research paper on e-shopping in bangladesh

E-shopping in Bangladesh

1 | P a g e U n i v e r s i t y o f R a j s h a h i

Research Paper

On

“E-shopping in Bangladesh”

This research paper is submitted in partial fulfillment for the requirements of the degree of Masters in Business Administration

Supervised By Dr. A S M Kamruzzaman

Associate Professor Department of Finance & Banking

University of Rajshahi.

Submitted By Fatah-Ul-Islam

Roll No: 09027707 Session: 2008-09

MBA- 2013 Department of Finance & Banking

University of Rajshahi.

DEPARTMENT OF FINANCE AND BANKING UNIVERSITY OF RAJSHAHI

Date of Submission: 11/2/2015



DEDICATED

TO MY BELOVED PARENTS & HONORABLE TEACHERS



LETTER OF TRANSMITTAL

February 2015

Dr. A S M KAMRUZZAMAN

Supervisor & Associate Professor

Department of Finance & Banking

University of Rajshahi,

Rajshahi-6205.

Subject: Submission of the Research Report.

Dear Sir,

It is my pleasures to submit my research report titled “E-shopping in Bangladesh” that has

an integral part of my degree requirement. I put my best effort to follow the instructions of

you in preparing this report. This research program was very much valuable to me as it

helped me to gain experience from practical field. While preparing this report I went through

extensive literature survey and interviewed with the parties involving in tourism sector. It

was a great experience for me. I tried to the maximum competence to meet as the

dimensions required for this report. However some of the aspects are unintentionally

overlooked. It is hoped that you would ignore any discrepancies considering my limitations.

I will highly appreciate if you kindly accept the report. Your positive action regarding this

matter would be very much helpful for my academic as well as professional career.

Thanking you in advance for your assistance and advice.

Sincerely yours,

Fatah-Ul-Islam

Roll No: 09027707

MBA-2013

Department of Finance and Banking


Rajshahi-6205.



ACCEPTENCE LETTER

I am very much pleased to declare that Fatah-Ul-Islam, ID No. 09027707, Student of MBA,

Department of Finance and Banking, University of Rajshahi, Rajshahi, Bangladesh, has

completed his Research Report on “E-shopping in Bangladesh” under my active

supervision.

He has reviewed all the relevant and collected latent data from the different sources. I hope

that this report will contribute in his career.

I wish all the best in his effort.

Dr. A S M KAMRUZZAMAN

Supervisor & Associate Professor

Department of Finance & Banking


Rajshahi-6205.

Date:



PREFACE

It is true that to achieve a complete knowledge in any discipline we should have a practical

knowledge along with the theoretical knowledge. Practical knowledge is the root of all

betterment. Understanding the importance of practical knowledge department of

management studies introduces a research program which is mandatory for the achievement

of MBA degree.

I have collected necessary data from extensive literature review, discussion with experienced

persons and from direct interview through a questionnaire and prepare this report which

entitled all these issues that I found during this period of time.

All efforts have been made to keep the report free from errors and I hope that the report will

prove helpful to all those interested in this field. If one is benefited by using this report, my

labor in this regard will be success.

Fatah-Ul-Islam

Roll No: 09027707

MBA-2013



Rajshahi- 6205.

.



ACKNOWLEDGEMENT

All gratitude and thanks to almighty “ALLAH” the gracious the most merciful and

beneficent who gave me courage, knowledge, strength, and ability to undertake and

complete this task towards success. I am very much obliged to my ever caring and loving

parents whose prayers have enabled me to reach this stage.

I express my sincere and gratitude, deep sense of appreciation, best regards and profound

indebtedness to my honorable teachers and research supervisor Dr. A S M

KAMRUZZAMAN, Associate Professor, Department of Finance And Banking, University

of Rajshah,i for his constant supervision, Scholastic guidance, encouragement, co-operation,

constructive suggestions and valuable advice to conduct my research work and prepare this

report successfully. I will ever remember their contribution.

And last but the least I would like to express my gratitude to all of my respondents

(Students, Teachers and Officer, Staffs, Businessmen) for giving me the necessary data and

information for my research program that I have completed, who help me without

considering any business purpose and also sharing this practical experience.

I feel a great pride and pleasure on the accomplishment of this report.

Fatah-Ul-Islam

Roll No: 09027707

MBA-2013



Rajshahi-6205.

.



.

EXECUTIVE SUMMARY

Electronic shopping (e-shopping) is the process of buying product through the internet.

The developed countries are generally using e-shopping for purchase product instead of going on

a physical shop. E-shopping is also started in Bangladesh. But it is a new term and experience for

a buyer to go into an e-shop. Customers of Bangladesh are not habituated yet to go to an e-shop.

Customer attitude depends on expectation of the customer to shop in a specific store. If

expectations are met, customers achieve a high degree of satisfaction, which influences their

online shopping attitudes, intentions, decisions, and purchasing activity positively. Product

quality problem is occurred when the quality of the product is not revealed clearly to the

customer. E-shopping is not always safe. There is always a fear of fraudulent is present there.

Though there is different kind of fear is present there it has a bright prospect. This paper

discusses different issues & challenges relating to the E-shopping in Bangladesh.



TABLE OF CONTENTS

ACKNOWLEDGEMENT

DECLARATION

ABSTRACT

1. INTRODUCTION 06-24

2. LITERATURE REVIEW 25-28

3. OBJECTIVE 29-32

4. RESEARCH METHODOLOGY 33-41

5. DATA ANALYSIS 42-73

6. FINDINGS 7

7. CONCLUSION 84-87

8. LIMITATION 88-91

9. RECOMMENDATION 92-97

10. CONCLUSION 107-109

11. QUESTIONNAIRE 110-118

12 BIBILIOGRAPHY 119-120



INTRODUCTION

CHAPTER - 1



1.0 INTRODUCTION Internet is changing the way consumers shop and buys 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 feed back 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.

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 that are based on the

traditional models of consumer behavior, and then examine their validity in the Internet

context.

1.1.0 ONLINE SHOPPING IN BANGLADESH

E-commerce is already quite popular in Bangladesh and it is only increasing. Compared to

other countries of the world, E-commerce came at a later stage in our country but it grew

very quickly. E-commerce or Electronic Commerce is closely related to computer and

Internet. If we have to talk about the history of E-commerce in Bangladesh then we also

have to talk about the history of computer and Internet this region. In 1853, the British

established telegraph service in Bangladesh. After one hundred year Pakistan Telegraph and

Telephone board was established. Radio came to Bangladesh in 1939. Television came in

1964 and Bangladesh got its first computer that same year. Atomic Energy Commission of

Bangladesh brought the first mainframe computer IBM-1620. This model had transistor,



magnetic disk and magnetic core. Bangladesh Agricultural University was the first

educational institution in the country to use and Radio Shack TRS-80 64K model computer.

The model is still preserved in Agriculture Museum. Still then, the use of computer was very

limited because of large size and higher cost. Computer started to become popular in the late

1980s. The printing and publication industry embraced this technology. Publication cost

decreased significantly.

1.1.1. Rise of computer in the 90s:

Throughout the 90s, use of computer only grew. Some of the major milestones of this

decade were:

Internet came to Bangladesh in 1993. Initially, it was Unix-to-Unix Copy Protocol (UUCP)

e-mail. They were replaced by Internet Protocol accounts in 1996. In June, 1996 the

government decided to allow private companies to act as Internet Services Providers (ISPs)

using VSATs.

From 1996, Computer was also being introduced as a subject in secondary level education.

Subjects like Computer Science, Computer Engineering became very popular. In addition,

numerous organizations were offering short courses or one year diploma course.

In 1998, the then government of Bangladesh removed all types of tax and duty from

computer. Bangladesh Computer Council and Bangladesh Bureau of Statistics conducted a

survey which revealed that there 780000 PCs in the country by the end of 1998 with more

than 120,000 licensed software. Dhaka had the highest concentration of computer (72%).

1.1.2. Arrival of mobile phone:

Mobile phone came into the country in the 90s. Sheba Telecom was the first Mobile phone

service provider but the service was very expensive. In 1997, Grameenphone introduced

affordable mobile service. Since then the usage of mobile only continued to grow.

1.1.3 Beginning of E-commerce in Bangladesh:

E-commerce started in Bangladesh in the late 90s. The earlier E-commerce sites were

actually gift sites targeted towards the Non-Residential-Bangladeshis (NRB) living in

abroad. All the sites were based in abroad and had branches in Bangladesh. NRBs would

buy various products for their families or loved ones and pay in credit card. The site would

then deliver the product to their family or friend in Bangladesh. From 2000 to 2008 the E-

commerce sector observed slow growth. There were few E-commerce websites but there



were no system for online transaction which is the first condition for E-commerce. In

addition, high cost of Internet and lower penetration meant that few people knew about these

sites. According to Bangladesh Bank, payments and transactions by credit cards were nearly

Tk11 billion in June 2008; one of the lowest in the world. The country had only about

400,000 credit card holders at the end of June 2009. From 2008, things started to look bright

as Bangladesh Bank took various initiatives including implementation of e-Payment

Gateway.

1.1.4 Bangladesh Bank opening up E-commerce sector:

The real change came in 2009 when Bangladesh Bank allowed online payment in the

country thus, officially opening up the E-commerce sector. In November that year,

Bangladesh Bank issued a circular where it gave permission for following types of online

transaction in the country:

• Online utility bill payment from client’s accounts to recipient’s accounts.

• Online money transfer from online of a client to his/her another account in the same bank

• Collection of money from/to buyer’s bank account to seller’s bank account for

Purchase/sale of products under e-commerce system transaction via internet using credit

cards in local currency.

Another major incident of 2009 was introduction of WiMax internet in Bangladesh. It

became quite popular in the country.

1.1.5 Year 2013: The Rise of E-commerce

The year 2013 has been an important year in the history of E-commerce in Bangladesh.

Some important things took place during this year that would have a long lasting effect in

the E-commerce sector.

First, Bangladesh Association of Software and Information Services (BASIS) and

Bangladesh Bank jointly observed E-commerce Week for the first time in the country. From

January 5 to January 11, there were four roundtable discussions, two seminars, one technical

session, special awareness program at Dhaka University and a special promotional campaign

at Bashundhara Shopping Mall. Supported by ICT Business Promotion Council, the

inauguration ceremony of E-Commerce Week took place in The Westin Hotel on 5 January,

2013. Governor of Bangladesh Bank, Dr. Atiur Rahman was the chief guest of the

ceremony. The theme of the week was “Shop Online: Anything. Anytime.” In his speech,



Dr. Atiur Rahman said that there were 4.6 million debit and credit card holders in the

country and 3 million mobile bank accounts.

In February 2013, for the first time in the country, Computer Jagat, the leading ICT

magazine of Bangladesh, under the supervision of Dhaka DC Office, organized the first fair

on E-commerce The three-day fair took place from February 7 to February 9 at the premise

of Begum Sufia Kamal National Public Library. The slogan of the fair was- “Festival for

buying and selling at your premise. A total of 31 public and private E-commerce

organizations showcased their products and services at the fair. Though first of its kind, the

fair was huge success attracting eighty thousand visitors. Computer Jagat also did live

webcast of the fair which was seen by more than fifty thousand people in Bangladesh and

abroad.

After the success of E-commerce Fair in Dhaka Computer Jagat organized two more fairs in

Sylhet and Chittagong. A total of 45 organizations participated in the Sylhet fair attracting

thirty thousand visitors. In the Chittagong fair a total of 51 organizations participated.

After three successful E-commerce fairs in the country. Computer Jagat, ICT Ministry

(currently Ministry of Post, Telecom and Information Technology) and Bangladesh High

Commission London jointly organized the first international E-commerce Fair. The three-

day UK-Bangladesh e-Commerce Fair will be held during September7-9 at Millennium

Gloucester Hotel in Central London. Dr. Dipu Moni, the then Minister of Foreign Affairs

Bangladesh inaugurated the fair. 19 organizations from Bangladesh and 13 from the UK

participated in this fair. The UK-Bangladesh e-Commerce also repeated the success of

previous fairs. Many Bangladeshis living in London and people of London came to visit the

fair.

Third, Bangladesh Bank gave permission to buy products and services online using

international credit cards Buying products and services from abroad using credit card is an

important aspect of E-commerce but it was not possible for the Bangladeshi international

credit card holders. In May last year, Bangladesh Bank gave permission to buy products

from abroad via international credit card.

1.2.0 Recent Developments

The number of users logging on to the Internet is growing by leaps and bounds. The

numbers indicate a growing sense of comfort with the use of Internet for shopping.

Accompanying this growth, there is an increasing maturity in the way people use the

Internet. It's a classical curve. Online users typically start by using e-mail; gradually move



on to browsing for news, information and entertainment, and finally graduate to shopping

and conducting business online. Online sales have registered a huge jump and what was a

concept five years ago is now beginning to hit the mainstream levels. Roughly 10 percent of

the world's population more than 627 million people have shopped online at least once, in

Bangladesh it is just sprouted and beginning to perish.

Internet is now going beyond the simple exchange of information to a shopping paradise.

This medium is far bigger than expected, but many retailers and marketers are not using it to

its full potential.

Bangladeshi customers are increasingly getting comfortable with online shopping, and there

is a higher acceptability for the concept. Bangladesh has 43641.604 thousand Internet users

and more is now turning to online shopping. There has been an influx of online shopping

sites in Bangladesh with many companies hitching onto the Internet bandwagon. Online

shopping has become the latest trend among shoppers. Bangladeshis are becoming more

comfortable with e-commerce. The consumer’s attitude has been evolving towards online

purchases. It has become increasingly positive over the years. The attitudes that drive people

to shop online, such as convenience, price comparison and choice are improving

tremendously in Bangladesh.

Though a miniscule amount in the global context, the Bangladeshi online shoppers’

population would make its presence felt quite remarkably Bangladeshi businesses have also

grown mature enough to move up the IT curve and they are considering Business to

consumer (B2C) e-commerce a viable revenue model.

1.2.1Some E-shopping sites in Bangladesh

www.kaymu.com.bd

www.priyoshop.com

www.bangladeshbrands.com

www.akhoni.com/

www.bdhaat.com

www.jemonkhushi.com

www.upoharbd.com

www.meenabazar.com.bd



1.2.2 Factors That Boost Online Shopping in Bangladesh

Rapid growth of cybercafés across Bangladesh

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 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.



1.3.0 ADVANTAGES

1.3.1. 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).

1.3.2 Information and reviews

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).

Some online stores provide or link to supplemental product information, such as

instructions, safety procedures, demonstrations, or manufacturer specifications. Some

provide background 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 having to depend on local retailers.

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.

1.3.3 Price and selection

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.

Another major advantage for retailers is the ability to rapidly switch suppliers and vendors

without disrupting users' shopping experience.

1.4.0 DISADVANTAGES

1.4.1 Fraud and security concerns

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

have 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 countermeasures such as firewalls and anti-virus software to protect

their networks.

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, as are server and network outages.

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 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:

Sticking with known stores, or attempting to find independent consumer reviews of

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

oversight programs such as trust mark or trust seal.

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 hidden price inflators, such as excessive shipping and handling charges.

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 start with "HTTPS".

Using strong passwords, without personal information. Another option is a "pass

phrase," which might be something along the lines: "I shop 4 good a buy!!" These

are difficult to hack, and provides a variety of upper, lower, and special characters

and could be site specific and easy to remember.

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 customer’s 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).

1.4.2 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, the lack of general full cost disclosure remains a concern.

1.4.3 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 knowledge) to add them to a catalog mailing list. This information is obviously not

accessible to the merchant when paying in cash.

1.4.4 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 satisfaction once the item has been received.

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



LITERATURE REVIEW

CHAPTER - 2



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.

The classic consumer purchasing decision-making theory can be characterized as a

continuum extending from routine problem-solving behaviors, through to limited problem-

solving behaviors and then towards extensive problem-solving 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

perspective, as it eventually affects consumers’ perception of satisfaction/dissatisfaction

with the 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 in Internet development in terms of building an appropriate dedicated

model of consumer buying 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 towards online shopping is a prominent factor affecting actual

buying behavior. (Source: Jarvenpaa Journal of Electronic Commerce Research, VOL. 6,

and NO.2, 2005)

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 buying online and people not buying online.



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 buy from the store.

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 the reason for consumers not purchasing from Internet

shops, as trust is regarded as an important factor under conditions of uncertainty and risk in

traditional theories.

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

personality trait possessed by buyers; is an important antecedent of trust. In Internet

shopping, 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.



OBJECTIVES

CHAPTER - 3



3.0 PROJECT PROFILE 3.1 Objective of the Study

The objective of this research study is to investigate online consumer behavior, which in turn

provides E-marketers with a constructional framework for fine-tuning their E-businesses’

strategies. The specific objectives of this research are:

1. To analyze consumer attitude to buy at e-shopping in Bangladesh.

2. To know about motivation factors and customer satisfaction level of e-shopping in

Bangladesh.

3. To know about growth of e-shopping in Bangladesh.

4. To know about barriers and threats of e-shopping in Bangladesh

3.2 Scope of the Study

1. The Study was conducted among the Internet users.

2. The Geographical area covered Rajshahi , Rangpur and Dhaka.

3. The Study was based on a Schedule of Questions.

3.3 The Scope of Internet Shopping

It was a time of past to spared your business in market by conventional methods. Old

market is today converted in high tech markets. Today if you want to purchase any

item from abroad you need not to go or you need not to call them for a sample. You

can find their products and see the catalogue on internet. Internet enables you to shop

throughout world from the comfort of your home. Internet has some special

characteristics which no other medium have. Only internet can provide you such

special information even no salesman can help you as internet helps. Countless

people can see products at a single movement, as well as they can purchase the

product same time. You can compare various product and choose which is more

useful for you, You have the facility to visit websites as much as you like no

restriction on you here you will find approximately all world class brands and their

products you have the facility to compare them, arrange according to many types like

by price, by size, by category, by most salvable item and many more. This facility

enables you to choose. This way of shopping provides a new way of shopping. You



get to identify the products, compare the prices and quality and view the products

from different angles. Testimonials and reviews are the unique feature of shopping

where you can share your experiences with other users/consumers. The most exciting

aspect of internet shopping is that it is a 24x7 affair! And you’re free to shop on your

leisure hours and even holiday are useful for shopping for you. Your time is best

valued here. You need not to go market so no tension of conveyance, pollution,

traffic etc.

The other dimension is that you directly purchase the items from original merchant in

online shopping no mediator comes between you and merchant so it becomes

cheaper to purchase item fewer mediators less price. Merchant will also save his

money by selling of goods on internet. Merchant need not spend for staff, showroom,

and other shop expenses. He can sale by less resources and less expenses, some

online store do not have their physical showroom they display their product and

services online and deliver goods on customer 's door such merchant save a lot of

expenses and they work in less capital that’s why they are able to sale goods on low

prices.

Internet has a very bright future. If you want to increase your business and cross the

boundaries of region you need to take help of internet. Without going online you cant

think about your progress worldwide. In this regard you can see all large scale

business. Big brand, big shopping store are online. Online shopping is the demand of

today’s modern time. Time and quality is the main subject of online shopping. Today

everybody is running to save time and who saves time automatically save money.

Day to day needed item is now available on internet and people prefer to shop online.

Not only for progressing but also to survive in this competition era business internet

help.

Are you looking for the fastest website for online shopping at low price branded

products then http://www.shoppingsnooper.com/ is the one name in one of the fastest

and largest shopping search engine. Here you can search every type of products at

competitive prices.

3.3 Rationale of Study

Selling on internet has a large potential due to the very high targeting possibilities As a

result of this exceptional development, the online selling industry is becoming interested in



the use of internet to reach their customers. Hence a better understanding of online shopping

is critical to the effective use of this channel of approach to the consumer. It is especially

important to know what are the consumer’s perceptions towards online shopping, benefits

perceived by them and what factors attract them towards online shopping



RESEARCH METHODOLOGY

CHAPTER - 4



4.0 RESEARCH METHODOLOGY 4.1 Research Objective

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?

4.2 Determination of information needs and sources

The following was the information required:

What is consumer’s attitude towards online shopping?

What are the key concern areas for consumers while online shopping?

Which factors shape the consumer’s attitude towards online shopping?

How has been recent shift taking place in online shopping?

4.3 Data Collection Method-

4.3.1 Primary Data

It is original primary data, for specific purpose of research project. For this project, I have to

use following common research instrument or tool-

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

4.3.2 Secondary Data

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.



4.4 Sample Design

4.4.1 Sample Unit

For studying consumer perception on online shopping, samples were selected from Rajshahi,

Rangpur and Dhaka.

4.4.2 Sample Media

The respondents in the samples are reached through personal interviews.

4.4.3 Sample size- 100

4.4.4 Sample Design

I have prepared this project as descriptive type, as the objective of the study.



DATA ANALYSIS

CHAPTER - 5



5.0 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

I. Have you purchased anything online ever?

Fig. 1 Total Purchase Online

The research showed that 62% of the Internet users had shopped online while 38% 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.



II How frequently did you purchase online?

Fig. 2 Frequency of Online Purchase

This helped to understand the purchasing behavior of the online shoppers. It was seen that

6% 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 88% 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.

5.1 The Internet Usage & Online Shopping

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 regular online shoppers has an effect on online shopping or not.

Fig. 3 Online Shopping & Internet usage by years



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 83%

and regular shoppers who have been using Internet for more than five years have shopped to

24%. 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.



5.2 The web online activity

The following classifications are done to study the online activities in case of a regular

online shopper.

Fig. 4 Online Activities

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 87% of the

regular online shoppers use Internet for communication while only 1% uses it for shopping

which shows that communication still forms the major activity among the regular online

shoppers.



Fig. 5 Online Activities by Age

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 could be seen

that shopping as a basic activity on the Internet contributes to the minimum. Internet as a

medium of shopping is maximum used by regular online shoppers between the age group18-

30 years, which are 1% 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 to 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



Fig. 6 Online Activities by Time

It is evident that regular online shoppers also spend a major part of their time in

communication unlike the occasional online buyers. In 0-1 hours a day they spend 93% of

their time in communication, which includes email, and chat as the major activity with

shopping which does not seem to exist at all. It is true that more regular online shoppers use

Internet shopping sites to gather information about products rather than to make a direct

purchase.

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. As the people spend more time it has been seen that activities like shopping and

finance related needs increases. The regular online shoppers who use the Internet for more

than 4 hours a day has shown that they have indulged into more shopping i.e. 8%. 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.



5.3 Demographic Factors

Online behavior is affected by demographics i.e. by gender, education and income.

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.

Fig. 7 Online Shopping & Gender

Among the 62% 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 Bangladeshi 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 marketers should make sure that they

produce the item keeping in mind the needs of the women population as they still continue

to be an important decision maker when shopping for the family.



Fig. 8 Online Shopping & Educational Qualification

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 frequency of purchase is more in case of a higher educated regular shopper

as compared to a online shopping done by a regular online shopper with HSC(8%) and SSC

(3%).



Fig. 9 Online Shopping & Income

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 regular online shopper whose income lies below tk 4000.

Analysis-

Thus three hypotheses stated were true in case of the regular online shopper and it can

interpret 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 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. Average 86% of the shopping was done by the regular

shopper who had income more than Tk 7,000 than average14% who had income less than

Tk.7, 000



5.4 Motivating & Satisfaction Factors

To identify the factors which Internet users choose to buy or not buy online and how

frequently they make such purchases. Analyzing is 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 who purchase occasionally.

Fig. 10 Online Shopping & Motivating Factors

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 36% of the

shopping had been done by the regular shopper who thinks convenience is the main driving

force while13% 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 (32%), 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 mind the convenience factors.

Fig. 11 Barriers to Shopping Online

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 privacy and security concern can be taken care

off.



Fig. 13 Convenience- The Motivating Factor

12%

74%

5%9%

5%

20%27%

48%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Only once 2-4 times More than5 times

More than6 times

purchase

convenience

12%

74%

5%9%

5%

20%27%

48%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Only once 2-4 times More than5 times

More than6 times

purchase

convenience

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.

5.4.2 Satisfaction Index

It is important to understand the satisfaction level among the regular online shoppers, which

had lead to online shopping. This could be understood by the satisfaction index and the

frequency of purchase among the shoppers.



Fig. 12 Satisfaction Index

2%

Highly Satisfied

12%Dissatisfied

31%Neither

Satified nor Dissatisfied

55%Satisfied

2%

Highly Satisfied

12%Dissatisfied

31%Neither

Satified nor Dissatisfied

55%Satisfied

A 55% of the regular online shoppers were satisfied with 12% dissatisfied. An important

thing to be noted is that only 2% of the regular online shoppers were highly satisfied while

31% of the regular online shoppers were neither satisfied nor dissatisfied. This shows

satisfaction level plays an important role in online shopping with more regular shoppers

falling under the category of satisfied. This shows that they were overall satisfied by the

experience of shopping online. But the companies should take measures so that the

dissatisfied and the neither satisfied nor dissatisfied category of regular online shoppers

could be moved to satisfy or highly satisfied. A note should be taken that only 2% of the

regular online shoppers are highly satisfied which shows that there are still concerns, which

poise the regular shoppers from using the Internet frequently as a shopping medium.

Satisfaction level can also be measured by the frequency with which the online shoppers

purchase online. According to human psychology it is true that frequency of purchase

depends upon the satisfaction level received. According to the figure 2 (already explained), a

74% of the regular online shopper has purchased 2-4 times and 9% had purchased more than

6 times indicating that an increase in the confidence level and accepting the Internet as a

shopping medium. The increase in the frequency of shopping was mainly because they were

overall satisfied by the entire shopping experience.

Analysis-

It is seen that the main orientation for buying among the regular online shoppers were

convenience (36%), saves time (32%), price (13%), product availability and superior

selection (12%), and product comparison (7%). The hypothesis stated that convenience is



major factor motivating the regular shopper was true as 75% of the regular online shoppers

who have shopped more than 5 times felt it were necessary as compared to 25% who

shopped less than 5 times.

The barriers to online shopping as stated by the regular online shopper were privacy and

security (33%), inability to touch and feel the product (21%), customer service problems

(16%), hassle of returning the product (14%), purchasing from unfamiliar source and person

(9%) and other problems (7%).

Satisfaction level plays an important role in online shopping, as 55% of the regular online

shoppers that are satisfied tend to purchase more. It can also be seen that 74% have shopped

more 2-4 times and 11% had shopped more than 5 times showing that satisfaction level

plays an important role in online shopping.

5.5 Future and growth of Online Shopping

This can be understood by the categories of good bought by the regular online shoppers

presently and the future of the various categories.

Fig. 14 Present & future categories of Goods

It is seen that railway tickets 87% and jewellery 93% are the most popular categories among

the online. 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 coming years as consumers want to

buy more in the future.

Table 1 Future Categories of Goods

Railway tickets 93%

Electronic Gadgets 20%

Books 43%

Gifts 25%

Jewellery 31%

Computer Software 20%

Hotel Rooms/Car Rental 20%

Event Tickets 30%

Toys 13%

Infant / Child items 10%

Food / Groceries 7%

Accessories apparel 3%

CD/Videos 3%

Magazines 3%

Home tools and products 3%

Sporting goods 3%

The table I show 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



Bangladesh 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 87% and bus 10%, electronic gadgets (12%)). 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.



5.6 SWOT ANALYSIS

Strengths:

An e-commerce company’s strengths are unique points which show their difference from

their competitors which are competitive advantages can increase a company’s strengths. E-

business salesmen and suppliers gain profits from small operational expenses and 24

hour shopping, unlike offline shopping business. E-shopping retail business start up

costs is more economic because both kind of new start ups have low income at the

start. Nowadays, an online business is full of needs especially with the use of e-mail system

and would bring better communications for a company.

Weaknesses:

There are many problems for businessmen but the great one is excessive charge backs. With

security and cheating internet everywhere, customers are often unwilling for online

purchases in using cards for online purchases. Product transferring is an important job.

Heavy, huge, and spoil goods are always problem and are very costly. Time for shipping can

make the customer’s options to purchase products from other places. Customers in these

markets have not any way of the company size identifying from the internet. A user needs

same level of services from new small online enterprise than an old and strong retail. A new

company must identify and understand consumer behaviors.

Opportunities:

Technology is very important; everything is changing in every moment. Technology works

like a tool to increase effect and productivity of retailers. Improved online shopping

cards are a good example. The new ones are quicker ensuring a more customer-friendly

experience. To increase product sales, a good environment for low cost promotions are

social Medias. The ability of a company to have 24/7 business makes it to be accessible for

all days of the week that customers will be able to order anytime they like even for

midnights orders.



Threats:

Laws associations are making some difficulties for cards recently. This have more impacts

on risky industries. Competition of top e-business like eBay and Amazon most of the time

effects on smaller businesses price and forces them to give up. Less limits for going into

ecommerce are also threats, nowadays anyone can start a company even without need

of paying for website costs. As far as giant supermarkets concerned, e-shopping enables to

not just have their customers contact addresses but allowed them to get to the customer with

new ways, offering a various items food and other product and services. Losing online

customers means losing great part of population. People fear about extends to privacy issues

and identity with consumers will skip to give personal information via the internet.



FINDINGS

CHAPTER - 6



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 of regular online shopper use Internet for communication as compared to

shopping.

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 fewer prices 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.

6.1 Barriers to the Growth of Online Market

6.1.1 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.



6.1.2 Lack of ‘Touch –Feel-Try’ Experience

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 more credibility in the e-Tailing market.

6.1.3 Mounting Competitive Pressures

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 competition and leaner margins.

6.1.4 Seasonality

E-Tailing Market is faced by seasonal fluctuations. As told by an Industry player, “August to

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 prefers buying and sending gifts online.

6.1.5 Credibility in Payment System

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.

6.1.6 Untimely Delivery of Products

It might take a few minutes to search, book and pay for products and services online, but the

delivery of the product may take unreasonable time.

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.



LIMITATIONS

CHAPTER - 7



7. 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 these 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 numbers 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.

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 fraud is all over my dear reader.

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.



Poor network server.

Sometimes in developing countries (Bangladesh) 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.

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 the right order.

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 online shopping. Before you pay for anything online.



RECOMMENDATIONS

CHAPTER - 8



8. RECOMMENDATIONS

Online shopping in Bangladesh is poised for greater acceleration as PC and Internet

penetration grows. It is becoming one of the top Internet activities and there is a huge

growth in this business as more manufacturers and providers are integrating the

Internet into their sales model. But there are many things that need to occur in online

shopping to generate higher revenues and the key to it lies in the hands of the

marketers. To make online shopping a boom following methods can be followed.

Bangladesh has a strong research and development (R&D) capability so companies

should innovate rapidly to take care of the security issues. Technology like text to

speech softwares should be innovated to take care of the security concern.

In Bangladesh the total ownership of credit cards is small as compared to its

population and there are also hesitant in using it as a mode of online payment

therefore alternative methods of payment like cash on delivery (COD) where the end

user pays cash after the product is delivered and debit cards where the bank accounts

are directly debited should be used. Other technologies like encryption technologies

trusted third-party certifications; digital ID systems and prepaid cards should be

used.

The consumers should be made aware that one of the safety aspect of using credit

cards online is that in case of disputed credit card payments for online transactions

the onus is on the merchants to prove that the transaction actually took place, as

online users don't physically sign a credit slip. As a result online users are protected

from fraudulent use of credit cards.

There is a growth in the cellular phone market in Bangladesh, more merchants

should make use of this device allowing the customers to access the Internet and use

it as mode of payment thereby obviating the need for PCs and credit cards.

It is not only important to pay strong attention to the security issue and create new,

innovative safeguards that protect consumers but the merchants should promote these

safeguards to the marketplace and make the prospective consumers aware that the



communications, personal data, credit card accounts, and transaction information can

be protected.

One of the factors that hinder Internet penetration in Bangladesh is access. More

companies should adopt click and mortar model with the real world operations to

complement its online presence for e.g. customers can walk to the office to access its

services.

Merchants should provide goods and services that offer the right value for money.

There should be transparency in policies (returns, privacy, shipping, etc), insurance

against fraud and a good after sales services should be provided to consumers

making it an enjoyable experience.

Consumers today demand a better, more efficient and less cumbersome way to

compare and buy products online. Innovative service should be provided to

consumers so that they can compare products, which are available online using their

mobile phones.

Online shopping today is an incomplete, fragmented, and sometimes frustrating

process. Therefore merchants should set themselves apart from their competitors by

factors other than price, constantly innovate and move towards creating customer

confidence to trade online. They should provide massive selection at lower prices,

offer a personalized customer experience and their web sites should deliver a

shopping experience that addresses all of the consumer needs like recommendation

about the products, feedback from other customers, etc.

Vendors should educate the customers about e-commerce like educating them on

safety tips like reading the item description, looking for a seller’s feedback score and

asking questions, detecting spoof mails and informing them about the new online

crimes which happen regularly.

In Bangladesh still the penetration of Internet has not happened the way it should

have been which hampers online shopping. Ecommerce revolution can be brought

about by providing more broadband connections at affordable prices.

There is a huge market for business in the rural Bangladesh therefore efforts should

be such that to bring these people also into experiencing online shopping. Companies



should create more Bangladeshi language software or content as Internet still is a

primarily English language world and language could be a barrier in rural

Bangladesh. Only few language portals like webduniya.com exist today.

Most of the Bangladeshis still like to see the product before buying; efforts should be

made to change this mindset of the people by making them aware of the benefits of

online shopping.

To make online shopping big the shopping web sites should give the customers the

convenience to shop anything on a single site like ordering pizzas, movie tickets,

groceries, etc rather than in scattered places. The site should not only provide

information content but also tools to navigate and evaluate this information. The

information on the site should be just sufficient for the consumers to make a decision

and not to overload them with information, which results in confusion.

Convenience and time saving are the main reason to shop online. Therefore Business

to Consumers (B2C) sites should be designed in such a way that consumers spend

less time in finding information they are looking for as delays in searching or loading

a web page might turn the consumers to other sites which have faster download and

display times.

Since consumers control the experience they receive from shopping over the Internet,

there is a need to find ways of managing the amount of information available over

the Internet. Sites that are able to offer this information and present it in a simple way

to understand will become the preferred destination for online shopping.

The key to selling to a customer which cannot be seen is to get the customer to trust

the website with which they have electronic transactions.

Active participation from consumer marketing companies to manufacturing

industries is required to make online shopping a booming sector.

Some of the things, which the consumers should take into considerations while

online shopping, are:

Use a secure browser. The browser should comply with industry security standards,

such as Secure Sockets Layer (SSL).



Consumers should shop with the known companies, as it is easy to set up a shop

online under any name. If they are not familiar with a merchant they should ask for

paper catalogue or brochure to get a better idea about the merchandise and services

and should find about the company’s refund and return policies. Consumers should

also search for the reviews of the company.

Read the privacy policy on the site of the companies before shopping as this helps to

know what information is being collected and how it would be used.

Keep a print record of the transactions this would come handy in case of any fraud.

One should find out how the company secures the financial and personal information

before paying the bills.

The personal information should be kept private like address, telephone numbers,

email, etc. One should avoid using telephone numbers or date of birth for

establishing a password instead should use a combination of numbers, letters and

symbols.

Proper research should be done about countries shopping laws and merchant when

shopping from other countries.



CONCLUSION

CHAPTER - 9



CONCLUSION:

Business is an important part of our economy and lives. Nowadays the dependency of online

for all sort of business is significantly increasing. E-commerce is one of the key factors to

success in business. As we mentioned before that our purpose is to customer satisfaction in

online and improves the e-commerce shopping in online. Now, using the current online based

facilities, we can check the inns out outs of every desired product through the online without

expending much more money. It opens a new window for doing business and significantly

reduces the distances. Many more potential opportunities have been created for the small

entrepreneur. Nowadays the quality of customer services has improved using internet

facilities. Every company is trying giving better service to withstand in the challenging

environment. 24 hours automated online customers assistant are ready to give customers

proper assistance. Online forum, online chat, instant messaging services all are the benefits of

this technology.

Currently, e-commerce is being used extensively in USA. However Sweden has the highest

e-readiness rating. It means that Sweden is poised for rapid growth in e-commerce. This

measure takes into consideration a country internet infrastructure, business environment,

consumer and business adoption of e-commerce, cultural acceptance, and a supportive legal

environment. Due to cheap labor cost, one of the current trends is to produce products in

Bangladesh, India, Pakistan, China and others Asian countries. So, many notable companies

have established their own factory in those countries. For example, every branded shop in

clothing business in Sweden has their own factory in Bangladesh so that they can sell their

product comparatively cheaper rate.

Our country is an over populated country. There are so many people who use internet, can be

the consumer of the e-shop. Through this our country can reduce its unemployment in various

sectors. Cause for this, there also need payment gateway, banking service and delivery

system should have to be updated. So we can say that E-commerce is the blessings of

business and in our daily life.



Appendix –A

Questionnaire

Dear Respondent,

I am a student of MBA in department of Finance and Banking at University of Rajshahi. I

have undertaken an academic research on “E-shopping in Bangladesh”. For this I need

your sincere participation in filling the following questionnaire. I assure the information

what you provide will be kept secret and used only for academic purpose.

Please give your opinion in each of the following statements

Fatah-Ul-Islam

MBA, 2013

Dept. of Finance & Banking

University of Rajshahi

Part A: General information

1. Name …………………………………………………………………

2. Mobile no. ……………………………………………………………..

3. E-mail …………………………………………………………………..

4. Sex

male female

5.Age

Below 18 yrs 18 - 30 yrs 31 - 40 yrs 41 – 50 yrs

Above 50 yrs

6. Income: (in thousands)

0-3 3-5 5-7 7-10 Above

7. Education:



SSC HSC Graduate Post- Graduate Others

8. Profession: Students service holder businessman

Part B: Research based information

1. Do you use Internet?

Yes No

2. How long have you been using Internet?

Less than 1 year 3 – 5 years

1 – 3 years More than 5 years

3. How would you describe your proficiency on the internet?

Novice Intermediate Advanced

4. How often do you use internet every day?

Less than one hour 1-2 hours 2-3 hours 3-4 hours

More than 4 hours.

5. What are the activities that you use Internet for? (Kindly rank them between 1 to

5,with 1=most used, 2=used to a large extent, 3=used to a good extent, 4=used sometimes,

5=rarely used)

Communication (Facebook, E-mail, Instant Messaging, Chat, etc.)

Information Gathering (Research, News, Sports scores, Search for employment,

etc.)

Entertainment (Games, Entertainment sites, Sports, Music, Web page design, etc.)

Finance (Investment portfolio, financial research, online banking, check stock,

trading, etc.)

Shopping (purchasing, auctions, Selling, Classifieds, etc.)

6. In general, you prefer to do your shopping of following commodities :( select only

one)



Items Over the internet Over the phone A retail

store

a. Railway ticket

b. Bus ticket

c. Event ticket

d .Books/CDs

e. Clothes

f. Cosmetics

g. Computer products

7. Have you purchased anything online ever?

Yes No

8. If you never had online shopping, please specify the reason(s)

I am worried about giving out my credit card number

I don’t have a credit card

I don’t like providing personal information

I don’t want to purchase from someone with whom I am not familiar

I enjoy going out to do my shopping

I like to see/touch the product in person, before I buy it

Internet is too slow / Pages take too long to load

I am worried about the cost/hassle of returning the product

Delivery costs are too high

Prices are too high

Technical foul-ups prevent transactions from going through

I can’t find anything that I want to purchase on the Internet

I don’t know how but I am uncomfortable about purchasing through Internet

The process is expensive due to cost of access

Any other, specify…………

9. . Features you think necessary for an online shopping site. (Arrange them in your

preference)



Multiple payment gateways Social networking integration

Privacy and secure checkout multiple delivery gateways

Customer friendly

10. Which category (ies) of goods have you bought through Internet?

Bus ticket Railway tickets � Electronic Gadgets even tickets

CD/Videos Computer Hardware Accessories apparel

Computer Software

Gifts Magazines Event Tickets Movies tickets

Hotel Rooms/Car Rental Office Supplies Jewellery

Food / Groceries Infant / Child items Sporting goods

Health and fitness products Toys

Any other, specify………………

11. Which category (ies) of goods are you planning to buy through internet in the

near future?

Bus ticket Railway tickets � Electronic Gadgets event tickets

CD/Videos Computer Hardware Books Computer Software

Gifts Magazines Event Tickets Movies tickets

Hotel Rooms/Car Rental Office Supplies Jewellery

Food / Groceries Infant / Child items Sporting goods

Health and fitness products Toys


12. When did u shop for the first time?

Last 6 months

6 months- 1year

1-3 year

3-5 year

More than 5 year

13. How frequently did you purchase online?

Only once



2-4 times

More than 5 times

More than 6 times

14. The payment system of E-shopping is much secured.

Highly Satisfied

Satisfied

Neither satisfied nor dissatisfied

Dissatisfied

Highly Dissatisfied

15. Overall, were you satisfied with your experience of online shopping

Highly Satisfied

Satisfied

Neither satisfied nor dissatisfied

Dissatisfied

Highly Dissatisfied

16. What is your main motivation for buying through Internet?

Convenience (ease of purchase, home delivery, ability to shop 24x7) Price

Saves time

Superior selection/Availability

Product comparison




Appendix –B

Bibliography

1. Prussakov Evgenii, Online shopping through consumer’s eyes, Am Navigator, 2008.

2. Price Lisa, The best of Online Shopping, Ballantine Books, 2001

3. Simpson Paul, Online Shopping: The rough Guide,3rd edition, 2000

4. Lillian Clark and Peter Wright, A review of Common Approaches to understanding

Online Consumer Behaviour, PP- 5.87- 5.122

5. Tonita Perea Monsuwe, Benedict G. C. Dellaut and KodeRuyter, What Drives

Consumers to shop Online? A literature review, PP- 765-789.

6. Donthu, Naveen and Adriana Garcia (1999), The Internet Shopper, Journal of

Advertising Research, V39 (3), 52-58.

7. Research report By: IAMAI

8. Emerald, Framework for consumers’ intentions to shop online, research report

9. Jarvenpaa Journal of Electronic Commerce Research, VOL. 6, and NO.2, 2005

10. http://en.wikipedia.org/wiki/online_shopping

11. www.iaciis.org/iis/2006_iis/PDFs/Changchit.pdf

12. http://www.ibimapublishing.com/journals/CIBIMA/2010/854516/854516.pdf

13. www.flipkart.com

14. www.amazon .com

15. http://www.btrc.gov.bd/content/internet-subscribers-bangladesh-december-2014