DEPARTMENT OF MANAGEMENT

Capstone Project Report

Factors affecting the trust of customer in online shopping
Submittedto Lovely Professional University
Master of Business Administration
Submitted By:
VIVEK OJHA

Submitted To:
(11004591)

Mr. RAJESH POONIA

KAPIL NAINIWAL (11006113)

EKTA BANSAL

(11002916)

DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
JALANDHAR NEW DELHI GT ROAD PHAGWARA, PUNJAB

LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF MANAGEMENT
DECLARATION
We hereby declare that the work presented herein is genuine work done originally by us and has not been
published or submitted elsewhere for the requirement of a Degree Programme. Any literature, data or works
done by others and cited within this dissertation has been given due acknowledgement and listed in the
reference section.
VIVEK OJHA

(11004591)

KAPIL NAINIWAL (11006113)

EKTA BANSAL

(11002916)

ACKNOWLEDGEMENT
Any accomplishment requires the efforts of many people and this work is not different. We thank Mr.
Rajesh Pooniaour project guide, whose patience and support was instrumental in accomplishing this task.
We also thank our friends and other faculty members who actually helped us by providing the valuable data
via acting as respondents for the study. Many research studies conducted by various authors across the globe
have been of great importance for giving an insight about the topic taken.
Every effort has been made to give the credit where it is due for the material contained herein. If
inadvertently I have omitted giving credit to someone, we are heartily sorry for that negligence.
Vivek Ojha(11004591)
Kapil Nainiwal (11006113)
EktaBansal (11002916)

ABSTRACT
An often mentioned reason for consumers not purchasing from Internet vendors, is the lack of trust. The lack
of physical clues and physical interaction in the online environment make it more difficult to establish trust
with the consumers. So, it is important for companies to learn how to manage consumers trust in ecommerce. Although, building consumer trust on the Internet is a challenge for online vendors.
The purpose with this dissertation was to get a better understanding of consumer trust in e-commerce. We
wanted to find important factors that help to establish consumer trust in e-commerce. These factors guided
our empirical research, in which our purpose was to investigate how consumers perceive the importance of
some selected factors, for them to feel trust to purchase online. We chose to use a survey as our research
strategy and the primary data was collected through a questionnaire. We found that there are many factors
that help establish trust, which are relevant for the consumers when purchasing online. Security and privacy
are factors that are of great importance for the consumers to feel trust, to purchase online. Businesses are not
able to directly control the trust their customers feel. They can just build environments that encourage people
to feel trust. A marketplace can be trustworthy, but the participants have to feel the trust before the
marketplace can be trusted.

Keywords: B2C, Consumer trust, E-commerce, Internet, Trust

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CHAPTER 1: INTRODUCTION
The changing scenario with more penetration level of internet has brought some changes in the market also.
As the internet is offers a worldwide network which connect all the people who are connected to the internet,
now internet is also becoming a great platform for business and market and selling things at any time and
any part of the earth. Now more and companies and business houses are coming on internet to their business
as they are now aware of the benefit of internet and its reach to people. Internet not only helping the business
houses and companies but also consumers and customers to search for the product and gathering information
about the product on different website.
The word e-commerce means that all transaction is online and all business is done virtually.
Online shopping is basis of our research and throughout this capstone project we will discuss the factors
which affect the consumer trust in online shopping. In current time on internet B2C means that selling the
product and services to consumer through internet. The internet is also attracting more and more user as it
gives more power to its user by controlling many aspects of their life such as time, money, health etc.
1.1 Advantages of Purchasing Online
E-commerce is continually growing and people purchase online for aNumber of reasons and according to
Hansen (2005), the four main reasonsare:

Convenience
Greater supply
Lower prices.
Price comparison.

When e-commerce comes in picture, trust also comes in scene because new method of doing or purchasing
things online brings uncertainty among consumers. One of the biggest reason for not doing shopping online
by the people is lack of trust and presence of them in real place and trust is essential tool to do transaction
online, so it is very important for companies to manage consumer and their trust in e-commerce. Although it
is very difficult and challenging task for these companies to build trust on internet through website and
others factors. For this reason our group thinks this would be an interesting topic to find which factors affect
the consumer trust most in online shopping. In our research we are trying to find the answer to our question
and factors which can help e-commerce companies to build stronger trust with the consumer. It is difficult to
define the concept of trust, partly because trust is always situation-specific.
The series of process of buying and selling of product, in each single transaction, include variety of phases
such as the information, agreement and settlement phase. Figure 1.1, illustrates the trust levels during the
various transaction phases
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Figure 1.1
Trust levels during transaction phases
(From: Petrovic, O., Ksela, M., Fallenbck, M. &Kittl, C. (2003). Trust in the NetworkEconomy. Vol. 2.
Wien: Springer-Verlag Wien New York. p.339)

CHAPTER 2: LITERATURE REVIEWS

1. Chan Mei-Jane et.al (2008) Purpose of this paper was to examine the critical factors that affect
consumer trust in online shopping environment in Taiwan.The objective of this research is to test which
factors have an effect on consumers trust and on their subsequent intention to purchase online.The study
suggests that if there are more perceived trust in online shopping environment and if shoppers felt that
online shopping gave them enough comfortable and security about the service and products , the number
of online shoppers would be higher.
This paper included many Factors Affecting Trust in Online Shopping which are

Reputation

Size

The vendors perceived

Competence

Perceived privacy control

Situational factor

Third party certification

Legal framework

Recommendation

Order fulfilment

Service quality

Product information

The vendors perceived competence

The research says the 8 dimensions ( i.e. Online stores reputation, security and privacy policies, Thirdparty certification, Recommendation and testimonies, product information, Website User Interface
design, order fulfilment, Service Quality) are significantly correlated with consumer trust in online
shopping in Taiwan. The statistical results also showed that vendor reputation, security, order fulfilment,
and service quality, are significant in predicting the consumer trust in online shopping.
2. Aghdaie et.al (2011the aim of study is to examine factors that affect to establish a trust. This research is
based on primary data which is gathered by survey. This study establishes factors affecting level of trust
in online shopping. It included many Factors Affecting Trust in Online Shopping which are

Trust propensity
skill & experience
Trustee factors
Data Quality
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Graphic design
Reputation and past performance
Electronic payment systems and methods
Delivery system
Environmental factors
Assurance and guarantees
Rules and regulation
Promotions and advertising
Perceived ease of use
Perceived usefulness

The results provide valuable insights into understanding the factors that affect the trust attitude. The
correlation test showed that all of the variables affecting trust attitude. As the result showed, in addition
to expressed hypotheses, two other factors were also observed. Information quality and ease of
transaction.

3. Pi et.al (2012)This research was done in Taiwan with 126 respondents to study why users trust or
distrust online services which mainly deals in finance. In this online financial services helps the people in
doing financial transaction in less time without and boundary in Geographics. For this type of service
given through time, speed, and accuracy are important factors.
According to the research the cost which comes during transaction of money has no impact on trust.
Factors that effects the website trustare:

Transaction Security
Old experience on internet
Knowledge about Website and company
Design of website and interface
User friendliness of website
Personalization

4. Koufaris(2004)B2C is no longer a new thing but still only 15% out of 500 million user. Reason for that
is their lack of trust in companies that they only experience through the web medium. Trust in the web
based vendor is one of the critical factors of success in online commerce. In e-commerce customers
cannot have the interaction with the sales person and most importantly the loss of physical interaction
with the product.
The main disadvantage of e-commerce is that the customers only have a 2D display with any face to face
interaction with human representative and there the online sites losses the control the customers.

The research was conducted through a game type questionnaire. Participation was voluntary and each
participant was paid $10 and made eligible for a drawing of $100 for completing the study, which took
approximately 3045 min to finish. They were asked that which website they have never visited before
and then they were given the link of that website to use to remove the effects of prior experience.
The study was done on 212 respondents (128 male and 84 female)
Reasons for initial trust in company for new customers
Perceptions about the company

Perceived willingness to customize

Perceived reputation
Perceived size

Perceptions about the website

Perceived usefulness
Perceived ease of use
Perceived security control

5. Cheung (2005)In this study, Man Kit Chang and Waiman Cheung (2005) examine three trust building
mechanisms i.e. Third party certification, reputation and return policy. The conclusion of this research is
that these three factors affect most in building the trust in online shopping. This research categorize the
factors which affect consumer trust in two groups -Transactional (factors which are linked with the
process of transferring money communication before purchase, security, delivery charges etc.); NonTransactional (factors which are not related directly with the process of making). According to this study,
the tools which build the trust are web site, certificates of website, information about company,
information on connection with physical world, accuracy of products and service data, recommendations,
information on privacy policy and ease of navigation.
6. Kruter(2003)The main purpose of this research paper is to examine factors that affecting the formation
trust and their impact on online purchase behavior in decision making process. This research is based on
data that obtained through a survey study. In this study, the hypotheses were presented considering the
variables were associated with trust and technology acceptance and diffusion model that in 2009 by Yu
and Tao was presented. In this research paper, factors were considered in the overall format of the
trustee, trustor and environmental factors in the three-step approach for building trust, purchase and
purchase repeat. Because of convenience, ease of data collection, the ability to compare prices, wider
choice of products and services and saving time, online shopping is increased. Compared with traditional
procurement, risk in online shopping is much higher. Due to the uncertainty, the unknown, lack of
control and potential opportunism, the exchange in an online environment requires trust as an important
element. One of the challenges that online merchants are facing, is consumer trust, when consumers
spread throughout the world, controllable trusted sources are not readily available to merchants.
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7. Wong(2005)Purpose of this research paper is to investigate web-shopping behavior in Hong Kong:

identification of the general attitude towards web-shopping; relationships between past web-shopping
experience, attitude towards web-shopping, adoption decisions, search behavior and web-shopping
intentions; and influences of promotional offers and product categories on web-shopping
intentions.Relevant hypotheses were constructed and a web-based questionnaire survey was than
conducted using technically educated subjects. The proposed hypotheses were statistically tested and
principal components analysis and structural equations were used to produce a structural model. The
sample employed was composed of technically educated undergraduates and graduates. The data base for
this study was obtained from a sample of 191 individuals who had purchased on the internet and the
techniques used in the statistical analysis of the data were as follows: principal components analysis,
structural equations and regression analyses
Main findings of this study is web-shopping intentions are directly affected by web-search behavior and
web-shopping adoption decisions, and are indirectly affected by web-shopping attitudes, past webshopping experiences and past experience with the web. Web-search behavior was a stronger factor than
adoption decision in terms of influencing web-shopping intentions. The presence of promotional offers
had a positive effect on web-shopping intentions, and web-shopping intentions were different for
different product categories. Experienced internet users and experienced web-shoppers are more likely to
be potential future web-shoppers. Those who have a general dislike for shopping and who tend to buy in
a great haste when the purchase becomes absolutely necessary may eventually be another group to
become web-shoppers. There are other findings which state that cost and guarantee also explain value in
e-commerce. In the data resulting from the analyses, guarantee turns out to be a more important factor
with respect to overall perceived quality and consumer attitudes than cost.
This research paper also suggests some practical implication based on its analysis:

If a company manages to improve its e-commerce transaction results, this will have a favorable effect
on overall perceived quality and consumer attitudes. In other words, the result is as important as the

process for a successful purchase.

The scale, integrated for the dimensions guarantee and cost should help firms to identify and
improve their B2C e-commerce results from the customer perspective. Consequently, it will have a
positive effect on overall quality, disposition to repeat and disposition to recommend.

8. Seocket.al(2007)This research paper aims to examine the influence of attitudes toward particular
clothing web sites, specifically favourite ones, on information search at those web sites and on the choice
to purchase items from those web sites and from non-internet channels after finding the items at the web
sites. Using survey data from 414 US college students who had online shopping experience and favourite
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clothing web sites that they especially like to visit, hypothesized relationships among attitude toward
internet web sites, online information search and channel choices for purchasing were tested using path
analysis. Findings of this research paper showed that participants' attitudes toward their favourite
clothing web sites had a direct, positive effect on their intentions to search for information at those web
sites as well as intentions to purchase clothing items from those web sites after finding the items there.
Additionally, operating through information-search intentions at the web sites, participants' attitudes
toward those web sites had an indirect, positive effect on their intentions to purchase clothing items from
non-internet channels after finding the items at the web site This research provides insights into how
college students' attitudes toward internet web sites affect their information search at the web sites and
their channel choices for purchasing. Our results suggest potential benefits of multi-channel retailing for
online clothing retailers targeting US college students and the importance of building effective web sites
to elicit those consumers' positive attitudes toward the web sites. This study is the first to investigate
young adult online shoppers' attitude towards internet web sites and their information search and channel
choices for purchasing

9. Perottiet.al(2005)This research paper examines the shopping and buying behaviour of younger and older
online shoppers as mediated by their attitudes toward internet shopping. Over 300 students and staff from
a US university completed a survey regarding their online shopping and buying experiences for 17
products. The results show that, while older online shoppers search for significantly fewer products than
their younger counterparts, they actually purchase as much as younger consumers. Attitudinal factors
explained more variance in online searching behaviour. Age explained more variance in purchasing
behaviour if the consumer had first searched for the product online. Retailing managers can make use of
the results as describing multifaceted nature of online shopping and buying behaviour. Age differences
(in both directions) were seen for many product categories. In addition, results indicate that how one
measures online shopping impacts on one understands of age effects on internet shopping. Age was
negatively correlated with online pre-purchase search but was positively correlated with online
purchasing when pre-purchase search behaviour was taken into account.
The limitations of the present research are:
First, the sample was restricted to university faculty, staff and students. Second, a better measure of the
hedonic motivation construct is needed. Third, additional independent measures such as income should
be included to understand the additional demographic factors related to online purchase. The present
study advances knowledge of the nature of the relationships among age, attitudes, and online shopping
and buying behaviour.

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10. Seock et.al(2007)This research paper aims to examine the influence of attitudes toward particular
clothing web sites, specifically favourite ones, on information search at those web sites and on the choice
to purchase items from those web sites and from non-internet channels after finding the items at the web
sites. Using survey data from 414 US college students who had online shopping experience and favourite
clothing web sites that they especially like to visit, hypothesized relationships among attitude toward
internet web sites, online information search and channel choices for purchasing were tested using path
analysis. Findings of this research paper showed that participants' attitudes toward their favourite
clothing web sites had a direct, positive effect on their intentions to search for information at those web
sites as well as intentions to purchase clothing items from those web sites after finding the items there.
Additionally, operating through information-search intentions at the web sites, participants' attitudes
toward those web sites had an indirect, positive effect on their intentions to purchase clothing items from
non-internet channels after finding the items at the web sites. This research provides insights into how
college students' attitudes toward internet web sites affect their information search at the web sites and
their channel choices for purchasing. Our results suggest potential benefits of multi-channel retailing for
online clothing retailers targeting US college students and the importance of building effective web sites
to elicit those consumers' positive attitudes toward the web sites. This study is the first to investigate
young adult online shoppers' attitude towards internet web sites and their information search and channel
choices for purchasing Limitation of this study is that Results cannot be generalized to the larger
population of young consumers and to other consumer groups. Future research should include other
population groups.

11. Bhatnagar et.al (2007Purpose of this research paper is that individuals use the web for shopping for
both personal and professional objectives. The purpose of this paper is to show that the demographic
profile of individuals who shop online for personal reasons is different from that of those who shop for
professional reasons.

Based on various literatures, hypotheses were generated regarding the

relationships between tendency to purchase online and demographics. The data were collected through
online surveys, and the hypotheses tested with an ordinal regression model. Findings of this research
indicated that individuals with children, high incomes, and large internet experience are more likely to
shop online for personal purposes and younger men with large internet experience are more likely to
shop online for professional purposes. One of the limitations of this study is that it focuses on only the
demographic determinants, and ignores others, such as reputation and size, service quality, overall ease
of use and usefulness of the web site, etc.
12. Changsu et.al(2008)Based on customer experiences in Internet online shopping, this study, from
consumersmindset, develops a framework for e-CRM to describe the psychological process that affects
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the trust of consumer in online shopping and help the e-commerce site to maintain a long term
relationship with the online vendor. This paper gives a series of link between the key factors affecting
consumers commitment or breaking the trust to specific e-commerce site. These factors include
perceived value, satisfaction,and trust. Important variables affecting Internet online shopping trust , such
service quality given by company after post purchase, product quality at the time of delivery , and price
of the product , secure and reliable payment. This study empirically tested and assisted a major part of
the given framework.
13. Herzlich et.al (2008) This research says that Nearly fifty percent say that they have canceled an order or
left their shopping cart due to fear of losing their money or security fear, according to a 2009 survey of
516 adults conducted by Harris Interactive and security technology company McAfee Inc. says that small
business or running on internet have to pull up their socks to build the consumer trust within the online
community. According to the Harris-McAfee survey, 63 percent of consumers won't purchase from a site
that doesn't display a Trustmark or security policy. This research paper also includes many factors that
affect the consumer trust in online shopping which are update of website, reallocation of office given in
website, offer testimonials, provide quick reply to customers problem, confirmation mail of shopping to
customer.
14. Chaeet.al(2013)The objective of this paper is to investigate how showing human brands affects
consumers trust of buying the product from the particular website. This research paper uses the
experimental design examine the effect of human brands in an online shopping environment and as a
result two factor comes out from the study. The first factor of the paper was a product type which is sold
online, and the second was a measure of the level of perceived quality. The sample of subjects were
taken from one of the University of SouthKorea. The research concluded that the product type influences
consumers' perceived trust towards the product. In addition the human brand can increase trust towards
products in online shopping and, moreover, lead consumers to go in positive direction and help them to
make qualitydecision. The paper recommends that companies should use human brand to increase the
customer trust towardsthem. Limitation of this research is that it has taken relatively small sample size
and the use of a sample of university students, which may not be representative of the general
population.
15. Prompongsatornet.al(2013)Trust is the important factor for online shopping. The organization who
wants to enhance their business and want to grow fast should understand the influence of customer trust
in online shopping or for particular website during shopping. On the other hand they also need to
understand the cause of changing level of consumer trust, how to make it constant and improve it and
what factors will help to improve it. By doing so the organization will get benefit of understanding the
existing customer and this will help them to retain them also. This research paper investigates the factors
influencing consumer trust in internet shopping in geographic location of Thailand. Based on various
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previous research papers, a framework was developed that shows mainly six factor affect the trust of
customer in online shopping. The data was analyzed by using structural equation modeling to test the
given hypotheses. The results of this study show that integrityand ease of use have a good affect with
respect to trust toward Internet shopping in Thailand.
16. Kuo-Lun Hsiao et.al(2010) This paper aims to improve understanding of the reasons why people trust
the information about product recommendations on social shopping networks of websites, a new ecommerce method which combines social networking and shopping, and to investigate the impact of the
trust on the consumers' intention to purchase products from the online shop of a website. An online
survey instrument was developed to gather data, and 1,219 questionnaires were used to test the
relationships in the proposed model. The results indicated that perceived ability, perceived
benevolence/integrity, perceived critical mass, and trust in a website were four important antecedents of
trust in product recommendation in a social networking site. In addition trust in product
recommendations can influence the consumers' intention to purchase from the website through
increasing their intention to purchase the products. The research model demonstrated the importance of
trust in product recommendations to online consumers' transaction intention. The results of the study
showed that trust in product recommendations will influence consumers' purchase intentions. Therefore a
social shopping website or the websites transforming into social shopping websites should put more
emphasis on ways to establish the virtual communities or social networks which can provide the
information about product recommendations that consumers trust. The study provides a comprehensive
framework of the antecedents and effects of consumers' trust in recommendations in the context of social
shopping.
17. Wall(1998)ONLINE traders are spending their lot of revenue and profit as anexpenditure. they are
spending heavily on making their website look great , crafting their site that will help to catch the
customers eye , to build more trust from their side towards customer, but still customer are scared of
buying any product online. There is meaningless belief in the mind of consumer that putting the credit
card or debit card number on the website will invite the burglar to their door. Thus e-commerce side need
to more focus on secured and reliable connection between customer and server to secure the transfer of
data between them.
18. Lin (2013) Online shopping has become one of the most popular trends in shopping any ty e of product
due to its benefits of cost saving gaining more profit and it is also having competitive advantage over
offline retail shops. The objective of this study is to find the relationship among trust, satisfaction and
loyalty websites of Taiwan. The proposed model was constructed through structure equation modeling.
For establishing trust, mainly three variables including online customer review, type of payment, and
secure certificate were important. Four variables product quality, price, the consistency of products and
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photos, and delivery speed important in satisfaction. With respect to loyalty, three variables
recommendation to others, going back to site, and leak of data. the conclusion of this paper was that a
significant relationship was there between trust ,loyalty and satisfaction.
19. Lenget.al(2009)Purpose of this research paper is to study the influencing factors of customers trust to
great discount online shops, find what factors can influence customers trust and to what extent their
influence is. Relevant hypotheses were constructed and questionnaire survey was than conducted using
technically educated subjects. This research paper basically focus on deductive research therefore
quantitative approach is used to find the quantitative effect of the independent variables of influencing
factors on the dependent variable of customers trust. The sample of 133 respondents used to test the
research hypotheses included university students and office employees between 18 year-old and 40 yearold who had shopping experience or show potential purchasing interest in great discount online shops.
Based on the result of research hypothesis testing obtained by regression analysis main factors which are
supported by this study are:
Security
Reputation of online shop
Reputation of products brands
Service of online shop
Perceived ease of use and Perceived usefulness
The major findings of this research paper implies that some objective factors can significantly influence
customers trust, such as security of great discount online shop, reputation of online shop, reputation of
products brand and service of online shop.
20. Aghdaieet.al(2009)Purpose of this research paper is to study the factors that affect the trust and their
impact on purchase behavior in decision making process. Relevant hypotheses were constructed to test
the variables which were associated with trust and technology acceptance and diffusion model that in
2009 by Yu and Tao was presented in the format of the trustee, trustor and environmental factors in the
three-step approach to building trust, purchase and purchase repeat. Descriptive survey and random
sampling is used in this study.
Based on the result of research hypothesis testing main factors which are supported by this study are:
Promotion affects consumers trust attitudes in online shopping.
Information quality has affect consumers trust attitudes.
Payment method has affect consumers trust
Skill and experience
Perceived ease of
Governmental rules have been affect consumer purchasing behavior in online shopping.
Trust propensity
The major findings of this research paper implies that For increasing purchase behavior skill &
experience, information quality, graphic design, reputation, payment methods, governmental rules and
promotion are the main influencing factors and finally in purchase repeat behavior, ease of use, skill &
experience, information quality, payment methods and assurance must be highlighted.
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21. Yang(2009)Trust is a key factor in growth and success of electronic commerce. Website provide one stop
buying and selling point for customer and companies but it also comes with problem of unethical issues
of using data of consumer in wrong way. This study is to find the effect of shopping websites' perceived
ethical performance on consumer trust. This paper is done on a experimental study of the working
shopping website, the result shows that consumers will trust the website if they perceivesite has good
brand value and no wrong name is linked with it and practicing a strong privacy policy to secure the data
of consumer. This finding recommends e-commerce companies have a better knowing of the link
between website ethics and consumer trust.

CHAPTER 3: RATIONALE/SCOPE OF THE STUDY

3.1 PROBLEM STATEMENT
Presence of real thing and world in the conventional shopping market place, such as full-fledged store the
items in it and the direct contact with sales persons that affect consumers trust, are invisible in the online
shopping through e-commerce website. Absent of physical clues like shop and sales person is one of the
reason that make it difficult for consumer to trust. So, this constitutes a major challenge for companies that
engage in e-commerce. Therefore, it is very important to find the factors that can affect or establish
consumer trust in e- commerce.
3.2 PURPOSE OF STUDY
The purpose of our capstone project is to get a better understanding of consumer trust in e-commerce. We
want to find important factors that help to establish consumer trust in e-commerce.
CHAPTER 4: OBJECTIVE OF THE STUDY
The capstone is based on the following research Objective:

To identify the factors that affects the trust of consumer in online shopping.
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To identify how important are these specific factors for the consumer to feel trust to purchase online.

CHAPTER 5: RESEARCH METHODOLOGY

5.1 DESIGN
For conducting a study, methods and procedures are required and the research design specifies the same. The
research design gives the arrangement of conditions for collection and analysis of the data. The research
design also helps to maintain the economy of study and keeps the study relevant to the research purpose.
Research study is of three types
1. Exploratory Research Design
2. Descriptive Research Design
3. Casual Research Design
We have chosen the Exploratory Research Design.
EXPLORATORY RESEARCH DESIGN:
The main purpose of exploratory research studies also termed as Formative research studies is to formulate a
problem for more precise investigation or research of developing a working hypothesis from an operational
point of view.
5.2 SAMPLE DESIGN
Sample design is a plan of obtaining a sample from a given population. It refers to the procedure of selecting
the items for the sampling designs are as below:
5.3 SAMPLE SIZE
The sample size selected for this capstone project is 200.
5.4 SAMPLING METHOD
The sampling method used in this study is Non-probability sampling method (Convenience Sampling)
5.5 SURVEY TOOL (INSTRUMENT FOR SURVEY):
Questionnaire is used to understand the attitudes and behaviour of people towards online banking. For this, a
Likert scale of five points, multiple choice questions is used in survey. Bar charts, percentage analysis and
factor analysis will be used for getting outcome of the objectives.
5.6 HYPOTHESIS

Hypothesis 1: The risk of losing money and financial details will have negative effect on attitude
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toward online shopping.

Hypothesis 2: The product risk will have negative effect on attitude towards online shopping.
Hypothesis 3: Having a friendly website and good service to better help the customers for shopping,

will have positive influence on attitude towards shopping online

Hypothesis 4: After sales service and low shipping fees will have positive influence on attitude
towards online shopping.

5.7 SUMMARY OF FACTORS

We have found that there are many factors that help establish trust, which are relevant for the customers
when purchasing online. We think that trust is constantly changing, that consumers demand on, for example,
security is changing. The factors we found to be important for establishing trust in e-commerce, after
reviewing literature on the subject, may not be the most important factors in the future. We believe that the
focus, on which subfactors that are important to establish trust will change with time. Consumers attitudes
toward trust and their main concerns in the online environment will probably change. With this we mean that
consumers may not be so concerned about credit card payment in the future. Furthermore, it is difficult to
say what trust is for different people. How people perceive trust can be influenced by that they have different
backgrounds, experiences and expectations. People perhaps have different opinions about how they value
privacy. So some factors, for example convenience, are hard to define, since people might have different
opinions about what convenience means to them. Thus, the level of convenience can
be interpreted in different ways. A consumers trust in an Internet vendor may be influenced by the
consumers past online experiences, since knowledge and/or experience increase the consumers trust.
Rule and Friedberg (2005) stated that, a marketplace can be trustworthy, but the participants have to feel the
trust before the marketplace can be trusted. Businesses are not able to directly control the trust their
customers feel. They can just build environments that encourage people to feel trust. We think this statement
gives a good view about why it is important for companies online, to build an environment that makes the
consumers feel the trust. So, one can say that trust has to be experienced. We will now summarize the main
factors, mentioned throughout this chapter, which help establish consumer trust in e-commerce. Under each
main factor, we will also present examples through which trust can be established. We call these examples
subfactors. One main factor is for example, security and the subfactors listed below this factor, are examples
of things that increase the sense of security. So, these subfactors are also trust establishing. The factors form
the base for our empirical research, were we want to find out the importance of some of the factors. So, this
is measured through the questionnaire. Since it is impossible to include all subfactors in the questionnaire,
we have selected some which we thought would be relevant and interesting to include. These are pinpointed
in the list below.
Security

Information about how security solutions work

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Updated security solutions

Insurance solutions
Mark or seal (certificate from third party)
Security policy (on visible place)
The ability to choose different payment methods
Secure and reliable payment systems (buy safely)
Clearly stated which third party that administers the card payment

Privacy policy (on visible place)

The handling of personal information
Guarantees that personal information is not misused or sold by the company
Feel control over personal information (company should ask permission to get

Privacy

information)
Guarantees

Guarantee policy about for example, returns and refunds

Order fulfillment
Standard terms - clearly stated in connection to the order
Confirmation after finished order and purchase

Customer Service

Social presence: Options to contact the company available

Show concern for consumers needs
Prompt answers/replies
Show willingness to help
Knowledgeable staff
Discussion forums (let users share experiences and opinions)
Make the consumers feel involved by acknowledging their opinions for improvement
Offer online help during the order/payment process

Word of mouth recommendations (from other users)

Reputation about an Internet vendors
Offline reputation
Prior relationship with the website/the vendor (Offline or online)

Clear and simple design (how the website looks)

First impression
Feel welcome and convenient when visiting the website

The Brand

The Website

Functionality and Content

Easy to navigate (should not have to be a computer expert)

Possibility to go back and change data or exit the order process
Understandable menu
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Understandable language
Adjusted for people with disabilities
Essential information in visible place

Easy to register and use technology

Easy to use payment systems

Good product information

Information that is updated, correct and easy to read
Newsletters with advertising and information
Information on how to avoid abusive situations and problems
Informative and understandable website
Understandable language
Convenient/Convenience

Clearly defined actual costs (including freight)

How much the product / service costs

User-friendly

Information

Price

5.8COLLECTION OF DATA
5.8.1 DATA COLLECTION
The study was conducted by the direct interaction with respondents and the information was directly
recorded on questionnaire. Following are the two types of data type used;
1. Secondary Data
The secondary data is the data that are collected through different means of books, articles and the
internet. The secondary data collected for this study was the literature reviews related to our topic. As
background information about e-commerce we also collected and presented a short information about
the internets development and also the development of the e-commerce. The thing about the ecommerce is that it is not static but constantly changes and develops. This can impact the consumers
trust in both positive and negative way because it has new opportunities and new uncertainties.
Different researchers often define different factors that help to establish consumer trust. This shows
that the trust is multi-dimensional and difficult to define. So, we have also taken different dimensions
of trust and also tried to present the most mentioned factors that are important for establishing
consumer trust.
2. Primary Data
Our primary data was collected through a questionnaire. The purpose with the questionnaire was to
gather information about how consumers perceive the importance of different trust factors. The
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questions in the questionnaire were based on the factors found in our literature review. Prior studies
often look at consumer trust towards a specific Internet vendor and its website; however the aim with
our survey is to look at consumer trust in e- commerce, in a general way. The questionnaire was
handed out to people in various ages, from 18 years and up. We also tried to ask an equal amount o
men and women. Since we handed out the questionnaires in person, we were able to continue the
collection of answers until we had gathered our pre-set amount of 200 questionnaires. The collected
answers were then processed and analyzed statistically; by using the software program SPSS.
One advantage with using a questionnaire is that it is an efficient way of collecting data. Another
advantage is that the respondents answer the same set of questions. Standardized data can be
expressed in numbers, and can then be analyzed quantitatively, which allows for easy comparison. A
disadvantage with using a questionnaire is that it is difficult to form questions that are understandable
for the respondents and, at the same time, provide the researchers with the right information needed
to reach the purpose. Furthermore, the respondents may interpret the questions differently than
intended by the researchers. The reason for this can be that full clarifications cannot be included in a
questionnaire, since it has to be
kept as simple as possible

5.9 COLLECTION TECHNIQUE

Primary Data
Questionnaire Method

Secondary Data
Books
Journal
Website

6. LIMITATIONS
This study is not without its limitations. The sample size itself is relatively small. The study can be
strengthened by increasing the sample size and including participants in other geographical areas.
There are several unexplored areas of online brand trust that present fertile opportunities for future research
relating to online trust. Some of these can be investigated empirically with the availability of data that may
not be very difficult to collect. With an increased sample size, a more detailed empirical analysis among the
independent variables and the variables that have multiple categories can be performed. Potential
correlations between some of the independent variables (e.g. gender, race, working experiences, educational
level) need to be reported in a future study.
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7. PRACTICAL IMPLICATIONS
Based on our study and the knowledge gained in the process of writing our dissertation, our findings can
provide some practical implications to companies. The different factors important for establishing trust in ecommerce that we found in our research, can be helpful to companies. The factors constitute tools and
techniques, which companies can adopt and implement to become better at serving the consumers needs
when it comes to establishing trust.
8. FUTURE RESEARCH
Here follows some suggestions for future research:.

One possibility for future research is to conduct the same survey, but with a larger sample to be able
to generalize the findings. Also the survey could be conducted in other parts of Sweden. Since we
conducted our survey in rather small cities, in the jalandhar region of punjab, a survey conducted at
other locations would perhaps show a different result.
Since both e-commerce and trust are areas in constant change, it could be interesting to see if a
research as ours would yield the same results in five to ten years from now. Peoples perceptions of
trust in e-commerce will most likely change as e-commerce will become even more integrated into
peoples lives. Will the same factors for establishing trust that are important today, be as important in
the future?
An interesting aspect to look at, in connection with consumer trust in e- commerce, is culture. Do
people from different cultures emphasize different trust establishing factors? Can any differences be
distinguished and if so, why?
In our research the focus has been on consumer trust in e-commerce. However, online trust is a
relevant aspect for other parties as well, for example, employees, suppliers and distributors. One
recommendation is to shift the focus to one of these parties and see if it might result in different kinds
of trust establishing factors.
One further suggestion for future research is to go out and ask companies that engage in e-commerce
how they have managed to handle the challenge of establishing consumer trust online.
A lot of online companies today are segmenting their customers after which kind of shoppers they
are. For example, consumers can be convenience shoppers, comparison shoppers or brand loyal
shoppers. It could be interesting to investigate if different kinds of shoppers emphasize different trust
establishing factors.

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