Digital literacy as a capability for managing risk in online commerce: Evidence from an emerging market

Online commerce has expanded rapidly in emerging economies, yet consumer participation remains uneven because perceived risk persists and digital literacy varies substantially. Although previous studies have emphasized trust and perceived risk as key determinants of online decision-making, less attention has been given to digital literacy as a consumer capability for navigating uncertainty in digital markets. This study analyzes how trust, perceived risk, and digital literacy jointly influence online purchase intention, customer loyalty, and channel use, with attention to the moderating role of digital literacy in risk-related decisions. Using survey data from 1,000 adult consumers in Ecuador with prior online purchasing experience, the study applies Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings show that trust consistently promotes online participation, whereas perceived risk acts as a significant behavioral constraint. Digital literacy has a dual effect: it directly strengthens consumer engagement and reduces the negative impact of perceived risk on online decisions. These results suggest that online market participation cannot be explained only through trust–risk dynamics, but also depends on consumers’ ability to understand, evaluate, and manage digital interactions. The study conceptualizes digital literacy as a practical risk-management capability and offers implications for firms and policymakers seeking more inclusive digital commerce.