E- Service quality and Loyalty intentions: A study in Tiki.

vn retail website
Tran Thi Anh Thu
Da Nang University of Economics

Abstract
With the grow of internet retailing, E-service quality of e-retailers is increasingly recognized as a
key determinant in exploring success levels of e-commerce ventures. In the e-shopping environment
context, there is a growing number of studies about customer satisfaction, trust, acceptance, service
quality, customer perceptions and customer loyalty. The purpose of this paper is to examine E-service
quality and loyalty intentions in Tiki.vn retail website. The sample is represented by 146 customers
buying products from Tiki.vn retail website in Da Nang city with the aim of investigating relationships
between E-Service Quality and Loyalty intentions. According to the results of our study, we can educe
that there is a strong relationship between E-service Quality and Loyalty Intentions act as a mediator
between them.
Key word; E- service quality, Loyalty Intention, E-commerce, B2C e-commerce, e-retailer

1. Introduction
The growth of information and communication technologies, e-commerce is an important tool for
individuals and companies worldwide. E-commerce, which can be simply defined as the exchanging of
digitized transmission of electronic orders, is a cost optimal way to promote and run a business (Jeffrey
and Bernard, 2004). Driven by Vietnams young population and growth of internet and smart phone
penetration, e-commerce in Vietnam has experienced robust growth over the last five years, especially
the business-to-customer (B2C) segment. Revenue from B2C e-commerce in Viet Nam in 2015
accounts for 2.8% of the country 's gross retail sales of goods and B2C e-commerce market in Viet Nam
has boomed with a stream of 10,000 more websites that offer online sales (Vietnam E-Commerce and
IT Agency, 2015).
Incredible rise in the importance of Internet retailing resulted in more emphasis on service quality
in the online environment and became an important factor in determining the success or failure of e-
commerce ventures (Santos, 2003; Yang, 2001; Zeithaml, Parasuraman, & Malhotra, 2002). Research
into service quality area has been popular for more than two decades being recognized as a key factor
in differentiating service products and building competitive advantage (Zeithaml, 1996; Bitner, 2000).
Quality is the key force leading to delighted customers, firm profitability, and the economic growth of
countries. (Golder et. al., 2012).
The previous literature supports the notion that favorable E-service quality lead to improved
customer loyalty. Loyal customers visit their favorite websites twice as often as non-loyal customers,
and loyal customers spend more money (Dialscore.com 2000). According to analysts, 35 to 40% of e-
commerce website sales revenue comes from repeat visitors (Rosen 2001). Hence, understanding
customers perceptions of service quality and how they affect loyalty intentions is one of the most
important for e-retailers.
Previous research found that e-retailers experience difficulty maintaining customer loyalty despite
the recent rapid growth in B2C e-commerce (Hoffman and Novak 2000). Although there are certainly
challenges shared by both traditional retailers and e-retailers, e-retailers face greater competition due to
the fact that on the Internet a competitor is only a click away (Mithas, Ramasubbu, Krishnan, and
Fornell 2007). Therefore, attracting and retaining the attentions of customer is not easy in an
increasingly competitive e-market.
This paper generally focuses on Viet Nams ecommerce environment. Specially, looking at one of
its representatives, Tiki.vn, it explores the e-service quality and seeks to determine how they affect their
customer loyalty intentions.
Tiki.VN was founded by Son Tran in March 2010, at a time when the Vietnamese market was still
new to E-Commerce. Over the period of 6 years, Tiki.vn has become one of the most famous e-
commerce companies in Viet Nam. Beginning with selling books, Tiki.vn expands to 9 sectors as
books, fashions, consumer goods, stationary, electronic goods and accessories, mother and baby
products and technical equipment. Tiki.vn has served more than 800,000 customers with the number of
products up to 12,000.
Under the light of preceding discussions, this paper attempt to examine relationship between
service quality and customer loyalty intentions in Tiki.vn retail website customers in Da Nang. This
study objectives are twofold (1) understand dimensions e-service quality, and (2) to investigate the
influence of e-service quality dimensions on customers loyalty intentions of Tiki.vn retail website
customers in Da Nang city.
2. Literature review
2.1 E-Service quality
Zeithaml (2002) defined e-service from a service quality perspective as the extent to which a
website facilitates efficient and effective shopping, purchasing and delivering of products and services.
E-Service Quality can be described as entire customer perceptions or evaluations of electronic service
experience of the online marketplace (Santos, 2003).
Based on SERVQUAL's traditional service quality scale (Parasuraman et al., 1985) with five
dimensions are tangible, reliability, responsiveness, assurance and empathy, Yoo and Donthu (2001)
have developed the SITEQUAL scale for evaluating perceived quality on an online retailer's website.
The SITEQUAL scale embraces dimensions such as: ease of use, aesthetic design, processing speed,
and security. However, SITEQUAL does not provide a comprehensive evaluation of a web site
(Parasuraman et al., 2005). ). On the other hand, Zeithaml et al. (2001) developed e-SERVQUAL
measure and identified 11 dimensions of service quality: access, ease of navigation, efficiency,
flexibility, reliability, personalization, security/privacy, responsiveness, assurance/trust, site aesthetics,
and price knowledge. Loiacono et al. (2002) developed WebQual instrument which consists of 12
dimensions: informational fit-to-disk, interactivity, trust, response time, ease of understanding, intuitive
operations, visual appeal, innovativeness, flow/emotional appeal, consistent image, online
completeness and better than alternative channels.
Kaynama and Black (2000) developed an instrument called E-QUAL to measure web service
quality dimensions of online travel services. E-QUAL has seven dimensions, namely content and
purpose, accessibility, navigation, design and presentation, responsiveness, background, personalization
and customization. Wolfinbarger & Gilly (2003) developed eTaiQ explaining that fulfillment/reliability,
customer service, personalization, usability, experiential/atmospheric, ease of use, informativeness,
selection, security/privacy are basic dimensions of service quality.
 More recently, Parasuraman ( 2005) developed a scale measuring E-service quality. The basic e-
service quality scale consisted of four dimensions with 22 items: efficiency, fulfillment, system
availability and privacy. E-SQ is related to customers perceptions of e-service quality when customers
experience no problems with the site, whereas E-RecSQ deals with problems encountered during the
online purchase process. So, both parts are worth to investigate since they have significant effects on
customer satisfaction and loyalty in eservices. The seven dimensions of Parasuramans ESQ and E-
RecSQ (2005) are described as: 1- Efficiency: The ease and speed of accessing and using the site. 2-
Fulfillment: The extent to which the sites promises about order delivery and item availability are
fulfilled. 3- System availability: The correct technical functioning of the site. 4- Privacy: The degree to
which the site is safe and protects customer information. 5- Responsiveness: Effective handling of
problems and returns through the site. 6- Compensation: The degree to which the site compensates
customers for problems. 7- Contact: The availability of assistance through telephone or online
representatives. Both two scales infer psychological characteristics based on findings from multiple
reliability and validity tests. The purpose of E-S-QUAL (and E-RecS-QUAL) is to measure the quality
of Web services. Other aspects of experience such as fun and interesting are not covered by the concept
of quality of service, as those aspects may not be relevant to all or for all clients.
Between two scales, we implemented E-SQ dimensions put forward by Parasuraman et al. (2005),
since it is widely accepted in science. (1) Efficiency: The ease and speed of accessing and using the
site. (2) Fulfillment: The extent to which the sites promises about order delivery and item availability
are fulfilled. (3) System availability: The correct technical functioning of the site. (4) Privacy: The
degree to which the site is safe and protects customer information.
2.2 Loyalty intentions
While some organizations simply focus on achieving customer satisfaction, gaining customer
loyalty intentions is the ultimate ambition of many service providers. E-loyalty is understood as a
consumers intention to revisit a web site and to consider purchasing from it in the future (Cyr, 2008).
Loyal customers buy more, are willing to spend more, are easier to reach, and act as enthusiastic
advocates for our firms (Harris et al., 2004).
Recent research suggests that e-retailers enjoy customer loyalty more than bricks-and-clicks retailers
do (Reichheld & Schefter 2000). Service quality has been shown to promote customer loyalty and
retention (Parasuraman et al. 2005) Online shoppers are no longer willing to be engaged in extensive
searches and they are willing to pay premium prices when transacting with e-retailers they experienced
(Reichheld & Schefter 2000) The importance of loyalty has been emphasized recently because loyal
customers may be worth up to ten times as much as its average customer and bring many benefits to a
seller and be considered one of the critical indicators used to measure the success of marketing strategy
(Anderson & Srinivasan, 2003; Yoon & Uysal, 2005). Most companies try their best to continually
satisfy their customers and develop long-term customer- organization relationships. One of the reasons
is that the loyal customers are willing to pay a higher price and are more tolerant when something goes
wrong. In fact, the success of several online companies is attributed to their high ratio of repeat sales
(Gefen 2002). Amazon.com, for example, generated 66% of its sales from purchases made by returning
customers a couple of years ago already (The Economist 2000).
Related research shows that customer loyalty is based primarily on trust (Fukuyama 1995, Reichheld
and Sasser 1990) and on customer service quality (Heskett et al., 1994, Reichheld and Sasser 1990).
One way to increase customer loyalty, suggested by several studies (eg, Heskett et al., 1994), is to
improve service quality.
 To sum up, the issues of loyalty mainly concerned on how loyalty is operationalized. It is very
important to understand how we should measure loyalty (Zehir et al., 2015) Although there are three
approaches that can be used to measure loyalty (i.e. behavioral, attitudinal, and composite approaches),
most researchers resorted to attitudinal measurement in terms of intention to repurchase and intention to
recommend as an indicator of loyalty (Sondon Jr. etc., 2007). We used the loyalty scale of Parasuraman
et al., 2005 developed by Zeithaml et al. (1996) to measure customer loyalty including one dimension
of five items: 1. Say positive things about this site to other people? 2. Recommend this site to someone
who seeks your advice? 3. Encourage friends and others to do business with this site? 4. Consider this
site to be your first choice for future transactions? 5. Do more business with this site in the coming
months?
3. Methodology
3.1 Research hypothesis
In order to investigate the relationships between E-Service Quality and Loyalty Intentions we set
up four hypotheses as follows:
Hypotheses:
H1: There is a significant relationship between Efficiency and Loyalty Intensions.
H2: There is a significant relationship between System availability and Perceived Value.
H3: There is a significant relationship between Fulfillment and Loyalty Intentions.
H4: There is a significant relationship between Privacy and Loyalty Intentions.
3.2 Sample collection
For the quantitative research, our sample included 146 customers buying products from Tiki.vn
retail website in Da Nang city.
3.3 Research methods
- Sampling method: simple random sampling
- Data collection methods: We conduct both primary data and secondary data. Primary data was
collected based on an online questionnaire conducted on 146 people using the Tiki.vn retail website in
Da Nang City. Secondary data was used to analyze the problems based on involvement research.
- Questionnaire: The questionnaire consists of 14 questions in 3 parts: online consumer shopping
habits, Customer's opinions about e service quality of Tiki.vn website and the last is Personal
information. We use Likert scale for each question ( 5-point scale: (1) = strongly disagree, (5)=
strongly agree).
- Analysis: This study uses SPSS tool to process data, measure quality of service and loyalty
intentions on Tiki.vn website.
4. Result
4.1 Descriptive analysis
 Table 1 Descriptive statistics of respondents profile

Variable Item Frequency Percentage

Age Under 18 22 15.1
18-25 99 67.8
25-33 25 17.1
34-40 0 0
Over 40 0 0
Gender Male 41 28.1
Female 105 71.9
Occupation Student 120 82.2
Officer 12 8.2
Free labor 12 8.2
Retirer 0 0
Another 2 1.4
Monthly income Under 1 million 57 39
1-3 million 53 36.3
3-5 million 18 12.3
5-7 million 9 6.2
Over 7 million 9 6.2

Table 1 lists some descriptive statistics of the respondents profiles (demographic characteristics)
including age, gender, occupation and monthly income. It shows that most of the respondents (82.2%)
are students. Tiki.vn is a well-known retail website for selling books. Students are the most customers
who reading books for study or entertainment. Also, 71.9 % of the respondents are female, and the rest
are male. Woman love and spend more time on shopping online than man. The percentage of
respondents with a monthly income of less than 1 million is 39%. This is because most of the sample
respondents, 82.2%, are students.
4.2 Factor analysis
Table 2 Factor analysis

Dimension Factor % of Cronbach's

Factor Dimensions codes loading Variance alpha
Dependent Efficiency EFF3 0.799 7.519 0.875
EFF2 0.763
EFF1 0.705
EFF4 0.61
EFF6 0.602
EFF7 0.595
EFF5 0.484
System availability SYS3 0.773 5.763 0.843
SYS4 0.759
SYS2 0.67
 SYS1 0.664
Fulfillment FUL2 0.826 10.257 0.92
FUL3 0.822
FUL1 0.76
FUL7 0.732
FUL6 0.612
FUL4 0.583
FUL5 0.525
Privacy PRI3 0.807 4.989 0.855
PRI1 0.774
PRI2 0.733
Independent Loyalty Intentions LOY3 0.905 66.036 0.869
LOY5 0.89
LOY2 0.795
LOY1 0.741
LOY4 0.713
4.3 Correlation matrix
Table 3 Regression analysis

System Loyalty
Efficiency Fulfillment Privacy
availability Intentions
Efficiency Pearson Correlation 1 .587(**) .652(**) .538(**) .645(**)
Sig. (2-tailed) .000 .000 .000 .000
N 146 146 146 146 146
System Pearson Correlation
.597(**) 1 .683(**) .549(**) .664(**)
availability
Sig. (2-tailed) .000 .000 .000 .000
N 146 146 146 146 146
Fulfillment Pearson Correlation .652(**) .683(**) 1 .656(**) .709(**)
Sig. (2-tailed) .000 .000 .000 .000
N 146 146 146 146 146
Privacy Pearson Correlation .538(**) .549(**) .656(**) 1 .689(**)
Sig. (2-tailed) .000 .000 .000 .000
N 146 146 146 146 146
Loyalty Pearson Correlation
.645(**) .664(**) .709(**) .689(**) 1
Intentions
Sig. (2-tailed) .000 .000 .000 .000
N 146 146 146 146 146
**. Correlation is significant at the 0.01level (2 tailed)
4.4 Regression
 Table 4 Summary of regression model

Adjusted R
Model R R square square Std. Error of Estimate
1 0.806 0.649 0.640 0.33261
Coefficients
Standardized
Model Unstandardized Coefficients Coefficients t Sig.
Coefficients
B Std.Error Beta
Constant 0.05 0.269 0.188 0.851
Efficiency 0.244 0.085 0.2 2.885 0.005
System Availability 0.23 0.075 0.221 3.082 0.002
Fulfillment 0.223 0.082 0.221 2.721 0.007
Privacy 0.293 0.063 0.315 4.634 0

4. Discussions and implications