ONLINE BRAND TRUST: WHAT ARE THE CONTRIBUTORS?

Thanks to the flexibility, ease of interactivity and personalization, the usage of internet has been increasing since it was first introduced back in the early 1980s. The internet has opened a new window and business opportunity that have never been imagined before, thus changing the way consumers shop. Differs from the traditional way of shopping, online shopping has allowed consumers to decide what kind of product they want, when and where they want to purchase the items within their budget by a click of a mouse or mobile phones. Instead of waiting for a premise to be opened and spending so much time looking for a parking space, online shopping provides a convenient way to shop as digital marketplaces are open all day, every day, throughout the year. However, trust has remained one of the most popular issues that leads to the ineffective use of digital marketplaces.

Because consumers play the main role for any business transactions, their trust contributes to the reduction of uncertainty and complexity of any transactions and relationships involving digital marketplaces. When customers show their trust to the brand and the company, they will show willingness in any transactions, eventually creating a smooth business transaction. Likewise, trust develops not only positive attitude towards suppliers but brings in customer loyalties (Schurr and Ozanne, 1985). Furthermore, a world of abundance for consumers is just another world of rivals for brands. When a particular brand is viewed as trustworthy, it has the added advantage to succeed as opposed to its competitors (Reast, 2005). 

Despite the increasing number of Internet users who spend their time with online shopping, companies should stay committed to Internet branding by considering the consumer’s perception of brand trust online. Ha (2004) defines brand trust as the trust possessed among the customers in a particular brand. In this era of e-commerce, online brand trust is considered as one essential component that spurs online purchases and more consumers are becoming aware of its importance (Quelch and Klein, 1996). When consumers put their trust in a particular brand, they will not be reluctant to spend a premium price not only for the brand itself but its brand extension while carrying on being loyal. Furthermore, when customers view a brand as trustworthy, they would not mind spending their time, sharing feedbacks regarding their behavior, tastes and preferences which would allow the brand to develop.

For businesses to remain strong in the game in the long run, there are several aspects that influence online brand trust which comprise of website factors and consumer factors. Sultan et al. (2002) identifies website factors such as navigation, advice, no error, fulfillment, community, privacy and security, trust seals and brand presentation are responsible in developing consumer’s trust. On the other hand, the study shows that trust is contributed by consumer factors such as self-confidence, past behavior, online shopping experience as well as entertainment experience. Lee and Turban (2001) also agree that the declining of online shopping activity is the result of the lacking of consumer trust. 

Salo and Karjaluoto (2007) suggest that internal factors namely consumer characteristics, previous experience with digital marketplaces, reputation, website quality and non-government association are likely related to online trust. As for external factors, they conclude that the product or service characteristics, the distinctive markets, cultures and countries act as the driving factors to the level of trust among consumers. Also, Srivinasan (2004) concludes that brand trust is greatly affected by word of mouth, positive online shopping experience and quality of information. In Malaysia, a recent study involving studying online brand trust in online ticketing determines word of mouth, online experience, quality information and brand reputation as the factors (Alam and Yasin, 2010). 

To make digital marketplaces fairer, it is not an easy task and Rome was not built in a day. As a developing country, it is important for online businesses to be prepared with the new challenges in building consumer online brand trust. They should execute effective plans and consider numerous factors such as demographic variables based on the previous studies. These online businesses must acquire an in-depth knowledge of factors contributing to online brand trust. 

WATCH OUT FOR COUNTERFEIT ITEMS!

Imagine you are purchasing an item over the internet which cost you a fortune, only to realize that it was counterfeit. How would you feel about that? Wouldn’t you feel disappointed? Wouldn’t you lose your trust in online shopping? You see, this has been one of the ongoing issues which has been causing consumers to be in the state of trauma.

Some customers who initially planned to purchase genuine designer products reported that they received counterfeit products once receiving their packages and their efforts to contact the sellers remain pointless since the sellers have changed their contact numbers (The Star Online, 2016). Thus, before hitting the “buy” option, consumers are encouraged to carry out their own due diligence to avoid this kind of pitfall. If one encounters with a branded item but the price is too cheap, the chances that the seller may be listing fake products are rather high. Carousell, which is one of the popular digital marketplaces also advises their users to meet the seller at a particular for product inspection when purchasing such items. In order to safeguard and ensure the product meets the expectation of a customer, cash-on-delivery is said to be the best alternative (The Star Online, 2016). 

Basically, unauthorized seller would photograph the fake branded items in a set up premise, not only to make the stocks to appear attractive, but also deceiving potential buyers into thinking the items sold are authentic. On top of that, these sellers have the audacity to forge the certificates of authenticity. It is worth to mention that the certificate of authenticity does not have intrinsic commercial value and is never sold separately from the product. To prevent any suspicion among the buyers, they create the impression that the items are genuine by simply attaching the certificate together. In the case of customers who were fallen victims to this dispute, they are welcome to recognize sellers who advertise fake products on the internet by reaching KPDNKK toll-free line 1800-88-6800 in order to prevent other online shoppers from being the next target. 

It is not always the case of product originality, but there are other important issues namely the ability to differentiate genuine products from the fake ones. This issue may result in continuity in quality, risk reduction and protection of brand and intellectual property. Because of the almost identical packaging to the original ones, consumers are easily tricked into buying counterfeit products. This is extremely dangerous when it comes to products related to health product where consumers’ wellbeing may be jeopardized and they may be exposed to illnesses. Despite the usage of chemically hazardous ingredients in the products for advanced results, the sellers could not careless about the customers and would not take the blame as they are constantly making their way to generate even more profits from the business. 

Apart from seizing the counterfeit products, businesses who owned the brand of the products should immediately take legal action towards the sellers so that consumers can steer away from illegal businesses piracy can be put to an end. Furthermore, the authority should regularly conduct investigations at manufacturing premises as well as questioning the suppliers involved. The act of producing and selling counterfeit items is considered as a serious offense. In order to maintain the integrity of digital marketplaces, the goods are supposed to be destroyed under the order of the court, according to the Supply Control Act 1961, the Copyright Act 1987, the Consumer Protection Act 1999, the Price Control and Anti-Profiteering Act 2011 and the Trade Descriptions Act 2011. 

FRAUD TRANSACTION AND DELIVERY: SHOPPERS ARE WORRIED

A number of online shoppers have voiced out their fear of buying goods online due to online fraud. There are numerous reports regarding fraud occurring in our country. Online shoppers reported that they did not hear any updates from the sellers by the time they have made the payment. Other than the sellers terminating their contact numbers or websites, they would deliver items which failed to meet the requirements as advertised on the digital marketplaces, leading the customers to ultimate disappointment. 

Moreover, there is a case where a scammer manages to access a depositor’s bank account to conduct his criminal activity. The scammer who disguised himself as a loan agent, had persuaded 200 people to deposit their money into the complainant’s bank account for RM1000 scooters he advertised on FaceBook. The complainant who realized his account had been so active with money going in and out was left with charges as those depositors had pressed charges against him. Unfortunately, the person committing the crime vanished with the loan processing fee and due to the small amounts involved, the reluctance of the victims to lodge police reports had prompt these scammers to pursue their illicit trade without being traced (Mukhtar et al, 2016).

Hence, before successfully enrolling these businesses or individuals on digital marketplaces, they need to be authorized first. The details of the company or individual, company registration number, identity card, company address and bank account statement should be acquired beforehand. These documents can beneficial when it comes to performing a verification check. Even though these online scammers would provide a false information, this measure would impede them from continuing their activities due to the high level of security. 

GOODS ARE FAULTY? WARRANTY!

Although e-commerce is still developing and maturing rapidly in Malaysia, there are a few areas that need to be focused on in dealing with consumer protection. Other than being scammed by unethical sellers, online buyers are actively expressing their concerns regarding the warranty of their purchased goods. In general, any user guides are attached to the products being sold and return or exchange policies are often posted on the merchant’s website. Consumers are advised to register with them and store any proof of payment be it receipt or bill with them should any events occur. 

 Nevertheless, the warrant claim process could be tiring for buyers as it took quite some time to settle, which could lead for months. On the contrary, from a study carried out by Mukhtar et al., (2016) stated that half of the consumers mentioned that the process of claiming warranty for a product bought online usually required less than 14 days to accomplish. This issue arises because of several factors. Other than the delays, consumers are always denied of warranty because of the dispute between the service centres and their respective brands, together with the lack of service centres in the buyer’s location. 

In other cases, warranty claims are often ignored due to the absence because purchasers do not acquire formal bills from the sellers. Furthermore, the negligence of the dealer to stamp or sign the warranty card may decline the purchaser’s rights. Plus, due to the component being phased out by the goods manufacturer despite the products are still under warranty, dealers are not able to cover any future warranty claims. The issue involving the product life-cycles and growth in outsourcing is evident when purchasers buy items belong to the computer industry. 

It is important for both purchaser and dealers need to be certain that the warranty card is stamped with a clear date of purchase. Consumers should always keep in mind to check the expiration date of the warranty and the conditions that may void coverage. Also, it is recommended for consumers to look for conditions that could prove expensive or inconvenient especially when buyers need to deliver a heavy purchase to a factory for service. Lastly, because the e-commerce in Malaysia is lagged behind approximately 3 to 5 years when compared to industries in the US (Mukhtar et al, 2016), both stores and brands should come up with a feasible solution to resolve their issues. 

LOOK OUT! DANGER AHEAD!

Internet is widely used as a tool to conduct research, browsing through social media, new and online shopping. Malaysia is reportedly having the highest penetration of online shoppers, encompassing of 19 million users supporting a business worth RM 25bil and the is predicted to double by 2020. Malaysians are lucky enough to experience the luxury of shopping online, price advantages, exclusive deals and availability of reviews. These days, booking flight ticket or movie tickets, paying school fees and making telegraphic transfers online and within minutes in the comfort of our homes. Also, it is unlikely for a customer who perform online transaction to get caught in a scam or encounter any problems if they follow the instructions correctly or do not get conned by phishing sites. However, the risk is higher when consumers make a purchase through social media when they have to deal with small companies or individuals who do not provide sufficient security features or secure payment methods. 

The Consumers’ Association of Penang (CAP) reported that it has received approximately 50 complaints of online scams in 2017. Furthermore, the organization believes that the actual number could be much greater because some complainants would just feel discouraged to carry on the issue further. In addition, the complainants would be carrying another burden where the expenses incurred were a lot compared to the claims they were after. Moreover, according to Kuala Lumpur Commercial Crime Investigation Department chief ACP Mohd Luthfi, the backgrounds of the victims are the same where they are individuals who were urgently seeking for financial aid. Plus, these victims were tricked with the appealing terms found on advertisements set up on social media sites such as low interest rate, no guarantor, immediate approval and hassle-free applications, especially for applicants who were blacklisted by banks. 

The irresponsible scammers would run away with the loan processing fee. What is even worse, because of the amount to be rather small, victims felt that it was not necessary to lodge a police report. This in turn would make the scammers to even further their act as no action is taken. Next, as scammers are getting even more cunning as the technology evolves, there are so many new tactics they could use on us. Recently, automated teller machines (ATM) in Malaysia have been hacked by overseas hackers all because of the obsolete operating systems. 

So, what can we do about this?

As a consumer who does online shopping most of the time, we need to be aware of what is criminal issues which are currently happening in the cyber world. On top of that, it is advisable for users to not make any online transactions when they are out public places. Although quick response (QR) codes come in handy most of the time, we need to be extra careful because irresponsible parties could be embedding their own codes instead of the real ones. Meanwhile, the authorities could educate the society at large by updating the statistics on cybercrimes and ways to prevent them. Those who committed this crime should be tracked down and given a hefty sum of penalties so that this crime activities could be put to a halt. Lastly, banks should always update their operating systems regularly to avoid from being hacked.

KEEPING UP WITH THE DIGITAL MARKETS CONSUMERS

As many people are continuously demanding for better, faster and cheaper products or services, businesses must always find new ways to come up with the next best thing consumers will want. Businesses must learn to keep up with the new types of consumer needs and trends as these are proven to be contributing to the companies’ survival and success. The e-commerce prospect in Malaysia and the Asia region are predicted to be profitable in the future. 

Furthermore, the engagement of Malaysian Governments and regulatory bodies on a massive platform has provided guidelines to merchants to make use of e-commerce systematically by imposing e-commerce laws, policy and regulations. Apart from that, this action manages to provide protection for customers who are into e-commerce. As technology is always emerging, e-commerce in Malaysia is always moving forward and becoming a vital tool especially to businesses. 

Consumers and businesses should take precautions when dealing with e-commerce. This is to ensure that any malpractices such as false claim, scams and fake products can be curbed. Other than building a sense of security and awareness, the actions taken act as reminder to the consumers and business entities where they are always protected by Malaysia’s law, acts and regulations. There is no escape for them to commit any wrongdoing since their actions are being watched by the authorities.  

Should any customers encounter any unethical behavior by the other party, they should make a report without any hesitation. It is advisable for cheated consumers to lodge a report within 24 hours once the fraud activity has been identified. If both parties have agreed on a certain price offered, the online transaction should be made without a hassle and the delivery of the item should be made immediately. It is also recommended to assure the buyers that their purchases will be arriving in a good condition in a short period of time so that they will not feel distressed after performing online shopping. 

Additionally, e-commerce is mainly facilitated by technology that comes with network, hardware and applications. We need to ensure that the devices are equipped with a high level of protection to ensure information security of e-commerce. Also, the security products should be tested by other independent and trusted party to validate if they are reliable. Besides that, the Malaysian Common Criteria Scheme (MyCC) was initiated to elevate the competitiveness in quality assurance of information security through the deployment of the Common Criteria (CC) standard as well as to gain the consumer confidence in Malaysian information security product and systems. On top of that, the laboratory use for testing purposes are always on the go to conduct CC evaluation to local information security product and is now being accredited with MS ISO 17025.

MALAYSIAN DIGITAL MARKETPLACE AND ITS FUTURE

Traditional retail industries are making their ways to participate in the digital trend. This eventually has heightened the fear of market saturation to the e-commerce industry. In order stay in the game for a longer period of time, digital marketers are investing their time, money and energy on newer technologies to further improving their businesses. Furthermore, technology experts believed that with the implementation of innovative and creative technology, the e-commerce industry is predicted to be more mobile and would involve the latest virtual reality market. Online shoppers will be dealing with sellers through such medium such as augmented reality and virtual reality when making purchases over the internet (Global Retail Trends, 2017). 

Furthermore, KPMG International Cooperative (2017) mentioned that online shopping via the digital marketplaces is predicted to be available on mobile devices. Mobile-first sites, dedicated apps and various payment methods made it easier for people who are busy running their day-to-day lives to shop by using their phones. For example, global mobile sales accumulated to 34% of all e-commerce transactions worldwide and it was predicted to grow 31% in 2017 (e-Marketer, 2017). Hence, businesses are utilizing omni-channel services as they believed that the consumers are always looking for a more convenient way of shopping. 

To provide a positive customer experience, businesses are working on a communication through the usage of technologies such as bots. Businesses are seen to be doing a good job connecting their physical and digital presence in enhancing the customer experience. For customers who expect a ‘phygital’ online shopping experience, investing in innovative and latest technologies is the answer. Other than fulfilling savvy consumers demands for customized services and experience, the latest technologies offer businesses to rise to the personalization challenge. 

WHAT MAKES SKEPTICAL MALAYSIAN CONSUMERS TO PURCHASE ITEMS ONLINE WHEN PERSONAL INFORMATION AND MONEY ARE INVOLVED?

The Malaysian e-commerce is considered by the majority of leading experts to be in the early stage of development. Consumers are still studying the brands available online and what each brand can provide them. SKMM (2010) stated that 66.3% of our consumers are still choosing to shop in a physical store that enable them to have the privilege of inspecting the goods without having to worry about the security of e-commerce. Furthermore, since 59.1% of the consumers are expressing their disbelief of e-commerce while 58.7% of the consumers do not find digital marketplaces provide enough safety, Alam and Yasin (2010) studied the factors influencing consumer trust by taking data from the purchasing of flight tickets over the internet. 

Consumer behavior is reportedly to be influenced preferably through word-of-mouth (WOM) compared to other means of marketing communications, be it advertising and publicity. Ha (2004) mentioned that WOM is one of the key drivers of brand trust because as it is proven to increase consumer awareness, expectations, perceptions, attitudes, behavioral intentions and behavior. Alam and Yasin (2010) agreed that brand trust can be instilled successfully with the existence of positive WOM, hence concluding that there is a strong, positive relationship between WOM and the level of trust possessed by the consumer.  

One of the reasons consumers are reluctant to trust the digital marketplaces is because they are hesitant to provide their personal details, especially when it involves credit card. Unlike high-performing e-commerce economies, ours lacks of high-end security features which causes Malaysian consumers feeling insecure and lacking of trust in the internet. According to a 2013 survey carried out by Rakuten Online Shopping, an internet service company and owner of Malaysian marketplace, 83% of the respondents agreed that a secure website and transaction is the most important element that persuade their online shopping decision. Hence, the decision of the people in Malaysia buying their flight tickets over the internet is mainly prompted by the high level of security system offered by the marketplace towards the consumer’s personal information and transaction being disclosed to third parties (Ha, 2004; Alam and Yasin, 2010).

Alam and Yasin (2010) stated that there is a strong, negative relationship between perceived risk and the level of brand trust attained by consumers. Perceived risk can be categorized as economic risk, performance risk and purchasing risk. Consumers are terrified over the issue of monetary loss from online purchasing decision, the level of security in digital marketplace website and having to deal with products or services that do not meet the requirements as advertised. Therefore, the greater the amount of perceived risk that consumers have in online purchase transaction, the greater the impact on a certain brand.

In order to convince consumers to make more purchases online, it is important to set up a useful website with detailed and quality information. The engaging, authentic and relevant information ensures the consumers to have a good online experience as they get the opportunity to build a good rapport with the brand available on the digital marketplaces. Plus, quality information has the ability to increase consumers’ knowledge and awareness of the brand. Brands that are willing to invest their time and money into perfecting their functioning websites are considered to portray their level of commitment to their customers. A seamless user experience will eventually increase their consumers’ perception of their brand and trust. 

To make the digital marketplaces fair, the aforementioned factors could serve as a guideline for marketers in understanding the development of brand trust. Sellers should identify the factors that prompted customers to buy certain items or services over the internet. This is to make sure that businesses can always execute an effective plan to make their businesses more profitable at the end of the day. In addition, consumers can have the luxury of better services which will be greatly contributing to their confidence in digital marketplaces.

Trust is earned, but it can also be broken. So, show your commitment and install it into the basis of your company so everyone is onboard. 

COMBATING THE CHALLENGES OF ONLINE MARKETPLACES

One might ask, “Who is the regulator of digital market place?” or “Who is in charge of the consumer grievances due to internet fraud?” Well, Malaysia has introduced a set of e-commerce regulations based on a combination of the Electronic Commerce Act 2006 and the Electronic Government Activities Act 2007. The government also suggests that the contents in the e-commerce legislation are needed to be reviewed in order to adjust to any modification in technology as well as social networking and mobile applications. Plus, Malaysia has a prolific number of consumers who take the advantages of mobile phone where in 2011, it was reported that Malaysian constituted 61% of internet users in Asia (Mukhtar et al, 2016).

According to Bohme and Moore (2012), the likelihood of reducing online shopping among consumers who experienced cybercrimes previously has increased by 10%. Furthermore, the alarming number of cybercrimes has cause major concerns among consumers where 18% of them stated to reduce the activity of online shopping while 50% of them claimed to be extra cautious when buying things over the internet. As consumers feel discourage to make use of the online marketplaces, this could be causing a harmful effect to e-commerce businesses which could hinder them from expanding. Thus, Malaysia has look beyond this issue by establishing an Internet Banking Task Force and Malaysian Cyber Security Agency with an aim to encourage the consumers to do online shopping by heightening their confidence with the presence of strong internet security. 

Also, Malaysia Central Bank (BNM) called for the implementation of EuroPay Master card-Visa standard for transactions involving credit cards back in 2005. Furthermore, minimum risk management requirements are introduced for all types of electronic banking which consist of two-factor authorization. Malaysia too does not miss the opportunity to join the bandwagon of introducing e-commerce laws, policies and regulating e-commerce transactions internationally by participating in Asia Pacific Economic Cooperation’s (APEC). The aforementioned measures are expected to build a more convenient e-commerce environment in Malaysia as the health of the economy would deteriorate if consumers are declining the use of digital marketplaces. The authorities or organizations in Malaysia play significant roles in regulating Malaysian e-commerce environment and hopefully, one day, our e-commerce will grow and be on the same level to those in the United States or other advanced e-commerce destinations. 

PROVIDING ONLINE DISCLOSURE; WHY DOES IT MATTER?

Businesses embarking on digital marketplaces should at least provide a clear, accurate and easy to access information about their identities. For instance, businesses should justify the identification of the business, provide prompt, easy and effective consumer communication with the business, appropriate and effective resolutions regarding any disputes, service of legal process in domestic and cross-border disputes and the location of the business. This is to ensure that the customers shall have sufficient details when making an informed decision concerning a particular transaction. Furthermore, when businesses announce their membership in any relevant self-regulatory programme, business association or other body, consumers may use the opportunity to take advantage of the dispute resolution mechanisms provided by the organization should any issues arise.

Besides that, they should justify information regarding the goods or services they are offering as sufficiently. This is to enable the consumers to be aware of their products before proceeding with their purchases. Furthermore, Oxley and Yeung (2001) found out that consumers whose behavior tends to be influenced by the availability of information on the internet when making online purchases are more likely to navigate away from website with insufficient relevant information. Whether businesses are selling goods or services, the key functionality and interoperability features, key technical or contractual requirements, limitations that might affect a customer’s ability to acquire, access or use the good or service, safety and health care information as well as age restrictions should be stated. 

Finally, businesses should feature a clear and an unambiguous confirmation process after the duration of payment is due, else the customers are contractually bounded. The confirmation process should come with a summary of their purchases which include the items, delivery and pricing information so that customers can take a final look at their order and make modification if necessary. Next, if customers do not provide expressed and informed consent, businesses should not carry on the transaction. Also, businesses should allow customers to keep a complete, accurate and durable record of the transaction that is compatible with their technology devices.