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INTERVARIABLE INFLUENCE ANALYSIS OF HIERARCHY OF EFFECT (HOE) MODEL IN CROSS-BORDER E-COMMERCE (STUDY CASE: SHOPEE
AND LAZADA)

January 2021 · ASEAN Marketing Journal 12(2)


DOI:10.21002/amj.v12i2.12901
Authors:

Diyang Risma Gabriella


Anna Amalyah Agus
University of Indonesia

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ASEAN Marketing Journal • Vol. XII • No. 2 • 112-120

INTERVARIABLE INFLUENCE ANALYSIS OF HIERARCHY OF EF-


FECT (HOE) MODEL IN CROSS-BORDER E-COMMERCE
(STUDY CASE: SHOPEE AND LAZADA)

Diyang Risma Gabriella1


1
Management, Universitas Indonesia
Depok, Indonesia
[email protected]

Anna Amalyah Agus2


https://www.researchgate.net/publication/348926733_INTERVARIABLE_INFLUENCE_ANALYSIS_OF_HIERARCHY_OF_EFFECT_HOE_MODEL_I… 1/11
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y g
2
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Management,
Read full-text
Universitas Indonesia
Download citation Copy link
Depok, Indonesia
[email protected]
5
Magister of Strategic Management, Prasetiya Mulya University, Jakarta, Indonesia
[email protected]

ABSTRACT
Manuscript type: Empirical research
Research aims: This study was conducted to analyze and develop the intervariable inuence
within the stages of HOE Model in CBEC context.
Design/methodology/approach: Based on the Hierarchy of Effect (HOE) model which con-
sists of the stages of customer progression of learning and decision-making as a response of
their shopping experiences. A total research data of 1,651 respondents were collected through
a structured questionnaire. SEM method was used to test the proposed research model.
Research ndings: HOE Model was found to vary based on the level of product cognition
and platform involvement. Two case studies provide different results which occur due to the
different shopping journey held by the customer from the stages of cognition and involvement
to the decision of making a purchase.
Theoretical Contribution/Originality: The less attention that was given to the customer
behavior in CBEC context has driven the authors to analyze customer journey from prod-
uct cognition to actual behavior stage in CBEC context. The modication towards previous
research model is conducted to extend the analysis with a purpose to provide a full picture of
the customer experience and the factors that inuence their buying decision.
Practitioner/Policy Implication: Provide insights to encourage parties involved for imple-
menting strategic plans that could escalate market presence and competitiveness of Indonesia
CBEC at the global trade.
Research limitation/Implications: The authors extend the research model to actual behavior
stage which creates a wider unexplored variables on the formation of perceived trust and the
overall affective stage.

Keywords: E-commerce, Cross-border e-commerce, Business to customer, Online shopping,


Involvement, SEM, Hierarchy of eect model

112

Diyang Risma Gabriella et al. / ASEAN Marketing Journal © Desember (2020) Vol. XII No. 2 113

INTRODUCTION which are Shopee and Lazada. Referring to Zhu


et al. (2019), the HOE model can identify sever-
E-commerce and online trade transactions have al main factors that play a role in systematically
grown and begun to enter the global market predicting purchase intention to actual purchas-
through the Cross-border E-commerce (CBEC) es from consumers in CBEC (Zhu et al., 2019).
platform. Cross-border e-commerce (CBEC) The potential contribution of this research is to
refers to a new type of international transaction provide insight into the parties involved, both
where the entities involved in these transac- sellers and managers of the CBEC platform in
tions come from different countries (Hu & Luo, Indonesia so that they understand that efforts to
2018). There are several examples of CBEC that improve consumer product cognition are very
https://www.researchgate.net/publication/348926733_INTERVARIABLE_INFLUENCE_ANALYSIS_OF_HIERARCHY_OF_EFFECT_HOE_MODEL_I… 2/11
1/3/23, 7:50 PM (PDF) INTERVARIABLE INFLUENCE ANALYSIS OF HIERARCHY OF EFFECT (HOE) MODEL IN CROSS-BORDER E-COMMER…

have
Download full-text been widely used by cross-border consum- important to encourage
Copy link their purchase intention.
ers,PDF
such as AmazonRead full-text
(Emily Download
D., 2020) which has citation
Ultimately, successfully driving consumers’
more than 197 million visitors from all over the actual purchases will benet sellers, platform
world each month, Zalora with 2 million visits managers, and the industry itself. In addition,
every month from all over the world (Annelle, this research can contribute to providing addi-
TJ, 2020), Shopee and Lazada are also included tional references to academics and practitioners
in the CBEC example because of the meeting related to the dynamics of situations faced by
between sellers and buyers from different coun- consumers and sellers during the consumer buy-
tries. These examples differ from traditional ing process in the HOE Model stages.
e-commerce such as BliBli.com, BukaLapak,
and Tokopedia where the entities involved come LITERATURE REVIEW
from the same country.
Cross-Border E-commerce (CBEC)
Indonesia has two largest cross-border e-com-
merce sites, which are Shopee and Lazada. CBEC is an international application of e-com-
Based on Iprice’s research (2019), it appears merce where there are network transactions in
that Shopee occupies the rst position in Indo- foreign trade (Hu & Luo, 2018). On the CBEC
nesia with the highest number of active users per platform, consumers can directly search for
month compared to Lazada. However, Lazada product information, place orders and have
won rst place in other Southeast Asian coun- products sent to their address (Y. Wang et al.,
tries, such as Malaysia, the Philippines, Singa- 2017). CBEC can be considered a breakthrough
pore and Thailand. This shows that Shopee and in international trade, whether in the context of
Lazada are the largest CBECs with their respec- B2B, B2C and C2C (Y. Wang et al., 2017).
tive strengths and dominance in each different
country where Lazada controls the Southeast Hierarchy of Eect (HOE) Model
Asian market and Shopee controls the Indo-
nesian market (Iprice, 2019). This fact is what HOE model is a consistent sequence consisting
supports the researchers to choose Shopee and consumer response in three stages; cognition,
Lazada as the two case studies in this research so affection, and conation. Cognition is seen as
that the performance of the two CBECs can be mental activity that is reected in the thoughts,
seen and researched from the scope of Indonesia beliefs, or knowledge of consumers about some
and Southeast Asia. products on the CBEC platform (Barry and
Howard, 1990), and researchers in the journal
Based on the data and analysis previously de- call this product stage cognition. In addition,
scribed, this study aims to analyze the role of affection is treated as a level of feelings and
product cognition on purchase intention and con- emotions that can be linked to the CBEC plat-
sumer actual purchasing behavior on the CBEC form (Wijaya, 2015). In this study, the main ref-
platform. So far, there has been little academic erence journal referred to this stage as platform
research on CBEC, especially in analyzing the emotion. Finally, conation reects the intention
effect of product cognition on purchasing inten- to carry out the behavior (e.g., purchase) or the
tion in CBEC (Zhu, Mou, & Benyoucef, 2019). behavior itself on the CBEC platform (Egan,
Hierarchy of Effect (HOE) Model which refers 2007).
to a series of sequential processes from cogni-
tion to conative stages or from product aware- Product Description
ness to actual purchase (Lavidge & Steiner,
1961a; Zhu et al., 2019) will be adopted by re- Consumers are generally rational decision mak-
searchers in the context of CBEC in Indonesia, ers who use product information, prices, ben-

114 Diyang Risma Gabriella et al. / ASEAN Marketing Journal © Desember (2020) Vol. XII No. 2

ets, and promotions to determine whether a H6: The higher the platform situational in-
product is of good quality or not (Gentry et al., volvement, the higher the purchase intention
2006). According to Toulmin (1958), convinc- for Cross-border E-commerce Shopee/ Laza-
ing communication with trust must have a struc- da.
ture and well-ordered content.
Perceived Trust
H1: The higher the quality of the product de-
scription, the higher the perceived trust will be Bradach & Eccles (1989) view trust as a con-
https://www.researchgate.net/publication/348926733_INTERVARIABLE_INFLUENCE_ANALYSIS_OF_HIERARCHY_OF_EFFECT_HOE_MODEL_I… 3/11
1/3/23, 7:50 PM (PDF) INTERVARIABLE INFLUENCE ANALYSIS OF HIERARCHY OF EFFECT (HOE) MODEL IN CROSS-BORDER E-COMMER…
p , g p ( )
towards Cross-border
Download full-text PDF E-commerce
Read full-text Shopee/ trol mechanism
Download citation that facilitates
Copy link the exchange
Lazada. of relationships characterized by uncertain-
ty, vulnerability, and dependence. Many re-
Product Awareness searchers argue that trust is an important sup-
porting factor in online transactions, where
Consumer awareness is an instrument that there is uncertainty, information asymmetry
businesses use to build consumer attitudes and fear of opportunism (Gefen et al., 2003;
towards a brand or company by creating as- Triandis, 1980).
sociations and trust of the target audience in
a particular organization or product. In order H7: The higher the perceived trust, the high-
to identify the success of consumer attitudes er the purchase intention in Cross-border
towards a brand or company, it is important to E-commerce Shopee/ Lazada.
create protable brand associations and brand
trust. Awareness can inuence consumer per- Purchase Intention
ceptions and attitudes (Foroudi, 2019).
Hsu (1987) suggests that purchase intention
H2: The higher the product awareness, the refers to certain exchange behaviors created
higher the perceived trust in Cross-border after a consumer’s general evaluation of a
E-commerce Shopee/ Lazada product. Chang et al. (2016) show that buying
intention in CBEC, is inuenced by percep-
Platform Involvement tions of security, privacy, and the perceived
benets of transacting in CBEC.
According to the commitment-involvement
theory, when a person has a strong commit- H8: The higher the purchase intention, the
ment to an activity or behavior, he is unlikely higher the actual purchase towards Cross-bor-
to take the initiative to stop his activity or be- der E-commerce Shopee/ Lazada.
havior (Helgeson et al., 2002). Platform in-
volvement is divided into platform enduring Actual Purchase Behavior
involvement and platform situational involve-
ment. Platform enduring involvement reects Researchers have considered buying intention
the level of continued concern with the plat- as a proxy for actual buying behavior (Arm-
form. This can happen consistently for a long strong, Morwitz, & Kumar, 2000). Another
time (Albaum et al., 1998). Meanwhile, plat- aspect of actual purchases is to accurately
form situational involvement reects transient estimate the willingness of consumers to pay
feelings for the platform in terms of consumer the maximum price for a product (Lowe and
desires, interests, and beliefs. Alpert, 2010; Voelckner, 2006; Wertenbroch
and Skiera, 2002). This is especially import-
H3: The higher the platform enduring in- ant when successfully planning and evaluat-
volvement, the higher the perceived trust in ing pricing strategies, advertising, and pro-
Cross-border E-commerce Shopee/ Lazada. motional activities (Jedidi and Zhang, 2002)
or when developing new products (Morwitz,
H4: The higher the platform situational in- 2001).
volvement, the higher the perceived trust in
Cross-border E-commerce Shopee/ Lazada. RESEARCH METHOD
H5: The higher the platform enduring in- Data Collection Methods
volvement, the higher the purchase intention
in Cross-border E-commerce Shopee/ Laza- There are two methods that researchers use,
da. which are primary data and secondary data.

Diyang Risma Gabriella et al. / ASEAN Marketing Journal © Desember (2020) Vol. XII No. 2 115

Primary data is data that is collected directly by Research Model


researchers for a speci c purpose in answering
research problems (Malhotra, 2010). The scale Research model of this study is adopted and
used by researchers in this study is the Likert modied by referred to Agmeka, Wathoni,
scale 1-7, the scale was chosen to avoid the dis- & Santoso (2019), A. Singh & Verma (2017),
https://www.researchgate.net/publication/348926733_INTERVARIABLE_INFLUENCE_ANALYSIS_OF_HIERARCHY_OF_EFFECT_HOE_MODEL_I… 4/11
1/3/23, 7:50 PM (PDF) INTERVARIABLE INFLUENCE ANALYSIS OF HIERARCHY OF EFFECT (HOE) MODEL IN CROSS-BORDER E-COMMER…
tribution of respondents’ answers that are too Lavidge & Steiner (1961), Sadeghi, Khani, &
inclined
Download full-text PDFin one direction. Secondary data is
Read full-text data citation
Download Hosseini (2013), Singh
Copy link & Srivastava (2019),
collected from various sources as supporting Smith, Chen, & Yang (2008), Sukma Wijaya
data (Malhotra, 2010). (2012), and Zhu et al. (2019). Below is the re-
search model for this study:
Sampling Method
The three-stage model used in Zhu et al. (2019)
The criteria for respondents needed in this study adapted from the Hierarchy of Effects (HOE)
are Generation X (birth years 1965-1979 or Model, which explains that the consumer re-
ages 41-55 years), Generation Y (birth years sponse process is divided into three stages,
1980-1996 or ages 24-40), and Generation Z namely cognitive, affective and conative. In
(birth years 1997-present or age smaller equal conative, Zhu et al. (2019) only explore the
to 23 years) (Schiffman & Wisenblit, 2015) who stage until purchase intention variable. For this
used the CBEC Shopee and Lazada platforms study, researchers develop the model by making
to shop within the last 6 months. The research- modications through the addition of the actu-
er uses non-probability sampling (judgmental al purchase variable. Based on the journal Ag-
sampling), which is a sampling technique that meka, Wathoni, & Santoso (2019), it is stated
relies on the personal or researcher’s judgment that there is a signicant positive effect between
in which each element in the population does purchase intention and actual behavior where
not have the same opportunity or opportunity to the research involves Lazada e-commerce con-
be sampled (Malhotra, 2010). sumers to be researched. Next. A. Singh & Ver-
ma (2017) show a positive inuence between
Sample Size purchase intention on actual behavior by using
Theory of Reasoned Actions (TRA), in the con-
In accordance with the references Hair, Black, text of organic food purchases. Sadeghi, Khani,
Babin, & Anderson (2014), the minimum sam- & Hosseini (2013) in their journals explain the
ple required in the study is the number of ques- inuence between variables in Lavidge & Stein-
tion items multiplied by the number ve. There- er (1961) HOE Model, it shows that there is a
fore, with the number of question items, which positive in uence between purchase intention
are 41 questions, the minimum number of re- on actual behavior. This is also explained fur-
spondents needed in this study was 205 respon- ther by Smith, Chen, & Yang (2008), Sukma
dents for each case study. In this study, 1,651 re- Wijaya (2012), and Singh & Srivastava Journal
spondents who had passed the lter stage would (2019) who state that high purchase interest can
choose the CBEC application or website they positively inuence consumer’s actual buying
used, thus it was found that 1,281 respondents behavior.
were CBEC Shopee customers and 370 respon-
dents were CBEC Lazada customers. RESULT AND DISCUSSION
Respondents Demographics

Analysis of the respondent’s prole shows


that CBEC Shopee and Lazada users are dom-
inated by women, where there are 84.86% fe-
male users at CBEC Shopee and 67.84% fe-
male users at CBEC Lazada. The two CBECs
were dominated by respondents aged less
than or equal to 23 years, which are 83.22%
for the Shopee CBEC case study and 70.81%
for the Lazada CBEC case study. Then, it ap-
pears that the two CBECs are dominated by
Figure 1. Modied Research Model for Case respondents whose last education completed
Study of CBEC Shopee and CBEC Lazada is senior high school/ equivalent, where there
are 64.32% for Shopee CBEC and 62.70%

116 Diyang Risma Gabriella et al. / ASEAN Marketing Journal © Desember (2020) Vol. XII No. 2

for CBEC Lazada. Furthermore, both CBECs ≥ 1.96. Except SI5 of the platform situational
were dominated by respondents with occupa- involvement variable which has an SLF value
tion as students, which are 74.79% for Shop- below the minimum limit, which is 0.44. Al-
https://www.researchgate.net/publication/348926733_INTERVARIABLE_INFLUENCE_ANALYSIS_OF_HIERARCHY_OF_EFFECT_HOE_MODEL_I… 5/11
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ee CBEC and 63.51% for CBEC Lazada. In though it does not cross the SLF 0.5 limit, based
addition,
Download respondents
full-text PDF were
Readalso dominated byDownload
full-text on Igbaria
citation et al. (1997), thislink
Copy value can still be de-
those from Jabodetabek, which are 52.46% for clared valid because it is still above 0.30 so that
CBEC Shopee and 50.81% for CBEC Lazada. the SI5 indicator can be further processed. Then,
Regarding the respondents’ average expendi- in terms of reliability, all variables also show re-
ture per month, the majority of respondents in liable results because they have the construct
both CBECs spent <IDR 1,000,000.00, which reliability (CR) number ≥ 0.70 and the variance
are 41.14% for Shopee CBEC and 35.95% for extracted (VE) value 0.50. Furthermore, the re-
CBEC Lazada. sults showed that all indicators had valid values
in the Lazada CBEC case study. In addition, all
The Measurement Model (Conrmatory variables also show reliable results. Therefore,
Factor Analysis) it can be concluded that all indicators and vari-
ables in the study of CBEC Shopee and CBEC
Based on the validity and reliability test results Lazada respondents have valid and reliable val-
of the Shopee CBEC case study main test, it was ues so that they can be used further in structural
found that all indicators have valid value, which tests.
were marked by the SLF value ≥ 0.5 and t-value

Figure 2. Goodness of Fit for Measurement Figure 3. Goodness of Fit for Structural
Model Model

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