Abstract
Online retail trade in Indonesia has grown dramatically in recent years. However, it is not being followed by an increase in the transaction completion ratio, with a cart abandonment rate of up to 70 percent. This indicates that the transition from online purchase intention to actual purchase is not as simple as postulated in the theory of planned behaviour (TPB); yet, there are other factors moderating the conversion. Therefore, this study aims to develop a model analysing the moderating role of perceived transaction security and convenience in the relationship between online purchase intention and actual purchase. Model development was also motivated by critics regarding TPB’s robustness in explaining consumer purchase behaviour; therefore, this model is expected to enrich TPB by providing a more comprehensive picture in online purchase behaviour. The sample consisted of consumers who had shopped for retail products online. The proposed relationship was tested with partial least square method. Results showed that perceived transaction convenience has a positive and significant moderating effect, whereas perceived transaction security showed an insignificant moderating impact. This finding is noteworthy amid risky online purchase environment. Respondents’ characteristics and alternative payment methods might explain the insignificant moderation. As a practical implication, it is recommended that online retailers improve online transaction convenience to increase the conversion rate.
Highlights
Indonesia’s retail ecommerce market is undergoing a development phase, which is reflected in a significant increase in Indonesia’s ecommerce transactions annually
Likewise, when transaction security is high, the impact of online purchase intention on actual purchase remains strong. This implies that an improvement in transaction security does not significantly strengthen the relationship between online purchase intention and actual purchase
Lowering fraud risk which is highly associated with online purchases. This explains why perceived transaction security insignificantly moderates the influence of online purchase intention on actual purchase
Summary
Indonesia’s retail ecommerce market is undergoing a development phase, which is reflected in a significant increase in Indonesia’s ecommerce transactions annually. The time frame when the transaction was abandoned is after consumers decided to buy the product on the vendor’s website, enter the payment stage, complete each required step, but leave the payment stage incomplete; in short, the transaction is not completed (Rajamma, Paswan, & Hossain, 2009). This shows that even when the consumer has an intention to purchase online, it is not necessarily converted into an actual purchase
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