Facrors affecting customer trust in online shopping in vietnam
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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 1 st 2013
Tran Minh
i
Table of Contents
Abbreviations............................................................................................................................. iii
List of Tables ............................................................................................................................. iv
List of Figures............................................................................................................................. v
List of Appendix ........................................................................................................................ vi
Chapter One: Introduction .......................................................................................................... 1
1. Background..................................................................................................................... 1
1.1. The Internet in Vietnam.......................................................................................... 1
1.2. Online shopping in Vietnam ................................................................................... 1
2. Statement of purpose ...................................................................................................... 2
3. Research question ........................................................................................................... 3
4. Significance of the study................................................................................................. 3
5. Scope of the study........................................................................................................... 3
6. Structure of the study...................................................................................................... 3
Chapter Two: Literature Review ................................................................................................ 5
1. Trust in online shopping ................................................................................................. 5
1.1. Definition of trust in e-commerce........................................................................... 5
1.2. The importance of trust in e-commerce................................................................ 15
2. Trust antecedents identified in the literature................................................................. 16
2.1. Perceived privacy and security protection ............................................................ 16
2.2. Perceived risks and benefits.................................................................................. 18
Chapter Three: Methodology.................................................................................................... 20
1. Participants.................................................................................................................... 20
2. Instruments.................................................................................................................... 20
3. Samples and data collection procedures ....................................................................... 24
4. Data analysis ................................................................................................................. 24
Chapter Four: Results ............................................................................................................... 26
1. Characteristics of the sample population ...................................................................... 26
2. Reliability of measurement instruments ....................................................................... 28
ii
2.1. Validating measures.............................................................................................. 28
2.2. Exploratory factor analysis ................................................................................... 32
3. Tests of regression assumptions ................................................................................... 37
3.1. Test of multicollinearity........................................................................................ 37
3.2. Test of normality of residual & heteroscedasticity............................................... 38
4. Evaluating demographic variables’ impacts on customers’ trust ................................. 38
5. Hypotheses testing ........................................................................................................ 39
6. Summary of the results ................................................................................................. 41
Chapter Five: Discussion .......................................................................................................... 43
1. Findings ........................................................................................................................ 43
2. Implications .................................................................................................................. 44
3. Conclusion .................................................................................................................... 45
4. Limitations and directions for future research.............................................................. 45
References................................................................................................................................. 46
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 ........................................................... 6
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
Table 4.4. Pattern Matrixa ......................................................................................................... 35
Table 4.5. Item-Total Statistics................................................................................................. 36
Table 4.6. Model Summary ...................................................................................................... 39
Table 4.7. ANOVAb.................................................................................................................. 39
Table 4.8. Coefficients a............................................................................................................ 40
iv
List of Figures
Figure 1. Conceptual Model ..................................................................................................... 19
Figure 2. Results of testing the conceptual model .................................................................... 42
v
List of Appendix
Appendix A. Customer Survey Form ............................................................................51
Appendix B. Graphs.......................................................................................................57
Graph 1. Regression Standadized Residual ...................................................................57
Graph 2. Normal P-P plot of regression standardized residual......................................57
Graph 3. Scatterplot .......................................................................................................58
vi
Chapter One: Introduction
1. 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,
1
product features, after sale service facilities they will receive, but they can save time
and cost for buying products from a particular store. In 2010, every second Internet
user in Vietnam has already visited sites that offer online shopping, buy and sell
activities or auctions. Este et al. (2012) suggest that the most of customers purchasing
online is just a small piece of big potential e-commerce market and online shopping
activities are mainly common in the north and in big cities, whilst in smaller cities it is
not yet frequent. Hanoi is the undisputed leader in e-commerce with 60 per cent of
Hanoi net citizens using these sites.
To advance its e-commerce to improve businesses’ competitiveness thus
boosting the country’s industrialization and modernization, Vietnam government
approved a plan on e-commerce for the next 5 years 2011 – 2015 last year. This
decision helps concretize Vietnam’s commitments for international integration with
WTO, APEC and ASEM. Although e-commerce purchases in early stage market in
Vietnam, the high young generation population and great coming opportunities closer
promises the strongest growth in online shopping area. However, the major problem in
the area of online shopping is the low confidence in online payment systems. Este et al.
(2012) suggest that one of the key factor to explain for this is that people does not trust
in Internet shopping. Therefore, studying trust is considered as a vital key for
individuals or organizations to maintain and build customer’s trust so in Internet
shopping that the growth of e-commerce can be speeded up for the coming years in
Vietnam.
2. Statement of purpose
This study aims to identify which ones of the four antecedents of trust (privacy
protection, security protection, perceived risk, and perceived benefits) have impacts on
customer trust in online in shopping in Vietnam.
2
3. Research question
Is customers’ trust affected by perceptions about privacy, security protection,
perceptions about the risks and benefits during the transaction on the Internet.
4. Significance of the study
In terms of theory, this study provides an empirical understanding role of factor
trust towards online shopping; And in terms of practice, this study presents strategic
implications and directions for the development of online shopping in Vietnam.
5. Scope of the study
The study focuses on collecting people having experience in the online shopping
Ho Chi Minh City. The city is selected due to the highest Internet penetration rate. Este
et al. (2012) suggest that the Internet penetration rate is more than 50% the population
have used the Internet already in urban Vietnam. The city is higher than the average
rate of 50% of the population with the rate 62% in 2011.
6. Structure of the study
The thesis consists of five chapters. Chapter 1 introduces an overview of the
background, statement of purpose, research question, the significance of the study, and
scope of the study. Chapter 2 reviews existing literature on trust, online customer trust,
and the four antecedents of trust. These literatures summarize briefly the knowledge of
recent studies, describes the conceptual model, and hypotheses. Chapter 3 presents who
participate in this study, instruments used to measure the research constructs, the
description of the samples, data collection procedures and data analysis. Chapter 4
describes characteristics of the sample. In addition, validity and reliability of measures
will be checked by coefficients of Cronbach‘s Alpha and EFA (Principle Axis
Factoring with Promax). Then testing the assumption of regression, evaluating
3
demographic variables’ impacts on customers’ trust, and testing hypotheses are
presented. Chapter 5 presents discussions on the research findings. Theoretical
contributions, practical implications, and limitations of the current research are also
discussed. Suggestions for future research will conclude this dissertation.
4
Chapter Two: Literature Review
1. 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 contexts, researchers offer different meanings.
As Table 2.1 shows below, trust is viewed as 1). A set of specific beliefs (Doney &
Cannon 1997; Ganesan 1994). 2). A general belief that another party can be trusted
(Gefen 2000; Hosmer 1995; Moorman et al. 1992) 3). Affect reflected in “feelings” of
confidence and security. 4). A combination of three elements mentioned above. Based
on trust objects, trust has been conceptualized as a specific and general belief. Some of
them describe the specific beliefs as antecedents to the general beliefs (Jarvenpaa and
Tractinsky, 1999; Mayer and Davis, 1999; Mayer et al., 1995; Jarvenpaa and
Tractinsky, 1999) or sometimes conceptualize the specific beliefs as antecedents to
trusting intentions (McKnight et al., 1998). The others conceptualize trust as general
beliefs in e-commerce contexts that leads to behavorial intentions (Gefen, 2000); as a
combination of intergrity and caring that leads to an increase in behavioral intentions to
vulnerability (Javenpaa and Tractinsky, 1999); as a specific belief dealing with
benevolence, competence, and intergrity that results in trusting intentions (McKnight et
al., 2002).
However, the distinction between trust as a set of specific and general belief is
primarly happened dealing with interpersonal trust in organizational settings
(McAllister, 1995; McKnight et al., 1998). However, this distinction is seldom occured
in economic transaction settings because the definition of trust is used in these contexts
is an extension of trust definition rather than the original definition of interpersional
trust (Hosmer, 1995; Williamson, 1985). Consequently, some researchers stated that
actual behavior in ongoing economics alliances is a proxy for trust, defined in that
5
context as confidence or an overall belief (Gulati, 1995). This study has adopted the
conceptualization of trust as a set of specific beliefs because it deals with going
economic relationships (Crosby et al., 1990; Doney and Cannon, 1997; Ganesan, 1994;
Schurr and Ozanne, 1985) and this set of specific beliefs is most widely used in the
literature. Therefore, Trust as a feeling (Rempel et al., 1985) has been previously
studied in the context of interpersonal relationships. It is arguably irrelevant to business
transaction. (see Table 2.1)
Table 2.1. Summary of prior conceptualizations of trust
Study Trust Conceptualization Trust Object Measures
Anderson Expectations about the Business Overall trust
and Narus behavior of the other relationships
(1990) company.
Bustler Two sub-constructs: Organizational Measure of overall
(1991) 1. Attitude affective trust trust
2. Cognitive specific trust
Crosby et Confidence that the trusted Buyer-seller Empirical: overall
al. (1990) party will behave in the relationships trust, caring, integrity
interest of the customer.
Doney and Perceived credibility Buyer-seller Honesty, caring,
Cannon (integrity) and benevolence. relationships trustworthy
(1997)
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
6
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Doney et Willingness to rely and be Culture Conceptual
at. (1998) dependable upon another.
This encompasses trust as a
set of beliefs (Fukuyama
1995; Larzelere and Huston
1980; Rotter 1971) and
willingness to behave
(Luhmann 1979; McAllister
1995)
Fukuyama Expectation of regular, Business Conceptual
(1995) honest, cooperative relationships
behavior.
Gambetta The subjective probability Conceptual Conceptual
(1988) that the trusted party will
behave in a way that
warrants cooperation with
them.
Ganesan Willingness to rely on a Buyer-seller Empirical:
(1994) partner in whom one has relationships 1. Credibility (ability
confidence based on belief and
in that party's credibility reliability/honesty)
(integrity and ability) and 2. Benevolence
benevolence.
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
7
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Gefen Willingness to depend. E-commerce Empirical: overall
trust
(2000)
Gefen Willingness to depend. E-commerce Empirical: overall
(2000a) trust
Gefen Willingness to depend based Business Empirical: a single
(2000b) on beliefs in ability, relationships scale with items
benevolence, and integrity. dealing with ability,
integrity, and
benevolence.
Gefen and Willingness to depend based Business Empirical: a single
Silver on beliefs in ability, relationships scale with items
(1999) benevolence, and integrity. dealing with ability,
integrity, and
benevolence.
Giffin Reliance on the Literature Conceptual: integrity,
(1967) characteristics of another in review benevolence, and
a risky situation. ability
Gulati Expectations that alleviate Business Empirical: indirect
(1995) fears that the other party will relationships measurement
be opportunistic.
Hart and Confidence about the Business Conceptual
Saunders behavior and goodwill of relationships
(1997) another.
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
8
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Hosmer The expectation of ethical Literature Conceptual
(1995)
behavior, related to the review
willingness to rely on the
trusted party based on
optimistic expectations that
the trusted party will behave
in a morally correct manner.
Jarvenpaa Willingness to be vulnerable Online student Empirical: overall
et at. based on expectations that teams trust that is built
(1998) the other party will behave through beliefs in
appropriately even without ability, benevolence,
monitoring. and integrity
Jarvenpaa Willingness to rely when E-commerce Empirical: overall
and there is a vulnerability. trust combined with
Tractinsky integrity, and caring.
(1999)
Jarvenpaa A governance mechanism in E-commerce Empirical: overall
et at. buyer-seller relationships. trust combined with
(2000) integrity, and caring.
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
9
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Korsgaard Confidence in the goodwill Interpersonal Single item
et al. of the leader, meaning trust in
(1995) honesty, sincerity, and being organizational
unbiased. settings
Kumar Belief in dependability and Business Conceptual
(1996) honesty. relationships
Kumar et Honesty and benevolence. Business Empirical:
al. (1995a) relationships 1. Trust in honesty
2. Trust in
benevolence
Separate from a
willingness to invest
construct.
Kumar et Honesty and benevolence. Business Empirical:
al. (1995b) relationships 1. Trust in honesty
2. Trust in
benevolence
Separate from a
willingness to invest
construct.
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
10
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Larzelere Benevolence and honesty. Interpersonal Integrity and
and Huston trust in close benevolence
(1980) relationships
Luhmann Willingness to behave based Social life Conceptual
(1988) on expectation about the
behavior of others when
considering the risk
involved.
Mayer and Willingness to be Interpersonal Empirical: overall
Davis vulnerable. trust in trust, which is
(1999) organizational separate from
settings trustworthiness that is
defined as ability,
benevolence, and
integrity.
McAllister Willingness to depend upon Interpersonal Empirical:
(1995) another. trust in 1. Cognitive-based
organizational trust (ability, trust,
settings monitor)
2. Affect-based trust
(share ideas and
feelings, emotional
investment)
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
11
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 1 st 2013
Tran Minh
i
Table of Contents
Abbreviations............................................................................................................................. iii
List of Tables ............................................................................................................................. iv
List of Figures............................................................................................................................. v
List of Appendix ........................................................................................................................ vi
Chapter One: Introduction .......................................................................................................... 1
1. Background..................................................................................................................... 1
1.1. The Internet in Vietnam.......................................................................................... 1
1.2. Online shopping in Vietnam ................................................................................... 1
2. Statement of purpose ...................................................................................................... 2
3. Research question ........................................................................................................... 3
4. Significance of the study................................................................................................. 3
5. Scope of the study........................................................................................................... 3
6. Structure of the study...................................................................................................... 3
Chapter Two: Literature Review ................................................................................................ 5
1. Trust in online shopping ................................................................................................. 5
1.1. Definition of trust in e-commerce........................................................................... 5
1.2. The importance of trust in e-commerce................................................................ 15
2. Trust antecedents identified in the literature................................................................. 16
2.1. Perceived privacy and security protection ............................................................ 16
2.2. Perceived risks and benefits.................................................................................. 18
Chapter Three: Methodology.................................................................................................... 20
1. Participants.................................................................................................................... 20
2. Instruments.................................................................................................................... 20
3. Samples and data collection procedures ....................................................................... 24
4. Data analysis ................................................................................................................. 24
Chapter Four: Results ............................................................................................................... 26
1. Characteristics of the sample population ...................................................................... 26
2. Reliability of measurement instruments ....................................................................... 28
ii
2.1. Validating measures.............................................................................................. 28
2.2. Exploratory factor analysis ................................................................................... 32
3. Tests of regression assumptions ................................................................................... 37
3.1. Test of multicollinearity........................................................................................ 37
3.2. Test of normality of residual & heteroscedasticity............................................... 38
4. Evaluating demographic variables’ impacts on customers’ trust ................................. 38
5. Hypotheses testing ........................................................................................................ 39
6. Summary of the results ................................................................................................. 41
Chapter Five: Discussion .......................................................................................................... 43
1. Findings ........................................................................................................................ 43
2. Implications .................................................................................................................. 44
3. Conclusion .................................................................................................................... 45
4. Limitations and directions for future research.............................................................. 45
References................................................................................................................................. 46
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 ........................................................... 6
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
Table 4.4. Pattern Matrixa ......................................................................................................... 35
Table 4.5. Item-Total Statistics................................................................................................. 36
Table 4.6. Model Summary ...................................................................................................... 39
Table 4.7. ANOVAb.................................................................................................................. 39
Table 4.8. Coefficients a............................................................................................................ 40
iv
List of Figures
Figure 1. Conceptual Model ..................................................................................................... 19
Figure 2. Results of testing the conceptual model .................................................................... 42
v
List of Appendix
Appendix A. Customer Survey Form ............................................................................51
Appendix B. Graphs.......................................................................................................57
Graph 1. Regression Standadized Residual ...................................................................57
Graph 2. Normal P-P plot of regression standardized residual......................................57
Graph 3. Scatterplot .......................................................................................................58
vi
Chapter One: Introduction
1. 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,
1
product features, after sale service facilities they will receive, but they can save time
and cost for buying products from a particular store. In 2010, every second Internet
user in Vietnam has already visited sites that offer online shopping, buy and sell
activities or auctions. Este et al. (2012) suggest that the most of customers purchasing
online is just a small piece of big potential e-commerce market and online shopping
activities are mainly common in the north and in big cities, whilst in smaller cities it is
not yet frequent. Hanoi is the undisputed leader in e-commerce with 60 per cent of
Hanoi net citizens using these sites.
To advance its e-commerce to improve businesses’ competitiveness thus
boosting the country’s industrialization and modernization, Vietnam government
approved a plan on e-commerce for the next 5 years 2011 – 2015 last year. This
decision helps concretize Vietnam’s commitments for international integration with
WTO, APEC and ASEM. Although e-commerce purchases in early stage market in
Vietnam, the high young generation population and great coming opportunities closer
promises the strongest growth in online shopping area. However, the major problem in
the area of online shopping is the low confidence in online payment systems. Este et al.
(2012) suggest that one of the key factor to explain for this is that people does not trust
in Internet shopping. Therefore, studying trust is considered as a vital key for
individuals or organizations to maintain and build customer’s trust so in Internet
shopping that the growth of e-commerce can be speeded up for the coming years in
Vietnam.
2. Statement of purpose
This study aims to identify which ones of the four antecedents of trust (privacy
protection, security protection, perceived risk, and perceived benefits) have impacts on
customer trust in online in shopping in Vietnam.
2
3. Research question
Is customers’ trust affected by perceptions about privacy, security protection,
perceptions about the risks and benefits during the transaction on the Internet.
4. Significance of the study
In terms of theory, this study provides an empirical understanding role of factor
trust towards online shopping; And in terms of practice, this study presents strategic
implications and directions for the development of online shopping in Vietnam.
5. Scope of the study
The study focuses on collecting people having experience in the online shopping
Ho Chi Minh City. The city is selected due to the highest Internet penetration rate. Este
et al. (2012) suggest that the Internet penetration rate is more than 50% the population
have used the Internet already in urban Vietnam. The city is higher than the average
rate of 50% of the population with the rate 62% in 2011.
6. Structure of the study
The thesis consists of five chapters. Chapter 1 introduces an overview of the
background, statement of purpose, research question, the significance of the study, and
scope of the study. Chapter 2 reviews existing literature on trust, online customer trust,
and the four antecedents of trust. These literatures summarize briefly the knowledge of
recent studies, describes the conceptual model, and hypotheses. Chapter 3 presents who
participate in this study, instruments used to measure the research constructs, the
description of the samples, data collection procedures and data analysis. Chapter 4
describes characteristics of the sample. In addition, validity and reliability of measures
will be checked by coefficients of Cronbach‘s Alpha and EFA (Principle Axis
Factoring with Promax). Then testing the assumption of regression, evaluating
3
demographic variables’ impacts on customers’ trust, and testing hypotheses are
presented. Chapter 5 presents discussions on the research findings. Theoretical
contributions, practical implications, and limitations of the current research are also
discussed. Suggestions for future research will conclude this dissertation.
4
Chapter Two: Literature Review
1. 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 contexts, researchers offer different meanings.
As Table 2.1 shows below, trust is viewed as 1). A set of specific beliefs (Doney &
Cannon 1997; Ganesan 1994). 2). A general belief that another party can be trusted
(Gefen 2000; Hosmer 1995; Moorman et al. 1992) 3). Affect reflected in “feelings” of
confidence and security. 4). A combination of three elements mentioned above. Based
on trust objects, trust has been conceptualized as a specific and general belief. Some of
them describe the specific beliefs as antecedents to the general beliefs (Jarvenpaa and
Tractinsky, 1999; Mayer and Davis, 1999; Mayer et al., 1995; Jarvenpaa and
Tractinsky, 1999) or sometimes conceptualize the specific beliefs as antecedents to
trusting intentions (McKnight et al., 1998). The others conceptualize trust as general
beliefs in e-commerce contexts that leads to behavorial intentions (Gefen, 2000); as a
combination of intergrity and caring that leads to an increase in behavioral intentions to
vulnerability (Javenpaa and Tractinsky, 1999); as a specific belief dealing with
benevolence, competence, and intergrity that results in trusting intentions (McKnight et
al., 2002).
However, the distinction between trust as a set of specific and general belief is
primarly happened dealing with interpersonal trust in organizational settings
(McAllister, 1995; McKnight et al., 1998). However, this distinction is seldom occured
in economic transaction settings because the definition of trust is used in these contexts
is an extension of trust definition rather than the original definition of interpersional
trust (Hosmer, 1995; Williamson, 1985). Consequently, some researchers stated that
actual behavior in ongoing economics alliances is a proxy for trust, defined in that
5
context as confidence or an overall belief (Gulati, 1995). This study has adopted the
conceptualization of trust as a set of specific beliefs because it deals with going
economic relationships (Crosby et al., 1990; Doney and Cannon, 1997; Ganesan, 1994;
Schurr and Ozanne, 1985) and this set of specific beliefs is most widely used in the
literature. Therefore, Trust as a feeling (Rempel et al., 1985) has been previously
studied in the context of interpersonal relationships. It is arguably irrelevant to business
transaction. (see Table 2.1)
Table 2.1. Summary of prior conceptualizations of trust
Study Trust Conceptualization Trust Object Measures
Anderson Expectations about the Business Overall trust
and Narus behavior of the other relationships
(1990) company.
Bustler Two sub-constructs: Organizational Measure of overall
(1991) 1. Attitude affective trust trust
2. Cognitive specific trust
Crosby et Confidence that the trusted Buyer-seller Empirical: overall
al. (1990) party will behave in the relationships trust, caring, integrity
interest of the customer.
Doney and Perceived credibility Buyer-seller Honesty, caring,
Cannon (integrity) and benevolence. relationships trustworthy
(1997)
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
6
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Doney et Willingness to rely and be Culture Conceptual
at. (1998) dependable upon another.
This encompasses trust as a
set of beliefs (Fukuyama
1995; Larzelere and Huston
1980; Rotter 1971) and
willingness to behave
(Luhmann 1979; McAllister
1995)
Fukuyama Expectation of regular, Business Conceptual
(1995) honest, cooperative relationships
behavior.
Gambetta The subjective probability Conceptual Conceptual
(1988) that the trusted party will
behave in a way that
warrants cooperation with
them.
Ganesan Willingness to rely on a Buyer-seller Empirical:
(1994) partner in whom one has relationships 1. Credibility (ability
confidence based on belief and
in that party's credibility reliability/honesty)
(integrity and ability) and 2. Benevolence
benevolence.
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
7
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Gefen Willingness to depend. E-commerce Empirical: overall
trust
(2000)
Gefen Willingness to depend. E-commerce Empirical: overall
(2000a) trust
Gefen Willingness to depend based Business Empirical: a single
(2000b) on beliefs in ability, relationships scale with items
benevolence, and integrity. dealing with ability,
integrity, and
benevolence.
Gefen and Willingness to depend based Business Empirical: a single
Silver on beliefs in ability, relationships scale with items
(1999) benevolence, and integrity. dealing with ability,
integrity, and
benevolence.
Giffin Reliance on the Literature Conceptual: integrity,
(1967) characteristics of another in review benevolence, and
a risky situation. ability
Gulati Expectations that alleviate Business Empirical: indirect
(1995) fears that the other party will relationships measurement
be opportunistic.
Hart and Confidence about the Business Conceptual
Saunders behavior and goodwill of relationships
(1997) another.
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
8
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Hosmer The expectation of ethical Literature Conceptual
(1995)
behavior, related to the review
willingness to rely on the
trusted party based on
optimistic expectations that
the trusted party will behave
in a morally correct manner.
Jarvenpaa Willingness to be vulnerable Online student Empirical: overall
et at. based on expectations that teams trust that is built
(1998) the other party will behave through beliefs in
appropriately even without ability, benevolence,
monitoring. and integrity
Jarvenpaa Willingness to rely when E-commerce Empirical: overall
and there is a vulnerability. trust combined with
Tractinsky integrity, and caring.
(1999)
Jarvenpaa A governance mechanism in E-commerce Empirical: overall
et at. buyer-seller relationships. trust combined with
(2000) integrity, and caring.
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
9
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Korsgaard Confidence in the goodwill Interpersonal Single item
et al. of the leader, meaning trust in
(1995) honesty, sincerity, and being organizational
unbiased. settings
Kumar Belief in dependability and Business Conceptual
(1996) honesty. relationships
Kumar et Honesty and benevolence. Business Empirical:
al. (1995a) relationships 1. Trust in honesty
2. Trust in
benevolence
Separate from a
willingness to invest
construct.
Kumar et Honesty and benevolence. Business Empirical:
al. (1995b) relationships 1. Trust in honesty
2. Trust in
benevolence
Separate from a
willingness to invest
construct.
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
10
Table 2.1. Summary of prior conceptualizations of trust (Cont.)
Study Trust Conceptualization Trust Object Measures
Larzelere Benevolence and honesty. Interpersonal Integrity and
and Huston trust in close benevolence
(1980) relationships
Luhmann Willingness to behave based Social life Conceptual
(1988) on expectation about the
behavior of others when
considering the risk
involved.
Mayer and Willingness to be Interpersonal Empirical: overall
Davis vulnerable. trust in trust, which is
(1999) organizational separate from
settings trustworthiness that is
defined as ability,
benevolence, and
integrity.
McAllister Willingness to depend upon Interpersonal Empirical:
(1995) another. trust in 1. Cognitive-based
organizational trust (ability, trust,
settings monitor)
2. Affect-based trust
(share ideas and
feelings, emotional
investment)
Source: Gefen, David; Karahanna, Elena; Straub, Detmar W. (2003, p. 56-59)
11