AN EMPIRICAL STUDY ON CUSTOMER’S SOCIAL MEDIA BEHAVIOR AND THEIR PURCHASE INTENTION: A CASE OF LAZADA.CO.ID IN JAKARTA, INDONESIA

Abstract

The trends of ecommerce in Indonesia keep growing fast. Many ecommerce see the potential and start emerging in Indonesia. Lazada.co.id is one of the fastest growing ecommerce in Indonesia. As well popularity of social media usage keep increasing and ecommerce takes this opportunity and use social media as a tool to promote their business. Since the launch of Lazada.co.id in 2012, Lazada.co.id has proven to be the most followed by the customer in social media among other ecommerce. However Lazada is only on the 3rd position of ecommerces in Indonesia. Thus, this research will look at the importance of social media in daily lives, how it impacts customer’s intention of purchase with exogenous variables of Community, Connectedness, Openness, Speed, Dependence as part of Social Media and Trust, Perceived Risk, and Purchase Intention as the endogenous variables. The sampling method used in this research is using purposive and snowball sampling method. A total of 358 valid data were analyzed with structural equation modeling (SEM) to test the hypotheses. Based on the findings, there are seven hypotheses accepted and four hypotheses are rejected. The results show that the highest impact on purchase intention is perceived value, while perceived value is significantly affected by social media dependence and perceived risk.