The effect of perceived trust on electronic commerce: Shopping online for tourism products and services in South Korea

According to the OECD's 2008 statistics (Seoul Finance Internet News, 2009), Korea was ranked number one in terms of the percentage of homes with Internet access, at 80.6% of the total population. The survey also reported that two-thirds of Koreans with access to the Internet at home are online shoppers. Many tourism companies now actively use Internet sites as a key marketing and sales vehicle for their products and services. To be successful, tourism e-commerce services must be trustworthy.This study aims to examine which factors influence trust, satisfaction, and loyalty. We employed a structural equation modeling approach to investigate the relationships among exogenous variables (navigation functionality, perceived security, and transaction cost) and mediating variables (trust and satisfaction), with loyalty as a dependent variable. To this end, a total of 340 questionnaires were collected from online panel respondents by an Internet research firm.The results of our study indicate that navigation functionality and perceived security had a significantly positive effect on trust. However, we found that transaction cost had no effect on trust. Satisfaction was found to positively impact trust—which, in turn, influenced customer loyalty. Our findings imply that customer satisfaction influences trust, which plays a key role as an antecedent of customer loyalty in online shopping for tourism products and services.