4/10/24, 4:24 PM Determinant Factors Affecting Customer Satisfaction among Filipinos in Lazada Online Shopping during COVID-19 Pandemic: A S…

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Determinant Factors Affecting Customer Satisfaction among Filipinos in Lazada

Online Shopping during COVID-19 Pandemic: A Structural Equation Modeling
Approach
Publisher: IEEE Cite This  PDF

Yogi Tri Prasetyo ; Darlene Gayle D. Dela Fuente All Authors 

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Abstract Abstract:With the rise of online shopping during COVID-19 pandemic in the Philippines, it is important to understand
the buying decision among Filipinos. The purpose of this study... View more
Document Sections
 Metadata
I. Introduction
Abstract:
II. Methodology With the rise of online shopping during COVID-19 pandemic in the Philippines, it is important to understand the buying
decision among Filipinos. The purpose of this study was to determine the factors affecting customer satisfaction in
III. Results online shopping. A valid response of 251 Filipinos participated in the empirical study. Structural Equation Modeling
(SEM) was used to validate the measurement model and to test the causal relationship in the model. The result
IV. Discussion
revealed that products/services, pricing, consumer, and technological were significantly influenced the consumer
V. Conclusion buying decision which also affect customer satisfaction. Surprisingly, operational was found not significant as a
predictor for buying decisions and customer satisfaction. The SEM derived from the study could be beneficial to e-
Authors commerce platforms and businesses which can contribute to a better understanding of the determinants that affect
buying decision and customer satisfaction.
Figures
Published in: 2020 7th International Conference on Frontiers of Industrial Engineering (ICFIE)
References

Date of Conference: 27-29 September 2020 DOI: 10.1109/ICFIE50845.2020.9266734

Citations
Date Added to IEEE Xplore: 03 December 2020 Publisher: IEEE
Keywords
 ISBN Information: Conference Location: Singapore
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SECTION I.
Introduction
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4/10/24, 4:24 PM Determinant Factors Affecting Customer Satisfaction among Filipinos in Lazada Online Shopping during COVID-19 Pandemic: A S…
Online shopping is booming in the Philippines due to the strong improvement of the internet,
mobile applications, and various web developments. It is an easy solutionContents
for the busy life and
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COVID-19 pandemic that the world is facing today. Based on a study conducted by Statista, the
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Philippines ranks third place in the world's fastest-growing e-commerce markets outlasting its
neighbor country in Southeast Asia [1]. In addition, a study conducted found that Filipinos shopped

online for the convenience of not having to go to and line up at brick-and-mortar stores (58%),
better prices (47%), and deals (46%) [2].

Analyzing the consumer buying decision is a main part of e- commerce success. A study argued that
without knowing the factors encouraging online shopping it is difficult to develop e-commerce [3].
E-commerce needs to identify the factors needed to achieve and what criteria they should be
consistent with. On a conducted research where it sought to identify features of people making
online purchases shows that knowledge exploration was defined as an individual's actions in
shopping online [4]. A study conducted examining online shopping shows that shopping
experience and motivations lead to high purchase intention [5].

Another research showed that factors of online shopping include attitude and a change in
customers' attitudes towards making online purchases [6]–​[7]. On the contrary, a study shows that
online shopping is significantly influenced by the perception of risk, enjoyment, social influence,
and online advertisement [8]. Furthermore, customer feedback, trust, perceived usefulness, and
information quality are factors that most influence consumers [9]–​[10]. A study revealed that
another factor includes the word-of-mouth, loyalty, and post-recovery satisfaction [3]. Another
study suggests that the price, availability, scarcity, product details, conditions, and social media
affect buying decisions [11]. In an empirical examination conducted in online shopping towards
customer satisfaction, the result revealed that loyalty, price insensitivity, quality, time, and
information availability significantly affect satisfaction. [12]–​[13].

This research study is intended to determine the factors affecting customer satisfaction in online
shopping among Filipinos during COVID-19 pandemic. With the growing craze in online shopping,
the study aims to bridge the gap by determining the relationship between the factors, buying
decisions, and customer satisfaction.

Lazada is the most talked e-commerce site on the Philippine social media [2]. To make it more
logical, identification of the factors that significantly influence the consumer when buying online
and their satisfaction can help Lazada to overcome obstacles and strive to provide a convenient
service to consumers, which represents a key driving force in enhancing competitiveness and
advantages.

SECTION II.
Methodology
This study discussed the consumer buying decision in online shopping. Lazada App was chosen
platform. Lazada is the most frequently used e-commerce app among Filipinos when shopping
online [2]. Specifically, this study focused on enhancing the Customer Satisfaction among Filipinos
in online shopping during COVID-19 pandemic. Other e-commerce platforms were not included in
this study.

A. Instrument Design
The instrument contains 2 parts, the first part using a nominal scale that collects the basic
information about consumer characteristics to guarantee its eligibility including gender, age,
marital status, employment status, monthly income, and frequency of online shopping in a month.
The second part introduced the factors influencing consumer buying decisions [3].

B. Data Collection
The study focuses on a sample of Filipinos who shops online using the Lazada App. To obtain
responses, an online survey was deemed the most appropriate collection method to reach a wider

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4/10/24, 4:24 PM Determinant Factors Affecting Customer Satisfaction among Filipinos in Lazada Online Shopping during COVID-19 Pandemic: A S…
range of Filipino online shoppers who are using Lazada. Moreover, a snowball technique was also
used. This sampling technique was used to recruit participants as it gives Contents
access to an
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interconnected network of people and is known to be economical, efficient, and effective [5], [14].
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Out of the 260 responses received from the online survey, 9 were invalid due to lack of experience in

online shopping on Lazada, resulting in a valid sample size of 251. 111 male and 140 female range
from below 18 years old to above 50 years old took part. The survey was voluntarily undertaken by
all participants. Table I shows the descriptive statistics of the respondents.
C. Questionnaire
Table II shows the factors influencing the consumer buying decision [3]. The first factor consisted
of questions regarding knowledge exploration and being an advanced user in technology defined as
Technological Factor (T) [4]. The second factor is Operational (O) which focuses on security, trust,
and informative online shopping experience [15], [16]. The third factor focuses on ease of use,
usefulness, shopping experience, and consumer reviews identified as Consumer Factors (C) [3],
[12], [16]. The fourth factor consists of the availability of product information, product types, and
services identified as Products/Services (P/S) [10]. The fifth factor focuses on discounts,
promotions, and sales identified as Pricing Factor [3], [5], [17]–​[18]. Buying Decisions (BD)
which focuses on continuance use intentions and decisions [13], [19]. And lastly, the Customer
Satisfaction (CS) towards online shopping in Lazada among Filipinos. The items were measured on
a 5-point Likert Scale where 1 is “strongly disagree” and 5 is “strongly agree.”

Table I. Descriptive statistics of the respondents (N = 251)

D. Structural Equation Modeling

This study uses Structural Equation Modeling (SEM) to assess the measurement model. SEM is a
multivariate technique increasingly found in scientific researches to test and evaluate causal
relationships that combine factorial and regression analysis [20]–​[22]. SEM is composed of two
elements: (1) the relationship between the endogenous and exogenous latent variables to evaluate
the causal effects; (2) the relationship between latent variables and observed variables [23].

To assess the fit of the research model, the SEM was derived using SPSS 26 and AMOS 20 with the
Maximum Likelihood (ML) estimation approach [22]. The following statistics were used to
evaluate the hypothesized model and observed data: the full model test and a goodness of fit test

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[24]–​[25]. The criteria for full model test, normed Chi-Square (χ /df) of less than 2.0 (p-value
2

 > 0.05) indicated no significant difference between the observed sampleContents

and SEM estimated
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covariances matrices [22]. The Goodness of fit was measured by Incremental Fit Index (IFI),
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Tucker- Lewis Index (TLI), and Comparative Fit Index (CFI), values greater than.90 indicated
good fit [19]. Root Mean Square Error of Approximation (RMSEA) was derived, lesser than


0.07 value indicated a good fit. [22]. Finally, Goodness of Fit (GFI), and Adjusted Goodness of Fit
(AGFI) was derived to verify the reliability and validity of the hypothesized model, the threshold
value is 0.90 [25].

SECTION III.
Results

Table II. Parameter estimates and goodness of fit

There were two significant items to represent the Technological Factor since the factor loadings are
greater than 0.70. Those were knowledge exploration (0.78) and product information for
comparison (0.76). Meanwhile, one indicator under Operational was found significant which is the
relevant information provided by the site (0.78). Regarding Products/Services, two items found
significant those were useful information about items (0.77) and easily find product specifications
(0.75). One indicator to represent Consumer Factor was found significant which is a better
experience in navigating the store (0.70). For Pricing, four among five indicators were found
significant. Those were lower price (0.71), shopping online during a sale (0.70), promotions and
discounts (0.80), and promotional information tailored to preferences (0.79). Same with Buying
Decision, four among five indicators were found significant. Those were better purchase decisions
(0.80), the intention of continuance use (0.80), the possibility of using the ecommerce site in
Online Shopping (0.79), and continuance of online shopping (0.87).

Interestingly, all indicators in Customer Satisfaction were found significant. Those were satisfaction
in previous online shopping (0.79), use of e-commerce site more often (0.89), satisfaction with the

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site which leads to the continuation of buying (0.89), recommendation (0.83), satisfaction in
Contentsexpectation in
browsing and product comparison (0.89), and meeting or exceeding the customers'
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online shopping using the e-commerce site (0.82).
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Fig. 1 shows the initial model of factors affecting customer satisfaction which shows that the 
Operational Factor found not significant as a latent variable or a predictor in consumer buying
decision (β = −0.01). The derived value is extremely lower compared to the other latent variables.


Figure 1.
Initial model of factors affecting customer satisfaction.

Fig. 2 shows the final model of factors affecting customer satisfaction. Technological Factor (
β = −0.17 ), Consumer Factors (β = −0.65 ), Products/Services (β = 1.00 ), Pricing (β = 0.71 ),
and Buying Decision (β = 0.94 ).


Figure 2.
Final model of factors affecting customer satisfaction.

As presented in Table III, the normed Chi-Square (χ /df) is 2.1 which is a little bit higher than the
2

accepted value. The Incremental Fit Index (IFI), Tucker-Lewis Index (TLI), and Comparative Fit
Index (CFI) all reveal acceptable results as they present values above 0.90 which indicates that the
hypothesized model was a good presentation of the observed data. Regarding the badness of fit
index, the current model revealed an RMSEA of 0.067 which indicates a good result.

Table III. Parameter estimates and goodness of fit

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 Contents
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Table IV shows the direct, indirect, and total effects among selected latent. The result of SEM
indicate that Products/Services had the highest effect on consumer buying decision
(β = 1.000, p = 0.010), followed by Pricing (β = 0.719, p = 0.010) , Consumer

(β = −0.651, p = 0.082) , and Technological (β = −0.167, p = 0.333). Interestingly,

Consumer buying decisions had a high effect on Customer Satisfaction (β = 0.940, p = 0.001) .
Furthermore, Products/Services has the highest indirect effect in Customer Satisfaction
(β = 0.999, p = 0.010) , followed by Pricing (β = 0.676, p = 0.010) , Consumer

(β = −0.612, p = 0.084) , and Technological which has least indirect effect

(β = 0.157, p = 0.335) .

Table IV. Direct, indirect, and total effects

SECTION IV.
Discussion
The analysis of path coefficients revealed that Products/Services is the most predictor in Buying
Decision. The result corresponds to a previous study suggests that the availability of product details,
product type and specification positively influences the buying decision in online shopping [3], [11].
This study revealed that Filipinos when shop online seek more information that suits their
preferences. Interestingly, Products/Services was also found the highest indirect effect in Customer
Satisfaction.

This study suggests that Lazada should focus more on providing detailed description to cover the
informational needs of Filipinos as it greatly influences their buying decision and satisfaction.
Pricing also represents a strong impact as a direct effect on buying decisions and an indirect effect
on satisfaction. It is visible that product price, shipping cost, and discounts play a role when online

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shopping [3], [11]. It is also assumed that Filipinos still want to choose the right product based on
Contents
personal interest rather than solely buy the cheapest product. The needs and wants of Filipinos are
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still prioritized rather than the influence of sales promotion [9]. When online shopping, the study
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
revealed that online shopping experience relatively affect their buying decision. Online shopping
experience and online shopping motivations can lead to purchase intention [5]. Moreover,

knowledge exploration affects buying decisions. It means that the limited applicability of the e-
commerce browser might affect the ability of Filipinos to fulfill their needs in online shopping.
Product comparison application in an online store allows consumers to compare the wide range of
products from one place with ease [11]. Surprisingly, the study could not reveal any statistically
significant effect of Operational Factors in buying decisions and satisfaction. This result is
contradicting with the most studies conducted [3], [8]–​[9], [16]. However, one study shows that
security has a weak relation to customer satisfaction [13]. This might be due to the fact, the longer
period the consumer shop online they might have acquired trust in transactions. Furthermore,
buying decision significantly influenced customer satisfaction. There is a relationship between
continuance use intentions and satisfaction [15]. Filipinos are most likely to continuously shop
online if they are satisfied with the previous transactions.

In general, the study revealed that four out of five identified factors significantly influenced the
consumer buying decision which affects the Customer Satisfaction. By determining what interests
the Filipino consumers, Lazada can prioritize these items that should be improved. Therefore,
knowing what customer seeks, Lazada can focus on strategy they can implement to stay ahead as a
leading e-commerce in the Philippines.

This study contributes to both theory and practical application of e-commerce sites, but has
limitations that can be addressed in future research. First, future study should significantly explore
more between factors which might affect the buying decision. To make the study more relevant,
Customer Loyalty might be added. Second, the number of respondents was unsatisfactory despite
the effort of the author to attain a large sample, which may have influenced the findings. Third,
Lazada is operating in Southeast Asia thus geographical location and diversified sampling can also
be considered. Lastly, the demographic profile of the respondents and years of experience in online
shopping might be added as it can be valuable in the research direction.

SECTION V.
Conclusion
COVID-19 pandemic is a big challenge in the Philippines [26]. With the rise of online shopping
during COVID-19 pandemic in the Philippines, it is important to understand the buying decision
among Filipinos. The purpose of this study was to determine the factors affecting customer
satisfaction in online shopping. A valid response of 251 Filipinos participated in the empirical study.
Structural Equation Modeling (SEM) was used to validate the measurement model and to test the
causal relationship in the model. The result revealed that products/services, pricing, consumer, and
technological were significantly influenced the consumer buying decision which also affect customer
satisfaction. Surprisingly, operational was found not significant as a predictor for buying decisions
and customer satisfaction. The SEM derived from the study could be beneficial to e-commerce
platforms and businesses which can contribute to a better understanding of the determinants that
affect buying decision and customer satisfaction.

Authors 
Figures 
References 
Citations 

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Keywords Contents 
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Metrics
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