DOI: 10.14457/tu.the.2019.444
title: Willingess of Thai consumers to pay for data privacy in online shopping applications

description: The Personal Data Protection Act of Thailand went into effect on February 28, 2019. As a result, businesses, including Business-to-Consumer (B2C) e-commerce, have raised concerns about data privacy. The e-Commerce process of consumer data collection, data processing, and data sharing is often unavoidable as related to data privacy. Online shopping applications can take the opportunity to learn consumer privacy concerns and offer a service design to meet consumer needs for privacy protection.The theme of this study is a relevant contemporary topic in applied marketing, focusing on the area of technology. There are three main objectives of this study. 1) Identify psychological and behavioral factors influencing willingness to pay for protecting data privacy. 2) Understand the value consumers are willing to pay for the three privacy enhanced versions of an online application, including: a) Not allow data collection, b) Allow the deletion of whatever whenever consumers want and c) Not sharing data to third parties. Finally, 3) identify segments from consumer psychology, behaviors, and value of willingness to pay for privacy enhanced versions.The study draws on the literature review and applies the consumer behavior models named ‘Privacy Calculus’ and ‘Privacy Paradox’ in describing consumer psychology and behavior toward the decision of trading off privacy with services or products (Dinev & Hart, 2006). The theories helps construct the key research variables in the questionnaire. Furthermore, the Price Sensitivity Model (PSM), an economic valuation method, is applied to measure the willingness to pay for the privacy enhanced versions of an online shopping application. The research is conducted using two research designs, qualitative and quantitative research. The qualitative method approach consists of the literature review and three in-depth interviews. The quantitative research consists of questionnaires using a sample of 234 people aged 14 and above. Both in-depth interviews and questionnaires employ the convenience sampling method, described in later methodology. The analysis uses the Statistical Package for the Social Sciences (SPSS) program and the R program.The result shows that key factors influencing the willingness to pay for data privacy are privacy concerns and perceived risks from online shopping. Thai consumers have neutral concerns toward data privacy but their behaviors on protecting their data privacy are at a high level. Generally, Thai consumers tend to compromise their privacy concerns in trading off with services and products. The value consumers are willing to pay for a privacy enhanced version is between 50 baht per month to 280 baht per month, and the optimal value is 100 baht per month. Among the three aspects of data privacy: a) Not allow data collection, b) Allow the deletion of whatever whenever consumers want, and c) Not sharing data to third parties, consumers give the highest importance to the third aspect which is not allowing data sharing to others, followed by the first aspect which is not allowing data collection, and the second aspect which is allowing the deletion of whatever whenever consumers want respectively.Moreover, the study classifies consumers into three segments which are 1) Service trust seeker, 2) Self-protector, and 3) Privacy concern suppressor. The differences between the three segments are that the service trust seeker segment perceives that the service providers in Thailand are safe rather than the others do. This segment gives the least importance to all three privacy enhanced versions. It is willing to pay for the versions at 100-400 baht per month. The self-protector segment is the most concerned segment about risks of online shopping so it gives the most importance to privacy enhanced version b) Allow the deletion of whatever whenever consumers want. The segment has the highest willingness to pay for the three versions at 100-460 baht per month. While, the third segment, the privacy concern suppressor, is more likely to compromise the privacy concerns than the other two segments, especially when it perceives the benefits of online shopping. This segment gives the most importance to privacy enhance version a) Not allow data collection, and c) Not sharing data to third parties. It has the lowest willingness to pay for the three versions at 60-370 baht per month.In conclusion, the online shopping service provider should communicate their ability to protect consumers’ data privacy as it can become a competitive advantage to make a point of differentiation in the e-commerce market. Besides, online shopping service providers who implement customization in the management of consumers’ data will incur a cost. This cost can be recovered through a service fee. The acceptable price is between 50 baht per month to 280 baht per month. The suggested value (optimal value) is 100 baht per month as an acceptable service fee.