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Student name : Minh Dai Nguyen Student number: 110063077 Module: E-commerce Tittle : Individual Coursework Appraisal Article:

: Lim, K., Sia, C. L.; Lee, Matthew K. & Benbasat, I. (2006) Do I Trust You Online, and If So, Will I Buy? An Empirical Study of Two Trust-Building Strategies. Journal of Management Information Systems, Fall, Vol. 23 Issue 2, pp233-266

In the industry of online retailing today, trust has become a key determinant of every successful business. Particularly, for newly started online stores, initial trust building strategies are much more important. Another study of Brewer (1981) suggests that trust can be formed by the first impression and developed through cognitive cues. For online retailing, the first impression of a visitor to an online store is its interface. Lim, Sia, Lee, and Benbasat (2006) believe that if the interface can convey the stores qualities such as honesty, proficiency, usefulness, trusting belief toward the store can be built. Trust will create the willingness to buy a product from the store and improve the chance of actual buying behavior. The research of Lim, Sia, Lee, Benbasat (2006) examines the effectiveness of 2 trustbuilding strategies based in website interface used by an Internet bookstore without established reputation. The two strategies are portal affiliation and customer endorsement. Portal affiliation is described as the way the new online store attach visible associations with well-known online portals on its website. On the other hand, customer endorsement involves showing positive recommendations of previous customers on the website. Figure 1 and 2 in the end of this appraisal summarize the process of both strategies. The research was carried out using a laboratory experiment and a questionnaire survey. 182 participants were provided different versions of store websites. The attitude toward the store and real buying behaviors based on different versions were recorded. A questionnaire was conducted to compare the effectiveness of different versions. The partial least square analysis (PLS) was employed to assess the relationship between independent variables (portal, customer endorsement) and dependent variables (trusting beliefs, attitude, willingness to buy and actual buying behavior). The result of the research is illustrated in figure 3 and table 1 below, it confirmed the significant influence of customer endorsement throughout trusting beliefs, attitude, willingness to buy, and actual buying behavior. The effect of portal affiliation is not as significant as customer endorsement. The other findings are the effect of similar peer endorsement is significantly stronger and different nature business of the portals do not have significant impacts. There are a number of strengths and weaknesses of the study. First, it was conducted in a practical circumstance, participants used their own financial source to buy products and faced a number of risks, such as security, quality of product, scam. Secondly, the study has applied PLS analysis as a systematic approach to precisely construct the relationship between variables. One limitation of the study is that the number of participants is small (182 participants) and they are relatively homogenous as they came from a same university. The payment used by participants in the study is different from common online transactions. The other weakness is that the study was taken in university laboratory. The demand for academic books is high among students, and perception of the online bookstore could be favored or not objective. Therefore, the quality of the study can be improved by increase the number and diversification of participants in the study. To conclude, the finding in the study of Lim, Sia, Lee and Benbasat (2006) gave us an empirical support to the customer endorsement strategy of trust-building. Despite of a number of its limitations, the study suggested a concrete effectiveness of the strategy. In term of practical implication, the findings could be useful for new started online stores. Successful setup an appropriate endorsements system can help to build trust among potential shoppers and transform them into buyers. Due to the effectiveness of the strategy, the relevance of the study to the economy can be estimated as 8 (on a scale 110). This strategy is necessary in most cases of new started online retailers.

Figure 1 : The Trust-building process through Portal Affiliation

Figure 2 : The Trust-building process through Satisfied Customer Endorsement

Figure 3: Path Estimate (Standard Error) of PLS Analysis

Table 1 : Number of textbook buyers in each treatment

REFERENCE Brewer, M.B. Ethnocentrism and its role in interpersonal trust. In M.B. Brewer and B.E. Collins (eds.), Scientific Inquiry and the Social Sciences. San Francisco: Jossey-Bass, 1981, pp. 345360 Lim, K., Sia, C. L.; Lee, Matthew K. & Benbasat, I. (2006) Do I Trust You Online, and If So, Will I Buy? An Empirical Study of Two Trust-Building Strategies. Journal of Management Information Systems, Fall, Vol. 23 Issue 2, pp233-266