Consumer Trust in E-commerce

An analysis of consumer trust in e-commerce: The case of how to expand overseas market of
Alibaba
 Abstract

In B2C markets trust in e-commerce has been substantially contributing in development. The study is
based on analyzing consumer trust in e-commerce by taking example of Alibaba as a case of how to
expand business in overseas market. The paper will support company to identify ways to intervene
support of customers in overseas. We have developed concepts and aspect to aid company in
evaluating e-commerce in B2C market. The description has included model to get process-oriented
approach and to comprehend expand. The analysis and findings offer approach to study dynamic e-
commerce aspects that help to achieve aim of developing business globally. The description of
strategies will help in improving customer service on the internet and building promotion of trust in
internet.

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 Acknowledgements

First of all I would like to thank

First of all I would thank Almighty ALLAH who has guided me the way for a bright future. I
would like to acknowledgement the help provided by my teacher to make this project a success.
My teacher Dr. Noor Ahmed Memon provided guidance and learning at every step of the project
which helped me, a lot in the questioning, data collection and preparation of this report. He
always gave full energy and showed willingness in my project. I am also thankful to my parents
who accommodated me during those long hours of work in writing Literature Review and all the
friends and colleagues who equally encouraged me. I would also like to appreciate the co-
operation I got from my classmates at the institute, which boosted my morale and encouraged
me to strive for better results.

5 references
http://www.academia.edu/7961526/Research_paper_on_B2C_ecommerce_adoption

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Contents

chapter 1-Introduction
1.1Background ....................................................................................................................... 6
1.2 Aims and objectives ........................................................................................................ 6
Aims: ....................................................................................................................................... 6
Objectives: ........................................................................................................................ 6
chapter 2- Literature Review
2.1 Literature review (theoretical framework) ...................................................................... 7
Effect of consumer trust in e-commerce and building customer confidence, adoption,
retention & improved satisfaction ......................................................................................... 7
E-commerce: business, technology society ......................................................................... 8
Value-for Engagement model (Trust social relations & engagement) (Padua, D (2012) ...... 8
TRA model (Theory of Reasoned Action) ............................................................................. 8
ECT MODEL (Expectation confirmation theory) ................................................................... 9
Customer service on the internet.......................................................................................... 9
Strategies for building and promoting trust on the internet ................................................. 10
Marketing ........................................................................................................................ 10
It is an essential tool that is used for convincing customer for perceiving consuming
along with trust development. It entails legitimacy on the website. ................................. 10
Information ...................................................................................................................... 10
Trustful seals .................................................................................................................. 10
Communication and transparency .................................................................................. 10
Protection and security ................................................................................................... 10
The pyramid of Trust .......................................................................................................... 11
Characteristics of consumer ........................................................................................... 11
Chapter 3- method
3.1Research methodology .................................................................................................. 13
3.2Data collection methods .................................................................................................... 13
3.3 Reseatch Approach
3.1.1Primary and Secondary............................................................................................ 13
3.4 Validity and Reliability ...................................................................................................... 13
Chapter 4-research Findings

Chapter 5- Research Analysis

5.1 Discussion and Analysis of data .................................................................................. 14
5.1.0Gender ................................................................................................................... 14
5.1.1Age ............................................................................................................................. 14
5.1.2Attitude towards using the internet ............................................................................. 15
5.1.3 How often do you shop? ............................................................................................ 15

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 5.1.4 Security and reliability factors .................................................................................... 16
5.1.5Information about security solution ........................................................................... 16
5.1.6 Security in payment method ...................................................................................... 16
5.1.7 Views on privacy and personal inforamtion when ordering........................................ 17
5.1.8 Guarantees................................................................................................................ 17
5.1.9 Customer services ..................................................................................................... 17
5.2.0 The brand, reputation and recommendation .............................................................. 18
5.2.1 Design, functionality .................................................................................................. 18
Chaper 6- Limitations of the study ..................................................................................... 19
6.1 limitations
6.2 Self-criticism

Chaper 7-Conclusions
6.1Practical implications ................................................................................................... 20
6.2 Conclusion ............................................................................................................. 20
References ........................................................................................................................... 22
Questionnaire ....................................................................................................................... 25

Appendices 1

The questionnaire

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 1. Introduction Background information

The research has aim to review online servicing company Alibaba which is working in B2C e-

commerce which is leading and largest online retail marketplace. The purpose is to view significance

of trust in e-commerce supporting aim of the company in connecting thousands of customers. The

Chinese internet companies like Alibaba have contributed effectively in developing trustful

perspectives on online product and services. Millions of customers are emerging by e-commerce

approach by internet using that connects them all over the world. Trust has been viewed as most

essential factor in gaining customer perceived satisfaction in internet or online shopping (Lee, and

Turban, 2001, p.81). Business of Alibaba has achieved an effective reputation in market by e-

commerce service that comprehends trust in succeeding business. In this study we will take a look in

factors that may help in learning complex and dynamic approaches to improve customer trust in e-

commerce and how they can expend overseas market by taking case of Alibaba as a case example

which is e-commerce giant in China. Regularity of dynamic markets and management, experimenting

with business models and portfolio, focusing on grabbing strategic opportunities, building systems to

support fluidity and feedback are the major tools used by company to handle 800 million of people. In

order to expand business overseas planning are need to develop for establishing operating centers.

2. Aims and objectives（reduce repeat rate）

Aims:

The aim is to analyse the effect of customer trust in e-commerce and how to build the consumer

confidence, adoption, retention and improved satisfaction.

Objectives:

 To examine how to create trust building to solve online trust problems effectively. And how to

make customers are willing to purchase online. All of the information about consumer trusts in

e-commerce on the basis of literature.

 To comprehend customer’s want and need, from the perspectives of customer.

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  To investigate about brand strategy is the guiding principle of Alibaba’s global strategy.

3. Literature review (theoretical framework)

In this session by using theoretical framework has been plausibly used for determining review on

internet and e-commerce. Therefore, by review of distinct theories ways for building consumer trust in

e-commerce examined which is important for making trust with customer while online servicing

(Salam etal, 2005, p.75). It covers essential background information on the subject by representation of

e-commerce and internet approaches (Gao, 2016, p.353).

Effect of consumer trust in e-commerce and building customer confidence, adoption, retention &

improved satisfaction

The internet and e-commerce approaches are providing beneficial prospective to customer all over

the world (Sui, 2015, p.27). The hostages between customers due to geography have been eliminated

and now there more options, apt prices and ways in obtaining products and service.

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E-commerce: business, technology society

E-commerce to customer can provide grant for wider scope of success by building customer trusts

and virtual perspectives (landon& Kenneth, 1944). The issue in e-commerce to perceive expected

number of customer in business would be due to lack of trust factor (Hoffmann, n.d, p.2). In recent

years companies have increase their rate of revenues and market growth by building trustful

relationship (Burke, & Eaton, T.V., 2016). There are certain factors that influence trust of customer in

e-commerce and can be employed for expand in overseas business.

Value-for Engagement model (Trust social relations & engagement) (Padua, D (2012)

Trust can build by generating the Value for engagement model for getting engagement and

building trust with customers. This model can be used for expanding business overseas as it determine

ways to increase and build engagement and trust building with customers. It measures effective

addressing by concepts of value engagement that positively work for making social relations,

engagement and trust (Teo, & Liu, 2007, pp.23-24). VfE model would be beneficial for Alibaba to

build and generate dimensions of emotion, actions, time and space which are essential to lead business

by producing ways to improve reputation and social capital (Kassim, &Asiah Abdullah, 2010, p.336).

This model can be effective to influence and improve trust in e-commerce and expanding business to

overseas (Grabner-Kraeuter, 2002, p.44). It helps to convey strategy for trust and engagement building

and verification which is essential to value trust factor in B2C.

TRA model (Theory of Reasoned Action)

This is another theory that helps in determining correlation of attitudes, behavior and wants and

building relation with customers. TRA model contribute in examining significance of decision in

maintaining consistent behavior and customer intent. In accordance to TRA model these aspects

majorly impact on their decision in representing behavior and performing act that help in achieving

their trust and preference (Linda, n.d, p.2252). Another approach in this regard may be TAM

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(Technology Acceptance model) that describes e-commerce with relation to trust of the customers.

These models explains that customer intend majorly depends on the ease and convenience in using

new techniques (Di Menna, n.d, p.8). Mcknight and his co-workers examined that distinct customer

have distinct perspectives that based on their beliefs and attitudes that impact on perceived trust and

intend in performing act based on trust (McKnight et al, 2002, p.336).

ECT MODEL (Expectation confirmation theory)

This theory can be implied on our chosen company for building effective trust relation with

customer for expanding business to overseas. The model proposed by Oliver that examined the relation

of customer behavior with purchase or repurchase of product (Zuccaro, 2016, p.144). It describes that

customer firstly build an expectation with the company or product that builds their perspective for

consuming specific service/product (Pavlou, 2003, p.69). Based on expectation they will build their

level of satisfaction that helps in approving quality of product that they expect and this will determine

trust and satisfaction that will enforce them to repurchase the product based on expectation and

intentions (Hackstetter, 2013, p.63). When they confirmed expectation of choosing a trustful e-

commerce approach, customer will be more engaged in perceiving purchase of product from e-

commerce website.

Customer service on the internet

Sterne articulates that customer service on the internet is helping making possible and

widespread ways on entailing effective communication with customer (Sterne, 2000). In such a way e-

mail has become most plausible mode in creating developing on internet as it is the fastest way of

interacting with people (Hutt & Speech, 2004, p.69). This development has changed the whole

scenario in recent years among the customers and businesses in order to sell or buy things online. Web

has created a great contribution to technology world in which now millions of businesses are making

revenues based on its ease (Kim, Ferrin, and Rao, 2008, p.1). Thus, e-commerce in this concerning

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company can generate high rate of revenue by providing information and managing customer

perspective as studies depicted it as an essential tool for increasing profits and leverage for company.

Strategies for building and promoting trust on the internet

There are various techniques that help in creating trustful relation with customer in internet

business. The chosen company can promote it by entailing these techniques:

Marketing

It is an essential tool that is used for convincing customer for perceiving consuming along with

trust development. It entails legitimacy on the website.

Information

Another tool that employs trustworthiness is education and information that gives potential explaining

to customer to buy or consume product (Pavlou, 2003, p.69).

Trustful seals

This approach helps in clarifying customer about the advantages of the product and attributes to

develop trust with individuals (Tan et al, 2009, p.2).

Communication and transparency

By interacting effectively and perceived transparency with customer we can build a plausible relation

based on trust by imposing positive impact of website and product range and restraining negative

aspects (Corbitt, Thanasankit, and 2003, p.205)

Protection and security

By providing security and protection of privacy, trustful relation can build by establishing safety

measures (Kim et al, 2005, p.145).

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These are consider as mechanism for underlying service on website that holds reliability and resolving

negative aspect that restrict trust building with customer.

The pyramid of Trust

Trust can build by meeting customer satisfaction and reducing their complexities by examining

these elements while leading an e-commerce business:

Characteristics of consumer

For approaching consumer trust in e-commerce and intend to expend overseas market of

Alibaba the management must understand that distinct consumers have distinct perspectives which are

termed as follows:

 Trust disposition that describe distinct personalities within individuals that may help in

distinguish of disposition to trust (Di Gregorio, 2008, p.186).

 Behavior and attitudes while performing online shopping which are based on their norms,

perspectives and social constraints for which they must refer to improving control on their

behaviors. By effective interaction and reducing risks in e-commerce they can make the most

of internet shopping.

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  Past purchase behavior which is important to improve product consuming, past experience

majorly impact on consumer for which they must provide more effective price and product.

The studies have found that e-commerce entails better tools and techniques in getting trust of the

consumer (D Harrison McKnight, 2001, p.38). Murphy in 1997 articulates that this technology holds

reliability, security, simplicity and acceptability of the consumer while providing online products

(Turban, King, & Wang, J., 2003, p.156). The review of literature concludes that in perceiving trust

factor, this is important to fulfill their expectation, demands, and security and better options in online

shopping. Thus, trust factor helps in anticipating better engagement of consumers in using internet and

e-commerce.

Figure 1Alibaba Revenue ratio

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4. Research methodology

Data collection methods

In order to get wider view on the subject we have included the empirical method, in this way we have

design questionnaire that enabled us to gain standardized information. The result presented by numbers

that represents that essentiality of trust of customer in e-commerce. We have discussed consumer trust

by discussing factors that affect customer trust in literature review. Survey questionnaire has been

included by using method of convenience sampling (Saunders et al, 2007). It is used for obtaining

desire results from sample as it help in reaching required response of the respondents. In this case it

helped in their key engagement. Following are the basic methods that are used for collection of in-

depth knowledge on subject.

Primary and Secondary

For collection of primary data collection method we have included questionnaire which is focused on

the importance of the different trust factors. By quantitative approach we have collected knowledge by

designing questionnaire and stochastic accessing. This method has helped us in gaining valid results.

Further, the secondary data collection method is focused on taking information by books, articles and

internet modes. Further, face to face interviews has been taken by customers who has used Alibaba.

The primary data was collected by questionnaire based on importance of trust factors in reviewing the

consumer views on trust while using internet and websites. We have chosen customers as respondents.

These reviews were processes statistically and analyzed by using SPSS. The secondary data helped us

finding the knowledge on internet and e-commerce development. The knowledge gained by these

sources helped us in getting both positive and negative aspect in improving trust relationship.

Validity and Reliability

These methods have provided effective and required results by entailed validity on the taken

results. Validity is concern with the findings of the analysis and it is important for providing rightful

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outcomes on the designed questionnaire. For achieving outcomes validity and reliability have been

achieved that are the key essentials of the research. To get consistent and plausible results we have

entailed reliability which is important for understanding and measuring uncertainties. The information

and knowledge that we have included is valid and reliable and gained with full transparency and

privacy of the respondents. The included time constraints on survey were three days of week for

providing them apt time for giving reviews that determined reliable response.

5. Discussion and Analysis of data

The information has been collected by the data of Alibaba present in their financial statement.

Further, the results of the questionnaire and interviews with the employees of the company are

analysed by using SPSS that helped in providing comprehensive data analysis. The following graph,

charts and pie describes the perceived results.

Gender
The table shows the ratio of male and female respondents in the survey and this was necessary

for analysing the importance and differences in males and females. It has been analysed that

comparably to females there was a majority of male respondents.

Age
The following table shows that age distribution of the respondents and this was included to

identify the differences among different ages and importance of this factor. It has analysed that

59% of them belongs to age group of 18-29 and 30-39 and only 5.5% were in the age of 60 and

above.

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Attitude towards using the internet
They were about their attitudes towards using the internet while purchasing product and

services. It has analysed that most of them had positive attitude with ratio of 62% while 17.5%

had no opinion towards this matter. The age group of 18 to 39 had subsequently positive

attitude in using the internet and e-commerce.

How often do you shop?

The following table shows result of question when they were asked as how often they shop on

the internet. It has analysed that 69.5% of them have already experience of online shopping.

Further majority shop on yearly basis, few with frequently in a month and rest of them

answered as they had never experience online shopping.

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security and reliability factors
They were asked as how they find security and reliability factors important for trust in

purchasing product on the internet. The response shows that 90.5% of them find it important to

gain trust while purchasing online products.

Information about security solution

The respondents were asked as How much securities work for to solve information measures

which is to analyse their views on Information about security solution. The following table

shows that 71.5% of them find it important to perceive for getting security solutions and

information.

Security in payment method

They were asked that does security help customer in payment and cash on delivery of their

shopping. The following table is the result of their response and it shows that 66% of them find

it important for possibly secure payment method. It shows that most of them find it very

important in online payment.

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Views on privacy and personal inforamtion when ordering
The respondents were asked as how privacy is imporatnt for entailing personal information

while ordering. The table shows that most of them with 72% find it important to identify and

handling the personal information.

Guarantees
They were asked as how many guarantees possess importance in returns and refund. The

following result shows that most of the respondents believe that it is very important in

perceiving reliable online shopping experience and using e-commerce and internet.

Customer services
They were asked to give views on customer services and the response shows that majority of

them find it necessary in experiencing online shopping. It perceived secure and privacy of the

customer. Thus, 55% of them respond with very important.

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The brand, reputation and recommendation
They were also asked to provide your views on familiarity. The table shows that result of the

response in perceiving trust in purchasing online product. The result shows that majority of the

respondents with 38.5% respond with important, 36.5% respond with very important while 18%

of them respond with pretty important.

Design, functionality
The respondents also gave their views about the website. The table shows the cumulative

results and it shows these two factors are important in perceiving trust in e-commerce. The

respond shows that majority with 46.5% of respondents find it important.

The survey concludes that all these factors significantly impact on trust factor in e-commerce

on the customers when perceiving online shopping. It has analysed that in order to build trust in e-

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commerce these aspects must be understand for satisfying customer. It concludes that these factors

must entailed by company to identify distinct perspectives of the customers which as identified by the

analysis of the questionnaire and their response. It has analysed that consumer trust in e-commerce and

internet using can gained by entailing these trust factors that improve customer online shopping

experience (Greeven, 2014, p.380). Their response helps in getting knowledge that these factors help

in leading the business promisingly. Their views shows trust is highly dependable on these aspect that

affect their attitudes and behavior towards online shopping modes. To establish trust, these factors

must be understood in perceiving high level of engagement in shopping on the internet. By having a

trustful, consumer may feel satisfied and this may help company in meeting their expectations. These

factors including website, security, privacy, customer services, prices and other highly affect their

attitudes when making online shopping. It may help the company in increasing value of their business;

they can perceive expected outcomes by assessing lack of trust of consumer on internet and e-

commerce.

Limitations of the study

In accomplishing research objective we have collected some limitations which were regarding

to the time which is considerably limited also the sample size limited our effective approach. The

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sample is collected by questionnaires with people in Hull where may not be representative of the

general population of B2C e-commerce consumers and the sample size is not the large enough. Thus,

to increase validity and generalization of study we should take a larger sample size with more response

from consumers of e-commerce.

Self-criticism

There are certain aspects that can be criticized including the lack of testing the questionnaire

while making use of it that may impact on our results. In this way it may affect clarity, frequency and

presentation of the results of the survey questionnaire. However, by using diagram in presentation we

have entailed ease for viewer. Further, if we had used the ranking method, it would be easier for us to

determine trust factors more clearly. Time constraints have restricted us in more effective statistical

measuring of correlation of trust factors.

Practical implications

The findings of the study provides knowledge and practical implications on the chosen

company in building trust with customer in e-commerce as it has determine the trust factors and certain

aspect that are helpful for the company to improve performance and expanding business to overseas.

The described tools and methods will help them in adopting better servicing and providing apt needs to

their consumers by building of trust-based relationship.

Conclusion

The study concludes the factors that affect the trust in e-commerce and aspect that may

employed for perceiving consumer satisfaction in purchasing product from the internet. The lack of

trust is the measure that the company can eliminate by promotion of trust and building trustworthy

relation with customers. Trust can build by using these tactics while payment, transaction and placing

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their order. It could be plausible for making multiple approaches to perceived trust in e-commerce.

Trust increase the standard and level of business development by fulfilling needs and wants of

customer by taking their engagement. For the company trust would be essential in perceiving better

experience and expected outcomes in using the internet and e-commerce. Further, the study describes

that websites and managing these trust factors is necessary for building trust with customer by which

they would be able to assess business challenges. We have identified that these factors help in creating

a trustful relation with customer that embrace the reputation of company. We have discussed the

importance of its establishment in assessing concerns of their customer and providing security, privacy

and under important factors. These factor aids to improve business performance and getting their

engagement in online shopping and internet using. The study also concludes the theories that can be

reviewed by the company in expanding the business overseas, building trust in e-commerce and

making betterment in consumer trust in online purchase of products or services.

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Questionnaire

Male Female

1. Age

A:18-28 years B:29-38 years C:39-48 years D:Above 50

2. What is your attitude towards the Internet shopping in purchasing products?

A: Positive B:Negative C:No opinion

3. How often do you purchase products from Internet?

A: One time in a mouth B: more then 10 times in a mouth C: Never

4. How do you find security and reliability factors important for trust in purchasing product on the Internet?

A: Not important B: Less important C: Pretty important D: Important E: Very much important

F: No idea

5. Does security help customer in payment and cash on delivery of their shopping ?

A: Not important B: Less important C: Pretty important D: Important E: Very much important

F: No idea

6. How privacy is important for entailing personal information while ordering ?

A: Not important B: Less important C: Pretty important D: Important E: Very much important

F: No idea

7. How much guarantee possess importance in returns and refunds

A: Not important B: Less important C: Pretty important D: Important E: Very much important

F: No idea

8. Give views on customer services ？

A: Not important B: Less important C: Pretty important D: Important E: Very much important

F: No idea

9. Provide your views on familiarity？

A: Not important B: Less important C: Pretty important D: Important E: Very much important

F: No idea

10. Give views about the website

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A: Not important B: Less important C: Pretty important D: Important E: Very much important

F: No idea

26