FACTORS AFFECTING ONLINE PURCHASE INTENTION: THE CASE OF E-COMMERCE ON LAZADA

Abstract

This study aims to explore the scale and measure of the impact of factors affecting the online shopping intention of the consumer on the Lazada ecommerce website in Ho Chi Minh City. The study confirms the theoretical analysis of consumer behavior (Theory of Reasoned Action - TRA), (Theory of Planned Behavior - TPB), as well as compares the research articles related to online shopping intention of domestic and foreign authors. From the survey results from 300 customers, the author pointed out that six factors positively affecting online purchase intention include usefulness - convenience, trust, behavior control awareness, business competency, and reference group opinion. The other factor is the perceived risk that has negative affect customers' online shopping intentions. Since then, the research offers the causes, solutions, implications to help traders on e-commerce sites capture the needs and psychology of customers and help them partially improve their ability to attract customers online shopping in Ho Chi Minh City.

Headnote

Submission: 6/27/2019

Revision: 9/18/2019

Accept: 10/2/2019

ABSTRACT

This study aims to explore the scale and measure of the impact of factors affecting the online shopping intention of the consumer on the Lazada ecommerce website in Ho Chi Minh City. The study confirms the theoretical analysis of consumer behavior (Theory of Reasoned Action - TRA), (Theory of Planned Behavior - TPB), as well as compares the research articles related to online shopping intention of domestic and foreign authors. From the survey results from 300 customers, the author pointed out that six factors positively affecting online purchase intention include usefulness - convenience, trust, behavior control awareness, business competency, and reference group opinion. The other factor is the perceived risk that has negative affect customers' online shopping intentions. Since then, the research offers the causes, solutions, implications to help traders on e-commerce sites capture the needs and psychology of customers and help them partially improve their ability to attract customers online shopping in Ho Chi Minh City.

Keywords: usefulness - convenient; trust; perceived risk; reference group; behavior control awareness; business competency

1. INTRODUCTION

Online shopping has become a popular and growing shopping method in the world in recent years (WU; CAI; LIU, 2011). It is reflected in the increasing proportion of consumers buying online as well as the recent online retail sales (OZEN; ENGIZEK, 2014). However, the proportion of Vietnamese consumers participating in online shopping is still lower than in other countries in the region and the world (MINISTRY OF INDUSTRY AND TRADE, 2015). Therefore, in order to attract more online shopping consumers, it is necessary to identify the factors that influence the customer's intention to buy online for online retailers in the context of development fast of internet and e-commerce like today (LOHSE; BELLMAN; JOHNSON, 2000).

The development of the internet and e-commerce has impacted consumers' lives, the way they traded, and the decision-making process is thereby creating the difference between online consumer behavior and behavior traditional consumption (PAVLOU, 2003; PAVLOU; FYGENSON, 2006). Therefore, with the desire to learn about the factors affecting consumer shopping behavior in Ho Chi Minh City, the author chose the topic research "Factors affecting online purchase intention: The case of e-commerce on Lazada" to conduct specific analysis.

2. LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT

The intention is a factor used to evaluate the possibility of future behavior (AJZEN, 1985). The intention of online shopping is the ability of consumers to make purchases via the Internet (DELAFROOZ; PAIM; KHATIBI, 2010).

Also, consumer purchasing behavior is consumer action related to the procurement and consumption of products/ services, including the recognition of need, the search for information, evaluation of alternatives, purchase decision, and the post-purchase behavior when buying (KOTLER, 2003). Consumer purchasing behavior is the behavior that consumers express in the search, purchase, use, and evaluation of products and services they expect to satisfy their individual needs (PRESSEY; WINKLHOFER; TZOKAS, 2009).

Online shopping behavior (also called online buying and Internet shopping) refers to the act of buying products or services over the Internet (HA; STOEL, 2009). Online shopping behavior refers to the process of purchasing products or services over the Internet; this process consists of five steps, and it is a similarity to traditional shopping behavior (LIANG; LAI, 2000).

The study of factors affecting online buying intentions has been based on various theories by the authors, in which the (Theory of Planned Behavior - TPB) has been widely used in successful research and application as a theoretical framework to predict intent and online buying behavior. TPB was developed by Ajzen (1991) based on the theory of reasoned action (TRA) of Fishbein and Ajzen (1975) by adding the factor "perceived behavioral control" to TRA. Perceived behavioral control reflects the ease or difficulty of behavior, depending on the availability of resources and opportunities for behavior (AJZEN, 1991). According to TPB, the client's "behavior intention" is affected by "attitude," "subjective norms," and "perceived behavioral control."

Studies related to consumer confidence have shown that brand trust influences consumer awareness of an online supplier, thereby increasing people's buying intentions consumption from an online supplier (CHINOMONA; S ANDADA, 2013; DABHOLKAR; SHENG, 2012). Moreover, consumers who believe in their prior buying decisions positively affect consumer buying intentions (BOCK et al., 2012; KIM et al., 2011).

Also, trust is one of the factors that have a significant influence on consumers' intention to buy online. The lack of trust has been recognized as one of the main reasons preventing consumers from shopping online (JARVENPAA; TRACTINSKY; VITALE, 2000; LEE; TURBAN, 2001; YADAV; MAHARA, 2017). If trust is not built, online transactions will not happen (WINCH; JOYCE, 2006). Therefore, customer trust for online sellers is the basis for online shopping to take place (CHEN; BARNES, 2007), especially the sellers who give brand trust for customers (KIM; JONES, 2009). In the context of online shopping, trust plays a particularly important role because, in the online environment, consumer perceptions of risks in transactions are higher because buyers do not have direct contact with people selling as well as the product they intend to buy (JARVENPAA; TRACTINSKY; VITALE, 2000; PAVLOU, 2003). Therefore, the proposed research hypothesis is:

* H1: Consumer trust has a positive effect on online buying intention.

Subjective norms can be described as personal perceptions of social pressures on whether or not to perform an act (AJZEN, 1991). Previous studies suggest that between subjective norms and intentions, there is a positive relationship (HANSEN; JENSEN; SOLGAARD, 2004; LIM et al., 2012). In the context of online shopping, Lin (2007) argues that subjective norms reflect consumer perceptions of the reference group's influence on online shopping. In this article, the author approaches Lin's point of view (2007) to concretize and limit the implications of the subjective norms factor. Lin (2007) has demonstrated that the opinion of the reference group has a positive impact on consumers' online shopping intent (BAI; YAO; DOU, 2015; CHANG; LIN; LUARN, 2014; FAGERSTROM; GHINEA, 2010; LAOHAPENSANG, 2009; DZIAN et al., 2015, XU et al., 2017). Therefore, the proposed research hypothesis is:

* H2: The opinion of the reference group positively affects consumers' online shopping intent.

Behavior control awareness (or perceived behavioral control) is defined as an individual's perception of easy or difficult behavior (AJZEN, 1991). It denotes the level of control of behavior rather than the result of behavior. In the context of online shopping, behavioral control awareness describes consumers' perceptions of the availability of necessary resources, knowledge, and opportunities to implement online shopping (HA, 2016; LIN, 2007). Behavioral control awareness has been shown to have a positive impact on consumers' intention to buy online (LIN, 2007). Therefore, the proposed research hypothesis is:

* H3: Behavior control awareness has a positive effect on consumers' intention to buy online.

The risks of the consumers may encounter when the customers buy the products online and the risk that includes financial risks and product risks (BAUER, 1960). The perceived risk is a factor that negatively affects the intention to buy online (CHANG; CHEN, 2008). However, Yenisey, Ozok and Salvendy (2005) argue that this factor does not have a direct relationship with the intention of buying online.

Besides, the perceived risk refers to consumer perceptions of the uncertainty and consequences of engaging in a particular activity (BHATTACHERJEE, 2000; HA; NGUYEN, 2016). Uncertainty regarding online transactions creates a lot of different risks. Pavlou (2003) classifies risks into financial risk, seller risk, privacy risk (personal information may be disclosed illegally) and security risks (Stolen credit card information). Some studies have found an inverse relationship between perceived risk and intention to buy online (DOWLING; STAELIN, 1994; DU; MAO, 2018; HU et al., 2009; CHANG; CHEN, 2008). Therefore, the proposed research hypothesis is:

* H4: The perceived risk has a negative effect on the intention to buy online.

Professionalism in quickly receiving orders and delivery is a way to demonstrate the capabilities of an e-commerce site (DOWN; LIEDTKA, 1994). Easy-to-use purchase software, simple purchase method, product quality and product introduction information are complete and useful, making the connection between commercial site traders and well-established buyers.

Nakandala et al. (2017) pointed out that suppliers play a vital role in sharing information when customers understand the position, reputation and capacity of the company in the market, they will intend to buy goods at an e-commerce site that the company is operating. Previous studies have shown that technology services are fundamental to have a significant impact on consumers' intention to purchase if suppliers know how to build advertising images, update product information continuously (CURTY; ZHANG, 2013; HUANG; BENYOUCEF, 2013; WU; WANG, 2011). These studies, when determining factors affecting online purchase intentions, are related to the capacity of an online trader. Therefore, the proposed research hypothesis is:

* H5: The business competency has a positive impact on online buying intentions.

Pressey, Winklhofer and Tzokas (2009) discussed the importance of purchasing management; if the purchase management is excellent, fast, and highly useful, the buyer will easily make a purchase decision and make a purchase (DAVIS; BAGOZZI; WARSHAW, 1989; DAVIS; VENKATESH, 1996).

Operators of electronic websites should design purchasing plans, simple purchase methods, quick order processing (KOUFTEROS; CHENG; LAI, 2007). The online environment introduces inherent barriers to purchases, such as shoppers leaning toward the relevant technology, their perception of the site and their ability to trust that site (YENISEY; OZOK; SALVENDY, 2005; PAVLOU; FYGENSON, 2006; ZHOU et al., 2018; AMARO; DUARTE, 2015).

On the other hand, e-commerce sites provide much information, so shoppers can browse various e-commerce sites before making decisions (PAVLOU; FYGENSON, 2006). Buyers, in one search for information, consider and compare prices on different websites (BOGINA; KUFLIK; MOKRYN, 2016). Liang et al. (2011) argue that site quality dramatically affects the intention of purchasing. Their final choice of websites to buy depends on things like order handling, eye-catching interface, proper delivery fees, and so on (VENKATESH; AGARWAL, 2006; WOLFINBARGER; GILLY, 2001). From previous studies, the proposed research hypothesis is:

* H6: The usefulness and convenience affect the intention of buying online at e-commerce sites.

The proposed model including six influencing factors as follows: attitude, opinion of the reference group, awareness of behavioral control and perceived risk, usefulness and convenience, business competency.

3.METHODOLOGY

Preliminary study: The author conducts the preliminary research through qualitative methods to explore and adjust the scales - The qualitative research conducted for customers who have purchased online in Ho Chi Minh City. Through an investigation of 50 individual customers, this research collected the customers' general opinions about online buying intentions. Based on aspects such as the desire to buy products, aware of the resources, be aware of the risks and spread of word-of-mouth feedback from people around, or feedback from people who have purchased products through e-commerce sites.

After obtaining results from preliminary research, the author built and designed the questionnaire based on the opinions and data analysis; from there, give the official variables for research. Besides, the author goes to determine the size of the sample. Sample size is determined based on standard 5: 1 by Bollen (1989) and Hair et al. (2014), i.e., to ensure data analysis, (Exploratory factor analysis - EFA) it is required that at least five observations for a measurement variable and the number of observations should not be less than 100 (HOANG; CHU, 2008). The survey model included six independent factors and a dependent factor, with 28 observations. Therefore, the number of observations required for a sample is from 28 · 5 = 140 and above. In the study, a survey of 300 observations was conducted.

4.ANALYSIS AND RESULTS

4.1.Data description:

After the three months to conduct the survey from February to May in 2019 and do data analysis in the first two weeks of June, the author collected 300 valid respondents, and the following table can describe the data:

About gender: The number of male respondents is 136, accounting for 45.33%. While the number of female respondents was 163, accounting for 54.67%. The results show that there is no much difference between male and female when they purchase goods and services via online website, although the number of online shopping women is higher than the number of online shopping men in Ho Chi Minh City.

Regarding the time which users have used the internet: The time which is under one year is the smallest, and it is 31, accounting for 10.33%. The time from one to three years is 109 respondents, accounting for 36.33% rate. The most significant number of users who use the internet is from 3 to 5 years, and the respondents are 123, accounting for 41.00%. The number of internet users who have used the internet for over five years is 37, accounting for 12.33%. Based on this analysis, the number of internet users in Ho Chi Minh City is almost 3 to 5 years.

About the time of using the internet in one day: The number of respondents using the internet is less than one hour a day is 20, accounting for 6.67%. The number of respondents using the internet from one to three hours a day is 62, accounting for 20.67%. Besides, From three to five hours a day, the number of respondents using the internet is 55, accounting for 36.67%. The last group is the number of respondents using the internet from five to seven hours a day, and it is 72, accounting for 24.00%.

The number of respondents using the internet over seven hours a day is 33, accounting for 11.00%. Based on this result, the largest group belongs to the number of internet users in Ho Chi Minh City from three to five hours, and the small one belongs to the number of internet users that access the internet less than one hour in Ho Chi Minh City.

Regarding the number of users access online e-commerce websites in one month: The number of users access from 10 to 20 times is 106 people, accounting for 35.33%, and it is the dominant group. While the minor group is the number of users who access less than five times, and it is 41, accounting for 13.67%. Besides, the number of users access from 5 to 10 times and access over 20 times are 80 and 73 respondents, accounting for 26.67% and 24.33%, respectively.

4.2.Reliability test: Cronbach's Alpha

According to Nunnally and Bernstein (1994), the condition to accepting variables is that Corrected item-total Correlation is equal or greater than 0.3 and Cronbach's Alpha if item deleted is equal or greater than 0.7. According to Hoang and Chu (2008), and Hair et al. (2014), new studies can accept that Cronbach's Alpha, if item deleted, is equal to or greater than 0.6. Therefore, these items satisfy the condition, and this can be used for analyzing Exploratory Factor.

After analyzing the Cronbach's Alpha coefficient of the scale, based on the statistical results table shows Cronbach's Alpha coefficients of scales Trust, Risk of perception, Behavior control awareness, Reference group opinion, Online entrepreneurship capacity, usefulness and convenience, Customer buying intentions have values greater than 0.7 and the correlation coefficient of the total variables of all measurement variables of the factors is greater 0.3 should reach the reliability and validity. Since all the variables in the scale are meet all of the requirements, the Exploratory Factor Analysis and regression can be conducted as follows.

4.3.Exploratory Factor Analysis (EFA)

In the Exploratory Factor Analysis, the author used Principal Component Analysis and Varimax rotation to group the components.

4.3.1. Independent variables

The results show that KMO is 0.779 and can make sure the requirement 0.5<KMO<1. Bartlett is 4097.125 with p-value = 0.00<0.05, so all of the variables are correlation together in each component. Total variance explained equals 67.73%, and it is greater than 50%; as a result, it can meet the requirement of variance explained. From this one, this research can conclude that variables can explain 67.73% in changing factors. The rotated matrix in EFA shows that the loading factor is higher than 0.55, and it can divide into six components by the following table.

4.3.2. Dependent variable:

The results show that KMO is 0.665 and can make sure the requirement 0.5<KMO<1, so all of the variables are correlation together in each component. Total variance explained equals 63.23%, and it is greater than 50%; as a result, it can meet the requirement of variance explained. Finally, all of the variables have the loading factor that is greater than 0.55 and meet the requirement.

4.4. Regression

The results show that the overall of the model is accepted because F is 49.51, and pvalue of F is 0.000<0.05. Moreover, R2=0.5034 means that all of the independent variables can explain 50.34% for online buying intention. The variance inflation factor is smaller than 2, so there is no multicollinearity in this model.

Five variables include trust (TR), business competency (BC), behavior control awareness (CA), reference group (RG), and usefulness - convenient (UC) are statistical significance at 99% confidence level because of the p-value <0.01. TR, BC, CA, RG, UC have a positive effect on online buying intention.

Perceived risk variable (PR) is statistical significance at 90% confidence level because of the p-value =0.077<0.1. So PR has a negative effect on online buying intention. It means that when PR increase, that leads to the decreasing of online buying intention.

4.5. Hypothesis testing:

5.CONCLUSION

In this study, six factors affecting the intention to purchase via e-commerce site Lazada in Ho Chi Minh City in turn from high to low are Trust, Business competency, reference group, usefulness and convenience, behavior control awareness, and finally, the perceived risk (based on standardized beta). From the test results, it shows the appropriateness of the theoretical model for the intention to buy goods on the e-commerce site Lazada in Ho Chi Minh City, as well as the accepted hypotheses in this study, will help the trade page, uniquely Lazada captures what factors affect consumers' online shopping intent in Ho Chi Minh City. Since then, The businesses have launched a program to reach customers most effectively, creating outstanding competitive advantages and sustainable development in the future.

Consumer confidence is the most significant barrier to the e-commerce industry in Vietnam. Moreover, customer trust comes from the desire to experience. The question is whether the Lazada e-commerce site has attracted customers to want to experience yet? Also, how to attract customers to visit the site and have enough confidence to experience products and services coming from this site.

To meet the requirements such as quality products, beautiful forms, affordable prices, fast delivery time, and thoughtful after-sales mode, and so on. Lazada's e-commerce site must recruit a large and professional staff. Besides, they need to check the information carefully, the sale history of the registered sales units to ensure that from the first stage are the products they sell are quality. The businesses commit to say no to counterfeit goods and comply with what is committed. Because if the company lost the trust of the customer, then there is no next time, the customer comes back to the page.

At the same time, create hotlines for customers to respond and complain about cases of inferior quality goods, and so on to Lazada to investigate, to handle timely and thoroughly overcome this situation, affirm beliefs in customer's goods, let them continue to trust to use the service.

Through the impact of the comments of the referring group to the intention to buy goods on the e-commerce website, Lazada shows that the online retailer Lazada should focus on customer feedback to promptly answer questions. Also, they handle complaints and giv solutions better, expressing responsibilities and ensuring customers' rights.

Besides, it is necessary to create many other social links such as links with websites, social networking sites to help customers easily share information about products, customers also easily refer to ideas. Contributing to have more confidence, positively impacting the intention of shopping through Lazada e-commerce site.

Lazada e-commerce site should capture the perceived risk of the customers and build a solid trust with customers by ensuring a real quality source, at the same time any complaints occur, immediately respond and handle complaints about customers so they can be assured of the money they have spent, and more trust in Lazada 's service. Strictly handle cases of counterfeit goods, have appropriate and appropriate handling measures to protect the interests of customers.

In the era of technology development as today, the convenience becomes more prominent than ever, with the busy life like today, the shopping process takes place more quickly and conveniently in order and payment, and delivery will prevail. So Lazada's ecommerce site should focus on building links, coordinating with transport units to be able to deliver goods to consumers as soon as possible, meeting their increasing needs. At the same time, improve and shorten the order processing process, to ensure the processing time is the fastest, omitting unnecessary steps, as minimal as possible. However, it is not necessary to ensure that the quality of packaging and transportation affects the quality of goods inside.

Because of the limited time of the project implementation, the research has not yet conducted an in-depth analysis of the variables in the research model to have a more detailed view of online shopping intent on Lazada e-commerce site.

This research still has some limitations on implementation time; information collected from some users does not cooperate. However, the author also hopes this topic will provide more useful information for Lazada e-commerce site and can help the company's revenue grow more, meeting the increasing needs of consumers. Based on that, the Lazada company, the e-commerce company and the businesses can apply the results and achieve outstanding business performance in the future.

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