JRSSEM 2023, Vol. 02, No. 8, 1706 – 1721

E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494

DOI : 10.36418/jrssem.v2i08.380 https://jrssem.publikasiindonesia.id/index.php/jrssem/index

MILLENNIAL AND GENERATION Z ONLINE PURCHASING

DECISIONS ON INDONESIAN MARKETPLACE

Virgo Simamora

1

Virgo Simamora

1

Paras Islami

2

| 1707

INTRODUCTION

outside activity. As a result, the overall value

of e-commerce transactions has increased

significantly, rising from IDR 106 billion in

2018 to IDR 206 billion in 2019, and IDR 279

billion in 2022, and is expected to reach IDR

572 billion by 2023. ((Annur, 2022).

Furthermore, the availability of information

technology enables enterprises to adopt

digital business practices, resulting in a rise

in online transactions. Entrepreneurs may

stores during COVID-19 impacted the

growth of online transactions in Indonesia.

With a population of 275,773 million

(Statistik, 2022) and an internet penetration

rate of 77.02% (Association of Internet

Service Providers, 2022), Indonesia has

emerged as a prospective market for a

global marketplace. In this circumstance,

the millennial generation (born 1981–1996)

Due to the abundance of opportunities

in the e-commerce business, competition

among e-commerce platforms has risen in

Indonesia. Shopee, Tokopedia, Lazada,

Blibli, and Bukalapak are the five e-

commerce platforms that compete in the e-

commerce industry in Indonesia. According

to SimilarWeb, citing (Annur, 2022), Shopee

was the most popular e-commerce

visits, Blibli with 24.9 million visits, and

Bukalapak with 24.9 million visits.

To stay competitive, online stores have

released a variety of tools that may entice

customers to make more purchases via

online marketplaces. They provide many

different applications, such as e-customer

reviews, e-customer ratings, and e-

payment, to get people to buy stuff from

their marketplace. E-payment (Lestari &

1708 | Millennial and Generation Z Online Purchasing Decisions on Indonesian Marketplace

making a purchasing decision, many

people go to customer reviews for

al., 2022). In an electronic payment, or "e-

payment," the value of the transaction is

saved digitally on some kind of electronic

media, such as a server or a microcircuit

(Shobri et al., 2022).

The purpose of this study is to

investigate how Millennials and Generation

Z make purchasing choices in online

marketplaces in the context of e-customer

reviews, e-customer ratings, and e-

According to (Mulyati & Gesitera,

electronic word of mouth (eWOM) that

consists of product information provided

by other customers and posted online. E-

customer reviews are reviews given by

consumers about a product from various

aspects (Hariyanto & Trisunarno, 2021).

Customer reviews may be positive or

negative (Sianipar & Yoestini, 2021).

((Fransiscus et al., 2022). Comments

submitted by a customer are comments

customer references. E-customer reviews

employed in marketplaces are expected to

influence consumer purchasing decisions

((Suryani et al., 2022). According to (Fahrozi

et al., 2022), customer reviews increase

consumer trust and influence online

consumer purchasing. In other words,

consumers place a high value on the

opinions of other customers in a product

review (Harli et al., 2021).

Several factors are used to explain

consumer reviews based on previous

studies. In the research of (Fransiscus et al.,

Whitening are described as indicators of

credibility, trustworthiness, and honesty. E-

customer reviews of electronic products are

described by (Tran et al., 2022) as a source

of information, receiver, and message.

Furthermore, (Rinaja et al., 2022) define

Virgo Simamora

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Paras Islami

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refers to a statement that is thought to be

true or accurate and reliable if the

utilizing a product in an honest evaluation

without manipulating, plagiarizing, or

deceiving others for personal advantage.

E-customer rating

E-customer rating describes a

product's rating, which is presented in the

form of a star symbol rather than words

(Priangga & Munawar, 2021). The ratings

given describe consumer opinions based

on their experiences with sellers (Fransiscus

customer ratings have a favorable influence

on consumer confidence. Therefore, the e-

customer rating is a source of information

primarily for prospective customers and

first-time customers who do not know a

product they want to purchase (Chatterjee,

According to this study, e-customer

ratings are consumer opinions regarding

the rating of a product that explains that a

(Ridwan et al., 2015), three indicators can

be used to describe e-customer ratings on

trustworthiness, and perceived enjoyment.

According to Mandasari and (Astarina et al.,

2018; Wahyuni et al., 2019), the e-customer

rating of Gojek is defined by two indicators:

perceived usefulness and perceived ease of

use. In the (Hariyanto & Trisunarno, 2021)

study, three e-customer rating indicators

are used to define Shopee's e-customer

rating: benefit, cost, and number of users.

The indicators employed in this study

comprehend the meaning to be conveyed

while viewing or reading online ratings and

favor displays that make it simple to view

and read online ratings. Consumers may

improve their buying self-control by

utilizing internet ratings to obtain the

information they need to make a purchase

as well as vital information about the goods

they wish to buy.

E-payment

1710 | Millennial and Generation Z Online Purchasing Decisions on Indonesian Marketplace

payment since sensitive information and

money are being sent over the internet

store information on different payment

instruments such as credit cards, debit

cards, and digital currencies like bitcoin.

Another kind of electronic money that may

be used on cell phones without the

requirement for a bank account is e-checks,

also known as digitally issued and signed

checks.

E-payment is a significant tool that

may encourage customers to buy online, as

payment methods (Purwaningtias et al.,

payments whenever and wherever they'd

like, regardless of time or place; it's free for

all merchants, customers, and vendors; and

it helps cut down on criminal behavior and

fraud (Al-Sabaawi et al., 2021). Security,

perceived risk, trust, perceived advantages,

the official website, and website usability

are all factors that might sway customers

interoperability, portability, security,

anonymity, ease of use, transaction fees,

confidence and safety, awareness and

perception, and form of e-payment.

This study applies the same Turban and

King-recommended indicators to explain e-

payment, namely safety and ease of use.

One indicator taken from the research of

(Lestari & Ramadani, 2022) study, namely

awareness, and perception, and one

indicator from the research of (Pringgadini

& Basiya, 2022) namely a trust indicator, are

consumer behavior research focuses on the

behavior of people, community groups,

and organizations in selecting, purchasing,

using, and using products or services to

meet consumer wants and preferences. A

consumer's choice to choose and buy a

product is a reaction to a stimulus (Nofri &

Hafifah, 2018). (Anjani & Simamora, 2022)

defines purchasing decisions as customer

behavior in choosing a product from

Virgo Simamora

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Paras Islami

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buying choices are actions of buying

products or services through the internet.

products when they shop online.

Several factors cause consumers to choose

to buy products or services online,

including the convenience they feel when

shopping, the lower costs incurred by

consumers, the ability to save time, and the

fact that they can shop anytime and

anywhere without stopping (Hartanto et al.,

purchasing decisions are made because

transaction security, diverse product

preferences, ease of access in transactions,

and saving costs and time (Hartanto et al.,

Several factors cause consumers to

choose to buy products or services online,

including the convenience they feel when

shopping, lower costs incurred by

consumers, saving time, and they can shop

anytime and anywhere without stopping

e-commerce players.

Based on the previous research, the

MATERIALS AND METHODS

This is a type of explanatory study in

which theories or hypotheses are tested to

reinforce or weaken existing theories or

hypotheses. The purpose of this study is to

explain Millennial and Generation Z online

purchase decisions on marketplaces in

Indonesia based on e-customer reviews, e-

which includes obtaining samples from the

population and defining specific criteria to

generate a representative sample. The age

range of 16–41 years and having

transactions in the Indonesian marketplace

were the criteria employed in this research.

To collect data, this research used a

questionnaire, which was sent through

Google Forms and distributed from

December 8, 2022, to January 16, 2023, to

1712 | Millennial and Generation Z Online Purchasing Decisions on Indonesian Marketplace

the respondents were users of the Shopee

marketplace (59%), Tokopedia (13%),

from Generation Z (age 16–26 years).

According to the results of this study, 3% of

respondents had a junior high school

education, 42% had a high school

education or its equivalent, 12% had a

diploma, 40% had a bachelor's degree, and

3% had a master's degree. According to the

research results, product categories that are

often purchased by consumers are fashion

products (39%), electronic goods (14%),

care and beauty (14%), automotive (9%),

including 5 e-customer reviews (ECR)

indicators, 3 e-customer ratings (ER)

indicators, 4 e-payment indicators (EP), and

5 online purchasing decisions (OPD)

indicators. By using the Smart PLS

application, the first PLS Algorithm model

with 17 indicators and 22 questions is

presented below :

Sources: Processed Data (2023)

Validity test

The validity test is performed to

determine whether the measuring tool can

discriminant validity are used to assess the

validity of the measurement instrument.

The loading factor value is the reference

used in the validity test. The acceptable

limit for the loading factor to achieve the

0.70, indicating that the convergent validity

criteria have been fulfilled (See Table 1.)

Virgo Simamora

1

Paras Islami

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| 1713

Sources: processed data (2023)

The validity test is continued by

conducting a discriminant validity test, The

discriminant validity test ensures that each

indicator of each latent model is different

value and the Average Variance Extracted

(AVE) value serve as a benchmark for

assessing discriminant validity (Ghozali,

1714 | Millennial and Generation Z Online Purchasing Decisions on Indonesian Marketplace

Sources : processed data (2023)

Table 2 shows that the loading value

for each indicator on its construct is higher

than the crossloading value. This means

using the Average Variance Extracted (AVE)

approach. In this study, the minimum AVE

value was greater than 0.5, indicating that

Table 3. Average Variance Extracted (AVE)