Difference of Risk-relievers between High Risk and Low Risk in Online Purchasing

The Online business model for purchasing agent service is getting more popular. However, consumers perceive more risk when buying products from foreign online purchasing agents (FOPA) than from common online sellers (COS). This study focuses on finding out how consumers manage risk when they perceive risk and what different risk-reliever strategies they use when buying from high-risk FOPA and low-risk COS. This study has proved the following two. First, when consumers perceive risk at online purchasing, they tend to select risk-reliever strategies, such as the use of communication media, online assurance mark, seller's record, and secure payment to mitigate risk. With the application of those risk-reliever strategies, they built trust with the seller. Second, risk-perception of FOPA influences usage of communication media and check of online assurance mark more strongly than that of COS. On the contrary, risk-perception of COS influences the check of seller record more strongly than that of FOPA. This study helps to explain why FOPA is proliferating, despite its inherent high risk due to the fact that buyers and sellers are separated in time and space and that buyers and sellers have different social and cultural backgrounds. This study also helps managers of E-commerce to relieve consumer's risk-perception and to build trust.