Influence of Consumer’s Perceived Risk on Consumer’s Online Purchase Intention in Pakistan

Abstract

The purpose of this study is to examine the relationship between six dimensions of consumers’ perceived risk and their online purchase intentions. The study incorporates Theory of Planned Behavior (TPB) and Technology Acceptance Model (TAM) to identify the influence of perceived risk. Specifically, it investigates the impact of financial risk, product risk, security risk, time risk, social risk, and psychological risk on consumers’ willingness to purchase online. Using an online survey method for data collection, 397 respondents participated in an online questionnaire, and the data were analyzed using IBM SPSS Statistics and SEM (Structural Equation Modeling). The findings reveal that five dimensions of perceived risk—financial, product, security, time, and psychological risks—negatively influence online purchase intentions, with psychological risk being the most significant deterrent. Interestingly, social risk was found to have no significant impact. The study offers valuable insights for e-commerce retailers, highlighting the importance of addressing security concerns and minimizing other perceived risks to foster consumer trust and enhance online transactions. By understanding the main contributors to perceived risk, online retailers can develop strategies to improve the online shopping experience and encourage consumer engagement. This research contributes to the existing literature by addressing gaps in understanding consumers’ perceived risks in the context of online purchase intentions and offers actionable recommendations for mitigating these risks.