CONSUMER ATTITUDE TOWARDS THE USE OF E-COMMERCE IN HO CHI MINH CITY : A CASE STUDY OF THEGIOIDIDONG.COM In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In International Business By Mr Pham Huy Viet ID: MBA03041 International University – Vietnam National University HCMC October 2013 CONSUMER ATTITUDE TOWARDS THE USE OF E-COMMERCE IN HO CHI MINH CITY: A CASE STUDY OF THEGIOIDIDONG.COM In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In International Business by Mr Pham Huy Viet ID: MBA03041 International University - Vietnam National University HCMC October 2013 Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree Approved: -Chairperson -Committee member -Committee member Advisor Committee member Committee member Acknowledge I would like to express my very great appreciation to my advisor – Dr Ho Nhut Quang with all my respect and gratitude Thanks for all his great support to provide guidelines, challenges ideas, and all of his value comment to help me finish this thesis I would like to thank all my friends, my brother and sister to support their ideas, answer my questions during the time I this research And finally I want to say my great thank to my family, who always besides me to overcome all difficulties during this time With many thanks, Plagiarism Statements I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at the International University – Vietnam National University Hochiminh City Copyright Statement This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the author’s prior consent © Pham Huy Viet/ MBA03041/ 2013 Table of contents CHAPTER ONE: INTRODUCTION 1 Introduction 1.1 Overview of E-commerce 1.2 Development of e-commerce in Vietnam 1.3 Reasons for the Underdevelopment of E-commerce in Vietnam 1.4 E-commerce models in Vietnam 1.5 Overview about thegioididong.com Research problem: Research questions: Research objectives: Scope and limitation Implication: Research structure: CHAPTER TWO: LITERATURE REVIEW 10 Consumer attitude: 10 Technology acceptance model- TAM: 10 Research model and hypothesis: 12 CHAPTER THREE: RESEARCH METHODOLOGY 14 Research approach: quantitative 14 Research process: 14 Questionnaire design 15 Sampling design 15 Piloting test 16 Data analysis 16 CHAPTER FOUR: DATA ANALYSIS AND RESEARCH RESULT 19 Sample demographic 19 Descriptive statistics 21 2.1 Perceived benefit 21 2.2 Perceived ease of use 22 2.3 Perceived quality of service 23 2.4 Consumer attitude to online transaction 24 Reliability test 24 3.1 Reliability statistic of perceived benefit 24 3.2 Reliability statistic of perceived ease of use 25 3.3 Reliability statistic of perceived quality of service 26 3.4 Reliability statistics of consumer attitude to online transaction 27 Exploratory Factor Analysis 27 4.1 Exploratory factor analysis for independent variables 27 4.2 Exploratory Factor Analysis of Dependent Variable 31 Cronbach’s Alpha after exploratory factor analysis 32 Regression analysis 33 Revision of hypotheses and research model 36 CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS 37 Conclusion 37 Recommendations 38 Limitations 39 List of Tables Table 1: Relationship between perceived value and consumer attitudes to online transaction 13 Table 2: coding data summary 17 Table 3: Descriptive statistics of perceived benefit 22 Table 4: Descriptive statistics of perceived ease of use 22 Table 5: Descriptive statistics of perceived quality of service 23 Table 6: Descriptive statistics of consumer attitude 24 Table 7: Reliability statistics of perceived benefit 25 Table 8: Reliability statistics of perceived ease of use 25 Table 9: Reliability statistic of perceived quality of service 26 Table 10: Reliability statistics of consumer attitude 27 Table 11: Exploratory factor analysis for independent variables 28 Table 12: Rotated Component matrix 30 Table 13: Exploratory factor analysis of dependent variable 31 Table 14: Cronbach’s Alpha after exploratory factor analysis 32 Table 15: regression analysis 33 Table 16: anova test 34 Table 17: coefficient 34 List of Figures Figure 1: The best e-commerce website in 2012 Figure 2: Thegioididong.com offline store Figure 3: thegioididong.com online store Figure 4: Technology Acceptance Model-TAM 11 Figure 5: Research model 12 Figure 6: Research Process 14 Figure 7: percentage gender of respondents 19 Figure 8: percentage of age’s respondents 20 Figure 9: percentage of marital status 20 Figure 10: Income description 21 Figure 11: Revised Research model 36 Abstract As an inevitable trend of the globalization process, E-commerce has become an indispensable part of today’s modern economy due to its benefits brought to consumers and businesses, including lower transaction costs, greater convenience and the power of personalization Despite the wide adoption of this technology in some developed countries, many emerging markets are still in the initial stage of implementing the Internet for their commercial activities This research aims to investigate the consumer attitudes to E-commerce and its adoption in Vietnam In particular, thegioididong.com website will be studied to identify the extent of E-commerce usage and the factors that influence Finally, recommendations will be provided to address the problems Key words: e-commerce, consumer, attitude The model summary reports the strength of the relationship between the model and the dependent variable, overall product/service quality The value of 0.722 of adjusted R Square indicates that 72.2% variance of the independent variable can explained by the four mentioned factors The ANOVA table tests the acceptability of the model from a statistical perspective Base on the data in the ANOVA table, the significance value of the F statistic is less than 0.05, which means that this result have meaning in statistical aspect and this sample result can be representative for whole population Table 16: anova test ANOVAa Model Sum of Df Mean Squares Regression Residual Total F Sig Square 148.176 55.824 201 204.000 204 49.392 177.841 000b 278 a Dependent Variable: attitude b Predictors: (Constant), benefit, ease of use, quality Table 17: coefficient Coefficientsa Model Unstandardized Standardized Coefficients Coefficients B (Constant) Std Error 2.654E-017 037 quality 603 037 ease of use 545 benefit 257 t Sig Beta 000 1.000 603 16.331 000 037 545 14.777 000 037 257 6.960 000 a Dependent Variable: attitude 34 In the coefficients above, the Standardized Coefficients beta between Consumer attitude and Perceived benefit, perceived ease of use, perceived quality of service was positive and significant because the significance value of perceived benefit, perceived ease of use, perceived quality of service is lower than 0.5, it satisfies with the statistical standard This demonstrated that perceived benefit, perceived ease of use and perceived quality of service was related to consumer attitude or there was linear relationship between consumer attitude and perceived benefit, perceived ease of use and perceived quality of service In addition, for measuring how strongly of impact level between consumer attitude and perceived benefit, perceived ease of use and perceived quality of service, we continue with the standardized coefficient beta in the table above The largest value of standardized coefficient beta is 0.603, it means that perceived quality of service has the strongest impact to consumer attitude The smallest value of standardized coefficient beta is 0.257, it means that the perceived benefit value has the lowest impact to consumer attitude Therefore, Linear Regression equation is CA = 0.603PQ + 0.545PE + 0.257PB + 2.654E-017 35 Revision of hypotheses and research model Perceived Ease of use H2 H1 Consumer attitude to online transaction H3 Perceived quality of service Perceived benefit Figure 11: Revised Research model H1 There is a positive influence of Perceived quality of service to consumer attitude to online transaction H2 There is a positive influence of Perceived ease of use to consumer attitude to online transaction H3 There is a positive influence of Perceived benefit to consumer attitude to online transaction 36 CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS Conclusion Our research topic: “Consumer attitude towards the use of E-commerce in Ho Chi Minh city: a case study of thegioididong.com “ is conducted to find the factors that influence to consumer attitude towards the use of thegioididong.com website and the challenges to thegioididong.com development We focus on finding out how consumers evaluate the product/ service quality of thegioididong.com and measuring their attitude to improve the thegioididong.com case Take the advantage of Technology Acceptance Model was developed by Davis(1986), three dimensions including perceived benefit, perceived ease of use, perceived quality of service are used to get in-depth interview with respondents In order to answer the research objectives, the methodology was presented in chapter Researcher applied mixed method to collect data including qualitative and quantitative method In preliminary research, using qualitative method to collect data on individual’s personal history, expectation by provided structure interview with 10 consumers The main research is conducted by distributed questionnaire survey after piloting test completed This result processed by using SPSS 20.0 to test reliability and validity measurement scale of dependent variable and independent variables Cronbach’s Anpha, EFA( exploratory factor analysis) used for reliability test Test the validity, test model and test hypothesis based on linear regression technique as presented in chapter four The core objective of this study was established the effect of these independent variable: perceived benefit, perceived ease of use, perceived quality of service Based on data analysis, the key factor effect to consumer attitude is perceived quality of service But in the condition of Vietnam, many consumers have the same habit that they only search information about product or review rating before they buy cell phone and after they get enough data about the phone, they will go to an offline store to get the new That have many reasons, because when they intend to buy a phone online in e-commerce 37 website, in this case thegioididong.com, they feel dissatisfied with unclear policy, noncompetitive pricing, delivery, return policy, payment policy… so it make they decide to go to offline store to get clear about many things above Recommendations Base on the descriptive statistic, we recognized that perceived benefit and perceived ease of use have the average mean lower than 3.5 so we need to find some way to improve this value In perceived benefit value, we need to improve the value of “Save your time for choosing and purchasing phone products and services”, “Offer you with cheaper prices than you going to the retail stores”, “Send you personalized emails that make you think they really know you personally? i.e greeting your name, offering you with relevant products and services, promoting deals in your local areas”,” Put your mind at ease with a safe and convenient online experience”,” Always put your privacy and benefits their first priority”, all these value have mean lower than 3.5 In perceived ease of use, we need to improve the value of “Has logically structured design”, “Allows you to navigate easily without any confusion from page to page”, “Clearly state their policies every time before a purchase is made (terms and conditions of use, privacy policies, returns and warranty policies)”, “Has quick download speed (page loading time, applications download)”, all these value also have mean lower than 3.5 Despite thegioididong.com is one of the best e-commerce website in Vietnam, but when we compare with some famous other website such as amazon.com to get strength and weakness to develop market, we recognize that thegioidiong.com seem as only the first stage of e-commerce website So, we suggest some solution for thegioididong.com: o With phone product: we should show more item related to phone such as accessory ( case, screen protector), items viewed by others( similar phone, games) o Response to customer question regarding specific product is displayed o Polices about payment, delivery, transaction should be stated clearly 38 o More competitive pricing for buying online If the board of thegioididong.com can the above suggestion, we believe that they can get many benefits such as improve online presence ( more effective), improve customer attitude towards online transaction, cost saving for offline channel, increase revenue To get these benefits, we need to pay some cost but relatively low: development cost of customer tracking system, recommended system, product differentiation( such as download gps map when buying online), channel cooperation( sell online, handle return offline, repair cost), promotion with condition( payment with bank card), percent discount with condition… But in any problem, it still has positive and negative side The negative side of this is risk of online transaction can happen but if we have good enough information and knowledge about e-commerce, we think that we can control this Some risk we can face to improve online transaction: o Channel conflict ( cannibalization) : if we pay attention to develop online store, so the big systems of offline store can be closed o Privacy violation: this make consumer afraid when using ecommerce because they worry about losing personal information, credit card account, password, virus… In conclusion, e-commerce is a useful tool help business to improve competition, existing and development in the trend of globalization To take advantage of e-commerce, business needs to have knowledge basically about all factor effect to consumer attitude to purchasing online so that they can operate and the e-commerce system effectively Limitations Like all research, this research has several limitations to the interpretation of the result and other problem should be considered during study procedure Firstly, with limited time and cost, so in this research, we stop at evaluating the consumer attitude to online transaction in Ho Chi Minh city and Binh Duong So the first 39 suggestion is should have a general evaluation to all factor effect to Vietnamese consumer attitude Secondly, with this research, we only pay attention to consumer who has known thegioididong.com and particular in the case of phone in thegioididong.com e-commerce website So we can not mentioned all the factor motivate consumer learn and have transaction online The next suggestion is a research with all consumers for the moment ecommerce websites to generalize the situation in Vietnam 40 References A.Afuah, N.Bahram, the hypercube innovation, Res.Policy 24(1995) 51-76 E-commerce: A Brief Overview - Dr Gezgin by Ulas Basar Gezgin on May 16, 2008 Forrester Research 2000 E-marketplaces will lead US business E-commerce to $2.7 trillion in 2004 From the World Wide Web: http://www.forrester.com/ER/Press/Release/0.1769.243.FF.html Forrester Research.2000.Worldwide E-commerce growth From the World Wide Web : http://www.forrester.com/ER/Press/ForrFind/0.1768.0.FF.html Gartner Group.2000 Gartner group forecasts regional B2B outlook through 2004 From the World Wide Web : http://gartner5.gartnerweb.com/public/static/aboutgg/pressrel/pr021600.html Hooft, F P.C.V., and Stegwee, R.A 2001 E-business strategy : How to benefit from a hype Logistics Information Management, 14 (1/2) : 44-53 http://www.american.edu/ Joongho Ahn, Jinsoo Park, Dongwon Lee (2001), Risk-focused E- commerce Adoption Model-A Cross Country Study, University of Minnesota Kevin Zhu, Sean Xu and Kenneth L.Kraemer,The Gobal Diffusion and Convergence of E-commerce: Cross country analyses, 2006 Marios Koufaris (2002), Applying the Technology Acceptance Model and Flow Theory to Online Consumer Behavior, Information Systems Research Peffers, K., and Santos, B.L.D 1998 Competitor and vendor influence on the adoption of innovative applications in electronic commerce Information and Management, 34 (3) : 175-184 Porter, M.E 2001 Strategy and Internet Harvard Business Review, 79 (3) : 62-78 Psychometrika, “Test “reliability”: Its meaning and determination”, Lee J.Cronbach, March 1947, Volume 12, Issue 1, pp 1-16 41 Appendixes Appendix 1: Questionnaire (English version) Hello everyone, my name is Pham Huy Viet, a member of MBA03, International University Now, I am doing thesis about “Consumer attitude towards the use of Ecommerce in Ho Chi Minh city: a case study of thegioididong.com “ Would you mind help me to the below survey? All provided information will be keep secret and only use for research Thanks for all you kinds Personal information What is your gender? Male Female What is your age? Under 18 18-24 25-30 31-40 Over 40 What is your marital status? Married Single What is your income level per month ? less than millions millions → millions millions → 10 millions more than 10 miliions Please indicate in a five-point scale to which extent to which you are satisfied or dissatisfied Totally disagree Disagree Uncertain Agree Totally agree Perceived benefit Thegioididong.com Save your time for choosing and purchasing phone products 42 and services Offer you with cheaper prices than you going to the retail stores Send you personalized emails that make you think they really know you personally? i.e greeting your name, offering you with relevant products and services, promoting deals in your local areas Put your mind at ease with a safe and convenient online experience Always put your privacy and benefits their first priority Perceived ease of use and Thegioididong.com Has logically structured design Allows you to navigate easily without any confusion from page to page Provide various payment options for customer(credit card, bank transfer, cash on delivery, …) Clearly state their policies every time before a purchase is made (terms and conditions of use, privacy policies, returns and warranty policies) 10 Has quick download speed (page loading time, applications download) Perceived quality of service Thegioididong.com 43 11 Always deliver to you products with quality consistent with what described online 12 Deliver products on time 13 Provide clear and comprehensive information about their products and services 14 Provide the best customer service warranty 15 Always provide information that is complete and correct (about products, promotion, policies,…) 16 Allow customers to comment and feedback on each product displayed, and provide you with helpful product rating and reviews Consumer attitude to online transaction In general, Thegioididong.com 17 You are satisfied with products and services provided in thegioididong.com (service quality, products variety …) 18 Make you feel connected with them via their facebook page and allow you to share a product of interest on your own facebook page? 19 You will buy a mobile phone from thegioididong.com if opportunity comes 44 Questionnaires ( Vietnamese version) Xin chào Bạn, tên Phạm Huy Việt, học viên lớp MBA03 trường Đại Học Quốc Tế Hiện làm luận văn đề tài “ Hành vi người tiêu dùng ảnh hưởng đến việc sử dụng thương mại điện tử Thành phố Hồ Chí Minh: trường hợp nghiên cứu Thegioididong.com” Xin bạn vui lịng giúp tơi hồn thành bảng khảo sát Tất thông tin bạn cung cấp giữ bí mật dung cho mục đích nghiên cứu Xin chân thành cảm ơn Phần thông tin cá nhân Giới tính Nam Nữ Độ tuổi bạn Dưới 18 18-24 25-30 31-40 Ngồi 40 Tình trạng nhân Kết hôn Độc thân Mức thu nhập hàng tháng bạn Dưới triệu triệu → triệu triệu → 10 triệu Trên 10 triệu Xin vui lòng chọn ( đánh ) vào ô theo thang mức độ hài lịng bạn cho mục sau Hồn tồn khơng đồng ý Khơng đồng ý Trung lập Đồng ý ý Hoàn toàn đồng Nhận thức lợi ích Thegioididong.com Tiết kiệm thời gian cho bạn việc chọn lựa mua sản phẩm điện thoại hay dịch vụ Cung cấp cho bạn giá rẻ bạn đến cửa hàng bán lẻ 45 Gửi đến bạn thư điện tử riêng làm cho bạn cảm giác họ thật hiểu bạn? chẳng hạn gửi lời chào tên bạn, đề nghị bạn sản phẩm dịch vụ liên quan, thúc đẩy chương trình khuyến địa phương bạn Mang đến cho bạn tâm lý thoải mái với kinh nghiệm trực tuyến an toàn thuận tiện Ln ln đặt lợi ích quyền riêng tư bạn lên hàng đầu Nhận thức tính dễ sử dụng Thegioididong.com Thiết kế hợp lý Cho phép bạn chuyển hướng mộ cách dễ dàng mà khơng có nhầm lẫn từ trang sang trang khác Cung cấp nhiều phương thức tốn khác cho khách hàng(thẻ tín dụng, chuyển khoản, tiền mặt, …) Nêu rõ sách thực mua bán(điều khoản điều kiện sử dụng, sách bảo mật, trả sản phẩm bảo hành) 10 Tốc độ truyền tải nhanh (thời gian tải trang, ứng dụng tải về) Nhận thức chất lượng dịch vụ Thegioididong.com 11 Luôn chuyển đến bạn sản phẩm với chất lượng phù hợp với mộ tả trực tuyến 12 Giao hàng 46 13 Cung cấp thông tin rõ ràng toàn diện sản phẩm dịch vụ 14 Cung cấp dịch vụ bảo hành tốt cho khách hàng 15 Luôn cung cấp thông tin đầy đủ xác(về tính sản phẩm, chương trình khuyến mãi, sách,…) 16 Cho phép khách hàng nhận xét hay phản hồi sản phẩm cung cấp cho bạn đánh giá số hữu ích sản phẩm Thái độ khách hàng mua bán trực tuyến Thegioididong.com 17 Bạn hài lòng với sản phẩm dịch vụ thegioididong.com (chất lượng dịch vụ, sản phẩm đa dạng …) 18 Bạn cảm thấy có mối liên kết với thegioididong.com thơng qua facebook họ bạn chia sẻ sản phẩm ưa thích lên facebook bạn 19 Bạn mua điện thoại thegioididong.com có hội đến 47 Appendix :factor analysis Component Transformation Matrix Component 699 562 442 -.504 -.052 862 507 -.826 247 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization Appendix 3: regression Residuals Statistics Minimum Predicted Value Maximum a Mean Std Deviation N -3.5356257 2.1431782 0E-7 85226317 205 -1.53408802 1.31333184 0E-8 52311327 205 Std Predicted Value -4.149 2.515 000 1.000 205 Std Residual -2.911 2.492 000 993 205 Residual a Dependent Variable: attitude Appendix 4: EFA Communalities Initial Extractio n C1-satisfy with product/service C2-feel connected C3-buy a phone if have opportunity 1.000 779 1.000 790 1.000 629 Extraction Method: Principal Component Analysis 48 .. .CONSUMER ATTITUDE TOWARDS THE USE OF E- COMMERCE IN HO CHI MINH CITY: A CASE STUDY OF THEGIOIDIDONG. COM In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION... Consumer attitude and Perceived benefit, perceived ease of use, perceived quality of service was positive and significant because the significance value of perceived benefit, perceived ease of use, ... testing reliability, there are no item deleted, so sixteenth remain items are in used to the Component matrix for Independent variables, they are gathered by three components as table above They