Volume 3, Issue 2, 2021

e-ISSN 2682-8170

Social Media Use and Purchase Intention: The Mediating

Roles of Perceived Risk and Trust

Maria Shiela Rose Isip1 and Jean Paolo Lacap2

Publication Details: Received 21/03/21; Revised 25/05/21; Accepted: 30/05/21

ABSTRACT

The study examines the impact of social media use on purchase intention of social media
users in Angeles City, Philippines. Furthermore, it investigates how perceived risk and trust
indirectly affect the relationship between social media use and purchase intention. The data
were collected using self-administered online survey questionnaire. Predictive-causal
research design through partial least squares (PLS) path modelling was utilized to measure
the hypothesized relationships. The results showed that social media use significantly
influences perceived risk, trust, and purchase intention. It was also found out that trust
mediates the significant relationship between social media use and the intention to purchase.
This research suggests the integration of social media in businesses, which can be used to
influence consumers’ brand awareness and buying intention. Moreover, the effective use of
social media can help companies to maintain customer relationships and gain global
competitive advantage.

Keywords: Social Media, Sociability, Usability, Dependence, Involvement, Perceived Risk,

Trust, Purchase Intention

INTRODUCTION

The world wide web (WWW) has greatly influenced the way people communicate with one
another and changed the manner on how individuals access information (Hiremath &
Kenchakkanavar, 2016). It is known as the fastest developing broadcasting medium of all
time (Rudman & Bruwer, 2016). Social media turned out to be a notable connection platform
of the world wide web that individuals use to socialize with other people and businesses
(Xhema, 2019). Online users become more open, connected, and involved (Voorveld et al.,
2018).

The advent of social media allows people to create virtual communities where they share the
same interests and background (Shawky et al., 2019). Social media encourages engagement
and active participation; therefore, users can give comments, share their reviews, and provide
feedbacks regarding different products and services (Shawky et al., 2019). Social media sites,
such as Facebook, Twitter, Instagram, and YouTube, have permitted billions of people all
over the world to add and share a huge amount of accessible information (Silvia, 2019).
1
Graduate School, Our Lady of Fatima University, [email protected]
2
Graduate School, Our Lady of Fatima University & City College of Angeles, [email protected]
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According to Hotkar and Garg (2018), businesses generate more income through the
marketing efforts they place on social media. Vast volume of sales comes from different
purchases and acquisitions of consumers (Sharma & Bhatt, 2018). Fundamentally, companies
need to take into consideration how social media affect the consumer behavior, particularly
their purchase intention (Lim et al., 2016).

Consumers and businesses around the world have been more associated than before with the
involvement of interactive Internet (Lee et al., 2018). Changes in consumer behavior because
of the influences of social media are one of the most captivating angles in the contemporary
marketing (Scolere et al., 2018). Lim et al. (2016) stated that purchase intention is the
possibility of acquiring or purchasing a product or a service. People are becoming more
mindful of their actions prior to purchasing an item or service (Kumar, 2017). Thus,
customers will likely choose the product that has the lowest risk (Alkibay & Demirgunes,
2016).

According to Jordan et al. (2018), perceived risk involves uncertainty and consequences.
Uncertainty is described as the unfamiliarity of consumers about the description, properties,
and functions of the product while consequences relate to the loss that the consumers may
experience after the purchase in terms of identity theft, privacy risk, wastage of time, and
money. On the other hand, Kumar and Asawa (2016) interpreted trust as the belief and
expectation of consumers on the benefits that they can get from the businesses or trading
partners. Having trust means that the consumers rely on the suppliers’ honesty and loyalty in
transactions, their capability of responding to customer queries with integrity, delivering what
is expected with competence, and catering to the consumers’ needs as promised (Jordan et al.,
2018).

The improvement of online life in the Philippines is currently growing. Both individuals and
businesses have solid interests and confidence in it. All things considered, from the
consumers' viewpoint, Filipinos are becoming more eager to partake in social media
platforms by considering available information prior to their acquisition of products or
services. Hence, understanding consumers’ perspective is essential. From the business' point
of view, companies and proprietors in the Philippines are yearning to utilize social media for
brand awareness, and promotion; therefore, the greatest concern is how to impact the
customers’ decision effectively and efficiently in buying.

LITERATURE REVIEW

This study was grounded on the technology acceptance model (TAM) and theory of planned
behavior (TPB). The TAM was developed by Fred Davis in 1986 to improve understanding
of the consumers’ acceptance and use of new technology (Muñoz-Leiva et al., 2017). This
model explains why people would choose to use a particular technology and that they do so
because they find the technology useful to them and easy to use (Lim et al., 2016). Sharma
and Bhatt (2018) applied the TAM and found that consumers have the intention to purchase
online through social media if the ordering and delivery processes are simple and easy.

The TPB was proposed by Icek Ajzem in 1991 and is directed at predicting and analyzing the
behavior of consumers. It states that behavior is a function of three factors: attitudes,
subjective norms, and perceived behavioral controls (Arifani & Haryanto, 2018). The model
has three phases. First, the behavior of an individual is influenced by behavioral intention.

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Second, the behavioral intention is influenced by three factors: the attitude toward the
behavior, the subjective norm, and perceived behavioral control. Third, the three factors are
influenced by extrinsic variables such as environmental and social factors, depending on the
situation. This model created a foundation for future studies on consumer behavior and
beliefs (Lim et al., 2016).

As stated by Wong (2018), behavioral intention is the major determinant of usage behavior.
External variables are important factors such as social influences to determine the attitude.
When these things are in place, people will have the attitude and intention to use the
technology. Sen (2019) compared the TAM and the TPB and found that both models are
reliable in predicting behavior from intention.

Social Media Use

Social media use is the integration of social media in relation to the engagement of users
through the significance and emotional attachment to this use. Social media use is
characterized by sociability, usability, dependence, and involvement (Cham, Cheng, & Ng,
2020; Cham, Cheng, Low, & Cheok, 2020; Lim, Ng, Chuah, Cham, & Rozali, 2019; Maree,
2017). The sociability function of social media is characterized by community and
connectedness. Community permits people to form online groups sharing the same
perspectives and interests (Permatasari & Kuswadi, 2017). Usability refers to the ease of use
concerning the utilization of technology by humans (Khan & Wang, 2018). Dependence
states that the more people depend on media to satisfy their personal and social needs, the
more significant the media will be to the people’s life and consequently, there will be
affective, behavioral, and cognitive changes in people (Li et al., 2019). Social media
involvement is composed of participation and conversation from people engaging with others
in the social media platforms (Khan & Wang, 2018).

Purchase Intention

Purchase intention is the consumer’s plan to buy products or services in the future (Arifani &
Haryanto, 2018). It is a significant tool in the hands of advertisers to figure out the future
purchasing pattern of consumers and to enable them to identify suitable promotional
strategies to make long-term relationship ties among customers (Sangurde, 2019). Yu et al
(2018) argued that purchase intention is subjective and can be seen through the willingness of
consumers to buy goods or services. Consumers have different perspectives and their
decisions are immensely influenced by trust or perceived risk (Rachbini, 2018).

Perceived Risk

Perceived risk determines the nature and measure of risks related with products and services
when buying in the Internet which is perceived and seen by the customers (Lim, Cheng,
Cham, Ng, & Tan, 2019; Rachbini, 2018). As stated by Jordan et al. (2018), perceived risk
consists of consequences and uncertainty such as the vagueness of product information
available on the web, and the possible loss that customers may experience in terms of privacy,
money, time, and identity. Sharma and Bhatt (2018) studied on the negative relationship
between perceived risk and online purchase intention. Perceived risk is viewed as one of the
significant obstacles in transacting online and intercedes in the development of purchasing
online.

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Trust

Trust is one of the important determinants of consumer purchasing intention; therefore, the
customers who buy items, products, and services from businesses expect that they deliver
with integrity, honesty, and competence (Cheng et al., 2019; Low et al., 2021; Lacap et al.,
2021; Pandey & Parmar, 2019; Tan et al., 2021). Sangurde (2019) suggested that trust is a
significant forerunner in impacting consumers’ purchase intention when they buy through
social media on the grounds that it is the blend of exchange utility and securing utility. The
higher the trust of the consumers in using social media is, the higher their intention to buy the
products or services will be (Khan & Wang, 2018).

Hypotheses Development

Previous studies have explored the influences of social media use on perceived risk, trust, and
purchase intention. For instance, in the study of Permatasari and Kuswadi (2017), the rise of
social media swiftly permits people to form virtual groups (sociability) with the use of
technology (usability) in order to satisfy their social and personal needs (dependence) through
continuous participation (involvement). According to Wang et al. (2019), relationships built
in social media create connections that can be strong or weak. Trust may be an outcome of
strong relationships formed in the community while perceived risk is from weak ties due to
social pressure and uncertainty. In another study conducted by Rachbini (2018), consumers
choose to use social media with the lowest risk. Kumar and Asawa (2016) also identified that
there is a high probability that consumers use the social media they trust. Therefore,

H1a: Social media use (sociability, usability, dependence, and involvement) significantly
influences perceived risk.
H1b: Social media use (sociability, usability, dependence, and involvement) significantly
influences trust.
H1c: Social media use (sociability, usability, dependence, and involvement) significantly
influences purchase intention.

Sharma and Bhatt (2018) stated the positive relationship between value, quality, and trust that
characterized the interrelationships among these factors, and the negative relationship
between perceived risk and online purchase intention. Perceived risk is viewed as one of the
significant obstacles in transacting online and intercedes in the development of purchasing
online. It is accounted from different researches that practically half of the customers do not
buy online on the grounds that they perceive high risk. It is extremely critical to lower
percentage of perceived risk so as to draw in new customers and retain the current consumers.
In this manner, there is a need to comprehend the online risk disposition. Lim et al. (2016)
explored the significant positive relationship between trust and purchase intention, where the
buyer's intention to purchase determines the consumer's purchasing behavior. Therefore,

H2a: Perceived risk significantly influences purchase intention.

H2b: Trust significantly influences purchase intention.

Prasad et al. (2017) emphasized that the more conversations are held between consumers, the
more they can get information about the products or services. Thus, there will be more trust
and perceived value among users. The support, interaction, and information shared on social
media, as well as the level of involvement between people can contribute to customer loyalty,
trust, and purchase intentions (Khan & Wang, 2018; Vashu et al., 2018; Vashu et al., 2021).

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In the study of Ibrahim et al. (2017), social media use of consumers resulted to positive
influence on trust while moderate negative influence on perceived risk. Therefore,

H3a: Perceived risk mediates the significant relationship between social media use
(sociability, usability, dependence, and involvement) and purchase intention.
H3b: Trust mediates the significant relationship between social media use (sociability,
usability, dependence, and involvement) and purchase intention.

Figure 1. Research Framework

RESEARCH METHOD

Research Design

A causal-predictive design was used in this study. This design was used as the main goal of
the research was to predict an effect on an independent variable by manipulating dependent
variables while considering all other constant variables (Iacus et al., 2018). Since the present
study examined the influences of social media use on perceived risk, trust, and purchase
intention, and analyze the mediating effects of perceived risk and trust on the relationship
between the influences of social media and consumer behavior, then a causal-predictive
research was appropriate.

This study used the partial least squares path modelling approach for the overall data analysis.
This is a popular method across many disciplines and, at the same time, it is an easy and
powerful estimation technique for running structural equation modelling. It is great due to its
robust prediction-orientation, and can estimate formative measurement models. The purpose
of SEM is to try and understand the reputed cause and effect relationships between latent
variables. PLS-SEM is an extension of multiple regression. Partial least squares is a
technique for solving multiple equations at the same time to simultaneously determine the
direct and indirect effects among the equations (Sarstedt et al., 2017). Since the present study
involves prediction of several relationships and mediation analysis, PLS-SEM is an
appropriate statistical tool.

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Participants

The participants of the study are the residents of Angeles City, Pampanga who are of legal
age and have the capacity to purchase products and services through social media. The
respondents of this research were thoroughly selected through the application of convenience
sampling method. Using inverse square root and Gamma-exponential methods (Kock &
Hadaya, 2018), the sufficiency of the sample size was measured. From the structural model
which indicates the minimum path coefficient (p value less than 0.05) of 0.332, significance
level of 0.05 and power level of 0.8, the minimum sample size must be between 43 (Gamma-
exponential method) and 57 (inverse square root method), as computed using WarpPLS 7.0
(Kock, 2020). The present study was able to obtain 403 participants, signifying that the
structural model is robust to support the results of the hypothesized relationships.

Figure 2. Results of Sample Size Power Analysis using Gamma Exponential and Inverse Square Root
Methods

Table 1: Respondents’ Demographics Results

Demographics Frequency Percent
Sex
Male 151 37.5%
Female 252 62.5%
Employment Type
SHS 6 1.5%
College Student 59 14.6%
Employed 273 67.7%
Self-Employed 65 16.1%
Age
18-25 133 33.0%
26-30 117 29.0%
31-35 74 18.4%
36-40 31 7.7%
41-45 24 6.0%
46-50 11 2.7%
51-55 13 3.2%
Monthly Income
<Php5,000 20 5.0%
Php5,000-Php9,999 18 4.5%
Php10,000-Php14,999 99 24.6%

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Php15,000-Php19,999 67 16.6%
Php20,000-Php24,999 82 20.3%
Php25,000-above 117 29.0%
Time Spent in Social Media (Total
number of Hours / Week)
<1hour 6 1.5%
1-5hours 64 15.9%
6-10hours 93 23.1%
11-20hours 107 26.6%
21-40hours 93 23.1%
41hours-above 40 9.9%

Table 1 reveals the respondents’ demographics results. Out of 403 respondents, 252 are
female online purchasers and the remaining 151 are male.

The results show that 67.7% of the total respondents are employed, while 16.1% are self-
employed, 14.6% are college students, and 1.5% are senior high school students. The findings
also show that majority (81.5%) of the college and senior high school students are employed
while the remaining 18.5% obtain their main source of funds from their parents or guardians.
The study indicates that the major online buying forces and social media users comprise
people and working students with decent jobs.

The results also present the age group percentage distribution of the respondents. The
respondents age 18 – 25 years old constitute 33% who purchase products and services online.
On the other hand, 29% of the respondents are between 26 to 30 years old; 18.4 % are
between 31 to 35 years old; 7.7% are between 36 to 40 years old; 6% are between 41 to 45
years old; 3.2% are between 51 to 55 years old; and 2.7% are 46 to 50 years old. The research
indicates that respondents with younger age tend to willingly and enthusiastically accept new
technology and use social media more than people with older age.

Table 1 manifests the percentage distribution of the respondents’ monthly income. Out of 403
respondents, 29% receive more than 25,000 pesos; 24.6% receive between 10,000 to 14,999
pesos; 20.3% receive between 20,000 to 24,999 pesos; 16.6% receive between 15,000 to
19,999; 5% receive less than 5,000 pesos; and 4.5% receive between 5,000 to 9,999. The
results show that those whose income is 25,000 pesos and above take up high percentage of
the respondents who purchase products and services online through social media platforms.

The findings also reveal the respondents’ time spent in social media in terms of total number
of hours per week. On a weekly basis, 26.6% of the respondents use social media for 11 to 20
hours; 23.1% spend either 6 to 10 hours or 21 to 40 hours; 15.9% spend 1 to 5 hours per week;
9.9% consume 41 hours and more; and 1.5% utilize social media for less than an hour.

Research Instrument

The questionnaire consisted of 38 items with additional demographic and personal

information questions. In terms of measurement scale, 4-point Likert scale was used with this
scoring: 4=Strongly Agree, 3=Agree, 2=Disagree, and 1=Strongly Disagree. Likert scale is
the most widely applied rating scale that requires participants to indicate the degree of
agreement and disagreement on each individual item of statement (Voramontri & Klieb,
2019). The measurement items are taken from the study of Liwei Chen in 2014.

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The quantitative data collection was conducted through an online distribution strategy. The
online Internet surveys were the primary source of data. A sample questionnaire was
uploaded on the online survey platform (Google forms) to generate a link. We then posted the
survey link to different social media platforms, as well as other applications such as instant
messaging tools. This data collection strategy was fast and efficient as long as the
respondents have electronic devices with Internet access. Included in the survey is a comment
box where the respondents can freely express their thoughts and provide necessary
suggestions.

RESULTS

Assessment of the measurement model involves the scrutiny of the reliability and validity of
the constructs of the study. In measuring the reliability of the constructs, composite reliability
(CR) and Cronbach’s alpha were gauged. According to Kock (2014) and Kock and Lynn
(2012), in assessing the reliability of a construct using CR and CA, the threshold is 0.7. As
seen in Table 2, all constructs – social media use (CR = 0.935, CA = 0.918), usability (CR =
0.944, CA = 0.932), dependence (CR = 0.938, CA = 0.900), involvement (CR = 0.939, CA =
0.918), perceived risk (CR = 0.935, CA = 0.917), trust (CR = 0.925, CA = 0.8910, and
purchase intention (CR = 0.915, CA = 0.876) – are within the acceptable threshold.

Table 2 also presents the factor loading of each latent variable and its corresponding average
variance extracted (AVE). To establish that a latent variable exhibits convergent validity,
each item loading must be at least 0.5 and must be significant, which means that its
corresponding p-value must be equal to or less than 0.05. Furthermore, the AVE of every
latent construct must be equal to or greater than 0.5 (Fornell & Larcker, 1981; Hair et al.,
2009; Kock, 2014; Kock & Lynn, 2012). Based on the results, all latent variables passed the
requirements for convergent validity.

Table 2: Convergent Validity and Reliability Measures

Construct / Item (Reflective) Item Loading AVE CR CA
Social media use
Sociability 0.674 0.935 0.918
SOC1 0.731
SOC2 0.725
SOC3 0.848
SOC4 0.907
SOC5 0.823
SOC5 0.868
SOC6 0.830
Usability 0.679 0.944 0.932
USE1 0.743
USE2 0.792
USE3 0.819
USE4 0.832
USE5 0.859
USE6 0.834
USE7 0.847
USE8 0.861
Dependence 0.834 0.938 0.900

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DEP1 0.930
DEP2 0.931
DEP3 0.878
Involvement 0.755 0.939 0.918
INV1 0.799
INV2 0.883
INV3 0.885
INV4 0.894
INV5 0.879
Perceived Risk 0.707 0.935 0.917
PRI1 0.863
PRI2 0.828
PRI3 0.829
PRI4 0.783
PRI5 0.841
PRI6 0.864
Trust 0.755 0.925 0.891
TRU1 0.877
TRU2 0.909
TRU3 0.907
TRU4 0.776
Purchase Intention 0.730 0.915 0.876
PI1 0.855
PI2 0.869
PI3 0.842
PI4 0.850
SOC-sociability; USE-usability; DEP-dependence; INV-involvement; PRI-perceived risk; TRU-trust; PI-
purchase intention. All item loadings are significant, p < 0.001.

As for the discriminant validity, Fornell-Larcker criterion was measured, and further
validated using heterotrait-monotrait (HTMT) ratios. According to Fornell and Larcker
(1981), Kock (2015), and Kock and Lynn (2012), discriminant validity requires that the
square roots of average variance extracted (AVEs), the diagonal values in Table 3, must be
higher than those off-diagonal coefficients. Based on the results, the three latent variables
possess discriminant validity.

Table 3. Discriminant Validity Using Fornell-Larcker Criterion of Reflective Constructs

SOC USE DEP INV PRI TRU PI
SOC 0.821
USE 0.663 0.824
DEP 0.648 0.629 0.913
INV 0.784 0.677 0.668 0.869
PRI -0.342 -0.309 -0.350 -0.373 0.835
TRU 0.500 0.558 0.539 0.588 0.643 0.869
PI 0.559 0.534 0.630 0.596 0.407 0.596 0.854
SOC-sociability; USE-usability; DEP-dependence; INV-involvement; PRI-perceived risk; TRU-trust; PI-
purchase intention.

We also checked the discriminant validity of the latent constructs of the study using HTMT
ratios. According to Henseler et al. (2015), the HTMT ratios are best when their values are

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less than 0.85. Moreover, Gold et al. (2001) argued that HTMT ratios must be less than .90.
As seen in Table 4, all constructs exhibit discriminant validity.

Table 4. Discriminant Validity Using HTMT Ratios of Reflective Constructs

SOC USE DEP INV PRI TRU PI
SOC
USE 0.715
DEP 0.712 0.688
INV 0.854 0.729 0.740
PRI 0.374 0.335 0.384 0.407
TRU 0.554 0.615 0.604 0.653 0.700
PI 0.625 0.592 0.709 0.667 0.513 0.676
SOC-sociability; USE-usability; DEP-dependence; INV-involvement; PRI-perceived risk; TRU-trust; PI-
purchase intention.

Since the present study has one second-order (higher-order) construct (social media use),
measurement model assessment using variance inflation factor (VIF), outer weight and the
corresponding p-value, and full collinearity VIF were measured.

Table 5 manifests the VIFs, outer weight, and significance of the formative indicators for
each construct used in the study. Collinearity was measured using VIFs. According to
Diamantopoulos and Siguaw (2006), the threshold for VIF is equal to or lower than 3.30. It
can be noted from Table 5 that all formative indicators of the construct passed this criterion.
In terms of outer weight of each item, the requirement is that each indicator must have a
corresponding p-value of equal to or less than 0.05 (Ramayah et al., 2018). Based on the
results, the measurement model assessment for the second-order construct (social media use)
passed the required thresholds.

To assess the discriminant validity of the second-order construct (social media use), full
collinearity was measured, as suggested by Rasoolimanesh et al. (2017). To say that the
structural model does not suffer from collinearity problems, the values of full collinearity
VIFs must be equal to or less than 3.30 (Kock, 2015; Kock & Lynn, 2012). As reflected in
Table 5, social media use is within the acceptable thresholds.

Table 5. Measurement Model Assessment of Higher-Order Formative Construct

Higher-Order Full
Formative Factor Weight p-value VIF collinearity
Construct VIF
Social media use 2.115
Sociability 0.294 <0.001 2.949
Usability 0.280 <0.001 2.167
Dependence 0.277 <0.001 2.095
Involvement 0.297 <0.001 3.126

Figure 3 and Table 6 reflect the results of hypothesis testing. Data analysis revealed that
social media use is significantly and negatively related to perceived risk (β = -0.470, p <
0.001) with moderate effect size (f2 = 0.221). The result suggests that when users are much

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involved in social media, they perceive social media platforms as less risky. As the level of
social media use rises, users’ perception of risk decreases. Hence, H1a is supported.

The findings also show that social media use significantly leads to higher trust (β = 0. 0.639,
p < 0.001) and purchase intention (β = 0.428, p < 0.001) with substantial (f2 = 0.408) and
moderate (f2 = 0.289) effect sizes, respectively. The result indicates that the level of
utilization of social media increases the level of users’ trust and even their intention to buy
goods and services online. Therefore, H1b and H1c are supported.
In terms of the relationship between perceived risk and purchase intention, it was found out
that these two (2) constructs are not significantly related (β = -0.044, p = 0.185). On the other
hand, trust was found to be significantly and positively related to purchase intention (β =
0.332, p < 0.001) with a moderate effect size (f2 = 0.216). These findings suggest that lower
or higher perceived risk does not translate to intention to buy among social media users. As
the level of trust of users on social media platforms rises, the propensity for them to buy
goods and services moves in the same direction. Hence, H2a is not supported, while H2b is
supported.

Figure 3. The Structural Model with Parameter Estimate

In the present study perceived risk and trust were tested whether they mediate the relationship
between social media use and purchase intention. An analysis of the data revealed that
perceived risk does not mediate the significant and positive relationship between social media
use and purchase intention (β = 0.021, p = 0.276). Only trust acts as mediator on the social
media use–purchase intention relationship (β = 0.212, p < 0.001) with a small effect size (f2 =
0.143). In short, greater social media use leads to higher trust on social media platforms,
which in turn, heightens the propensity of users to buy online. Hence, H3a is not supported,
while H3b is supported.

Table 6. Results of Direct and Mediating Effects

Path Standard Effect
Hypothesis p-value Decision
coefficient error size
Direct effects
H1a. SOCMED → PRI -0.470 <0.001 0.047 0.221 Supported
H1b. SOCMED → TRU 0.639 <0.001 0.046 0.408 Supported

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H1c. SOCMED → PI 0.428 <0.001 0.047 0289 Supported

H2a. PRI → PI -0.044 0.185 0.050 0.023 Not supported
H2b. TRU → PI 0.332 <0.001 0.048 0.216 Supported
Indirect effects
H3a. SOCMED → PRI → PI 0.021 0.276 0.035 0.014 Not supported
H3b. SOCMED → TRU→ PI 0.212 <0.001 0.034 0.143 Supported
SOCMED-social media use; PRI-perceived risk; TRU-trust; PI-purchase intention. The effect sizes
follow Cohen’s (1988) criterion: 0.02=small, 0.15=medium, 0.35=large.

Full collinearity VIFs were also assessed to detect and correct common method variance.
According to Kock (2015), to say that the constructs are free from common method bias, the
value of full collinearity VIF for each construct must be equal to or lower than 3.3. Based on
the results, all constructs – perceived risk, trust, purchase intention, and social media use –
passed the common method bias test.

Table 7. Common Method Bias, Predictive Relevance, and Coefficient of Determination

Full collinearity VIF Q2 R2
PRI 1.701 0.210 0.221
TRU 2.396 0.404 0.408
PI 2.029 0.524 0.528
SOCMED 2.115
SOCMED-social media use; PRI-perceived risk; TRU-trust; PI-purchase intention.

The coefficient of determination (R2) and predictive validity (Q2) were also included in the
analysis as part of the scrutiny of the structural model. According to Cohen (1988) and Kock
(2014), R2 coefficients of less than 0.02 indicate that the effects are very weak to be included
as relevant in a practical perspective. The R2 values of 0.221, 0.408, and 0.528 reflect weak to
moderate effects. On the other hand, the Stone-Geisser Q2 coefficients need to be greater than
zero to say that the variable has predictive relevance (Geisser, 1974; Kock, 2020; Stone,
1974). The Q2 coefficients of 0.210, 0.404, and 0.524 are all greater than zero. From the
results in Table 7, all constructs – perceived risk, trust, purchase intention, and social media
use – passed the requirements for R2 and Q2.

DISCUSSION

Results of the study reveal that social media use is significantly and negatively related to
perceived risk. This finding suggests that when respondents are more exposed to social media,
their perception of risk towards it decreases. The result supports the study of Kumar and
Asawa (2016) which says that when consumers interact freely and engage in discussions,
their perceived risk on social media decreases as more data are accessible to them. When
consumers can easily search available information online and as the transfer of conversations
between social media users is smooth and fast, their perceived risk reduces (Pütter, 2017).

Furthermore, it was also found out that social media use is significantly and positively related
to trust. This finding indicates that as the utilization of social media increases, the
respondents’ level of trust also rises. The result conforms with the study of Hjorth and Hinton

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 Journal of Marketing Advances and Practices 88

(2019) which reveals that the more people get involved and connect with other users, the
more they get dependent on and trust social media.

The findings also reveal that social media use is significantly and positively related to
purchase intention. This result suggests that the respondents’ level of utilization increases
their purchase intention. The finding supports the study of Jothi and Gaffoor (2017),
highlighting that as consumers get prompt responses and find reliable and useful information
on social media about good quality products and services, their intention to purchase online
increases.

Moreover, the results show that perceived risk is not significantly related to purchase
intention. This finding indicates that higher or lower perceived risk does not result to
intention to purchase among social media users. The finding does not conform to the study of
Sharma and Bhatt (2018) indicating that there is a significant impact of perceived risk on
purchase intention. It also negates the research conducted by Wong (2018) which notes that
users perceive social media as less risky in terms of low financial risk, low probability of
getting poor-quality products and low possibility of getting under social pressure; hence,
increasing the likelihood to purchase from social media.

The result also unveils that trust is significantly and positively related to purchase intention.
The finding suggests that higher trust of respondents on social media leads to more intention
to purchase products and services. The result validates the study of Kumar (2017), implying
that the consumers’ intention to buy rises when they trust social media; the trust of social
media users is described through the sense of belongingness they feel in the virtual
community and by the immediate responses they get to clarify their uncertainty towards a
purchase.

In addition, findings reveal that perceived risk does not mediate the significant and positive
relationship between social media use and purchase intention. The result suggests that the
respondents’ perception of risk does not influence their intention to buy and their usage of
social media. The result contradicts the study of Rachbini (2018) indicating that the
consumers’ usage of social media which brings about less perceived risk, influences the
purchase intention of buyers to make an online transaction through social media platforms.

The findings also present that trust mediates the significant and positive relationship between
social media use and purchase intention. The result indicates that higher social media use
increases the trust of respondents which leads to greater intention of buying online via social
media platforms. This result supports prior undertakings (Kipp & Zhang, 2017; Lim et al.,
2016; Prasad et al., 2017). Consumers’ use of social media such as seeking information,
making comments, participating in discussions, and sharing valuable data brings an increased
trust and further develops higher intention to purchase (Ringim & Reni, 2019).

STUDY IMPLICATIONS, LIMITATIONS, AND FUTURE RESEARCH DIRECTIONS

The present study examines the mediating effect of perceived risk and trust on the
relationship between social media use and purchase intention. The current research concluded
that social media use significantly influences the perceived risk, trust, and purchase intention
of consumers. In line with this, trust acts as a mediating factor between the social media use
and purchase intention relationship. These signify that online users can easily access and

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 Journal of Marketing Advances and Practices 89

learn more about the product information and services of a company through social media.
People can quickly browse and get the needed data from published and updated contents on
various social media platforms. Users with the same attributes and interests form groups and
communities through social media and share meaningful discussions, experiences, and make
informed purchasing decisions. People can conveniently search for comments and reviews
made by reliable sources, friends, and family. These feedbacks have huge impact on the
buying decision of consumers. The buying process via social media is shorter compared to
the long traditional purchasing method. Users can promptly look for products and services,
decide, and make a purchase in no time. Consumers often make use of vouchers, discounts,
and promotions offered by companies through social media to reduce the total cost they have
to pay for the goods or services.

The upsurge use of social media has led to the increased engagement among businesses and
consumers. This era of accelerating technological advances has heightened the activities in
social media platforms that produced systems where consumers can communicate, generate
content, influence perceptions of other users, and develop valuable relationships with
companies and the virtual community. Businesses should continually seek for effective
strategies to delve into the utilization of social media by building user dependency on their
brand, creating groups and online communities, integrating influencer marketing, and
reducing consumers’ perceived risk, in order to reach customers, establish rapport, and shape
consumers’ intention to purchase products and services for success, growth, and profitability.
As time does not stop and innovation continuously improves, businesses need to remain in
the loop and utilize any chances to improve advertising, quality, and customer satisfaction.
Technology enables customers to search for products and services, to mark them, and
evaluate them fairly. Thus, numerous organizations today have pages on social media to
enhance information held about products. Buyers tend to relate considerably more with a
business after they read several reviews and comments of the customers who have bought or
availed the products or services. Additionally, by utilizing social media, purchasers have the
ability to impact different consumers through surveys or feedbacks. Social media users trust
in what their companions, family and even strangers believe. Numerous online consumers
consider social media as being significant and a dependable source for exploring products
and services.

The current undertaking contemplates on perceived risk and trust as mediating variables to
examine the influences of social media use to purchase intention. The participants of the
study were limited to the residents of Angeles City, Pampanga; thus, it is proposed to future
researchers to conduct similar studies and expand the locale. They may also explore other
variables relating to social media use, the mediating factors, and purchase intention.

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