A STRUCTURAL EQUATIONS MODELING OF PURCHASING DECISION THROUGH E-COMMERCE

By: Togar Alam Napitupulu

ABSTRACT: The purpose of the study is to explore the factors influencing customer buying decision through Internet
shopping. Several factors such as information quality, firm’s reputation, perceived ease of payment, sites
design, benefit of online shopping, and trust that influence customer decision to purchase from e-commerce
sites were analyzed. Factors such as those mentioned above, which are commonly considered influencing
purhasing decision through online shopping in othercountries were hypothesized to be true in the caseof
Indonesia. A random sample comprised of 171 Indonesian people who have been buying goods/services
through e-commerce sites at least once, were collected via online questionnaires. To test the hypothesis, the
data were examined using Structural Equations Modeling (SEM) which is basically a combination of
Confirmatory Factor Analysis (CFA), and linear Regression. The results suggest that information quality,
perceived ease of payment, benefits of online shopping, and trust affect online purchase decision
significantly. Close attention need to be placed on these factors to increase online sales. The most
significant influence comes from trust. Indonesian people still lack of trust toward online commerce, so it is
very important to gain customer trust to increase sales. E-commerce’s business owners are encouraged to
develop sites that can meet the expectation of potential customer, provides ease of payment system, provide
detailed and actual information and responsible forcustomer personal information and transaction records.
This paper outlined the key factors influencing online shopping intention in Indonesia and pioneered the
building of an integrated research framework to understand how consumers make purchase decision toward
online shopping; a relatively new way of shopping in the country.