People Innovation Excellence

Trust in e-commerce

E-commerce is a business transaction that transfers the ownership of the good or services through the internet or by other electronic means such as telephone, television. There are three stages on e-commerce transaction: 1) The Order Placement, 2) The Payment and the 3) delivery of the good or services. A transaction can be define as e-commerce transaction if the transaction does the phase 1, or phase 1 and phase 2, or all of the phases, through internet or by other electronic mean.

Trust is an important factor on e-commerce. Without trust, it is impossible that e-commerce transaction will be done successfully. In e-commerce, trust play more significant role compare to brick and mortar shop, or traditional market, which have face to face relationship. In e-commerce, there is no physical contact either with the vendor, goods or money, also the consumer and the vendor can be separate from few km to thousands km spatial space, its make consumer has no possibility to use social cues to assess the vendor.

One of the trust definitions that widely accepted: Trust is a psychological condition that one party willing to be vulnerable bases on positive expectation of the intention the other party. In the e-commerce context trust can be define: The willingness of the consumer to depend on the vendor, the willingness is base on the perception of the vendor will fulfill or deliver the commitment. Building trust is a job that needs a big effort in term of resources and money, in a long time period, but we can destroy it in a second. Trust is involving a calculation process, to calculate the gain and the loss if the trusted party delivers the commitment or not. To building the trust, the buyer or the consumer needs analytical skill to predict the behavior of the other party. There are five processes to build a trust: 1. Calculation, 2. Prediction, 3. Capability, 4. Interpretation and assessment, 5. Transfer.

In the e-commerce environment that the uncertainty is bigger compare to face to face, the trust is fundamental in building and retaining the relationship.The buyer needs to trust on the e-vendor and also on the medium or the internet. Some of the question generated by buyer fear or buyer uncertainty that need be overcome by trust: 1.The vendor is real or scammer? 2. They sent the real thing or the fake one? 3. The Internet is secured? 4. My personal information will be kept in safe and secure way or they will sell it to other party? People tend to be risk adverse, its means they will have higher probability to purchase on more trusted vendor with certain amount higher price, compare to the less trusted e-vendor with cheaper price.

Bibliography:

Doney, Patricia M; Cannon, J. P. (1997). An examination of the nature of trust in buyer-seller relationships. Journal of Marketing, 61(2), 35 – 51.

Jones, K., & Leonard, L. N. K. (2008). Trust in consumer-to-consumer electronic commerce. Information and Management, 45, 88–95. doi:10.1016/j.im.2007.12.002

Mcknight, D. H., & Chervany, N. L. (2001). What Trust Means in E-Commerce Customer Relationships: An Interdisciplinary Conceptual Typology. International Journal of Electronic Commerce, 6(2), 35–59. doi:Article

Pavlou, P. a., Tan, Y.-H. T. Y.-H., & Gefen, D. (2003). The transitional role of institutional trust in online interorganizational relationships. Hawaii International Conference on System Sciences, 36. doi:10.1109/HICSS.2003.1174574

Pavlou, P., Tan, Y.-H., & Gefen, D. (2003). Institutional Trust and Familiarity in Online Interorganizational Relationships. Proceedings of the Eleventh European Conference on Information Systems, 16(1), 21. Retrieved from http://60.88.dyn.lse.ac.uk/asp/aspecis/20030116.pdf

Wang, W., Chen, R., Wang, W., & Chen, R. (2012). How to Retain Your Customers : The Impact of Consumer Trust and Commitment in E- marketplaces Commitment in E-marketplaces.

Yang, Q., Huang, L., & Xu, Y. (2008). Role of Trust Transfer in E-Commerce Acceptance. Tsinghua Science and Technology, 13(3), 279–286. doi:10.1016/S1007-0214(08)70045-2


Published at :
Written By
Wanda Handoko
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