RESEARCH REPORT

THE ONLINE PURCHASE INTENTION ON PERCEIVED

RISK AND ONLINE TRUST.

BAQAR QAMBER RIZVI (13763)

MUAZ KHAN (11800)

SUBJECT: Research Method and Skills.

INSTRUCTOR: SIR KAMRAN MOHY-UD-DIN

CHAPTER # 01:
INTRODUCTION:
Three decade earlier there is pandemic situation came in everyone life that type of unpredictable
situation had never seen before since 2007-2008 financial crisis, this pandemic was a disaster for
many lives and businesses there was a huge economy down fall all the communication and
medium of trade has been closed but after an year the era of online business which is known as
E-commerce had evolve it was already in the market but after this pandemic the E-commerce has
come up as a new normal life for a lot of businesses and education system people are slowly
coming online to restart their businesses. Through E-commerce a lot of new businesses have
introduce. All the customers move from physical stores to online stores.

The usage of internet users rapidly increased and the world started to become digitalized. In this
generation the emphasis of using the internet is increasing day by day. According to research,
5.18 billion internet users worldwide is approximately 64.6% of the world’s total population
(Statista, 2023). And as a result of this internet user craze, businesses in the clothes, jewelry,
food, and service sectors have begun reaching out to their current customers and attracting
additional customers. Perceived risk plays a role, in shaping consumer behavior especially when
it comes to online shopping. consumers may experience concerns related to the security of their
personal and financial information, product quality, and the reliability of the e-commerce
platform ((Jarvenpaa, Tractinsky, & Saarinen, 2000). It shows the doubts and potential
drawbacks that consumers associate with making a purchase decision. The dimensions of
perceived risk encompass financial risk, performance risk, psychological risk, social risk, and
time risk (Bauer, 1960). As the whole world is moving towards digitalization the chance of
frauds and trust issue has also come, so many people did not accept the technology evolution
they think that this is so difficult to use, and its interface is not friendly. Therefore, some
consumers lack trust in online shopping and tend to prefer buying in offline shopping (Ventra
and Kolbe 2020). Trust also plays a role, in motivating people to make purchases by reducing
their perceived risks. Trust is a multidimensional concept involving elements of competence,
integrity, and benevolence (McKnight & Chervany, 2001).
Therefore, these issues have brought attention to two factors; trust and perceived risk. Numerous
previous studies have explored the correlation, between these factors and the intention to make
purchases. These studies have provided insights for policymakers. There are still some gaps in
their research that we aim to address in our own study. In our research we analyze the data
collected from customers who have experienced e commerce both before and, after the COVID
19 pandemic shedding light on studies while also filling in those gaps.
PROBLEM STATEMENT:
In years there has been a shift, in Consumer behavior in the retail sector has started to shift
significantly in one direction over the past few decades, from in-store purchases to online
purchases. But most of the consumer do not prefer to purchase goods from online due to high
risk of getting fraud and scam which to leads to lack of trust. In this study we want to see that
how our independent variables (online trust and perceived risk) are effecting the dependent
variable (online purchase intention) are there relationship is positive or negative. In this research
we had identified all the gaps and try to fill those gap for which we are going to collect data from
the people who had done the purchases in the pre and post time of covid because in this period so
many business has shifted to online that’s why it was the golden time of the online purchasing
that’s why we take that audience as our target population from which we separate our sample
audience who will represent the whole audience. We had collected data through the online survey
form because it is the best way to collect data in a short time with a big audience.

CHAPTER # 02:

LITERATURE REVIEW:

1. ONLINE TRUST ON ONLINE PURCHASE INTENTION:

To build a trust among the costumers is very important factor in the online purchasing context,
because when a customer will feel the seller a trustworthy person for them so the intension of a
costumers will automatically build up for the online purchasing and for that seller. When a
consumer has a higher degree of trust to the seller, the consumer will elicit higher degree of
purchase intention (Ling, Daud, Piew, Keoy, & Hassan, 2011). In an online transaction, there is
no physical interaction between the buyer and the seller, and the payment method is usually paid
by credit card, thereby increases the probability that the consumer's financial data may be
exposed and used incorrectly, (ling, daud, piew, keoy, & hassan, 2011) and if the customer gets
cheated on the online platform their believe from the online purchasing gets ended because the
experience that they get from the E-commerce website was not satisfactory. It is found that lack
of trust generates a negative effect on willingness to online purchasing activities. (Fatemeh,
2013).

H1: The online trust has a significance impact on online purchase intention.
 2. PERCEIVED RISK ON ONLINE PURCHASE INTENTION:

Perceived risk is when customers worry about being cheated or falling into a scam when they
shop online. And it strongly influences whether they decide to buy things online. This type of
risk is very common in most of the costumers when they go for the online purchasing and it has
an powerful impact on the online purchase intension There are a lot of fear of a costumer which
increase the intension of their perceived risk. Perceived risk has a significant part in determining
consumer purchase intentions. Consumers’ perception toward risk is crucial in determining their
evaluations and purchasing behaviors (Ariffin, Mohan, & Goh, 2018).

Privacy risk is related with the fear of personal information being leaked or misused by online
retailers or third parties. It's a significant concern in an era of data breaches and privacy
violations ( Dwivedi, Rana, Jeyaraj, Clement, & Williams, 2017). Time risk has also great impact
on customer behavior because the time and effort required for the online shopping process.
Delays in delivery, complicated navigation on e-commerce websites, and uncertainties about the
speed of service can lead to this type of perceived risk ( Tsaih & Han, 2016). So there is
relationship between perceived risks with the online purchase intention.

H1: The Perceived Risk has a significance impact on online purchase intention.

ONLINE TRUST

ONLINE PURCHASE
INTENTION

PERCEIVED RISK
CHAPTER # 03:
DATA AND METHAOLOGY:
In this research there is one dependent variable which is Online Purchase Intention and two
independent variables which are perceived risk and perceived trust. Our research is quantitative,
and we use Cross sectional research design which is appropriate in our study because in the
survey of the research, we collect data predominantly by questionnaire and Cross-sectional
research is appropriate in determining the prevailing characteristics in a population at a single
point in time. We made our questionnaire of this research on Interval scale because variables are
measured on numerical scores or values. Our sample population are those customers who are
above eighteen and had experience of at least one year of online shopping, we made our
questionnaire on google forms and shared with them online via WhatsApp.

Data were analyzed using descriptive statistics via the computer program known as SPSS.

1. VARIABLES AND MEASUREMENT:

S.NO Variable Name Reference Measurement

1. Online Purchase (Dharmesti, 1. I like to shop online.
Intention Dharmesti, Kuhne, & 2. I have a strong intention to
Thaichon, 2019) purchase online in the future.
3. I will buy it in the future.
4. I often consider buying online.

2. Perceived Risk (Kolbe & Ventre, 1. I feel safe making purchases on

2020) the Internet using my credit
card.
2. I feel safe giving my personal
details to an online organization
if requested.
3. I think that using the Internet is
riskier.
4. There is too much uncertainty
associated with using the
Internet to make purchases.

3. Online Trust Ling, Daud, Piew, 1. Online websites are trustworthy

Keoy, & Hassan, and honest.
2011 2. Online websites want to keep
promises and obligations.
3. Online information on this
website is plentiful and
sufficient.
4. Online website offers secure
personal privacy.
CHAPTER # 04: ANANLYSIS AND RESULT:
 1. DEMOGRAPHICS PROFILE:
In this demographic profiles total Respondents are 50. As seen from demographic characteristics the
respondent age group category showed that (38%) were falling in the age bracket of below 25, (24%)
were in the age bracket of 25–30years whereas (02%) in the age bracket of 36 or above. Most of the
respondents were bachelor (76%) whereas, (16%) were diploma holder, 08% were master, (2%) were
Phd. In this demographic profile 94%) respondent are Single while (6%) are married. In terms of gender,
the 30% of respondents were female, while 70% were Male’s.

VARIABLE CATEGORIES FREQUENCIES PERCENTAGES

(%)
Age Below 25 38 76
25-30 12 24

Education Bachelor 38 76
Diploma 8 16
Master 3 8
PhD 1 2

Marital Status Single 47 94

Married 3 6

Gender Male 35 70
Female 15 30

2. CHRONBACH’S ALPHA:
It investigates the inter item correlation in all variables. Correlation between all responses checked by it.
Table shows reliability analysis of all variables. The Cronbach’s Alpha should be more than 0.7 (70%).
The first variable online purchase intention has 4 items and the value of alpha of these items are
0.889>0.7 showing that there is high inter item correlation. In the second variable Perceived risk the value
of alpha is 0.791>0.7 showing that the inter item correlation is high. Lastly, In the third variable Online
Trust has 4 items and the value of alpha of these items is 0.843>0.7 it means all the items of online
purchase intention, perceived risk and online trust are correlated with each other. The overall reliability
having the 12 items came with the value of 0.927 which is greater than 0.7, which shows the data is
reliable.

S.NO. VARIABLES ITEMS CHRONBACH’S ALPHA

1. Online Purchase Intention 4 0.889
2. Perceived Risk 4 0.791
3. Online Trust 4 0.843
Overall Reliability 12 0.927

3. Descriptive Analysis
Data were analyzed using descriptive analysis via SPSS. Maximum Value of online purchase intention is
5, Perceived Risk is 5 while 5 is for Online Trust. Minimum Value of online purchase intention is 1,
Perceived risk is 1 and Online Trust is 1 .Mean for the Online Purchase intention is 3.26 which is the
highest. Standard deviation of online purchase intention is 0.98063 which is highest, and the lowest
standard deviation is for perceived Risk which is 0.833.

Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation Skewness Kurtosis
Statisti Statisti Std. Std.
Statistic Statistic Statistic c Statistic c Error Statistic Error
OnlinePurchaseIntentio
n 50 1.00 5.00 3.2600 .98063 -.407 .337 -.186 .662

PerceivedRisk
50 1.00 5.00 2.8050 .83344 .154 .337 -.007 .662
OnlineTrust
49 1.00 5.00 2.9388 .84707 -.202 .340 -.011 .668
Valid N (listwise)
49
 Statistics

OnlinePurchaseInte PerceivedR OnlineTr

ntion isk ust
N Valid 50 50 49
Missi
0 0 1
ng
Mean 3.2600 2.8050 2.9388
Median 3.3750 3.0000 3.0000
Mode 4.00 3.00 2.50
Std.
.98063 .83344 .84707
Deviation
Variance .962 .695 .718
Skewnes
-.407 .154 -.202
s
Std. Error
of
.337 .337 .340
Skewnes
s
Kurtosis -.186 -.007 -.011
Std. Error
of .662 .662 .668
Kurtosis
Minimum 1.00 1.00 1.00
Maximum 5.00 5.00 5.00
Sum 163.00 140.25 144.00

MEAN OF ONLINE PURCHASE INTENTION: The average respondent of the data lies in
the category of Neutral. Its mean Average respondent are Neutral with Online Purchase Intention.
While the most middle respondents of data belongs to neutral .Its mean respondent exist in
middle of sample data are Neutral with Online Purchase Intention. The most of the respondent
are observed in the category of Neutral. Its means most repeated respondent are Neutral with the
Online Purchase Intention.
MEDIAN OF ONLINE PURCHASE INTENTION:
The average respondent of the data lies in the category of Neutral. Its median Average
respondent are Neutral with Online Purchase Intention. While the most middle respondents of
data belong to neutral. Its median respondent exist in middle of sample data are Neutral with
Online Purchase Intention. The most of the respondent are observed in the category of Neutral.
Its median most repeated respondent is Neutral with the Online Purchase Intention.
MODE OF ONLINE PURCHASE INTENTION:
The average respondent of the data lies in the category of Agree. Its mode Average respondent
are Agree with Online Purchase Intention. While the most middle respondents of data belong to
agree. Its mode respondent exist in middle of sample data are agree with Online Purchase
Intention. The most of the respondent are observed in the category of Agree. Its mode most
repeated respondent is Agree with the Online Purchase Intention.

MEAN OF PERCEIVED RISK:

The average respondent of the data lies in the category of Neutral. Its mean Average respondent
are Neutral with Perceived risk. While the most middle respondents of data belong to neutral. Its
mean respondent exist in middle of sample data are Neutral with Perceived risk. The most of the
respondent are observed in the category of Neutral. Its mean most repeated respondent is Neutral
with the Perceived Risk.
MEDIAN OF PERCEIVED RISK:
The average respondent of the data lies in the category of Neutral. Its median Average
respondent are Neutral with Perceived risk. While the most middle respondents of data belong to
neutral. Its mean respondent exist in middle of sample data are Neutral with Perceived risk. The
most of the respondent are observed in the category of Neutral. Its means most repeated
respondent is Neutral with the Perceived Risk.
MODE OF PERCEIVED RISK:
The average respondent of the data lies in the category of Neutral. Its mode Average respondent
are Neutral with Perceived risk. While the most middle respondents of data belong to neutral. Its
mode respondent exist in middle of sample data are Neutral with Perceived risk. The most of the
respondent are observed in the category of Neutral. Its mode most repeated respondent is Neutral
with the Perceived Risk.

MEAN OF ONLINE TRUST:

The average respondent of the data lies in the category of Neutral. Its mean Average respondent
are Neutral with Online trust. While the most middle respondents of data belongs to neutral .Its
mean respondent exist in middle of sample data are Neutral with Online Trust. The most of the
respondent are observed in the category of Neutral. Its means most repeated respondent are
neutral with the online trust.
MEDIAN OF ONLINE TRUST:
The average respondent of the data lies in the category of Neutral. Its median Average
respondent are Neutral with Online trust. While the most middle respondents of data belongs to
neutral. Its median respondent exist in middle of sample data are Neutral with Online Trust. The
most of the respondent are observed in the category of Neutral. Its median most repeated
respondent are neutral with the online trust.
MODE OF ONLINE TRUST:
The average respondent of the data lies in the category of Neutral. Its mode Average respondent
are Neutral with Online trust. While the most middle respondents of data belong to neutral. Its
mode respondent exist in middle of sample data are Neutral with Online Trust. The most of the
respondent are observed in the category of Neutral. Its mode most repeated respondent is neutral
with the online trust.

Correlation:
Online Purchase Intention has significant and positive correlation with perceived risk (Prc= .0.705, p
value 0.00<0.01), Online Purchase Intention has insignificant and positive correlation with online trust
(Prc=.753, P value 0.00 < 0.01). Hence, it can be concluded that both independent variable correlate with
dependent variable.
Correlations

PerceivedRisk OnlineTrust OnlinePurchaseIntention

PerceivedRisk Pearson
Correlation 1 .705** .709**

Sig. (2-
tailed) .000 .000
N 50 49 50
OnlineTrust Pearson
Correlation .705** 1 .753**

Sig. (2-
tailed) .000 .000
N 49 49 49
OnlinePurchaseIntention Pearson
Correlation .709** .753** 1

Sig. (2-
tailed) .000 .000
N 50 49 50
**. Correlation is significant at the 0.01 level (2-tailed).

4. Regression:

Coefficientsa

Unstandardized Coefficients Standardized Coefficients

Model B Std. Error Beta t Sig.
 1 (Constant)
.459 .335 1.369 .178

PerceivedRisk
.396 .147 .342 2.689 .010
OnlineTrust
.583 .145 .511 4.018 .000

a. Dependent Variable: OnlinePurchaseIntention

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1 Regressio
n 28.009 2 14.004 38.381 .000b

Residual 16.784 46 .365

Total 44.793 48
a. Dependent Variable: OnlinePurchaseIntention
b. Predictors: (Constant), Online Trust, PerceivedRisk

Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .791 a
.625 .609 .60405
a. Predictors: (Constant), Online Trust, PerceivedRisk

Regression Equation:
Y= α + β1(X1) + β2(X2) + et
Y= dependent variable
X= independent variable
Alpha= intercept
et= error term= unexplained part
Online Purchase Intention = α + β1 Perceived Risk + β2 Online Trust +et
Online Purchase Intention = α + β1(PR) t + β2(OT) t +e t
Online Purchase Intention = 0.459 + 0.396(PR)+0.583(OT)
(0.178). (0.10). (0.00)
Intercept
Intercept has negative and no significant impact on Online Trust (p-value 0.178>0.05)
If all independent variable zero than Online Purchase Intention decreases by 0.459.
Perceived Risk
Perceived risk has positive and significant impact on online purchase intention (p-value 0.010<0.05),
therefore accept H1 and reject Ho
If one-unit increase in perceived risk, than 0.396 unit increase in online purchase intention.
Online Trust
Online Trust has positive and significant impact on organization Performance (p-value 0.000<0.05),
Therefore, accept H1 and reject Ho.
If one-unit increase in Online Trust then 0.583 unit increase in Online Purchase intention.
If probability value is less than 0.05 independent variable has significant impact on dependent variable

Adjusted R square
60.9% of Online Purchase Intention is explained by Perceived Risk and Online Trust and 39.1% is
unexplained i.e., error part.
Anova:
As the results of F-stats is 0.00<0.05 indicating that the research model is good fit.
REFERENCES:

Dwivedi, Y., Rana, N., Jeyaraj, A., Clement, M., & Williams, M. (2017). Re-examining the Unified Theory of
Acceptance and Use of Technology (UTAUT): Towards a Revised Theoretical Model.

Jarvenpaa, S. L., Tractinsky, N., & Saarinen, L. (2000). Consumer Trust in an Internet Store: a Cross-
Cultural Validation. Journal of Computer-Mediated Communication, Volume 5,.

McKnight , D., & Chervany, N. (2014). What Trust Means in E-Commerce Customer Relationships: An
Interdisciplinary Conceptual Typology.

Tsaih , R. H., & Han, T. S. (2016). Managing Innovation and Cultural Mnagement in the Digital Era.

Ariffin, S. K., Mohan, T., & Goh, Y. N. (2018). Influence of consumers’perceived Risk on consumers online
purchase intention.

Fatemeh, Z. B. (2013). Online Purchase Intention: Effects of Trust and Security Perception .

Jarvenpaa, Tractinsky, & Saarinen. (2000). Consumer trust in an Internet store: A cross-cultural
validation. Journal of computer-Mediated Communication.

Kolbe, D., & Ventre, I. (2020). The Impact of perceived usefulness of online reviews , trust and perceived
risk on online purchase intention in emerging markets.

ling, k. c., daud, d. b., piew, t. h., keoy, k. h., & hassan, p. (2011). perceived risk, perceived technology,
online trust for the online purchase intention in Malaysia.

Ling, k. C., Daud, D. b., Piew, T. H., Keoy, K. H., & Hassan, P. (2011). Perceived Risk, Perecived Technology,
Online Trust For the Online Purchase Intention in Malaysia.

Statista. (2023).
 Questionaire
Dear Sir/Madam,
The following information is strictly confidential and will only be used
for research purpose. I will be grateful if you could kindly fill the
information.

Age:
a) 18-25 b) 26-30 c) 31-35 d) 36 or above

Gender:
a) Male b) Female

Marital Status:
a) Single b) Married

Education:
a) Bachelors b) Diploma c) Master d) PHD

S. Variables & Items 1 2 3 4 5

No
S.D.A D.A N.S A S.A

A ONLINE PURCHASE INTENTION

1. I like to shop online.

2. I have a strong intention to purchase online in the future.

3. I will buy it in the future.

4. I often consider buying online.

B PERCEIVED RISK

1. I feel safe making purchases on the Internet using my credit card.

2. I feel safe giving my personal details to an online organization if

requested.

3. I think that using the Internet is riskier.

4. There is too much uncertainty associated with using the Internet

to make purchases.

C ONLINE TRUST

1. Online websites are trustworthy and honest.

2. Online websites want to keep promises and obligations.

3. Online information on the website is plentiful and sufficient.

4. Online websites offer secure personal privacy.