RISK IN ONLINE SHOPPING: THE IMPACT OF DIFFERENTIATED RISK IN PRODUCT CATEGORISATION, EFFECT OF SALES AND CONSUMERS’ PREDISPOSITION TO RISK ON ONLINE SHOPPING BEHAVIOUR

Abstract

Today, global e-commerce sites continue to break record sales as more consumers opt to spend money online. However, this facilitates the proliferation of imitation products sold by unscrupulous sellers; and sellers themselves may be unaware that they are selling these fake products. This poses a threat to both consumers and the reputation of online retailers. Even though many studies have explored the relationship between risk and online shopping, this study aims to fill the literature gap by proposing a new product risk category for products online known as “health risk”. It aims to explore the factors at play when it comes to online shopping. An experiment with a 2x2 factorial design was carried out to determine if there is basis for such a proposal, and how sales online would affect consumer’s online purchasing behaviour with regards to risky products. The results indicate that consumers do see a significant difference between “high” and “low” risk products. The presence of sales affects the willingness of consumers to purchase “high” and “low” risk products. High risk products saw an overall decrease in willingness to purchase by consumers in the presence of sales, while low risk products saw an overall increase in willingness to purchase by consumers in the presence of sales. Risk-adversity of the individual were also taken into account as an explanation for purchasing behaviour. Based on these results, some implications for further research and application are given.