Online shopping intention of young consumers in buying facial cosmetics in ho chi minh

THE STATE BANK OF VIETNAM SOCIALIST REPUBLIC OF VIETNAM HCMC BANKING UNIVERSITY Independence - Freedom – Happiness BANKING DEPUTY GRADUATION THESIS Title: ONLINE SHOPPING INTENTION OF YOUNG CONSUMERS IN BUYING FACIAL COSMETICS IN HO CHI MINH CITY CODE:7340101 Proposal Prepared by NGUYEN VU KIEU KHANH part fulfillment of the degree requirements for the Bachelor of Arts in Business Administration Name: NGUYEN VU KIEU KHANH Class: HQ2-GE04 Student ID: 030630141559 Supervisor: DINH THU QUYNH Ho Chi Minh city, August 10th, 2018 I ABSTRACT The role of e-commerce has dramatically increased in the recent years Internet has transformed into arena for successful international retail With growing importance of online trade, research of consumer behavior in online context gained significant attention The proposes of this study were to understand online shopping behavior and to study the influential factors affected on online purchase intention of facial cosmetic products among young consumer in Ho Chi Minh city This study provides significant suggestions for facial cosmetic brand/ saler/ maketer that wants to invest in e-commerce as to know the impact of perceived risk on an online purchase facial cosmetic intention of young Vietnamese consumers in Ho Chi Minh city also deliver appropriate marketing strategy to increase sales from online shopping as well as the future researchers who want to study more about the consumer's online shopping attitude and behavior II DECLARATION I declare that this thesis research is entirely my own composition, the research’s result is honest, in which there is no previously published content or other content performed by another person except the quotations are cited completely in the thesis I am responsible for my thesis Author III ACKNOWLEDGEMENT I would like to take this opportunity to acknowledge several individuals who have helped me to complete my thesis First of all, I would like to express my endless thanks and gratefulness to my supervisor Ph.D Dinh Thu Quynh Her kindly support and continuous advices went through the process of completion of my thesis Her encouragement and comments had significantly enriched and improved my work Without his motivation and instructions, the thesis would have been impossible to be done effectively Secondly, I want to thanks my parents for their endless love, care and have most assistances and motivation me for the whole of my life I also would like to explain my thanks to my siblings, brothers and sisters for their support and care me all the time Next, my deeply thanks come to all of my friends who always support me during time I study in university I am thankful for the times that they have listened to me, advised me and even comforted me Their kindly help, care and motivation gave me strength and lift me up all the trouble for the rest of my life IV TABLE OF CONTENTS ABSTRACT I DECLARATION II ACKNOWLEDGEMENT III TABLE OF CONTENTS IV LIST OF FIGURES VI LIST OF TABLE VII CHAPTER INTRODUCTION 1.1 Problem statement and research purpose 1.2 Related Researches: 1.3 Research objectives: 1.3 Subject and scope of the study 1.4 Research method 1.5 Structure of the study .5 SUMMARY CHAPTER LTTERATURE REVIEW 2.1 E-commerce definition: 2.2 E-distribution Characteristics 2.3 Segmentation of Online Beauty and Cosmetics Shoppers .9 2.4 Online purchase experience 10 2.5 Perception of Risk 10 2.6 Online purchase intention .12 2.7 Reasons of online shopping reluctance 13 SUMMARY 14 CHAPTER 15 RESEARCH METHODOLOGY .15 3.1 Research Design .15 3.1.1 Qualitative Research 15 3.1.2 Quantitative Research 16 V 3.2 Identification of Key Research Variables .16 3.3 Sampling Procedure 17 3.4 Data Collection 17 3.5 Data Analysis 18 SUMMARY 19 CHAPTER 20 RESULTS AND DISCUSSION 20 4.1 Sample description .21 4.2 Demographic Characteristics .21 4.2.1 Frequencies: Gender 22 4.2.2 Frequencies: Age 23 4.2.3 Frequencies: Job 25 4.2.4 Frequencies: cosmetic usage 26 4.3 Online shopping facial cosmetic behavior 26 4.4 Perceived risk 32 4.4.1 Finacial risk .32 4.4.2 Performance Risk 33 4.4.3 Psychological Risk: 35 4.4.4 Time risk .35 4.5 Online shopping facial intention though perceived risk: 37 4.6 Measure the reliability of the scale by Cronbach's Alpha: 37 4.7 Explore 42 4.7.1 Gender & Online facial cosmetic purchasing Intention: Describe the relationship between gender and online purchasing facial cosmetic intention of young consumer in HCMC .42 4.7.2 Age and online facial cosmetic purchasing Intention: .44 SUMMARY 48 CHAPTER 49 CONCLUSIONS AND RECOMMENDATIONS 49 5.1 Conclusion 49 5.1.1 Total Respondent Profile 49 5.1.2 General Online Shopping Finacial Cosmetic Behavior .49 5.1.3 Impact of Perceived Risk Towards Online Purchase Intention: 50 5.2 Recommendations 51 VI 5.2 Limitation of The Study 51 SUMMARY 53 REFERENCE 55 LIST OF FIGURES Figure 1: Gender Distribution 22 Figure 2: Age Distribution 23 Figure 3: Amount of Money Spent on Online Shopping facial cosmetic Distribution 27 Figure 4: Online Shopping facial cosmetic Factors 28 Figure 5: Purpose of buying online facial cosmetic 29 Figure 6: Things people before shopping online facial cosmetic 30 Figure 7: Facial Cosmetic Online Shopping Sources Distribution 30 Figure 8: Satisfied Factors from Past Online Shopping Facial Cosmetic 31 Figure 9: Unsatisfied Factors from Past Online Shopping Facial Cosmetic 32 Figure 10: Respondents distribution of Financial Risk 33 Figure 11: Respondents distribution of Performance Risk 34 Figure 12: Respondents distribution of Psychological Risk 35 Figure 13: Respondents distribution of Time Risk 36 VII LIST OF TABLE Table 1: Job Distribution 25 Table 2: Statistical description of Information Strategy 32 Table 3: Statistical description of Performance Risk 33 Table 4: Statistical description of Psychological Risk 35 Table 5:Statistical description of Time Risk 36 CHAPTER INTRODUCTION This chapter provided an overview of the current study which discusses the importance of understanding how the young consumers behave when purchasing facial cosmetics? It also explored and identified factors relevant to the behavior of young consumers in Ho Chi Minh city This chapter includes problem, related research, aims/objective of the research, subject and scope of study, research method and structure of the study 1.1 Problem statement and research purpose As the Internet and wireless network technologies have a had lot of advancement in decades, their increasing use has resulted in more online shopping activities 2017 sees many changes and moves in the domestic online- shopping market In such a dynamic market as Vietnam, the growing online consumer market allows consumers to make financial transactions online anywhere in the world specifically Ho Chi Minh city, Vietnam Viet Nam is a country with a large population, ranking 14th in the world, with approximately 93.6 million people, of which urbanization is 31% As of January 2017, Vietnam has 50.05 million internet users, accounting for 53% of the population, a 6% increase from 2016 The number of Internet users is considered high in the world, but the percentage of users is still high on average Vietnam has 46 million social network users, accounting for 48% of the population Percentage of Internet access devices that are popular among mature users are smartphones with 72%, laptops (or desktop) with 44%, tablets with 14% On average, Vietnamese spend hours and 53 minutes browsing the Web on their PCs and tablets, hours and 33 minutes using their mobile phones and spending hours and 39 minutes on social networks In the field of e-commerce, the percentage of users who regularly search for product information before purchase is 48%, access to retail pages is 43%, product deals are 39%, and 29% of users Product deals by laptop and mobile The profitability of e-commerce in Vietnam is not very much and there is still great potential for development There are 33.26 million online shoppers with a relatively modest market value of $ 1.8 billion compared to a $ 215 billion country In 2016, the global cosmetics market grew an estimated of four percent in comparison to the previous year Skincare, hair care, make-up, perfumes, toiletries and deodorant, and oral cosmetics are the main product categories of the cosmetic market Skincare was the leading category, accounting for about 36% while make up accounted for 18,2% in 2016 So, the cosmetic market is a special potential market in the trend of technology and the opening in mindset of social development The main purpose of this study is to analyze the behavior of young consumers in perception, importance and satisfaction when buying facial cosmetics online Although fewer innovative statistical techniques are involved in this study, a basic statistical method is sufficient to realize how young consumer behave when buying cosmetics online The results from the empirical analysis of this study hopefully provide the relevant government departments and online vendors with a useful reference in their decision-making 1.2 Related Researches: The Research “Consumers online purchase intention in cosmetic products” of Shirin Aliyar & Clara Mutambala was conducted to explain the relationship between trust, perceived risk, shopping enjoyment, site design quality and online purchase intention The independent variables trust, shopping enjoyment and site design quality are related to the dependent variable online purchase intention Trust, shopping enjoyment and site design quality is positively related to online purchase intention This can be validated by the hypotheses that were tested and supported: hypotheses 48 SUMMARY In Chapter 4, the thesis analyzed the descriptive statistics of the sample, evaluated the reliability of the scale by using Cronbach's Alpha, EFA and regression analysis for the independent variables Based on the result obtained after processing and analyzing data in chapter 4, the next chapter presents the conclusion of the current study, the recommendation of these findings and identifies limitations as well as propose direction for further research 49 CHAPTER CONCLUSIONS AND RECOMMENDATIONS 5.1 Conclusion 5.1.1 Total Respondent Profile All on the respondent were young people age between 13 – 30 years old Most of the respondents were young people from 18-24 years old and working as an office worker or being a student Their online facial shopping burget is from under milion dong to 3milion dong Comparing respondent’s profile between online shopping users and non- online shopping users, they also shared some similar profile in terms of income, education and internet usage profile The significant different was the age Online shopping users were younger than non-online shopping users 5.1.2 General Online Shopping Facial Cosmetic Behavior For online shopping behavior, the average price range that the respondents normally buy from online was from under milion dong to milion If it costs more than milion dong, they will think that the price is too high to consider online purchasing The reason that they shop online were convenience and comparable price In addition, the factor that satisfied most respondent when they shop online was convenience In other hands, the most unsatisfied factor was “provide uncompleted information such as product detail, reviews” For the facial cosmetic online shopping behavior, it was found that all of the respondents bought for repurchase purpose also bought for new brand but the percentage of repurchase purpose is a little big higher This was because of the product intangibility and inexperience in the brand before Therefore, the first 50 things the respondent did before making online purchase was read the online review 5.1.3 Impact of Perceived Risk Towards Online Purchase Intention: The most influential perceived risk on the online purchase reluctance of faicial cosmetic products was psychological risk when interating with facial cosmetic online stores which could be because the personal of customer not be kept in private and their shopping habits and purchasing behavior are tracked This study showed that the second top rank risk that has high impact on the online purchasing facial cosmetic reluctance was time/convenience risk, respondent were engaged in their intention that information search and evaluation of the facial cosmetic product is very important before making a purchasing decision, this perceived risk also showed that if it takes an uncertain/ too long time for customer to wait for their product to arrive or too complicated in replace an order/ communicate with the saler then it will also have a significant negative effect on their purchasing intention Financial risk and Performance risk have nearly the same affect on online purchasing facial cosmetic intention while financial risk attributes that related to the financial risk were high price goods, cannot be refund and payment security In addition, due to the product characteristic of facial cosmetic that people have to try and match with their preference, seeing or touching the real product before buying was a very important thing Performance risk or called product risk The attributes of this risk were such as not seeing the real product before buying, buying a new product that have not used it before, cannot see the goods quality (manufactured and expired date) However, to study whether past online shopping experience had an impact on the online purchase intention, researcher found that people who have an experience on online shopping have different attitude of perceived risk towards online purchase intention from people who have never shop online in terms of psychological risk and time risk While the attitude of finacial risk performance risk towards online purchase intention in the studied groups were not be much different 51 5.2 Recommendations It is crucial for marketer or companies that have cosmetic online stores or are considering starting to operate in that context to understand consumers on what are their influential factors that might be barriers of shopping facial cosmetic online intention sales channels in order to come up with a suitable strategy to increase the adoption rate of online shopping facial cosmetic as well as to increase sales from online channels The most important factor that makes people refuse to purchase online is reluctance The only way to reduce this reluctance is to build more confident to the customers throughout the buying decision process From this study, it is significantly shown that providing completed and enough information to the customer helps to reduce the distance between customers and products, it is a way to motivate consumers to buy products online they have not tried before, is providing them with unbiased user generated content such as product reviews and ratings on retailer websites Most of foreign e-commerce websites provide 3D virtual system on the website in order to reduce the anxiety from not seeing the real product or not confident that the goods will be matched or not This system builds up customers’ confident on the product at the first stage of decision making process Then brands/online stores have to ensure the customers with its security policy such as customer personal data, privacy and security on payment method certified by well-know bank Finally, the most important attribute on doing online business is the return policy This return policy actually helps ensure customers confident from the first till the last stage of decision making process People will feel comfortable to buy online if they know at the beginning that the intangible goods that they are going to buy can be refund or return 5.2 Limitation of The Study Due to time constraint, this research was set at the minimum of 240 respondents in Ho Chi Minh city of all target groups and used on non-probability sampling, 52 convenience sampling This enhances the limitation on getting the fairness data This method could get the views of a specific group of people Therefore, if some groups were over-represented or under-represented, this could affect the quality of data being gathered In addition, since all the samples are concentrated around the acquaintance of the researcher, it could not represent the whole sample as a whole The current study only used a sample size of 240 people, this sample size is just guaranteed according to the theory of choosing sample The value of this study will be higher if the sample size is larger Due to time and capacity are limited, the subject of this study are young consumers who are living in Ho Chi Minh city This study only focuses on the online field and mainly the influence of perceived risked To get a view of the whole consumer decision process in the cosmetic industry a more extensive research would have to be conducted or a different approach applied, to complement this research The study is limited to women between the age of 13-30 years, which is young consumer groups It would be interesting conduct a research that includes a broader range of age groups , since this would lead to an overall bigger picture of the decision behaviour 53 SUMMARY In this chapter, the author showed general conclusion about the result of this study In addition, the author also presented some limitations of this research Moreover, the author also offered some recommendations to help the maketers/ salers who want to understand online purchasing facial cosmetic intention of young consumers improve the and attract more consumer also shaping the customer intention in buying facial cosmetic product online 54 54 REFERENCE Electronic Commerce (E-Commerce), https://goo.gl/AxFHF6 Internet user statistic in Vietnam, https://goo.gl/breQaQ Anne-Flore Maman Larraufie, P., & Kourdoughli, A (2014) The E-semiotics of Luxury, Retrieved from marketing trends congress A.T Kearney (2012) Beauty and the E-commerce beast, Retrieved from atkearney Emarketer (2015) Cosmetics Shoppers Choose to Beautify In-Store Retrieved November 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intention of young consumer in buying facial cosmetic in Ho Chi Minh city" I hope that you will take your time to help me complete this survey All your responds play an important role in the success of this research This survey is based on voluntary and your personal information will be kept privately PART I: Personal Information What is your gender? A Male B Female C LGBT How old are you? A 13 – 17 years old B 18 – 24 years old C 25 – 30 years old What is your job? A Student B Office Worker C Freelancer D Merchant/ Business owner E Household F Other jobs Do you use facial cosmetic? A Yes B No PART 2: Online buying facial cosmetic intention: Have you ever bought facial cosmetic through online sales channel? A Yes B No What are the factors that make you buy facial cosmetic online? A Convenience B Price comparable C Variety D Promotion E Other reasons What is your propose for online buying of facial cosmetic? A Buy a new product (with the same brand you used to use) B Buy a new brand/ new product (that you have never used before) How you evaluate the facial cosmetic product before making any online purchase? A Read the online review B Go to the shop to test first C Ask your friend/ relatives How much money you spend over your facial cosmetics online shopping in one time? A Less than milion dong B From to milions dong C From 3,1 to milions dong D From to 10 milions dong E More than 10 milions dong What are the websites that you used to shop most? A Branded cosmetics E-commerce website (Shopee/ Sendo/ Tiki v v) B Branded Cosmetics online retail shops such as Sephora, Guardian C Unbranded shop on Facebook/ Instagram What are the things that you satisfied most from your past online shopping facial cosmetic experience? A Promotions B Return policy C Free delivery service D Convenience (Time and Place) E Provide information such as product detail, reviews What are the things that make you unsatisfied most from your past online shopping facial cosmetic experience? A Return policy condition B Delivery fee C Privacy invasion D Difficult to communicate with saler E Provide uncompleted information such as product detail, reviews F Shipping error PART 3: This section presents statements related to the intention in online purchasing facial cosmetic of young consumers in Ho Chi Minh city Please show your level of buying intention corresponsive cells: Please provide your level of buying intention to the Level of buying intention following statements regarding the online purchasing 1= will not buy, 2= still facial cosmetic of young consumers in Ho chi minh feel uncertain to buy, 3= city still be willing to try/buy, 4= still have a plan to buy, 5= still be intend to buy A Finacial Risk If I feel that my credit card number may not be secured, I If the price of the product is high, I If I cannot trust the specific online shopping website, I… Most of cosmetics products are non-refundable, I If the payment process was managed by reliable company such as paypal, I… If the e-commerce website I am shopping has no rating or review from the customers, I B Performance Risk If it is the brand / product that I have never used before, I It is hard to judge the quality of the cosmetics over the internet (such as expired date, the physical of the products, second hand, etc.), I 10 It is possible that my facial cosmetic product might be damaged during the delivery, I If I not sure whether the facial cosmetic suits me (color, skin type, etc.) before buying online, I C Psychological Risk 11 12 If my personal information does not be kept in private after finishing my online shopping, I… If I feel that my shopping habits and purchasing behavior are tracked, I… D Time Risk 13 14 15 16 If the e-commerce website I am shopping has less information on the product, I If It is too complicated to place an order over the internet, I If I cannot wait until the facial cosmetic product arrives, I Communicating with the seller over the internet may require a lot of time, I E.Intention 17 Will you keep buying online facial cosmetic product? SINCERELY THANKS FOR YOUR COOPERATION ... scope of the study - Subject of the study: Online shopping behavior of young consumers in buying facial cosmetics in Ho Chi Minh city, Vietnam - Subject of the survey: young consumers in Ho Chi Minh. .. which influence on online shopping facial cosmetic To examine the influence of perceived risk towards online purchase intention of facial cosmetic products among young consumer in Ho Chi Minh city... consumer behavior towards online shopping with respect to Vietnam economy, identify factors which influence online shopping facial cosmetic intention of young consumer in Ho Chi Minh city, Vietnam 1.3