through attitude Thus, a hypothesis can be drawn as follows: H3 2.2.4 TikTok Customer Engagement and Consumer Purchase Intention The degree of interchange between users and various forms of advertising is known as interactive ability It enables users to engage in creativity and amusement and is characterized as a way for people to communicate effectively regardless of place and time (Hoang et al., 2022) A unique difference of TikTok is that it allows users to easily save videos to their devices so that the TikTok effect is spread more widely through other social networking sites Moreover, TikTok users can also respond to audience comments through video, which has facilitated them to be more involved in the activities taking place on this social networking platform According to Cheung, Xiao and Liu (2014), customer engagement has a significant role in the information analyzing process By engaging in the platform’s activity, Tik Tok users can freely participate in activities on the platform by interacting (like and comment) with the short videos, and by doing so, users can collect helpful information and experiences from others to make purchasing intention In addition, some studies have also shown that enhancing customer engagement will also help them raise their perception of their product expertise (Li et al., 2002), which later affect significantly on their purchase intentions Based on the previous discussion, it may be hypothesized that: 6 H4 2.2.5 TikTok Irritation and Consumer Purchase Intention Irritation is related to the degree of discomfort and negative feeling of consumers when seeing annoying and distracting advertisements or a video with inappropriate content According to Ducoffee (1996), consumers are prone to view advertising as an unwelcome and bothersome influence when it uses tactics that irritate, offend, insult, or are too manipulative The effectiveness of advertising will be diminished because the feeling of irritation will cause consumers to have a negative reaction and misapprehend the value of the advertisement (Martinsa, Costab, Oliveirab, Gonçalvesa, & Branco, 2019) Intrusive, obnoxious, and frequently exaggerated advertising can be perceived as unsolicited information and cause unpleasant emotions in consumers, fostering a bad opinion of advertising (Gaber, Wright, & Kooli, 2019) Therefore, consumer purchase intentions may decrease Thus, we propose a hypothesis as follows: H5 2.2.6 TikTok Sales Promotion and Consumer Purchase Intention Sales promotion is intended to increase the speed or significance of short-term purchases of a product by a customer, hence promoting the sale and purchase of goods and services (Kotler & Armstrong, 2012) Sales promotion may be characterized as marketing initiatives that give additional incentives in the near term to encourage an immediate reaction from consumers, such as online coupons, product discounts, or sweepstakes offers (Sohn & Kim, 2020) Akram et al (2018) indicate that sales promotion is to excite consumers’ demands and persuade people to purchase a product right away For instance, when watching a product advertising video on TikTok or making a purchase on TikTok Shop, a discount coupon or free gifts offered will make the consumer decide to buy the product immediately Customers’ purchase intention may increase if sales and promotional activities are increased (Husnain, Rehman, Syed, & Akhtar, 2018) Therefore, we can hypothesize that: H6 7 Study Factors examined Platform target Shareef et al (2017) Facebook Informativeness, irritation, advertising Facebook Jung et al (2016) value, and attitudes Social networking websites Saxena and Khanna (2013) Informativeness, promotional rewards, Boateng and Okoe privacy concern (2015) Informativeness, irritation, and Mir (2012) entertainment Corporate reputation Not identified Attitudes toward social media Facebook, MySpace, and advertising, information, ad-clicking LinkedIn 3.5 Measurement scale 3.5.1 Questionnaire structure The survey form is divided into two main parts: - Demographic questions: Questions about participants' background information such as name, sex, and age - Investigation questions: Questions that related to the study’s objectives 3.5.2 Questionnaire scale 3.5.2.1 Open-ended questions These questions are designed to collect background information of participants The responses would be answered freely without any limitations or given choices 3.5.2.2 Closed-ended questions - Likert scale - Matrix table In this study, researchers use the ordinal scale, the Likert scale in particular to evaluate the data This psychometric scale was developed by Rensis Likert in 1932 Additionally, the Matrix table would also be used to strengthen the survey's results 3.5.3 Questionnaire design 3.5.3.1 Demographic questions The form of these questionnaires are open-ended and nominal scale based questions The study's demographic questions are shown in the below table No Question Form of question Answer 1 What is your name? Open-ended 13 2 What is your age? Closed-ended 15-18 19-25 Above 25 3 What is your gender? Closed-ended Male Female Others 4 What is your nationality? Open-ended 5 Do you work or study? Closed-ended Work Study 6 Have you ever used TikTok? Closed-ended Yes No The amount of hours you Closed-ended 7 spend on TikTok per day < 30 0.5 - 2 > 2 hours minutes hours Above 1 million and Your average monthly ≤ 1 less than 3 More than spending on your online million 8 shopping VND million 3 million Have you ever bought a Closed-ended VND VND 9 product on TikTok? Closed-ended Yes No 3.5.3.2 Investigation questions The Likert scale questionnaire is used to evaluate the agree and disagree levels of participants In which, the measurement scale has six aspects divided into 54 variables Questions are referenced based on existing research papers about factors such as informativeness, trust, and others affecting purchase intention on social media In this study, we applied those question structures and developed other questions to have an accurate measurement for the items we adopted Questions to test the effect of “Algorithm" were referenced from Siles et al (2022) and Zhao et al (2022) “Informativeness" was captured by eight aspects from Logan et al (2012) and Alawan et al (2018), showing whether Tiktok is a convenient source of product information “Trust” and “Irritation" were surveyed using questionnaire structure from Hanifa et al (2022) “Customer engagement" was measured using ten adapted items from Jjang et al (2010) and Alalwan et al (2018), capturing the extent to which participants actively engage in and are connected to 14 promotional activities on Tiktok And questions about “Sales promotion" was based on research conducted by Tang et al (2016) We not only take references from existing research but also create some new meaningful statements in order to have an accurate survey The aspects in use to describe how TikTok influences customers' purchase intention are: (1) Algorithm; (2) Informativeness; (3) Trust; (4) Customer Engagement; (5) Irritation; (6) Sales promotion The observed variables are assessed in accordance with the Likert scale In this circumstance, the study uses the five-point level of agree-disagree scale in ascending order: (1) Strongly disagree (2) Disagree (3) Neither agree nor disagree (4) Agree (5) Strongly agree The agree-disagree scale questions are shown in the below table The sources of questions have been mentioned above No Variables Sign Statement After pressing the like button on a video, the videos 1 A1 with related content appear on your main page You usually see the videos from the country you set in 2 Algorithm A2 the system Tiktok suggests a lot of videos about one product, but 3 A3 each video has different aspects about that product 15 "For you" section includes useful and attractive content, 4 A4 which makes you easily discover other products/videos Based on the videos you've seen, TikTok recommends 5 A5 new videos to increase your purchasing experience After watching different videos about one product, you 6 A6 have a tendency to buy that product Hashtag makes it easy for you to find videos related to 7 A7 products The display of TikTok also affects your purchase 8 A8 decision of a product You are satisfied with the recommendation of product promotional videos that are linked to your shopping 9 A9 interests on TikTok Tiktok saves time searching for information about the 10 I1 product by giving detailed descriptions about it Sellers regularly answer your questions about the 11 I2 product as you comment on the promotional video The content of the video is useful, which led to your 12 I3 purchase decision The content of the video is suitable for your interest and 13 Informativeness I4 demand The content in the recommended section from TikTok gives you a deeper approach to the product promotional 14 I5 videos that you are interested in and eager to watch Features of TikTok such as commenting and sharing 15 I6 make it easier to access product information 16 I7 You are attracted by videos that provide information 16 about the product you are interested in You input your debit/credit card number to pay on 17 T1 Tiktok You enter your shipping address when purchasing on 18 T2 TikTok without much thought The privacy policy of customers' personal information 19 T3 is good You allow TikTok to access your location and contacts 20 T4 while using You do not worry about being scammed while 21 Trust T5 purchasing on TikTok Celebrities and influencers' reviews on TikTok attract 22 T6 your attention to the product The reviews from the KOLs and celebrities are very 23 T7 objective 24 T8 The content of promoting videos on TikTok is reliable The product that you receive has the same appearance 25 T9 and quality as it was reviewed on TikTok The fact that the product is advertised on TikTok 26 T10 greatly influences my purchase intention TikTok has a simple interface, easy to interact with and 27 E1 search Customer There are like/comment functions for users to easily 28 engagement E2 rate the product 29 E3 TikTok has a simple purchasing process 30 E4 You can place an order during live-streaming on 17