Adoption of E-commerce in Bangladesh: Probit Regression and Principal Component Analysis Approach

Abstract

Web based services have turned into an integral part of peoples’ life. Ease of use and several advantages lead to the popularity of adopting electronic commerce (e-commerce). Though a big number of customers visit and register on the commerce sites daily, the selling rate is low for lack of trust and loyalty. Trust is the main connector of companies and customers. Loyal customers are the important assets for the companies. This study aims at identifying the factors that are associated with the trust and risk perception of the customers on e-commerce. A primary dataset is collected on this occasion. Likert scale type questionnaire is involved in the questionnaire and data reliability is checked through Cronbach's alpha. Probit regression and principal component analysis are used as statistical analysis. The study finds the variables age, internet using purpose, market orientation, and technology as significantly related to trustworthiness of the customers on e-commerce, while the variables experienced using the internet, internet using purpose, and market orientation are potential determinants of risk perception. The study results suggest the e-commerce companies emphasize technologies for keeping accurate information, performing the outmost of the customers’ benefit, and collecting customers’ information. In addition, they should be conscious of the customers’ opinion and pleasant experience, along with maintaining the mentioned delivery time.