What does it take to give your trust online? an analysis on building trust on online commerce in the Philippines / Chabely V. Esguerra

Date : December 18, 2017
Number of Pages : 77 leaves
Adviser : Prof. Ma. Elizabeth A. Francisco

Abstract

E-commerce in the Philippines is projected to grow to almost trillion pesos in sales by 2025. And yet, we are still behind our South East Asian counterparts like Thailand and Indonesia. The potential of e-commerce in the Philippines is promising with the fast growth of internet penetration and infrastructure upgrade including fulfillment services, faster internet service, etc., but it is hindered by the market itself; Filipinos do not trust online commerce. The main problem that this research paper tried to find answers to is about this online trust. What would it take for Filipinos to trust online commerce?

The problem in this research paper is a topic that the researcher sees on a daily basis. Being part of Company X, a local buy and sell platform in the Philippines, the problem of converting a platform visitor to a successful buyer or seller online is a big and evolving challenge.

To explore and solve the problem, a framework is proposed that introduces four tiers of online trust and security. The researcher proposes that the framework will be used as the building blocks of any Filipino e-commerce platform to break the barrier of trust. The framework also served as the basis of the methodologies used in this research paper. Three methods of analysis were used : 1) survey 2) interview, and 3) comparative research. Most of what the methodologies were able to analyzed are the first and second tier of the framework. The third and fourth layer, due to limitations in resources were not explored comprehensively.

After the survey, several interviews and the platform comparison, we saw that the Filipino market's top of mind when it comes to online trust in e-commerce are user reviews, which is contained in the first-tier of the framework. User reviews pertain to the reviews, rating, or feedback of other platform users that were able to experience the platform. It can be user reviews of the item being sold, the vendor who is selling the item or the platform/business itself. The next three tiers, although not top of mind, seem to be what they expect at the minimum from the platform. Users will not transact unless they know that the platform is technically secured. This is because users know that the platform holds their personal and bank information. Users also have a concept of 'trusted site' that stems from loyalty (user was able to have a successful transaction before) or from brand/platform integrity (the brand is known to be secured or legitimate).

From the comparative research, we have seen industry players that are already ahead in building trust online like Lazada and Shopee, while some need to look at the framework for opportunities for improvement. However, a big gap that was evident in the research in the linkage between and among public and private entities. We have available government policies on cybercrime and cybersecurity and each of the industry players implement their own best practices in cybersecurity. However, there is no partnership between public and private or even private and private. In one local e-commerce business, after a user reported an incident of fraud, the user would need to report the same incident separately to the Philippine National Police. In such cases, the business can only provide assistance by providing data or information about what transpired. Exploring this gap in linkage is an open opportunity for the industry to strengthen the market's perception of online trust in general.

The framework in this research paper explores only the minimum requirement for building trust and security due to constraints in time and resources. It is recommended that businesses use the framework as a blueprint of how they would build trust and security on their platform. Additional research (market data, usability) is needed on their part to add into the framework and be able to successfully customize the framework to suit their business objectives and their users' needs.

In conclusion, building on an e-commerce platform's trust and security should follow the four-tier framework. It acts as a foundation or must-have in any platform within the same industry. The framework captures what the users want to see to proceed with their online transaction and what the users don't seek out to see but is as important for them to feel secured.