CHAPTER II REVIEW OF LI'I‘RATURE

The strategies that marketers are using have not adequately addreued the changing demands of the
consumer to ensure customer satisfaction (Day & Landon, 1977). The marketing function limits the
scope of marketing strategies in operating successfully online. New electronic communication
marketing variables have exploded the alternatives available to customers globally. These changes
have redefmed many of the old views of marketing, trade and power. Furthermore, many
researchers recognize and accept that customer satisfaction

is a logical measurement of success in market exchanges (Dubrovski, 2001).

Bellman et al (1999) has found out that demographics are not so very much important in
determining online purchasing potential. Whether the consumer has a wired lifestyle and the time
constraints the person has are much

more influential, risk taking propensity is also a power full factor. E-shoppers have higher risk tacking
tendencies.

Kwaketal (2002) have found that the consumers with high levels of

privacy and security concerns have lower purchasing rate in online markets but

they balance their quest for making use of the information advantage of the environment.

Miyazaki and Femandaz (2001) has concluded that the educated

mdiViduals are more confident decision makers, are much more demanding and

have greater control over the purchasing process from initiation to completion.

Saced (2003) has concluded that the customer keenly notices transaction Security, vender quality,
price consideration. Information and service quality. SYstem quality, privacy and security risks, trust,
shopping enjoyment. valence of online shopping experiences, and perceived product quality.
Andrews and Currim (2004) has found out that the factors like online shopping experience.
Perceived vendor quality having both positive and negative impact on customers’ propensity for
shopping does not seem to be

very different from the consideration encountered in offline environments.

Adrita Goswami et.al (2013).studied “Customer Satisfaction towards Online Shopping with Special
Reference to Teenage Group of Joe hat Town” study concludes that online customers are satisfied.
This research explicitly indicates that online marketer should give more importance on price factor
and after sale factor. In this competition era all the online marketers should have to concentrate on
the customer’s satisfaction to retain the existing customers and

have to offer new scheme day by day to attract the new customers.

Alam and Yasim (2010) reported that that website design, reliability, product variety and delivery
performances are the four key factors influencing

consumers’ satisfaction of online shopping.

Ah net a] (2004) Lee and Joshi (2007); found that delivery performance

has significant in flounce on customer satisfaction.

Vyas and Srinivas (2002), in their paper stated that majority of the intemet users were having
positive attitude towards online buying of products / SerVices. There exists a need for developing
awareness about consumers’ rights

and cyber laws. They also emphasized on better distribution system for online

products.

Crawford (1997) in his paper said that traditional consumer behavior shopping has its own model,
which the buying process starts from the problem
recognition, information search evaluation of alternatives, then purchase, and at last post purchase
behavior.

Mayer (2002) chin and he (2003) has concluded that common reasons for purchase reluctance are
the difficulties and costs of distance shipping, inadequate amount of purchase related information,
troubles experienced after the purchase such as delivery or refund problems, general security fear,
and various perceived risks such as financial, product-related or psychological

risks.

CHAPTER III OVERVIEW OF STUDY

India’s e-commerce market was worth about $2.5 billion in 2009, it

went up to $6.3 billion in 2011 and to $14 billion in 2012. About 75% of this is

travel related (airline tickets, railway tickets, hotel bookings, online mobile

recharge etc.). Online retailing comprises about.

12.5% ($300 Million as of 2009 India has close to 10million online

shoppers and is growing at an estimated 30%. CAGR vis-e‘l-vis a global rate of

8-10%, electronics and apparel are the biggest categories in terms of sales.

Key drivers in Indian e-commerce are:

Increasing broadband intemet (growing at 20% Mom) and 3G

penetration

Rising standard of living and a burgeoning, upwardly mobile middle

class with high disposable incomes

Availability of much wider product range (including long tail and direct

import) compared to what is available at brick and mortar retailers

Busy lifestyles, urban traffic congestion and lack of time for offline

shopping.

Lower prices compared to brick and mortar retail driven by

disintermediation and reduced inventory and real estate costs.

Increased usage of online classified sites, with more consumers buying

and selling second-hand goods.

Evolution of the online marketplace model with sites like jawbone, flip

kart, snap deal, and Infibearn.

India’s retail market is estimated at $ 470 Billion in 2011 and is expected to grow to $ 675 Billion by
2016 and $850 Billion by 2020, estimated CAGR of 7%.accounting to forester, the e-commcrce
market in

India is set to grow the fastest within the Asia pacific region at a CAGR of over 57% between
20.12.2016. ~

As per “India Goes Digital”, a report by Agendas Capital, a leading India Investment Bank specializing
in digital media and technology sector, the Indian e-commerce market is estimated at Rs 28,500
corer ($6.3 billion ) for the year 2011. Online travel constitutes a sizable portion (87%) of this market
today. Online travel market in India is expected t grow at a rate of 22% over the next 4 Years and
reach Rs 54,800 Corer ($12.2 billion ) in size 2015. Indian e-tailing industry is estimated at Rs 3,600
corer (U3$800 million) in 2011 and estimated to grow to Rs 53,000 Corer ($11.8 billion) in 2015.
On 7 March 2014, e-tailor flip kart claimed it has hit $1billion in sales, a feat it has managed to
achieve before its own target (2015). Overall ecommerce market is expected to reach Rs 1,07,800
crores (US$24billion) by the year 2015 with both online travel and e-tailing contributing equally.
Another big segment in e-commerce is mobile/DTH recharge with nearly 1

million transaction daily by operator websites.

Though the sector has witnessed tremendous growth and is expected to grow, a lot of e-commerce
ventures have faced tremendous pressure to ensure cash flows. But it has not worked out for all the
e-commerce websites. Many of them like indiaplaza.com, 21 diamonds in allshcoolstuff.com
amongst

others had to close down.

REGULATORY VIOLATION AND UNFAIR PRICES

Legal issues of e-commerce in India are generally ignored by ecommerce websites. This may change
in the near future as foreign companies and e-commerce portal would be required to register in
India and comply with India laws E-commerce websites dealing with nutraceutical, Bit coin,
Ayurvedic products online pharmacies, online payment, online poker, etc are

violating laws of India.

Enforcement directorate (ED) of India has already initiated legal action against companies dealing
with Bit coins in India tax liability of foreign companies like Google, Face book entices also under
consideration in India

similarly, illegal online sales of regulatory authorities of India.

Mantra, flip kart and many more e-commerce websites are under regulatory scanner of ED of India
for violating Indian laws and pllices.USbased n‘ansport application provide unbar loc has also been
questioned by the

service tax department of India.

The federation of publishers and booksellers ‘associations in India (FPBAI) has also questioned the
predatory pricing tactics adopted by various e-commerce websites in India. The confederation of all
India traders (CAIT) has also decided to approach the competition commission of India to oppose the
predatory pricing tactics of Indian e-commerce websites demand for introducing suitable provisions
to regulate taxation, anti competitive practice and predatory pricing of Indian and foreign e-
commerce websites have also

been raised.

Based on participants involved in the transaction e-commerce

transactions can be segmented into three broad categories or modes:

> Consumer to consumer (C2C) -Online classified, online travel

> Business -toconsumer (B2C) -Online retail, online /e-tailing, online

classifieds, digital downloads, financial services , online travel

SIZE OF THE E-COMMERCE MARKET IN INDIA India’s consumer-facing e-eommerce market (B2B)
grew at a whopping CAGR of 49.1% from 2007 to 2011 to reach a market size of US$99 billion.

Online travel, the largest domestic B2B e-commerce segment, accounted for

81% revenues in 2011.

INDIA’S E-COMMERCE ECOSYSTEM

Pros 02° Annual disposable income per household to grow by two-and-a-half times by 2015 02°
Discretionary spending expected to form a major portion of expenditure in India 03° Proliferation
expected in the sales of PCs, tablets and Smartphone '2' More Indians increasing time spend online
.3 Probability of growth in intemet user base, mirroring that of the voice user base '30 Volume and
average value of transactions higher for credit cards than debit cards 0:0 Increase in the number of
payment options Cons

'3 Low average broadband speed and flat average intemet speed cause
for concern

‘3' Online payment landscape marred by low penetration of credit and

debit cards

ONLINE SHOPPING WEBSITES

Flipkart.com

This one has to come first hands down. The entire country is completely dependent on Flip kart for
nearly all their shopping needs. Flip kart sells everything from gitt vouchers to electronics to home
appliances. In fact, statistics claim that there are more items on flip kart than in a mall. Hence,

Indians are heavily reliant on flip kart for all their shopping needs.

Amazon.in

A large number of people from India swear by the services of Amazon. Amazon and flip kart are
always at war with each other and are always at close heels. Amazon has an equally large number of
products as flip kart. In fact, Amazon apparently sells more than flip kart. Since Amazon is an
American company, it lacks the dies taste that would be preferred by an Indian. It would

be wise to indianite its Indian domain. It would then be an instant hit amongst

the masses.

Snapdeal.com

Snapdeal is a completely Indian website and is often preferred by the masses for its cheap rates. It
sells products at really low prices and hence, is a favorite of the masses. It is a good idea to buy from
Snap deal if you are looking for absolutely cheap prices. However, there have been times when
consumers have complained of the products of Snap deal and hence, some of
them stay away from Snap deal..

Jabong.com

Jabong is again an American brand but seems to be doing very well in India. It has a large number of
clothes and accessories for sale and is a complete paradise for those who love shopping for clothes.
It has all kinds of Products from western wear to dies kuris and it would be fun to sit home and

§h0p for clothes on jabong. Jabong is excessively preferred by women shoppers

Myntra.com

An equally large number of women favors mantra over jabong. Myntra also has a large number of
accessories and clothes on its online portal. It has a large number of categories as well and one can
buy from a category of their

choices. From western to ethnic to traditional, all kinds of clothes are sold on

myntra.

Homeshop18

This is an equally popular website amongst online shoppers. Those who do not mind waiting a little
extra for delivery at the reward of a lower price, order from here. A lot of times, the cheapest of
items and the remotest of items are easily found on homeshop18.com. Thus, this site also has an
equally large number of shoppers who are loyalists. However, homeshop18 cannot be trusted when
one is in an emergency. You’d rather buy from one of the websites where

they give express deliveries.

Infibeam.com

Infibeam.com is a place where you often find things that are not found anywhere else. The rarest of
things, the rarest of books and the west of electronics and many other such items are easily found
on infibeam.com. Infibeam.com has a long way to go before it comes higher up the ranks but it
definitely isn’t doing badly so far.
Shopclues.com

Shopclues.com is famous for their heavily discounted best shopping deals. Shop clues is one of the
best online stores that offers a wide variety 0f carneras, Computer accessories, Mobile, Gift,
Jewelers, Cosmetics, toys, clothes, books and bag.

Firstcry.com

Firstcry.com India’s largest store for Kids selling 7000O+ items from 400+ tap International and
Indian brands.

For, the options available to the consumer are fairly limited and it will be a while before the
consumer is spoilt for choice with a large number of

online shopping portal.