Chapter 1 Introduction

1. Research Background

With economics development, more and more customers are shopping online which is not incurable way. The customers can directly go to web site and search some information and purchase products or any services which is basic for e-commerce. Moreover, consumer-purchases are mostly based on information of product how it shows out, such as pictures of product, quality information, delivery time and price etc ( Park & Kim 2003, Kolesar and Galbraith 2000). As shopping online cannot tough or smell the products, therefore the web site and sellers’ reputation are very important which might be affected the consumers purchase making decision (Park & Kim 2003, pp.16).

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As internet has already linked to all of countries, it effectively advances the business development and there is no limited for them. Internet is not only advanced telecommunications, but also appearance of e-commerce has helped advance the environment which promotes the globalisation of markets throughout the world (Aljifri, et al 2003, pp.130). Moreover, e-commerce shows that lots of benefits, for example, expend the information area, development and innovation the new technologies, do some promotion for product sales and other services, and also cooperation between those in a supply chain (Aljifri, et al 2003, pp.130 & OECD, 1997). However, as it has grown and become an important tool for some, the most of people are still reluctant in indulging in this recent fact.
It is not argued that consumers are not browsing through e-commerce sites altogether, it shows that is increasing however the number of people that actually purchase from these e-commerce sites is low. According to Croner (2000), the biggest barrier to e-commerce growth is nor technology, but people’s attitude towards it. Some consumers are still feeling online shopping is difficult to trust. According to Moseley (2000) e-commerce to be towards a viable market place and people should trust the internet. In the future, e-commerce will be dependant and also develop relationships between website and customers which can increase the creditable from website and more confidence from customers.
In a recent survey by Commerce Net, (2000), the top business to consumer barriers identified fro growth of e-commerce worldwide were security and encryption, trust and risk, user authentication and lack of public key infrastructure, and legal issues.
Global e-commerce, in its current embryonic state, cannot be overly regulated in order to promote innovation and growth. Yet measures need to be taken to implant trust between all parties in e-commerce. Atif (2002) recently proposed a system that utilizes a network based intermediaries designed to eliminate some of the transactional risks in conducting e-commerce transactions. He proposed the introduction of trust service providers (TSP) to act on behalf of all the parties involved in these transactions. Implementations of such systems will help to promote security within e-commerce transactions. Stories of criminal behavior in the e-commerce arena have created a stereotype for e-commerce that portrays the internet as an area of little governance and no true security. This stereotype has generated the lack of trust in electronic transactions and establishing trust highly depends on user perceptions.
The concept of trust in e-commerce has influenced many scholars from many different academic areas, which are elaborated later in the study. Previous research has concentrated on the adoption of e-commerce (Yaholm et al., 1993; Thomas., 1994; Cheskin Research, 1999; Beale, 1999; Periera, 1999; Siyal, 2000) all reveal consumers do not trust the existing security technologies and the general e-commerce set up. Studies also displayed that customers are worried about the delivery of their products ordered via the internet and about fraudulent e-merchants (Cheskin Research, 1999;Beale, 1999). At the same time consumers are becoming more mature, sophisticated and intelligent, are demanding higher levels of product information before making purchasing decisions (Periera, 1999).
Further research by Beale (1999) on e-commerce trust revealed that consumers are concerned about the privacy and protection of their personal information (including their credit card numbers, social insurance or security numbers and buying pattern history) when shopping online.
Previous research in to e-commerce trust aimed to identify trust, loyalty and likelihood of online purchase as the focal points of the investigation (Swaminathan et al, 1999; Jarvenpaa & Tractinsky, 1999; Jungwon et al, 1999). This study will also look into to these issues however at the same time it will attempt to provide further insight in to the factors that influence consumer trust online. This will involve examining the already proposed trust element of online vendors, from a consumer perspective, particularly focusing on the difference in purchasing demands between different ethnic origins.

1.2 Research objectives and questions

The study will compare online demand between white (European) and Asians, which is explained in more detail later in the study.
The study will aim to provide answers to the following research questions and objectives;

Highlight from a psychological, business and consumer behavior papers the principles of trust.

Examine the relative importance of trust in e-commerce.

Identify and examine factors that determine consumer’s levels of trust towards the concept of e-commerce.

Investigate the concept of online trust under different categories of consumers, i.e. according to education, computer experience, ethnic origin etc.

Look in to vendor characteristics and reputation elements to explore how likely they are to inspire trust online.

1.3 Contribution of the study

1.4 Research structure

This dissertation will be structured as below,
Chapter 2 – Literature review
Chapter 3 – Research methodology will be aimed towards an inductive approach, and will involve the following research processes:

Review the current theory and research findings on the concept of online trust.

Use existing theory and methodology in order to provide a method of investigation.

Collect data and investigate in to factors by analyzing and presenting the findings.

Use the research findings in order to improve or justify previous studies and provide further conclusions.

To acquire the perceptions and attitudes of consumers towards the concept of online trust the research used structured questionnaires. This was achieved through a street survey taking place in Sheffield. The theoretical framework created to investigate the factors and the selected methods of investigation, (i.e. questionnaire design and sampling method) are explained in great depth in chapter three. Chapter two has concentrated on the theoretical background associated to the research subject, looking in to the concept of trust, online trust and factors that influence trust. This chapter also highlights in greater detail the security and privacy issues related to consumers.
Chapter 4 – Data analysis and findings will present the findings which have
been collected from the data sources, evaluate and discuss the findings in
the context of this particular study. Data analysis of the research findings is found in chapter four, with constant reference to aspects related to the aims of the research
Chapter 5 – It includes a discussion of the results with relation to research objectives. The findings will identify key elements that online vendors may want to focus upon in order to inspire trust, therefore recommendations are provided in this chapter. It also includes summarized research findings and the research limitations are acknowledged.