Understanding consumer online shopping behaviour from the perspective of transaction costs

2.3.4 Perceived Channel Characteristics 
Online channel features (such as information quality, security, convenience, uncertainty) are 
found to influence consumers’ online shopping intention and purchase behaviour (Ahn
 et al.
2004). Further, online stores, traditional stores, and other shopping channels compete with 
each other to survive. Consumers’ adoptions of online shopping are highly dependent on the 
superiority of online shopping to other shopping channels and perceived drawbacks. The 
findings of existing research on the impacts of perceived channel characteristics are 
summarized and shown in Appendix C. The following discusses the identified channel 
characteristics in relation to online shopping. 
2.3.4.1 Perceived Risk 
Dunn et al. (1986) defined perceived risk as the expected negative utility that consumers can 
associate with the purchase of a particular brand or product. According to Pavlou (2003), 
perceived risk refers to the consumers’ subjective belief of suffering a loss in pursuit of a 
desired outcome. Online marketing researchers have frequently adapted the concept of 
perceived risk in their examination of online shopping or purchasing in general (e.g., Choi 
and Lee, 2003), for particular types of products (Pires
 et al.
2004), and from a particular 
online store (Park
 et al.
2005).

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Extant studies have measured the perception of risk either in a general way (Liu and Wei 
2003, Cheng
 et al.
2012, D'Alessandro
 et al.
2012) or in a specific way (Lee 2009a, Hong 
and Cha 2013). The general risk was measured by asking respondents to assess whether 
buying goods online is risky, whereas specific risk was concerned with credit card fault 
(Bhatnagar
 et al.
2000b), product quality (Kolsaker
 et al.
2004), privacy infringement (Lunn 
and Suman 2002), system/web security (Burroughs and Sabherwal 2002), fraudulent 
merchant behaviour (Grazioli and Jarvenpaa 2000) and environmental uncertainty (Park
 et al.
2004). Not surprisingly, the studies proved quite controversial. 
For generally perceived risk, many researchers noted that it has a significantly negative 
impact on intention and actual online adoption behaviour in different contexts, such as online 
shopping (Kolsaker
 et al.
2004, Park
 et al.
2004, Pires
 et al.
2004, Doolin
 et al.
2005, Park
 et 
al.
2005, Huang
 et al.
2006, Chang and Chen 2008, Kim
 et al.
2008, Crespo
 et al.
2009, Lee 
2009b, Cheng
 et al.
2012, D'Alessandro
 et al.
2012, Clemes
 et al.
2013, Kim and Lennon 
2013), mobile banking (Luo
 et al.
2010), mobile payment (Thakur and Srivastava 2014), 
online trading (Lee 2009b), and Internet banking (Yousafzai
 et al.
2009).
Particularly, in the online shopping context, perceived risk was found to negatively affect 
consumers' responses to online retailers: the lower the risk perceived by consumers, the 
higher their acceptance of the online shopping mode (Forsythe and Shi 2003) and the greater 
their purchase intention from the online store (Clemes
 et al.
2013). Perceived risk is higher in 
online versus in-store shopping conditions, and this difference is especially true for non-
digital, physical goods such as apparel products that require high involvement (Biswas and 
Biswas 2004, Pires
 et al.
2004). The negative correlation was also found to influence both 

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experienced and novice consumers (Liang and Huang 1998), while others did not find such a 
relationship (Miyazaki and Fernandez 2001, Yusniza 2007). Moreover, several studies 
(Jarvenpaa and Todd 1997, Jarvenpaa