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CHAPTER 1: INTRODUCTION
1.1. Theoretical and Practical Foundations
1.1.1. E-commerce at a glance
Vietnam is considered to be one of the countries with the highest growth of internet users in
the world (28%, ranked 4th) (Wearesocial, 2018). Vietnam has a population of 95 million, of
which 50 million are internet users with an average daily internet access time of 6 hours 53
minutes on computers, laptops, and tablets, and 2 hours 33 minutes on mobile phones while
spending only 1 hour 26 minutes watching television (Wearesocial, 2017). Also according to
Wearesocial (2017), the total value of Vietnam's e-commerce industry in 2016 reached (US)$
1.8 billion, and revenue per consumer is estimated at (US)$ 55. Currently, the number of
online consumers in Vietnam is about 33 million, accounting for 35% of Vietnam's
population; therefore, the market capacity is still very large which will be a great opportunity
for e-commerce and online retail industry to increase growth in the future (Wearesocial,
2017).
1.1.2. Theoretical perspective
Although e-commerce has much special potential in the retail industry, it also has many
barriers that need to be overcome. The study was done by Hoang and Swierczek (2008) stating
that Vietnam's market still has many barriers related to laws, regulations, payment systems,
security technologies, risks, scams, and technology crimes. Moreover, according to previous
studies, trust is an important factor that encourage consumers to make their purchases in the
internet environment (Corbitt, Thanasankit, and Yi, 2003; Ho and Chen, 2013).
Some authors argue that to succeed in Internet-based business, online retailers need to build
and maintain customer trust (Pappas, 2016; Pavlou and Fygenson, 2006; Suh and Han, 2003;
Vos et al., 2014). While, other authors found negative impacts of perceived risks on
purchasing decisions (Hong and Cha, 2013; Kamarulzaman, 2007) related to products (Ward
and Lee, 2000) and retailers' websites (Jiang, Jones, and Javie, 2008). Thus, how the concepts
of trust and perceived risk will interact and affect buyers, to answer this question, more
research is needed to understand the relationship between consumer trust, perceived risk, and
buying behavior. Besides, the results of this research will help online retailers strategically
cope with consumers' trust and perceived risks effectively.
1.1.3. Background to the research
Currently, studies on trust have not been consistent. The concept of trust is often measured as
a general and simple construct while only a few studies measure this concept as higher order
construct. Although many studies suggest that the concept of trust is a multi-dimensional
construct and complex but few studies argue and develop this construct explicitly, as well as
the mechanism of its formation in the online environment in Vietnam. The reason to
reconsider measuring this concept is that an inadequate measurement will not capture the
