Trust Issues and Other Challenges Perceived by the Millennials While Shopping on Fashion E-

commerce Websites in Nepal

Abstract
The E-Commerce industry is expected to have a major influence on the economy of Nepal in

near future. The increased popularity of online shopping among Nepalese customers (especially

millennials), aroused the need to identify the potential factors affecting their online behavior.

Millennials are most active on digital media. They are trendsetters influencing the online

behavior of other groups as well. This article, therefore, aims to explore the trust & challenges

perceived by the millennials while shopping from fashion e-commerce websites of Nepal. This is

descriptive research with a quantitative study, conducted involving the sample respondents from

the population representing the study area. The data collection has been done from the primary

source with sample size (n) =160 following the convenience sampling method. The results show

Ecommerce Knowledge and Perceived Usefulness share a positive relationship with the Trust of

Millennials in fashion e-commerce stores while Perceived Risk and Ease of Use have no impact

on trust. The findings of this study would help in understanding the online behavior of Gen-Y

and identify the trust determinants which ultimately benefit the e-retail and e-commerce

businesses of Nepal at large. It will also help such businesses to formulate marketing strategies.

This study is an addition to the study of this kind in Nepal, and it sheds light on the different

determinants of consumer trust in online buying from Nepal's viewpoint.

Keywords: E-commerce, Fashion, Millennials, Customer Trust, Customer Buying Behavior

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1. Introduction

With the increasing advancement in technology and the rising popularity of the internet,

businesses nowadays are transforming their business functions from an offline setup to online

platforms. Electronic Commerce, generally known as E-commerce has evolved in extreme ways

redefining business and commercial activities around the globe. It has helped in establishing the

online presence of the businesses and transferring the core business functions online. Like all

other industries, e-commerce has made significant progress in the retail industry also. It is

expected to be a speedily emerging industry. Traditional brick-and-mortar stores have also begun

to follow the same by offering items and services on the internet (Sethi et al., 2018).

Nepal is also on the way to e-commerce success with the arrival of advanced cutting-edge

technologies and influence from the neighboring nations. Online shopping is sweeping the

Nepali market, aided by rapid, low-cost 3G and 4G internet technology facilitated by local

service providers. Similarly, user-friendly, interactive shopping apps and convenient payment

methods are paving the way for an unprecedented expansion in the e-commerce sector. Increased

possibilities for e-Commerce growth in Nepal have been directly attributed to expansion in the

information technology sector, as well as an increase in youth involvement.

The fashion/Apparel Ecommerce industry was taken into the investigation of this research for

three reasons. To begin with, clothing/apparel is the most commonly searched and purchased

item in Nepal e-commerce, and has consistently increased over the past few years. Secondly, the

apparel industry is extremely unpredictable; as a result, most company models rely on high sales

and must be able to respond swiftly to market changes while also offering rapidly changing

fashions. To retain their competitive advantage, fashion firms must be able to respond swiftly to

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changes in consumer demand; as a result, they must have a complete awareness of consumer

needs at all times.

A few years ago, many retailers assumed that consumers wouldn't turn to online shopping for

apparel and fashion products. However, as more consumers began to shop for fashion apparel

and other things online, such an assumption was proven false. According to data provided by

Kaymu, a famous digital e-commerce marketplace of Nepal, the online retail business is growing

in Nepal as a result of increased internet users. In 2015, the country's internet penetration rate

was just 17.4 percent. Now, with the increment in the figures, more than 2.6 percent of online

shoppers are interested in buying clothes and other associated fashion accessories. The e-

commerce business in Nepal is booming with the enhancement in infrastructures and

convenience. Any customer can now easily order the most recent and trendy products and

apparel. They don't have to go to multiple stores to compare products, nor do they have to worry

about finding time to shop or finding a parking spot. E-commerce enterprises simplify

transactions by allowing customers to buy anything and anytime with only a few mouse clicks.

With the expansion of the e-commerce industry, the country will discover a new and innovative

way to the smaller and attractive niche markets transforming the overall shopping experience of

the customers(Vaidya, 2019).

Before E-commerce, the consumers physically had to visit the retail outlets of the products

which they wanted to purchase. Every commercial transaction required direct and physical

interactions of the buyers and sellers. According to Tech Timez Online, nowadays around 22%

of the world shops from online shopping websites.

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Although the concept of e-commerce has attracted consumers of every demographics,

millennials collectively called Generation-Y are mostly fascinated by these innovations. U.S.

Census Bureau has defined the millennials as people of age group ranging from 18-34. These

groups are most active on digital media and use various social networks to get connected to the

ongoing global trends. Millennials, in addition to having grown up with modern technologies, are

more at ease in technological and online buying environments than previous generations. Over

half of those planning to buy anything online are millennials (Son et al., 2017). Millennials are

trendsetters who can influence the online behavior of other age groups and are also a huge

customer base for electronic retailers. The millennial generation is the largest population

generation in the world, and their spending power and willingness make them a desirable target

for fashion clothes brands (Rahman et al., 2020).

Out of the various products available in an online platform, Fashion clothing and apparel are

mostly bought by the Gen Y population. Because the majority of millennials have grown up with

the Internet and utilize it for product research and shopping, online fashion companies see them

as a very promising segment. For millennials, the Internet is the first source of the information to

search for things of their interest and to build trust within them (Naumovska, 2017). The most

used social networking websites like Facebook, Twitter, Instagram, Pinterest, etc. play a

significant role in positioning such fashion products online. Besides this, the nature of products

to be purchased, competitive prices, perceived ease of use, time saved, trust in online websites

are some major aspects considered by the potential online buyers (Katawetawaraks & Wang,

2011). Consumers can only have confidence in a company if they perceive the seller is capable

of providing and delivering goods of the expected quality. Another crucial concern at this time is

how consumers might build trust in an Internet shopping mall. To excel in the e-commerce

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 business and digital markets, electronic retailers must identify and address these aspects

sincerely.

Therefore, this study is done with a purpose to discover the potential factors influencing trust and

the other challenges perceived by the millennials while shopping on fashion e-commerce

websites in the context of Nepal and examine the relationships between them.

2. Literature Review

Millennials represent the largest generational population globally, and their purchasing

willingness and ability is making them an attractive segment for the fashion clothing industry

(Rahman et al., 2020). Besides, the millennials' preferences for various brands influence the

purchasing behavior of their families and peers, directly or indirectly (Tang & Chan, 2017).

Similarly, Brand awareness has a mediating, and brand schematics have moderating effects on

the millennial's purchasing behavior towards fashion clothing brands Rahman et al., 2020. A

study conducted by (Dharmesti et al., 2019) showed that the online purchase intention of young

consumers in Australia has positively influenced their attitude towards online shopping

processes. This research finding assisted the online vendors to cater and appeal to the demand of

young segments of buyers. Similarly, product variety and online reviews also significantly

influence the shaping of online purchase intention especially in the case of online fashion stores.

David Gefen and his colleagues' (2003) constructed a table providing a summary of the prior

conceptions of trust and the various trust components. Trust in customers is only ensured when

the customers are provided and delivered the goods of the quality expected by them. Research

done by (Awal & Khanna, 2019) has confirmed that perceived reputation, perceived security,

and privacy, website design, the propensity to trust, experience in internet usage are strong

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determinants of trust while shopping in e-commerce websites. Nowadays, consumers are more

likely to purchase from e-commerce platforms and are willing to face the risk arising out of

online transactions (Hidayanto et al., 2012).

(Hernández et al., 2011) examined whether people's socioeconomic variables, such as age,

income, and gender have an impact on their internet purchasing habits. The people who were

studied were frequent e-shoppers who buy things on the internet regularly. The findings of their

study reveal that socioeconomic factors do not affect the influence of previous internet use or e-

commerce perceptions; in other words, they do not influence the behavior of experienced e-

shoppers.

Due to the uncertainty in online buying of a product or service, and the anticipated loss that

could result in brings other challenges as well. Perceived risk, therefore can be defined as a

consumer’s expectation of adverse consequences and uncertainty while engaging in any online

purchasing activity (Dowling & Staelin, 1994).

Security concern relates to the fear of security in technologies used in e-commerce websites. The

online store's system software has the potential to be attacked or hacked by an invader, raising

concerns that customer data and information could be stolen and exploited (Hidayanto et al.,

2012). Similarly, privacy concern relates to the fear of personal data and information shared

while transacting being misused by people except for buyers.

Similarly, perceived reputation is a kind of indirect information. Information through indirect

means cannot provide consumers with as much belief as direct information which is collected

during an actual online shopping experience. However, for those consumers who are short of

purchasing experience on e-commerce websites, indirect information works as a sort of piece of

key information to establish their trust (Kamalul Ariffin et al., 2018).

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Advertisement, promotion, and brand reputation are capable of arousing the desire to buy and

enhance the motives of the customers. The consumer tends to compare the prices and post

purchasing benefits after assessing the contents of promotional activities (Vidya & Selvamani,

2019). Trust has a significantly strong relationship with purchasing intention. Greater the

consumer trust greater would be the motivation of customers to purchase on E-commerce

websites(J. Kim & Park, 2007).

Dimensions such as Security of customer’s financial information and Privacy of the customer

personal data, perceived reputation, propensity to trust, E-commerce website design, brand

recognition, and the customer experience in internet usage have been established as strong

determinants of trust in online shopping (Awal & Khanna, 2019).

Research is done by (J. Kim & Park, 2007) with sample size(n)=182 has resulted in a significant

impact of perceived ease of use, e-commerce knowledge and perceived risk in the trust.

However, the relationship of the trust with perceived reputation was seen to be non-significant.

A model by (Connolly & Bannister, 2008) has brought the most important collection of trust

determinants from several strands of previous research and presented them as a single entity that

could guide the empirical investigation. It also puts them to the rigorous testing that is required

for this study. The measurement model, for example, has 30 measures that assess trust

antecedents such as privacy controls, perceived integrity, vendor's competence, perceived

security, personality, perceived risk, and so on.

(Moshrefjavadi et al., 2012) studied the financial risks associated with online purchasing, as well

as their impact on customers' intents to purchase things online. Financial risks, product hazards,

convenience risk, non-delivery risk, return policy, and attitude were among the variables.

Similarly, (Nadeem et al., 2015) looked into how online buying, peer recommendations, and the

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quality of website service affect consumer trust, attitudes, and loyalty intentions. The research

was done, and the constructs were validated using factor analysis. Consumer behavior was

examined separately in regards to getting information and purchasing behavior in the research

model given by (Pavlou & Fygenson, 2006). Both of them were found to be influenced by

perceived risk and trust, consumer attitude, social and cultural influence, individual online skills,

and technology-related variables such as perceived usefulness and ease of use, and website

features.

Research Gap

Internet shopping or Electronic Commerce in Nepal is a relatively new concept with enormous

potential to grow as an independent industry. When the businesses go online, it invites ample

challenges and issues together. In Nepal, electronic commerce has just begun to flourish and gain

its customer's trust. Also, a large part of e-commerce transactions is done by the most active

market segment which includes Gen Y. Gen Y I.e. Millennials are most active on digital media

and use various social networks to get connected to the ongoing global trends. They are the

people of the age group with high income having high purchasing power and willingness to pay.

Millennials are trendsetters who can influence the online behavior of other age groups. However,

they are also sensitive to trust and risk factors while making online purchases. Although similar

researches were conducted in many countries in past, Nepal's e-commerce market is yet to be

explored in these aspects. The significant role of trust factors, their relative influence on

consumers buying patterns, the increasing popularity of electronic commerce in the fashion

industry as well as the lack of this kind of research in Nepal are the main reasons for conducting

this research in the context of Nepal.

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Objectives of the Study

The online shopping trend has just started to grow in Nepal. With the gradual increase in internet

users, user-friendly online shopping websites, and interactive shopping applications the demand

for online shopping has immensely evolved over the past few years. However, the e-commerce

trend and online shopping industry in Nepal are still unable to penetrate the anticipated span of

customers. There are various factors actively regulating the consumer's perception and

propensity to trust internet buying. Thus, this study is done with the objectives which can be

listed as below:

1. To study trust determinants and online behavior of consumers across different demographics

such as age group, income level, and gender.

2. To explore the factors that influence customers' trust in online purchasing and e-commerce.

3. To help in developing a notion of consumer trust specific to the online shopping in fashion e-

commerce websites of Nepal.

4. To proliferate the e-retailers involved in the fashion industry of Nepal and to provide the basis

to formulate marketing and business decisions.

Variables under Study

The various variables considered in this study can be understood as below:

Trust

(H.-W. Kim et al., 2004) defined trust as the conviction that the other person in an exchange

relationship will behave in a trustworthy manner. In an online platform, neither of the parties;

buyer or seller can have one-on-one interaction with the each other directly. There is always a

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sense of fear that the other party will default the transaction causing economic loss to the other.

This is where the essence to study the trust factor in an e-commerce transaction takes place.

Similarly, apparel is a dynamic product category containing behavioral and psychological

characteristics when compared to other products. Consumers who buy hedonic products see

more threats than those who purchase utility products since hedonic products can be bought on

the spur of the moment and offer a wide range of possibilities throughout the product search

(Kushwaha & Shankar, 2013).

E-commerce Knowledge

E-commerce knowledge refers to a customer's understanding of e-commerce-related

technologies as well as the fundamental knowledge required to use e-commerce. This type of

expertise encompasses the know-how and ability to complete an electronic transaction activity,

as well as the ability to use the numerous technologies and methodologies needed to complete an

e-transaction. Consumer trust can only be built when customers believe that their competencies

and awareness can equip them to perform Internet buying (J. Kim & Park, 2007).

Perceived Risk

Perceived risk by the customers includes the fear of disclosing personal information shared on E-

commerce websites and the fear of possible leakage of financial information like debit and credit

card details while making online payments (Salam et al., 2005). Previous research has revealed

two alternative perspectives on perceived risk: (1) the uncertainty of the outcome following an

online purchase of a product or service, and (2) the projected loss that could arise from the

purchase. The system software of the online store has the potential to be hacked or attacked by

the intruder, thus there are fears that the data and information of consumers are at risk of being

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stolen and misused (Hidayanto et al., 2012). According to (Lee & Turban, 2001), the perceived

financial risk of losing money, performance risk of a product failing to function, physical risk of

a product causing harm, psychological risk relating to self-satisfaction after receiving the

product, and social risks are all examples of perceived risks encountered during the purchasing

process which arises from the negative feedback of previous buyers or the close acquaintances.

These all come under the causes for perceived risk experienced by customers.

Perceived Reputation

Perceived reputation talks about the seller's reputation, goodwill, and ability. It is the extent to

which the customers trust the integrity of an online seller(Vaidya, 2019). The perceived

reputation of the customers helps the businesses in both ways; initially, it induces the economic

transaction and later with the word of mouth publicity. It can also relate to a customer's

attribution of a vendor on the basis of information gathered through their friends, relatives,

coworkers, and other sources. (Son et al., 2017) has mentioned in his research that online

customers nowadays are increasingly concerned about the content quality of internet reviews

also. When a review is timely, relevant, accurate, and complete, it is considered beneficial and

inherits trust. When considering the authenticity of online apparel product evaluations, reviewers'

fashion experience and review detail are crucial elements to consider.

Perceived ease of use (PEOU) and Perceived usefulness (PU)

These two are the factors that influence the behavioral intention of the customers regarding the

use of technologies in online markets. In a digital environment, many of the limitations that used

to exist in traditional commerce have been eliminated. Consumers will be more likely to conduct

this type of transaction if it is made easier for them to do so. As a result, online purchasing

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becomes a novel and powerful type of transaction (J. Kim & Park, 2007). Perceived usefulness in

E-commerce, talks about the extent to which any customer believes that using a particular online

website would enhance their digital shopping experience. While, Perceived Ease of Use (PEOU)

denotes the degree to which the customer believes the particular digital technology and its

interface are easy to navigate and understand (Charness & Boot, 2015). User acceptance in an

online platform is also known as Internet trust, which is distinct from offline trust in several

respects. Perceived Ease of Use believes online trust is based on the quality of Web site, Internet,

or technology. In terms of establishing customers' trust, a company's website should be

comparable to a store and outperform the functions provided by the physical store

(Prompongsatorn & Combs, 2012).

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3. Theoretical Framework

Based on the review of literature and need of the research, the theoretical framework was
developed and presented as below:

Independent Variable Dependent Variable

E-commerce Knowledge
(EK)

Perceived Risk (PR)

Perceived Reputation
Trust
(PRep)

Perceived ease of use

(PEOU)

Perceived Usefulness
(PU)

Figure 1: Theoretical Framework

Proposed Hypothesis

Hypothesis 1: Millennials' knowledge of e-commerce has a significant positive impact on

gaining their trust and overcoming other challenges on fashion e-commerce websites.

Hypothesis 2: Perceived risk factors associated with e-commerce transactions have a significant

negative impact on gaining trust and overcoming other challenges of millennials on fashion e-

commerce websites.

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 Hypothesis 3: Reputation of the website has a significant positive impact on gaining the trust of

millennials in fashion e-commerce websites.

Hypothesis 4: Perceived ease of use has a significant positive impact on gaining the trust of

millennials in fashion e-commerce websites.

Hypothesis 5: Perceived usefulness has a significant positive impact on gaining the trust of

millennials on fashion e-commerce websites.

4. Research Design

a. Methodologies of Study

The methodology applied for this study is quantitative analysis focused. This is an empirical

study with a descriptive nature where the primary data are collected on basis of convenience

sampling. There were set of questionnaires that were provided to the respondents to fill. This

comes under the primary source of data collection. Whereas, the various secondary sources of

databases are also used to conduct literature reviews and to reach out the findings.

b. Data Collection

The sample size for this study is taken n=160. The questionnaire was circulated to the millennials

of age group 20-39 residing in Kathmandu City of Nepal, through the online google forms. The

questionnaire contained two parts. Only the respondent who has had an online shopping

experience before was qualified for the survey and considered eligible to fill the second part of

the questionnaire. The questionnaire contained the five demographic questions and nineteen

questions on each variable prepared on the Likert scale. This study also uses Statistical Package

14
for Social Sciences (SPSS) for data processing and Correlations, ANOVA, & Chi-Square tests

are used for analyzing the survey results.

Among 160 respondents, 52.5% were males while 47.5% were females. The respondents consist

of 41.25% married people, 57.5% unmarried and only two consisting divorced and widowed.

Most of the respondent's highest qualifications were Graduation followed by Post Graduation

and Intermediate level. 38.13% and 51.88% of the respondents are students and the working

population respectively.

Number Percentage
Gender
Female 76 47.50%
Male 84 52.50%
Marital Status
Divorced 1 0.63%
Married 66 41.25%
Unmarried 92 57.50%
Widowed 1 0.63%
Highest Education Qualification
9th class 1 0.63%
Bachelor 2 1.25%
Diploma 21 13.13%
Graduate 91 56.88%
High School 2 1.25%
Post Graduate 41 25.63%
Under SLC 1 0.63%
Undergraduate 1 0.63%
Profession
Business 9 4.38%
Student 61 38.13%
Unemployed 9 5.63%
Working 83 51.88%
Table 1 Demographics of the Respondents

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5. Findings

a. Reliability Test

To check the reliability of the research Cronbach Alpha is used. The values of all variables from

the analysis were found to be greater than 0.7 except for the Perceived Reputation. Perceived

Reputation (Per. Rep) with Cronbach Alpha value 0.568 (less than 0.6) shows its non-reliability

with the scale and therefore is excluded from the further analysis.

Std.
Variables Mean N Cronbach's Alpha
Deviation
Trust1 3.84 0.650 160
0.794
Trust Trust2 3.74 0.647 160
Trust3 3.51 0.991 160
EK1 4.26 0.705 160
Ecommerce 0.763
Knowledge(EK) EK2 4.17 0.693 160
PR1 3.12 0.893 160
0.848
Perceived Risk(PR) PR2 3.01 0.918 160
PR3 3.67 0.742 160
Per. Rep
4.08 0.740 160
Perceived 1 0.568
Reputation(PRep.) Per. Rep
4.05 0.838 160
1
PEOU1 4.16 0.789 160
Perceived Ease of Use PEOU2 4.28 0.726 160 0.817
(PEOU) PEOU3 4.16 0.751 160
PEOU4 4.11 0.790 160
PU1 4.19 0.711 160 0.7
Perceived Usefulness (PU)
PU2 4.24 0.705 160
Table 2 Reliability Test Results

b. Chi-Square Test
Chi-Square Tests
Value df Asymptotic a. 5 cells (41.7%) have a
Significance count that is fewer than
(2-sided) 5. The estimated
Ecommerce Pearson Chi- 50.911a 6 0.000 minimum count is.08.
Knowledge Square
Likelihood Ratio 48.672 6 0.000

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 Linear-by-Linear 37.442 1 0.000
Association

N of Valid Cases 160

Perceived Pearson Chi- 15.920a 9 0.069 7 cells (43.8%) have an
Risk Square anticipated count of less
than five. The estimated
Likelihood Ratio 18.311 9 0.032
minimum count is.06.
Linear-by-Linear 3.975 1 0.046
Association

N of Valid Cases 160

Perceived Pearson Chi- 13.650a 9 0.135 9 cells (56.3%) have a
Ease of Use Square count that is less than 5.
The estimated minimum
Likelihood Ratio 15.542 9 0.077
count is.01.
Linear-by-Linear 10.965 1 0.001
Association

N of Valid Cases 160

Perceived Pearson Chi- 24.417a 9 0.004 9 cells (56.3%) have an
Usefulness Square expected count of less
than 5. The minimum
Likelihood Ratio 20.939 9 0.013
expected count is .01.
Linear-by-Linear 13.887 1 0.000
Association

N of Valid Cases 160

Table 3 Results of Chi-Square Test

Chi-
Asymptotic
Factors Square Interpretation
Significance(2sided)
Value
Ecommerce p-value=0.000<0.05; It shows
50.911 0.000
Knowledge significant relationship.
p-value=0.069>0.05 ;It shows
Perceived Risk 15.920 0.069
insignificant relationship.

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 Perceived Ease of p-value=0.135>0.05 ; It shoes
13.650 0.135
Use significant Relationship
Perceived p-value=0.004 < 0.05 ; It shows
24.417 0.004
Usefulness significant relationship
Table 4 Analysis of Chi-Square Test

c. Analyzing the impact on dependent variable through the result of Correlation Coefficients

Correlation Analysis is the measure of how closely the two variables are related. It shows the

association between variables.

Correlations
Trust EK PR PEOU PU
Correlation
Trust 1.000 .497** -0.146 .248** .270**
Coefficient
Sig. (2-tailed) 0.000 0.065 0.002 0.001
N 160 160 160 160 160
Correlation
EK .497** 1.000 .184* .211** .271**
Coefficient
Sig. (2-tailed) 0.000 0.020 0.008 0.001
N 160 160 160 160 160
Correlation
PR -0.146 .184* 1.000 0.082 0.071
Coefficient
Sig. (2-tailed) 0.065 0.020 0.303 0.372
N 160 160 160 160 160
Correlation
PEOU .248** .211** 0.082 1.000 .505**
Coefficient
Sig. (2-tailed) 0.002 0.008 0.303 0.000
N 160 160 160 160 160
Correlation
PU .270** .271** 0.071 .505** 1.000
Coefficient
Sig. (2-tailed) 0.001 0.001 0.372 0.000
N 160 160 160 160 160
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
Table 5 Correlation Analysis

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 The various output from the correlation analysis are as follows:

i) The coefficient of correlation between Trust and Ecommerce Knowledge is 0.497 which shows

a positive and significant relationship at a 99% confidence level.

ii) The coefficient of correlation between Trust and Perceived Risk is -0.146 which suggests that

there is no significant relationship between these variables.

iii) The coefficient of correlation between Trust and Perceived Ease of Use is 0.248 which shows a

positive and significant relationship at a 99% confidence level.

iv) The coefficient of correlation between Trust and Perceived Usefulness is 0.270 which shows a

positive and significant relationship at a 99% confidence level.

Now, testing hypothesis at significance level 0.05, we get,

Independent Dependent
Hypothesis Testing
Variables Variable
Ecommerce As the p-value(0.000) is comparatively less than the
Trust
Knowledge (EK) critical value (0.05), H1 is accepted.
Perceived Risk As the p-value (0.065) is greater than the critical value
Trust
(PR) (0.05), there is insufficient evidence to accept H2.
Perceived
H3 is eliminated considering the results of the Reliability
Reputation Trust
Test.
(PRep.)
The p-value (0.002) is less than the critical value (0.05).
Perceived Ease of
Trust However, H4 is eliminated as the Chi-Square test showed
Use (PEOU)
no significant relationship between these two variables.
Perceived As the p-value(0.001) is less than the critical value (0.05),
Trust
Usefulness (PU) H5 is accepted.
Table 3 Hypothesis Interpretation

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d. Analyzing the fitness of the model through ANOVA

R R Square Adjusted R Square Std. Error of the Estimate

.581a .337 .320 .527

Sum of Mean
Model df F Sig.
Squares Square
Regression 21.913 4 5.478 19.719 .000b
1 Residual 43.062 155 .278
Total 64.975 159
a. Dependent Variable: Trust
b. Predictors: PU, PR, EK, PEOU
Table 4 ANOVA Table

Here, in the above table, regression value is 21.913 and R square is 0.337 which shows the

model explains 33.73 % of the total change independent variable i.e. Trust caused by

independent variables i.e. Ecommerce Knowledge (EK), Perceived Ease of Use (PEOU),

Perceived Risk (PR), Perceived Usefulness (PU). The significance of ANOVA is less than the

critical value (i.e. 0.05) which suggests that there is a significant relationship between the

dependent variable (Trust) and independent variables (EK, PEOU, PR, PU) as a whole.

Unstandardized
Model Significance
Coefficients
B Std. Error
(Constant) 1.311 0.388 0.001
EK 0.471 0.069 0.000
PR -0.194 0.050 0.000
PEOU 0.106 0.071 0.139
PU 0.121 0.074 0.101
Table 5 Unstandardized Coefficients and Standard Error

The above table shows, the changes in the dependent variable (Trust) due to the changes in one

unit of independent variables (EK, PEOU, PR, PU). The table indicates the following:

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 i) Holding all independent variables constant, a change in Ecommerce Knowledge (EK) by one

unit leads to a change in Trust by 0.471 units.

ii) Holding all independent variables constant, a change in Perceived Risk (PR) by one unit leads

to a change in Trust by -0.194 unit.

iii) Holding all independent variables constant, a change in Perceived Ease of Use (PEOU) by one

unit leads to a change in Trust by 0.106 units.

iv) Holding all independent variables constant, a change in Perceived Usefulness by one unit

leads to a change in Trust by 0.121 units.

6. Discussion

This study explores the factors leading to trust issues perceived by millennials while shopping on

the e-commerce website of Nepal. The results of the correlational analysis show the positive and

significant relationship between E-commerce Knowledge, Perceived Ease of Use, and Perceived

Usefulness with Trust. This can be interpreted as the change in these variables will lead positive

influence on Trust of Millennials in Ecommerce websites. The more the people of Gen-Y feel

they are aware of the e-commerce transaction process and possess sound knowledge on this, the

more trust they will have in the e-commerce Websites. The higher they realize the Ecommerce

process is easy to operate and is beneficial for them against offline shopping higher will be their

trust. On the contrary, Perceived Risk has a significant negative relationship with Trust leading

negative influence on their relationship. This means millennials tend to lose trust in Ecommerce

transactions if they find it risky while transacting or in any other terms.

Similarly, The Chi-Square test done in the latter part of the research indicates the relationship

between the variables as well as their significance. The Chi-Square test, here, showed the

significance of Ecommerce Knowledge (EK) and Perceived Usefulness (PU) with Trust while

21
the insignificant relationship of trust with Perceived Risk (PR) and Perceived Ease of Use

(PEOU). Similarly, the testing hypothesis with α= 0.05 and evaluating it with a p-value of each

variable laid down enough evidence to accept H1, H4, H5, and insufficient evidence to accept

H2. Here, H4 is eliminated from the study despite enough evidence to support it with correlation.

It is due to the results of the Chi-Square test, which showed no significant relationship between

the Perceived Ease of Use (PEOU) with Trust, hence H4 is also rejected.

The findings of this study are partially in line with those of a prior study done by

(Prompongsatorn & Combs, 2012). Their study found no relationship between the consumer’s

perceptions of reputation, privacy, ease of use, usefulness with trust except perception of

integrity. They discovered the most influential factor for consumer trust in online shopping is the

integrity of the website. Here, perceived riskiness can be referred to as the perception of integrity

related to e-commerce businesses. In general, integrity and coherence are supposed to be crucial

features of e-commerce websites, however, the findings of this research didn't show the

relationship between perceived riskiness and the trust of customers in e-commerce businesses.

The payment and the information security systems of Nepal ensure high data security with the

joint effort of Nepal Rastra Bank(NRB) and the Government of Nepal. Also, the reactiveness to

the customer’s grievances to large extent is addressable and online businesses are handling it

very diligently with fair returnable policies and multiple discounts/offers. This could be the

reason for Nepali customers to feel safe in buying apparel from fashion e-commerce websites.

(Dang et al., 2018) in their research found that customers' attitudes regarding online shopping

behavior are more firmly and positively connected with convenience since customers may

receive a broad variety of products, make speedy transactions, save time, avoid long lines, and

pay with ease while shopping from their homes and anyplace. This can also be understood as the

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perceived usefulness of the customers. The findings of this research confirm the same.

Acceptance of H5(i.e. Perceived usefulness has a significant positive impact on gaining trust),

therefore shows the essence of e-commerce in terms of variety in offerings, reduction in

transaction time, fast service, and cutting off other hassles. It can be related to the Nepali context

as the customers of Nepal especially millennials demand the service in less time than possible.

They avoid going to the physical store and ignore the processes which make them wait and

suffer. They are even ready to pay more in many instances if they find easier and time-saving

ways to shop. Thus, they tend to trust e-commerce websites more given the perceived

usefulness.

Similarly, this research has provided sufficient evidence to reject H4(i.e. Perceived ease of use

has a significant positive impact on gaining trust). For this variable, the findings of this research

are disregarded by the results of (J. Kim & Park, 2007). As per them, customers perceive online

shopping from any website or online mall as a portal that offers quick search, with a simplified

buying process, quick access, and easy payment, which make them more likely to trust it and

make purchases there.

As prior research has suggested that e-commerce knowledge is a significant component in

creating trust in Internet shopping, this study also found it to be a key component of trust. This

conclusion is justifiable in the case of Nepal. Unlike India or other advanced nations, only a

small percentage of Internet users in Nepal have a thorough understanding of the e-commerce

method and processes required to place strong trust in an e-commerce website especially in

fashion e-commerce.

In contrast to all other prior research, this study doesn't provide sufficient evidence to support the

relationship of the perceived risk in e-commerce websites with trust. Uncertainty about the
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 purchasing process, a sense of a lack of guarantee on quality, concerns about privacy, and other

factors are although a matter of concern for many online customers, this study fails to show

relationships among them.

There are few limitations of this study as well. First, the study could have included a large

sample. Due to hindrances in data collection caused by the mobility restriction in this pandemic

situation, the sample size was kept low (i.e.=160). Similarly, to have an overall view of the e-

commerce industry of Nepal, all other age groups and places could also be considered than just

the Gen-Y population of Kathmandu City. Finally, while the determinants of trust investigated in

this study have been identified as important by the literature, they do not attempt to represent the

entire range of trust causes. The impact of different factors like consumer feelings, emotional

connect, customer service, store varieties were not considered in this investigation. Thus, future

research may concentrate on these topics as well.

7. Conclusion and Implications of the Study

The findings of this study suggest several managerial contributions that will aid in a better

understanding of the aspects that influence customer’s online shopping behavior. To begin with,

because the online buying experience is so important, marketers can design strategies and

enhance a customer's online engagement to improve the experience. The factors described above

can be leveraged to drive marketing strategies and segmentation of online shoppers for the

advantage of businesses and to improve customer loyalty by e-retailers and marketers who are

interested in improving purchase and repurchase intentions of consumers to buy online.

Convenience is a crucial variable, implying that online retailers should constantly strive to

improve their e-commerce websites and applications to make them more comfortable and easy to

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use for their customers. Furthermore, customers are driven to technology that may save them

time and effort. Therefore, the website must be user-friendly and capable of promptly processing

the customer's request. As a result, customers will be able to complete transactions more rapidly,

which will benefit them both.

Given the trust to have a substantial impact on purchasing intent, e-commerce businesses and

government should devise some strategies to increase customer trust to accelerate the growth of

the e-commerce business sector in Nepal. Below are a few of the recommendations which are

based on the outcomes of this research.

1) The Nepal government and E-commerce service providers should provide Internet and e-

commerce education and training, as well as associated support to aware more people

especially the Gen-Y population for increasing their engagements in an online platform. This

will go a long way toward gaining the trust of customers.

2) Different efforts should be implemented to lessen consumers' fear depending on their risk

perceptions.

3) To fulfill and exceed consumers' expectations for easy-to-use Web sites, systems utilized in

the e-commerce shopping platforms should be updated regularly.

4) Since Trust is so essential in e-commerce, the government and e-commerce service providers

must include consumer trust enhancement in their aims when taking steps intended to increase

customer purchases on their sites. Consumers' lack of e-commerce knowledge, fear of

possible threats, and perceived discomfort during online buying should all be addressed in

ways that contribute to creating and increasing customer confidence.

5) Millennials are growing up in a world where technology allows them to personalize and

receive immediate gratification in every aspect of their lives. As a result, marketers should

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 update their website content regularly, provide the 3D image of the products, update the

payment system and ensure safety for each online transaction.

This research is useful in both practical and theoretical ways. It gives further insight into the

nature of the trust construct as seen in the behavior of online shopping users and potential. This

research adds to our knowledge of the phenomenon in a variety of ways. It is the addition to the

study of this kind in Nepal, and it sheds light on the different determinants of consumer trust in

online buying from Nepal's viewpoint.

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