Effects of perceived service quality, website quality, and reputation on purchase intention: the mediating and moderating roles of trust and perceived risk in online shopping

Abstract

Globally, there is an increasing trend in online shopping, which is considered a critical preference due to the wide reach of the internet. Internet usage has been continuously growing for two decades. In 2019, of the 7.676 billion population, 4.388 billion people were using the internet, of which 3.484 billion were active social media users and 3.256 billion were using the internet over mobile phones (Kemp, 2019). Asia has an estimated population of 4.24 billion, of which 2.33 billion (c. 55%) are internet users; the penetration rate in the region is 54.2% (Internet World Stats, 2019). In 2018, almost 1.8 billion people purchased online products from various platforms, including Walmart, Amazon, daraz.pk, and flipkart.com. In 2018, online retail sales reached $US2.8 trillion, estimated to be US$4.8 trillion in 2021 (Clement, 2019). The UK, China, and Finland are the top three countries dealing in e-commerce retail sales, with 76.9% of people purchasing via computers/laptop, 37% of whom are aged between 30 and 39 years; the worldwide penetration rate is 47.3% (Saleh, 2019). Despite this growth in the usage of the internet and online shopping worldwide, in some countries, customers are still reluctant to shop online due to a lack of trust (Stouthuysen et al., 2018), privacy (Regner & Riener, 2017), education (Badwan et al., 2017), perceived risk (Pelaez et al., 2019), and perceived quality (Sahoo et al., 2018). Conversely, the motivational factors for online shopping include time-saving (Escobar-Rodríguez & Bonsón-Fernández, 2017), discounted pricing (Carlson & Kukar-Kinney, 2018), convenience (Pham et al., 2018), competitive pricing, expert advice, and greater access to information (Tarhini et al., 2018). This study aims to analyze the factor of trust, as previous scholars consider it one of the most significant elements in online shopping (Thomas et al., 2018). Ariff et al. (2014) proposed that perceived risk is a significant issue in online shopping due to its direct influence on attitude and intention to purchase. There remains, however, a need to expand the theoretical conceptualization and provide detailed evidence for contexts in which online shopping is supported and beneficial (Hsu et al., 2018). Several theories of trust such as cue utilization suggest that trust mediates the interaction. Although trust has received significant research attention in online shopping, little attention has been paid from the process point of view and its causal relationship (Chuang & Fan, 2011); hence, the mediating role of trust has not been included. Furthermore, regarding purchase intention and its antecedents, online suppliers and e-retailer must learn that customers’ first concern during buying is not the products/services but the perceived risk, which may reduce their purchase intention (Salisbury et al., 2001). Hence, perceived risk may have a moderating effect on purchase intention. The motivation for this study includes the scant examination of the trust-building mechanism and its interactions (Chang et al., 2013), its significant impact on internet society, and intention towards online buying (Truong et al., 2017). Theoretically, this article contributes to the existing literature by offering insights into the mediating role of trust in the relationship between perceived service quality, perceived website quality, perceived reputation, perceived risk, and the moderating role of perceived risk between trust and purchase intention. Practically, this scholarship can benefit well-established and new online shopping platforms’ executives regarding the importance of trust and how perceived risk affects the relationship between trust and purchase intention in the online shopping context.