Analysis of Consumer Behavior Towards Purchase Intention in Lazada Indonesia

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By

Raditianto Adipriyana 13110114

A thesis submitted to the Faculty of

BUSINESS ADMINISTRATION AND HUMANITIES

in partial fulfillment of the requirements for the

BACHELOR’S DEGREE in

INTERNATIONAL BUSINESS ADMINISTRATION

SWISS GERMAN UNIVERSITY EduTown BSD City

Tangerang 15339 Indonesia

August 2014

Revision after the Thesis Defense on July 16, 2014

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Raditianto Adipriyana STATEMENT BY THE AUTHOR

I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.

Raditianto Adipriyana

_____________________________________________

Student Date

Approved by:

Junaidi Sinaga, MBA.

_____________________________________________

Thesis Advisor Date

Prof. Eric Jos Nasution, MBA, MA, PhD

_____________________________________________

Dean Date

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Raditianto Adipriyana ABSTRACT

ANALYSIS OF CONSUMER BEHAVIOR TOWARDS PURCHASE INTENTION IN ONLINE BUSINESS:

A CASE STUDY OF LAZADA INDONESIA By

Raditianto Adipriyana Junaidi Sinaga, MBA, Advisor SWISS GERMAN UNIVERSITY

Bumi Serpong Damai

The purpose of this study is to analyze and measure the influencing factors of online consumer intention in Lazada Indonesia, also to identify which factors that has the most significant influence to it. Multiple regression method is used for this study to measure the factors. The data collection is done by distributing questionnaires to Lazada Indonesia’s newsletter subscribers and 100 valid questionnaires are processed using IBM SPSS version 21 for the statistical analysis. The result shows that from five factors that are being tested, there are two factors which have significant relationship towards online consumer intention, which are consumer characteristics and merchant and intermediate characteristics. Moreover, merchant and intermediate characteristics has the most significant influence toward online consumer intention.

Keywords: E-Commerce, Online Business, Online Consumer Behavior, Online Consumer Intention, Lazada Indonesia.

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Raditianto Adipriyana DEDICATION

I dedicate this thesis to my father, my mother, my brother and family for their support and encouragement.

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Raditianto Adipriyana ACKNOWLEDGEMENTS

First of all, I would like to thank Allah SWT for making everything possible and easy by giving me strength to finish my bachelor’s thesis. I dedicate my thesis to my family that always give me support and love anytime. I am so thankful to my father Wisnu Surono Adiputranto, S.E. and my mother Drg. Ratna Komala and my brother Fahriandra Adiwisesa for their continuous support and love.

I would like to give my sincere appreciation to my advisor, Mr. Junaidi Sinaga for his guidance and advice during the process of this thesis.

I also would like to thank Boris Anggoro that had help me during my thesis at and outside his office.

Sincerely thank to my friends, Nindyo Utomo Indratno, Reyhan Ali Firmansyah, Nakhrita Andradite Priyanto, Evan Akira and Trisna Dimas Setyabudi for our ups and downs in university life. Also to Hannan Hibatullah Bahalwan, Hanastasia Gunawan, Istaseptria Christiawan and Bellarminus Bryan Wibowo Trisna for their helpful suggestions and sharing times during the thesis writting period. To all of my classmates of International Business batch 2010, thank you for our great time for 4 years.

Last but not least, to my friends, my family and other parties that can not be mentioned one by one for their support for me to finish my bachelor’s degree.

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Raditianto Adipriyana TABLE OF CONTENTS

Page

STATEMENT BY THE AUTHOR ... 2

ABSTRACT ... 3

DEDICATION ... 5

ACKNOWLEDGEMENTS ... 6

TABLE OF CONTENTS ... 7

LIST OF FIGURES ... 10

LIST OF TABLES ... 11

CHAPTER 1 - INTRODUCTION ... 13

1.1 Background ... 13

1.2 Research Problem ... 15

1.3 Research Purpose ... 15

1.4 Research Questions ... 16

1.5 Significant of Study ... 16

1.6 Scope And Limitations ... 16

1.7 Thesis Structure ... 17

CHAPTER 2 – LITERATURE REVIEW ... 18

2.1 Framework of Thinking ... 18

2.2 E-Commerce ... 19

2.2.1 Types of E-Commerce ... 21

2.3 Consumer Behavior ... 23

2.3.1 Consumer Characteristics ... 23

2.3.2 Consumer Purchasing Decision Process ... 28

2.4 Online Consumer Behavior... 30

2.5 Previous Study ... 36

CHAPTER 3 - METHODOLOGY ... 38

3.1 Research Process ... 38

3.2 Research Model ... 39

3.3 Hypothesis and Question Design ... 40

3.3.1 Hypothesis ... 40

3.3.2 Questions Design ... 41

3.4 Type of Study ... 45

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3.5 Type of Data ... 45

3.6 Data Collection ... 46

3.7 Population and Sample ... 46

3.8 Data Analysis ... 48

3.8.1 Validity and Reliability Test ... 48

3.8.2 Multiple Regression ... 49

CHAPTER 4 – RESULT AND DISCUSSION ... 53

4.1 Company Background ... 53

4.2 Respondent Profile ... 55

4.2.1 Gender ... 56

4.2.2 Age ... 57

4.2.3 Internet Usage Frequency ... 57

4.2.4 Online Shopping Experience ... 58

4.2.5 Experience in Buying from Lazada Indonesia ... 59

4.3 Validity and Reliability Test ... 59

4.3.1 Pre-Test ... 60

4.3.2 Post-Test ... 67

4.4 Classical Assumption Test ... 74

4.4.1 Multicollinearity Test ... 74

4.4.2 Heteroscedasticity Test ... 75

4.4.3 Normality Test ... 76

4.4.4 Durbin-Watson Test ... 77

4.5 Multiple Regression Test ... 78

4.5.1 F-test ... 79

4.5.2 T-test ... 80

4.6 Hypothesis Testing ... 83

CHAPTER 5 – CONCLUSION AND RECOMMENDATION ... 86

5.1 Conclusion ... 86

5.1.1 Respondent Profile ... 86

5.1.2 Variable Relationship ... 87

5.2 Recommendation ... 87

GLOSSARY ... 89

REFERENCES ... 92

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APPENDICES ... 95

APPENDIX A – PEARSON’S PRODUCT-MOMENT CORRELATION COEFFICIENT ... 95

APPENDIX B – CRITICAL VALUES FOR THE F DISTRIBUTION (0.05 SIGNIFICANCE LEVEL) ... 96

APPENDIX C – DURBIN-WATSON STATISTIC (0.05 SIGNIFICANCE LEVEL) ... 98

APPENDIX D – T DISTRIBUTION CRITICAL VALUES TABLE ... 99

APPENDIX E – QUESTIONNAIRE FORM (IN BAHASA) ... 101

APPENDIX F – PRE-TEST RESULT ... 110

APPENDIX G – POST-TEST RESULT ... 111

CURRICULUM VITAE ... 112

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Raditianto Adipriyana LIST OF FIGURES

Figures Page

Figure 1.1 Major Players in Indonesian E-Commerce ... 13

Figure 1.2 Alexa Traffic Rank of Lazada Indonesia’s website ... 14

Figure 2.1 Framework of Thinking ... 18

Figure 2.2 A Framework of E-Commerce ... 20

Figure 2.3 Homepage of Shopify ... 21

Figure 2.4 Homepage of Bhinneka.com ... 22

Figure 2.5 Homepage of olx.co.id ... 22

Figure 2.6 Model of Consumer Behavior ... 23

Figure 2.7 Maslow’s Hierarchy of Needs ... 27

Figure 2.8 Consumer Purchasing Decision Process ... 28

Figure 2.9 Example of SSL Connection ... 34

Figure 3.1 Research Process ... 38

Figure 3.2 Research Model for the Study ... 39

Figure 4.1 Top 20 Province of Lazada Indonesia’s Market Share... 53

Figure 4.2 Respondents Profile Based on Gender ... 56

Figure 4.3 Respondents Profile Based on Age ... 57

Figure 4.4 Respondents Profile Based on Internet Usage Frequency ... 57

Figure 4.5 Respondents Profile Based on Online Shopping Experience ... 58

Figure 4.6 Respondents Profile Based on Experience in Buying from Lazada Indonesia ... 59

Figure 4.7 Scatterplot of Heteroscedasticity Test ... 75

Figure 4.8 Histogram Result for Normality Test ... 76

Figure 4.9 P-P Plot Result for Normality Test ... 77

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Raditianto Adipriyana LIST OF TABLES

Table Page

Table 2.1 Consumer Characteristics ... 24

Table 2.2 Characteristics of Online Consumer Behavior ... 30

Table 2.3 Previous Studies ... 36

Table 3.1 Questions Design ... 42

Table 3.2 Likert Scale Description ... 45

Table 3.3 Sample Size Determination... 48

Table 3.4 Cronbach’s Alpha to Test Reliability ... 49

Table 4.1 Data Sample Questionnaires ... 60

Table 4.2 Consumer Characteristics Pre-test Validity and Reliability Test ... 60

Table 4.3 Environment Influences Pre-test Validity and Reliability Test ... 61

Table 4.4 Product Characteristics Pre-test Validity and Reliability Test ... 62

Table 4.5 Medium Characteristics Pre-test Validity and Reliability Test ... 63

Table 4.6 Merchant and Intermediate Characteristics Pre-test Validity and Reliability Test ... 65

Table 4.7 Online Consumer Intention Pre-test Validity and Reliability Test ... 66

Table 4.8 Consumer Characteristics Post-test Validity and Reliability Test ... 67

Table 4.9 Environment Influences Post-test Validity and Reliability Test... 68

Table 4.10 Product Characteristics Post-test Validity and Reliability Test ... 70

Table 4.11 Medium Characteristics Post-test Validity and Reliability Test ... 71

Table 4.12 Merchant and Intermediate Characteristics Post-test Validity and Reliability Test ... 72

Table 4.13 Online Consumer Intention Post-test Validity and Reliability Test ... 73

Table 4.14 Multicollinearity Test Result ... 74

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Table 4.15 Model Summary Table ... 78

Table 4.16 ANOVA Table ... 79

Table 4.17 Coefficient Table ... 80

Table 4.18 Significance Table ... 83