The Influence Of Tiktok On Consumer Purchase Intention In Asia.pdf

This study aims to examine six undiscovered factors affecting customer purchase intention on this platform in Asian countries, which are algorithm, trust, informativeness, customer engag

VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND LAW

The Influence of TikTok on Consumer Purchase Intention

in Asia

Lecturer: Chung Tu Bao Nhu

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 CTTY - 12/2022

TABLE OF CONTENTS

ABSTRACT

1 INTRODUCTION

2 LITERATURE REVIEW

2.1, Key concepts and theoretical background

2.2 Model development with hypotheses

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 & Schafer, 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, 202 1b)

In recent years, the influence of social networking platforms on e-commerce has become more and more popular, namely Facebook, Instagram, Twitter, and

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

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

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,

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 1s 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'

involvement (Rezek, 2022) In this way, TikTok appeals to the soctal-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:

All TikTok's algorithm has a positive influence on consumer purchase intention 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 The informativeness of TikTok has a_ positive influence on consumer purchase

intention

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

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:

3 Trust in TikTok has a positive impact on consumer purchase intention

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:

HẠ TikTok enhances Customer Engagement which affects positively on consumer purchase intention

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, Gongalvesa, & 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:

ANS Irritation has a negative impact on consumer purchase intention on TikTok 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:

6 Sales promotion on TikTok has a positive impact on consumer purchase intention

3 METHODOLOGY

In this chapter, the specific procedures and stages that were utilized in the Investigation's framework are broken down and described The authors will discuss the structure of the research, the methodology, the selection of samples, the method for collecting data, and the measurement scale

3.1 Research design

The purpose of this survey, which makes use of a quantitative research approach, is to determine the extent to which there is a correlation between the engagement of customers and the behaviors and their intention regarding their purchases More specifically, this study is to analyze the ways in which TikTok's Algorithm, Informativeness, Trust, Customer engagement, Irritation, Sales promotion all influence the intentions that customers have when they are in the process of making purchases Researchers adopt a primary quantitative research method in general and a survey research method in particular, conducting surveys through self-administered questionnaires utilizing Likert scales and Matrix Table Questions From this point on, we are able to gather the quantitative data and, in conjunction with the mathematical analytic tools, we are able to emphasize the relationship between observable variables and client intentions This survey also includes open-ended questions with regard to background information (name, nationality), as well as closed-ended questions with regard to further knowledge about the respondents’ status, amount of using TikTok, average monthly expense on shopping online, and experience in shopping online via TikTok This is done in order to collect detailed fundamental information and obtain a diverse range of responses

The combination of two survey instruments (the Likert scale and Matrix Table) enables us to easily determine the fundamental link between the variables We deploy Matrix Table Questions to examine the level of consumer satisfaction with each variable (Algorithm, Informativeness, Trust, Customer engagement, Irritation, Sales promotion) of TikTok It delivers supportive background data used to discuss whether

a higher rate of satisfaction would shape the likelihood of purchase intentions Besides, the Likert scale explicitly yields knowledge of how a single element works and affects the purchase intentions by posing pointed statements relating to each

variable, such as "After pressing the like button on a video, the videos with related content appear on your main page." or "You input your debit or credit card number to pay on TikTok." The respondents rate the statements based on a scale from 1 (strongly disagree) to 5 (strongly agree) From this vantage point, it is simple to observe how sensitively the customers react to the surveyed factors, and since this design poses minor difficulties for respondents and is straightforward, accessible, and quick, the survey would be presented in a time-saving format with a high response rate Despite the positive sides of the design, it likely contains limits and causes respondents to experience uncertainty as they are asked to standardize their requirements in a numerical form Moreover, since the survey would mainly be conducted online, it may be problematic to reach the middle-aged, the elderly, or even some youngsters

3.2 Research process

3.2.1 Identify the issue

TikTok has become one of the most popular online social media platforms, particularly in Asia, where a variety of news and information is disseminated via videos TikTok also plays a key role in Asian commercial sectors, since it increases consumer purchase intentions by supporting retailers and producers with the promotion of their products via captivating short videos Increasing numbers of Asians have purchase intentions after viewing movies or livestreams on TikTok, which is anticipated to become a regular pastime in the near future At this point, we began to

be concerned about the impact of TikTok variables on client intentions, which could assist us in gaining an in-depth understanding of contemporary Asian consumer purchasing patterns

3.2.2 Draft literature review

The literature review must provide functional information regarding the highlighted issue Beginning with the thesis statement, "How TikTok influences Asian consumer purchase intentions," the author planned to introduce the topic and the purpose of the research Researchers have also included theoretical background (Purchase Intention, TikTok and TikTok shop, Consumer behavior) as well as related studies and subsequent results, and notions to investigate the research's foundation In

addition, we intended to create hypotheses on six factors that may influence TikTok users' purchase intentions (Algorithm, Informativeness, Trust, Customer engagement, Irritation, and Sales promotion) At the conclusion, we analyze the literature-derived framework that serves as the foundation for the subsequent steps

3.2.3, Establish a research topic, aims, and hypothesis

The purpose of this study is to determine the level of influence of TikTok on consumer purchase intentions in Asia During the course of the research, we came to the following hypotheses about the aforementioned factors:

e Hi TikTok's algorithm has a positive influence on consumer purchase intention

e H2 The informativeness of TikTok has a _ positive influence on consumer purchase intention

e H3 Trust in TikTok has a positive impact on consumer purchase intention

e H4 TikTok enhances Customer Engagement which affects positively on consumer purchase intention

e HS Irritation has a negative impact on consumer purchase intention on TikTok

e H6 Sales promotion on TikTok has a positive impact on consumer purchase intention

3.2.4 Adopt the research design

To determine the relationship between TikTok and client purchase intentions,

we believe quantitative research methodologies provide the most credible, trustworthy, and accessible results Specifically, we employ the survey research method, administering self-administered questionnaires to collect basic data and investigate the relationship

3.2.5, Evaluate the sample design

We investigate voluntary response sampling, in which participants willingly participated in the survey With this approach, the data is not expected to be highly reliable but valid, as the result is extremely prone to bias due to the fact that the majority of voluntary participants have strong opinions about the topic area and are likely to provide biased responses

3.2.6 Collecting data

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This study uses quantitative data collection techniques, surveys, and questionnaires to gather crucial data and information pertinent to its purpose Besides, researchers also imply knowledge from previous studies and other tested hypotheses 3.2.7, Running and analyzing the input

Data processing often originates with data preparation and coding The data is customized to manage consistency among participant responses and to identify gaps Data analysis usually aims to break down large amounts of data into manageable chunks, provide summaries, look for trends, and use statistical tools so that researchers can look at and understand the results

Researchers also check to see if the results match up with the previous studies and hypotheses that came out of the investigation

3.2.8, Sum up and report the findings

3.3 Sampling selection

This study would like to use voluntary response sampling where our respondents are volunteering themselves to fill up the form The target participants of our study would be students of universities in Vietnam, knowing that many universities in Vietnam have international students, most are from the Asia region including Laos, Cambodia, Thailand, China, Japan, and Korea (Pham, 2017) Therefore with these responses, the result will not be limited only in Vietnam Also, to expand the age diversity, the study aims to conduct a survey among other generations through Facebook, which is one of the most popular online social media sites, with more than 1.7 billion users (Gunter et al., 2020) Moreover, secondary data sources will be used to complete this study Secondary data are those that have previously been compiled and summarized from existing data or prior research It can be obtained from websites on the internet, public libraries, and commercial data sources such as newspapers, journals, and magazines

There are several ways to determine the sample size Cattell (1978) suggested that 500 would be a great sample size to research for most problems, however, 250 or

200 could be accepted Our research is planned to have a confidence level of 95%, which means Z-score = 1.96, the margin of error is 5% and the population proportion

is 0.5, these parameters were suggested by Beaton (2003) for conducting an accurate

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