An Empirical Study on Model of Consumers’ Initial Trust in Online Pharmacies

HAN Xue-ting,HUANG Zhe

(School of Business Administration,Shenyang Pharmaceutical University,Shenyang 110016,China)

An Empirical Study on Model of Consumers’ Initial Trust in Online Pharmacies

HAN Xue-ting,HUANG Zhe*

(School of Business Administration,Shenyang Pharmaceutical University,Shenyang 110016,China)

Objective To put forward some suggestions for developing consumers’ initial trust in online pharmacies. Methods Literature on consumers’ initial trust in online pharmacies was analyzed and a model of consumers’ initial trust in online pharmacies and 9 hypotheses were proposed. A total of 207 valid samples were also studied with the questionnaires and AMOS. Results and Conclusion Some factors such as website usability,website simplicity,structural assurance,and trust tendency would influence consumers’ initial trust and their purchasing behaviors. Online pharmacies can improve consumers’ initial trust by enhancing website quality,building trust mechanism and focusing on consumers’ personal characteristics.

online pharmacy; initial trust; empirical study

In recent years,pharmaceutical e-commerce is developing rapidly in China,but there is still a majority of consumers who have no online pharmacies transactions. According to the statistics from China’s Pharmacy Business Research Center[1],in 2013,China’s online pharmacy trade was 4.26 billion yuan,accounting for only 0.33% of the overall sales of China’s pharmaceutical products. The reason for the small online pharmacy is because medicine is related to human health,but consumers can not contact with commodity face to face like a traditional transaction way which makes them have no trust in online pharmacies,then they would not choose online pharmacies shopping. Thus,consumers’ trust has become one of the major obstacles which restricts the development of online pharmacy. Trust is a dynamic process,in which the initial trust occurrs in the first transaction and it is the first step as well as the most important step[2]. Therefore,it is necessary to establish a model of consumers’ initial trust in online pharmacies to analyze to the factors affecting consumers’ initial trust in online pharmacies.

1 Literature review

1.1 Initial trust

Javrenpaa[3]and Corritore[4]divided trust into initial trust and mature trust by taking the first transaction as a dividing line according to the length of time for establishing the trust. The range of the time of initial trust is from the consumers’ first visit to the website to the first purchase on the website. It is the critical stage for the consumers to understand and judge the company and to decide whether they are willing to do the online shopping in the future[5]. At the stage of initial trust,consumers are not familiar with the company,so the company cannot rely on their goods and services to show that they are trustworthy and reliable. Consumers mainly rely on second-hand information such as the website or company’s reputation to make judgement. Therefore,at this moment consumers face uncertainty and risk. For the enterprise,the first step is important to win the consumers’ initial trust and to reduce their worries about making the first purchase decision.

The importance of initial trust has caused many scholars’ extensive research. McKnight et al.[6]first studied the initial trust,and they aimed at building trust between 2 strange people. They constructed a conception model of initial trust which contained a disposition to trust,institution-based trust,trust beliefs and trust intentions. After that,Koufaris et al.[7]proposed a research model of new customers’ initial trust in company. The model consisted of 7 factors that affect initial trust in the B2C company,which included customized willingness,perceived reputation,perceived size,perceived usefulness,perceived ease of use,perceived security control and trust propensity. In addition,Euijin Kim[8]summarized the influencing factors of B2C e-commerce trust as environmental factors,individual factors and process factors based on others’research on e-commerce trust. Especially,the process factors were fully summarized,which included the perception of organizational support,corporate image,service quality and website quality.

1.2 Online pharmacy

On September 29th,2005,the former State Food and Drug Administration (SFDA) released “Temporary Provisions for Internet Drug Transaction Service Approval”,which is the first normative documents about online pharmacies supervision and management. On December 29th of the same year,Jingwei Pharmacy received the first “Internet Drugs Transaction Service Qualification Certificate” and opened the first online pharmacy in China—www.yaofang.com. Online pharmacy refers to the electronic virtual market for pharmaceutical commodities trading on the internet which is established by enterprises according to the law. The main function of online pharmacies is online drug retail and online pharmacy service[9].

The relevant research on trust in online pharmacies is still in the initial stage in China. Most of the studies realized the importance of consumers’ trust in online pharmacies. Based on the analysis of domestic and international online pharmacy development status and consumers’trust situation,YANG Jie-min et al.[10]summarized the influencing factors of consumer’s trust in online pharmacy from three aspects,consumption link,the legislative and the supervision. According to the related literature of online pharmacies[11-13],customers’ distrust came from the following aspects: (1) Now that there are a large amount of illegal online pharmacies on the internet and most consumers cannot judge the legitimacy of online pharmacies that increase the risk of online shopping. (2) Customers worry about uncertain factors in the distribution process,such as the delayed delivery,the possible damage or the replacement problem. (3) Consumers worry about the integrity of companies for they might sell the outdated drugs. (4) Customers fear that the lack of licensed pharmacist guide can lead to improper medication. Through the literature review we can make the conclusion that the domestic researches on trust in online pharmacy is mostly from the qualitative point of view without empirical study. What is more,most of the researches are on mature trust. It is more practical to study about consumer’s initial trust in online pharmacies in China now.

2 Researches on hypotheses and model

Above all,it is crucial to build consumers’ initial trust in online pharmacies. Based on the previous researches on the initial trust in online pharmacy,this paper summarizes the factors influencing consumers’ initial trust in online pharmacies from 4 aspects: website factors,company factors,consumer individual factor and environment factor.

2.1 Website factors

Before the consumers’ first purchase,they do not have experience on the enterprises’ products and services. They only browse through the website to get the product images and information. Therefore,website factors play an important role in the initial trust. The ease of use and usefulness are the 2 main structures of technology acceptance model (TAM),which is directly related to the function of the websites[14]. In the field of electronic commerce,TAM is widely used to measure the user’s acceptance degree to one site of technology. In this paper,online pharmacy has been seen as a new way of shopping and technology. The ease of use of website means that it is easy for users to use the website. The usefulness of website means the website can improve the user’s efficiency. The ease of use plays the role indirectly through the usefulness of the website. Therefore,we proposed the following hypotheses:

Hypothesis 1: the ease of use is positively related to usefulness.

Hypothesis 2: the usefulness of the website is positively related to consumers’ initial trust in online pharmacies.

2.2 Company factors

2.2.1 Company reputation

Reputation is an important information for cusomers to judge the credibility of enterprises,and it is mainly through the establishment of consumer word-of-mouth and certification. It is a concentrated expression of the past behavior and the results of the enterprises. In the initialstage of trust building,company reputation is a major factor for consumers to form trust. At this stage,there is no experience for consumers to follow. They believe the enterprise with a good reputation will not hurt consumers’right so that they can maintain the company image[1]. Therefore,the following hypothesis was proposed.

Hypothesis 3: the company reputation is positively related to consumers’ initial trust in online pharmacies.

2.2.2 Service commitment

Euijin Kim[8]studied on the initial trust in the electronic commerce and he thought that the consumers’perceived organizational support and service quality would have a crucial influence on consumers’ initial trust. Since consumers did not have a substantial trading relationship with the compnay,we studied the influence of enterprise service commitment on consumers’ initial trust instead of service quality in this paper. Online pharmacies shoppers must face with different personalized service commitments which are provided by different enterprises,such as logistics services,consulting services and refunds treaty. These will inevitably produce different initial trust. Therefore,the following hypothesis was proposed:

Hypothesis 4: the service commitment is positively related to consumers’ initial trust in online pharmacies.

2.3 consumer individual factor

Disposition to trust refers to a person’s tendency to trust and depend on others. Psychologists believe that disposition to trust are formed from the past experience and social cognitive. It will not change along with the changes of the environment and the trust objects[15]. Many studies showed that consumers’ disposition to trust plays an important role in the process of initial trust,and the man with a high trust tendency is often willing to trust others.

Hypothesis 5: disposition to trust is positively related to consumers’ initial trust in online pharmacies.

2.4 Environment factor

Structural assurance refers that consumers believe relevant laws and regulations,the third-party security assurance and the network security technology in the specific trading environment can assure the transaction successfully. A high structural assurance environment can help reduce perceived risk. Consumers believe that they are protected by the law and technology and then they can build initial trust.

Hypothesis 6: structural assurance is positively related to consumers’ initial trust in online pharmacies.

2.5 Research model

Because the actual purchase behavior is difficult to measure,we chose the measurement of consumer behavioral intentions to study the effect of initial trust in online pharmacy. The behavior intention of consumers is divided into 3 dimensions respectively,accepting the website advice,sharing personal information and willingness to pursue[16]. According to the theory of reasoned action (TRA),the behavior logic development of people is in accordance with the behavioral beliefs―behavioral attitude―behavior intention―real behavior. The more trust in a website,the more likely consumers will shop on the site.

Hypothesis 7: consumers’ initial trust in online pharmacies is positively related to the intention to accept the website advice.

Hypothesis 8: consumers’ initial trust in online pharmacies is positively related to the intention to share personal information.

Hypothesis 9: consumers’ initial trust in online pharmacies is positively related to the willingness to pursue.

Based on the literature review and the hypotheses above,we set up a model of online pharmacies consumers initial trust,as shown in Figure 1. The model assumes that six factors,including website ease of use,website usefulness,structural assurance,company reputation,service commitment and consumers’ disposition to trust decide consumers’ initial trust in online pharmacies,at the same time,the initial trust can influence the trust behavior intention.

3 Questionnaire design and data collection

In order to test our model,we conducted a field study and collected data via an online questionnaire.

3.1 Questionnaire design

The questionnaire is divided into 2 parts: basic information and the related online pharmacy consumers’trust survey. In order to measure various factors in the model,the specific evaluation index should be introduced,as shown in Table 1. Therefore,the questionnaire design is more scientific. Our questionnaire used five-point Likert items for all constructs measured: “l” means strongly disagree; “2” means disagree; “3” means uncertain; “4”means agree; “5” means strongly agree. The degree of recognation is deepened in turn.

Figure 1 Research model for initial trust in online pharmacies for customers

Table 1 Evaluation indexes of research variables

3.2 Data collection

This article used the method of the online survey. The questionnaire listed 5 sales which were ranking in front of online pharmacy respectively[17]: www.J1.com,www.7LK.cn,www.ehaoyao.com,www.yaofang.com and www.360kad.com. This survey has collected 269 questionnaires,of which 55 samples had online pharmacy experience,and 7 questionnaires were invalid,eventually we collected 207 effective questionnaires.

4 Empirical approach

4.1 Reliability analysis

Before carrying out the empirical approach with structural equation modeling (SEM),the reliability of the sample data should be analyzed through statistical software SPSS 22.0. Reliability analysis is used to determine the scale of reliability and stability. In this paper,we use Cronbach’s alpha test scale reliability to validate the scale of reliability and stability. In general,reliability is 0.60 or above means the values are acceptable,if reliability is low,such as less than 0.60,the research tool should be revised or a new questionnaire should be prepared. The statistical software SPSS 22.0 should be used to calculate the reliability of the scale,and the results were in Table 2. The latent variables in the questionnaire Cronbach’ alpha coefficients were higher than 0.60,and the overall questionnaire coefficient reached 0.927,which showed that the scale had good reliability.

Table 2 Reliability analysis

4.2 Structural equation modeling analysis

Structural equation modeling is a comprehensive approach which includes path analysis,multiple regression analysis and confirmatory factor analysis. It can process various sets variables which contributes to confirmatory factor analysis. Besides,some variables can not be measured accurately in the social research,such as the reputation and trust. Structural equation modeling can deal with these problems in some ways. The approach sets a series of observable variables for these latent variances. The research of the relation among observable variables takes the place of the relation among latent variances. Therefore,the structural equation modeling is reasonable.

We used AMOS 17.0 to analyze the model. After putting the reliability data into structural equation model,we got the fitting analysis and causal link between the analysis of the path.

Fitting analysis was used to value the fitting degree of theoretical model and actual data. The fitting index was shown in Table 3. These indexes met their standards,which showed the model confirmed to the fitting index was fairly good.

CR values are used to prove the hypothesis in structural equation modeling. If CR value of one path is greater than 1.96 (α=0.05),this path is significant. Path coefficients can be seen in Table 4. The CR of “Initial trust＜--- Company reputation” and “Initial trust＜--- Service commitment”,both are less than 1.96,and these two paths are not significant.

Table 3 Fitting degree

Table 4 Path coefficients

The results from our study showed that usefulness,ease of use,structural assurance and disposition to trust affect consumers’ initial trust in online pharmacies. The company reputation and service commitment had no significant effect on initial trust. The initial trust in online pharmacies had significant influence on consumers’information and purchase intention to listen to others opinions and sharing website. The initial trust was the significant factors affecting online pharmacies purchase behavior.

4.3 The analysis of test results

The results of model of consumers’ initial trust in online pharmacies are as follows:

(1) The effects of structural security of consumers’initial trust in online pharmacies were remarkable,and the path coefficient was 0.519. It meant that when consumers buy medical merchandise online,what they concern most are the security transaction environment,perfect laws and regulations.

(2) The website usefulness significantly affected consumers’ initial in online pharmacies trust,and the path coefficient was 0.432. The reason is as follows: most of consumers were accustomed to purchasing medical goods off line,and the usefulness of website was the main reason for them to change their consumption habits to do online pharmacy shopping. Ease of use in online pharmacies affected the initial trust indirectly.

(3) Disposition to trust also had a significant influence on initial trust in online pharmacies,and the path coefficient was 0.356. It was because consumers did not know about the online pharmacies and they had to rely on personal trust propensity to judge.

(4) The hypothesis of company reputation impact on consumers’ initial trust in online pharmacies was not tested,and there were 2 possible reasons: one was that the online pharmacies in China started too late and it developed slowly. Therefore,consumers did not fully grasp the information of online pharmacies. Most of the respondents were not familiar with the five sited provided by the survey. The other was the majority of online pharmacies cooperate with the third-party platform (for example T-mall Medical Museum,Jingdong Medical City etc.),and consumers hadaccess to online pharmacies mainly through the third-party platform.

(5) The impact of service commitment on the initial trust in online pharmacies was not significant,and the possible reason might be different web provided with similar services,but the position of the service commitment in the web page was not obvious.

5 Measures and suggestions

The analysis of the empirical results showed that the factors influencing consumers’ initial trust in online pharmacies mainly include the structural security,website usefulness,usability and trust propensity. Therefore,the design of China’s online pharmacy trust mechanism can be carried out from the following aspects.

5.1 Providing a safe trading environment

First,the government should improve laws and regulations,and establish a strict supervisory system to punish the illegal actions. Now online pharmacies laws in China are still in the initial stage,which mainly regulated the qualification of online trading subject and the administrative examination and approval procedures. The low cost of breaking the law and repeating illegal behavior cause risk from both safety and security to consumers. Second,enterprises should use the latest encryption technology to guarantee the safety of the trade for customers such as announcing their legitimacy certificates (the internet drugs transaction qualification certificate number marked on the home page of the website),previous operating records,third party certification mark to help consumers understand the whole transaction process which can help establish initial trust. Besides,the government and company should work together to guide the consumers to distinguish the legitimate online pharmacies so that they can have a secure trading environment.

5.2 Improving the quality of website

Enterprises with online pharmacies should improve the quality of websites from the following 3 aspects: First,they should ensure the stability and security of the system,the reliability and rapidity of access,and the low error rate of all levels[18]. Second,as consumers are concerned about the information such as pharmaceutical ingredients,indications,adverse reactions and the production date,and the websites should pay more attention to the accuracy,timeliness and completeness of the information. Third,most purchasers of drugs are middle-aged or senior citizens and few of them have experience in online shopping. It is necessary to provide a convenient and efficient shopping environment for them. Therefore,online pharmacies should provide the advanced websites design,including the clearity of the web pages,the ease of navigation and the friendly of the interface.

5.3 Paying attention to consumer characteristics

Consumers’ disposition to trust can be gained in the process of the growth and cognition to society,therefore,it requires a good atmosphere of trust and credit constructed by the whole society for consumers to enhance their trust propensity. In addition,enterprises can determine a higher trust propensity target market according to demographic characteristics[19],and then to carry out targeted marketing activities.

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Project supported by: Public relation plan of social development of science and technology agency in Liaoning Province “Platform of technical transfer service in biomedical technology industry”(2012225095) 2012.04-2014.12

* Corresponding author: HUANG Zhe,associate professor. Major research areas: knowledge management,e-commerce. Tel: 13998874590,E-mail: huangzhe2000@sina.com