Trust, risk and transaction intention in consumer-to-consumer e-marketplaces. An empirical comparison between buyers’ and sellers’ perspectives
| Pages | 331-350 |
| Published date | 11 March 2019 |
| DOI | https://doi.org/10.1108/IMDS-10-2017-0489 |
| Date | 11 March 2019 |
| Author | Kangning Wei,Yuzhu Li,Yong Zha,Jing Ma |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
Trust, risk and transaction
intention in consumer-to-
consumer e-marketplaces
An empirical comparison between buyers’and
sellers’perspectives
Kangning Wei
School of Management, Shandong University, Jinan, China
Yuzhu Li
Charlton College of Business, University of Massachusetts Dartmouth,
North Dartmouth, Massachusetts, USA
Yong Zha
School of Management, University of Science and Technology of China,
Hefei, China, and
Jing Ma
College of Business and Public Management, Kean University, Wenzhou, China
Abstract
Purpose –The purpose of this paper is to compare the relative impacts of trust and risk on individual’s
transaction intention in consumer-to-consumer (C2C) e-marketplaces from both the buyers’and the
sellers’perspectives.
Design/methodology/approach –Two surveys were used to collect data regarding buyers’and sellers’
perceptions and transaction intentions at a typical C2C e-marketplace. Partial least squares was used to
analyze the data. A complementary qualitative study was conducted to triangulate the results from the
quantitative study.
Findings –Institution-based trust (IBT) exerts a stronger influence on transaction intentions for buyers than
for sellers. Sellers perceive a stronger impact of trust in intermediary (TII) than buyers on transaction
intentions. The impacts of perceived risk in transactions are not different between buyers and sellers.
Furthermore, IBT mediates the impacts of TII and perceived risk on transaction intentions for buyers.
Research limitations/implications –The results indicate that the impacts of trust and risk on transaction
intention in e-marketplaces do differ between buyers and sellers. This suggests a need to further investigate
the buyer–seller difference in online transactions.
Practical implications –Intermediaries need to focus on different types of trust-building mechanisms
when attracting buyers and sellers to make transactions in the e-marketplace.
Originality/value –C2C e-marketplaces cannot survive without participation from both buyers and
sellers. Most prior research is conducted from the buyers’perspective. This research sets a starting
point for future research to further explore the differences between buyers’and sellers’behavior in C2C
e-commerce environments.
Keywords Buyers, Risk, Trust, Consumer-to-consumer, Sellers, Transaction intention
Paper type Research paper
1. Introduction
With the advent of the internet and portable devices, consumer-to-consumer (C2C) e-commerce
has been experiencing rapid development around the world (Dan, 2014). The exemplars of
popular C2C e-marketplaces include eBay in the USA and Taobao in China. C2C markets not only Industrial Management & Data
Systems
Vol. 119 No. 2, 2019
pp. 331-350
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-10-2017-0489
Received 18 October 2017
Revised 4 February 2018
21 May 2018
Accepted 23 June 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
This research has been supported by National Social Science Foundation of China (No. 15BGL034) and
National Natural Science Foundation of China (Nos 71671173 and 71371008).
331
C2C
e-marketplaces
facilitate buyers’activities but also foster micro-entrepreneurial activities (Avgerou and Li, 2013).
By joining a C2C e-marketplace, buyers can enjoy significant interaction with multiple sellers,
communicate their needs and shop for goods and services at economical prices anytime and from
anywhere (Dan, 2014). Sellers can receive benefits such as reaching a big group of individual
consumers, achieving market penetration and expansion and saving costs (Kim and Ahn, 2006).
However, despite its importance and the rapid growth, C2C e-marketplaces in China are
facingfierce competitionfrom other types of onlinemarkets such as B2Cmarkets (Huang et al.,
2017). According to a recent report conducted by iResearch[1], the market share of B2C markets
in China’s online shopping market first exceeded that of C2C markets in 2015 (52.1 vs
47.9 percent); it is expected the share of B2C markets will keep expanding and would reach
60.4 percent in 2019 and C2C will only be 39.6 percent. Thus, how to keep individuals, including
both buyers and sellers, make transactions in C2C e-marketplaces becomes a crucial issue.
Current C2C e-commerce research is mainly conducted from the buyers’perspective,
assuming that buyers are the main drivers of online traffic (Guo et al., 2017). However, both
buyers and sellers are users of C2C e-marketplaces and have motivations to participate.
A C2C e-marketplace must attract a large number of buyers and sellers simultaneously in
order to sustain development (Kim and Ahn, 2006). Chu and Manchanda (2016) found that
sellers are more important in driving Taobao’s growth since sellers can attract 3.5 times
more buyers than its buyers can in generating sellers’growth. Therefore, to keep online
transaction traffic, it is important for a C2C intermediary to examine both buyers’and
sellers’perspectives. In this research, we compare these two perspectives on the impact of
trust and perceived risk, two extensively studied constructs in e-commerce research
(e.g. Pavlou, 2003; Fang et al., 2014) on online transaction intentions.
Trust and risk are essential issues in e-commerce mainly due to the fraudulent activities
occurred every day online. Indeed, e-commerce fraud is growing at an alarming rate.
According to Experian data[2], e-commerce fraud rates in the USA are 33 percent
higher in 2016 than in 2015. Similar to buyers, sellers are also routinely engaging with
buyers with whom they have little or no prior interactions. Therefore, they are also facing
e-commerce fraud such as behind-time payments for the products and unreasonable
disputes from buyers regarding the products and services (Sun, 2010), and chargeback
fraud (Guo et al., 2017). A report[3] reveals that e-commerce industry suffered an estimated
revenue loss of $6.7bn due to chargebacks in 2016, and every dollar of fraud cost
e-commerce merchants $2.40 in 2016, up from $2.23 in 2015.
Seller’s perceptions of trust and risk can be different from those that of buyers, but they
have received limited attention in the C2C e-commerce research (Sun, 2010; Leonard, 2012).
Sellers’trust is built on different technical, policy and institutional bases (Sun, 2010).
Buyers try to buy quality products at economical prices while sellers try to make
long-term profits by regularly selling products (Meehan and Wright, 2011). The different
purposes might lead to different perceptions of trust and risk in sellers’use of an
e-marketplace. It is crucial for C2C marketplaces to understand these differences in order
to attract both buyers and sellers to make transactions. Only after understanding them,
can C2C marketplaces take appropriate measures to enhance trust and reduce risks for
sellers and buyers differently.
This study aims to compare buyers’and sellers’perspectives on the impacts of trust and
perceived risk on their online transaction intentions. As a motivational factor, behavioral
intention is suggested as the most influential predictor of actual behavior (Ajzen, 1991).
A large number of e-commerce studies have investigated the intention to use an
e-marketplace or intention to make transactions in e-marketplaces (e.g. Gefen et al., 2003;
Wen et al., 2011; Pavlou, 2003). Specifically, we address the following research question:
RQ. How do trust and perceived risk impact the buyers’and sellers’intentions to make
transactions in a C2C e-marketplace differently?
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