A STUDY ON DIFFERENT TYPES OF RISKS PERCEIVED BY THE

CONSUMERS AND THEIR INFLUENCES ON CONSUMERS BUYING

BEHAVIOR WITH SPECIAL REFRENCE TO TELANAGANA STATE

ABSTRACT

With the changing market scenario and economical growth, the

demand for online shopping has increased. Explosion of e-commerce has
changed the buying patterns and preferences of customers. The
important brands are also moving towards e commerce technology for
increased sale of their products.
There is no doubt about it that ecommerce has made the
transactions smooth, quick, faster and easier. Both the sellers and the
buyers get benefited by his technology. As we all are aware that
Commerce and Business are the backbones of a countrys development, if
they were supported by the electronic technology and tools like ecommerce, it will make wonders in the economical growth of the country.
An important part of e commerce is online shopping. It helps in many
ways both parties, the buyer as well as the seller. The e commerce
technology and the usage of online shopping has increased in
tremendous ways in India.
Today almost every big company has adopted these technologies to
increases sales, to make branding all over the globe. Online shopping in
India saw a 128% growth in interest from consumers in 2014 as
compared to the previous year, according to a new report. The growth was

only 40% between 2013 and 2012. Consumers were most interested in
apparels & accessories (30%) and consumer electronics (34%). Other
categories that Indians searched for online were Books (15%), Beauty &
Personal care (10%), Home & furnishing (6%), Baby products (2%) and
healthcare (3%). This study aims at identifying the different types of
perceived risk having includes Fraud, Delivery, Financial, Process and
Time loss, Product, Privacy, Information risk. Factors on attitude towards
online shopping.
KEY WORDS: E-COMMERCE,RISK,

CHAPTER-I -INTRODUCTION

1.0 INTRODUCTION
The internet is being developed rapidly since last two decades, and with
relevant digital economy that is driven by information technology also
being developed worldwide. After a long term development of internet,
which rapidly increased web users and highly speed internet connection,
and some new technology also have been developed and used for web
developing, those lead to firms can promote and enhance images of
product and services through web site.
Therefore, detailed product information and improved service attracts
more and more people changed their consumer behaviour from the
traditional mode to more rely on the internet shopping. On the other
hand, more companies have realized that the consumer behaviour
transformation is unavoidable trend, and thus change their marketing
strategy. As the recent researches have indicated that, the internet

shopping particularly in business to consumer (B2C) has risen and

online shopping become more popular to many people.
According to the report, The Emerging Digital Economy II, published by
the US Department of Commerce, in some companies, the weight of ecommerce in total sales is quite high. For instance, the Dell computer
company has reached 18 million dollars sales through the internet
during the first quarter of 1999. As a result, about 30% of its 5.5 billion
dollars total sales were achieved through the internet (Moon, 2004).
Therefore, to understand internet shopping and its impact on consumer
behaviour could help companies making use of it as a form of doing ebusiness.
There are many reasons for such a rapid developing of internet shopping,
which mainly due to the benefits that internet provides. First of all, the
internet offers different kind of convenience to consumers. Obviously,
consumers do not need go out looking for product information as the
internet can help them to search from online sites, and it also helps
evaluate between each sites to get the cheapest price for purchase.
Furthermore, the internet can enhance consumer use product more
efficiently and effectively than other channels to satisfy their needs.
Through the different search engines, consumers save time to access to
the consumption related information, and which information with
mixture of images, sound, and very detailed text description to help
consumer learning and choosing the most suitable product (Moon, 2004).
However, internet shopping has potential risks for the customers, such as
payment safety, and after service. Due to the internet technology
developed,

internet

purchasing

goods

payment
from

the

recently
internet.

becomes
Internet

prevalent
payment

way

for

increase

consumptive efficiency, at the same time, as its virtual property reduced

internet security. After service is another way to stop customer shopping
online. It is not like traditional retail, customer has risk that some after
service should face to face serve, and especially in some complicated
goods.
1.1 REASONS BEHIND THE GROWTH OF E COMMERCE
1. Busy Lifestyle- The lifestyle of people is so busy that they are
unable to go to the crowded markets every time for shopping. The
customers prefer to shop in a relaxed environment at their own
convenience.
2. High Disposable Income: With growing job opportunities the
income sources have also increased. Because of high spending
power, customers are willingly able to pay for the products online.
3. Awareness of Products: People are much more aware nowadays
regarding the products available in the markets. They are quite
aware about new products, product features, availability, price etc.
through the help of media like television, radio, newspaper etc.
Because of these reasons they feel confident while shopping online.

4. Rising Computer Educational Level: Due to the efforts of

Government

and

Private

Educational

Institutions

in

India,

computer education is getting new horizons. People are much more

aware regarding the tools and techniques of computers. Not only
students of urban areas, students of rural areas, housewives and
business

persons

are

also

attracted

towards

the

advance

technologies of computer like e commerce and e business. With

the development of educational standards there is automatically a

great demand to buy and use new products.

5. Increased Usage of Internet - With more than 100 million Internet

users, the country is beginning to achieve a critical mass of users
who are familiar with web services. In addition, over the past few
years, relatively sophisticated online travel agents (OTAs), such as
MakeMyTrip which started turning these initial Web users into
Web consumers have dominated Indian e-commerce. Saves
Money One another reason for adapting e- Commerce and online
shopping technology is that the unwanted expenditure of petrol,
parking and toll etc. is considerably reduced.

6. Easy to Find the Review of Products It is quite easy to find the

review of products by the help of online shopping. Ecommerce has
made it simpler to get information regarding the product and the
customers can purchase the products after getting reviews and
feedback of the product.

1.2 ESSENTIALS FOR MAKING ONLINE SHOPPING EFFECTIVE

1. It must be Secure Every customer wants to make safe and secure

transactions while purchasing online. If the website is secure,

customers will tend to purchase more from it. Secure Sockets Layer
(SSL) is a standard security technology for establishing an encrypted
link between the web server and a browser. E commerce websites
with the SSL certificate are able to prevent and protect the users
information when customers access their websites.

2. Easy and Understandable Content The website must be in easy

language and understandable. While making the website, the language
must be kept simple and if possible the translation of the content
must be given on the website in other languages.

3. Combination of Branded Products and Non Branded Products An

online shopping website must be a combination of branded products
as well as of non- branded products. Customers preferences and taste
are different and even sometimes customers change their buying
patterns because of many reasons such as price, utility of the product,
purpose behind buying the product etc.

4. Create Awareness An online website must create awareness among

the customers regarding the products. The website should include all
the latest news about the products, innovations of the market, new
product features, revised pricing, new price list, information about the
gifts and discounts etc.

5. Deliver High and Quick Quality Services One of an important

feature to make your online shopping websites better than others is to

deliver high and quick quality services. The processing on the website
must be quick in regards of payments, home delivery services etc.

1.5 DIFFERENCE BETWEEN ONLINE SHOPPING AND TRADITIONAL

SHOPPING

The world is moving fast and one of the greatest reasons behind the
demand of online shopping is busy lifestyle and economic growth. Online
Shopping is different from Traditional Shopping in many ways like the
product descriptions gifts, home delivery, payment modes, etc. are easy to
access online now a days. The difference between both the modes is more
defined in the following ways

ONLINE SHOPPING VS. TRADITIONAL SHOPPING

Traditional Shopping

Online Shopping
Product descriptions, information
pages, gift services, search function,

Sales clerk service

clerk on the phone/e-mail

Special offers, online games and
lotteries, links to other sites of

Sales promotion

interest, appetizer information

Store window displays

Home page
Interface consistency, store
organization, interface and graphics

Store atmosphere

quality
Featured products on hierarchical

Aisle products

levels of the store

Screen depth, browse and search

Store layout

functions, indices, image maps

Number of floors in the store

Hierarchical levels of the store

Number of store entrances and

Number of links to a particular online

store outlets/branches

retail store
Online shopping basket and/or order

Checkout cashier

form
Limited to image quality and

Look and touch of the

description, potential for sound and

merchandise

video applications

Number of people entering the

Number of unique visits to the online

store

retail store

Sales per period

Sales per period

Source: Lohse and Spiller (1999)

CHAPTER-II- REVIEW OF LITERATURE

Holbrook (2014), Internet shoppers can be described as problem

solvers, others can be regarded as seeking fun, fantasy, arousal,
sensory stimulation, and enjoyment. The problem solvers merely shop
online in order to acquire a specific product or service, in which case
shopping is considered to be a task or work

According to Davis (2013) consumers attitudes regarding Internet

shopping are depending on the direct effects of relevant online
shopping features. Online shopping features can be classified into
consumers perceptions of functional and utilitarian dimensions such
as ease of use and usefulness, or into their perceptions of emotional
and hedonic dimensions like enjoyment.

Kim & Lee, (2012) defines reliability as the ability of website to

accurately and quickly perform promised services and guarantee the
online transaction security.

According to Huang, Schrank&Dubinsky (2006) found online

shoppers possessed lower perceived risk than non-shoppers. Reliability
may relate to the ability of the web site to fulfill orders correctly, deliver
promptly, and keep personal information secure.

Bellman and colleagues (1999) report that Internet surveys agree that
the online population is relatively younger, more educated, wealthier,
although the gaps are gradually closing. They argue that demographics
appear to play an important role in determining whether people use the

Internet, however once people are online, demographics do not seem to

be key factors affecting purchase decisions or shopping behavior.

Bhatnagar and colleagues (2014) provide evidence that demographics

are not relevant factors in determining which store to patronize or how
much to spend, though men and women do tend to buy different types
of products or services via the Internet.

According to Rajamma, Paswan,&Ganesh(2013) Services are more

likely to be associated with the online shopping mode, whereas more
tangible products are likely to be associated with bricks and mortar
stores

Vijayasarathy & Jones (2010) found that perceived risk influenced

both attitudes toward online shopping and intention to shop online in
line with other studies. However, perceived risk is said to decrease with
internet experience.

Sultan and Henrichs (2010) reported that the consumers willingness

to and preference for adopting the Internet as his or her shopping
medium was also positively related to income, household size, and
innovativeness
Akhter (2002) indicated that more educated, younger, males, and
wealthier people in contrast to less educated, older, females, and less
wealthier are more likely to use the Internet for purchasing. Service
quality depends greatly on the behavior of consumers. Hence, if the
website design could enable consumers to use easily and quickly find

the information or purchase service they need, consumers would feel

the service excellence of the websites
Jahng, Jain, and Ramamurthy (2011) propose and validate a
Technology/Product Fit Model to describe and predict the relationship
between

product

characteristics,

e-commerce

environment

characteristics, and user outcomes. They classify products sold on the

Internet as belonging to four categories based on social and product
presence requirements: simple, experiential, complex, or social.
CHAPTER-III RESEARCH METHDOLOGY

3.1 OBJECTIVES OF THE STUDY

The research paper consists of the following objectives:

1. To identify the different types of perceived risk that has influence
on consumer attitude towards online shopping
2. To analyze the growth of .e-commerce and online shopping
3. To recognize the factors to decide the success of online shopping
4. To throw light on the improvements to make the websites
appealing for enhancing the number of buyers.

3.3 RESEARCH METHODOLOGY

For making this research successful and worthy, a questionnaire

was structured. Through the help of the questionnaire, primary data
has to be collected. Interviews has to be taken from the respondents.
The research also includes secondary data which has been collected
from various websites, books etc.

3.4 SAMPLE SIZE

The respondents in the sample consisted of urban consumers.

100 respondents of Hyderabad, the capital city of Telangana were
interviewed. These respondents have certain exposure to the online
shopping. The samples are further presented in the tabulation form
with their responses.

3.4 QUESTIONNAIRE DESIGN

The design of questionnaire is very rely on what data need to be
collected and how to analyze the data, and the questions asked in the
questionnaire are need to be defined prior to data collection. According
to the aims and objectives of this study, the questionnaire was
conducted to collect data about the impacts of Internet shopping on
consumer behaviors within the summarized framework in associated
with the respondents online shopping experience.
3.5 LIMITATIONS OF THE STUDY.
1) The study has been conducted based on the data acquired from the
online buyers of India only and the findings may not be applicable to
other countries of the world because of socio cultural differences.
2) Sample size is very small.

1. Gender
a) Male
b) Female
2. Which age group do you belong to?
a)
b)
c)
d)
e)
f)

Under 18 years
18-30 years
31-39 years
40-49 years
50-59 years
Over 60 years

3. Employment Type?

a)
b)
c)
d)
e)
f)

Full-time employment
Part-time employment
Student
Unemployed
Housewife/husband
Retired

4.Do you have Internet access?

Yes
5. From how long you are using the Internet?
a)
b)
c)
d)
e)

Less than a monthLess than 1 year 1 2 years 2 4 yearsMore than 4 years -

6. How often do you use the Internet for the following purpose? [Search
product info]
a)
b)
c)
d)

Very often
Often
Occasionally
Never

7.How often do you use the Internet for the following purpose? [Internet
shopping]
a) Very often
b) Often
c) Occasionally
d) Never
8.What kind of goods do you purchase from the Internet?
a) Books
b) Toys
c) Gifts
d) Computer (Components)

e)
f)
g)
h)
i)
j)

CD/Video
Tickets
Consumer electronics
House wares Flowers
Software
Other

9. Reasons for Internet shopping? [Saves time]

a) Strongly Agree
b) Agree
c) Neutral
d) Disagree
e) Strongly Disagree
10. Reasons for Internet shopping? [Saves money]
a) Strongly Agree
b) Agree
c) Neutral
d) Disagree
e) Strongly Disagree
11. Reasons for Internet shopping? [More relaxing shopping]
a) Strongly Agree
b) Agree
c) Neutral
d) Disagree
e) Strongly Disagree
12. Reasons for Internet shopping? [Much easier shopping]
a) Strongly Agree
b) Agree
c) Neutral
d) Disagree

e) Strongly Disagree
10. Reasons for Internet shopping? [More efficient]
a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

11. Which medium do you prefer for online Shopping?

a)
b)
c)
d)
e)

PC
Tablet
Ipad
Cell Phone
Other

12. How do you make payments mostly when shopping on the Internet?
a)
b)
c)
d)
e)
f)

Credit Card
Personal Cheque
Third party (e.g. PayPal / World Pay)
Bank transfer
cash on delivery
Other

13. Do you feel secure when shopping on the Internet?

a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

14. Do you intend to continue purchasing products from the Internet

in
a)
b)
c)
d)

the near Future?

Strongly Agree
Agree
Neutral
Disagree

e) Strongly Disagree

15. How do you feel after the Online Shopping ?

a) Not Satisfied
b) Satisfied
c) very much satisfied
d) Can't Say
16. Using the online payment service will charge an additional fee
a) Strongly Agree
b) Agree
c) Neutral
d) Disagree
e) Strongly Disagree
17. Online shopping may cost more than the store
a) Strongly Agree
b) Agree
c) Neutral
d) Disagree
e) Strongly Disagree
18. Online shopping is not a good judge of product quality
a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

19. The personal information may be disclosed to others companies

a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

20. Online shopping the bank card may be misused by others

a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

21. Online shopping E-mail address may be abused by others

a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

22. Online shopping the phone number may be abused by others

a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

23. Online shopping may make others reduce consumers evaluation

a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

24. Prolonged online shopping may lead to fatigue or visually impaired

a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

25. Buying counterfeit products can damage my health

a) Strongly Agree
b) Agree
c) Neutral

d) Disagree
e) Strongly Disagree
26. Prolonged use of computer may cause adverse effects for health.
a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

27. The loss because of online shopping will cause pressure on my

Heart.
a)
b)
c)
d)
e)

Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree