Determinants of Repurchase Intentions at Online Stores in Indonesia

Determinants of Repurchase Intentions at Online Stores in Indonesia

Rahmad Wijaya (Doctoral Program in Economic Studies, Universitas Diponegoro, Semarang and Faculty of Economics and Business, Universitas Muhammadiyah Malang, Malang, Indonesia), Naili Farida (Universitas Diponegoro, Semarang, Indonesia) and Andriyansah (Universitas Terbuka, Tangerang Selatan, Indonesia)
Copyright: © 2018 |Pages: 17
DOI: 10.4018/IJEBR.2018070106

Abstract

The rapid growth of the internet users in Indonesia poses a challenge to marketers to explore and develop the potential for e-commerce. In this article, consumer trust is expected to encourage customers to make repurchases in online stores. This article aims to build a determinant model of repurchase intention at online stores in Indonesia. This article is based on a survey of Indonesian online store consumers. Respondents were asked to provide responses related to satisfaction, trust, website quality, and repurchase intention. There were 193 final respondents obtained from 300 distributed questionnaires. The model was tested using Structural Equation Modeling (SEM) with AMOS 18. The results revealed the role of the mediating variable of customer satisfaction on repurchase intention. The findings are expected to contribute ideas related to the formation of model reinforce the repurchase intention of online store customers. This implies for website designers to design an online store capable of increasing trust and strengthening the repurchase intention.
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Introduction

The growth of e-commerce market in Indonesia is increasing rapidly (Moore, 2017; Widjaya, 2015; Pangestu & Dewi, 2017; Ford & Honan, 2017). ICD Research (http://www.icd-research.com) predicts that Indonesia’s e-commerce market grows by 42%, exceeding the commerce market development of Malaysia (14%), Thailand (22%), and Philippines (28%) (Mitra, 2014). In early 2016, Frost and Sullivan (2016) predicts that Indonesia's e-commerce market will grow by 31.1% in 2019. The growth of the market is supported by the growing number of internet users in Indonesia (Anggraeni, Dwiatmadja & Yuniawan, 2017). Internet World Stat data shows that as of June 2016, 34.1% of Indonesians have been using the internet (Internet World Stat, 2016). The results of joint research between the E-commerce Association of Indonesia (idEA), Google Indonesia, and TNS (Taylor Nelson Sofres) estimate the value of Indonesia’s e-commerce market increased rapidly in 2016, reached Rp. 295 trillion (22.125 billion U.S. dollars) (Erlangga, 2014). This indicates that Indonesia’s e-commerce has great potential to grow. In Indonesia, there is a tendency of internet usage to communicate through social media like Facebook, Instagram, Twitter, and so forth.

Although the development of e-commerce in Indonesia has increased, there are still obstacles, including transaction security and customer trust in online transactions. Indonesian consumer trust in online stores and electronic payments has not yet strong (Watts, 2014). Moreover, the community reluctance to use online transactions is also an obstacle need to be scrutinized. This reluctance shows the fear of internet users to use online transactions caused by the doubt about security in online transactions (Damar, 2016; Budiharseno, 2017). Consequently, there are disproportionate growth of the number of internet users and online transactions.

This study investigates the relationship between website quality perceived by customers, online customer satisfaction, online customer trust, and repurchase intention. Repurchase intentions are the starting point to customer loyalty. Loyalty has long been the focus of attention for marketing researchers to explore and develop. Customer loyalty is closely related to the power of repurchase intention on post-purchase evaluation. Customer commitment to stay loyal to an online store is indicated by repurchase behavior (Erciş at al., 2012).

In order to obtain customers loyalty, companies always strive to provide high value products for customers in terms of visible and invisible benefits. In various studies, loyalty and repurchase intention are built through customer satisfaction. There have been many studies examining the relationship between customer satisfaction and repurchase intention. However, this topic is still interesting to study since there is still much controversy about the relationship. Anuwichanont and Mechinda (2009), Kuo and Tang (2011), Eid (2011), Miremadi et al. (2011), Wahyuni and Ginting (2017), Dharmesti and Nugroho (2012), Srivastava (2014) reveal that customer satisfaction has significant effect on repurchase intention. However, Gautama et al. (2012), Dehghana et al. (2015) find that customer satisfaction has no significant effect on repurchase intention.

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