Facrors affecting customer trust in online shopping in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Minh FACTORS AFFECTING CUSTOMER TRUST IN ONLINE SHOPPING IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2012 Ho Chi Minh City – Year 2012 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Minh FACTORS AFFECTING CUSTOMER TRUST IN ONLINE SHOPPING IN VIETNAM ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr NGUYEN HUU LAM Ho Chi Minh City – Year 2012 Acknowledgement Apart from the efforts of me, the success of this thesis is depended largely on the encouragement and guidelines of many others Especially, Dr Nguyen Huu Lam and Associate Prof Dr Nguyen Dinh Tho have been instrumental in the successful completion of this study I would like to take this opportunity to express my gratitude to them and I really appreciate with their tremendous support and help I feel motivated and encouraged every time I attend his meeting Without his encouragement and guidance, this project would not have materialized Besides, I would like to thank my close classmates and staffs working at International School of Business – UEH including Nguyen Thanh Huong, Huynh Ngoc Duy, Thai Thi Thu Giang, and Nguyen Thi Ngoc Lien for their guidance and support Ho Chi Minh City, Jan st 2013 Tran Minh i Table of Contents Abbreviations List of Tables List of Figures List of Appendix Chapter One: Introduction 1.Background 1.1 The Internet in Vietnam 1.2 Online shopping in Vietnam 2.Statement of purpose 3.Research question 4.Significance of the study 5.Scope of the study 6.Structure of the study Chapter Two: Literature Review 1.Trust in online shopping 1.1 Definition of trust in e-comme 1.2 The importance of trust in e-c 2.Trust antecedents identified in the literature 2.1 Perceived privacy and security 2.2 Perceived risks and benefits Chapter Three: Methodology 1.Participants 2.Instruments 3.Samples and data collection procedures 4.Data analysis Chapter Four: Results 1.Characteristics of the sample population 2.Reliability of measurement instruments ii 2.1 Validating measures 2.2 Exploratory factor analys 3.Tests of regression assumptions 3.1 Test of multicollinearity 3.2 Test of normality of resid 4.Evaluating demographic variables’ impacts on customers’ trust 5.Hypotheses testing 6.Summary of the results Chapter Five: Discussion 1.Findings 2.Implications 3.Conclusion 4.Limitations and directions for future research References iii Abbreviations WTO World Trade Organization APEC Asia-Pacific Economic Cooperation ASEM Asia-Europe Meeting SPSS Statistical Package for the Social Sciences PP Privacy Protection SP Security Protection PR Perceived Risk PB Perceived Benefit CTIS Customer Trust in Internet Shopping EFA Exploratory Factor Analysis TVE Total Variance Extracted VIF Variance Inflation Factor iii List of Tables Table 2.1 Summary of prior conceptualizations of trust Table 3.1 Privacy protection and security protection scales 21 Table 3.2 Perceived risk and perceived benefits scales 22 Table 3.3 Customer trust scale 23 Table 4.1 Distribution of respondents based on demographic characteristics 27 Table 4.2 Item-Total Statistics 29 Table 4.3 Total Variance Explained 34 a Table 4.4 Pattern Matrix 35 Table 4.5 Item-Total Statistics 36 Table 4.6 Model Summary 39 b Table 4.7 ANOVA 39 a Table 4.8 Coefficients 40 iv List of Figures Figure Conceptual Model 19 Figure Results of testing the conceptual model 42 v List of Appendix Appendix A Customer Survey Form 51 Appendix B Graphs 57 Graph Regression Standadized Residual 57 Graph Normal P-P plot of regression standardized residual 57 Graph Scatterplot 58 vi Chapter One: Introduction Background 1.1 The Internet in Vietnam It has been more than one decade since the Internet started to have been used in Vietnam Vietnam connected the world in 2000, the Internet users was a small figures, just 0.3% of the population in 2000 However, the Internet is growing fast, much faster than in any other Asian countries in 2011 Over the last ten years 2000-2010, Internet usage has grown by 12.4 times in Vietnam This is the highest level of penetration in the Asian countries After five years from 2000, this number was up to 12.8%; and 17.9% in 2007; 24.0% in 2008; and 25.7% of Vietnam population in 2009 Impressively, este et al (2012) suggest that a large number of Vietnamese Internet users accounted for 30.8 million at the end of Feb 2012, equivalent to 34% of Vietnam population More and more people are online and in Vietnam, they spend a massive amount of time on the Internet There is a huge, targetable population of consumers online As to Feb 2012, 30.8 million Vietnamese people can be reached on the Internet, with a strong growth every year In addition, these are not just the teenagers, but also more and more also their parents and in general, the household decision makers, an interesting target audience for marketing activities They are also increasingly comfortable with making purchases online 1.2 Online shopping in Vietnam The internet is changing the way consumers shop and buy goods and services, and has rapidly evolved into a global phenomenon and even in Vietnam Many companies have started using the Internet with the aim of cutting marketing costs, thereby reducing the price of their products and services in order to stay ahead in highly competitive markets Customers use the Internet not only to compare prices, Conclusion In this study, Principle Axis Factoring with Promax methods are used to validate measures help the study refine the supposed research model and increase knowledge of the four antecedents of trust predicting customer’s trust response The model of trust has both practical and theoretical value in Vietnam context It not only provides an increased insight into the nature of trust and provides a refined understanding of the predictors, but it also provides efficient marketing tools to push up online businesses Limitations and directions for future research This study has a number of limitations metioned as follows Firstly, the conceptual model just considers four antecedents of trust in Lee and Turban’s (2001) proposed model for CTIS and four demographic variables without adding other controller variables such as online experience, average years of working experience, etc Secondly, demographic variables (gender, age, education, and income) were investigated, and no significantly additional contribution to the outcome of prediction to CTIS However, these variables are necessary for Vietnamese online shoppers Therefore, they should be examined in future research Thirdly, this study was implemented in Ho Chi Minh City, the highest internet penetration zone in Vietnam; Consumers in other provinces may exhibit different concerns toward trust in online shopping Expanding areas to collect data will be possible to conduct in future research to generalize findings Fourthly, the measurement of perceived risk has Cronbach’s alpha lower than 600 (see Table 4.2) Whenever researchers on the same object, they need to notice this point to improve the validity and reliability Finally, this study has not found out suitable reasons to explain why security protection and perceived benefits were not supported Therefore, to find reasons to explain it will be able to conduct in future researches 45 References B Jorgensen (October 2000) A matter of trust, Electronic Business Barney, J.B and Hansen, M.H (1994) Trustworthiness as a Source of Competitive Advantage, Strategic Management Journal 15: 175-190 Bierhoff, H., & Vornefeld, B (2004) The social psychology of trust with applications in the Internet Analyse and Kritik, 26, 48-62 Chen, L., & Tan, J (2004) Technology adaptation in e-commerce: Key determinants of virtual stores acceptance European Management Journal, 22, 74-86 Chen, L., Gillenson, M., & Sherrell, D (2002) Enticing consumers online: An extended technology acceptance perspective Information and Management, 39, 705-719 Cimigo NetCitizens 2012 (n.d.) 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Research in Organizational Behavior, Vol Greenwich, CT: JAI Press, pp 53–111 50 Appendix A CLIENT SURVEY FORM (PHIẾU THĂM DÒ Ý KIẾN KHÁCH HÀNG) Participation in this study is anonymous and voluntary You can choose to withdraw from this study at any time This study is primarily concern with your perceptions about online shopping It is used for the master‘s thesis proposal “Factors affecting customers' trust in online shopping in Vietnam” This study not only provides an empirical understanding role of factor Trust towards online shopping, but it also presents strategic implications and directions for the development of online shopping in Vietnam Please select the appropriate answers and thank you for your cooperation (Các Anh/Chị đóng góp ý kiến cho Phiếu khảo sát hoàn toàn tự nguyện ẩn danh Các Anh/Chị dừng cho ý kiến vào thời điểm Anh/Chị muốn Phiếu khảo sát đề cập đến nhận thức Anh/Chị mua sắm HH & DV Internet Và Phiếu phục vụ cho đề tài nghiên cứu “Đánh giá tác động nhân tố rủi ro, lợi ích, vấn đề an ninh quyền riêng tư hình thành tin tưởng khách hàng mua sắm HH & DV Internet” Đề tài không nhằm cung cấp hiểu biết vai trò thực tiễn tin tưởng mà gợi ý chiến lược phát triển kinh doanh cho cá nhân/doanh nghiệp hoạt động lĩnh vực thương mại điện tử Xin Anh/Chị vui long dành chút thời gian để chọn câu trả lời thích hợp chân thành cảm ơn giúp đỡ Anh/Chị !!!) Filter questions (Câu hỏi bắt buộc) Have you ever bought goods, services online and paid for them by PayPal, Visa, MasterCard, American Express, JCB OnePay, or Visa Debit Cards issued by Vietcombank, Sacombank, Vietinbank, etc… or a digital wallet? (Anh/Chị có mua hàng hóa, dịch vụ Internet Paypal, Visa, Master Card, Visa, MasterCard, American Express, JCB OnePay, v.v thẻ tín dụng hay ví điện Internet chưa?) 51 Yes (Có): No (Khơng): ===> Stop (Dừng đây) A Instructions: Below are statements to assess your perceptions about online shopping For each of the following statements, choose the number that indicates the level of your agreement or disagreement using the following scale: (A Hướng dẫn: Sau phát biểu liên quan đến nhận thức mua hàng hóa, dịch vụ trực tuyến Đối với phát biểu sau, xin Anh/Chị vui lòng khoanh tròn lựa chọn cho phát biểu sau theo mức:) – Strongly Disagree (Rất không đồng ý) – Disagree (Không đồng ý) – Neutral (Phân vân) Strongly Strongly Disagree Agree ▼ ▼ Privacy Protection (Bảo vệ quyền riêng tư) I am concerned that unauthorized persons (e.g., hackers) have access to my personal information (Tôi lo ngại người không phép (hackers) đánh cấp thông tin cá nhân tôi.) I am concerned that Web vendors will share my personal information with other entities without my authorization (Tôi lo ngại websites chia thông tin cá nhân cho tổ chức khác.) I am concerned about the privacy of my personal information during a transaction (Tôi lo ngại bị xâm phạm quyền riêng tư thông tin cá nhân tôi.) I am concerned that Web sites are collecting too much personal information (Tôi lo ngại websites thu thập nhiều thông tin cá nhân tôi.) 52 Strongly Strongly Disagree Agree ▼ ▼ Privacy Protection (Bảo vệ quyền riêng tư) I am concerned that Web vendors will use my personal information for other purposes without my authorization (Tôi lo ngại websites sử dụng sai mục đích thơng tin cá nhân tôi.) I am concerned that Web vendors will sell my personal information to others without my permission (Tôi lo ngại websites bán thông tin cá nhân tôi.) Security Protection (Sự bảo an ninh) In general, providing credit card information online is riskier than providing it over the phone to an offline vendor (Nói chung, việc cung cấp thơng tin thẻ tín dụng Internet rủi ro so với việc cung cấp qua điện thoại đến người bán hàng không thông qua mạng Internet.) Internet merchants usually ensure that transactional information is protected from accidentally being altered or destroyed during a transmission on the Internet (Các website thường đảm bảo thông tin giao dịch không bị thay đổi hay mát suốt trình truyền liệu.) I feel secure about the electronic payment system of Internet merchants (Tôi cảm thấy yên tâm hệ thống toán trực tuyến website.) Internet merchants implement security measures to protect Internet shoppers (Các website thực nhiều biện pháp an ninh để bảo vệ khách hàng.) I am willing to use a credit card to make purchases online (Tơi sẵn sàng sử dụng thẻ tín dụng để mua hàng Internet.) I feel safe making transactions online (Tôi cảm thấy an toàn mua hàng Internet.) 53 Strongly Disagree Privacy Protection (Bảo vệ quyền riêng tư) Perceived Risks (Rủi ro) I believe that the risk of purchasing online is very high (Tôi tin rủi ro mua hàng trực tuyến cao.) There is a high probability of losing a great deal by purchasing from Internet merchants (Xác suất đánh hội mua hàng ưng ý việc mua hàng trực tuyến cao.) There is a great uncertainty associated with purchasing from Internet merchants (Có khơng chắn lớn liên quan đến việc mua hàng trực tuyến.) Overall, I would label the option of purchasing from Internet merchants as something negative (Nói chung, tơi gán lựa chọn mua hàng trực tuyến điều mang tính tiêu cực.) Perceived Benefits (Lợi ích) Using the virtual store enables me to accomplish shopping more quickly than traditional stores (Hoàn tất việc mua hàng nhanh so với cửa hàng truyền thống.) Using the virtual store enables me to accomplish information seeking more quickly than traditional stores (Tìm thấy thơng tin nhanh so với cửa hàng truyền thống.) Using the virtual store improves my performance in shopping (e.g., save money) (Cung cấp cho khả tiết kiệm tiền mua hàng) Using the virtual store improves my performance in information seeking (e.g., save time) (Cung cấp cho khả tiết kiệm thời gian tìm kiếm thơng tin) Using the virtual store increases my productivity in shopping (e.g., make purchase decisions) (Làm tăng số lần định mua hàng khoản thời gian ngắn.) 54 Strongly Disagree ▼ Privacy Protection (Bảo vệ quyền riêng tư) Using the virtual store increases my productivity in information seeking (e.g., find product information within the shortest time frame) (Làm tăng số lần tìm thấy thông tin khoản thời gian ngắn.) Using the virtual store enhances my effectiveness in shopping (e.g., get the best deal) (Nâng cao hiệu mua hàng (ví dụ: mua hàng ưng ý)) Using the virtual store enhances my effectiveness information seeking (e.g., find the most important information about a product.) (Nâng cao hiệu tìm kiếm thơng tin (ví dụ: tìm thấy thơng tin quan trọng sản phẩm).) Using the virtual store makes it easier for me to shop (Giúp cho việc mua sắm trở nên dễ dàng hơn.) 10 Using the virtual store makes it easier for me to find information (Giúp cho việc tìm thấy thông tin trở nên dễ dàng hơn.) 11 I find the virtual store very useful in my shopping (Rất hữu ích cho việc mua sắm) 12 I find the virtual store very useful in information seeking (Rất hữu ích cho việc tìm kiếm thơng tin.) Customer Trust in Internet Shopping (Sự tin tưởng khách hàng) In general, I cannot rely on Internet vendors to keep the promises that they make (Nói chung, tơi khơng thể trơng cậy vào cam kết website.) Internet shopping cannot be trusted, there are just too many uncertainties (Mua hàng trực tuyến khơng thể tin có q nhiều điều khơng chắn.) Anyone trusting Internet shopping is asking for trouble (Bất kỳ tin vào mua sắm Internet gặp phải nhiều rắc rối.) Internet shopping is unreliable (Mua hàng trực tuyến khơng đáng tin cậy.) Strongly Agree ▼ 2345 2345 2345 2345 2345 2345 2345 2345 2345 2345 2345 55 B Before getting the survey finished, please give some information about your self (B Trước kết thúc, xin Anh/Chị vui lịng chọn.) Gender (Giới tính) Male (Nam) Age (Tuổi) 17-25 The highest academic school you have acquired (Bằng cấp cao mà Anh/Chị High school diploma or equivalent (PTTH) Bachelor Degree (Đại học) Associate Degree (Cao đẳng) Average monthly income (mln VND) (Thu nhập bình quân triệu Đồng/tháng) ≤4 4–8 Thank You for Your Cooperation !!! Chân thành cảm ơn giúp đỡ anh/chị !!! 56 Appendix B Graph Regression Standadized Residual Graph Normal P-P plot of regression standardized residual 57 Graph Scatterplot 58 ... CTIS2 Customer trust in internet shoppin Items = 4) In general, I cannot rely on Internet v make Internet shopping cannot be trusted, t CTIS3 Anyone trusting Internet shopping is CTIS4 Internet shopping. .. Literature Review Trust in online shopping 1.1 Definition of trust in e-commerce Trust definition in Internet shopping is a quite complicated concept in e- commerce field Depending on different... (2001) points out that security and privacy protection impacts trust in Internet shopping Security and privacy in online shopping have a positive association with trust in Internet shopping (Monsuwe