Syntax Literate: Jurnal Ilmiah Indonesia p–ISSN: 2541-0849 e-ISSN: 2548-1398

Vol. 7, No. 10, Oktober 2022

FACTORS AFFECTING REPURCHASE INTENTION ON E-MARKETPLACE AMONG MILLENNIALS IN INDONESIA

Anggie Noor Rachmad, Diaz Reza Yudhatama, D Roozbeh Babolian Hendijani

Universitas Bina Nusantara (Binus), Indonesia

Email: [email protected], [email protected], [email protected]

Abstract

The objective of this study is to examine the variables that contribute to customer repurchase intention in Indonesia. The finding can help the developer and founder of a new platform or application to create a more attractive, safe and secure application to give guarantees for online shoppers. This research uses a quantitative approach in which data can be measured on a numerical scale. In addition, the researchers employed a survey method with a 5-point Likert scale to collect primary data from the study's findings.The population of this study is the millennial generation in Jakarta, aged 25 to 40 years old. The current study used a questionnaire with a five-point Likert scale as the data gathering method. First part of the questionnaire is about participants' experience with e-marketplace. It consists of 29 items. The results of this study show that there are perceived benefit does not have a significant impact on customer satisfaction. Perceived risk does not have a significant impact on customer satisfaction. Perceived ease of use does not have a significant impact on customer satisfaction. Similarly, perceived usefulness does not have a significant impact on customer satisfaction. In this study, it is found that customer satisfaction has a significant impact on repurchase intention. This result relevant with customer satisfaction in the e-marketplace plays an important role in repurchasing intention. E-marketplaces should continue to develop their services, facilities, and products in order to ensure that customers who have already purchased their items are satisfied and will continue to do so in the future. E-marketplace should further improve services such as giving more choices and options for goods so that customers can find the desired item more easily.

Keywords: analysis of factors, repurchase intention, e-marketplace.

Introduction

As nowadays more economic and social sectors pervade, digital technology continues to advance at a breakneck speed. It alters the interactions between customers and sellers, governments and citizens, employees and employers, and individual's social lives. In a larger sense, digital technology is seen as a key driver of long-term national and global economic growth. One of the developing countries in digital technology in South East Asia is Indonesia. Indonesia is predicted to become the region's largest digital economy market (Google, Temasek, 2020). Indonesia's digital economy was anticipated to have risen fivefold since 2015 in 2019, with the country's digital economy expected to reach 124 billion USD by 2025 (Google, Temasek, 2020). Electronic-based marketplace (e-marketplace) is the most important sector covered in the estimate, accounting for around half of Indonesia's digital economy in 2019 and this sector's contribution is predicted to reach over 60% by 2025 (Google, Temasek, 2020). In recent decades, the Internet has become one of the most important commodities in Indonesia, as seen by the internet's continued development year after year (Google, Temasek, 2020). In Indonesia, 85% of internet users access the internet via mobile phones, while 13% access the internet using tablets (Prakosa, 2020).

Nowadays, various markets which sell goods and services have been continuously modified using computers and the internet. Most people have a habit of shopping from their PCs, laptops and smartphones. Shopping activity including transactions of buying and selling via the internet create a new market and this market slowly replaces traditional markets (Changcit, Cutshall, Lonkani, 2018). In fact, according to Detik.com (2020), there was a difference from 2019, which was increasing by 17% or 25 million internet users in Indonesia to around 175.4 million internet users in 2020, which implies that more than half of the whole population in Indonesia has access to the internet. Also, according to Detik.com (2020), more than half of Indonesia's population conducted online shopping in 2018, accounting for 53% of the overall population, with some variety of goods and services dominated by online shopping in Indonesia.

According to the results of a census between February and September 2020, Generation Z accounted for 75.49 million people, or 27.94% of the overall population of 270.2 million people. Meanwhile, the millennial group accounted for 69.90 million people, or 25.87% of the total population. Millennial generation has a high contribution to the development of online shopping platforms, because it has a long process when shopping online, from seeing trends, until deciding to buy. Customer attitudes and behavior among Millennials are defined by a substantial combination of behavioral and attitudinal characteristics, which are expressed in their customer attitudes and actions (Purani, Kumar, 2019). According to Jackson et al. (2011), millennials are more savvy customers.

In the study of Trivedi and Yadav (2018), prior study has focused on developing relationships between construct of security, privacy concern, ease of use, repurchase intention relationship and e-satisfaction as the mediator also investigated were conducted in India. The study found security, privacy concern, trust, Ease of Use has a significant impact on repurchase intention and customer satisfaction has a positive impact on e-marketplace. In this case, the researchers focus on the Millennial of Indonesia, the development of internet access capabilities has triggered changes in online shopping habits of the people of Indonesia (Fajriah, 2017). Prakosa (2020) has paid attention to perceive the usefulness and ease of use as the important factors of using internet services. The consumers who decide to use online shopping must feel comfortable with it. While one empirical study on the elements influencing millennial customers' online buying behavior discovered that design, layout, user interface, and transaction security are related to 78% of overall customer happiness.

The research gap in this study arises as explained by Johan et al. (2019) that the customer satisfaction has a strong positive effect on repurchase intention in the fashion online shopping industry in Indonesia, according to the study with the category of age early adulthood, this study targeted millennials as the subject for research because millennials are digital savvy and have grown up with technological advancements (Pérez-Cueto et al., 2010). The objective of this study is to examine the variables that contribute to customer repurchase intention in Indonesia. The finding can help the developer and founder of a new platform or application to create a more attractive, safe and secure application to give guarantees for online shoppers.

Literature Review

The Technology Acceptance Model (TAM) was created by David (1989). The TAM model is one of the most popular frameworks extensively used in information systems research in relation to various other factors to create new frameworks (Wen, Chao., Prybutok, Xu, 2011). This model is widely used in information systems and can be combined with various factors to create new research models. Furthermore, TAM model users are guided by the nature of the community, which recognizes the benefits provided by technology even before expressing an intention to utilize it (Latief, 2019). According to the TAM approach, a person's desire to use a technology is formed by a positive attitude and a person's view of a technology that is simple and has many benefits for him (Nguyen et al., 2019).

Figure 1: TAM model

Millennials in Indonesia

As the first generation to grow up with Internet-based technologies, millennials make the bulk of online purchases, while other customers prefer to shop in traditional ways (Statista, 2017). Because of fundamental changes in their features compared to earlier generations, millennials' repurchase decision has become an attractive research issue (Kim & Yang, 2020). People born between 1980 and 2000 are referred to as Millennials in the literature (e.g. Dimock, 2019; Corodeanu, 2015). The millennial generation is a potential market of 63.5 million in Indonesia (IDNtimes, 2020). In addition, according to Wijayaningtyas, Handoko and Hidayat (2019), In 2025, Gen Y is expected to account for 39% of Indonesia's population, or 110 million individuals out of 285 million. In this study, Millennials are selected since they are thought to have a lot of power, especially in this digital era.

E-marketplace in Indonesia

An e-marketplace is a website or app that facilitates shopping from many different sources (Maftukhah et al., 2018). The Indonesian e-marketplace is currently growing at a rapid speed, which should be maintained in order to boost societal prosperity (Australian Trade and Austrade, 2018). Some e-marketplaces grow very rapidly in Indonesia, e.g. Tokopedia, Bukalapak, Blibli.com and Lazada. Tokopedia is the fastest growing e-marketplace in Indonesia, as proven by the fact that in September 2014, 11 million individuals visited Tokopedia, and in June 2018, the website received the largest number of visitors to date (Gunawan et al., 2019). According to this information, in the last four years, the rise has been 11,800%, or approximately 245% every month. Also Tokopedia was the most frequented e-commerce market in the third trimester of 2018, with a total of 153.6 million monthly visits, according to databoks.co.id (Gunawan et al., 2019).

According to Statista (2017), since 2015, roughly $2.5 billion has been invested in the Indonesian e-commerce business, which offers numerous prospects. In addition, from the same reference, in 2025, the number of Indonesians shopping online is expected to reach 119 million (Statista, 2017). The market is dominated by local e-commerce sites like Tokopedia, Traveloka, Bukalapak, and Go-jek. Four of the ASEAN Unicorns are represented by these merchants. The increasing smartphone penetration, the rise of the middle class, foreign direct investment, and the growth of digital payments are all contributing to Indonesia's e-commerce growth (Australian Trade and Austrade, 2018).

Perceived benefits

Perceived benefits is the degree to which the user believes that by using a product that is offered, customers will feel the benefits of using the product (Andryanto, 2016). The primary advantage of online shopping is that customers may purchase things at 24-hours a day, seven days a week, at any time of day or night (Delafrooz et al., 2011). In addition, customers purchase online for a variety of reasons, including time savings, convenience, a broader selection, a lower price, 24 hour customer support, and fun and entertainment (Delafrooz et al., 2011). For buyers expected market efficiency and supply chain efficiency in electronic markets offering access to markets, more options and competitive price (Lubis & Wardana, 2020). Additionally, Maharany et al. (2021) demonstrate that there is a positive and substantial relationship between perceived benefits and satisfaction in their research in Indonesia.

Based on the explanation above leads to hypotheses,

H1 : Perceived benefits have significant influences with the customer satisfaction

Perceived risk

Financial risk, product performance risk, psychological risk, social risk, and time risk (To & Ho, 2016), particularly from the customer's perspective. While satisfaction and trust are necessary to persuade and retain e-buyers, achieving satisfaction and trust when the consumer is wary about buying online is tough. Knowledge of the risk that a customer perceives can aid in the development of appropriate methods for achieving customer happiness and trust in a website. Customer satisfaction is influenced by perceived risk, demonstrating that millennials do not consider e-commerce purchases to be risky (Lestari, 2019).

Based on the explanation above leads to hypotheses,

H2 : Perceived risk have a significant influences with the customer satisfaction

Perceived Ease of Use

Perceived Ease of Use’s factors explain the extent to which a person will believe that using a technology or system will be free from one's physical or mental effort when doing something. Ease implies effort that is carried out without difficulty or without the need for hard effort. Perceived ease (perceived ease of use) looks at the user's belief that the system or technology used does not require a big effort when using it (Prakarsa, 2019). Ease of use is a very important variable for receiving information systems because it is the basis of using the system.

An individual is more likely to make further use when the use is considered useful. Thus, it can be said that the perceived ease of use can be obtained when a consumer finds it easy to interact with the website, to find product information and pay online. They will consider that shopping online will be more useful. It means that perceived ease of use has a positive influence on customer satisfaction (Tandon et al., 2016).

Based on the explanation above leads to hypotheses,

H3 : Perceived ease of use has significant influences with the customer satisfaction.

Perceived Usefulness

Perception of usefulness (perceived usefulness) means that it pays attention to the extent to which a person will believe that with a system will be able to improve work performance or the performance of users of the system. This perceived usefulness variable will affect customer intention to use significantly (Prakarsa, 2019).

When consumers feel the ease of interaction with e-commerce websites, to find product information and pay online, they will consider shopping to be more useful. A system that is difficult to use will be considered less useful by the user and may be abandoned by the user. Wen et al. (2011) explains that the perceived usefulness is where consumers feel that shopping at web-based stores will increase spending and the extent to which consumers feel the ease of interaction with websites and can receive product information that they need.

Based on the explanation above leads to hypotheses,

H4 : Perceived usefulness have significant influences with the customer satisfaction.

Customer Satisfaction

One of the most important factors in enhancing client retention, online store long-term growth, and repurchase intention is customer satisfaction (Chen et al. 2012). Researchers determined where trustworthiness in the e-marketplace from the internet was affected by the consumer's repurchase intention (Lee, 2017). Direct positive relationship between customer satisfaction and repurchase intention has a very strong potential to occur (Ahmad et al., 2010).

Based on the explanation above leads to hypotheses,

H5 : Customer satisfaction has significant influences to repurchase intention

Repurchase Intention

Repurchase intention is a psychological trait that motivates customers to acquire more products or services (Trivedi & Yadav, 2018). Prior experience underlines repurchasing on shopping online and trust toward its possibility to have considerable impact on purchase intention (Thamizhvanan, 2012). When the customer feels convenient with the loyalty program held by the online market, the customer also has the intention to repurchase to the store and the retailer must build creation to keep their customers always loyal.

White (2014) gives the opinion that repurchase intention is one of the most suitable dependent variables in any system of connection designed to construct management insight and improved strategic planning and also have looked at the influence of satisfaction on loyalty and varying components of behavior intention (White, 2014).

Methodology

This research uses a quantitative approach in which data can be measured on a numerical scale (Sugiyono, 2017). In addition, the researchers employed a survey method with a 5-point Likert scale to collect primary data from the study's findings (Sugiyono, 2017).

The population of this study is the millennial generation in Jakarta, aged 25 to 40 years old. The current study used a questionnaire with a five-point Likert scale as the data gathering method. First part of the questionnaire is about participants' experience with e-marketplace. It consists of 29 items. The first part of the questionnaire measured perceived risk with 6 questions which borrowed from previous studies (T. Natarajan, 2017; Chin et al., 2017), the second part of the questionnaire measured perceived benefit with 6 questions which borrowed from previous studies (Rao et al., 2007; Ozlen et al., 2014), the third part of the questionnaire measured perceived usefulness with 5 questions which borrowed from previous studies (T. Natarajan, 2017), the fourth part of the questionnaire measured perceived ease of use with 5 questions which borrowed from previous studies (T. Natarajan, 2017), the fifth part of the questionnaire measured customer satisfaction with 4 questions which borrowed from previous studies (Anderson, 2003; Yang, 2004), the sixth part of the questionnaire measured repurchase intention with 3 questions which borrowed from previous studies (Gefen, 2000; Jarvenpaa et al., 2000). Socio-demographic factors include gender, marital status, levels of education, income level, occupation, frequency of purchase, money spent, and products were also included in this study.

The analytical method used is partial least squares structural equation modeling (PLS-PM, PLS-SEM) using SmartPLS software. Model testing was carried out using structural equation modeling (SEM). The ability of SEM to estimate several connected dependent connections, as in our model, was the primary reason for its usage in analysis (T. Natarajan et al., 2017). Before doing the SEM analysis, the measurement model was evaluated for accuracy and validity. The instruments' dependability was measured using Cronbach's alpha. The validity of the measures was assessed using both exploratory and confirmatory factor analysis (EFA & CFA). To assess the instruments' reliability and validity, other metrics, such as average variance extracted (AVE), composite reliability (CR), and average loadings (AL) were used. Data collection conducted from 17 to 19 November 2021, it was prepared in dual language, that is in English and Bahasa Indonesia, the sampling is 20 respondents.

Result and Discussion

The demographics profile of the respondents shows that most of the respondents have ever purchased in the e-marketplace and shown 100% in this study. Most of the respondents are female in this study and 69.2% compared to 30.8% are male respondents. The respondents in this study skewed toward the majority married status of 69.2%. The majority of the respondents have a highly educated bachelor’s degree of 56.4% followed by a master degree of 33.3%. All the respondents in this study are employees of 56.4% followed by self-employed workers of 25.6%. Moreover, 17.9% of the total respondents have monthly income under Rp 3.5 million category and 48.7% between Rp 3.6 to 10 million category.

Based on the survey, the majority of consumers buy clothes (23.1%) through e-marketplace. Followed by the food and skincare that had 15.4% of the consumers, 12.8% buy electronic devices, and 10.3% buy household appliances.

Structural Equation Models (SEM) are used to examine the relationship between variables in a research issue. When it comes to calculating and interpreting study results, sample size is critical. According to Hair et al. (2010), the size of the sample size has a significant impact on the results of statistical tests (statistical tests). In most scientific investigations, the sample size varied from 30 to 500 people (Sekaran, 2003).

Table 1: measurement model of study

Indicator	Scale	Factor Loading	CR	AVE	Cronbach Alpha
	Perceived Risk		0.860	0.674	0.756
PR1	Purchases from offline are lower risk than e-marketplaces	0.775
PR3	I believe the security system built in the e-marketplace is strong enough to protect my account	0.906
PR5	It is safe to provide credit card information for purchasing product in e-marketplace	0.774
	Perceived Benefit		0.875	0.638	0.809
PB1	I can save money by using e-marketplace	0.759
PB4	I can enjoy 24 hours online shopping	0.839
PB5	E-marketplace provides better information about products for me	0.729
PB6	E-market place allows me to shop around for the best pricing	0.860
	Perceived Usefulness		0.941	0.799	0.916
PU1	I find it easier to decide to buy something through an e-marketplace	0.914
PU3	Using e-market place would increase my productivity	0.872
PU4	Using e-market place is advantageous	0.873
PU5	I find it more effective to shop through an e-marketplace	0.914
	Perceived Ease of Use		0.917	0.788	0.864
PEU1	Instructions to use e-market place is easy to follow	0.940
PEU2	Internet shopping for products is easy to understand	0.913
PEU3	I would find it easier to use internet to buy the products that I want to buy	0.804
	Customer Satisfaction		0.931	0.772	0.900
CS1	I am satisfied with my decision to use e-market place for shopping	0.896
CS2	My choice to use e-market place was a wise one	0.938
CS3	The overall quality of the e-marketplace products is excellent	0.770
CS4	I'm enjoy purchasing through e-marketplace	0.901
	Repurchase Intention		0.946	0.855	0.915
RI1	I am likely to recommend this e-marketplace to my friends	0.931
RI2	I would like to refer to the e-marketplace for my next purchase	0.949
RI3	I would like to revisit the e-marketplace to purchase products in the near future	0.893

The Cronbach's Alpha of each concept in this study is greater than 0.70, which indicates that the responses of the respondents are consistent or that the constructs are reliable. In addition, to determine whether the measuring tool is valid or not, the researcher performed another way by evaluating the value of each factor loading at each indicator. It can be seen in the table above that all the measuring tools in this study have a factor loading value > 0.60 and the composite reliability > 0.60, also Average Variance Extracted (AVE) > 0.50.

Customer satisfaction R square value is 0.774, or 77.4%. This demonstrates that the diversity of perceived risk, perceived reward, perceived utility, and perceived ease of use can have a 77.4% effect on customer satisfaction.

The R square value for repurchase intention is 0.646, or 64.6%. This demonstrates that the diversity of customer satisfaction characteristics can have a 64.6.4 percent effect on repurchase intention.

In PLS, hypothesis testing is performed using T-test analysis. The T-test is used to compare the values of t-count (t-statistic) and t-table at a level of error (margin of error) of 5% or 1.96. Hypothesis accepted if t-count exceeds t-value, table's or in other words, T-count is more than 1.96. The T-test is conducted in smartPLS 3.0 via the bootstrapping procedure. Figure 3 illustrates the bootstrapping result.

Figure 3 : Full Structural Model (Bootstrapping)

Table 2 : Path Analysis

Hypothesis		T Value	P Value	Remark
H1	Perceived Benefit → Customer Satisfaction	1.889	0.059	Reject
H2	Perceived Risk 🡪 Customer Satisfaction	2,471	0.013	Reject
H3	Perceived Ease of Use → Customer Satisfaction	1.841	0.066	Reject
H4	Perceived Usefulness → Customer Satisfaction	1.449	0.147	Reject
H5	Customer Satisfaction → Repurchase Intention	12.703	0.000	Accepted

The results of testing the hypothesis are as follows:

Because the T-Statistic value of the perceived benefit variable is less than 1.96, it has no meaningful effect on customer satisfaction. As a result, the hypothesis "Perceived benefits having a considerable impact on customer satisfaction" is refuted.

Customer satisfaction is significantly impacted by the variable perceived risk, as the T-Statistic value is 2.471, which is more than 1.96. As a result, the hypothesis "Perceived risk has a large effect on customer satisfaction" can be ruled out.

Because the T-Statistic value of perceived ease of use is 1.841, which is less than 1.96, it has no meaningful effect on customer satisfaction. As a result, the hypothesis "Perceived ease of use has a major effect on customer satisfaction" is refuted.

Because the T-Statistic value of 1.449 is less than 1.96, the perceived usefulness variable has no meaningful effect on customer satisfaction. As a result, the hypothesis "Perceived usefulness has a considerable impact on customer satisfaction" is discarded.

Customer satisfaction has a significant effect on repurchase intention, as measured by the T-statistic, which is more than 1.96. As a result, the hypothesis "Customer happiness has a large impact on repurchase intention" may be accepted.

Conclusion

Perceived benefit does not have a significant impact on customer satisfaction. Perceived risk does not have a significant impact on customer satisfaction. Perceived ease of use does not have a significant impact on customer satisfaction. Similarly, perceived usefulness does not have a significant impact on customer satisfaction. In this study, it is found that customer satisfaction has a significant impact on repurchase intention. This result relevant with customer satisfaction in the e-marketplace plays an important role in repurchasing intention. E-marketplaces should continue to develop their services, facilities, and products in order to ensure that customers who have already purchased their items are satisfied and will continue to do so in the future. E-marketplace should further improve services such as giving more choices and options for goods so that customers can find the desired item more easily.

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Copyright holder:

Anggie Noor Rachmad, Diaz Reza Yudhatama, D Roozbeh Babolian Hendijani (2022)

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Syntax Literate: Jurnal Ilmiah Indonesia

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