Volume.7 Issue.

1 June, 2020
Journal of Institute of Human Resource Advancement
University of Colombo ISSN 1800-0266

Determinants of Online Purchase Intention in

Fast Fashion Retail Industry:
Sri Lankan Perspective
Habaragoda, B. S1, Senarathne, R. S2,
1
Department of Industrial Management, Faculty of Applied Sciences,
Wayamba University of Sri Lanka
2
Correspondence Author: Habaragoda BS (shabaragoda@yahoo.com)

Abstract
Online purchasing is one of the major trend emerging in e-commerce and
it is important for the marketers to be aware and understand the factors
effecting on online purchase intention especially pertaining to fast fashion
retail industry. Currently, there is an intense competition in the fast fashion
retail industry, and it has become a greatest challenge for fashion retailing
organizations to build long term relationships with their customers. There
is an increasing need for the fashion retailers to identify and evaluate the
determinants of online purchase intension in order to gain and retain their
market share in an ever increasing competitive environment. The study used
both primary and secondary data where primary data was collected through a
well-structured online questionnaire and it was consisted of five demographic
type questions and twenty-one Likert scale type questions. A total of 300
respondents were surveyed to identify significant factors based on their online
purchase experiences. The research hypotheses were tested by means of
multiple regression analysis with R software. Results of the study indicated that
online trust, website quality and prior experience positively and significantly
influence online purchase intention while shopping orientation and consumer
behavior has no significant impact on online purchase intension.

Keywords: Online Purchase Intention, Online Trust, Prior Experience,

Consumer Attitude, Shopping Orientation, Website Quality

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1. Introduction
Sri Lanka has a growing fast fashion retail industry. The fast-fashion retail
industry can be considered as a developed version of the apparel industry. The
late seventeenth century was the beginning period of the emergence of the
apparel industry. The industrial revolution, took place in the period from 1760
to 1840, witnessed for major industrialization and revolution which no doubt
enhance the performance of the apparel industry too. This revolution caused to
enhance the buyer perception towards the ready-made garments.

Europe can be considered as the birth place of the fast fashion industry. Europe
has developed the sector to meet the rapidly changing preferences of young
women who were very interested in fashion trends and continuously followed
trends but at a fraction of the cost (Linden, 2016).

When developed countries are moving along with the fast fashion retail
industry, as a developing country Sri Lanka has also adopted the emergence of
the fast fashion retail industry. New advances in the internet and its associated
technologies are opening great avenues for the development in many low and
middle income countries. As a result, developing countries are rapidly acquiring
information technologies to increase internet access in many sectors, despite
the several barriers that stand in the way. E-commerce sales in the Asian region
too have been growing at a steady rate. The latest statistics indicate that nearly
42% of the entire world’s internet users live in this region. More than more
and more people are using smartphones and smart mobile devices to purchase
goods from online platforms. This trend is applicable to the fast fashion retail
industry as well. However, with the phenomenal growth of mobile broadband
connections and a rapidly increasing fixed internet connections, Sri Lanka is
fast establishing itself as a potential regional ICT hub in the region.

It has been evidences that, increasing number of Sri Lankan consumers

research their products online prior to making purchases while millennial
remain the main consumers of online e-commerce sites. Therefore this will be
a greatest opportunity for the Sri Lankan fast fashion retail industry to enhance
their online purchase platforms.

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Determinants of Online Purchase Intention in Fast Fashion Retail Industry:
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1.1. Research Objectives

The primary objective of this study is to identify the determinants of online
purchase intention. Specifically, the researchers sought to explore the relative
importance of factors such as online trust, shopping orientation, consumer
attitude, website quality and prior experience on online purchase intension
in the fast fashion retail industry in Sri Lanka. Further step has taken to
investigate the effect of several demographic factors such as age, level of
education, gender and income level on online purchase intention.

1.2. Research Questions

This study addresses the following research questions.
Q1: What factors influence the online purchase intention in the fast fashion
retail industry?
Q2: What are the significant factors which may influence the online purchase
intention in the Sri Lankan fast fashion retail industry?
Q3: What would be the impact of demographic variables on online purchase
intension?

2. Literature Review
2.1. Online Business
Businesses that generate their revenue directly from their website belongs to
online business category. E-commerce could deliver a significant benefit to
the market segment in developing countries by increasing their control over
its place in the supply chain, thus improving its market efficiency (Molla
and Heeks, 2007). According to Schneider (2014), 1990 can be considered
as the turning point of the online business. At that time some organizations
had moved towards online shopping establishments (Schneider, 2014). Online
customers expect fast, friendly, and high-quality services. They may demand
choice, convenience, and responsive services with a personal touch (Gurvinder
and Zhaobin, 2005). With the rapid development of web-based businesses,
traditional market places had been deteriorated at a similar rate. In that case,
e-commerce businesses provide both advantages and disadvantages to the
society (Abdul, 2016).

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2.2. Fast Fashion Retail Industry

The emergence of the apparel industry really began with a brief histo-
ry of British colony, started in the late seventeenth century. The introduction
of the ready- made garment was made possibly through Britain’s enclosure
movement and the Industrial Revolution (Durieu, 2006). The present fashion
market is highly competitive and the consistent need to ‘refresh’ product rang-
es implies that there is an inescapable move by many retailers to extend the
number of seasons. This means that the recurrence with which the whole mer-
chandise within a store has changed (Christopher, Lowson and Peck, 2004).
With the rise of Omni channel retail, online business is enhancing traditional
retail by empowering businesses to reach out to customers at several touch-
points. It is the same with regard to fashion-oriented businesses (Johnsen,
Miemczyk and Howard, 2017). 

2.3. Emergence of Internet and its impact on the fast fashion industry
The traditional marketing and fast fashion industry experience a revolution
because of the emergence of the internet. Wei and Zhou (2011) studied several
well-known fast-fashion retailers such as Zara, H&M, and UNIQLO. Those
brands used low cost promotions and positioning strategies to support their
operations. Quick manufacturing at an affordable price is the main concept of
those retailers (Wei and Zhou, 2011). Some studies showed that there were a
lot of retailers in the world and some of them used a multichannel strategy to
conduct their businesses; it means both online business and offline business
(King, Sen and Xia, 2004).

2.4. Online purchase intention

According to the findings of the previous studies, four key factors are based
on the offline store operations and they are the key determinants of the online
purchase intention too. Those operations were offline store service, offline store
merchandise, offline store atmosphere, and offline store layout. In par with
that, online store service, online store merchandise, online store atmosphere,
and online store navigation have been identified as the factors which influence
the online purchase intention (Verhagen and Van Dolen, 2009). Online search
intention can be considered as the key predictor of online purchase intention.
There are some main factors affecting online search. Some of them are the
utilitarian value of internet information search, the hedonic value of internet
information search, perceived benefits of internet shopping, perceived risk of
internet shopping, and purchase experience. Prior studies showed that these

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factors positively affect the online search intention and online search intention
positively affects the online purchase intention (Kim, Lee and Kim, 2004).

2.5. Factors affecting online purchase intention

2.5.1. Website Quality
Website quality can be considered as one of the critical steps to drive business
online. Some studies showed that website quality is a multidimensional
construct. This is true whether website users or website designers evaluated
the website or whether the site was selling or not. According to a prior study,
website quality can be divided into three major dimensions as system quality,
information quality, and service quality (Lin, 2007). Website quality influences
consumers’ perceptions of product quality and it also affects online purchase
intentions. By considering the investigations of the previous results, website
quality can be considered as one of the prominent determinant of online
purchase intention (Hsu, Chang and Chen, 2012).

2.5.2. Shopping orientation

The study conducted by Leo, examined the relationship between shopping
orientations, product types, and consumer intentions in using internet
for shopping (Vijayasarathy, 2003). There was a significant difference in
the shopping orientation according to each demographic characteristics
(Vijayasarathy, 2003). Vast number of research have been investigated the
relationship between shopping orientation and online purchase intention. Those
studies have clearly proved that shopping orientation is a strong predictor for
consumers’ online purchase intention (Chen and Hung, 2015; Nirmala and
Dewi, 2011).

2.5.3. Online Trust

Trust can be defined in various ways. Credibility, reliability, or confidence
can be considered as the concepts of trust. Past study has been conducted
considering that online trust is a multidisciplinary perspective (Wang and
Emurian, 2005). Purchasing products online often involves various levels of
risk/uncertainty, especially when consumers need to provide an online retailer
with their personal information such as credit card numbers. In this vulnerable
situation, consumer’s trust of a company may reduce any uncertainty that
consumers may have regarding online shopping (Gefen, Karahanna and
Straub, 2003).

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2.5.4. Prior Experience

Many researchers have investigated that prior experience is one of the
important factor affecting online purchase intention. Previous studies examined
the relationship between internet shopping experience and the perceived risk
associated with the use of the internet and making purchases online. The
results shows that the internet users with no prior online shopping experiences,
perceived higher risk than internet users with prior online shopping experiences
(Liebermann and Stashevsky, 2002).

2.5.5. Consumer Attitude

Consumer attitude towards online purchasing can be determined in various
ways. One of the prior research has found that website design, website
reliability/fulfillment, website customer service, and website security/privacy
are the four dominant factors that influence consumer perceptions with
relating to online purchasing. There are different types of buyers and they have
different evaluations of website design and website reliability/fulfillment but
similar evaluations of website security/privacy issues. That finding showed
that security/privacy issues are important to online buyers (Shergill and Chen,
2005).

2.6. Conceptual Frame work

Based on the prior studies, five determinants of online purchase intention were
identified and used for the purpose of this study: website quality, online trust,
prior experience, shopping orientation and consumer attitude (Figure 1).

Figure 1: Conceptual Frame work

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The following research hypotheses were formed with the purpose of

addressing the identified research objectives. Each hypothesis accompanies a
null hypothesis which states a no relationship between the said two variables.

H1: Website quality is positively associated with online purchase intention

H2: Online trust is positively associated with online purchase intention
H3: Prior Experience is positively associated with online purchase intention
H4: Shopping orientation is positively associated with online purchase
intention
H5: Consumer attitude is positively associated with online purchase intention

3. Research Methodology
3.1 Population and sample
The population of this study includes all the current and potential internet
users in Sri Lankan context. The sample consists of 300 respondents who were
chosen randomly to the extent possible. The 300 respondents were selected in
different age groups and different areas to represent the country as a whole.

3.2 Survey Instrument

The primary data were collected via an online questionnaire. The measures,
used to operationalize the constructs in this study, were mainly adopted
from previous related studies. The questioner is consisted of two parts with
twenty-six questions all together. The first part includes five questions mainly
focusing on the demographic information of the participants. The second
part includes 21 items on 5-point Likert scale (from 1-strongly disagree to
5-strongly agree). In order to measure the online purchase intention, this study
used three survey questions. Website quality and online truest were measured
using three and five survey questions respectively. Three survey questions
were used for measuring each of prior experience and shopping orientation.
Consumer attitude was measured using two survey items. Cronbach’s Alpha
was used to measure the reliability of the items. The questionnaire which has
been adopted for this study is an established survey instrument and has been
used in several research studies and has well established content validity.
Therefore, the validity of the measurement was tested.

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3.3 Data Analysis

First, a statistical reliability test was performed for evaluating the internal
consistency of survey items. Descriptive statistics for each demographic
variable and final scores for the Likert-style format items were calculated. A
correlation analysis was used to examine the relationship among the variables.
Finally, multiple regression analysis was conducted to identify the determinants
of online purchase intention.

4. Data Collection and Analysis

The questionnaire was developed using online Google Docs and made avail-
able for the participants in the sample. Of the 300 participants in the sample,
a total of 277 submitted responses to the online survey. The majority of the
participants were female (n=175) and 112 participants aged between 18 and
27. All responses received (277) were used for the subsequent analysis since
none of them are consisted of missing values and invalid responses.

4.1. Analysis of Demographic Variables

The demographic variables of the study were analyzed by means of frequency
and cumulative frequency distributions as given in Table 1. According to the
sample information majority of the respondents are female (175, 63%). The
study employed five age groups and majority of the respondents (112, 40%)
belong to 18-27 group while just 4 (1.4%) participants were over 58 years.
Most of the participants have passed at least the advanced level examination
while 84 (30%) of them have either a degree or similar qualification. Majority
of the participants do not belong to either fairly low income category (less than
25,000 LKR per month) or fairly high income category (above than 100,000
LKR per month).

4.2. Reliability Test

To determine the internal consistency of the survey items used in the
instrument, the Cronbach alpha coefficient was used. The total scale reliability
is high (0.77) and greater than the required threshold limit (0.7). The subscale
reliability was high for all six dimensions: (a) 0.87 for website quality, (b) 0.79
for online trust, (c) 0.91 for prior experience, (d) 0.85 for shopping orientation
and (e) 0.78 for customer attitude.

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4.3. Correlation Analysis

Variables with a correlation coefficient between 0.6 and 0.8 are considered to
have a strong relationship while variables with a correlation coefficient over
0.8 have nearly a perfect relationship. Prior experience (0.44), online trust
(0.42), and website quality (0.36) indicate a moderate positive correlation
between the dependent variable. Shopping orientation (0.3) and consumer
attitude (0.31) indicate a fairly low correlation with the dependent variable.
This provides some preliminary evidences regarding the determinants of
online purchase intention. Thus, based on the correlation analysis, website
quality, online trust and prior experience tend to impact on online purchase
intention significantly.
Table 1: Analysis of Demographic Variables
Frequency Cumulative % Cumulative
Frequency %
Gender Female 175 175 63.18 63.18
Male 102 277 36.82 100.00

Age 18-27 years 112 112 40.43 40.43

28-37 years 78 190 28.16 68.59
38-47 years 47 237 16.97 85.56
48-57 years 36 273 13.00 98.56
58 or above 4 274 1.44 100.00

Education GCE O/L or below 20 20 7.22 7.22

GCE A/L 76 96 27.44 34.66
Diploma or Similar 59 155 21.30 55.96
Qualification
Degree or Similar 84 239 30.32 86.28
Qualification
Post Graduate ,Similar 38 277 13.72 100.00
qualification

Income Below 25000 LKR 9 9 3.25 3.25

25,001 – 50,000 LKR 131 140 47.29 50.54
50,001 – 75,000LKR 72 212 25.99 76.53
75,001 - 100,000LKR 37 249 13.36 89.89
Above 100,000LKR 28 277 10.11 100.00

4.4. Multiple Regression Analysis

Multiple regression analysis was employed in order to identify the underlying
predictors of online purchase intention. Based on the results of the regression
analysis, hypotheses were tested and Table 2 presents a summary of the
findings. P-values for shopping orientation and consumer attitudes are greater
than 0.05, such that the null hypotheses are accepted, concluding that there is
no significant impact of shopping orientation and consumer attitude
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on online purchase intention, with a 95% level of confidence. P-values for

website quality, online trust and prior experience are less than 0.05, such that
the alternative hypotheses are accepted, concluding that there are significant
impact of website quality, online trust and prior experience, with a 95% level
of confidence. Therefore website quality, online trust and prior experience,
Online Trust and Website Quality are statistically significant in predicting the
dependent variable; online purchase intention.
Table 1: Hypothesis Testing Table

Hypothesis Estimate P-value Status of Null

Hypothesis
H1: Website Quality Online Purchase Intention 0.265273 0.00477 ** Rejected
H2:Online Trust Online Purchase Intention 0.343302 3.88e-05 *** Rejected
H3: Prior Experience Online Purchase Intention 0.362302 5.36e-06 *** Rejected
H4: Shopping Orientation Online Purchase Intention 0.023865 0.71142 Accepted
H5: Consumer Attitude Online Purchase Intention 0.058146 0.33495 Accepted

The estimated statistical model is given below based on the results of the
multiple regression analysis (ε denotes the error term).

Online Purchase Intention = 0.565 + 0.362* (Prior Experience) + 0.343*

(Online Trust) + 0.265* (Website Quality) + ε

Among the three significant independent variables, prior experience has the
highest coefficient value which indicates that among the three determinants
of online purchase intention, prior experience has the highest impact.
Respectively, online truest (0.343) and website quality (0.265) impact on the
online purchase intention. Multiple R-squared value is 0.881, indicates that
approximately 88.1% variation in online purchase intention is explained by
the three significant independent variables.

4.5. ANOVA Test

ANOVA test was performed to check the significance of the model where the
null hypothesis states that the model is not significant.

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Table 3: ANOVA Table

Df Sum Sq Mean Sq F value Pr(>F)

Prior Experience 1 2354.38 2354.38 1918.252 2.2e-16 ***
Online Trust 1 114.98 114.98 93.680 2.2e-16 ***
Website Quality 1 32.35 32.35 26.354 5.397e-07 ***
Residuals 274 336.30 1.23

P values of prior experience (0.000), website quality (0.000), and online trust
(0.000) are all less than 0.05 (Table 3), such that the null hypothesis can be
rejected at a 5 percent level of significance. It can be concluded that there is
95% percent evidence that the model is significant.

Two more tests were conducted to check the autocorrelation of the residuals
and multicollinearity. Autocorrelation was tested in terms of Durbin Watson
(DW) test. DW statistic is 2.16 (P-value >0.05), such that it can be concluded
that the residuals are not linearly auto-correlated. The results of the correlation
analysis revels no significant correlations among the independent variables.
However, to further confirm, variance inflation factor (VIF) values for
computed for each independent variables. VIFs for prior experience, online
trust and website quality are 6.70, 6.809 and 6.128 respectively. All these
values are well below the threshold (10), such that there is no multicollinearity
issue in the dataset.

A residual analysis was conducted in order to detect any violations of

assumptions made in the regression analysis such as non-linearity, unequal
error variance and outliers. Residuals were plotted against the fitted values
and there are no unusual data points in the data set and they are seem to be
distributed randomly as depicted in the Figure 2. Therefore it can be concluded
that the residuals are independent and they have a constant variance.

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A normal probability plot was created to assess whether the dataset is

approximately normally distributed. The residuals from the model fit were
plotted against a theoretical normal distribution. As depicted in Figure 3, the
points are distributed near to the straight line. Thus, the normal probability test
confirms that the data set is approximately normally distributed.

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5. Discussion
Within the study context, findings indicate that the impact of demographic
variables on online purchase intention is insignificant. Among the five factors
identified through the literature review, only website quality, online trust
and prior experience are positively and significantly associated with online
purchase intention while there is no any significant affect from shopping
orientation and consumer attitude.

Among these three determinants, the prior experience can be considered as the
highest influential factor towards online purchase intention. Such that based
on their prior experiences, consumers tend to use online purchasing websites
in the future. Therefore, usefulness, ease of use, and benefits are some of
the factors that consumers may remember after visiting a physical store or
making an online purchase. Rather than shopping through new websites,
consumers are more likely to shop via the websites which are more familiar
to them. In order to obtain the customers’ attraction, sellers are required to
add value to their websites and differentiate their sites continuously. At his/
her first visit, if the customer receives the expected satisfaction from his/her
online shopping experiences, there is more likely that he/she is willing to do
more transactions with the same website in the future too. In order to give a
worthy and memorable experience to the customers, Sri Lankan fast fashion
retailers may add modifications such as incentives and rewards, online live
chat support, free deliveries and offers to their shopping websites.

Online trust is the second most significant factor which affects the online
purchasing decision. Trust has been identified as one of the main determinants
of the success of e-retailers, and much research has been conducted with regard
to web site features triggering consumer trust. Considering the Sri Lankan
scenario, fast fashion retailing sector consists of both well-established online
retailers and those who are fairly new to the online retailing environment.
When making online purchases, lack of clear legal norms and issues pertaining
to trust may effect on online transactions. Trust is a factor that cannot be
built immediately or there is no any specific way to build it, making things
hard for online retailers. Sellers should consider every single aspects when
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doing online businesses. Trust is an effective method to reduce uncertainty in

e-commerce and plays a critical role in purchasing processes where consumers
look for high-quality goods. Creating the “About Us” page, updating contact
information, and creating a privacy policy are some of things that can be done
by retailers to enhance trust of their websites.

The third most influential factor on online purchase is website quality. When
using websites, consumers primarily focus on the website design, information,
ease of use, etc. At present, there are immense number of fast fashion retailing
websites, making it really a big challenge to the fast-fashion retailers to
enhance the website quality to satisfy the consumers by differentiating from
competitors. Information quality, service quality, and the website design are
some other features which combine with the website quality. To enhance the
quality of their websites, Sri Lankan fast fashion retailers can create more
user friendly websites, provide clear information, and modify websites using
modern technology. One such modern technology is referred as virtual reality
(VR) shopping platforms. By using VR technology, consumers can feel a
memorable experience from the home, just like the experience they get when
they visit the physical store. Sri Lankan retailers too can modify their websites
by using these new technologies to the extent possible.

6. Conclusion
6.1. Limitations and Future Research
The overall results of this study validate and add to previous research that
explore determinants of online purchase intention. However, limitations for
this study exist that should be considered for future research to increase the
generalizability. One significant limitation of the study is that the participants
were predominantly drawn from one single industry; fast fashion retailing.
Therefore, the results of this study may be applicable only to the sample
represented. Future research studies should extend over to other industries
like hotel, insurance and banking. The present study employed only factors
in its attempt to identify the determinants of online purchase intention (prior
experience, website quality, online trust, shopping orientation and consumer
attitude). A fruitful extension for future work can be done by examining a

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more comprehensive model of consumer online purchase intention by

incorporating factors associated with Sri Lankan culture such as the impact
of family, friends, lifestyle and personality factors. Another limitation of the
study is that the Sri Lankan consumers are still not technologically savvy.
This limitation might have influenced the findings of the study. Present study
setting did not allow to observe whether consumers actually reserve online
(i.e. at a competing website) or offline (i.e. by telephone, direct mail or through
physical shopping place). This study is quantitative in nature, hence a future
study can use qualitative aspect too by specially referencing to a particular
organization.

6.2. Recommendation
Today, the consumers are well knowledgeable and they are always looking
for better deals with more benefits, making it difficult to maintain consumer
purchase intention and to keep consumers loyal to one particular brand.
Consumers are continuously exposed to new services and new experiences in
both internet technology and fast fashion retail industry, thus marketers have
a great challenge to retain their customers and attract new customers to their
organizations. The purpose of this study was to find out the factors affecting
the online purchase intention in fast fashion retailing industry in Sri Lanka.

According to the findings of the study, there is a higher level of online purchases
in the fast fashion retailing sector. Therefore it is important for the fashion
retailing organizations that engage online businesses to attract their customers
to their brands and keep long term relationships with them by addressing key
influencing factors on online purchase intention. Prior experience, online trust,
and website quality significantly influence on the online purchase intention.
Therefore marketers need to understand those factors well and the effect of
those factors on the online purchase intention of their consumers. To maintain
or to increase online purchase intentions, marketers should take actions such
as adding value to the websites to positively enhance the consumer prior
experiences, taking necessary actions to provide secure services and maintain
an attractive and well-performed websites.

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6.3. Conclusion
The fast fashion retailing industry operates in a highly dynamic and
competitive environment and has been rapidly growing over the years. Fast
fashion retailers are grabbing the market at a high paste with the rapid increase
in the development and penetration of internet. This study provides an insight
into the determinants of online purchase intention in the fast fashion retailing
industry in Sri Lanka.

It can be concluded that online retailing has been growing rapidly in the fast
fashion industry and factors such as prior experience, online trust, and website
quality significantly influence online purchase intention in the fast fashion
industry in Sri Lanka. Among all the influencing factors prior experience and
online trust have a high impact on the online purchase intention. Therefore the
management of fashion retailing organizations should focus on the factors such
as website quality, online trust, and previous experience. Also, they need keep
update about the ever improving internet technologies and other technologies
relevant to fast fashion industry, since technology highly influences online
customers.

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