Chapter 1: Introduction
The Internet is characterized as a mass medium that gives consumers with purchase characteristics that are different from traditional purchasing methods. Traditionally buying and selling took place face-to-face. This isn't the situation with online shopping which is characterized by its convenience for the consumer, compared to the conventional way of shopping, such as the capacity to see and buy items at any time, imagine their requirements with items, and examine items with other buyers (Joines et al. 2003).
There is a large gap between developed and developing countries on understanding on how consumers perceive online shopping and there is growing interest in understanding what factors impact on consumers’ decisions to shop or not shop online (Brashear et al., 2009). Online Shopping, which is sometimes called e-tail (electronic retail) or e-shopping, is a form of electronic commerce allowing consumers to directly buy goods or services from a seller over the internet using a web browser. It is also known that E-shopping was invented by Michael Aldrich, an English entrepreneur, in 1979. Other alternative names are: e-web-store, e-shop, e-store, internet shop, web-shop, web-store, online store, online storefront and virtual store. According to McGoldrick (2002), electronic shopping is defined as a form of shopping in which some form of electronic communications technology is used at the offering, ordering and payment stage. E-commerce takes place between companies and their customers, or between companies and public administrations, (Whiteley, 2000). While Koty (2006) said that "E-commerce is the process of managing online financial transactions by individuals and companies.
With the help from the internet, merchants have sought to sell their products to people spending time online. Every shopper can visit web stores while they are at home and just shop as they sit in front of computer that help bring comfort and save time. Consumers can buy a huge variety of items from online stores, and just about anything can be purchased from companies that provide their products online. Books, clothing, household appliances, toys, hardware, software, and health insurance are just some of the hundreds of products consumers can buy from an online store. That’s why many people choose to shop online because of the convenience. The customers don’t have to shop at a brick-and-mortar store as they used to do before. Especially they don’t need to drive to the store, find a parking place, walk throughout the store until locating the products they need, and stand in long lines at the cash register.
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Chapter 2: Literature Review
2.1 Online consumers’ purchase intention
Purchase intention is the plan to buy a specific product or service within a designated time period (Hair et al., 2011). Moreover, online purchase intention is affected by the consumers’ determination to purchase from an e-commerce business (Choon et al., 2010). When consumers are familiar with e-commerce businesses, they are more likely to visit an online site with the intention to purchase (Yu-Hui & Barnes, 2007). The familiarity in ecommerce means that the consumers have an understanding for what is happening in that context and why, and also what is going to happen next (Gefen & Straub, 2004).
Gefen (2003) designed a model of influence factors for online purchasing intention of the consumer which is based on TAM. In addition, reliability of shopping sites, perceived ease and perceived usefulness of shopping goals straightforwardly impact on the intention of the online purchasing customer which is assumed through exact research. Jarvenpaa (2005) studied the effect of online consumers' trust on their purchasing intentions, dividing a trust into four dimensions, namely goodwill, honesty, action, ability, and foreseeability. Online consumers purchase intention had a certain relationship with every dimension. The author constructed a hypothetical model, adopted MBA students as the survey object and adopted statistical analysis such as core analysis and different regression on the collected data. The results indicate that online consumers' familiarity with shopping websites significantly and positively influences the trust establishment. Consumers and shopping websites' communication significantly positively influence the establishment of trust relations. Online consumers' recognition of the goodwill of shopping websites positively influences their purchase intention to buy. Moreover, Online consumers' positive recognition of shopping websites positively influences their purchase intention.
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2.2 Service quality
The concept of service comes from business literature. Many scholars offered various definitions of service. For instead, Ramaswamy (1996) explained that the trading of business is known as the service which both of service provider, called giver, and customer, call receiver, take place between each other to can make a result for the customer to get satisfied. Also, Gronroos (1990) indicated that: "A service is a process that consisting of intangible activities that normally take place during interactions between the customer and service providers employees either online or at a physical store, through purchasing of goods (such books, makeup, magazine etc.) which are provided as solutions to customer problems. ". While Lakhe and Mohanty (1995) state that some researchers view service from the perspective of a system-thinking paradigm: a production framework where different inputs are handled changed and value included creating a few yields which have utility to the service searchers. The above definition of service quality we can sum up that it is a process that takes place between a seller and consumer who utilize an interactive platform to trade and purchase a product or service.
Recognizing and knowing the features of service is fundamental to understand the concept better (Yong, 2000). Firstly, service provider and service have a relationship with each other that happens through interaction when service becomes a performance (Gronroos, 1990; Ramaswamy, 1996). Secondly, physical environments or physical resources it takes place in have an essential median role in the preparation of service production and utilization (Gronnroos, 1990). Thirdly, service is required by shoppers to supply specific functions which assist in problem-solving on the part of the consumer (Gronroos, 1990; Ramaswamy, 1996). This shows that a service combined with products is experienced and evaluated by customers who have specific objectives and inspirations for purchasing the service. Many researchers struggle with identifying whether service is tangible or intangible especially now that online shopping is becoming popular and consumers prefer to purchase products from the comfort of their offices or homes and not in a physical store. According to Yong (2000), the important thing for businesses to pay consideration is the inconsistency relationship among service's marketing strategies and products' marketing strategies. This is the impasse that we can understand the requirement. Also, Parasuraman, Zeithaml, and Berry (1985); Zeithaml and Bitner (1996) identified that service, which distinguish it from the products, has four features. They mentioned that service is intangible, heterogeneous, and simultaneous in production and consumption, and perishable. This helps understand the concept of service and the importance of its maintenance and appearance to customers, especially on an online platform.
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Chapter 3: Theory development and Hypothesis ................... 27
3.1. Service Quality ................... 29
3.2. Perceived Risk ........................ 29
Chapter 4: Research methodology ........................ 35
4.1. Research design .................... 35
4.2. Questionnaire ............................... 35
Chapter 5: Data interpretation and analyzing ...................... 39
5.1 Demographic information ................................. 39
5.2 Reliability Analysis ................... 42
Chapter 5: Data interpretation and analyzing
5.1 Demographic information
The table 1 illustrates that in the base of this survey, the questionnaire is distributed among a different group of people and a different group of age as well. The table shows that there were 202 respondents, whereas 144 respondents were male, they are 71.3% of the total respondents and their counterparts were 58 female respondents that is 28.7 of the total respondents. However, in the survey 84 respondents are under the 30s or more than that, they are making 41 percentage from the total, and others as under 25 to 29 are 46 in number and 22.8 in percent, 60 respondents are under 20 to 24, that is 29.7% and only 12 respondents are under the 15 to 20, that is 5.9 %. Moreover, this table illustrated that researcher mostly gathered data from the people who belong to the private company that is 49.5 % and 100 in number and 76 (37.6%), 6 (3.0 %), 8 (4.0 %) and 12 (5.9 %) are Students, government, non-government and others respectively. In addition, this is also illustrated that all respondents have different qualification, such as Bachelor, Master and Ph.D., most of the respondents’ qualification are bachelors, that is 120 in number and making 59.4 percent of the total respondents, 62 responds have completed master degree which is 30.7 percent of the total and 6 and 14 are from Ph.D.
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Chapter 6: Conclusion
6.1 Discussion
After the analyzing and interpreting data from 202 participants, the result of finding reveals insightful information about online purchase intention a deep understanding of perceived risks and service quality and consumer on online purchasing in Cambodia. It thus allows all involved entrepreneurs to execute the right strategies to improve its performance and online shopping habit. As a high number of people can access to the internet now, and quite a lot of young teenagers are so keen on the technology industry, e-commerce is well-suit to the Cambodian context nowadays and an excellent opportunity for any entrepreneur to penetrate this business into the Cambodian market. Understanding consumer's intention toward online shopping is so essential for any marketers to allocate resources and develop strategies with actionable insights so that they can generate higher sale volume. With the higher growth in internet usage and the lack of competition in the e-commerce market, it can be seen as much potential for growth and hope for success in establishing it in Cambodia that this research, more or less, can help understanding its barriers leading to failure and hints for anticipating. But after going through the analysis, we can see that many of the independent variables are supporting the dependent variable. The reliability of the service and the quality itself are essential to influence the online purchase intention. since our paper is related with two factors (service quality and perceived risk) that impact online purchase intention all the hypotheses were supported. If we go through the hypotheses one by one, service quality has two hypotheses which is related with reliability and responsiveness. H1 and H2 from service quality have a positive impact on online purchase intention. Not only reliability but economic risk and privacy are also influencing consumer online purchase behavior. Therefore, many practitioners and academics in online shopping have recently focused on the service quality to attract potential customers and how to retain current customers (Jun et al., 2004).
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