The factors contributing towards The perceived risk during online Shopping: a case of an Islamabad’s Online shopper

Abstract

This research is aimed to investigate the factors that contribute towards the perceived risk during online shopping. The factors of the perceived risk which were chosen to study this relationship are Financial Risk, Product Risk, Security Risk, Time Risk, Social Risk and Psychological Risk. In this research, online surveys were conducted using Google Docs to collect the responses. The hypotheses were tested through quantitative approach. A total of 384 respondents were targeted but only 346 responses were received in return. The data was analyzed in numeric form using IBM SPSS Statistics 20. The results from this study suggested that the consumers do perceive risks when they intend to shop online. All the factors were found to have a significant negative impact on online shopping. This study provides useful information to online retailers in e-commerce activities. Previous studies show that many online retailers are still facing some risks in online businesses, and this will affect the transaction and performance of the retailers. It is hoped that the findings can help online retailers to formulate strategies to reduce risks in the online shopping environment, especially security risks for better e-commerce. The development of online shopping has led to some challenges to consumers, which comprise security of payment, data protection, insufficient information disclosure, product quality and enforcement of rights. This issue emerged because many online retailers do not understand the main factors that will contribute to consumers’ perceived risk.