ANTECEDENTS OF CUSTOMER REPURCHASE INTENTION - A STUDY OF ONLINE GROUP-BUYING IN VIETNAM

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ABSTRACT
Online group-buying has emerged as a new e-commerce model and received
attention in both academics and practice. Prior researches focused on investigating
online group-buying mainly from the marketing perspective, such as the transaction
process, price mechanism, and benefits (Li & Liu, 2012). Few of studies have
investigated the relation between consumer’s acceptance and their purchasing
behavior. Hence, this study focuses in measuring relationship between cognitive
factors – trust, satisfaction and perceived usefulness – and online group-buying
repurchase intention. Simultaneous, this study also integrates website quality - a direct
and indirect variable – to measure its impact on customer repurchase behavior.
To examine research model, information and data is accessed by using
questionnaire for respondents more than 18 years old and have ever purchased on
online group-buying websites. Sample size of this quantitative research is 365
respondents. Confirmatory factor analysis (CFA) is used to test measurement scale
and the structural equation modeling (SEM) is used as the main method for analyzing
research model and hypotheses.
Results in this study show that individual user’ intention to repurchase in online
group-buying websites is motivated by trust, satisfaction and website quality. Among
three impact factors, website quality has the strongest direct influence, followed by
trust and satisfaction. Besides direct influence, website quality also has indirect
impact on customer repurchase intention through both of trust and satisfaction. Trust
also has strong impact on customer satisfaction, thus, affect indirectly to customer
retention.
With these results, research framework can be seen fitted with data market. Study
results also suggest that in order to increase customer retention should not only
consider about their strategies of increasing trust and satisfaction, they should also

take consideration of increasing website quality, especially in content quality and
technical adequacy.
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CHAPTER 1
INTRODUCTION
This chapter is starting point of this study. In this chapter, the research interest of
thesis is first introduced. Subsequently, the motivation of this research is discussed.
Research objectives are presented in the next section. Then, methodology and scope of
this research is introduced summarily. Final, structure of this study is presented. This
chapter aims at specifying the purpose of this research and the research content.
1.1 Research interest:
In recent decades, science and technology develops surprisingly. Achievements of
these progresses create more opportunities as well as challenges for development of
economies. Forms of transactions become more diversified; suppliers have more
approach ways to interact with customers. Traditional markets have not caught up
with higher demands of consumers. Buyers become more and more busy and have so
many choices that make their buying decisions more difficult. Hence, to satisfy
customers, electronic commerce appears and grows extraordinarily with widespread
Internet usage.
Electronic commerce, commonly known as e-commerce, consists of the buying
and selling of products or services over electronic systems such as the Internet and
other computer networks. A form of e-commerce is online shopping which is the
process whereby consumers directly buy goods or services from a seller in real time,
without an intermediary service, over the Internet. This form of shopping are
attracting more buyers, suppliers and researchers because it offers a lot of benefits
such as convenience, speed, time, a 24-hour opening, information on products and

reviews. To nowadays, online shopping continues their rapid spread and gains many
increasing importance in the lives of a wider range of the population.
Group-buying is seen as an effective form of online shopping and a promising field
for applying agent technologies. Group-buying is a model in which multiple buyers
cooperate and buy goods at a discount price (Matsuo, 2009). Innovative group-buying
sites offer bargains on everything from meals to travel packages. Customers can make
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comparison of product/service prices and choose the supplier with the lowest price
(Gounaris et al., as cited in Li & Liu, 2012) when using this new model.
With the tremendous growth, online group-buying attracted more and more
attention of practitioners as well as researchers. However, most previous online group-
buying studies focus mainly on the pricing mechanisms, coalition formation, benefits
of bidder cooperation, uncertain demand, incentive mechanisms and consumer
adoption (Fan et al., 2010). There are not many studies investigated the relationship
between customers’ acceptance of online group-buying and their purchasing behavior.
In recent years, this topic begins become a hot issue, especially, continuance behavior
receives more attention because this issue at an individual level has been regarded as
crucial for sustainable web-based services (Premkumar & Bhattacherjee, 2008).
Besides that, many online group-buying websites as well as others online websites
are facing strong competition due to the evolution and proliferation of web-based
services. Moreover, web-based services have low entry barriers by its nature, if one
service is created, then a number of comparable alternative web-based services
follow, resulting in a high switching rate between those services by users
(Vatanasombut et al., as cited in Lee & Kwon, 2011). Thus, many online group-
buying providers are struggling to find strategies to exist in this difficult period.
Retaining their existing customers becomes a strategic way to ensure the company's

success and overall sustainability. Exploring and analyzing which factors influence
customer retention have significant meaning to online providers.
Research on continuance intention in both online shopping and online group-
buying is still in its infancy. Prior researches on consumer online repurchase placed
more emphasis on the impact of psychological factors such as trust, satisfaction
formation, loyalty (Cheung et al., 2003). These researches primarily base on
expectation-confirmation theory and information system (IS) continuance intention
model. Very few studies have attempted to investigate the impact of product/service
characteristics as well as website quality on online consumer continuance.
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Website quality nowadays is assumed to have the potential to influence the future
behavior of service users and have an impact on the profits of IS investment (Cronin
and Taylor; Zeithaml, Berry and Parasunaman, as cited in Li, 2010). Several studies
on website quality in physical encounters have concluded that some factors of website
quality are responsible for customers’ perception which is likely to lead to behavioral
intentions to purchase. However, in online group-buying context, according
mentioned above, there are a few of studies attempted to measure the direct and
indirect impact of website quality to repurchase behavior. In particular, research on
taking an integrated perspective to examine the predictors of website quality and
investigate the relationship between website quality and repurchase intention is still
lacking. This is a promising topic for future research in this context of e-commerce.
1.2 Motivation of the study:
In Vietnam, group-buying model was introduced in 2010 and after a short time,
group-buying model and daily deal sites increased very quickly. With a win-win-win
model for three parties: enterprises can sell their products, group-on companies profit
from commission and customers can get good deals, group-ons or group vouchers

have become popular among Vietnamese students and white-collar workers due to
attractive discounts and a wide range of services and products
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.
To the end of 2011, there are almost 100 group-on sites in Vietnam with more
than 6700 deals and 4.2 millions sold out vouchers
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. Four leading group-buying
websites include: Nhommua, Hotdeal, Cungmua and Muachung. Ho Chi Minh City is
the strongest competition market with about 74% transaction deals and many
followers
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. Other markets such as Da Nang, Binh Duong, Can Tho… begin introduce
this new model, however, amount of transaction is still limited.
Along with development of group-buying market, perceived risk and competition
between rivals also increase very strongly. The biggest challenge for group-buying

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sites is method of payment and privacy. In Vietnam, many people are still not familiar
with online transaction. With weak privacy security system, customer beliefs have
trend of reducing when purchasing vouchers by money transfer or cash on delivery
method. Besides, there are many partners who do not follow the contract, provide bad

service or treat group-on customers differently. Many vouchers are delivered late or
lost, customers cannot dictate the time to receive vouchers and have to book in
advance to use the service. With many problems, online-group buying websites in
Vietnam are facing many difficulties in attracting customers as well as keeping
existing customers.
Base on operational experiences in vouchers transaction, many group-buying
businesses begin selecting other ways to limit their obstacles. Firstly, they can
become distributors, delivery directly products to customers, instead of delivering
vouchers. Second, group-buying company can become e-commerce exchange. They
can buy and manage deals by themselves. They also provide some flexible solutions
for suppliers such as: create own websites, provide orders management system, and
provide customers management system… However, according to many experts the
key to success for this kind of business is still to ensure service quality and price to
keep customer trust. Do (2012) – who is interested in Vietnam’s start-up, social media
and technology scenes – cites that:
An increased skepticism of the online space is low on the list of dangers though. With the
internet penetration at 34 percent and an increasing portion of them moving into social media,
the online market is getting bigger and bigger. Although companies and people may not be
trusting of web content, they are learning more and more to be dependent on it.
In general, Vietnam is still a promising market for online group-buying model.
Companies in this market need to learn and develop more and more to succeed.
Customer retention is a necessary topic for helping group-buying businesses increase
their competitive advantages and maintain their market. Simultaneously, online
group-buying model is really an interesting research field for practitioners and
researchers in developing way of e-commerce in Vietnam.
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1.3 Research objectives:
As discussion in section 1.1, information system (IS) retention has been one of the
most recently explored topics in the IS research field. Many theoretical perspectives,
to nowadays, have been advanced in order to understand what motivates individuals
to repurchase in online group-buying websites. Thus, based on literature covering the
concept of IS continuance model and circumstance of online group-buying market in
Vietnam, this paper aims:
 To propose a model predicting customers’ repurchase intention in online
group-buying context in Vietnam.
 To investigate impact of website quality on customers’ repurchase intention
in online group-buying context.
 To examine impact of cognitive factors (trust, satisfaction and perceived
usefulness) on online group-buying repurchase intention.
This study is necessary for development of group-buying market in Vietnam. It
also demonstrates that website quality is a noteworthy factor affect repurchase
intention of customers in using online group-buying.
1.4 Methodology and scope of research:
Collecting data process of this study is designed into two stages. First is a pilot
test, second is main survey to collect data for examining research model. Pilot test is
quantitative research with sample 57 respondents to examine reliability and validity
of observed variables. Main study is also quantitative research with sample size 365
respondents.
Author accesses information and collect data by using questionnaire. Respondents
are more than 18 years old and have ever purchased on online group-buying websites.
Sample is selected by using non-probability sampling method – convenience sample.
Research is studied from September 2012 to December 2012.
Purpose of this research is to confirm and examine conceptual model. The
measurement scales are estimated using confirmatory factor analysis (CFA) to test
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reliability and validity. The structural equation modeling (SEM) is used as the main
method for analyzing the research model and hypotheses.
1.5 Research structure:
This thesis is organized into five chapters. It begins with introduction chapter
which presents an outline of this research, including the motivation, objectives and
scope of this research. The next chapter describes online group buying model,
literature of IS repurchase behavior model and website quality concept. This chapter
also describes research model and hypotheses. The third chapter is research
methodology used to empirically test the research model. The fourth chapter presents
the results of data analysis. The final chapter discusses summarizes the study’s core
findings, its contributions and its limitations.

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CHAPTER 2
LITERATURE REVIEW AND HYPOTHESES
2.1 Introduction:
This chapter mainly introduces theoretical background and research model of the
study. First, online group-buying model is introduced to clarify more clearly about
advantages and disadvantages of this new model. Second, literatures of IS repurchase
models in online shopping and online group-buying context are discussed. Next,
concepts and instruments of website quality are reviewed systematically. Finally,
research model, its constructs and relationship hypothesized among the constructs are
discussed.

2.2 Theoretical background:
2.2.1 Online group-buying model:
Group-buying, also known as collective buying, introduced in 1999 by a few of
companies. After introducing time, this model have been facilitated by the internet and
the easy, fast group coalition process brought by social networks (Xiong & Hu, as
cited in Erdogmus & Cicek, 2011). It is seen as a part of an innovative wave of online
market-based pricing mechanisms, includes traditional auctions, non-traditional
auctions, price-reduction models and group-buying models.
There are mainly two different types of online group-buying systems (Fei et al., as
cited in Erdogmus & Cicek, 2011). First type of this system is structured based on a
dynamic pricing mechanism. In this first type, masses of consumers are aggregated,
and perform collective buying to enjoy price discounts online. In the second type of
the online group-buying, the group-buying company offers a certain product or
service at a static large discount price. This price required the total number of the
buyers must be greater than the predetermined limit of the minimum required number
of buyers.
Today, many online websites are using group-buying models and have got great
success. These websites usually offers a large of products and services at significantly
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reduced prices. These websites claim they can negotiate low prices with manufacturers
and suppliers, and then pass these savings on to their customers (Kauffman & Wang,
2001).
However, group-buying websites, like other online shopping websites, are facing the
problem of obtaining market attention. With group-buying models, online group-buying
websites need not only a critical mass of consumer patronage and interest, but also a
significant amount of transaction volume so as to be able to profitably deliver on

their low price guarantee. Thus, if they cannot reach a critical mass of users and sales
volume, then it will be difficult for the group-buying business model to bring the
customers of the firms that adopt it the savings they expect (Kauffman & Wang, 2001).
Moreover, Cook (as cited in Kauffman & Wang, 2001) points out that the group-
buying business model is too difficult for the general consumer to understand. The
author also argues that the mechanics of group-buying on the Internet also prevent
impulse buying, due to the lengthy periods consumers have to wait until the end of
auction cycles. With these problems, amount of customers of online group-buying
websites begin increasing slower; in some markets, there are reducing signs of
customers as well as transactions.
In order to overcome obstacles, some online group-buying websites focus website
quality and service quality. For instance, Mobshop – a San Francisco, California-
based group-buying service provider- increased from 37.00 to 132.000 registered
users in a three month period from January to April 2000 (as cited in Kauffman &
Wang, 2001). Its early success attributed by its careful design, increasing technical
adequacy and saving delivery time. Focusing on quality is a good strategy for online
group-buying websites in highly competition market at current time and in the future.
2.2.2 IS repurchasing behavior model:
Online buying behavior can be understood in two stages: the first stage is primarily
concerned with the encouraging people to purchase online and the second is to
encourage them to repurchase, which is critical if the e-commerce vendor is to
succeed (Zang et al., 2011). In these two stages, second stage is an important subject
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of study because customer retention is often seen as a means to gaining competitive
advantage.
Researchers have studied online customer retention in different contexts, such as

“online repurchase intention”, “continue to shop online”, “customer intention to
return”, “web site stickiness”, and “continued information systems/IT intention”
(Wen et al., 2011).
2.2.2.1 Online customer retention:
Online customer retention in recent years, become a hot issue in both the IT and
marketing areas. Studies of this topic have been mainly divided into two streams
consisted of studies based on static-type models and process-type models (Lin & Ong,
2010).
(1) Static-type researches are derivation from concepts such as theory of planned
behavior (TPB), Fishbein and Ajzen's theory of reasoned action (TRA) or
technology acceptance model (TAM). The theory of Reasoned Action assumes
that if people view a behavior as positive (attitude), and if they believe that
others would prefer them to perform the behavior (subjective norm), there will
be a greater intention (motivation) to behave in that manner and they are thus
more likely to do so (Udo et al., 2010). TPB adds one major predictor –
perceived behavioral control – “to account for times when people have
intention of carrying out a behavior, but the actual behavior is thwarted because
they lack confident or control over behavior” (Miller, as cited in Udo et al.,
2010). Along with these theories, TAM has been confirmed as the most popular
parsimonious framework used to explain customers’ behavioral intention. TAM
is model that explains user intention and behavior based on forward-looking or
prospective expectations about IT usage. This model found perceived
usefulness and perceived ease of use as salient beliefs influencing IS
acceptance behaviors across a broad range of end-user computing technologies
and user populations (Davis et al.; Mathieson; Taylor and Todd, as cited in
Bhattacherjee, 2001). However, many empirical studies also comparing the
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relative effects of perceived usefulness and ease of use during pre-acceptance
and post-acceptance stages of IS use report that: perceived usefulness impacts
attitude substantively and consistently during both stages of IS use, and ease of
use has an inconsistent effect on attitude in the initial stages, which seems to
further subside and become non-significant in later stages (Davis et al.;
Karahanna et al., as cited in Bhattacherjee, 2001). Hence, studies base on TAM
to nowadays, perceived usefulness is usually used as direct variable influencing
on customer behavioral intention.
(2) Second stream is process-type models, mainly based on expectation-
confirmation theory (ECT) or expectation-confirmation model (ECM). This
stream had been developed from some limitations of TAM. It also uses
individual cognitive factors for predicting IS continued use. However, they
based on their backward-looking or retrospective perceptions grounded in
actual usage experience, such as performance, disconfirmation, and satisfaction,
in addition to initial expectations. (Premkumar, Bhattacherjee, 2008).






Source: Bhattacherjee, 2001
Figure 2.1: A post-acceptance model of IS continuance
In this model, consumers’ intention to repurchase a product or continue service
use is determined primarily by their satisfaction with prior use of that product or
service (Anderson and Sullivan 1993; Oliver 1980, 1993, as cited in
Bhattacherjee, 2001). Satisfaction is viewed as the key to building and retaining
a loyal base of long-term consumers and confirmed in many studies. Until
today, this stream develops widely in the consumer behavior literature to study

consumer satisfaction, post-purchase behavior and service marketing in general
Perceived
Usefulness
Satisfaction
Confirmation
IS continuance
Intention
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(Anderson and Sullivan; Dabholkar et al.; Oliver; Patterson et al.; Tse and
Wilton, as cited in Bhattacherjee, 2001). Many researches try to add new
construct, and integrate studies that combine these models and another theory or
model.
In addition to the mainstream researches, there is a recent focus on affective
factors. According to Lee & Kwon (2011), the factors suggested classified into two
categories: cognitive and affective. Cognitive factors are those related to the mental
process of knowing, including aspects such as perception, reasoning and judgment.
Representative cognitive factors are: perceived usefulness, satisfaction, trust,
perceived ease of use, security, confirmation and disconfirmation, perceived risk,
perceived switching cost… In contrast, affective factors are related to specific
emotions or states of feeling. Some affective factors are studied in recent years such
as perceived playfulness (enjoyment), pleasure, arousal, familiarity and intimacy. Lee
& Kwon (2011) also suggested that customer retention research has shifted its focus
from cognition-oriented factors to affective factors to explore more factors
influencing on customer behavior.
Table 2.1: Some integrated models of customer retention
Study Characteristics of the research model Research domain

Lin et al. (2005) Based on ECM: introduced
perceived playfulness as a
new factor
Web-portal
Thong et al. (2006) Based on ECM: introduce post-
adoption beliefs and
perceived enjoyment as new factors
Internet service
Limayen

and Cheung
(2008)
Based on ECM: adds IS habit as a new factor

Internet
-
based
learning
Atcharuyachanvanich et
al. (2006)
Based on ECM: adds customer loyalty as a new factor E-commerce
Min and Shenghua
(2007)
Based on ECM: adds perceived enjoyment as a new
factor
E
-

learning

Roca et al.(2006) An integrated study
that combines EDT model and TAM
model, adds perceived quality and perceived usability as
new factor
E- learning
Liao et al. (2007)

An integrated study that combines EDT model and the
theory of Planning Behavior, adds subjective norm as a
new factor
E
-
serv
ice

Chiu and Wang (2008)

An integrated study that combines United theory of
Acceptance and Use of Technology, adds subjective
task
value as a new factor
Web–
based learning
Source: Lee & Kwon (2011)
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In general, researchers have integrated many other factors to create new framework
that will improve the explanatory and predictive power for explaining online
customer retention.
2.2.2.2 Online group-buying repurchase model:
Few studies have tested online repurchase intention in online group-buying
context. In 2010, Fan et al. has used model of Bhattacherjee adapted expectation-
confirmation theory (ECT) and integrates the technology acceptance model (TAM) to
theorize a post-acceptance model of IS continuance. In this study, relationship
between customer satisfaction, perceived usefulness and online group-buying
repurchase intention are confirmed. Simultaneously, role of price expectation is also
measured
In 2012, Tien et al. also do research about repurchase intention in online group-
buying context. They examine repurchase intention through relationship quality and
expectation – confirmation theory views though relationship quality is regarded as an
important factor in the relationship marketing literature. This study emphasize
satisfaction is a particularly important foundation for a successful long-term
relationship between customers and group-buying websites. Hand in hand with
satisfaction is trust of the second factor. Just like previous researches, satisfaction and
trust continue being the important of two influence factors. Satisfaction is a stronger
predictor of repeat purchase intention than trust; this is consistent with the study in e-
commerce (Deng et al., as cited in Tien et al., 2012). Trust has direct and significant
effect on satisfaction and repeat purchase intention. Moreover, the results of this
research also show that trust, perceived value and perceived quality are important
antecedents of satisfaction. Among these factors, perceived quality is highly
influential determinant of perceived value and indirectly affecting repeat purchase
intention through satisfaction.
In the same year, Liu and Wu also study relationship between service quality,
word-of mouth, customer satisfaction, promotional incentive, and customer
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satisfaction. This study show that service quality has strong effect on customer
satisfaction, thus, indirectly influence to customer loyalty.
In summary, very little studies in online group-buying context focus on customer
buying behavior, especially, customer retention. While the online market is growing
and profitable, the competition for market share is also increasing. To remain
competitive, it is imperative for online providers to invest time and money to find out
strategy to keep existed customers. Studies of customer retention are really necessary
for development of online group-buying model in the future.
2.2.3 Website quality:
Quality is not a new concept in information systems management and research.
Information systems practitioners have always been aware of the need to improve the
information systems function so it can react to external and internal pressures
and face the critical challenges to its growth and survivability (Aladwani & Palvia,
2002). However, to nowadays, both the conceptualization and the measurement of
website quality have been two debated topics.
In study of Éthier et al. (2006), research on the concept of website quality can be
classified broadly into four complementary research categories. (1) The first focuses
on functionalities and/or content of website. The dimensions identified have generally
been: functional issues, navigation, content, technical issues and contact information
(2) The second category includes researches affected by technology acceptance model
TAM, relationship between perceived ease of use and perceived usefulness can be
seen as a relation of quality. Information quality, system quality and service quality of
websites are the essential components of website quality. (3) The third category
includes studies that highlight service quality as a fundamental aspect of the overall
quality of a website. E-service quality and website quality sometimes are use
exchangeable. Many researchers try to make conceptualization of service quality of
website, for instance, Zeithaml (as cited in Li, 2010) defines e-service quality as the

extent to which a website facilitates efficient and effective shopping, purchasing and
delivery of goods and services; Santos (as cited in Udo et al., 2010) defines e-service
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quality is the overall customer perceptions, judgments and evaluations of the quality
of service obtained from a virtual marketplace. These concepts are used popular and
developed from time to time. However, this category still faces many debates. (4) The
fourth category is composed of authors who believed that the principal criterion for
website quality was defined by customers' perceptions of quality. For example,
Huang (as cited in Éthier et al., 2006) describes website quality as whether the
website meet and/or exceeded expectations in terms of information and enjoyment
position; Wan (as cited in Éthier et al., 2006) states that the quality of a website was
based on: information, friendliness, responsiveness and reliability.
Like concepts of website quality, many instruments that combine the diverse
aspects of website quality have also been proposed (see in appendix A). Some
instruments combine traditional service quality dimensions and web interface quality
dimensions as the point of departure. For instance, in 2000, Loiacono et al. proposed
WEBQUAL, includes: ease of understanding, intuitive operation, informational fit-to-
task, tailored communication, trust, response time, visual appeal, innovativeness,
emotional appeal, online completeness, relative advantage, and consistent image.
After that, Yoo & Donthu (2001) measures website quality by SITEQUAL scale with
12 dimension: aesthetic design, competitive value, ease of use, clarity of
ordering, corporate and brand equity, security, processing speed, product
uniqueness, and product assurance quality. Aladwani and Palvia's (2002)
instrument focuses on website design and content. It used four dimensions: specific
content, content quality, appearance, and technical adequacy.
With the growth of recognition of different variability in the outcome of measuring

website quality, many studies show more different dimensions in website quality, for
examples: Madu &Madu (2002, as cited in Li & Suomi, 2009) develop a 15
dimensions scale of website quality, which is built on better understanding of
customers and providing services to meet the needs and expectations of customer;
Field et al. (2004, as cited in Li & Suomi, 2009) develop process model for assessing
and improving website quality by identifying e-service system entities and
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transactions between those entities and mapping key quality dimensions onto them.
Most recently years, Sohn & Tadisina (as cited in Li, 2010) proposed six dimensions
to measure website quality, include: trust, speed of delivery, reliability, ease of use,
customized communication, website content and functionality.
Among studies of website quality instruments, most researchers develop adapted
website quality scales based on the modification of the SERVQUAL instrument.
SERVQUAL scale is measurement scale had been used widely to measure service
quality with five dimensions: tangibles, reliability, responsiveness, assurance, and
empathy (Iwaarden, Wiele, as cited in Li, 2010). When adapting to e-commerce
context, Zeithaml (2000, as cited in Li & Suomi, 2009) proposed a 7-dimension
website quality scale. Later, Panasuraman et al. (2005, as cited in Liu & Wu, 2012)
developed it into seven constructs divided into two groups, includes: core e-SQ:
efficiency, fulfillment, availability, privacy; recovery e-SQ: responsiveness,
compensation and contact. To nowadays, these instruments is used popular in many
studies because it offers the surface dimensions of e-service quality based on
customers’ experience and evaluation perspective, which are viewed also as the
antecedents to the adoption of e-service (Rowley, as cited in Li & Suomi, 2009).
In general, website quality concept remains underdeveloped and is a vastly
undefined concept. This is a complex concept which has multiple dimensions.

Although recently, research on website quality has adopted a much broader scope on
website quality compared to its past focus on usability and interactivity. However, to
nowadays, there is no consensus on a definition on it. This topic is still a promising
field for researchers.
2.3 Research model:
This study adapted literature reviews of customer retention in online shopping and
online group-buying context. However, the advancement of many preliminary model
of human behavior required additional theoretical refinement and empirical testing in
order to improve its robustness and predictive ability across a wider range of contexts
(Li, 2010). Hence, some modifications and extensions to the original model were
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proposed in this study.
Firstly, online group-buying repurchase intention was designed as dependent
variables. Intention was considered the best immediate factor in the relationship
between attitude and behavior, and is appropriate to test consumers’ behavior (Wen et
al., 2011). Online repurchase intention was one of context of customer retention. In
many prior researches, online repurchase intention and IS continuance intention were
used exchangeable. In this study, repurchase intention was used instead of
continuance intention because these concepts were still different (Wen et al., 2011)
although in online environment, both continuance intention and repurchase intention
are influenced by the initial use/purchase experience and sometimes used as the same.
Continuance intention emphasizes the continued usage of e-commercial websites to
shop instead of the use of physical stores while online repurchase intention is a
construct combining information system theory and marketing theory (Wen et al.,
2011). In online group-buying model, customer purchased products or service
through online group-buying websites, not directly from providers, so, both on

customers’ IS use and purchasing behavior needed to investigate. “Online group-
buying repurchase intention” construct was acceptable with this study.
Secondly, two cognitive factors in expectation-confirmation model (ECM) –
satisfaction and perceived usefulness - were chosen for this study because they
commanded a majority of factors found to affect customer retention in prior studies.
Simultaneously, it ensures that the nomological structure of the research model is
consistent with the traditional belief-attitude-intention linkages in IS literature (Davis,
Bagozzi & Warshaw; Venkatesh et al., Ajzen, as cited in Li, 2010). In these linkages,
satisfaction is typically viewed as user attitude towards IS, which is primarily
measured by various beliefs about IS and posited to have strong saliency in predicting
continuance intention. Perceived usefulness in this study represents as IS user beliefs
and is a salient determinant of behavioral intention regarding IS use in TAM.
Thirdly, trust was added to the model due its role in influencing both satisfaction
and online repurchases intention. Trust in sellers is a vital key to maintaining
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continuity in the buyer relationship. An individual level of trust may increase
gradually based on positive outcomes from repeated behavior, although its important
in determining repeat purchase intention may decrease over time (Chiu et al., 2012).
Especially, in Viet Nam market, when some online group-buying websites faced
many problems make customer trust decrease, studies of the impact of this factor on
customer behavior become necessary for practitioners in improving and developing
their business.
Finally, website quality in this proposed model was also incorporated as a factor
leading and influencing to customer behavior through three constructs: perceived
usefulness, customer satisfaction and customer trust.
A review of the literature evaluation reflected that there were many instruments to

measure website quality. In this study, instrument from study of Aladwani & Palvia
(2002) was used due to its concept base on website functionalities and contents. This
instrument included four constructs: content quality, appearance, specific content and
technical adequacy. Appearance referred to the visual attractiveness of a website,
included colors, fonts, and multimedia features as well as an appropriate overall
layout. Specific content referred to finding specific details about products or services,
customer support, privacy policies and other important information (Aladwani &
Palvia, 2002). Content quality dealt with attributed such as information usefulness,
completeness, accuracy, and so forth, and was similar to the “information quality”
concept (Liao et al., 2006). Technical adequacy, according to Liao et al. (2006), was
also similar to the “system quality” concept. It meant that appropriate technologies
had been adopted by the web retailer. It could improve the security of online
transactions and contribute to convenience of usage for IS users.
With above discussions, the proposed research framework and hypotheses are
presented in figure 2.2

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H1a
H2
H3a
H4b
H4a
H5
H3b
H1b
H4d
H4c

Figure 2.2: Research model
2.3.1 Perceived usefulness:
Drawing from TAM, post-consumption expectation is represented as ex-post
perceived usefulness in the proposed IS continuance model (Bhattacherjee, 2001).
Davis (1989) defines perceived usefulness as “the degree to which a person believes
that using a particular system would enhance his or her job performance. According
to Burk (as cited in Al-maghrabi et al., 2010) perceived usefulness is the primary
prerequisite for mass market technology acceptance, which depend on consumers’
expectations about how technology can improve and simplify their lives (Peterson et
al., as cited in Al-maghrabi et al., 2010). Numerous empirical investigations have
established strong empirical support for direct impact of perceived usefulness on
intention. So, in this study, perceived usefulness is proposed factor captures the
instrumentality of IS use, and influences subsequent continuance decisions.
Hypothesis 1a: Customer perceived usefulness is positively associated with online
group-buying repurchase intention.
Besides an important predictor of initial intention to use information system (Davis;
Davis et al., cited in Liao et al., 2006) and of intentions for continued use
(Bhattacherjee, 2001), perceived usefulness also influences indirectly to customer

Perceived
Usefulness
Customer
Trust
Customer
Satisfaction
OGB
Repurchase
I
ntention

Website quality
Content quality
Specific content

Appearance
Technical adequacy
20




intention through customer satisfaction. Some studies also examine and confirm this
relationship such as Bhattacherjee, (2001), Li (2010), Wen et al. (2011). Thus, it is
assumed that:
Hypothesis 1b: Customer perceived usefulness is positively associated with
customer satisfaction.
2.3.2 Customer satisfaction:
Satisfaction is initially defined by Locke (1976, as cited in Bhattacherjee, 2001) in the
context of job performance as “a pleasurable or positive emotional state resulting

from the appraisal of one’s job.” This definition is extended by Oliver (as cited in
Bhattacherjee, 2001) to the consumption context as “the summary psychological state
resulting when the emotion surrounding disconfirmed expectations is coupled with
the consumer’s prior feelings about the consumption experience.” In many
researches, customer satisfaction has usually been applied to measure e-commerce
success or consumer repurchase behavior. Oliver (as cited in Fan et al., 2010) shows
that satisfaction has both direct and indirect connections with future intention through
its impact on attitude. Hence, proposed hypothesis of this study is:
Hypothesis 2: Customer satisfaction is positively associated with online group-
buying repurchase intention.
2.3.3 Customer trust:
In general, trust is viewed as a set of specific beliefs dealing primarily with the
benevolence, competency, and integrity of another party (Doney and Cannon, as cited
in Chiu et al., 2012). According to TRA, trust can be viewed as a behavioral belief
that creates a positive attitude toward the transaction behavior, which is turn leads to
transaction intentions (Pavlou and Gefen, as cited in Wen et al., 2011). The role of
trust is more important compared to traditional business as increasing uncertainties
will be cause by the distance and other impersonal factors. Many previous researchers
show that the violation of trust in e-commerce will lead to negative repurchase
intention and negative word of mouth communication. Lack of trust prevents buyers
21




from engaging in online shopping because they are unlikely to carry out transactions
with sellers who fail to convey a sense of their trustworthiness, mainly because of
fears of sellers’ opportunism (Hoffman et al., as cited in Wen et al., 2011). So, trust
plays an important role on driving repeat purchase intention. Following hypothesis is
proposed:

Hypothesis 3a: Customer trust is positively associated with online group-buying
repurchase intention.
Beside directly impact on customer repurchase intention, users’ trust also influences
customer behavior through satisfaction. In some previous researches, trust’s impact
has not high significance on customer repurchase intention (Tien et al., 2012), and in
study of Wen et al., (2011), this significant is very low. However, in the other hand,
some studies confirm that trust is still a factor influencing customer repurchase
intention because lack of trust could be the main reason customers decide not to shop
online or why they have negative concerns related to shopping online. So, this study
is proposed that:
Hypothesis 3b: Customer trust is positively associated with customer satisfaction
2.3.4 Hypotheses related to website quality:
Several elements of website quality, such as information quality, response time, and
visual attractiveness have been verified to be related to perceived usefulness (Liao et
al., 2006). Saeed and Abdinnour-Helm (as cited in Li, 2010) also assert that service
quality has impact on users’ extended usage and the exploratory usage of a website via
the perceived usefulness of a website. Thus, website quality is expected to have an
influence on user perception of the usefulness of online group-buying context. It is
assumed that:
Hypothesis 4a: Website quality is positively associated with customer perceived
usefulness

22




Website quality is referred to “the consumers’ judgment about a product’s overall
excellent or superiority” (Zeithaml, as cited in Tien et al., 2012). Consumer
satisfaction is a transient and experience – specific attitude, which is based on a

consumer’s specific service encounter (Li, 2010). Numerous studies have been
conducted to clearly demonstrate the relationship between service quality and
satisfaction. Fornell (as cited in Tien et al., 2012) proposed that website quality
positively affect overall customer satisfaction. Hence, this study proposed:
Hypothesis 4b: Website quality is positively associated with customer satisfaction
In study of Mcknight et al. (as cited in Liao et al., 2006), authors showed that if
consumers perceive that website quality is of high quality, they are likely to have high
trusting beliefs about the web retailer’s competence, integrity, and benevolence; and
will develop a willingness to depend on the web retailer. Zhou et al. (as cited in Li,
2010) also found that service quality had a stronger impact on consumer trust and
satisfaction. So, it is suggested that:
Hypothesis 4c: Website quality is positively associated with customer trust
Service quality usually was demonstrated to be an antecedent to satisfaction and
asserts a direct influence on consumer satisfaction (Anderson & Fornell; Sweeney &
Soutar, as cited in Li, 2010). However, some prior marketing literature also had
evidence showing that service quality affects the purchasing intention. Study of Liang
&Lai (as cited in Liao et al., 2006) showed that a high quality website not only affects
the customer’s purchase decision, but also is one of the main reasons for consumers to
determine whether they will purchase online or not (Gehrke & Turban, as cited in Liao
et al., 2006). Poor quality can result many loss in completion such as loss of
customers, reduction in profits, increasing costs… Therefore, website quality turn
leads to behavioral intention to use and reuse of customer. So, hypothesis is proposed
that:
Hypothesis 4d: Website quality is positively associated with online-group-buying
repurchase intention
23

2.4 Conclusion:
This chapter presented theoretical background of IS repurchase models and website
quality concepts and instruments. Base on discussion of literature review, online
group-buying had emerged a new e-commerce model. Customer retention of online
group-buying context was an interesting topic and necessary for development of this
model in the future. Hence, in this study, a research model was proposed with nine
hypotheses. Three cognitive factors – trust, satisfaction and perceived usefulness - was
chosen for this study because they commanded a majority of factors found to affect
customer retention in prior studies. Website quality was also incorporated to research
model. The next chapter will discuss about research method used to test this research
model.

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CHAPTER 3
RESEARCH METHOD
3.1 Introduction:
This chapter presents a detailed account of a research methodology of this study.
First, it discusses data collection method and research process. Then, measurement
scales are presented to develop questionnaire. Finally, results of pilot test are discussed
to contribute for measurement scales. This chapter aims at explicating the research
approach choice and presenting the reasons for its use.
3.2 Research design:
Collecting data process of this study was designed into two stages. First was a pilot
test, second was main survey. This study was conducted in Ho Chi Minh City, the
principal business center in Vietnam. Sample of this study is selected by using non-
probability sampling method – convenience sample. Most of respondents of this study

was full-time and part-time students who were studying at University of Economics
Ho Chi Minh City. They also were individuals who had experience in group-buying
and still had repurchase intention.
The pilot test of this study was conducted to assess the validity and reliability of
the instrument before the questionnaire was distributed. The initial data was collected
from a sample 70 randomly; however, only 57 questionnaires were collected. The
pilot study helped ensure that the final questions would be well understood and
attempted to predict an appropriate sample size and improve upon the study design
prior to performance of a full-scale research project. Simultaneously, cronbach alpha
and exploratory factor analysis (EFA) was used to test measurement scales.
Main survey was also quantitative research to collect data for examining research
model. The sample for this survey was also individuals who had experience in group-
buying but with a large amount. Based on rule of five observations per parameter
estimated, the minimum sample size needed for testing overall model was 205 (there
were 41 free parameters), hence, for the survey, 600 questionnaires were distributed
directly and email to respondents. After the data collection, total 550 responses were
25




collected, 185 responses were eliminated because respondents indicated that they had
never use online group-buying before or they had no intention to repurchase. Finally,
365 responses were used as a valid data for this research. In this main study,
exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used
to assess measurement scales. The structural equation model (SEM) had been used as
the main method for analyzing the research model by testing the assumed causation
among a set of dependent and independent variables. Bootstrapping with N = 1000 re-
samples was also used to assess the path significance.

Figure 3.1: Research process
Literature Review

Pilot test -
Quantitative
research
(n=57)

Cronbach Alpha
EFA- Exploratory factor analysis

Cronbach Alpha
EFA- Exploratory factor analysis
(Examine reliability and validity)

Composite reliability and Average
variance extracted
(Examine reliability validity)

CFA - Confirmatory factor analysis
(Examine discriminant and convergent
validity)

SEM – Structural Equation Model
(Examine research model)
Draft Scale

Final Scale

Main survey -
Quantitative
research
(n=365)