a study on online shopping preference of urban population, bangalore

List of Contents

Chapter I: Page Number

1. Introduction……………………………………………………….5 1.1 Background of research………………………………………6

Chapter II:

2. Design of the study……………………………………………….82.1 Title2.2 Aim2.3 Statement of problem2.4 Objective2.5 Hypothesis2.6 Research methodology

Stage 1: Literature researchStage 2: Sample designStage 3: Approaches to research design

2.7 Data collection2.8 Scope of the study2.9 Limitations of the study

Chapter III:

3. Industry Analysis……………………………………………………133.1 Industry Analysis3.2 Essentials of e-retailing3.3 Support services in e retailing3.4 Online shopping impact3.5 Online shopping in India3.6 Drivers of growth3.7 Factors that boost online shopping in India3.8 Facts about online shopping3.9 Top e- commerce companies in India3.10 SWOT Analysis

Chapter IV:

4. Data analysis and interpretation………………………………………35

1

Chapter V:

5. Summary of Findings ,Conclusions and suggestions…………………….56

Chapter VI:

6. Annexures

2

List of Tables and Graphs

4.1 Table and graph showing classification of respondents on the basis of age…………………36

4.2 Table and graph showing classification of respondents on the basis of gender……………..37

4.3 Table and graph showing classification of respondents on the basis of occupation…………38

4.4 Table and graph showing classification of respondents on the basis of monthly income…...39

4.5 Table and graph showing whether customer shops online…………………………………..40

4.6 Table and graph showing whether online shopping experience is superior than shopping at physical store…………………………………………………………………………………….41

4.7 Table and graph showing whether online marketer provides competitive price…………….42

4.8 Table and graph showing the factors that help customer to choose website………………...43

4.9 Table and graph showing what motivates customers to buy products online………………..44

4.10 Table and graph showing do offers and discounts coax customers to buy online………….45

4.11 Table and graph showing whether products sold online matches with shopping needs……46

4.12 Table and graph showing whether products sold online matches with lifestyle needs…….47

4.13 Table and graph showing whether shopping online saves time……………………………48

4.14 Table and graph showing whether online shopping takes more time to search a product…49

4.15 Table and graph showing whether online shopping takes more time to deliver a product…50

4.16 Table and graph showing whether it is easy to make online transactions………………….51

4.17 Table and graph showing whether speed of internet affects online shopping……………52

4.18 Table and graph showing whether customers face any problem while shopping online….53

4.19 Table and graph showing whether online transactions are fully secure……………………54

3

EXECUTIVE SUMMARY

The growing use of Internet in India provides a developing prospect for online shopping. If E-

marketers know the factors affecting online Indian behavior, and the relationshipsbetween these

factors and the type of online buyers, then they can further develop theirmarketing strategies to

convert potential customers into active ones, while retainingexisting online customers.

This project is a part of study, and focuses on factors which online Indian buyers keep in mind

while shopping online. This research found that information, perceived usefulness, ease of use;

perceived enjoyment and security/privacy are the dominant factors which influence consumer’s

preference of online Shopping.

Consumer preference is said to be an applied discipline as some decisions are significantly

affected by their behavior or expected actions. The two perspectives that seek application

of its knowledge are micro and societal perspectives.

Internet is changing the way consumers shop and buy goods and services, and has rapidly

evolved into a global phenomenon.Many companies have started using the Internet with the aim

of cutting marketing costs, thereby reducing the price of their products and services in order to

stay ahead in highly competitive markets.

Companies also use the Internet to convey, communicate and disseminate information, to sell the

product, to take feedback andalso to conduct satisfaction surveys with customers. Customers use

the Internet not only to buy the product online, but also to compare prices, product features and

after sale service facilities they will receive if they purchase the product from a particularstore.

Many Experts are optimistic about the prospect of online business.

4

CHAPTER -1

INTRODUCTION

Background of the research:

5

Shopping online offers lots of benefits that one will not find shopping in a store or by mail. The

Internet is always open — seven days a week, 24 hours a day — and bargains can be numerous

online. With a click of a mouse, one can buy an airline ticket, book a hotel, send flowers to a

friend or purchase favorite fashions. But sizing up your finds on the Internet is a little different

from checking out items at the mall. Recent surveys have found that the number of people who

shop online around the globe is increasing dramatically. The internet is like a gigantic shopping

mall and all of us can be a part of it. Many consumers now a days like to shop online, because it

is cheaper, easier and faster. People do not have to queue anymore at the store to pay for their

items. There are no long lines, no crowded aisles, no traffic and people do not have to look for a

parking space to go to store anymore. With internet, one can browse the site at your leisure,

which is important for busy people. There are three phases that people go through when they end

up buying a purchase online. In phase 1, people would just go on the internet to find general

information about the product that they are searching for, where they just browse to find the

general information about features, details, uses of the product that they want to buy and see

what brand names are out there for it. In phase 2, once they have all of their information about

the different features of the brands, they will compare the details from brand to brand or from

model to model of the product that they are thinking about buying. Phase 3 is called the buying

phase. It is where they actually make the purchase online. Shopping online is fast and easy. Once

the items or services have been chosen and placed in a virtual shopping cart, the customer

proceeds to checkout, just like at a retail store. Most sites are easy to use as items are clearly

displayed with accurate descriptions. It should be like that. Most shopping sites also have the

merchandise divided into categories, so the consumer can focus on what they are looking for. By

clicking on an item, one can get a close-up view and a more detailed description. The customer

can also check their order status or history through their order status and make returns if

necessary. After one has finished shopping, the merchandise should arrive in a couple of days

when promised from the site one purchased. Express shipping, at extra cost to the customer, is

attractive to last minute shoppers. Along with gift wrap and gift cards together with the

merchandise also seem to be an important element for consumers. These extra conveniences

enhance the online shopping experience. A site can also keep track of a specific shopper's sales

history and send out the infamous newsletter type to promote their new items available on their

store and also to keep reminding them about their existence. Online shopping is worthwhile to

6

everyone. The seller enjoys extra opportunities for sales. The customers can browse the site at

their leisure. A dynamic and convenient shopping site should be a popular and ultimate

destination for online shoppers.

The Internet has developed an into a new distribution channel and online transaction are rapidly

increasing. This has created a need to under how the consumers perceive onlinepurchasing.

Price, Trust and Convenience were identified as important factors. Price was consideredas tobe a

most important factor for a majority of the students. The internet has created aparadigm shift of

the traditional way people shop. A consumer is no longer bound toopening a times or specific

location. So he can become active at virtually any time anyplace and purchase the products or

services.

The internet is relatively a new medium for communication and the information exchangethat

has present in everyday life. The number of internet user is constantly increasingwhich is also

signifies that online purchasing is increasing. The rapid increasing isexplained by the consumer

behavior. The internet is considered a mass medium thatprovides the consumers with purchase

characteristics as no other medium. Certaincharacteristics are making it more convenient for the

consumer compared to thetraditional way of shopping, such as the ability to any time view and

purchase productsvisualize the needs with products and discuss products with other consumers.

Onlineshopping is the process of consumer go through the when they decide the shop on the

internet.

One of the primary reasons to use the internet combined with searching for products andfinding

the information about them. Therefore internet develop the h Companies also use the Internet to

convey, communicate and disseminate information, to sell the product, to take feedback and also

to conduct satisfaction surveys with customers. Customers use the Internet not only to buy the

product online, but also to compare prices,product features and after sale service facilities they

will receive if they purchase theproduct from a particular store. Many experts are optimistic

about the prospect of onlinebusiness. Due to the rapid development of the technologies

surrounding the Internet, a companythat is interested in selling products from its web site will

constantly has to search for anedge in the fierce competition. Since there are so many potential

consumers, it is of the out most importance to understand what the consumer wants and needs.

7

CHAPTER 2:

DESIGN OF THE STUDY

2.1 Title:

8

A Study On Online Shopping Preference among Urban Population ,Bangalore

2.2Aim:

To understand and analyze the factors that influence online shopping preference of urban consumer of Bangalore city.

2.3 Statement of problem:

At any given time there are millions of people online and each of them is a potential customer for a company providing online sales. Since there are so many potential consumers, it is at most important to understand what the consumer wants, needs and prefers. The importance of analyzing and identifying factors that influence the consumer when he or she decides to purchase on the Internet is vital. Since online shopping is a new shopping trend and online consumer behavior is diverse from traditional consumer behavior, and to analyses factor influencing the preference of online shopping.

2.4 Objective:

To analyze whether customer prefer online shopping or not. To analyze the factors influencing online consumer. To investigate if online shopping impacts lifestyle / shopping To know if online shopping saves time. To analyze whether shopping online is user friendly or not.

.

2.5 Hypothesis:

Ho - There is no significant difference between respondent Age group and usage of online shopping.H1- There is significant difference between respondent Age group and usage of online shopping.

9

2.6 RESEARCH METHODOLOGY

I Stage- Literature Research

Literature review:

Electronic commerce and online shopping continue to grow as consumers' channel of choice for

products and services. Yet, SarvDevaraj et al* in their study have mentioned that persistent

issues of security, availability and personalization inhibit its full potential. Using a structure-

conduct-outcome (SCO) framework, their study analyzed theeconomic aspects of consumer

transaction through incurredcosts and the social aspects through patterns of behavior.

The results from the structural equation modeling analysis indicate that asset specificity and

uncertaintystructure variables of the electronic marketplace are associated with the conduct

constructs such as timeresponsiveness, personalization, website design and security and

reliability of the online channel. Further, timeresponsiveness; personalization, security and

reliability are also significantly related to the consumer satisfactionoutcome with the channel.

They do not find support for website design being related to online consumers'satisfaction.

Finally, there is evidence that satisfaction derived from the above conduct variables is strongly

relatedto the consumers' preference for the online channelSearching product information and

buying goodsonline are becoming increasingly popular activities, whichwould seem likely to

affect shopping trips. Farag et al' intheir study have said that little empirical evidence about the

Relationships between e-shopping and in-store shopping areavailable. The aim of study is to

describe how the frequenciesof online searching, online buying and non-daily shoppingtrips

relate to each other and how customers are influenced bysuch factors as attitudes, behavior and

land use features. The results showed that predictors from all four categories are retained in the

final (best subset) solution indicating that click stream behavior is important when determining

the tendency to buy. This clearly indicated the contribution in predictive power of variables that

were never used before in online purchasing studies. Detailed click stream variables are the most

important ones in classifying customers according to their online purchase behavior. Kenneth K.

Boyer et al' in their study presented an analysis of the growing market for groceries and other

10

foodstuffs ordered via the internet or telephone for delivery to the customer's home. They said

that this industry has been growing for the past 5 years at greater than 25% per year .

II Stage- Sampling

Sample unit: Online consumers. Sample size: 100onlineconsumers from Bangalore City only. Sampling design: Simple Random Sampling

III Stage- Approaches to Research Design

1. Research Design – DescriptiveResearch

2.7 Data Collection

I. Primary data.II. Secondary data

Primary sources:We have send questionnaire online through Google docs in Bangalore city only.

1) Questionnaire Analysis

Secondary sources: For writing the report and understanding online shopping behavior in general secondary data was collected through Internet, Journal and Magazine

2.8 Scope of the study:

11

Today’s Indian market scenario offers more reliable and profitable online marketing opportunity. The internet has now become new source of distribution channel, which are rapidly growing. Despite the increase in the number of internet user in Bangalore and the product that are been offered on the web, there is relatively little work that specifically examine the internet usage and online shopping preference of the consumers. So this study will provide an opportunity to understand how consumers perceive online purchases and factors influence their online buying preference. The study was carried out in Bangalore city during the period of December 12st ,2012 to February 10th, 2013.

2.9 Limitation of the study:

The research is restricted to Bangalore city only.

Since the time frame may not be sufficient to carry out the study in greater depth, the sample size is restricted to 100 only.

12

CHAPTER 3:

INDUSTRY ANALYSIS

3.1 Industry analysis

13

The first World Wide Web server and browser, created by Tim Berners-Lee in 1990, opened for

commercial use in 1991. Thereafter, subsequent technological innovations emerged in 1994:

online banking, the opening of an online pizza shop by Pizza Hut, Netscape's SSL encryption of

data transferred online and Intershop's first online shopping system. Immediately after

Amazon.com launched its online shopping site in 1995 and eBay was introduced in 1996.

The e-retailing (less frequently; e-Retailing, e-Tailing, etc.) is the concept of selling of retail

goods using electronic media, in particular, the internet. The vocabulary electronic retailing, that

used in internet discussions as early as 1995, the term seems an almost in evitable addition to e-

mail, e-business and e-commerce, etc. e-retailing is synonymous with business- to- consumer

(B2C) transaction model of e-commerce. Although e-retailing is an independent business model

with certain specific constituents like; trust model, electronic transaction process, etc, but in

reality it is a subset of e- commerce by nature.

E-Retailing stores sell online promotion only for goods that can be sold easily online, e.g.,

Amazon did for Books & CDs, etc. The online retailing require lots of displays and specification

of products to make the viewers have a personal feel of the product and its quality as he gets

while physically present in a shop.

E-Retailing refers to retailing over the internet. Thus an e-Retailing is a B2C (Business to

customer) business model that executes a transaction between businessman and the final

consumer. E-Retailers can be pure play businesses like amazon.com or businesses that have

evolved from a legacy business such as tesco.com. The e-retailing is a subset of e-commerce.

Thus, e-commerce is the master domain defining the e-retailing operation.

Electronic commerce, commonly known as e-commerce, is a type of industry where buying and

selling of product or service is conducted over electronic systems such as the Internet and other

computer networks. Electronic commerce draws on technologies such as mobile commerce,

electronic funds transfer, supply chain management, Internet marketing, online transaction

processing, electronic data interchange (EDI), inventory management systems, and automated

data collection systems. Modern electronic commerce typically uses the World Wide Web at

14

least at one point in the transaction's life-cycle, although it may encompass a wider range of

technologies such as e-mail, mobile devices social media, and telephones as well.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists

of the exchange of data to facilitate the financing and payment aspects of business transactions.

E-commerce can be divided into:

E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered

into a "virtual mall"

The gathering and use of demographic data through Web contacts and social media

Electronic Data Interchange (EDI), the business-to-business exchange of data

E-mail and fax and their use as media for reaching prospective and established customers

(for example, with newsletters)

Business-to-business buying and selling

The security of business transactions

3.2 Essentials of E-Retailing

Electronic retailing or e-tailing, as it is generally being called now, is the direct sale of products,

information and service through virtual stores on the web, usually designed around an electronic

catalogue format and auction sites. There are thousands of storefronts or e-commerce sites on

the Internet that are extensions of existing retailers or start-ups. Penetration of computers and

proliferation of the Internet has given rise to many new forms of businesses, such as business

process outsourcing, call centre based customer relationship management, medical transcription,

remotely managed educational and medical services and of course, electronic retailing.

There are certain essential ingredients for an electronic retailing business to be successful. One

must consider these components well in advance before setting up an electronic storefront.

These essential components are:

15

Attractive business-to-consumer (B2C) e-commerce portal

Right revenue model

Penetration of the Internet

E-Catalog It is a database of products with prices and available stock.

Shopping Cart The customers select their goodies and fill shopping cart. Finally, as in a real

store, at the time of checkout, the system calculates the price to be paid for the products.

A payment gateway Customer makes payments through his/her credit card or e-cash. The

payment mechanism must be fully secure.

3.3 Support Services in E-Retailing

The electronic retail business requires support services, as a prerequisite for successful

operations. These services are required to support the business, online or offline, throughout the

complete transaction-processing phases. The following are the essential support services:

Communication backbone

Payment mechanism

Order fulfillment

Logistics

3.4 ONLINE SHOPPING IMPACT

16

Internet is changing the way consumers shop and buy goods and services, and has rapidly

evolved into a global phenomenon. Many companies have started using the Internet with the aim

of cutting marketing costs, thereby reducing the price of their products and services in order to

stay ahead in highly competitive markets. Companies also use the Internet to convey

communicates and disseminate information, to sell the product, to take feedback and also to

conduct satisfaction surveys with customers. Customers use the Internet not only to buy the

product online, but also to compare prices, product features and after sale service facilities the

will receive if they purchase the product from a particular store. Many experts are optimistic

about the prospect of online business.

In addition to the tremendous potential of the E -commerce market, the Internet provides a

unique opportunity for companies to more efficiently reach existing and potential customers .

Although most of the revenue of online transactions comes from business -to-business

commerce, the practitioners of business-to-consumer commerce should not lose confidence .It

has been more than a decade since business -to-consumer E-commerce first evolved. Scholars

and practitioners of electronic commerce constantly strive to gain an improved insight into

consumer behavior in cyberspace. Along with the development of E-retailing, researchers

continue to explain E-consumers „behavior from different perspectives. Many of their studies

have posited new emergent factors or assumptions which are based on the traditional models of

consumer behavior, and then examine their validity in the Internet context.

The Internet has developed an into a new distribution channel and online transaction are rapidly

increasing. This has created a need to under how the consumers perceive onlinepurchasing.Price,

Trust and Convenience were identified as important factors. Price was considered as to be a most

important factor for a majority of the students. The internet has created a paradigm shift of the

traditional way people shop. A consumer is no longer bound to opening a times or specific

location. So he can become active at virtually any time any place and purchase the products or

services.

The internet is relatively a new medium for communication and the information exchange that

has present in everyday life. The number of internet user is constantly increasing which is also

signifies that online purchasing is increasing. The rapid increasing is explained by the consumer

behavior. The internet is considered a mass medium that provides the consumers with purchase

17

characteristics as no other medium. Certain characteristics are making it more convenient for the

consumer compared to the traditional way of shopping, such as the ability to any time view and

purchase products visualize the needs with products and discuss products with other consumers.

Online shopping is the process of consumer go through the when they decide the shop on the

internet.

The internet has developed into a new distribution channel and the evaluation of this channel. E-

commerce has now identified. Using the internet to shop online has become one of the primary

reasons to use the internet combined with searching for products and finding the information

about them. Therefore internet develop the Companies also use the Internet to convey,

communicate and disseminate information, to sell the product, to take feedback and also to

conduct satisfaction surveys with customers. Customers use the Internet not only to buy the

product online, but also to compare prices, product features and after sale service facilities they

will receive if they purchase the product from a particular store. Many experts are optimistic

about the prospect of online business.

Due to the rapid development of the technologies surrounding the Internet, a company that is

interested in selling products from its web site will constantly has to search for an edge in the

fierce competition. Since there are so many potential consumers, it is of the out most importance

to be able to understand what the consumer wants and needs.

3.5 Online Shopping In India

It is a fact that a great online shopping revolution is expected in India in the coming years. There

is a huge purchasing power of a youth population aged 18 -40 in the urban area. Rising

Connectivity and the growth of InternetSubscribers , it is getting doubled year by year. The

usage of internet in India is only 4% of the total population.

This is also getting increased day by day as the costs of computers are decreasing and net

penetration is increasing. The cost of internet usage is also getting lower, with good competition

among the providers. Wi-Fi &Wi max system has also started in India. This will increase the

usage as it goes more on wireless internet. Indians are proving every time that they can beat the

18

world when it comes to figures of online shopping. More and more Indians are going to online

shopping and the frequency of India online buying is crossing the overall global averages.

In India’s largest retail e-com company Flipkart.com which recently raised $20 million in its

third round of funding from a venture capital (VC), valuing it in excess of Rs 1,000 crore.

Though the company has already raised $31 million, there are rumors that a very large ventures

capital fund is planning to invest another $150 million in the company raising its valuations to $1

billion or Rs 5,000 crore.

Then there are others like Myntra.com which raised $40 million, India plaza that raised $8

million so far, and daily deals site Snapdeal.com’s parent Jasper Infotech that recently raised $40

million from venture capital. Even global majors like eBay.com (entered six years ago) and

Amazon.com are present in the Indian space.

Large Indian off-line groups like Future and Times of India are also in the fray. It is estimated

that even after investing $300 million in the Indian retail e-com space, VCs are looking out for

more exciting ideas with a bagful of money. It is estimated that around 20,000 deal transactions

and 50,000 product transactions happen every day from the top 10 retail e-com sites.

Why are VCs so bullish on e-com? Will it be another bubble like the burst of dot.com companies

in the early 2000s? Early stage venture funding company Accel Partners, which has invested in

half-a-dozen e-com companies does not think so. “We are very bullish on the future potential of

the Indian retail e-com market. Buying online is catching up fast and all our funded companies

are gaining traction as planned,” said Accel Partners Partner PrashanthPrakash.

3.6 Drivers of growth

E-com companies and experts believe that several factors will drive e-retailing growth in India.

19

According to a recent report from Internet and Mobile Association of India (IAMAI), total

Indian market for e-com is around Rs 50,000 crore, of which 80 per cent or Rs 40,000 crore is

captured by travel e-commerce (online train, bus and airline tickets) while non-travel or retail e-

com is only 20 per cent or Rs 10,000 crore.

Experts hope that by the year 2025, the total e-com market will reach at least Rs 4,00,000crore

and the share of retail will be half at Rs 2,00,000 crore. “It is this kind of market predictions that

is making everyone sit up and make a note,” said Indiaplaza Founder and CEO K Vaitheeswaran.

Indiaplaza, now one of the top 10 e-com companies in the country, has been around for nearly a

decade and re-invented its business model to become a pure play e-retailer. One of the major

reasons why e-com has grown very fast in the last 2 to 3 years, Vaitheeswaran believes, is the

tremendous growth in internet penetration which has now reached 100 million as against only 3

million in 2001. “Earlier only around 1 per cent of internet users were shopping online, now

about 8 per cent or 8 million shop online,” said Vaitheeswaran.

With the phenomenal spread of mobile telephony and the advent of 3G in the country, buyers

from small towns and cities are also buying online in large numbers. It is a fact that internet has

dissolved the discrimination factor between the small and the big cities enabling buyers from

small towns to have access to the same branded goods, and quality products which earlier was a

privilege of large city buyers.

3.8 Factors That Boost Online Shopping in India

20

Rapid growth of cyber cafés across India

Access to Information

The increase in number of computer users

Reach to net services through broadband

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

3.8 Facts about Online Shopping

25% of regular shoppers in India are in the 18-25 age groups, and 46% are in the 26 -35 year

range. Indian online matrimonial sector is worth around $230 million Worldwide The figures

from IAMAI show that the internet users in India will grow to 200 million by 2010. Around E-

commerce is only growing at the rate of 28%, since India being a younger market, the growth of

e-commerce is expected at 51% in the coming years 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 2007 and it is expected to rise above $700

million by end March 2010.

Changing Attitude towards Online Shopping

“Awareness, Future Demand Focus for Emerging Markets & Current Issues” Malls springing up

everywhere and yet people are E -shopping! And not in small numbers either. Consumers are

more rational nowadays and have ability to get the choices from the market. Awareness among

the consumers is spread through internet. The number of internet users is increasing day by day

which attracts people who have an option to buy online. 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,

21

how is it that there are people buying these items online? In India there are some segments of

people who have not yet tried purchasing over internet.

E -commerce or electronic commerce saw sales revenues grow 12.1 percent i n 2001 to $31.4

billion a figure expected to reach $81.1 billion by 2006 it is anticipated that the worldwide

market for business -to-business and business-to-consumer e-commerce will total $3.1 trillion in

2004 as compared to $350.4 billion in fiscal 2000 -2001. Among the most profitable products

and services sold online are consumer goods such as books, videos, music, computers and other

tech products, and travel. There profitable sectors include investment transactions

The idea of online retailing or e-tailing which almost every net -savvy individual is familiar with;

offers a convenient mode of shopping online and the consumer gets to choose from a diverse

range of products and services as opposed to the analogous physical shopping experience.

Furthermore, online retailers or e -tailers get to expose and sell their products to a global

audience through their e-stores. (Also termed as online stores, internet shops, web shops etc.)

The E-commerce industry plays a vital role in its growth and development. The consumer or

buyer is usually provided with detailed information and description of the product which helps

them make a judicious choice before making an online purchase. For consumers who face a

paucity of time or want a diverse range of products to choose from, e-tailing proves to be an

ideal option. Every e -tailer wants his/her share of domain amidst the vast World Wide Web

galaxy. Due to the intense competitory quotient involved, every e-tailer out there wants to offer

their customer/buyer a smooth and pleasant shoppingexperience. Therefore, e-tailing is just not

restricted to put ting up products for sale for consumers to buy. As consumers today are well -

informed, it is understood that they would make a well informed decision as well. This involves

a fair amount of product. research, price comparison and checking the credibility of the E-store.

Top E-commerce Companies in India

1.Flipkart.com

22

2.Snapdeal.com

3.Fashionandyou.com

4.Myntra.com

5.Inkfruit.com

6.Dealsandyou.com

7.eBay

8.Homeshop18.com

9.Infibeam.com

10.99labels.com

Customers

Online customers must have access to the internet and a valid method of payment in order to

complete a transaction.

23

Generally, higher levels of education, occupation of the head of the household and income

correspond to more favorable perceptions of shopping online. Increased exposure to technology

also increases the probability of developing favorable attitudes towards new shopping channels.

In a December 2011 study, Equation Research found that 87% of tablet users made online

transactions with their tablet devices during the early holiday shopping season.]

LOGISTICS

Consumers find a product of interest by visiting the website of the retailer directly or by

searching among alternative vendors using a shopping search engine.

Once a particular product has been found on the website of the seller, most online retailers

use shopping cart software to allow the consumer to accumulate multiple items and to adjust

quantities, like filling a physical shopping cart or basket in a conventional store. A "checkout"

process follows (continuing the physical-store analogy) in which payment and delivery

information is collected, if necessary. Some stores allow consumers to sign up for a permanent

online account so that some or all of this information only needs to be entered once. The

consumer often receives an e-mail confirmation once the transaction is complete. Less

sophisticated stores may rely on consumers to phone or e-mail their orders (though credit card

numbers are not accepted by e-mail, for security reasons).

PAYMENT

24

Online shoppers commonly use a credit card or a PayPal account in order to make payments.

However, some systems enable users to create accounts and pay by alternative means, such as:

Billing to mobile phones and landlines

Cash on delivery (C.O.D., offered by very few online stores)

Cheque/ Check

Debit card

Direct debit in some countries

Electronic money of various types

Gift cards

Postal money order

Wire transfer/delivery on payment

Invoice, especially popular in some markets/countries, such as

Switzerland

Some online shops will not accept international credit cards. Some require both the purchaser's

billing and shipping address to be in the same country as the online shop's base of operation.

Other online shops allow customers from any country to send gifts anywhere.

The financial part of a transaction may be processed in real time (e.g., letting the consumer know

their credit card was declined before they log off), or may be done later as part of the fulfillment

process.

Product delivery

Once a payment has been accepted, the goods or services can be delivered in the following ways:

25

Downloading: The method often used for digital media products

such as software, music, movies, or images.

Drop shipping: The order is passed to the manufacturer or third-

party distributor, who then ships the item directly to the

consumer, bypassing the retailer's physical location to save time,

money, and space.

In-store pick-up: The customer selects a local store using

a locator software and picks up the delivered product at the

selected location. This is the method often used in the bricks and

clicks business model.Printing out, provision of a code for,

or emailing of such items as admission tickets and scrip (e.g., gift

certificates and coupons). The tickets, codes, or coupons may be

redeemed at the appropriate physical or online premises and their

content reviewed to verify their eligibility (e.g., assurances that

the right of admission or use is redeemed at the correct time and

place, for the correct dollar amount, and for the correct number of

uses).

Shipping: The product is shipped to a customer-designated

address.

Will call, lCOBO (in Care Of Box Office), or "at the door" pickup: The patron picks up pre-

purchased tickets for an event, such as a play, sporting event, or concert, either just before the

event or in advance. With the onset of the Internet and e-commerce sites, which allow customers

to buy tickets online, the popularity of this service has increased.

Information load

26

Designers of online shops are concerned with the effects of information load. Information load is

a product of the spatial and temporal arrangements of stimuli in the webstore. Compared with

conventional retail shopping, the information environment of virtual shopping is enhanced by

providing additional product information such as comparative products and services, as well as

various alternatives and attributes of each alternative, etc.

Two major dimensions of information load are complexity and novelty. Complexity refers to the

number of different elements or features of a site, often the result of increased information

diversity. Novelty involves the unexpected, suppressed, new, or unfamiliar aspects of the site.

The novelty dimension may keep consumers exploring a shopping site, whereas the complexity

dimension may induce impulse purchases

Consumer needs and expectations

A successful webstore is not just a good looking website with dynamic technical features, listed

in many search engines. In addition to disseminating information, it is also about building a

relationship with customers and making money.

Businesses often attempt to adopt online shopping techniques without understanding them and/or

without a sound business model; often times, businesses produce webstores that support the

organizations' culture and brand name without satisfying consumer expectations. User-centered

design is critical. Understanding the customer's wants and needs is essential. Living up to the

company's promises gives customers a reason to come back and meeting their expectations gives

them a reason to stay. It is important that the website communicates how much the company

values its customers.

Customer needs and expectations are not the same for all customers. Age, gender, experience

and culture are all important factors. For example, Japanese cultural norms may lead users there

to feel privacy is especially critical on shopping sites and emotional involvement is highly

important on financial pension’s sites. Users with more online experience focus more on the

variables that directly influence the task, while novice users focus on understanding the

information.

To increase online purchases, businesses must expend significant time and money to define,

design, develop, test, implement, and maintain the webstore.It is easier to lose a customer than to

27

gain one. Even a "top-rated" website will not succeed if the organization fails to practice

common etiquette such as returning e-mails in a timely fashion, notifying customers of problems,

being honest, and being good stewards of the customers' data. Because it is so important to

eliminate mistakes and be more appealing to online shoppers, many webshop designers study

research on consumer expectations.

Market Share and Future Prospective in India

People turned to the Internet to buy everything from diapers to books, houses and even groceries

this year, pushing e-commerce revenues in the country to $14 billion with the possibility of even

higher earnings in 2013.Factors like spiraling inflation and slower economic growth failed to

dampen the online shopping frenzy as more and more companies opted for selling wares through

the internet route, offering innumerable options and discounts to buyers."Increasing Internet

penetration and availability of more payment options boosted the e-commerce industry in 2012.

Besides electronics, customer traction grew considerably in categories like fashion and jewellery,

home and kitchen and lifestyle accessories like watches and perfumes," Snapdeal Vice President

(Marketing) SandeepKomaravellysaid.While travel still comprises a significant portion of the e-

commerce market, other segments are catching up fast.Apparel, books and lifestyle categories

(beauty, footwear and health) will drive e-commerce," HomeShop18.Com Founder and CEO

SundeepMalhotra said, adding that relatively stable and growing domestic economy will also be

major growth drivers. "The coming year looks promising for the industry."

According to peppercloset.com owner SumeetArora, e-commerce segment has doubled to $14

billion this year from $6.3 billion in 2011. This figure is likely to reach 38 million by 2015.

So, what can one expect in 2013 from the thousands of e-commerce websites.

"More personalized offers, loyalty programs and better customer care is what most e-commerce

companies would focus on to offer customers a richer, more relevant online experience," an

industry analyst said.

According to homeshop18.Com, an innovation that will "revolutionize" e-commerce in India is

cost optimization through warehouse and logistics management that will enable companies to do

28

profitable business.

While players like eBay and IndiatimesShopping have been around for a while, one saw many

more portals mushrooming in 2012. An important entry in the Indian market was that of one of

the world's largest online retailer -- amazoIndia also got its own version of 'Cyber Monday' on

December 12 this year as 'e-tailers' like Flipkart, Snapdeal, Homeshop18 and Makemytrip,

partnered Google India to offer discounts for online shoppers.

Celebrated on the Monday after Thanksgiving, the term 'Cyber Monday' was first coined in 2005

as a marketing term and has grown as a phenomenon over the years in the US.

According to analysts, factors like growing Internet penetration, increasing spending power,

availability of multiple payment methods like credit/debit cards, cash on delivery, combined with

faster adoption of smartphones and tablets are contributing to the growth of the sector.

"Mobility most likely will be the trend to look forward to the next year. Mobile commerce would

be huge as more and more people access Internet through tablets and smartphones. Most

companies are looking at enhancing their mobile presence," Malhotra said.

According to a study by IMRB International and IAMAI, there were an estimated 137 million

Internet users in the country as of June 2012. Of this, while 99 million were from urban parts of

the country, the remaining 38 million were from rural India.

The next year is expected to see increased participation from tier 2 and tier 3 cities.

With a gap of demand and supply in physical retail category, online shopping is set to grow in

tier 2 and tier 3 cities. The introduction of cash on delivery has helped gain the trust of

consumers in these markets and get rid of the apprehension of using credit cards online," he said.

According to him, there is a rising demand for books and health and beauty products from these

cities, but tier 2 markets score highest on kids and baby items and home appliances.

The year also saw acquisitions and consolidation activities picking up pace as dozens of online

shopping portals set up shop.

Among major deals, Snapdeal acquired Esportsbuy.Com, Flipkart acquired letsbuy.Com,

Madeinhealth was acquired by Healthkart, Yatra.Com acquired Travelguru from Travelocity

Global, Fashionandyou acquired UrbanTouch and Myntra.Com bought SherSingh.Com

"Acquisitions and consolidations will continue. It’s just the beginning and will continue

29

happening over the next few years. Bigger players will acquire smaller players and more

investments will flow into the segment," Arora said.

Despite the fact that most of these e-commerce companies are yet to start making money, growth

prospects for these companies remain high and there seems no dearth of investors.

According to experts, in 2012, the e-commerce companies in India raised over $500 million

(about Rs 2,743.3 crore).

In one of the biggest fund raising by an Indian e-commerce firm,Flipkart in August this year

raised $150 million (about Rs 822 crore) from four investors.Entertainment ticketing website

BookMyShow.Com also saw Rs 100 croreinvestment by Accel Partners, while Yebhi.Com

raised funding from Fidelity Growth Partners India and Qualcomm Ventures.

While "one will not see obscene valuations", investors would continue to make small

investments and 2013 will be a year of growth and consolidation, Arora said.

Online retail has also seen an heavy overlap with social networking due to aggressive marketing

on such platforms.

"As smartphones and tablets continue to proliferate, companies will need to embrace multi-

channel commerce strategy in 2013," Purehomedecor.Com owner SandeepJaglan said.

While consumers will be spoilt due to choice, players will have to sweat it out to differentiate

themselves from the competitors.

Komaravelly of Snapdeal believes that personalization would emerge as a key focus area in

2013. "The ability to customize and personalize shopping experience for customers will become

a critical differentiator. Social and mobile platforms will see increased customer adoption in the

coming year," he said.

Elitify.Com Founder and CEO AmitRawalagrees. "The market is overcrowded with companies

that are competing for the same pie and have very little differentiation in their product offering,"

he said.

30

Differentiation is centered around beating the other in marketing and competing on prices, both

of which are not sustainable trends for any industry, he added.

"So the only way forward is consolidation of players that can create synergies both in terms of

operations and product offerings," Rawal said.

Marketing campaigns by major players like Flipkart and Jabong have also made e-commerce a

household phenomenon, especially in the big cities, say experts. Social media would also

become crucial as more brands use social data to not just popularize their brands but also

personalize experience for customers on their websites.

Some experts are of opinion that cash on delivery, which is at present the predominant payment

mechanism, will become less popular and give way to usage of debit/credit cards.

"Given the various disadvantages like longer cash cycles for retailers, collection challenges etc.,

cash on delivery will become less popular and cards will start becoming more ubiquitous,"

Malhotra said.

With more lucrative deals, loyalty plans and newer products hitting the online shelf, netizens can

shop to their heart's content. 2013 surely promises to make customer the king for e-commerce

companies.

Market share of some Countries

E-commerce B2C product sales totaled $142.5 billion, representing about 8% of retail product

sales in the United States. $26 billion worth of clothes sold online represented about 13% of the

domestic market, and with 72% of women looking online for apparel, it has become one of the

most popular cross-shopping categories. Forrester Research estimates that the United States

online retail industry will be worth $279 billion in 2015. There were 242 million people doing

online shopping in China in 2012.

For developing countries and low-income households in developed countries, adoption of e-

commerce in place of or in addition to conventional methods is limited by a lack of affordable

Internet access.

31

3.10 SWOT ANALYSIS

Strengths

Ability to compete with other companies global and locally

Implementing an e-commerce business solution allows companies to expand their customer base

to a global level without considerable time or expense.

Specialization and niche selling

The larger customer base created by online sales allows e-tailers to specialize in certain niche

products that could not support a more traditional business model.

Low overhead cost and low barrier to entry

Startup costs for an e-commerce retail operation are a fraction of the costs of starting a traditional

brick and mortar company.

Direct consumer communication

This form of commerce allows the business to maintain a higher level of consumer

communication. The communication happens when the order is placed, when the order has

shipped and then at a point in the future, should the customer opt-in to receiving regular email

communication.

Weaknesses

High Customer Expectations

Small businesses can appear to be large companies on the Internet. Customers have no way of

gauge the business’ actual level of man power and resources. This leads to customers that

demand the same level of service from business with 1-2 employees as they would from industry

giants like amazon.com.

Search Engine Unpredictability

Web retailers live and die by organic search engine placement. The higher the store is placed on

the search engine result pages (SERPs) translates to more traffic and sales. Search engines

32

regularly change their ranking systems and this can cause major fluctuation in placement and

create an unpredictable environment.

Opportunities

Global Exposure

Adding an e-commerce component to a business allows the company to sell their products to a

global market.

High Availability: a 24/7 business

Selling on the Internet allows the company to take orders around the clock on every day of the

week. Orders can then be filled and processed during set business hours.

Strong business-to-business networking

Websites allow for business-to-business exchange links to increase traffic and search engine

placement for each businesses’ sites. This opens lines of communication on a business-to-

business level and aids in the cooperation between companies.

Industry Growth

Retail sales on the Internet in America have seen double digit growth each of the past 8 years.

Growth is expected to continue at high rates and having a business online allows the merchant to

be in a position to benefit from this expansion.

Threats

Competition

The low barriers and the comparatively low overhead costs allow a for a relative easy entry into

the market. This increases the level competition and can cause a reduction in prices and profit

margins. Threats are produced not only by other retailers within the same industry but also by

the manufactures that supply the products that the retailer sells. It is not uncommon for online

retailers to directly compete with the manufacturer of the lines they carry.

33

Innovation

Future innovation could have an adverse effect on e-commerce businesses.

Fraud

Some consumers are leery of doing business online out of concerns of fraud and misuse of their

financial data. This alienates an entire segment of the population from conducting business via

the Internet.

Privacy Concerns

Some consumers prefer not to give any personal information out over the Internet because of

fears that the information will be misused, lead to spam email or identity fraud.

Future Legislation

Internet sales only have tax applied to the purchase if the buyer and seller reside in the same

state. Considering the growth and amount of tax revenue lost to e-commerce, the federal

government and individual states could write legislation to impose tax on all online sales. This

would remove one incentive to conducting business online.

34

CHAPTER 4

DATA ANALYSIS ANDINTERPERTATION

35

TABLE 4.1: TABLE SHOWING CLASSIFICATION OF RESPONDENTS ON THE BASIS OFAGE

AGE GROUP NO. OF RESPONDENT PERCENTAGE15-20 6 6%20-25 54 54%25-30 27 27%30 and Above 13 13%TOTAL 100 100%

GRAPH 4.1: GRAPH SHOWING CLASSIFICATION OF RESPONDENTS BASED ON AGE:

6%

54%

27%

13%

AGE15-20 20-25 25-30 30 AND ABOVE

INTERPRETATION: 54% of respondents are in the age group of 20-25,27% in the age group of 25-30, 13% in age group of 30 and above and 6% in 15-20 age group.

36

TABLE 4.2: TABLE SHOWING CLASSIFICATION OF RESPONDENT ON THE BASIS OFGENDER:

GENDER NO.OF RESPONDENTS PERCENTAGEMALE 66 66%FEMALE 34 34%TOTAL 100 100%

GRAPH 4.2: GRAPH SHOWING CLASSIFICATION OF RESPONDENTS BASED ON GENDER:

MALE66%

FEMALE34%

GENDER

Interpretation: 66% respondents are males while 34% are females

37

TABLE 4.3: TABLE SHOWING CLASSIFICATION OF RESPONDENTS ON THE BASIS OFOCCUPATION

OCCUPATION NO. OF RESPONDENT PERCENTAGESTUDENT 54 54% PROFESSIONAL 21 21%GOVT.EMPLOYEE 5 5%SELF EMPLOYEE 14 14% OTHERS 6 6%TOTAL 100 100%

GRAPH 4.3: GRAPH SHOWING CLASSIFICATION OF RESPONDENTS BASED ON OCCUPATION:

Student Professional Govt.employee Self employee others0%

10%

20%

30%

40%

50%

60%

Chart Title

Series1Series2Series3Series4

INTERPRETATION: 54% of respondents are students, 21% are Professionals,5% are

government employees,14% self-employed, 6 % are others.

38

TABLE 4.4: TABLE SHOWING CLASSIFICATION OF RESPONDENT ON THE BASIS OFMONTHLY INCOME

MONTHLY INCOME NO. OF RESPONDENT PERCENTAGE0-10000 43 43%10000-20000 21 21%20000-30000 16 16%30000-40000 14 14%MORE THAN 40000 6 6%TOTAL 100 100%

GRAPH 4.4: GRAPH SHOWING CLASSIFICATION OF RESPONDENTS BASED ON MONTHLY INCOME

0-10k 10k-20k 20K-30k 30K-40K More THAN 40k

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Chart Title

Series1Series2Series3Series4

INTERPRETATION: 43% respondents are in the income class of below Rs.10000,

21% are in the range of 10k-20k, 16% are in the range of 20k-30k,14% in the range of 30k-40k,

6% in more than 40k .

39

TABLE 4.5: TABLE SHOWING WHETHER CUSTOMER SHOP ONLINE

RESPONSE NO. OF RESPONDENTS PERCENTAGEYES 96 96%

NO 4 4%

TOTAL 100 100%

GRAPH 4.5: GRAPH SHOWING WHETHER CUSTOMERS SHOP ONLINE:

96%

4%

CUSTOMER SHOP ONLINEYES NO

INTERPRETATION:96% respondents shop online, 4% don’t

40

TABLE 4.6: TABLE SHOWING WHETHER ONLINE SHOPPING EXPERIENCE IS SUPERIOR OVER SHOPPING AT PHYSICAL STORE

RESPONSE ONLINE SHOPPING EXPERIENCE

ONLINE SHOPPING EXPERIENCE

YES 61 61%NO 30 30%CAN’T SAY 9 9%TOTAL 100 100%

GRAPH 4.6: GRAPH SHOWING WHETHER ONLINE SHOPPING EXPERIENCE IS SUPERIOR OVERSHOPPING AT PHYSICAL STORE

61%

30%

9%

ONLINE SHOPPING EXPERIENCEYES NO CAN'T SAY

INTERPRETATION: 61% Respondents believe online shopping is superior overshopping at

physical store, 30% believe otherwise , 9% can’t say

41

TABLE 4.7 : TABLE SHOWING WHETHER ONLINE MARKETERS ARE PROVIDING COMPETITIVE PRICE:

PROVIDE COMPETITIVE PRICE

NO OF RESPONDENTS PERCENTAGE

YES 78 78%NO 20 20%CAN’T SAY 2 2%TOTAL 100 100%

GRAPH 4.7: GRAPH SHOWING WHETHER ONLINE MARKETERS ARE PROVODING COMPETITIVE PRICE:

78%

20%2%

COMPETITIVE PRICEYES NO CAN'T SAY

INTERPRETATION:.78% believe that online marketers are providing competitive prices, 20%

said no, 2% respondents can’t say

42

TABLE 4.8: TABLE SHOWING THE FACTOR THAT HELP CUSTOMER TO CHOOSE WEBSITE:

RESPONSE NO. OF RESPONDENT PERCENTAGESEARCH ENGINE 26 26%PERSONAL RECOMMENDATION

20 20%

SPECIAL OFFER ON SITE 12 12%ONLINE ADVERTISES 38 38%TV ADVERTISES 4 4%TOTAL 100 100%

GRAPH 4.8: GRAPH SHOWING THE FACTOR HELP CUSTOMER TO CHOOSE WEBSITE:

SEARCH ENGINE PERS. RECOMMEND SPE.OFFER ONLINE ADV. TV ADV.

26%

20%

12%

38%

4%

FACTOR TO CHOOSE A WEBSITE Series2Series3 Series4

INTERPRETATION: 38% Respondents look at online advertisements for choosing a

website, 26% look at search engine, 20% at personal recommendations, 12% at special offers

and 4% at tv advertisements

43

TABLE 4.9: TABLE SHOWING WHAT MOTIVATES CUSTOMERS TO BUY PRODUCTS ONLINE:

RESPONSE NO.OF RESPODENT PERCENTAGEEASY PAYMENT 22 22%NO HIDDEN COST 18 18%NO TRAVEL TO STORE 40 40%WIDE RANGE OF PRODUCT 20 20%TOTAL 100 100%

GRAPH 4.9: GRAPH SHOWING WHAT MOTIVATES CUSTOMERS TO BUY PRODUCTS ONLINE:

EASY PAYMNET22%

NO HIDDEN COST18%NO TRAVEL TO STORE

40%

WIDE RANGE OF PRODUCT

20%

MOTIVATION TO BUY ONLINE

INTERPRETATION: 40% Respondents shop online so that they do not have to travel to

store,22% for easy payment, 20% for wide range of products and 18% for no hidden cost

44

TABLE 4.10: TABLE SHOWING DO OFFERS AND DISCOUNTS COAX CUSTOMER TO BUY ONLINE:

RESPONSE NO. OF RESPONDENT PERCENTAGEYES 82 82%NO 18 18%TOTAL 100 100%

GRAPH 4.10: GRAPH SHOWING HOW OFFERS AND DISCOUNT S COAX CUSTOMERS TO BUY ONLINE:

82%

18%

COAX CUSTOMER TO BUY ONLINEYES NO

INTERPRETATION:. 82% respondents are coaxed by discounts and offers while 18% are not

45

TABLE 4.11: TABLE SHOWS WHETHER PRODUCTS SOLD ONLINE MATCHES WITH SHOPPING NEEDS :

RESPONSE NO OF RESPONDENT PERCENTAGEYES 90 90%NO 10 10%TOTAL 100 100%

GRAPH 4.11: GRAPH SHOWING WHETHER PRODUCTS SOLD ONLINE MATCHS WITH SHOPPING NEEDS

90%

10%

MATCH WITH SHOPPING NEEDSYES NO

INTERPRETATION: 90% of respondents agreed that products sold online matches with

their shopping needs,10% say it doesn’t.

TABLE 4.12: TABLE SHOWS WHETHER PRODUCTS SOLD ONLINE MATCHES WITH LIFESTYLE NEEDS :

46


GRAPH 4.12: GRAPH SHOWING WHETHER PRODUCT SOLD ONLINE MATCHES WITH LIFESTYLE NEEDS

90%

10%

MATCH WITH LIFESTYLE NEEDS

YES NO

INTERPRETATION:90% Respondents say products sold online matches with their

lifestyle needs, 10% it doesn’t.

47

TABLE 4.13: TABLE SHOWS WHETHER SHOPPING ONLINE SAVE TIME:

RESPONSE NO.OF RESPODENT PERCENTAGESTRONGLY AGREE 48 48%AGREE 42 42%CAN’T SAY 10 10%DISAGREE 0 0%STRONGLY DISAGREE 0 0%TOTAL 100 100%

GRAPH 4.13: GRAPH SHOWING WHETHER SHOPPING ONLINE SAVE TIME:

Strongly agree Agree

Can't sayDisagree

Strongly disagree

48%

42%

10%

0%0%

SAVE TIME Series2 Series3 Series4

INTERPRETATION: 48% strongly agree that online shopping saves time, 42% agree, 10%

can’t say

TABLE4.14 : TABLE SHOWS WHETHER ONLINE SHOPPING TAKES MORE TIME TO SEARCH A PRODUCT:

48


GRAPH 4.14: GRAPH SHOWING WHETHER ONLINE SHOPPING TAKES MORE TIME TO SEARCH A PRODUCT:


Can't sayDisagree

Strongly disagree

22%

40%

26%

10%

2%

SEARCH A PRODUCT Series2 Series3 Series4

INTERPRETATION: 40% agree that online shopping takes more time to search a product,

26% can’t say, 22% strongly agree,10% disagree,2% strongly disagree

49

TABLE4.15 : TABLE SHOWS WHETHER ONLINE SHOPPING TAKES MORE TIME TO DELIVER A PRODUCT:


GRAPH 4.15: GRAPH SHOWING WHETHER ONLINE SHOPPING TAKES MORE TIME TO DELIVER A PRODUCT:


Can't sayDisagree

Strongly disagree

4%

26%24%

38%

8%

DELIVER A PRODUCT Series2 Series3 Series4

INTERPRETATION: 38% respondents disagree that online shopping takes more time to

deliver a product, 26% agree, 24% cant’ say, 8% strongly disagree, 4% strongly agree

50

TABLE4.16: TABLE SHOW WHETHER IT IS EASY TO MAKE ONLINE TRANSACTIONS:


GRAPH 4.16: GRAPH SHOWING WHETHER IT IS EASY TO MAKE ONLINE TRANSACTION:

78%

22%

EASY ONLINE TRANSACTIONYES NO

INTERPRETATION: 78% say it is easy to make online transactions, 22% don’t think so.

51

TABLE4.17: TABLE SHOW WHETHER SPEED OF INTERNETAFFECT ONLINE SHOPPING:

RESPONSE NO OF RESPONDENT PERCENTAGEAGREE 99 99%DISAGREE 1 1%TOTAL 100 100%

GRAPH 4.17: GRAPH SHOWING WHETHER SPEED OF INTERNET AFFECT ONLINE SHOPPING:

99%

1%

SPEED OF INTERNET AFFECT ONLINE SHOPPINGAGREE DISAGREE

INTERPRETATION: 99% agree speed of internet affect online shopping,1% disagree.

TABLE4.18: TABLE SHOW WHETHER CUSTOMERS FACE ANY PROBLEM WHILE SHOPPING ONLINE:

52


GRAPH 4.18: GRAPH SHOWING WHETHER CUSTOMERS FACE ANY PROBLEM WHILE SHOPPING ONLINE:

56%

44%

PROBLEM FACE WHILE ONLINE SHOPPINGYES NO

INTERPRETATION: 56% face problem while shopping online,44% do not.

TABLE4.19 : TABLE SHOWS WHETHER ONLINE TRANSACTION ARE FULLY SECURE:

53

RESPONSE NO.OF RESPONDENTS PERCENTAGEYES 22 22%NO 44 44%MAY BE 26 26%DON’T KNOW 8 8%TOTAL 100 100%

GRAPH4.19: GRAPH SHOWS WHETHER ONLINE TRANSACTION ARE FULLY SECURE:

YES NO MAY BE DON'T KNOW

22%

44%

26%

8%

Series1 Series2 Series3

INTERPRETATION: 44% do not think that online shopping is fully secure, 26% say may

be, 22% say yes and 8% say don’t know.

Chi square test

54

AGE GROUP YES NO SAMPLE SIZE15-20 4 2 620-25 50 4 5425-30 25 2 2730 and above 10 3 13TOTAL 89 11 100

Hypothesis:

Ho: There is no significant difference between respondent age and usage of online shopping

H1: There is significant difference between respondent age and usage of online shopping

DEGREE OF FREEDOM : ROW=4, COLUMN=3

Df= (r-1)(c-1) = 3

Alpha=0.05 , chi square formula= χ2=∑ (O – E)2/ E

Critical value=7.815

AGE GROUP RESPONSE OBSERVED FREQUENCY EXPECTED FREQUENCY15-20 YES 4 5

NO 2 120-25 YES 50 48

NO 4 625-30 YES 25 24

NO 2 330 and above YES 10 12

NO 3 1

Chi square =0.549

Interpretation: Since calculated value of chi square =0.549 is smaller than the Critical value. Therefore Null Hypothesis cannot be rejected.

Therefore is no significant difference between respondent Age group and usage of online shopping

55

CHAPTER-5

FINDINGS

CONCLUSION AND SUGGESTION

SUMMARY OF FINDINGS

56

Majority of respondents who shop online are in the age group of 20-25, and customer

below 20 are rare in the data collected.

About 66% of respondents are males while 34% are females.

More than half of the respondents are students, around one fifth are professionals,

followed by government employees, self employed and others.

The study revealed that 43% respondents were in the income range of below 10000,21%

were between 10000-20000, 16% were in the range of 20000-30000 14% were in the

range of 30000-40000 while only 6% were in the range of more than 40000 per month.

It was found that a whopping 96% use online shopping while 4% do not.

Findings revealed that 61% respondents find online shopping superior than physical

store, 30% don’t while 9% were in dilemma.

The survey finds that 78% respondents believe that online marketers provide competitive

prices, 22% don’t think so.

It was found that majority of respondents relied on online advertisement for choosing a

website for shopping, followed by search engine, personal recommendation, special

offers on site

Around 40% respondents shopped online because they did not want to travel to store, rest

shopped due to reasons like easy payment, wide range of product and no hidden cost.

A whopping 82% respondents were coaxed by online offers and discounts while 18%

were not attracted.

The survey revealed that 90% of respondents needs were met online,10% did not agree

on the same. The survey also revealed that 90% of respondents lifestyle needs were met

online, again10% did not agree.

Around half of the respondents strongly agreed that online shopping saves time, 42%

agreed and 10% did not agree.

Around 40% agreed that it takes more time to search for a specific product, 26% did not

know, 22% strongly agreed, 10% disagreed and 2% strongly disagreed.

Most of the respondents, around 38% disagreed that it takes more time to deliver a

product,26% agreed it does take more time , 24% couldn’t respond, while rest either

57

strongly agreed or disagreed.

78% respondents were with ease in making online transactions, rest were not

The findings showed that 99% respondents agreed that speed of internet affected online

shopping, only 1% did not agree.

More than half of respondents faced problems while shopping online, rest did not.

Findings revealed that 44% believed that online shopping is not fully secure, 26% said

may be, 22% said yes, while 8% said they do not know.

Conclusion

This study is to determine the factors that play a vital role in online

shopping. Thesurvey method was used to collect data from the internet

users. After analyzing the collected data, it has been identified that there is

no significant difference between age group and usage of online shopping.

The preference is based on the comfort level of the customer.Economic

factors also play an important role in the preference towards the online

shopping. The study concluded that consumers prefer online shopping

because of thefollowing reasons:

People shop online to avoid crowds.

Shopping online is popular with people who have hectic schedules and

do not want to wait in queues for shopping or billing.

It saves time and allows consumers to do otherthings.

There are a variety of products available. The prices arecompetitive.

Product information is also easily available at same site.

58

SUGGESTION:

As we came to know after research 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 , so 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 risk shopping

of the net, and one more thing is that there is slow transaction of money and 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 .

Implication that should be followed are discount prices, fast transactions and focus on customer

preferences.

59

Bibliography and Annexures

60

References:

Kenneth K. Boyer et al, Customer behavioral intentions for online purchases: An

examination of fulfillment method and customer experience level, Journal of Operations

Management.

SarvDevaraj et al, 1103 Examination of online channel preference, Decision Support

Systems.

www.sciencedirect.com

Dan J. Kitn, A tmst-based consumer decision-making model in

electronic eommerce: the role of trust, perceived risk, and their

antecedents. Decision Support Systems, 44 (2), 544-564 (2008)

Jiunn-WoeiLian, Effects of consumer characteristics on their acceptance

of online shopping, Computers in Hutnan Behavior, 24 (1), 48-60(2008)

61

Questionnaire

Demographic profile

62

1. Name _________________

2. Age

o 15-20

o 20-25

o 25-30

o 30 and above

3. Gender

o Male

o Female

4. Occupation?

o Student

o Professional

o Govt. employee

o Self employed

o Others

5. Monthly income?

o Less than 10000

o 10000-20000

o 20000-30000

o 30000-40000

o More than 40000

63

6.Do you shop online?

o Yes

o No

7. Do you feel that online shopping is better than shopping at physical store?

o Yes

o No

o Can’t say

8. Do you feel online marketers are providing competitive prices?

o Yes

o No

o Can’t say

9.What factors help you choose a website for online shopping?

o Search engine

o Personal recommendation

o Special offers on sites

o Online advertising

o TV advertising

o Others

64

10.What motivates you to buy products online?

o Easy payment

o No hidden cost

o No travel to store

o Wide range of products

o others

11.Do offers and discounts coax you to buy online ?

o Yes

o No

12. Do the products sold online match with your shopping needs?

o Yes

o No

13. DO the products sold online match with your lifestyle needs?

o Yes

o No

14. Does online shopping save time?

o Strongly agree

65

o Agree

o Can’t say

o Disagree

o Strongly disagree

15.Does it take more time to search a specific product?

o Strongly agree

o Agree

o Can’t say

o Disagree

o Strongly disagree

16. Does it take long time to deliver a product?

o Strongly agree

o Agree

o Can’t say

o Disagree

o Strongly disagree

17.Is it easy to make online transactions?

o Yes

o No

18. Does speed of internet affect online shopping?

66

o Agree

o Disagree

19.Do you face any problem while shopping online?

o Yes

o No

20. Do you feel online transactions are fully secure?

o Yes

o No

o May be

o Don’t know

67

a study on online shopping preference of urban population, bangalore

Documents