Chapter 1

Introduction

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Internet is no more a niche technology. It is a mass media and an absolutely essential part of
modern time. As lives become more fractured and jumbled, it is not surprising that customers
attract to the unrivalled convenience of an Internet when it comes to searching and buying
product. E-business and e-commerce are often intermingled ideas which have very thin
borders to separate them. In e-business, Integrated Computerized Technology (ICT) is used to
augment a business. There are three main processes which are enhanced in e-business namely
firstly the production processes, which include production control processes and electronic
linkages with the suppliers. Secondly customer-aimed processes, which include marketing
and promotional efforts, internet sales, customers’ payments and purchase order. Lastly, the
internal management processes which include the following programs: training, employee
services, recruiting, internal communication, and video-conferencing. E-business is a term
which would generally be found to be used in two main ways within an organization. First it
is used in a company’s strategy and operations and second it is used as an adjective to depict
businesses that work online.
Internet population has been exploding. The World Wide Web (WWW) users have been
multiplying so rapidly that they have widely spread into all walks of life. The use of the
Internet is no longer limited to those computer nerds who do it for fun or curiosity. It has
opened up tremendous business opportunities for its users. Customer satisfaction of course
has become a critical issue in the success of every business system, traditional or the cyber
shopping store. Self-international trade has been trade with the science and technology in the
development of continuous 0permeates all aspects of society, which has significant impacts
in international trade. According to the information we got, network driven by the wave, the
worldwide industrial restructuring and upgrading is accelerating. As an information
technology application in the active area of trade shows, e-commerce through the Internet-
based information publishing, online negotiation, contract signing, electronic transactions and
calculations for a series of means of information transmission and processing of breaking the
constraints of time, logistics and orderly operation have greatly improved, thus that have
greatly reduced the transaction costs, which not only profoundly changed the traditional way
of production and management of existing services and consumption patterns but also had
far-reaching implications. E-commerce represents the future direction of development of
trade; the market has a great potential and a broad development prospect.
Internet and the World Wide Web have amended the business competitions and tailored the
Business-to-Consumer (B2C) relationship by introducing an innovative retailing platform
that provides for electronic one-on-one communication with the customers. The Internet
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possesses a capability of revolutionizing the business conventional format and the customer
service experience in many ways.

The availability of uncountable products and their respective pricing information on the
internet lets customers to efficiently and easily become knowledgeable and proactive while
shopping. It is of utmost importance according to previous literatures to understand
consumers and their utilization of the Internet for the organizations in cyberspace businesses
for sustainable success and growth. It is found out that success in superior economic returns
is attributed as a result of satisfied customers. The use of electronic technology in strategic
ways can boost to improve the overall customer to business relationship and can yield
customer satisfaction which could serve as the basis of competition within the cyberspace
industry and result innovative businesses methods for a firm (Hair & Keep, 1997).

The Dynamics of E-Commerce

This part of the study will introduce to key definitions of e-commerce and the history of its
evolution. It will explain the general trends in business-to-customer model and also will
scrutiny other e-commerce models. The two countries under consideration; Turkey and
Pakistan, will also be investigated in context of e-commerce acceptance and the satisfaction
of the customers achieved by B2C organizations.

The Notion of Business-to-Customer E-commerce

The worldwide expansion of the internet should be considered an integral part of any
country’s economy as the world has been revolutionized by technology and the near future is
e-commerce and e-business. The increasing confidence and trust in engaging in purchasing
online are a source of initiatives to support the development of the digital global economy.

The History, Present and Future Trends of E-commerce

The birth of e-commerce dates back to the year 1960’s. E-commerce commenced with the
introduction of EDI, which facilitates information exchanges and maintains relations between
companies via specifically designed group networks. EDI is not outdated and is still being
used in the Business-to-business model of e-commerce. The Internet and the World Wide
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Web have significantly contributed to the development of e-commerce (Meyer and Taylor,
2000).

There are two pillars which instigated the progress of ecommerce since its inception. The first
is the advancements in information technology. The second pillar is the global motto of
globalized world and trade with market liberalization policies. Furthermore, the need and
want of economic interdependency among countries contributed to the formation of
ecommerce (Korkmaz, 2002). To understand the trend of e-commerce it is very important to
understand what impact has time on the level of e-commerce activity. Figure 1 displays the
measures of e-commerce activity over time. From recent years the technological acceptance
and growth rates have seen massive increases worldwide.

Classification of e-commerce

As electronic-commerce (e-commerce) grows and further exploits the attributes of the

Internet, it will likely have significant effects on national economies and industry structure.
E-commerce has come to take on two important roles; first as a more effective and efficient
conduit and aggregator of information, and second, as a potential mechanism for the
replacement of many economic activities once performed within a business enterprise by
those that can be done by outside suppliers that compete with each other to execute these
activities. In response to this increased level of outsourcing opportunities, businesses will
exploit the benefits of e-commerce by decoupling as many links of their production chain as
possible in order to seek the most efficient and low cost supplier within the e-marketplace.
Given as the Internet has a global reach, these new e-marketplaces have fast become a
product of globalization, leading the Internet and e-commerce to further the process of global
integration. In its most basic form, e-commerce is any transaction made over the Internet.
Most often this involves the transfer of goods, services, or information. Common ecommerce
models include:

Business-to-business e-commerce, companies interacting with other companies, seeking

supplier bids, fulfilling orders, receiving invoices and making payments using the Internet as
a backbone; Business to Business (also known as commercial organizations on the business
sector, denoted by B to B or B2B e-commerce. B2B refers to business methods or business
ecommerce activities between agencies; it is Business to Business continuation of the
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traditional business activities. This type of e-commerce has been for many years, of which
corporate network through private networks or value-added (VAN using EDI business
activities carried out by way of particular models. This type of mainstream e-commerce, but
also enterprises are facing fierce competition in the market, improve competitiveness, the
main method to establish a competitive advantage.

Business to-business sales account for the largest total dollar volume of e-commerce. Online
B-to-B sales may reach as high as $8 trillion worldwide by 2007. Business-to-consumer
ecommerce, retail services between companies and customers; the business to consumer (also
known as Business to Consumer, denoted by B to C or B2C e-commerce. B2C mode refers to
enterprises or business organizations and consumer e-commerce activities between. This is
the consumer use of the Internet in the form of direct participation in economic activities. In
recent years, with the Internet for businesses and consumers to open up a new trading
platform, coupled with the increase of global Internet users, making this type of e-commerce
has been rapid development. In addition, Internet browsing capabilities to provide search and
multimedia interfaces, but also makes it easier for consumers to find and in-depth
understanding of the required products. Therefore, to Business to Consumer e-commerce has
great potential.

Consumer-to-consumer e-commerce, trade in goods, services and even information

between two or more consumers. Beyond the sale of goods, through auction sites like eBay or
Yahoo!, this model includes such ―human intelligence‖ services sites like Keen.com and
Guru.com; and Information retrieval, from public sites such as government agencies, libraries
or museums or proprietary sites such as those operated by online banking services or
brokerages.
Information retrieval, from public sites such as government agencies, libraries or museums or
proprietary sites such as those operated by online banking services or brokerages. Portals,
Some web sites act as windows to online content. A customer portal such as AOL, MSN, or
Yahoo. Design its site to allow individuals to find a variety of online content on its and others
sites. These portals make money from advertising revenue and the sale of products. Shopping
portals such as Amazon.com and Buy.com allow consumers to find and purchase product
online

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 Objectives of the study

1. To analyze the level of satisfaction that consumers have for different e-commerce
companies.
2. To identify factors which affect the consumers’ satisfaction regarding e-commerce
companies.

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The main impact of e-commerce customer satisfaction factors

The daily growth of the internet and e-commerce has changed the way of marketing and
selling products and services. As a result of development in electronic information resources
and the evolution of the ―digital age‖ product sellers and information service providers face
many new challenges. Internet is changing the way corporations conduct business with their
consumers who are increasingly expecting higher services, becoming time saved, and
wanting more convenience. In addition e-service quality is an essential strategy to gain
success, according to the results of previous literatures, probably more important than a low
price for online companies. Since one of the main duties of the internet as a communication
channel is how to manage service quality, which holds a significant importance to customer
satisfaction, the purpose of this research is to gain a better understanding of the impact of
web site quality factors on customer satisfaction. Also, through literature it is clear that there
is a relation

Other factors of e-commerce customer satisfaction

In order to achieve customer satisfaction, Companies should measure it because according to

Ho, (1995) you cannot manage something that you cannot measure it. There are two principal
interpretations of satisfaction within the literature, satisfaction as a process and satisfaction as
an outcome (Parker and Mathews, 2001). Solomon, (1991) recognizes customer satisfaction
as the overall attitude of the individual toward the bought product. Also, customer
satisfaction is defined as a customer’s overall evaluation of the performance of an offering to
date. This overall satisfaction has a strong positive effect on customer loyalty intentions
across a wide range of product and service categories (Gustafson, 2005). Kottler (2003, p.36),
states that there is a general agreement satisfaction is a person feelings of pleasure or
disappointment resulting. From comparing a product perceived performance (or outcome) in
relation to his or her expectations.

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E-COMMERCE- INDIAN SCENARIO

E-Commerce in India: Overview and Reasons for Growth

The Online e-commerce Industry is very well developed and is booming largely due to the
Internet-savvy urban population. The segments are categorized under travel industry and
online non-travel industry, include e-Tailing (online retail), online shopping, online
classifieds and Digital Downloads are still in a nascent stage). Though eCommerce took a
beating in the dotcom bust, it seems set to grow globally. The global revival of eCommerce is
having a ripple effect in India too where the B2B (Business to Business), B2C (Business to
Consumer), C2C (Consumer to Consumer), G2B (Government to Business) and G2C
(Government to Citizens) segments are showing rapidly increasing activity over the past few
years.
India has its share of success stories in the B2C segment in the form of Indiatimes.com,
Rediff.com, Shaadi.com, Indiamatrimony.com, MagicBricks.com, Monster.com and
Makemytrip.com ,ebay.com etc. These and such other portals are generating a lot of interest
and increasing transaction traffic. Smaller businesses have jumped onto the bandwagon by
offering products and services online and have successfully carved out niches for themselves.
The online community is growing by leaps and bounds as an increasing number of consumers
have started transacting online because the initial fears and apprehensions are being laid to
rest. Research studies have indicated several factors responsible for the sudden spurt in
growth of eCommerce in India such as:
 Rapidly increasing Internet user base
 Technology advancements such as VOIP (Voice-over-IP) have bridged the gap
between buyers and sellers online
 The emergence of blogs as an avenue for information dissemination and two-way
communication for online retailers and eCommerce vendors
 Improved fraud prevention technologies that offer a safe and secure business
environment and help prevent credit card frauds, identity thefts and phishing
 Bigger web presence of SME’s and Corporate because of lower marketing and
infrastructure costs.
 Longer reach - Consumers in the Tier II & Tier III cities are fast realizing the
potential of the Internet as a transacting medium

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E-Commerce offers several benefits to businesses

 Easy reach to a fast growing online community

 Unlimited shelf place for products and services
 Fuse the global geographical and time zone boundaries
 Helps reach national and global markets at low operating costs

There is a growing awareness among the business community in India about the opportunities
offered by eCommerce. Ease of Internet access and navigation are the critical factors that will
result in rapid adoption of Net commerce. Safe and secure payment modes are crucial too
along with the need to invent and popularize innovations such as Mobile Commerce.

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Popular Uses of eCommerce in India
ECommerce referring to the process of trading goods and services through an electronic
medium such as the internet has gained tremendous popularity in the recent years.
ECommerce involves paperless transactions and usage of EDI (Electronic Data Interchange),
electronic mail, bulletin boards, fax transmissions, and electronic fund transfers. With
advancements in technology, there have been changes in the methodology for business
transactions. India, being a rapid adaptor of technology is apace with the current scenario of
electronic data exchanges and has taken to eCommerce. The number of eCommerce
transactions have increased manifold. People use credit or debit cards for making purchases
in an online store. ECommerce is being used for purchase and sale of multiple products and
there are multiple players using various portals and websites for this purpose.
The popular uses of eCommerce in India involve the following

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A. Online Travel Industry in India
Use of eCommerce in India is increasing in the travel segment. Online travel industry is
expected to be worth US $6 billion in 2011. It is the most successful eCommerce initiative in
India. It has contributed Rs 340 Million to the total eCommerce business of Rs 900 Million.
The Indian Travel Ministry has introduced a travel portal called Incredible India. This portal
is a big success as tourists can easily contact travel agents, tour operators and hoteliers easily.
This portal has also caused a surge in medical tourism to India. By the year 2010, the medical
tourism market in India is expected to be around US$ 2 million. Other travel portals include
Makemytrip, Yatra, Cleartip, and Travelguru. Makemytrip has targeted revenue of Rs 230
Million for the financial year ending March 2010.
B. Online Retailing or eTailing
Due to improved broadband connections and increased penetration of credit card facilities to
a wider population, eTailing or online retailing is witnessing a substantial growth. Internet
retailers provide a wide range of facilities to the consumers, including discounted prices,
comparison of product features offered by various vendors, areas where the products can be
procured, etc. Currently, the online retail industry in India is estimated to be worth Rs 110
Million. By 2013, India is expected to have the third largest internet user base, which
improves the prospects of online purchases. Some of the retail stores offering online retail
facilities include: Reliance's Rmoneymall, Pantaloon's FutureBazaar.com, Videocon's
eDigiworld.com, Vishalmart's Vishalmegamart.com, and the Tata Group's Westside.

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C. Online Trading in Stocks and Shares
Online stock trading activity is gaining momentum in India. Services offered by the online
stock trading companies include online buying and selling of stocks and shares, market
analysis and research, details of companies, comparison of companies, and research on equity
and mutual funds, customer services through email and chat. Online trading also has an added
advantage of real time stock trading without calling or visiting the broker's office. Major
online stock trading websites in India include: ICICIDirect.com, Sherkhan.com,
Indiabulls.com, 5Paisa.com, Motilal Oswal Securities, HDFC Securities, Reliance Money,
IDBIPaisaBuilder, Religare, and Kotak Securities.
D. Online Advertisements
The Indian population accesses the internet from home, office, and cybercafés. There is a
large segment of population that is fast adapting to internet. Advertisers have identified the
internet as a medium for enhancing the awareness for their business activities. Online
advertising in India is expected to cover all organizations and their products. The online
advertisement industry grew to Rs 3250 million in India, accounting for 38% growth rate in
2008-2009. The growth rate for the year 2009-2010 is expected to be 32% which amounts to
Rs 4300 million.
E. Online Job Sites
Another area where eCommerce is widely used is that of employment. Internet has simplified
the process of search for 'right people on the right job'. There are a number of web portals and
sites that match a prospective employer's requirements with that of candidates applying for
that job. Some of the popular job sites in India

F. Real Estate Portals

There are a number of real estate portals and sites that provide information to users regarding
the property they wish to buy/sell. This information includes properties available for
sale/purchase, the cost, location, etc. Some of the popular real estate portals include:
Indiaproperty.com, 99acres.com, Magicbricks.com, and Makaan.com.
G. Online Matrimony Websites
Matrimony eCommerce portals provide the seekers appropriate information regarding the
prospective matches, region of their residence, their religion, caste, etc. Allied services are
also provided to the listed members. These services include: astrology, information on
customs and rituals, legal issues, health and beauty, fashion, wedding planners, etc. Some of
the leading matrimony portals in India include: Shaadi.com, Jeevansathi.com,
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Bharatmartimony.com, Indiamatrimony.com, and Simplymarry.com, and
LifepartnerIndia.com.

Government Regulations and Policies

The Government of India laid down the Information and Technology Act in 2000 and became
the 12th country in the world to have cyber-laws. The IT Act of 2000 covered the following
aspects:
a. Legal recognition of electronic documents
b. Legal recognition of digital signatures
c. offence and contravention
d. justice dispensations system for syber crimes

The IT Act 2000 was substantially modified through the Information and Technology
Amendment Act, 2008, which came into effect from October 27, 2009.The IT Act of 2008
covered amendments that provided additional focus on information security. It has added
sections on offences, such as Cyber terrorism and Data Protection. This act, however, has
been criticized because of lack of legal and procedural safeguards to prevent violation of civil
liberties of Indian people.

Cyber Laws and Crimes as per the Indian IT Act

The IT Act covers cyber laws and crimes, which are subject to the Indian Penal Code. Such
cyber crimes include:

 Crimes related to technical aspects, such as unauthorized access and hacking, Trojan
attack, virus and worm attack, email related attacks (email spoofing and email
spamming, email bombing), and denial of service attacks (DOS). DOS include:
 Consumption of limited or non-renewable resources like NW bandwidth and RAM,
alteration or destruction of configuration information, destruction or alteration of
network components, and pornography.
 Forgery

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  IPR violations, which include software piracy, copyright infringement, trademark
violations, etc. This also includes cyber terrorism, Banking and credit card related
crimes, ecommerce and investment frauds, sale of illegal articles, defamation.
 Cyber stacking, identity theft, data diddling, theft of internet hours.
 Breach of privacy and confidentiality.

Monitoring of Online Payments by Regulatory Bodies

Fig Payment mode

Online payments are generally credited to the intermediaries like PayPal, who transfer these
payments to merchants. To address this situation, Reserve Bank of India has issued new
norms for facilitating ecommerce transactions. As per the directives, the payment will be
credited directly to the merchants and not the intermediaries. With this arrangement, money
will be available to the merchant within 3 days of transaction. This will expedite shipping of
goods to the customer on time. Online transactions require use of electronic cards – credit or
debit. The credit card market is currently not too vast, with less than 25 million credit cards
issued in the market. However, debit cum ATM cards are widely used by account holders.

Steps by RBI to improve eCommerce Transactions

 Issue appropriate instruments (cards) to facilitate online payments: For example, all
debit cards are ATM cards, but all ATM cards are not debit cards. Additionally, there
are some co-operative banks offering internet
banking facilities. This facility is mostly for checking account balance, and this should be
extended to online transactions as well.

 Take steps to improve debit and credit card penetration. RBI should specify a time
frame to banks to issue credit cards, debit cum ATM cards.

 Improving the network connectivity of ATMs: Users can use one bank’s ATM card
for holding transactions with another bank because these ATMs are connected to

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 BANKS ATM network. Several banks still need to be connected to this network. RBI
should facilitate to expedite this connectivity.

 Improving payment gateway infrastructure: There is a need to improve payment

gateway infrastructure in the country. The payment gateways should accept all credit
cards, debit cards, and internet banking facilities that all banks are offering. RBI
should provide a mandate to the payment gateways to integrate such services of any
new bank within some stipulated duration of the new bank operations going live.

ECommerce in Rural India

With internet reaching a wider base of population, eCommerce transactions happen over a
vaster segment of Indian society. According to the survey conducted by Internet and Mobile
Association of India (IAMAI), the rural internet users have outgrown the number of urban
internet users. According to the eBay Census Guide 2009, India has 2471 eCommerce hubs.
These hubs are spread over the entire country and cover cities, towns, villages, and smaller
towns. All 28 states and 7 Union Territories have witnessed eCommerce transactions. It was
also found that rural Indians are actively involved in online shopping. Online buying and
selling trends have been observed in Bundy (Rajasthan), Thevaram (Tamil Nadu), and Tezpur
(Assam). Online shopping is underway in 747 rural towns of India. The study reveals that
181 rural towns, including Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra, and Gujarat
are active entrepreneurship hubs. These hubs cater to online selling in India and worldwide.

Successful eCommerce Ventures in India

India is the fourth country in terms of Internet usage. The internet-savvy population has a
number of online markets catering to a huge number of products. The eCommerce market in
India is expected to be around Rs 950 Million, out of which market for online shopping is at
Rs 130 Million. The global growth rate for online shopping is around 8%-10%, but India has
a much higher growth rate of 30%.
Some of the areas that have observed a successful eCommerce activity include:
Travel and tourism: In India, it is the most successful eCommerce initiative. It has
contributed Rs 340 Million to the total eCommerce business of Rs 900 Million.

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Online Shopping: In metro cities, particularly Delhi and Mumbai, online shopping is
becoming popular. Some of the stores providing online shopping facilities

16
include: The Bombay Store, Big Bazaar, Pantaloons, and shopping portals on websites such
as www.rediff.com.
Locations of widespread eCommerce activity: Mumbai is India’s leading eCommerce
marketplace. Delhi ranks second in online shopping activity. India’s top 5 eCommerce hubs
are: Delhi, Mumbai, Chennai, Jaipur and Bangalore. According to a survey conducted by
eBay, India had about 2,471 eCommerce hubs in 2009. In this year, all 28 states and 7 Union
Territories of India witnessed eCommerce transactions. Additionally, the survey reveals that
most of the eCommerce transactions originate from Andhra Pradesh, Tamil Nadu, Kerala,
Maharashtra, and Gujarat. These are the cities where most of the IT hubs are located.

E Commerce industry in Coimbatore

Coimbatore is the 15th largest eCommerce Hub in the country, according to a recent study
released by eBay India, the e-commerce marketplace. In 2008, eBay India Census ranked
Coimbatore as its 28th hub.
Guide
The eBay Census Guide documents the trends in online buying and selling across the
country. An e-commerce hub has been defined in it as selling and buying transactions (global
and domestic) on eBay from the city, according to a release from the company. The release
said that India had over 2,470 e-commerce hubs. Andhra Pradesh, Tamil Nadu, Kerala,
Maharashtra and Gujarat were the most wired States in the country and these had most of the
eCommerce cities. The study also found that online shopping was active in 747 rural towns in
the country. Of these nearly 180 were active entrepreneurial hubs that sold to buyers in India
and other countries

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Online products
According to the press release issued here, Coimbatore entrepreneurs sold mostly Indian
stamps, Indian notes, gold plated bangles, toys and T-shirts. They purchased through online
products such as handsets, CPUs, Indian stamps, British Indian coins and diamonds.

Online shopping store- mall.coimbatore.com

The mall.coimbatore is an online shopping store, which is your personal buying assistant in
Coimbatore. Browse the stores in this cybermall. Shop for yourself, or order a gift. It is
possible for any product to be shipped to any place in India. You can also select items that are
shipped worldwide. If you don't find what you are looking for, you can contact them through
live help available between 9:00 AM to 6:00 AM, Monday to Saturday. You can shop for
almost everything here including,

 Food products

 Books

 Magazines

 Cds

 Beauty products

 Home Appliances

 Gift Vouchers

 Health Coupons

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They will find it for you right away! Treat your near and dear to tasty Italian dishes not
available anywhere else in Coimbatore. There is assurance of 100% security in visiting
the site. Regarding the delivery of food products, the dishes are packed hygienically and
delivered in fresh, hot condition.
Why them?
The following characteristics make us to buy products from them.
Privacy Policy
At mall.coimbatore.com they value customer’s privacy. They will not sell or rent your
personal information to anyone. The details of your purchases are not revealed to third
parties. They use the information collected about you to personalize the services offered, to
speed up your orders, and to serve you better. Your email id's are not sold or hired outside.
Security
Your credit card info is very secure on mall.coimbatore.com. Here is why:

Unlike other websites, they do not capture or store any credit card information on our servers.
All card information is directly passed by a secure (https) page to Authorize.Net or PayPal.
This is more secure than the method used by many websites.

Additionally, your card CVV number is an added security feature to help protect you against
misuse of your card. The CVV Number is a group of 3 or 4 digit numbers printed on the back
of the card, immediately following your credit card number.

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Excellence
They strive for excellence in whatever they provide and focus on continuous improvement in
interactions with people, efficiency of products and their delivery, and the well being of the
site.
Customer Centricity
They mainly give importance to customers, both internal & external, by giving them priority.
They strive to exceed their expectations in terms of the value and quality delivered.
Integrity
They ensure consistency between their words and actions, always delivering what they
commit, thereby maintaining transparency, trust and accountability.
Accountability
They feel responsible and accountable for the commitments they make and the quality of the
results we deliver to all their stakeholders.
Terms and conditions
 Processing charges of 2$ applied on every order.

 All prices are in US Dollars unless otherwise indicated.

 Payment: You can pay by Visa and MasterCard, Money Order and Banker's Check.
Prices include shipping and handling charges within India and worldwide where
indicated.

 Some products are shipped worldwide.

 For corporate purchases or trade enquiries contact them. You will get the response
within 2 working days.

 Because we do not stock or sell these items, they always work for you, the customer.
So, you get the very best products, a wide selection, and unmatched service. On
receiving orders from you, they buy from the
 company or their authorised distributor. If you have bulk requirements, you can
engage them as your buying agent.

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E-COMMERCE- GLOBAL SCENARIO

In 2010, the United Kingdom had the biggest e-commerce market in the world when
measured by the amount spent per capita. As of 2013, the Czech Republic was the European
country where ecommerce delivers the biggest contribution to the enterprises´ total revenue.
Almost a quarter (24%) of the country’s total turnover is generated via the online channel.
Among emerging economies, China's e-commerce presence continues to expand every year.
With 668 million internet users, China's online shopping sales reached $253 billion in the
first half of 2015, accounting for 10% of total Chinese consumer retail sales in the same
period. The Chinese retailers have been able to help consumers feel more comfortable
shopping online. E-commerce transactions between China and other countries increased 32%
to 2.3 trillion yuan ($375.8 billion) in 2012 and accounted for 9.6% of China's total
international trade In 2013, Alibaba had an e-commerce market share of 80% in China. In
2014, there were 600 million Internet users in China (twice as many than in the US), making
it the world's biggest online market. China is also the largest e-commerce market in the world
by value of sales, with an estimatedUS$899 billion in 2016.
In 2013, Brazil's eCommerce was growing quickly with retail eCommerce sales expected to
grow at a healthy double-digit pace through 2014. By 2016, eMarketer expected retail
ecommerce sales in Brazil to reach $17.3 billion. India has an internet user base of about
243.2 million as of January 2014. Despite being third largest user base in world, the
penetration of Internet is low compared to markets like the United States, United Kingdom or
France but is growing at a much faster rate, adding around 6 million new entrants every
month. In India, cash on delivery is the most preferred payment method, accumulating 75%
of the e-retail activities.
E-Commerce has become an important tool for small and large businesses worldwide, not
only to sell to customers, but also to engage them.
In 2012, ecommerce sales topped $1 trillion for the first time in history.
Mobile devices are playing an increasing role in the mix of eCommerce, this is also
commonly called mobile commerce, or m-commerce. In 2014, one estimate saw purchases
made on mobile devices making up 25% of the market by 2017.
For traditional businesses, one research stated that information technology and cross-border
e-commerce is a good opportunity for the rapid development and growth of enterprises. Many
companies have invested enormous volume of investment in mobile applications.

21
There is no limit of time and space, there are more opportunities to reach out to customers
around the world, and to cut down unnecessary intermediate links, thereby reducing the cost
price, and can benefit from one on one large customer data analysis, to achieve a high degree
of personal customization strategic plan, in order to fully enhance the core competitiveness of
the products in company
Impact on markets and retailers
Economists have theorized that e-commerce ought to lead to intensified price competition, as
it increases consumers' ability to gather information about products and prices. Research by
four economists at the University of Chicago has found that the growth of online shopping
has also affected industry structure in two areas that have seen significant growth in e-
commerce, bookshops and travel agencies. Generally, larger firms are able to use economies
of scale and offer lower prices. The lone exception to this pattern has been the very smallest
category of bookseller, shops with between one and four employees, which appear to have
withstood the trend. Depending on the category, e-commerce may shift the switching costs—
procedural, relational, and financial—experienced by customers.
Individual or business involved in e-commerce whether buyers or sellers rely on Internet-
based technology in order to accomplish their transactions. E-commerce is recognized for its
ability to allow business to communicate and to form transaction anytime and anyplace.
Whether an individual is in the US or overseas, business can be conducted through the
internet. The power of e-commerce allows geophysical barriers to disappear, making all
consumers and businesses on earth potential customers and suppliers. Thus, switching
barriers and switching costs may shift. eBay is a good example of e-commerce business
individuals and businesses are able to post their items and sell them around the Globe.
In e-commerce activities, supply chain and logistics are two most crucial factors need to be
considered. Typically, cross-border logistics need about few weeks time round. Based on this
low efficiency of the supply chain service, customer satisfaction will be greatly reduced.
Some researcher stated that combining e-commerce competence and IT setup could well
enhance company’s overall business worth. Other researcher stated that e-commerce need to
consider the establishment of warehouse centers in foreign countries, to create high efficiency
of the logistics system, not only improve customers’ satisfaction, but also can improve
customers’ loyalty.

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Impact on supply chain management
For a long time, companies had been troubled by the gap between the benefits which supply
chain technology has and the solutions to deliver those benefits. However, the emergence of
e-commerce has provided a more practical and effective way of delivering the benefits of the
new supply chain technologies.
E-commerce has the capability to integrate all inter-company and intra-company functions,
meaning that the three flows (physical flow, financial flow and information flow) of the
supply chain could be also affected by e-commerce. The affections on physical flows
improved the way of product and inventory movement level for companies. For the
information flows, e-commerce optimised the capacity of information processing than
companies used to have, and for the financial flows, e-commerce allows companies to have
more efficient payment and settlement solutions.
In addition, e-commerce has a more sophisticated level of impact on supply chains: Firstly,
the performance gap will be eliminated since companies can identify gaps between different
levels of supply chains by electronic means of solutions; Secondly, as a result of e-commerce
emergence, new capabilities such implementing ERP systems, like SAP ERP, Xero, or
Megaventory, have helped companies to manage operations with customers and suppliers.
Yet these new capabilities are still not fully exploited. Thirdly, technology companies would
keep investing on new e-commerce software solutions as they are expecting investment
return. Fourthly, e-commerce would help to solve many aspects of issues that companies may
feel difficult to cope with, such as political barriers or cross-country changes. Finally, e-
commerce provides companies a more efficient and effective way to collaborate with each
other within the supply chain.

The social impact of e-commerce

Along with the e-commerce and its unique charm that has appeared gradually, virtual
enterprise, virtual bank, network marketing, online shopping, payment and advertising, such
this new vocabulary which is unheard-of and now has become as familiar to people. This
reflects that the e-commerce has huge impact on the economy and society from the other side.
For instance, B2B is a rapidly growing business in the world that leads to lower cost and then
improves the economic efficiency and also bring along the growth of employment.
To understand how the e-commerce has affected the society and economy, this article will
mention six issues below:

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1. The e-commerce has changed the relative importance of time, but as the pillars of indicator
of the country’s economic state that the importance of time should not be ignored.
2. The e-commerce offers the consumer or enterprise various information they need, making
information into total transparency, will force enterprise no longer is able to use the mode of
space or advertisement to raise their competitive edge. Moreover, in theory, perfect
competition between the consumer sovereignty and industry will maximize social welfare.
3. In fact, during the economic activity in the past, large enterprise frequently has advantage
of information resource, and thus at the expense of consumers. Nowadays, the transparent
and real-time information protects the rights of consumers, because the consumers can use
internet to pick out the portfolio to the benefit of themselves. The competitiveness of
enterprises will be much more obvious than before, consequently, social welfare would be
improved by the development of the e-commerce.
4. The new economy led by the e-commerce change humanistic spirit as well, but above all,
is the employee loyalty. Due to the market with competition, the employee’s level of
professionalism becomes the crucial for enterprise in the niche market. The enterprises must
pay attention to how to build up the enterprises inner culture and a set of interactive
mechanisms and it is the prime problem for them. Furthermore, though the mode of e-
commerce decrease the information cost and transaction cost, however, its development also
makes human being are overly computer literate. In hence, emphasized more humanistic
attitude to work is another project for enterprise to development. Life is the root of all and
high technology are merely an assistive tool to support our quality of life.
5. Online merchants gather purchase activity and interests of their customers. This
information is being used by the online marketers to promote relevant products and services.
This creates an extra convenience for the online shoppers.
6. Online merchandise is searchable, which makes it more accessible to the shoppers. Many
online retailers offer a review mechanism, which helps shoppers decide on the product to
purchase. This is another convenience and a satisfaction improvement factor.
E-commerce is not a new industry, technically speaking, but it is creating a new economic
model. Most people agree that e-commerce will positively impact economic society in the
future, but in its early stages its impacts are difficult to gauge. Some have noted that e-
commerce is a sort of incorporeal revolution. E-commerce has numerous social benefits: one,
the cost of running an e-commerce business is very low when compared with running a
physical store; two, there is no

24
rent to pay on expensive premises; and three, business processes are simplified and less man-
hours are required to run a typical business smoothly. In the area of law, education, culture
and also policy, e-commerce will continue to rise in impact. E-commerce will truly take
human beings into the information society.
E-commerce has grown in importance as companies have adopted pure-click and brick-and-
click channel systems. We can distinguish pure-click and brick-and-click channel system
adopted by companies.
 Pure-click or pure-play companies are those that have launched a website without any
previous existence as a firm.
 Bricks-and-clicks companies are those existing companies that have added an online
site for e-commerce.
 Click-to-brick online retailers that later open physical locations to supplement their
online efforts.

E-COMMERCE IN GLOBAL SOURCING SCENARIO

What Is E-commerce And How Does It Augments Global Sourcing?
E-commerce or electronic commerce, as it is popular, allows domestic as well as international
trade over the Internet. The advent of E-commerce is boon for global sourcing and import and
export. The boost to global sourcing and import/export through E-commerce is because of its
to conduct online marketing, monitoring supply chain and monetary & data transaction in a
dependable manner.
Evolution of E-commerce with Global Sourcing?
It is hard to tell whether import/export volume has swelled because of E-commerce but sure it
made global sourcing easier to monitor with its evolutionary phases. Three decades ago, it
facilitated fund transfers- albeit electronically besides facilitating exchange of POs and
invoices in international trade. Electronic teller machines are the recent manifestations now
overtaken by internet creditcard processing and endorsement of unsigned invoices even in
international trade.
Why is E-commerce Popular in International Trade and Import/Export?
Looked at from both import and export traders' perspective, international trade is easier
conducted electronically. Here are the points why present international trade depends much
on E-commerce.

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  Quick and ease of setting up E-commerce storefronts for both global sourcing as well
as import/export.

 Automatic running off of an import and export outfit without having to recruit many
staff.

 Global sourcing agents/companies can evaluate/list import/export vendor Online.

 Software assisted documentation for each global sourcing and import export
transaction

 Ability to handle multiple, quick and secure data and money transaction crucial to
international trade, simultaneously

In international trade, global sourcing happens to be one of the chief aspects of import and
export business. Global sourcing is an integral part of B2b scenario and has essentially
transformed world economies as well as boosted business in a great way. Nonetheless, it is
also giving great transformation to the work culture around the globe with China playing a
lead role in global sourcing. Nevertheless, it is also transforming work cultures around the
world silently with China business playing a major role.
Being an extension of open market dynamics, global sourcing facilitates the export and
import of goods to be in the reach of several small and medium enterprises in different
countries. In this b2b scenario, E-commerce plays an active role in the global sourcing where
the business houses are putting in deep efforts and reaping the benefits. In this rally of export
and import, traders happen to claim the share of the pie in global sourcing.
E Commerce & Global Sourcing
 Global sourcing is one of the widely known strategies of ensuring smooth business
and access to markets in a cost effective manner. In such a scenario, E-commerce has
brought in a new transformation. It has added to advantages like removing the barriers
of time zones, differences in costs, geographical locations etc. This has resulted in a
major push in development in infrastructure, technology and several other sectors
across the globe. As we see, E commerce is driving the export and import and
propelling the economic growth of numerous developing as well as developed
nations. Business strategies are becoming easy to execute and business houses are
having a wide range of options from where they can make their choices.

26
  E-commerce has made the path of business smoother and has facilitated not only in
lower cost, but also resulted in procuring material from places where there is
specialization. Moreover, business negotiations are easier and decisions are quicker
due to this boon. Driving the import and export business in this global sourcing
scenario has opened new frontiers for higher growth. The ease in supply chain is one
of the best advantages that has come from e-commerce in the global sourcing
scenario.
China, a major player in the global sourcing scenario has reaped several benefits in the e-
commerce enabled era. The use of internet has facilitated trade and boosted it at an immense
rate. Business from all over the world has been bagged by this country in spite of the
competitive market. Chinese traders have minted fast money and are still running in that race.

Security concerns in Global Sourcing

E-commerce is not without security concerns, loss/misuse of encrypted data which are still
being seriously being viewed by import/export operators before engaging in international
trade electronically. The truth is E-commerce providers employ SSL (Secure Sockets Layer)
to encrypt data/money (remember banks) transfer from your desktop to your clients'. You can
say, E-commerce is secure for both import/export operators as well as global sourcing agents
alike. E-commerce has arrived on the global sourcing scene as both import and export and
international trade partners are accepting it. Despite its growing stature and popularity E-
commerce is still thriving in retail sector domestically and the international trade needs to
cover a long distance before it catches up. Another reason for import/export operators'
leaning towards E-commerce is the growing costs of delays in processing POs and invoices
through traditional methods which render global sourcing useless.
E-commerce: A Boon for the Current Economic Downturn
E-commerce: A Boon for India
By the end of 2011, the e-commerce market in India had clocked close to Rs 50,000 cores. It
is interesting to consider whether the global economic downturn may have negatively
impacted the growth of e-commerce or possibly accelerated it as consumers look to new
online channels which can often deliver greater value than traditional stores.

27
Today, even though there are less than 10 million internet users who are actually engaging in
e-commerce activities, there are about 150 million internet users in India or around 75 million
households that are ready for e-commerce.
The growing reach in terms of internet connectivity to the interiors of India coupled with the
positive experiences of end consumers when buying online beyond the metros and big cities
are key drivers of the e-commerce boon in India. Businesses in even the smallest towns and
villages are becoming increasingly aware of e-commerce and are excited by the growth
potential.
The growing penetration of e-commerce along with positive consumer experiences is
reflected in a trend towards higher value online purchases. Today, consumers across urban
India are confident enough to make purchases that exceed Rs 20,000-25,000. Earlier, the
same shoppers stayed in the Rs 2,000-5,000 ranges. According to one study almost 57% of
business for e-commerce product sites came from tier I, tier II and tier III cities while the
eight metros accounted for the remainder 43%. The same pattern was visible in the service
sites too, with tier I, tier II and tier III cities contributing 54% of revenue versus 46 % by the
eight metros.
According to a report by the IAMAI, the current e-commerce market in India is around US$
10 billion. But with different levels of adoption, the market has the potential to grow
anywhere between US$ 70 billion – US$ 150 billion under one scenario and at another level
it can grow between US$ 125 billion – US$ 260 billion by 2024-25.
E-commerce: The world over
Globally, the scenario is much the same. Brazil, one of fastest growing economies in Latin
America, is seeing considerable growth. According to a recent report, it estimates business-
to-consumer (B2C) ecommerce, including both retail e-commerce and online travel sales,
will total to $18.7 billion in 2012, a growth of
21.9% over the previous year. Brazil will account for more than half of the total B2C e-
commerce sales in Latin America through 2013, thanks in large to its huge populace and
growing number of online buyers.
Retail e-commerce itself in the U.S.is predicted to grow at 17% and it will likely account for
$200 billion in sales in 2012 , according to a presentation at a popular forum. Retail e-
commerce totalled $48.2 billion during the third quarter of 2011; an increase of 13.7%
compared with the third quarter of 2010, according to estimates from the U.S. Census
Bureau. 2011 also saw the European online market boom despite the floundering euro.
Germany’s online trade increased 17% in 2011
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to €21.48billion compared to 2010, crossing the €20 billion mark for the first time,
outstripping traditional mail order sales by 10%. A similar growth rate of 10% to 15% is
expected in 2012.
In the global scenario, China is fast emerging as the biggest player in e-commerce. According
to an e-commerce report, by 2015, it may well surpass the U.S. In an astonishing illustration
of its online growth rate, China has added the equivalent of the entire population of France in
internet users in each of the last four years. It will add the equivalent of the entire population
of Canada as e-shoppers in each of the next four years. China is projected to rise from 145
million e-shoppers today to 329 million by 2015.

SCOPE, POTENTIAL & MARKET SIZE OF E COMMERCE IN INDIA

Electronic Commerce is more than just buying and selling products online. It also includes
the entire online process of developing, marketing, selling, delivering, servicing and paying
for products and services. India has shown tremendous growth in the E-commerce segment.
With an internet user base of over 300 million, India has third largest internet population after
US & China (see info-graphic below).
India has witnessed a major breakthrough E-commerce success stories particularly in e-retail
in Consumer Electronics & Fashion Apparel & Home Furnishing segments. E-commerce
creates new opportunities forentrepreneurial start-ups. Ease of Internet access, Safe and
secure payment modes coupled with aggressive marketing by E-Commerce Giants has
revolutionized this segment. Rapid development in mobile technology has given way to
Mobile Commerce with many E-Commerce companies shifting to App only model.

29
  Declining Margins: With the introduction of a large number of players in the already
competitive e-commerce market, the customer is pampered by offering huge
discounts, offers, taking returns etc. resulting in razor-thin margins.
 Logistics & Supply Chain: Logistics failure in any area can mean detrimental damage
to a startup’s future and can hurt the brand overall. Add to this the need for a
guaranteed return policy. Getting this right is a challenge.
 Tax related issues: Tax rate system of Indian market is another factor for lesser
growth rate of eCommerce in India in comparison to other developed countries like
USA and UK. In those countries, tax rate is uniform for all sectors whereas tax
structure of India varies from sector to sector. This factor creates accounting problems
for the Indian online business companies.
 Touch and Feel: Indian customers are more comfortable in buying products
physically. Companies dealing with products like apparel, handicrafts, jewelry have to
face challenges to sell their products as thebuyers want to see and touch before they
buy these stuffs.

Future
E-Commerce is here to stay !!
 Social Media: Majority of online buying decisions are made on Social Media. Social
network like Facebook, LinkedIn, Twitter, Google+, Pinterest etc have become a
medium for easy log-in and purchase. Moreover, the clients can stay updated via the
posts published on this media. Further, the advertising & promotions on these social
sites has increased the chances of success of generating transactions to many folds.

 Drone Delivery: Companies have been working their way around to innovate the
delivery process to shorten human effort as well as time. The answer to these
problems is Delivery by Drones. DGCA is now fast tracking the process of issuing
guidelines for the use of drones for civil purposes in India. If everything goes as per
the plan, then India might become the first country in the world to allow the use of
drones for civil purposes.

30
  Google's Buy Now Button: Google is reportedly working on its own “Buy Now” style
button that would allow e-shoppers search for products on Google and purchase them
with a single click, right through Google’s own search results page. The button will be
displayed near sponsored search results beneath a “Shop on Google” heading at the
top of the page. When users click on the Google’s “Buy Now” button, they will be re-
directed to another Google page that will allow them to choose specific item details,
such as color and size, and then select a shipping route. Google would then pass on
order information, including the customer’s name and shipping address, to the retailer.

 Artificial Intelligence: As the ecommerce space gets saturated, investors looking for
innovative use of technology are zeroing in on companies developing artificial
intelligence (AI) solutions. Jet Airways is experimenting with one such solution
devised by Vizury. It sifts through the individual’s public content on the internet, as
well as the customer’s previous searches and creates an instant profile. Based on this
information, the airline knows whether to package hotel deals, or simply stick with
airfare discounts. The system also allows them to predict how likely is it for the
customer to upgrade, and how flexible would the customer be to change travel
location or date.

TOP E COMMERCE COMPANIES IN INDIA

Behind numerous headlines of a cash crunch hitting major Indian e-commerce companies,
and their valuations being questioned, is a revelation not too many people are talking about.
Indian e-commerce was emblematic of frenetic growth until very recently, but the last six to
eight months have seen the industry come to a grinding halt, making it an inflection point for
all the players involved. TOI accessed and analysed data for top e-tailers, which revealed that
the online retail market stagnated between May 2015 and 2016 in terms of the value of goods
sold. While in May last year, the e-commerce biggies clocked a gross merchandise value, or
GMV, run rate of $9 billion, that number has only inched up to about $10 billion at the end of
May this year, translating into an 11% annual growth. In December last year, the total GMV
run rate had reached $10.5 billion on the back of the festive season, which typically sees a
rush of discounting from all e-tailers.

31
32
GMV is overall sales on an online marketplace, excluding discounts and returns which are an
integral part of the e-commerce market. The data gleaned from primary research and vetted
by multiple stakeholders in the industry indicated that Flipkart , the country's largest online
retail player, has seen its GMV run rate stall at about $4 billion for almost a year, while an
aggressive Amazon has gone from clocking $1 billion to $2.7 billion in gross sales. However,
Amazon's operations in India only began three years ago and it's been gaining ground on a
smaller base. What's worth noting is that Flipkart notched up a 400% growth the year before,
when it's GMV zoomed from $1 billion to $4 billion, post which the numbers have gone flat.
Gurgaon-based Snapdeal, on the other hand, has registered an almost 50% knock-down in
sales numbers after similar highs it touched exactly a year ago. The company said as of June,
its GMV run rate was more than $2.5 billion. An email sent to Flipkart's spokesperson did not
elicit a response till the time of going to press. In an earlier interaction with TOI, Amit
Agarwal, Amazon's India head, had said the online retailer hadn't witnessed any signs of a
slowdown and, instead, had grown shipments impressively at 150% in the first quarter of the
calendar year. E-commerce companies earn anywhere between 5% and 15% in commission
from sellers, which makes up their revenue. GMV had been the key metric for all e-tailers in
India to show rapid growth and ratchet up their valuations in multi-billion dollar fund-raises
over the past two years. But with sales staying flat or declining, most e-commerce players are
now starting to focus on returning customers, which their founders keep stressing in media
interactions.GMV run rate varies from month to month and is pretty jagged, depending on
promotions and discounts that are available at the time. But the data collated by TOI points to
a palpable slowdown for the first time after a heady period of growth. Reduced discounting
slowing growth? Post March this year, most e-tailers have reduced promotional campaigns
after the Indian government introduced new policy guidelines for online marketplaces. The
fresh rules prohibit online retailers from offering discounts directly. Cash burn for Amazon,
for instance, had risen up to almost $80-90 million per month in the early part of the year -
more than double of Flipkart's -but has since stabilized, people

33
privy to the matter said. Amazon's Agarwal, when asked about it recently, did not give details
on the mounting cash burn involved in weaning away Indian consumers from rivals. An
investor who has been tracking e-commerce says if the market has momentarily stopped
growing, it's because online players have reduced investments into market development. A
slug of risk capital came into India's online commerce industry, with Flipkart leading the
pack. Founded in 2007 as an online bookstore, the Bengaluru-based poster boy of India's
thriving startup ecosystem scooped up $3.2 billion, a majority of the funding coming over the
past two years, while Snapdeal collected $1.3 billion. The Jeff Bezos-led Amazon, too, has
been pumping billions into India, the latest being a $3-billion investment announcement -
taking its overall commitment for the country to $5 billion in three years of launching here.

34
Top E Commerce Companies In India – Most Valuable & Most Visited

1. Flipkart
Valued at US$ 11 Billion as of March 2016. It is most visited Online Shopping website in
India. Flipkart also gets the credit to revolutionize the Indian Online Marketplace. In terms of
Trust Credibility and Market Share as well Flipkart tops the chart.
2. Amazon India
Global E Commerce giant Amazon launched its Indian version in 2013 and since then it is
taking on Flipkart on every step. Right now they are neck to neck especially after Amazon’s
CEO and Founder Jeff Bezos vowed to invest US$ 5 Billion to strengthen their market in
India. Amazon group is currently valued at US$ 175 Billion making it 13th most valuable
brand in world.

3 Myntra
Valued at 300 Million USD In 2014 Myntra is an ecommerce company for Fashion and
Lifestyle products which was acquired by Flipkart in 2014 for 300 Million USD. It still runs
as a separate entity but sooner or later it will be merged with Flipkart.
4. Ebay
Ebay is one of the biggest Online marketplace in world and their India version is one of the
biggest Online Portal for Shopping. As of now Ebay has been valued at 68 Billion USD.

5. Shopclues
Valued at 1.1 Billion USD Shopclues has raised a lots of stairs that too very soon. Right now
they are one of the biggest marketplace in India with More than 15000 registered merchant
on their site.

6. MakeMyTrip
Only second Indian Online Business which listed on New York Stock Exchange. Biggest
Travel booking website in India with market cap of 700 Million USD.

35
7. Quikr One of the latest entrant in Indian E Commerce sector. It is among most visited and
biggest online classified in India. Recently they have enabled a feature where customer can
buy used product listed on Quikr directly from site and will receive doorstep delivery. This
could be the first step towards entering Online marketplace of India.
8. Snapdeal Ratan Tata and Alibaba backed E Commerce Website Snapdeal is third
biggest Online Shopping Website in India. It was valued at 6.5 Billion USD in March 2016,
making it one of the most valued StartUps in India.
9. PayTM
PayTM has grown significantly in last few years and by next year they will start Mobile
Banking service, for which they have got the licence from RBI. Valued at US$ 3 Billion they
are among fastest growing Online venture in India.

36
 Chapter 2
Review of literature

37
Taweerat Jiradilok, Settapong Malisuwan, Navneet Madan, and Jesada Sivaraks (2014) E-
commerce is gaining importance in Thailand. Shoppers have realized the benefits of online
purchasing over purchasing from Brick and Mortars. Numerous researches have focused on
descriptive research on customer satisfaction and purchase intentions on online purchasing
but little or no knowledge regarding factors that are most influential in motivating online
purchase intention in Thailand. This research utilizes a quantitative method to test the
conceptual framework of customer satisfaction that leads to online purchase intentions for all
online users, experienced online purchasers and inexperienced online purchasers. The results
of this research will increase researcher’s comprehension on difference in factors that
influence online purchase intentions of experience and inexperienced online purchasers.

P. Phani Bhaskar, D. Prasanna Kumar (2016) The rapid growth of online shopping has led to
inspire customer e-loyalty among Indians, especially living in this digital environment.
Satisfaction-trust-Loyalty theory is applied as the theoretical base to explain the factors
influencing customer e-loyalty. As online shopping is more and more common in everyday
life, e-loyalty has become a very important issue in e- commerce. In this study, proposed an
integrative model of e-loyalty development process and present a research design to test this
model. The main factors that impact e-loyalty include customer satisfaction, trust and service
quality. Based on the theoretical model, a set of hypotheses was formulated. The survey sent
through E-mail to 100 participants. The objective of this study is to identify the factors that
influence a consumer to become loyal to online. To address this objective the main research
question is “What are the factors that influence a consumer to become loyal to an online
retailer?

Amit Kumar Gupta (2016) The fierce competition in E-commerce has forced the companies
to focus on providing customer satisfaction and gain customer loyalty. Thus, measuring the
parameters which drive customer satisfaction is very important for the long-term growth of
the businesses. This research work makes an attempt to identify the factors which influence
the loyalty and satisfaction of customers in organized E-commerce sites. The samples are
collected from users who regularly do the transactions in E-commerce sites in metro cities,
majorly Delhi NCR and Mumbai. The study also identifies relative importance of factors
affecting satisfaction. Attention has been given to cover all the major factors with special
emphasis on the logistics part.

38
Habibur Rahman ,Lili Han (2011) At present, relatively fast development of e-commerce
activities are online sales, online promotions, and online services. Globalization of electronic
commerce as the development of enterprises provided many opportunities, but in developing
country’s electricity business is still in the initial stage of development, how to improve
ecommerce environment of consumer satisfaction, consumer loyalty and thus, related to the
electron the performance of business enterprises. Therefore, to the upsurge in e-commerce for
more benefits, for many enterprises, there is still need for careful analysis of the business
environment electricity consumer behavior, understanding the factors that affect their
consumption and thus the basis of network marketing the characteristics of the network setup
customer satisfaction evaluation index system, then the theory based on customer
satisfaction, on this basis to take corresponding countermeasures, the development of
effective and reasonable marketing strategy, E-commerce can improve business performance,
and promote the sound development of their self.

Gupta and Zeithaml (2006) consumer satisfaction is an approach based on two distinct
criteria which are conceptual and referential criterions. Conceptual criterion explains
satisfaction through types or processes of responses generated by consumers. Whereas, a
referential criterion reflects the aspects of a situation in which a response may occur. It is
very important to understand that these criterions are not necessarily mutually exclusive and
that the main definitions in the previous studies may highlight complementary and different
approaches

Poh-Ming Wong Winnie (2014) Trust, is tremendously essential element of basic human
feelings (e.g., sincerity) in addition to being an element of website confidence in this digital
world. In this regard, to enrich consumer’s trust in the comprehensive virtual environment,
eservice providers or e-stores have to be trustworthy. In fact, trustworthy online stores itself
may therefore affect online consumer purchasing intention. The main purpose of this study
attempts to identify the impact of trustworthiness on customer e-loyalty and customer
esatisfaction in Malaysia context. In this study, commitment-trust theory is used as the
theoretical base to explain the impact of trustworthiness on customer e-loyalty and customer
e-satisfaction among Malaysian Internet users. The researcher used smartPLS 2.0 (M3) as the
main analytical tool to test the proposed hypotheses. Three hundred ninety-five respondents
participated in the study. Empirical results indicated that trustworthiness is positively related

39
to customer e-loyalty and e-satisfaction. Several implications of the findings, limitations of
the study and directions for future research were discussed in further.

Mochammad Auditya Brilliant (2013) The number of Internet users in Indonesia and
ecommerce sales is growing. However, Indonesia is less active in e-commerce research
compared to other Asian countries, and existing studies cover limited area. The purpose of
this study is identifying the impact of customer satisfaction and trust on loyalty in ecommerce
and identifying the factors that influence satisfaction. The results are that information quality
affects trust and that trust affects loyalty. E-commerce websites should focus on delivering
trusted information on product quality, which will lead to greater customer trust, and greater
trust will lead to greater loyalty to the websites

Bai, B., Law, R., & Wen, I. (2008) With the increasing popularity of online shopping and
being the most populated country in the world, China is one of the major online markets now
and is likely to become the largest market in the future. In the academic literature, website
quality has generally been recognized as a critical step to drive business online. As such,
numerous studies have been devoted to website quality and evaluations. Research efforts are,
however, in need of understanding the use of websites in regards to online customers’
behavior, especially Chinese customers. This study developed and empirically tested a
conceptual model of the impact of website quality on customer satisfaction and purchase
intentions. Results indicated that website quality has a direct and positive impact on customer
satisfaction, and that customer satisfaction has a direct and positive impact on purchase
intentions. While the influence of website quality on purchase intentions exists, customer
satisfaction does significantly mediate this effect. Drawing on the empirical findings,
managerial implications and recommendations for future research are offered.

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 Chapter 3
Research Methodology

41
The research methodology depicts the flow of research process and serves as guidance for the
researcher to carry out the research smoothly. It includes the data source, sample size,
sampling technique and tools of analysis. The data source can be classified as primary data
and secondary data. The primary data is the data obtained by the researcher as first hand
information from the sample respondents. In this study, the researcher has used the primary
data obtained from 100 respondents selected by applying simple random sampling technique
in Coimbatore District. The statistical tools applied for analysis of data include percentage
analysis, and Garret ranking technique.
 Research design:
The term descriptive research refers to the type of research question, design
and data analysis that will applied to a given topic. Descriptive statistics tell
what is, while inferential statistics try to determine cause and effect. It is a
designed to depict the participants in an accurate way.
Data analysis should be possible by cross tabulation and pie chart on collected
data.
 Sources of Data:
The used both primary and secondary data.

Primary data is obtained by the use of questionnaire.

Secondary data is obtained from repots, text books, newspapers and other
form of electronically stored information like internet and other data
accounts. All literature was reviewed to provide a basis for interpretation of
responses.

 Sampling Plan:

Size: Total 104 respondents.

Technique: convenient sampling technique

Unit: online buyer of purhiran city (Punjab)

42
 Chapter 4

Data analysis and interpretation

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Gender

Respondents No of respondents
male 63
female 41
Total respondents 104

Figure1.1

In above pie chart that males used more E-commerce websites rather than females, but there
is minor difference between them. Out of 104 respondents 61.2% are males and 38.8 % are
the females who used the e-commerce websites for shopping, booking tickets and other
purposes. The above graph also described that the females used less e-commerce websites but
as compared to males the different between female and male are not a big difference.

2.Age

Age group Respondents

Less than 18 8
18-30 53

30-45 39

45-above 4

total 104

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 Figure1.2

The above graph shows that 51.5% respondents are under 18-30 years which would be the
students, Businessman or salaried employee.36.9 % respondents are under 30-45 age group
and rest of the respondents are differ in less than 18 and 45 years and above age group.

Q.OCCUPATION

Profession No. of people

Salary employe 23
Business man 21
Student 39
agriculturist 15
others 6
Total 110

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 Figure 2

This above graph shows the occupation level of customers and it represent the 23.3% are the
salary employed respondents and 37.9% are the students. 20.4% respondents refers to the
businessman level and the rest of respondents belong to agriculturist and other occupation.

Q1 Income level

Categories of income Respondents

Less than 10000 28
5000-above 14
30000 to 50000 36
10000 to 30000 26
Total respondents 104

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 Figure 2.1

The above graph represents the Income level of customers. 26.8% respondents belong to
10000-30000 category, 28.9% are belong to less than 10000 category, 37.1% are belongs to
3000-50000 category and rest are belongs to 50000 and above category

Q2 Are you aware about e-commerce websites

Male 63
female 41
total 104

Figure1

47
In above pie chart it shows that knowledge and usage regarding e-commerce companies
towards people. Out of 104 respondents 98% are aware about e-commerce websites and 2%
which are not aware ,there are some reasons to not aware like people perception that
ecommerce websites are not secured for transaction or they provide fake products to the
customers

Q3 How often you buy from e-commerce websites?

No experience of online shopping 18

Once in 6 months 37

Once in 3 months 23

Once a month 16

2 or more times a month 10

Total 104

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This Pie chart shows the how frequently the customers are buy through online e-commerce
websites. 36.3% respondents said that they buy from online within 6 months15.7% are buy
with in a month, 22.5% and 7.8% are belong to once in 3 months and 2 or more times a
month. 17.6% have no experience of online shopping which mean they don’t used the
ecommerce websites and they prefer traditional sources of buying.

Q4 . According to you, which factors effect the decision of purchasing online ?

respondent No. of people

Cheaper price 8

Good quality products 23

Saves time/convenient 34
Broad range of products 20
Flexibility of prices 14
Others 5
total 104

Figure 3

49
In above chart it shows that factors which effect the purchasing decision of the customers
regarding online trading. Out of 104 respondents 33.3% respondent respond that through
ecommerce websites they save their time and easily approachable for buying items. 22.5%
respondent said that the main reason to influence their buying decision is good quality
products. By providing good quality e-commerce companies attract the customers to buy
their products. 19.6% respondents choose the e-commerce companies because they provide
broad range of products means all the goods and items which customers’ needs are available
under one umbrella. Rest of respondents are effected by cheaper price of products and
flexibility of prices, other factors which influence the customers to buying online.

Q5 Which products do you usually buy from e-commerce companies?

Booking tickets 13
Clothing 22
Home appliances and home decor 12
Digital devices(Mobiles, cameras, 21
Electronics)
Books 15
Sports 13
Baby products 4
Watches 4
total 104

50
The above pie chart shows that out of 104 respondents 20.4% respondents buy digital devices
from online websites, 21.4%respondents represents that they buy clothes from online most of
the time and rest of the respondents are chooses booking tickets, Home appliances and décor,
Books, Sports ,baby products and watches.

Q6 Which Mode of payment do you use the most while online shopping?

Credit Card 15
Debit card 26
COD 38
Electronic fund transfer 9
Pay using UPI 5
Net banking 8
EMI 2
Total

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 Figure

This pie chart shows that the customers are used the payment method as Credit card and debit
card the data shows that 14.6% are used credit card and 25.2% shows that of debit card
respondents. The customers more prefer to debit card which is highest respondent ratio and it
is 36.9%. 14.6% are using the net banking services to pay their payments online. Rest of
respondents choose the Electronic fund transfer , Pay using UPI and EMI.

Q7 From which sources you learn the most about e-commerce companies?

TV and Radio 6
Newspapers 21
Social networking sites 46
Friend/Relative/Network 26
Others 5
Total 104

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 Figure 6

Now a days everybody know about e-commerce websites and how to operate them so the
peoples learn through social networking sites like Face book, what ‘up and other sites .the
ratio of social networking sites is 44.7% which means that the almost more than half of the
persons learn e-commerce websites through social networking sites and rest of the
respondents learn through TV and radio, Newspapers, Friend or relative and from other
resources

Q8 Which e-commerce do you mostly used?

Amazon 20
flipkart 22
Snapdeal 20
YepMe 5
Ebay 3
Homeshop18 13
Shopcules 8
Jabong 3
Myntra 7

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Others 3
total 104

Figure 7

The above pie charts shows that 19.4% people gave the equally preference to snapdeal and
amazon. Afterthat 21.4% respondent give prefer to flipkart. The rest of the respondents used
different e-commerce websites according to their choice.

Q9 Problems faced by customers while purchasing online?

Fake products 18
Wrong size of products 24
Too long delivery time 27
Damaged products 24
Meet problems when paying online 11
Total 104

54
 Figure

This pie chart shows that 23.5% respondents said that these e-commerce websites provide
wrong size of the products, 17.6% respondents said that they provide fake products, 26.5%
said that it took too long delivery, 23.5% said they provide damaged products and rest of the
respondents said that they facing problems when they paying online. So these are the
problems while the customers purchasing online.

55
Q:.10 Please rate the refund policy of the following companies?

Interpretation – in order to identify the factor affecting in online buying factor analysis has
been applied which examines the relationship among various interrelated variables and
represents them in terms of a few underlying factors. It was performed with the principle
component analysis followed by varimax rotation with Kaiser normalization, which allowed
the resulting factors to correlate and coverged them two factors to coorelate and coveraged
them two factors. The decision for arriving at the number of factors to be retain has been
made on the basis of latest root criteria i.e variable having eigen values greater than i which
reveals that there are seven factors. Moreover factors having loading greater than or equal to
0.50 have been considered. In this table we have one component 1st component highest factor
loading is is .868 and lower factor loading is -543

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .658

Bartlett's Test of Sphericity Approx. Chi-Square 70.349

df 28

Sig. .000

KMO statistic varies between 0 and 1kaiser-meyer-olkin value greater than 0.5 as acceptable
Value between 0.5 to 0.7 is mediocre
Value between 0.8 to 0.9 is great
Value between above 0.9 is superb

Rotated Component Matrixa

Component

1 2 3

VAR00001 .721
VAR00002 .648 .406
VAR00003 .697
VAR00004 .921
VAR00005 .703
VAR00006 .596
VAR00007 .724
VAR00008 .723

56
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 4 iterations.

Q:11. Corresponding to following companies to rate their delivery time

Interpretation – in order to identify the factor affecting in online buying factor analysis has
been applied which examines the relationship among various interrelated variables and
represents them in terms of a few underlying factors. It was performed with the principle
component analysis followed by varimax rotation with Kaiser normalization, which allowed
the resulting factors to correlate and coverged them two factors to coorelate and coveraged
them two factors. The decision for arriving at the number of factors to be retain has been
made on the basis of latest root criteria i.e variable having eigen values greater than i which
reveals that there are seven factors. Moreover factors having loading greater than or equal to
0.50 have been considered. In this table we have one component 1st component highest factor
loading is is .868 and lower factor loading is -543

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .475

Bartlett's Test of Sphericity Approx. Chi-Square 31.889

df 28

Sig. .279

KMO statistic varies between 0 and 1kaiser-meyer-olkin value greater than 0.5 as acceptable
Value between 0.5 to 0.7 is mediocre
Value between 0.8 to 0.9 is great
Value between above 0.9 is superb

Rotated Component Matrixa

57
 Component

1 2 3 4

VAR00001 .603
VAR00002 .828
VAR00003 .412 .614 .402
VAR00004 .816
VAR00005 .776
VAR00006 -.749
VAR00007 .621
VAR00008 .542 -.443

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 10 iterations.

Q:12. Corresponding to following companies rate their satisfaction level ?

Interpretation – in order to identify the factor affecting in online buying factor analysis has
been applied which examines the relationship among various interrelated variables and
represents them in terms of a few underlying factors. It was performed with the principle
component analysis followed by varimax rotation with Kaiser normalization, which allowed
the resulting factors to correlate and coverged them two factors to coorelate and coveraged
them two factors. The decision for arriving at the number of factors to be retain has been
made on the basis of latest root criteria i.e variable having eigen values greater than i which
reveals that there are seven factors. Moreover factors having loading greater than or equal to
0.50 have been considered. In this table we have one component 1st component highest factor
loading is is .868 and lower factor loading is -543

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .589

Bartlett's Test of Sphericity Approx. Chi-Square 77.515

df 36

Sig. .000

KMO statistic varies between 0 and 1kaiser-meyer-olkin value greater than 0.5 as acceptable

58
Value between 0.5 to 0.7 is mediocre
Value between 0.8 to 0.9 is great
Value between above 0.9 is superb

Rotated Component Matrixa

Component

1 2 3 4

VAR00001 .832
VAR00002 .769
VAR00003 .732
VAR00004 .700
VAR00005 .758
VAR00006 .561 .570
VAR00007 .596 .518
VAR00008 .747
VAR00009 .776

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 7 iterations.

59
Q:13. Corresponding to following companies to rate for better quality products?

Interpretation – in order to identify the factor affecting in online buying factor analysis has
been applied which examines the relationship among various interrelated variables and
represents them in terms of a few underlying factors. It was performed with the principle
component analysis followed by varimax rotation with Kaiser normalization, which allowed
the resulting factors to correlate and coverged them two factors to coorelate and coveraged
them two factors. The decision for arriving at the number of factors to be retain has been
made on the basis of latest root criteria i.e variable having eigen values greater than i which
reveals that there are seven factors. Moreover factors having loading greater than or equal to
0.50 have been considered. In this table we have one component 1st component highest factor
loading is is .868 and lower factor loading is -543

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .741

Bartlett's Test of Sphericity Approx. Chi-Square 134.037

df 36

Sig. .000

KMO statistic varies between 0 and 1kaiser-meyer-olkin value greater than 0.5 as acceptable
Value between 0.5 to 0.7 is mediocre
Value between 0.8 to 0.9 is great
Value between above 0.9 is superb

60
 Rotated Component Matrixa
Component
1 2 3
VAR00001 .636 .505
VAR00002 .861
VAR00003 .775
VAR00004 .690
VAR00005 .682
VAR00006 .680
VAR00007 .442 .502
VAR00008 .676
VAR00009 .637
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a.Rotation converged in 6 iterations.

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Findings of the study

• The result of research revealed that most of people are aware about E-commerce websites
and how to used them.
• Customers used the e-commerce websites because it saves times, easily approachable and
customers purchase all the goods and items under one umbrella.
• Amazon, flipkart are those e-commerce companies which the customers are more satisfied
rather than other e-commerce companies.

There are some reasons for that statement these companies

1. Provide Good quality at cheaper price

2. Give better Refund policy as comparison in other companies
3. These companies gained the trust of customers by providing their services

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SUGGESTIONS & RECOMMENDATIONS

 As we came to know after researching on this topic we recommend that, the online
sellers
have to make their payment transparent, and as people are coming on their sites and they are
buying their products.

 Retailers have to give more discounts to their customers so that they can visit again
and
again to their site , and it also helps to make people more aware about the low rick shopping
of the net.

 One more thing is that there should be transaction of money is very slow they have to
make it fast so that customer don’t have to face much problem to pay for the product, if
customer is going to face some problem he is not going to visit our site and buy product .

Following implications should be followed:

 Discount prices
 A transfer and reliable retailer
 Fast transactions
 Focus on customer satisfaction

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 Conclusion

Many consumers are slow to complete online transaction because the web sites of some
companies are hard to navigate and the technology used is unreliable. Individuals are
reluctant to buy a new product using an unfamiliar procedure on the internet. First of all, the
customer must trust the company. Secondly, the customer must believe the products better
than those available from traditional sources. Thirdly, the customers must feel comfortable
and secure with the purchasing procedures and technology. Companies devote a great deal of
resources and expertise to understanding and meeting customer needs. Companies must
design userfriendly web sites with procedures that customers can trust. From the theoretical
perspective, this study contributes meaningful and better knowledge of the interplay between
the definition and difference of trust and trustworthiness. It contributes the development of
theoretical understanding of consumer trust in e-commerce and also the online consumer
behavior among the Indian e-shoppers. Hence, it is the helpful guidelines to e-marketers and
e-retailers in India. With this, e-store marketers are easy to address the importance of
trustworthiness to enhance customer e-purchasing intention. Based on the findings of this
study, trustworthiness is a key factor in explaining the reasons of Indian e- shoppers less
engage in e-shopping. With the combination of honest, benevolence, and competence, e-
retailers can predict Indian econsumers’ intention to purchase or not purchase online.
Therefore, building consumer trust on the Internet is the responsible lesson to internet vendor
if they want to tailor the products and gain confident of the potential e- shoppers. Nowadays,
many e-commerce websites intend to design a professional website in terms of easy to use
and usefulness for the consumers

64
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 Jiradilok, Taweerat; Malisuwan, Settapong; Madan, Navneet & Sivaraks, Jesada
(2014). The Impact of Customer Satisfaction on Online Purchasing. Business and
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 Gupta, Kumar, Amit (2016). Customer Satisfaction and Loyalty of E-commerce in
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 Sheikh, Sahal, M. & Basti, Mehmet (2015). Customer Satisfaction in Business to
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