UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Thi Quynh Trang ANTECEDENTS OF CONTINUANCE INTENTIONS TOWARDS ONLINE SHOPPING: AN EMPIRICAL STUDY IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2015 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Thi Quynh Trang ANTECEDENTS OF CONTINUANCE INTENTIONS TOWARDS ONLINE SHOPPING: AN EMPIRICAL STUDY IN VIETNAM ID: 22130084 MASTER OF BUSINESS (Honours) SUPERVISOR: DR NGUYEN THI NGUYET QUE Ho Chi Minh City – 2015 Acknowledge This thesis could not be finish without the help and support of many people who are gratefully acknowledged here At the very first, I would like to express my deepest gratitude to my supervisor, Dr Nguyen Thi Nguyet Que With her guidance, I could have worked out this thesis She had offered me valuable suggestions and criticisms with her profound knowledge in rich research experience I am grateful to express my sincere to Prof Nguyen Dinh Tho and Dr Nguyen Thi Mai Trang I have learned from them a lot not only about research design, but also data analysis technique I am also extremely to give thankful to UEH – International School of business (ISB) supported me in all process I would like to extent my sincere thanks to all my classmate and friends Their kindness and supports have contributed very much in my working process Most important, I would like to express my most sincere thanks to my father, my mother and my brother for their continuous encouragement and support Abstract Online shopping has emerged as a new e-commerce model and received attention in both academics and practice This research extends Mehrabian and Russell’s Stimulus-OrganismResponse model to investigate website stimuli that affect emotional reaction and perceived risk, in turn consumers’ response systems The purpose of this paper is to test a more comprehensive model consisting of website quality (stimulus), cognition and emotion (organism) and continuance intention (response).To examine research model, information and data is accessed by using questionnaire for respondents purchasing on online shopping websites This research employed convenience sampling The questionnaire was distributed in Ho Chi Minh City In total, 227 usable questionnaires were obtained in Ho Chi Minh City through online survey Confirmatory factor analysis (CFA) is used to test measurement scale and the structural equation modeling (SEM) is used as the main method for analyzing research model and hypotheses Results in this study show that all four website quality dimensions had significant negative effects on perceived risk and positive effects on emotional reaction, except for customer service Perceived risk had a slightly negative effect on consumers’ emotional reaction Meanwhile, perceived risk had a significant influence on continuance intention In addition, emotional reaction also had a positive impact on continuance intention in the context of online shopping The results may be generalized to a limited extent With these results, research framework can be seen fitted with data market Study results also suggest that in order to increase customer retention should not only consider about their strategies of eliciting positive emotions and reducing perceived risk, they should a also take consideration of increasing website quality TABLE OF CONTENTS ABSTRACT CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Problems statement 1.3 Research objectives and questions 1.4 Methodology and scope of research 1.5 Research significance 1.6 Thesis structure CHAPTER 2: LITERATURE REVIEW 2.1 Introduction 2.2 Theoretical background 2.2.1 S – O –R paradigm 2.2.2 Website quality 2.2.3 Emotional reaction and perceived risk 10 2.2.4 Continuance intention 11 2.3 Hypotheses and proposed model 12 2.3.1 Stimuli and organism 12 2.3.2 Organism and responses 15 2.4 Summary 17 CHAPTER 3: METHODOLOGY 19 3.1 Introduction 19 3.2 Research design 19 3.3 Development of questionnaire 21 3.3.1 Measurement scale 21 3.3.1.1 Perceived risk scale 21 3.3.1.2 Emotional reaction scale 22 3.3.1.3 Continuance intention scale 23 3.3.1.4 Website quality scale 23 3.3.2 Draft questionnaire 25 3.4 Data collection method 26 3.4.1 Pilot study 26 3.4.2 Sampling method and sample size 27 3.5 Data analysis techniques 28 3.5.1 Cronbach’s alpha 28 3.5.2 Exploratory factor analysis (EFA) 29 3.5.3 Confirmatory factor analysis (CFA) 29 3.5.4 Structural equation model (SEM) 30 3.6 Summary 30 CHAPTER 4: ANALYSIS AND RESULTS 31 4.1 Introduction 31 4.2 Demographic statistic 31 4.3 Scale validation 33 4.3.1 Preliminary results 33 4.3.2 Confirmatory factor analysis (CFA) 35 4.4 Structural equation model 42 4.5 Discussion 43 4.6 Summary 45 CHAPTER 5: CONCLUSIONS AND LIMITATIONS 46 5.1 Conclusion 46 5.2 Managerial implications 48 5.3 Limitations and future research 49 REFERENCES 51 APPENDICES 59 LIST OF FIGURE Figure 2.1 Conceptual model 17 Figure 3.1 Research process 20 Figure 4.1 CFA for the full model 36 Figure 4.2 Structural equation model 42 LIST OF TABLE Table 3.1 Perceived risk scale 21 Table 3.2 Emotional reaction scale 23 Table 3.3 Continuance intention scale 23 Table 3.4 Website quality scale 24 Table 3.5 Cronbach’s Alpha Reliability Coefficient 28 Table 4.1 Demographic statistic 32 Table 4.2 Cronbach’s Alpha results 33 Table 4.3 Construct reliability, Factor loading and AVE in CFA 38 Table 4.4 Convergent validity result 39 Table 4.5 The relationship between constructs in research model 41 Table 4.6 Result of hypotheses testing 43 LIST OF ABBREVIATION AVE Average Variance Extracted CFA Confirmatory Factor Analysis CR Construct Reliability EFA Exploratory Factor Analysis E-commerce Electronic commerce ML Maximum Likelihood SEM Structural Equation Model S-O-R Stimuli – Organism - Response SPSS Statistical software package CHAPTER 1: INTRODUCTION 1.1 Research background The rapid growth of the Internet technology has resulted in the creation of a further form of retail transaction – electronic commerce or online shopping Electronic commerce, commonly known as e-commerce, includes the purchase and selling of products or services over electronic systems such as the Internet A form of e-commerce is online shopping which is the process whereby consumers directly buy goods or services from a seller in real time, without an intermediary service, over the Internet In recent years, the internet power, scope and interactivity provide businesses with the potential to enhance their customers shopping experience and in so doing increase their competitive positions (Doherty & Ellis-Chadwick, 2010) Retailers have more opportunities to reach their customers globally and directly via ecommerce and online shopping More specifically, it is easier for e-retailers to expand target markets, extend product lines, improve cost efficiency and enhance the customer relationships By and large, consumers have responded enthusiastically to these innovations (Doherty & Ellis-Chadwick, 2010) Thereby, the Internet opens up new avenues for e-retailers in a manner that traditional store cannot achieve As a result, there were variety of predictions, many of them highly optimistic, about the scale, scope and impact of e-retailers According to VECITA (2013), a company of market research in US - eMarketer announced that online retail sales totaled $262.3 million, raised 16.3% from $222.5 million in 2012 Consequently, US continued to lead the world in ecommerce retail market with $156.1 million online shoppers and average online purchase per shopper was $2.466 in 2013 (VECITA, 2013) Similarly, consumers across Southeast Asia are going online in droves, particularly with the rapid up-take of connected devices, and they are increasingly searching out online channels to research and purchase the products and services they need and want The growth of connected device ownership across Southeast Asia is laying the foundation for a booming 59 Yoo, C., Park, J., & MacInnis, D J (1998) Effects of store characteristics and in-store emotional experiences on store attitude Journal of Business Research, 42(3), 253-263 Yu, Y T., & Dean, A (2001) The contribution of emotional satisfaction to consumer loyalty International Journal of Service Industry Management, 12 (3), 234-250 Zeithaml, V A., Berry, L.L., & Parasuraman, A (1996) The behavioral consequences of service quality Journal of Marketing Management, 60, 31-46 60 Appendix A: Questionnaire Dear Mr/Mrs, I am a student of International School of Business of University of Economics Ho Chi Minh City I am making a research about online shopping continuance intention – in Vietnam market Hopefully you can spend your precious time to answer the questionnaire below The survey will take about minutes The responses from this survey will be used in a research in online shopping model All collected material will be used confidentially so that individual respondents will not be tracked Thank you for taking the time to complete the survey Part 1: Information about the respondents’ experience Have you ever used online shopping website? Never (Thank you and you can stop here) Yes, 1- times Yes, – times Yes, more than times List some online shopping websites which you usually purchase (maximum websites) ……………………………………………………………………………………… Among websites you listed in question 2, which online group-buying website you use most regularly (website X)? ……………………………………………………………………………………… Part 2: Based on your purchasing experience of website you answered in question 3(website X), please comment your level of agreement on the following statement: Your level of agreement is measured by a seven-point Likert scale (from 1- strongly disagree to 5- strongly agree) with the corresponding number: 1- Strongly disagree 2- Disagree 61 3- Neutral 4- Agree 5- Strongly agree Strongly disagree Strongly agree Website quality Website design The web site is well designed in order not to The web site provides in-depth information It is quick and easy to complete a transaction on 5 I feel my privacy is protected on this web site I feel safe in my transactions with this web site This website has adequate security features 5 5 waste my time this web site The website has good selection Privacy/ Security Fulfillment/ reliability The product delivered was represented accurately by the web site What I received after purchase was what I expected 10 The product is delivered on time as promised by the company 11 When you have a problem, this website shows 62 a sincere interest in solving it Customer service 12 The company is willing and ready to respond 13 Inquiries are answered promptly 14 The level of personalization at this site is 5 5 5 to customers’ needs about right, not too much or too little Perceived risk 15 I believe that online purchases from website are risky because the products/ services delivered may fail to meet my expectations 16 I believe that online purchases from website are risky because the products/ services delivered may be inferior 17 I believe that online purchases from website are risky because they may lead to financial loss for me 18 I believe that online purchases from website are risky because they may cause others to think less highly of me 19 I believe that online purchases from website are risky because the products/services delivered may fail to fit well with my personal image or self-concept 63 20 I believe that online purchases from website 21 Joy 22 Excitement 23 Peacefulness 24 Refreshment 25 Anger 26 Distress (disappointed, upset) 27 Disgust (displeased, bad) 28 Fear (scared, unsafe) 29 Shame 5 5 are risky because they may lead to a time loss for me Emotional reaction When shopping online, I feel: Positive emotion Negative emotion Continuance intention 30 I intend to continue shopping online rather than discontinue it 31 My intention is to continue using online shopping than using shopping at store 32 If I could, I would like to continue shopping online as much as possible 64 Part 3: Individual Information What is your gender? Male Female What is your age? 18 – 22 years 23- 30 years 31-40 years over 40 years What is your annual income? Under million – under 10 million 10- 20 million Over 20 million What is your education background? High school Bachelor’s level College student Master’s level PhD level THANK YOU! 65 BẢNG CÂU HỎI Xin chào bạn! Mình sinh viên trường Đại học Kinh tế TP HCM – Học viện đào tạo quốc tế ISB Hiện làm khảo sát ý định tiếp tục mua sắm online thị trường Việt Nam Rất mong bạn bỏ chút thời gian quý báu để giúp thực khảo sát Khảo sát khoảng phút để hoàn thành thông tin người tham gia giữ bí mật Thông tin thu thập dùng để nghiên cứu mô hình mua sắm mạng Cám ơn bạn tham gia Phần 1: Thông tin kinh nghiệm mua sắm Bạn sử dụng dịch vụ mua bán mạng? Chưa (Cám ơn, bạn dừng lại đây) Có, - lần Có, - lần Có, nhiều lần Vui lòng liệt kê websites mà bạn hay sử dụng để mua sắm hàng hóa (tối đa websites) ……………………………………………………………………………………… Trong websites kể trên, websites bạn sử dụng thường xuyên (website X)? ……………………………………………………………………………………… Phần 2: Dựa vào kinh nghiệm mua sắm website X kể trên, bạn lựa chọn mức độ đồng ý theo nhận xét sau đây: Mức độ đồng tình bạn xếp theo thang điểm Likert (với phản đối hoàn toàn đến đồng ý hoàn toàn) với mức độ sau: 1- Hoàn toàn không đồng ý 2- Không đồng ý 3- Trung lập 4- Đồng ý 66 5- Hoàn toàn đồng ý Hoàn toàn Hoàn toàn không đồng ý I đồng ý Chất lượng website Thiết kế website Website thiết kế khoa học không làm thời Website cung cấp thông tin chi tiết Thực giao dịch website đơn giản Website có lựa chọn hấp dẫn 5 Thông tin cá nhân bảo vệ Giao dịch bảo vệ Websites sử dụng tính bảo mật uy tín Sản phẩm trùng sát với mô tả website Tôi nhận với mong muốn 10 Sản phẩn giao hạn 11 Công ty nhiệt tình giải vấn đề gặp 12 Webites làm tốt khâu phản hồi khách hàng 13 Thắc mắc trả lời nhanh chóng gian định hướng Độ an toàn Sự tin cậy phải Dịch vụ khách hàng 67 14 Sự cá nhân hóa (thông tin cá nhân khách hàng) 15 Hàng hóa giao không giống mong đợi 16 Hàng hóa giao chất lượng 17 Nó dẫn đến mát tài 18 Công ty có khả tôn trọng 5 21 Vui mừng 22 Phấn khích 23 Yên bình (thoải mái, thư giãn) 24 Sảng khoái 25 Tức giận 26 Thất vọng 27 Thù ghét (không hài lòng, tệ hại) website mức vừa đủ, không nhiều mà không II Nhận thức rủi ro Tôi cảm thấy mua sắm mạng gặp nhiều rủi ro vì: với người mua 19 Hàng hóa giao không phù hợp với hình ảnh nhận thức thân 20 Nó làm thời gian III Cảm nhận khách hàng Khi mua sắm mạng, cảm thấy: Tích cực Tiêu cực 68 28 Sợ hãi (không an toàn) 29 Ngượng ngùng 30 Tôi tiếp tục mua hàng mạng 31 Tôi tiếp tục mua hàng mạng thay mua 5 IV Ý định tiếp tục mua hàng online cửa hàng 32 Nếu muốn mua sắm mạng lúc Phần 3: Thông tin cá nhân Giới tính bạn? Nam Nữ Tuổi bạn? 18 - 22 tuổi 23 - 30 tuổi 31 - 40 tuổi Over 40 tuổi Thu nhập hàng tháng bạn? Dưới triệu – 10 triệu 10 – 20 triệu Trên 20 triệu Học vấn bạn? Trung học Cử nhân Đại học Thạc sĩ Tiến sĩ CÁM ƠN! 69 Appendix B: KMO and Bartlett's Test of Independent Variables KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy .892 Bartlett's Test of Sphericity Approx Chi-Square 4603.471 Df 406 Sig .000 70 Table 4.3: Total variance explained Total Variance Explained Initial Eigenvalues Extraction Sums of Squared Loadings Compone Rotation Sums of Squared Loadings % of Cumulative nt Total % of Variance Cumulative % Total % of Variance % Cumulative Total Variance % 10.791 37.210 37.210 10.791 37.210 37.210 4.397 15.162 15.162 2.923 10.080 47.290 2.923 10.080 47.290 3.008 10.373 25.534 1.939 6.687 53.977 1.939 6.687 53.977 2.997 10.334 35.868 1.661 5.728 59.705 1.661 5.728 59.705 2.979 10.271 46.139 1.432 4.937 64.642 1.432 4.937 64.642 2.547 8.784 54.923 1.292 4.454 69.096 1.292 4.454 69.096 2.464 8.496 63.419 1.277 4.403 73.499 1.277 4.403 73.499 2.216 7.642 71.061 1.124 3.875 77.373 1.124 3.875 77.373 1.830 6.312 77.373 736 2.539 79.912 10 571 1.968 81.880 11 492 1.698 83.577 12 442 1.526 85.103 13 430 1.484 86.587 14 415 1.431 88.019 15 388 1.338 89.356 16 325 1.122 90.478 17 319 1.100 91.579 18 311 1.072 92.651 19 288 994 93.645 20 257 885 94.530 21 251 867 95.397 22 216 746 96.143 23 211 729 96.872 24 185 637 97.509 25 167 577 98.086 26 159 549 98.636 27 141 487 99.123 71 Total Variance Explained Initial Eigenvalues Extraction Sums of Squared Loadings Compone Rotation Sums of Squared Loadings Cumulative nt Total % of Variance Cumulative % 28 132 456 99.579 29 122 421 100.000 Extraction Method: Principal Component Analysis Total % of Variance % Total % of Cumulative Variance % 72 Appendix D: EFA result Rotated Component Matrixa Component PR4 810 PR5 781 PR6 751 PR1 742 PR2 735 PR3 733 NE4 853 NE1 842 NE3 826 NE2 796 FF1 865 FF2 819 FF4 731 FF3 698 PE2 822 PE1 821 PE4 720 PE3 687 WD2 837 WD3 834 WD1 811 OCI3 816 OCI2 806 73 Rotated Component Matrixa Component OCI1 787 PV3 769 PV2 763 PV1 759 CS2 897 CS1 878 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations ...UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Thi Quynh Trang ANTECEDENTS OF CONTINUANCE INTENTIONS TOWARDS ONLINE SHOPPING: AN EMPIRICAL STUDY IN VIETNAM. .. in Vietnam? Q4 Does perceived risk influence the continuance intention towards online shopping in Vietnam? Q5 Does emotional reaction influence the continuance intention towards online shopping. .. online shopping continuance intention has recently emerged as a prominent issue in research Exploring and analyzing which factors influence customer retention have significant meaning to online