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Consumers across the globe are increasingly swapping crowded stores for one-click
convenience, as online shopping becomes a safe and popular option. Online
shopping has some advantages over shopping in retail stores, including the ability to
easily compare prices from a range of merchants, access to a wide selection of
merchandise, being open 24*7 and the convenience of not having to drive to a
physical store. But despite that the online shopping cannot replace the experience of
shopping in a retail store or the entertainment value of going to a mall or market. A
customer who knows exactly what he or she wants can look it up online, read and
compare the information, and purchase from the site that offers the best price or
service. But a shopper who is uncertain what to look for, or who just enjoys browsing
through items on display, will prefer a retail store where the merchandise can be
seen, handled and sample. The décor, music and arrangement of goods in a retail
store creates a multi-dimensional shopping environment that cannot be duplicated
online. For many people, going shopping at a mall, department store or market is a
form of entertainment and a social experience. Many people who are currently
unfamiliar with computers and do not feel comfortable using the Internet to shop
are not likely to change their habits.Â
The Future growth will come through improvements to the shopping process on
1
Indian Scenario
While the Internet and the World Wide Web are continuing to expand at a rapid
pace, the development of electronic commerce has been slower. Surveys indicate
many Indian Internet users employ the developing interactive medium to shop or
browse for information on products and services, but a far smaller percentage has
actually made purchases online.
The number of people and hosts connected to the net has increased worldwide. In
India too, Internet penetration has became more widespread. Online shopping
though a small proportion of the Internet activity is believed to increase in the
coming years. Some of the prominent factors leading the change are greater
Internet penetration, fall in prices of hardware, fall in the price of Internet
communication, development of better and more reliable technologies, and
increased awareness among the users. Some of the various ways in which online
marketing is done in India are company websites, shopping portals, online auction
sites, etc.
E-commerce may not have taken off in India the way it should have, yet prospects
are bright. India is expected to be the third largest Internet market in the world in
the next five years (Source Ac Nielson). The advantages are there for both buyers
and sellers and this win-win situation is at the core of its phenomenal rise, as it is
believed that e-commerce transactions will represent the largest revenue earner
especially in the business to consumer (B2C) segment in India.
Indian customers are increasingly getting comfortable with online shopping, and
there is a higher acceptability for the concept. India has 25 million Internet users and
more is now turning to online shopping. There has been an influx of online shopping
sites in India with many companies hitching onto the Internet bandwagon. The
revenues from online shopping are expected to increase tremendously.
According to IAMAI, the average number of transactions per month in India has
gone up from 2 lakh in 2003-04 to 4.4 lakh in 2004-05 and has doubled to 7.95 lakh
transactions per month in the year 2005-06. The online sales during the festival
season had increased rapidly especially during Diwali and Ramzan which recorded a
sales of Rs115 crore, a 117 per cent increase from the Rs53 crore in the year 2004-05
(source IAMAI). These figures clearly show that online shopping has truly come of
age and consumers are keen to shop on the net. Effective customer communication
on products plus reduced shipping costs and timely delivery has helped online
marketers to seize a slice of the Rs 115 crore sales. Though a miniscule amount in
2
`the global context, the Indian online shoppers' population would make its presence
felt quite remarkably. The potential of the Indian e-market can be gauged from the
fact that 16 percent of Indian consumers want to buy online in the next six months,
making it the third most online-potential country after Korea (28 percent) and
Australia (26 percent) (Source:IMRB). This is an indication of a growing breed of
Indian consumers who are not only better equipped but also more confident of the
online transactions.
3
E consumer behaviout
The consumers' attitude towards online shopping is known as one of the main
factors that affects e-shopping potential (Michieal, 1998). Though attitudinal issues
are thought to play a significant role in e-commerce adoption, however social-
demographic variables such as the gender, income, age, and nation also affect
customers in purchasing. In a study of customer satisfaction and repurchase
behavior, Mittal, Kamakura & Wagner (2001) divided consumer characteristics into
six social-demographic variables. They were gender, age, educational background,
marital status, children, and living area.
A review of empirical studies in this area shows several things. Many studies have
found that typical online buyers have used the Web for several years, and because of
their familiarity, they searched online for product information and purchase options
(Bellmanet al., 1999). There was also evidence that the Internet shopper was
convenience-oriented (Donthu & Garcia, 1999; Korgaonkar & Wolin, 1999),
innovative and variety-seeking (Donthu & Garcia, 1999). He or she did not appear to
be brand-or price-sensitive (Donthu & Garcia, 1999). From a consumer's viewpoint,
Yao (1998) who researched the purchase behavior of online shopping in
demographic variables and behavior variables angle, found that different age groups
affected customer's product choice in price. Sheth (1983) considered that
consumers' purchase preference would affect their intention.
Considering that Internet shopping, is still not at the mature stage of development,
not too much is known about consumers' attitudes towards adopting this new
shopping channel and factors that influence their attitude toward (Haque et al.,
2006). That means that, through motivation and perception, attitudes are formed
and consumers make decisions. Thus, attitudes directly influence decision making
(Haque et al.,2006). Attitudes serve as the bridge between consumers' background
characteristics and the consumption that satisfies their needs (Armstrong and Kotler,
2000; Shwu-Ing, 2003). Because attitudes are difficult to change, to understand
consumers' attitudes toward online shopping, can help marketing managers predict
the online shopping intention and evaluate the future growth of online commerce.
4
OBJECTIVE:
5
SCOPE:
Today Internet is not only a networking media, but also as a means of transaction for
consumers at global market. Internet usage has grown rapidly over the past years
and it has become common means for delivering and trading information, services
and goods (Albarq, 2006). Since online shopping is growing tremendously in the
current business scenario it is imperative to study how consumers' make purchase
decisions on the Internet. With the advent of Internet shopping, consumers are faced
with an overwhelming amount of product offerings, and consequently have a greater
degree of freedom to choose among many different alternatives. Internet shopping
carries a number of different characteristics than traditional shopping methods.
In India the Internet has taken root and grown along many fronts in the past decade.
The research assumes significance since marketers have endeavored to cater to this
growing segment of consumers. Research undertaken within India on the profile of
Internet shoppers is piecemeal and incomplete. This empirical research intends to
explore into this issue, this study among the Internet users will help marketers to
plan highly focused online campaigns in the future.
6
2.0 LITERATURE REVIEW
The current literature on consumer online purchasing decisions has mainly concentrated on
identifying the factors which affect the willingness of consumers to engage in Internet shopping.
In the domain of consumer behavior research, there are general models of buying behavior that
depict the process which consumers use in making a purchase decision. These models are very
important to marketers as they have the ability to explain and predict consumers’ purchase
behavior.
and then towards extensive problem-solving behaviors [Schiff man et al., 2001].
The traditional framework for analysis of the buyer decision process is a five-step model. Given
the model, the consumer progresses firstly from a state of felt deprivation (problem recognition),
to the search for information on problem solutions. The information gathered provides the basis
for the evaluation of alternatives. Finally, post-purchase behavior is critical in the marketing
product/service.
This classic five stage model comprises the essence of consumer behavior under most contexts.
Nevertheless, the management of marketing issues at each stage in the virtual environment has to
be resolved by individual E-marketers. Peterson et al. [1997] commented that it is an early stage
behavior. Decision sequences will be influenced by the starting point of the consumer, the
relevant market structures and the characteristics of the product in question. Consumers' attitude
7
towards online shopping is a prominent factor affecting actual buying behavior. (Source:
Todd [1997] proposed a model of attitudes and shopping intention towards Internet shopping in
general. The model included several indicators, belonging to four major categories; the value of
the product, the shopping experience, the quality of service offered by the website and the risk
perceptions of Internet retail shopping. In the research conducted by Vellido et al. [2000], nine
factors associated with users' perception of online shopping were extracted. Among those factors
the risk perception of users was demonstrated to be the main discriminator between people
Other discriminating factors were; control over, and convenience of, the shopping process,
affordability of merchandise, customer service and ease of use of the shopping site. In another
study, Jarvenpaa et al. [2000] tested a model of consumer attitude towards specific webbase
stores, in which perceptions of the store's reputation and size were assumed to affect consumer
trust of the retailer. The level of trust was positively related to the attitude toward the store, and
inversely related to the perception of the risks involved in buying from that store. Jarvenpaa et al.
[2000] concluded that the attitude and the risk perception affected the consumer's intention to
Consumer risk perceptions and concerns regarding online shopping are mainly related to aspects
involving the privacy and security of personal information, the security of online transaction
systems and the uncertainty of product quality. Trust is interwoven with risk [McAllister, 1995].
One of the consequences of trust is that it reduces the consumer’s perception of risk associated
with opportunistic behavior by the seller [Ganesan, 1994]. Lack of trust is frequently reported as
8
the reason for consumers not purchasing from Internet shops, as trust is regarded as an important
Mayer et al. [1995] developed a model which combines traditional marketing philosophy on
consumer motivation to buy and the trust model. In this model, trust propensity; which is a
there is not much information available to the buyer regarding the seller, prior to purchase. A
buyer with a high propensity to trust will more likely be a potential customer than a buyer with a
lower propensity. Mayer et al. [1995] proposed that ability, benevolence and integrity constitute
the main elements of trustworthiness. Ability refers to skills, competencies and characteristics
that a seller has in a specific domain. In this context, sellers need to convince buyers of the
competence of their companies in the Internet shopping business. Benevolence is the extent to
which the seller is perceived by the buyer as wanting to ‘do well’. Sellers have to convince
buyers that they genuinely want to do good things for buyers, rather than just maximize profit.
9
1.1.6 Factors That Boost Online Shopping in India
Access to Information
Middle-class population with spending power is growing. There are about 200 million of
middle-class population good spending powers. These people have very little time to spend for
shopping. Many of them have started to depend on internet to satisfy their shopping desires.
The figures from IAMAI show that the internet users in India will grow to 200 million by 2010.
Around 25% of regular shoppers in India are in the 18-25 age groups, and 46% are in the 26-35-
year range.
only growing at the rate of 28%, since India being a younger market, the growth of e-commerce
10
In line with global trends finally India has also started shopping online these days. As per
the study by IAMAI online shopping in India has rose from $11million in 1999-2000 to $522
million in 2008 and it is expected to rise above $700 million by end March 2010.
Indians are also Shopaholics like other Asians. There is a strong booming young adult
11
HYPOTHESIS:
Keeping in mind the above objectives and in order to address the problem in the
most effective manner the following hypotheses have been formulated:
12
RESEARCH METHODOLOGY
To know and understand the consumer’s perception and awareness about internet marketing/
shopping. This will help to know the attitude and perception of consumers towards online
shopping and what are the factors which shape the consumer’s perception towards online
shopping. Also what are key concerns from the point of view of consumer while online
shopping.
What are the key concern areas for consumers while online shopping?
Eleven different factors were identified by studying the existing models of consumer
attitudes(Refer Annexure 1, 2) that play an important role in online purchase, then a model was
13
The data was collected only through Questionnaires. The sample size was 100. And random
After examining the 10 empirical studies, we identify a total of eleven interrelated factors for
which the empirical evidences show significant relationships. These ten factors are perceived
usefulness, perceived ease of use, perceived enjoyment, information on online shopping, security
and privacy, quality of internet connection, attitude towards online shopping, intention to shop
online, online shopping decision making, online purchasing, and consumer satisfaction.
Six (perceived usefulness, perceived ease of use, perceived enjoyment, information on online
shopping, security and privacy, quality of internet connection )are found to be ordinarily
independent and five (attitude toward online shopping, intention to shop online, decision making,
Consumer satisfaction is considered to be a separate factor in this study. It can occur at all
possible stages depending on consumer’s involvement during the online shopping process. The
relationships between satisfaction, attitude, intention, decision making and online purchasing are
proposed to be two-way relationships due to the reciprocal influences of each on the other. In
addition, three of the antecedents, perceived usefulness, perceived ease of use, perceived
Perceived Usefulness
Perceived usefulness is defined as the degree to which a person believes that using a particular
system would increase his or her job performance. It is an important factor affecting acceptance
14
of an information system, because the ultimate aim of any person is the superior job
performance.
This is an important factor that affects the acceptance of a particular information system. It is
defined as the degree to which a person believes that using a particular information system
would be free of effort. Hence an application perceived to be easier to use would more likely be
Perceived Enjoyment
Enjoyment refers to the extent to which the activity of using a computer is perceived to be
enjoyable in its own rights. This is seen as an intrinsic source of motivation to use a particular
application.
Amount of Information
Amount of information is defined as the information which is available for the product which a
person wants to buy through online shopping. This factor eases the decision of the user to
actually buy the product or not, or which product to buy. This factor becomes even more
Security and privacy are the main factors which hinder the growth of online shopping. The user
is concerned about his ID and Password which can be stolen by persons with wrong intentions
15
and then misuse it. At the same time they are concerned that their personal information may be
sold to the third party which poses a serious threat to their privacy.
Not only is the presence of internet connection necessary but also its Quality is important to shop
online. This is an important factor which determines whether the user would shop online or not
Consumer’s attitude and perception toward online shopping have gained a great deal of attention
in the empirical literature. It is believed that consumer attitudes will affect intention to shop
2) Consumer attitudes toward a specific Internet store (i.e., to what extent consumers think that
Consumer’s intention to shop online refers to their willingness to make purchases in an Internet
store. Commonly, this factor is measured by consumer’s willingness to buy and to return for
additional purchases. The latter also contributes to customer loyalty. Consumer’s intention to
shop online is positively associated with attitude towards Internet buying, and influences their
16
Online shopping decision making
choice making. The results bearing on this factor directly influence consumer’s purchasing
According to Haubl and Trifts (2000), potential consumers appear to use a two-stage process in
Initially, consumers typically screen a large set of products in order to identify a subset of
promising alternatives that appears to meet their needs. They then evaluate the subset in greater
depth, performing relative comparisons across products based on some desirable attributes and
Online purchasing
This is the most substantial step in online shopping activities, with most empirical research using
measures of frequency (or number) of purchases and value of online purchases as measures of
online purchasing; other less commonly used measures are unplanned purchases
shopping, intention to shop online, and decision making (Andrade 2000; Bellman et al. 1999)
Consumer satisfaction
17
It can be defined as the extent to which consumer’s perceptions of the online shopping
experience confirm their expectations. Most consumers form expectations of the product, vendor,
service, and quality of the website that they patronize before engaging in online shopping
activities.
These expectations influence their attitudes and intentions to shop at a certain Internet store, and
consequently their decision-making processes and purchasing behavior. If expectations are met,
customers achieve a high degree of satisfaction, which influences their online shopping attitudes,
associated with these four variables (Ho and Wu 1999; Jahng et al. 2001; Kim et al. 2001).
Information on
online shopping
Attitude Intention Decision Online
towards to shop Making Purchase
Security & Privacy
online online
shopping
Perceived Usefulness
Perceived Enjoyment
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4.4 Data Collection Method-
It is original primary data, for specific purpose of research project. For this project, I have to use
Questionnaire-
Questionnaire development is the critical part of primary data collection method. For this I will
prepare a questionnaire in such a way that it will be able to collect all relevant information
regarding the project. The questionnaire was designed using various scaling techniques. The
questionnaire was used mainly to test the model proposed for consumer perception towards
online shopping. Likert five point scales ranging from Strongly Agree to strongly disagree was
used as a basis of Questions. The data collection was done over a period of 8 weeks
It will be collected to add the value to the primary data. This may be used to collect necessary
data and records by different websites, magazines, annual reports, journals, reference books, and
newspapers, etc.
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DATA ANALYSIS
The objectives of the research were studied with respect to a regular online shopper who shopped
more than once because they would be the right respondent to give an insight about the online
shopping. Therefore it is firstly important to understand who is a regular online shopper. In the
survey the respondents where asked the following questions which helped to know about a
regular shopper.
Respondents were asked to rate the factors influencing online shopping purchase behavior. In all
six different factors were taken in questionnaire for getting the responses of consumers .Here are
those factors:
Perceived usefulness
Ease of use
Perceived enjoyment
Security
Quality of internet
Factor analysis was done using SPSS to extract the most important benefits derived by
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Interpretation:
The value of KMO test is coming out to be 0.667, which suggests the validity for factor analysis.
The principal component analysis is giving 72.584 as commutative % which is good enough
because data redundancy is less. Two components have been extracted with Eigen values more
The output value shows that following factors can be safely extracted after factor analysis:
The principal component analysis is giving 78.065 as commutative % which is good enough
Three components have been extracted with eigen values more than 1 after principal component
The output value shows that following factors can be safely extracted after factor analysis:
21
Have to wait for delivery (Extracted from component 1)
Respondents were asked to rate the factors of concern for online shopping purchase behaviour.In all
six different factors were taken in questionnaire for getting the responses of consumers .Here are those
factors:
Cannot bargain/negotiate
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Payments
Online shoppers commonly use a credit card to make payments, however some systems enable
Cheque/ Check
Debit card
Gift cards
Some sites will not accept international credit cards, some require both the purchaser's billing
address and shipping address to be in the same country in which site does its business, and still
other sites allow customers from anywhere to send gifts anywhere. The financial part of a
transaction might be processed in real time (for example, letting the consumer know their credit
card was declined before they log off), or might be done later as part of the fulfillment process.
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ADVANTAGES
Convenience
Online stores are usually available 24 hours a day, and many consumers have Internet access
both at work and at home. Other establishments such as internet cafes and schools provide access
as well. A visit to a conventional retail store requires travel and must take place during business
hours.
In the event of a problem with the item it is not what the consumer ordered, or it is not what they
expected—consumers are concerned with the ease with which they can return an item for the
correct one or for a refund. Consumers may need to contact the retailer, visit the post office and
pay return shipping, and then wait for a replacement or refund. Some online companies have
more generous return policies to compensate for the traditional advantage of physical stores. For
example, the online shoe retailer Zappos.com includes labels for free return shipping, and does
not charge a restocking fee, even for returns which are not the result of merchant error. (Note: In
the United Kingdom, online shops are prohibited from charging a restocking fee if the consumer
cancels their order in accordance with the Consumer Protection (Distance Selling) Act 2000).
Online stores must describe products for sale with text, photos, and multimedia files, whereas in
a physical retail store, the actual product and the manufacturer's packaging will be available for
direct inspection (which might involve a test drive, fitting, or other experimentation).
24
Some online stores provide or link to supplemental product information, such as instructions,
information, advice, or how-to guides designed to help consumers decide which product to buy.
Some stores even allow customers to comment or rate their items. There are also dedicated
review sites that host user reviews for different products. Reviews and now blogs gives
customers the option of shopping cheaper org anise purchases from all over the world without
In a conventional retail store, clerks are generally available to answer questions. Some online
stores have real-time chat features, but most rely on e-mail or phone calls to handle customer
questions.
One advantage of shopping online is being able to quickly seek out deals for items or services
with many different vendors (though some local search engines do exist to help consumers locate
products for sale in nearby stores). Search engines, online price comparison services and
discovery shopping engines can be used to look up sellers of a particular product or service.
Shipping costs (if applicable) reduce the price advantage of online merchandise, though
depending on the jurisdiction, a lack of sales tax may compensate for this.
Shipping a small number of items, especially from another country, is much more expensive than
making the larger shipments bricks-and-mortar retailers order. Some retailers (especially those
selling small, high-value items like electronics) offer free shipping on sufficiently large orders.
25
Another major advantage for retailers is the ability to rapidly switch suppliers and vendors
DISADVANTAGES
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of
fraud on the part of the merchant than in a physical store. Merchants also risk fraudulent
purchases using stolen credit cards or fraudulent repudiation of the online purchase. With a
warehouse instead of a retail storefront, merchants face less risk from physical theft.
Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers
being intercepted in transit between the consumer and the merchant. Identity theft is still a
concern for consumers when hackers break into a merchant's web site and steal names, addresses
and credit card numbers. A number of high-profile break-ins in the 2000s has prompted some
U.S. states to require disclosure to consumers when this happens. Computer security has thus
become a major concern for merchants and e-commerce service providers, who deploy
Phishing is another danger, where consumers are fooled into thinking they are dealing with a
reputable retailer, when they have actually been manipulated into feeding private information to
a system operated by a malicious party. Denial of service attacks are a minor risk for merchants,
Quality seals can be placed on the Shop web page if it has undergone an independent assessment
and meets all requirements of the company issuing the seal. The purpose of these seals is to
26
increase the confidence of the online shoppers; the existence of many different seals, or seals
unfamiliar to consumers, may foil this effort to a certain extent. A number of resources offer
advice on how consumers can protect themselves when using online retailer services. These
include:
their experiences; also ensuring that there is comprehensive contact information on the
website before using the service, and noting if the retailer has enrolled in industry
Before buying from a new company, evaluate the website by considering issues such as:
the professionalism and user-friendliness of the site; whether or not the company lists a
telephone number and/or street address along with e-contact information; whether a
fair and reasonable refund and return policy is clearly stated; and whether there are
Ensuring that the retailer has an acceptable privacy policy posted. For example note if
the retailer does not explicitly state that it will not share private information with others
without consent.
Ensuring that the vendor address is protected with SSL (see above) when entering credit
card information. If it does the address on the credit card information entry screen will
phrase," which might be something along the lines: "I shop 4 good a buy!!" These are
27
difficult to hack, and provides a variety of upper, lower, and special characters and could
Although the benefits of online shopping are considerable, when the process goes poorly it can
create a thorny situation. A few problems that shoppers potentially face include identity theft,
faulty products, and the accumulation of spyware. Whenever you purchase a product, you are
going to be required to put in your credit card information and billing/shipping address. If the
website is not secure a customers information can be accessible to anyone who knows how to
obtain it. Most large online corporations are inventing new ways to make fraud
more difficult, however, the criminals are constantly responding to these developments with new
ways to manipulate the system. Even though these efforts are making it easier to protect yourself
online, it is a constant fight to maintain the lead. It is advisable to be aware of the most current
technology and scams out there to fully protect yourself and your finances.One of the hardest
areas to deal with in online shopping is the delivery of the products. Most companies offer
shipping insurance in case the product is lost or damaged; however, if the buyer opts not to
purchase insurance on their products, they are generally out of luck. Some shipping companies
will offer refunds or compensation for the damage, but it is up to their discretion if this will
happen. It is important to realize that once the product leaves the hands of the seller, they have
no responsibility (provided the product is what the buyer ordered and is in the specified
condition).
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Lack of full cost disclosure
The lack of full disclosure with regards to the total cost of purchase is one of the concerns of
online shopping. While it may be easy to compare the base price of an item online, it may not be
easy to see the total cost up front as additional fees such as shipping are often not be visible until
the final step in the checkout process. The problem is especially evident with cross-border
purchases, where the cost indicated at the final checkout screen may not include additional fees
that must be paid upon delivery such as duties and brokerage. Some services such as the
Canadian based Wishabi attempts to include estimates of these additional cost,[but nevertheless,
Privacy
Privacy of personal information is a significant issue for some consumers. Different legal
jurisdictions have different laws concerning consumer privacy, and different levels of
enforcement. Many consumers wish to avoid spam and telemarketing which could result from
supplying contact information to an online merchant. In response, many merchants promise not
to use consumer information for these purposes, or provide a mechanism to opt-out of such
contacts.
Many websites keep track of consumers shopping habits in order to suggest items and other
websites to view. Brick-and-mortar stores also collect consumer information. Some ask for
address and phone number at checkout, though consumers may refuse to provide it. Many larger
stores use the address information encoded on consumers' credit cards (often without their
29
knowledge) to add them to a catalog mailing list. This information is obviously not accessible to
Hands-on inspection
Typically, only simple pictures and or descriptions of the item are all a customer can rely on
when shopping on online stores. If the customer does not have prior exposure to the item's
handling qualities, they will not have a full understanding of the item they are buying. However,
Written and Video Reviews are readily available from consumers who have purchased similar
items in the past. These can be helpful for prospective customers, but these reviews can be
sometimes subjective and based on personal preferences that may not reflect end-user
Because of this, many consumers have begun going to real-world stores to view a product,
before purchasing online. To combat the process, Target has requested distributors give them
equally low prices, or alternatively, exclusive products available at their store only
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I Have you purchased anything online ever?
NO
35%
YES
65%
The research showed that 65% of the Internet users had shopped online while 35% had not
bought anything. This is mainly because of the changing lifestyle and taste patterns. As the life is
getting more and more fast paced more people are moving on to shop online mainly because of
convenience. This shows that a more Internet users are using it as a shopping medium and there
is a huge potential in this sector but one should not be carried away by this figures. There could
be a possibility that only a small section of the online shoppers are shopping or only a particular
category of good had brought about this huge number. As a result the entire analysis was done
in case of a regular online shopper to understand the shopping behavior of the online shoppers.
The following question helped to understand who is a regular online shopper among the 65%
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II How frequently did you purchase online?
80% 74%
70%
60%
50%
40%
30%
20% 12%
9%
10% 5%
0%
Only Once 2-4 times 5-6 times More than 6
times
This helped to understand the purchasing behavior of the online shoppers. It was seen that 14%
of the online shoppers had shopped more than five times and 74% had shopped 2-4 times. The
frequency shows the acceptance of Internet as a shopping medium. Though only a small amount
of the online shoppers had purchased more than 6 times but still there is a huge opportunity in
the Internet arena. The 65% of the online shoppers who had shopped more than once were
considered as regular shopper and the entire analysis was based on these regular shoppers.
32
5.1 The Internet Usage
It is necessary to study the amount of time spend by the regular shoppers on the world wide web
because this would give us clear picture as to understand whether usage and time spent by the
90%
78%
80%
70%
60%
50%
40%
30%
20% 14%
10% 6%
2%
0%
Less 1–3years 3–5years More than
than1year 5years
The diagram shows that shopping has increased with the usage of Internet over the years.
Regular shoppers who have been using Internet for more than one year had shopped to 98% and
regular shoppers who have been using Internet for more than five years have shopped to 78%.
Internet is not a new concept for these regular online shoppers and they have been using it for
more than 5 years now. The increased usage over the years has lead to an increase in shopping,
as these regular shoppers are able to make use of the various e-commerce activities.
33
Fig. 4 Online Shopping & Internet usage by hours a week
40% 36%
35%
30% 28%
25%
20%
20%
15% 12%
10%
4%
5%
0%
0-5 6 - 10 11 - 15 16 - 20 More
hours a hours a hours a hours a than 20
week week week week hours a
week
The research shows that 36% of the online shopping had been done who use Internet for more
than 20 hours a week and 96% of the shopping has been done by regular shoppers who have
been using Internet for more than 5 hours a week. As more the regular online shopper are using
the Internet it is seen that they end up buying more also. This shows that Internet is becoming an
integral part of the daily activity of the regular online shopper. The regular online shoppers who
have been using Internet for more than 20 hours are more comfortable and confident as a result
they purchase more online as compared to who use Internet for less number of hours. The study
shows that the growing usage of Internet has lead to increase in online shopping as seen above.
There is a positive relation between increase usage of Internet and online purchase. The
marketers should capture this enormous growth, which can be brought by the penetration of
broadband and lowering the prices of computers. Thus increase in usage of Internet over the
years and the more time spent has lead to an increase in shopping. But one needs to know
whether online shopping is an integral part of regular shoppers or not this understood as follows.
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5.2 The web online activity
The following classifications are done to study the online activities in case of a regular online
shopper.
10%
32%
Shopping
20% Communication
Finance
24%
14%
Inf ormation
Entertainment
Gathering
The Internet offers four basic services communication (socializing service with peer group or
core group (email) or with new groups of people (chat), information services, entertainment
services and commerce services and shopping. The research shows 32% of the regular online
shoppers use Internet for communication while only 10% uses it for shopping which shows that
communication still forms the major activity among the regular online shoppers.
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Fig. 6 Online Activities by Age
70%
This classification further provides an insight that Internet is mainly used as a means of
communication in respect all the age groups of the regular online shoppers. It contributes to 60%
of the major activity among the regular online shoppers who lie between the age group 18-30
years. It could be seen that shopping as a basic activity on the Internet contributes to the
between the age group18-30 years, which is 18% while above 50 years it is used just to 2%. The
increase in usage among the 18-30 years is basically due to high awareness. The marketers
should focus mainly on the age group between 18-30, as they are the main drivers for growth.
Thus the research shows that though the regular shoppers are using the Internet for quiet some
time now but shopping still remains a small part of the major activity
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Fig. 7 Online Activities by Time
90%
80%
70%
60% Communication
50% Information
40% Entertainment
30% Finance
20% Shopping
10%
0%
0-5 hours 6-10 hours 11-15 16-20 more than
hours hours 20 hours
It is evident that regular online shoppers also spend a major part of their time in communication
unlike the occasional online buyers. In 0-5 hours a week they spend 77% of their time in
communication, which includes email, and chat as the major activity with shopping which does
not seem to exist at all. Information search constitute 20% of the time. The information search
increases as the regular online shoppers tries to figure out ways to surf the Internet and access the
information they require. It is true that more regular online shoppers use Internet shopping sites
But it is to be noticed that as the time spend increases communication falls and other activity
picks up like entertainment and finance. One could see from the graph that between 16-20 hours
a week communication falls further but information search also falls as the regular online
shoppers becomes more focused in their information search rather than wandering aimlessly in
the Internet space. They continuously use search engines for routine information needs. The time
spent on entertainment increases marginally to 18%. As the people spend more time it has been
37
seen that activities like shopping and finance related needs increases. The regular online
shoppers who use the Internet for more than 20 hours a week has shown that they have indulged
into more shopping i.e.10%. It is true that as the regular online shoppers spends more time on the
Internet there is a possibility that they would end up buying more as they are ease with the use of
internet. Increased usage of Internet is positively related to the buying behavior on the Internet.
Analysis-
It is true that increase in internet has lead to an increase in the online shopping as 78% of the
online shopping has been done by the regular online shopper who have been using internet for
more than five years and 36% of the online shopping have been done among the regular shopper
who uses the Internet for more than 20 hours a week. Thus increase in usage of Internet has lead
to an increase in online shopping. But shopping still constitute a small amount of the major
activity on the internet as 32% of the regular online shoppers uses Internet for communication
while only 10% uses it for shopping. Communication still constitutes the major activity on the
Internet.
5.3.1 Hypotesis
1. More male Internet users are frequent online buyers than female Internet users.
2. Regular online buyers are better educated than occasional online buyers.
3. Income is higher in case of a regular online shopper than occasional online buyer.
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Fig. 8 Online Shopping & Gender
28%
Female
72%
Male
Among the 65% of the online shopping, males (72%)had purchased more as compared to women
(28%). This shows that it is true that more males are shopping online as compared to women.
This is mainly because women still like to feel, see and touch the product before buying. It was
noticed that some of them felt shopping as a reason to go out with the family and spend time
together, which was not possible in case of online shopping. As more and more Indian women
are flocking to Internet there is a possibility that they might end up in a purchase. Also an
increase in the spending power in the hands of the women might lead to an increase in the online
shopping. The research showed that 28% of the women who shopped online fall mostly in the
service and executive class with an income above Rs10,000. The marketers should make sure
that they produce the item keeping in mind the needs of the women population as they still
39
Fig. 9 Online Shopping & Educational Qualification
3%
8%
Non
Matriculate
Matriculate
54% 35%
Postgraduate Graduate
Educational difference is a significant demographic variable, which shows that regular shoppers
who were better educated made more purchases online. 89% of the shopping has been done by
the regular shopper whose is educated with a graduate or postgraduate degree. This shows that
online shopping done by a regular online shopper with matriculate (8%) and non matriculate
(3%).
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Fig. 10 Online Shopping & Income
40 38
35
30
25 less5000
21
5000-10000
20
10000-25000
14 15
15 above25000
11
10 8
5 5
5 3 2 3
1 1 1 1 1
0
Student Service/Executive Business Others
Income and buying behavior are positively related. It was seen that a regular online shopper with
a higher income had purchased more online as compared to lower income online shopper. This
trend was seen in all segment of the population. It is true that more the income in the hands of
the population they would indulge in shopping. The service class had done the major purchase in
all the various levels of income. It can be seen that hardly any purchase is done among the
Analysis-
Thus three hypotheses stated were true in case of the regular online shopper and it can
interpreted that online shopping is effected by demographics like gender, education and income
levels. Among the 65% of the online shopping, males (72%)had purchased as compared to
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women (28%). There is a positive relation between education and income of the online shoppers.
89% of the online shopping was done among the regular shoppers who were educated with a
graduate or postgraduate degree compared to 11% shopping who were matriculate and non-
matriculate. A 60% of the shopping was done by the regular shopper who had income more than
To identify the factors which Internet users choose to buy or not buy online and how frequently
they make such purchases. Analyzing the importance of satisfaction level in the online
purchasing environment.
5.4.1 Hypothesis
Consumers who make frequent online purchases are higher in convenience orientation than those
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Fig. 11 Online Shopping & Motivating Factors
7%
Product 32%
Comparison Convenience
26%
Saves Time
12%
Superior
23%
selection
Price
It is believed that consumers whether online shoppers or non-online shoppers value price to
convenience but the study contrast this popular belief. The study showed that 32% of the
shopping had been done by the regular shopper who think convenience is the main driving force
while 23% of the shopping had been done for whom price was the main orientation for shopping
online. Other motivating forces, which had lead to online shopping, were saves time (26%),
product availability and superior selection (12%), and product comparison (7%). Convenience
here is characterized as ease of purchase, home delivery and ability to shop 24x7. These factors
motivate the regular online shopper to buy over the Internet and regular online shoppers who
value convenience are more likely to buy on the web, as compared to occasional online shoppers.
Every connection is a potential for net shopping. Therefore the companies should attract and
retain its regular online shoppers, as the Internet is a tangled jungle of web sites, which is
possible at a click of a mouse. They should design strategies and develop products keeping in
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Fig. 12 Barriers to Shopping Online
7% 33%
9% Others Privacy &
Unfamiliar
Security
14%
Hassle of
returning
16%
21%
Lack of
Inability to
Customer
touch & feel
Service
The main areas for concern in respect of the regular online shoppers while shopping were
privacy and security (33%). Most of them still preferred the conventional method of shopping
like the touch and the feel factor (21%). They felt that it is possible to see, feel, touch and try the
products before buying in a shopping store as compared to Internet shopping. Other reasons that
concern the regular online shoppers were inability to reach the customer service (16%), hassle of
returning the product (14%), technical foul –ups, hesitant in purchasing from an unfamiliar
source and person and delivery costs. The marketers should formulate such strategies so that the
44
Fig. 13 Convenience- The Motivating Factor
80%
74%
70%
60%
50% 48%
purchase
40%
30% convenience
27%
20% 20%
10% 12%
9%
5% 5%
0%
Only once 2-4 times More than More than
5 times 6 times
It has been seen that there is a positive correlation between the frequency of purchase and the
convenience factor for buying in the Internet arena. The regular online shopper who had
purchased more than 6 times (9%) for them convenience is the most important motivating factor
(48%)for shopping on the Internet. Convenience has been characterized as ease of purchase,
home delivery and ability to shop 24x7. The online shopper believes that large amount of
information about the product and the ability to compare prices is available at a click of a mouse
thus making the entire shopping experience very convenient. Thus the marketers to should keep
the convenience factor in mind while providing the goods and services.
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5.5 Future and growth of Online Shopping
This can be understood by the categories of good bought by the regular online shoppers presently
Books 43%
Gifts 33%
Jewellery 23%
Toys 13%
Food / Groceries 7%
Accessories apparel 3%
CD/Videos 3%
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Magazines 3%
Sporting goods 3%
The table I shows that shows that there is a future growth in the electronic gadget and book
categories also apart from railway and airline tickets, which continues to be on the priority list.
There is a growth in these categories because traditionally products like audio-video, apparel,
and computer accessories were purchased through catalogs and other forms of direct mail but
toady online shopping serves a convenient means of distribution channel. Another reason for the
growth in these categories is because of well-established sites for travel, audio-video (e.g., CD-
Now), and computers (e.g.www.dell.com, www.sonyvaio.com), which lure the consumers to buy
these products. These goods do well because consumers are not bothered much about the touch
and feel factors, which generally drive the shopping in India unlike categories like apparels and
groceries where it still remain an important factor while purchasing. It is difficult to change the
set mindset of consumers for certain categories of goods but still companies should keep
innovating and find means and ways to attract more online shopping.
Analysis-
There is a future growth in online shopping which can be especially seen in the travel arena with
railway 83% and airlines 80%, electronic gadgets (50%)and books (43%). Gifts also seem to
show a growth in the coming years. Thus the marketers should mainly focus on these growing
categories of goods, which would drive the online shopping in the future.
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Fig. 15 Present & future categories of Goods
120%
100%
80%
60%
40%
20%
0%
Books Railway Airline Electronic Gifts Movies
tickets tickets Gadgets tickets
Present Future
It is seen that railway tickets 70% and airline tickets 93% are the most popular categories among
the online shoppers followed by books and electronic gadgets. This is the main category, which
is bringing about online shopping culture among the regular online shoppers. The companies
should bring out innovative ways so that there is a growth in other categories of goods also. The
entire shopping culture among the regular shoppers is brought mainly by the travel categories
followed by electronic gadgets. The graph shows that online shopping is tend to grow in the
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6.0 FINDINGS
The findings show that Internet usage has increased over the years and it is leading to an increase
in online shopping and also shows the consumers attitude and perception towards online
shopping. Communication still forms the major activity among the large number of online
shoppers as 32% of regular online shopper use Internet for communication as compared to
shopping (10%).
Online shopping is affected by demographics as it has been seen that more males are shopping
online as compared women online shoppers and there is a positive relation between education
and income levels with respect to the increased online shopping behaviour.
The most important motivating factor, which influenced the online shopping, was convenience
followed by time saving and price. Regular online shoppers considered convenience as the main
motivating factor while buying and were less price sensitive. But the online marketers should
attempt to differentiate their products or services making the comparison easier. The marketers
should bring out innovative ways so that the consumers can do more online shopping while
taking the full advantage of rich information, easy access and convenience of the Internet.
One of the main concerns among the online shoppers was privacy and security. Another reason
that hindered online shopping was the touch factor. Consumers still preferred the experience they
get from traditional stores like feeling the store’s atmosphere, interacting with a salesperson, and
seeking sensory stimulation. This might hinder the use of certain goods like grocery and apparel,
as the touch factor is the main factor, which drives the shopping for these goods. The future of
online shopping is bright especially in the categories of travel, books, electronic gadgets and
gifts.
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CHANGING ATTITUDE TOWARDS ONLINE SHOPPING:
Malls malls springing up everywhere and yet people are e-shopping! And not in small numbers
either. E-commerce figures are going through the roof, according to Assocham (Associated
Chambers of Commerce & Industry of India). Today (2008-09) the figures are touching Rs. 2200
crore, but are expected to increase by 150 percent by 2009-10 - to Rs 5,500 crores! And two
Chennai 7% 11-12%
Kolkata 7% 10-11%
Bangalore 6% 9%
It was never thought that Indians would go in for e-shopping in such a big way. Ticketing, travel
bookings and even books and movies seem fine to buy online. Knowing that in India sizes vary
from brand to brand and quality is inconsistent, even of some electronic items, how is it that
50
Well, Assocham says that books are the hottest selling item on the internet. In fact most products
bought and sold off online are: books, electronic gadgets and railway tickets. However, people
are also buying clothes; gifts, computer and peripherals, and a few are buying home tools and
products, home appliances, toys, jewelry, beauty products and health and fitness products.
Traffic for e-commerce sites is mostly coming from the two metros of Delhi and Mumbai.
1. Convenience
It is the major reason. Both the cities are spread out over a large area and the best stores in
both these cities are often concentrated in certain ‘posh’ areas. In Mumbai for example
there are certain items you get only in Crawford market which is at the other end of town in
South Mumbai. And demographics show that the population of Mumbai is now
concentrated in the suburbs. Of course, huge malls have come up in the suburbs as well,
and India’s biggest mall Nirmal Lifestyle is in far-flung Mulund but often you find a better
choice of sizes and styles choice in other malls, say Phoenix (central Mumbai). And though
both Mumbai and Delhi have transport system, few people like to travel for two hours just
to get to a shop at the other end of town. Clearly the transport systems leave much to be
desired. In Delhi, safety is also an issue for women traveling alone in the evenings.
Most cities in India have a higher literacy rate as compared to the national average of 64.8
percent. In fact Mumbai has a highest literacy even amongst the cities (86 per cent). Delhi
51
too has a high literate population (81.2 per cent). Oddly, although Bangalore has a higher
literacy rate than Delhi, at 83 per cent, the city’s share of e-commerce is not very high.
Kolkatta too has a literacy rate (80.8 per cent) and so does Chennai (80.1 percent.) If one
compares these rates to literacy rates of cities like Patna (62.9 percent), Jaipur (67 percent),
Indore (72 percent) or Warangal (73 percent) its clear why its the metros which are going
In any case, home delivery is a concept that Indians are familiar with and love. The mall craze
has started only now. Earlier it was a choice between sweating it out in small crowded markets,
or asking a friendly neighbourhood kirana (grocer) to deliver groceries home and this system is
still thriving.
Increasing penetration of Internet connectivity and PCs has led to an increase in the Internet
users across India. The demographic segments that have witnessed maximum growth comprise
college going students and young persons. These segments are the users of advanced applications
and technologies online and are most likely to be heavy E-Commerce users.
The success of a marketplace depends on the presence of a large number of buyers and a
large number of sellers. In addition to online buyers, many offline stores have begun to sell
52
their products in the online marketplace. The greater the number of sellers and buyers, the
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8.1 Barriers to the Growth of Online Market
Consumers often display a bias for brands that they know well and have had a good experience
in the past. Thus products of brands with a favorable bias will score over the products of less
popular brands. A few would risk buying expensive jewelry from an unknown jeweler online.
The customer is not sure of the quality of the product unless it is delivered to him and post
delivery of the product, it is sometimes a lengthy process to get a faulty or the unsuitable product
changed. Thus, unless the deliverables are as per the customers expectations, it is hard to infuse
To attract customers, the competing online players are adopting all means to provide products
and services at the lowest prices. This has resulted in making the consumers choice-spoilt, who
in turn surf various websites to spot the lowest price for the product. Thus, although the number
of transactions is increasing, the value of the products sold is continuously falling owning to high
54
8.1.4 Seasonality
February is the peak seasons for sale, while March to July is the dry seasons for sale”. During the
peak season, occasions that drive the sales are Diwali, Rakhi, Valentines Day, New Year,
Christmas, Mother’s Day, Friendship Day etc are. On these occasions younger generations
Online frauds and breach are the biggest barriers to online sales. As a result, prospective buyers
prefer staying away from revealing their credit card and bank details.
It might take a few minutes to search, book and pay for products and services online, but the
It is a challenge for E-marketers to convert low frequency online buyers into regular buyers
through successful website design and by addressing concerns about reliable performance. Thus,
the online retailing raises more issues than the benefits it currently offers.
55
LIMITATIONS, PERILS AND DANGERS OF ONLINE SHOPPING
Scams and internet fraud is no more news in the internet world. Scammers have gone deep
online. Millions of dollars are reported every day of the year to be lost by innocent souls. Men
and women are duped online every day without any form of comfort in their lives. Since the
internet is for all and sundry, excessive exposure to it could be dangerous and risky. The problem
with online shopping ranges from A to Z. They are avoidable if they are known. It should be
clear that not everybody online is there to buy or sell real products. Some are there for fraud and
online scams. I am a victim of such disaster before I learnt my lesson in the hard way. Internet
As earlier quipped, internet fraud is very common on the internet market. Online
shopping is characterized with internet catastrophes. Since online shopping in the most popular
means of shopping, it is important to note that everybody is now online. Exposure of the internet
is now the avenue for some weaklings and indolent people to fraud innocent shopping seekers.
One need to be on the watch out against internet fraud when one is sincerely going for online
shopping.
Sometimes in developing countries of the world has poor network provider. It could in such a
way limit one’s online shopping in any form. News has made it clear that internet connections
are faster than each other; some are very slow while some are time wasters to say.
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Goods in transit
Goods might be declared in transit when been tracked on the internet. This is a great limitation.
This hinders the buyer to receive the good at the stipulated time. He receives such goods very
late at the eleventh hour. It is very common to almost all shops. Steps are on to set everything in
Currency barrier
Not every country in the world has the same currency. Dollars are popularly used but some
countries have no access to dollars. This has limited online shopping in the recent years.
There are limitations. There are dangerous strives. There are perils. Language could also limit
57
0 LIMITATION
Every study will have its problems and limitations at some point during the project. This study is
no different. The use of a non-probalistic sample in the research was a major limitation because
there was no way to make sure that the sample taken represented the total population of the
Internet users. A non-probability sample lacks the accuracy and precision that a probability
sample might offer. Though this samples provided a better insight about the online shoppers but
there could be a possibility that a respondent may have done online shopping but is not a regular
Internet user. It was seen that some respondents were biased towards some questions. Another
major limitation encountered doing the research assignment was the issue regarding the time.
Limitation of the study is the selection of the existing studies. Owing to time limitation, only a
few number of journals were searched. This may leave some other prominent empirical studies
out. In addition, owing to the multidisciplinary nature of online shopping, it would be very
interesting to compare IS literature to other disciplines that study online shopping attitudes and
behavior.
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CONCLUSION:
Increased Internet penetration, a hassle free shopping environment and high levels of Net
Consumer Bias
Consumers often display a bias for brands that they know well and have had a good experience
in the past. Thus products of brands with a favorable bias will score over the products of less
popular brands. A few would risk buying expensive jewelry from an unknown jeweler online.
The customer is not sure of the quality of the product unless it is delivered to him and post
delivery of the product, it is sometimes a lengthy process to get a faulty or the unsuitable product
changed. Thus, unless the deliverables are as per the customers expectations, it is hard to infuse
To attract customers, the competing online players are adopting all means to provide products
and services at the lowest prices. This has resulted in making the consumers choice-spoilt, who
in turn surf various websites to spot the lowest price for the product. Thus, although the number
59
of transactions is increasing, the value of the products sold is continuously falling owning to high
Seasonality
February is the peak seasons for sale, while March to July is the dry seasons for sale”. During the
peak season, occasions that drive the sales are Diwali, Rakhi, Valentines Day, New Year,
Christmas, Mother’s Day, Friendship Day etc are. On these occasions younger generations
Online frauds and breach are the biggest barriers to online sales. As a result, prospective buyers
prefer staying away from revealing their credit card and bank details.
It might take a few minutes to search, book and pay for products and services online, but the
It is a challenge for E-marketers to convert low frequency online buyers into regular buyers
through successful website design and by addressing concerns about reliable performance. Thus,
the online retailing raises more issues than the benefits it currently offers
er
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