CHAPTER 3

METHODOLOGY

3.1 Research framework

The purpose of this research is to identify the impact of perceived risk on

online shopping towards the online shopping behaviour of consumer. This
goal has been followed by examining the effect of consumer trust, the
financial risk, the security risk, the internet fraud, and the product risk towards
the online shopping behaviour as the hypothesis of the research.

Independent
variable

Dependent
variable

Consumer

Financial risk

Security risk
The online
shopping

Internet
fraud

Product
risk

Figure 3.1: The conceptual framework of this research

3.1 Hypothesis

H0: There is no significant relationship between the consumer trust and the
online shopping behaviour of consumer.

H1: There is a significant relationship between the consumer trust and the
online shopping behaviour of consumer.

H0: There is no significant relationship between the financial risk and the
online shopping behaviour of consumer.

H2: There is a significant relationship between the financial risk and the online
shopping behaviour of consumer.

H0: There is no significant relationship between the security risk and the
online shopping behaviour of consumer.

H3: There is a significant relationship between the security risk and the online
shopping behaviour of consumer.

H0: There is no significant relationship between the internet fraud and the
online shopping behaviour of consumer.

H4: There is a significant relationship between the internet fraud and the
online shopping behaviour of consumer.

H0: There is no significant relationship between the product risk and the
online shopping behaviour of consumer.

H4: There is a significant relationship between the product risk and the online
shopping behaviour of consumer.

3.2 Population

The population of this research is the online shopping consumers of two

Malaysia online shopping sites. This two online seller is ranked 1st and 2nd in
the Top 10 online shopping sites in Malaysia. The result of this ranking was
reported by EcommerceMilo using SimilarWeb in November 2016.
3.3 Sample

Generally, sampling has two techniques which are probability sampling and
non-probability sampling (Saunders et al. 2009). Saunders et al. (2009) further
mentioned that there are different types of probability sampling - mainly
simple random sampling, systematic sampling, stratified sampling, cluster
sampling and multistage sampling. On the other hand, nonprobability has
quota sampling, snowball sampling, purposive sampling, self-selected, and
convenience sampling (Saunders, et al. 2009). Further, Saunders et al. (2009)
cited that the accessibility of convenience sampling is the simple and easy way
available to the researcher.

This thesis uses non-probability sampling, concrete convenience sampling,

even though Saunders et al. (2009) stated it is problematic as it cannot be
scientifically representable and generalizes the results of study for the entire
population. Saunders et al. (2009) argued that these types of problems with
convenience sampling could be ignored if there is minimum difference in the
population, such sample could be more structured to be used as a pilot for
research. The reason to use this sampling is due to the reason that many
studies have adopted this as it represents a convenient substitute for online
population (Shahzad, 2015).

To efficiently reach target group survey was distributed online to 200

randomly selected citizens. (Uzun and Poturak, 2014). Therefore, the
questionnaire will distribute to 200 users of Lazada and 11 street. A website
survey will be created through Google form. The link of questionnaires will be
share on the Lazada and 11 Street social media page (Facebook) in order to
find the right target of respondents. The reason of choosing social media is
because currently the fan page of Lazada in Facebook is liked by 16,889,126
people and 1,225,623 people liked 11 Street in Facebook. In addition, a filter
question was used to confirm whether the respondents have the experience of
online shopping at this site. In order to make sure the respondents are the
online shopping consumers of this site, only respondents who are ever
experience shopping at this two site can proceed with the whole questionnaire
(Ariff, Sylvester, Zakuan, Ismail, and Ali, 2014).
3.4 Measurement of variable

Independent variable:

Payment method that consumer trust

Information security
Internet fraud that happen online
Confidentiality of consumer private information
Problem of fake product

Dependent variable:

The online purchase intent of consumer

To measure the variables, the nominal, ordinal interval, and ration level of
measurement will be use.

3.5 Data collection method

The data collection method that will be use is questionnaire. The questionnaire
will consist of six parts which is consumers demographic characteristics part,
consumer trust part, financial risk part, security risk part, internet fraud part,
and product risk part. Table 1 will show the number of question of each part.
The question are adapt from Forsythe, Liu, Shannon, and Gardner (2006),
Sweeney, Soutar, and Johnson (1999), and Dai, Forsythe, and Kwon (2014),
Swinyard and Smith (2003), Sevim and Eroglu Hall (2014), and Shazad
(2015). Many previous researches are also based on their questionnaires, thus
their questions can be seen as reliable and trustworthy with the smallest
information criterion, thus the questionnaire is based upon their research
contribution (Shahzad, 2015). The questionnaire will examine all the factor
with 30 question and eliminate the question that repeat.

Perceived risk Creators and Years Number of question

adapt
Consumer trust Swinyard and Smith 5
(2003),
Shahzad (2015)
Financial risk Forsythe, Liu, 5
Shannon, and Gardner
(2006),
 Dai, Forsythe, and
Kwon (2014)
Security risk Sweeney, Soutar, and 6
Johnson (1999),
Shahzad (2015)
Internet fraud Shahzad (2015), 4
Sevim and Eroglu Hall
(2014),
Product risk Forsythe, Liu, 5
Shannon, and Gardner
(2006),
Swinyard and Smith
(2003),
Dai, Forsythe, and
Kwon (2014),
Shahzad (2015)

Table 1: Adaption of question

The demographic part will be using open-ended question. Participants will fill-
in their information in this part. Consumer trust part, financial risk part,
security risk part, internet fraud part, and product risk part will be using the 5-
point Likert scale (1 = strongly disagree, 5 = strongly agree). After the
collected the data, the data will keep automatically in Google spreadsheet and
finally exported to Statistical Package for Social Science (SPSS) for the
process of analysis.

3.6 Data analysis techniques

The data analysis will be using Special Packet & Social Science(SPSS). Only
fully completed questionnaires were used for the analysis.

Reliability analysis will be using in this research. Reliability is a central

concept in measurement; referring to a meaning of consistency findings
(Punch, 1998: 99) where data collection techniques or analysis procedures
yield with it (Easterby- Smith et al., 2002; Sekaran, 2000), and whether the
results of the study are repeatable (Bryman and Bell, 2003: 33). This means
that the same answer should be obtained on measurement with the same
measurement method, if we assume the situation has not changed (Jankowicz,
2005), and will yield the same results each time it is administered. Descriptive
statistic will be using to calculate the central tendency such as Mean, Median,
and Mode. Variability test also be using to calculate Range and Standard
deviation. Inferential statistic such as t-test will be used to test the level of
significance.