Sei sulla pagina 1di 76

Online Shopping In India

PRINT REFERENCE THIS


Online shopping is the process of researching and purchasing products or services
over the Internet. The earliest online stores went into business in 1992, and
online retailing took over a significant segment of the retail market during the
first decade of the twenty-first century, as ownership of personal computers
increased and established retailers began to offer their products over the Internet.Â

Consumers across the globe are increasingly swapping crowded stores for one-click
convenience, as online shopping becomes a safe and popular option. Online
shopping has some advantages over shopping in retail stores, including the ability to
easily compare prices from a range of merchants, access to a wide selection of
merchandise, being open 24*7 and the convenience of not having to drive to a
physical store. But despite that the online shopping cannot replace the experience of
shopping in a retail store or the entertainment value of going to a mall or market. A
customer who knows exactly what he or she wants can look it up online, read and
compare the information, and purchase from the site that offers the best price or
service. But a shopper who is uncertain what to look for, or who just enjoys browsing
through items on display, will prefer a retail store where the merchandise can be
seen, handled and sample. The décor, music and arrangement of goods in a retail
store creates a multi-dimensional shopping environment that cannot be duplicated
online. For many people, going shopping at a mall, department store or market is a
form of entertainment and a social experience. Many people who are currently
unfamiliar with computers and do not feel comfortable using the Internet to shop
are not likely to change their habits.Â

The Future growth will come through improvements to the shopping process on

1
Indian Scenario
While the Internet and the World Wide Web are continuing to expand at a rapid
pace, the development of electronic commerce has been slower. Surveys indicate
many Indian Internet users employ the developing interactive medium to shop or
browse for information on products and services, but a far smaller percentage has
actually made purchases online.

The number of people and hosts connected to the net has increased worldwide. In
India too, Internet penetration has became more widespread. Online shopping
though a small proportion of the Internet activity is believed to increase in the
coming years. Some of the prominent factors leading the change are greater
Internet penetration, fall in prices of hardware, fall in the price of Internet
communication, development of better and more reliable technologies, and
increased awareness among the users. Some of the various ways in which online
marketing is done in India are company websites, shopping portals, online auction
sites, etc.

E-commerce may not have taken off in India the way it should have, yet prospects
are bright. India is expected to be the third largest Internet market in the world in
the next five years (Source Ac Nielson). The advantages are there for both buyers
and sellers and this win-win situation is at the core of its phenomenal rise, as it is
believed that e-commerce transactions will represent the largest revenue earner
especially in the business to consumer (B2C) segment in India.

Indian customers are increasingly getting comfortable with online shopping, and
there is a higher acceptability for the concept. India has 25 million Internet users and
more is now turning to online shopping. There has been an influx of online shopping
sites in India with many companies hitching onto the Internet bandwagon. The
revenues from online shopping are expected to increase tremendously.

According to IAMAI, the average number of transactions per month in India has
gone up from 2 lakh in 2003-04 to 4.4 lakh in 2004-05 and has doubled to 7.95 lakh
transactions per month in the year 2005-06. The online sales during the festival
season had increased rapidly especially during Diwali and Ramzan which recorded a
sales of Rs115 crore, a 117 per cent increase from the Rs53 crore in the year 2004-05
(source IAMAI). These figures clearly show that online shopping has truly come of
age and consumers are keen to shop on the net. Effective customer communication
on products plus reduced shipping costs and timely delivery has helped online
marketers to seize a slice of the Rs 115 crore sales. Though a miniscule amount in

2
`the global context, the Indian online shoppers' population would make its presence
felt quite remarkably. The potential of the Indian e-market can be gauged from the
fact that 16 percent of Indian consumers want to buy online in the next six months,
making it the third most online-potential country after Korea (28 percent) and
Australia (26 percent) (Source:IMRB). This is an indication of a growing breed of
Indian consumers who are not only better equipped but also more confident of the
online transactions.

3
E consumer behaviout
The consumers' attitude towards online shopping is known as one of the main
factors that affects e-shopping potential (Michieal, 1998). Though attitudinal issues
are thought to play a significant role in e-commerce adoption, however social-
demographic variables such as the gender, income, age, and nation also affect
customers in purchasing. In a study of customer satisfaction and repurchase
behavior, Mittal, Kamakura & Wagner (2001) divided consumer characteristics into
six social-demographic variables. They were gender, age, educational background,
marital status, children, and living area.

A review of empirical studies in this area shows several things. Many studies have
found that typical online buyers have used the Web for several years, and because of
their familiarity, they searched online for product information and purchase options
(Bellmanet al., 1999). There was also evidence that the Internet shopper was
convenience-oriented (Donthu & Garcia, 1999; Korgaonkar & Wolin, 1999),
innovative and variety-seeking (Donthu & Garcia, 1999). He or she did not appear to
be brand-or price-sensitive (Donthu & Garcia, 1999). From a consumer's viewpoint,
Yao (1998) who researched the purchase behavior of online shopping in
demographic variables and behavior variables angle, found that different age groups
affected customer's product choice in price. Sheth (1983) considered that
consumers' purchase preference would affect their intention.

Considering that Internet shopping, is still not at the mature stage of development,
not too much is known about consumers' attitudes towards adopting this new
shopping channel and factors that influence their attitude toward (Haque et al.,
2006). That means that, through motivation and perception, attitudes are formed
and consumers make decisions. Thus, attitudes directly influence decision making
(Haque et al.,2006). Attitudes serve as the bridge between consumers' background
characteristics and the consumption that satisfies their needs (Armstrong and Kotler,
2000; Shwu-Ing, 2003). Because attitudes are difficult to change, to understand
consumers' attitudes toward online shopping, can help marketing managers predict
the online shopping intention and evaluate the future growth of online commerce.

4
OBJECTIVE:

The purpose of this research study is to investigate online Indian consumer


behaviour, which in turn will provide E-marketers with a constructional framework
for fine-tuning their online strategies. The objectives of this research are:

 To study the attitudes and behaviour of Indian consumer regarding online


shopping.
 To evaluate the contribution of online shopping in India.
 To understand the issues and challenges of online shopping in India.
 To analyze if the Indian online buying behavior is affected by demographics,
cultural and social characteristics.
 To identify factors which determine online shopping.
 To examine the satisfaction level of online purchases of Indian consumers.
 To investigate the future and growth of Online Shopping in India.

5
SCOPE:
Today Internet is not only a networking media, but also as a means of transaction for
consumers at global market. Internet usage has grown rapidly over the past years
and it has become common means for delivering and trading information, services
and goods (Albarq, 2006). Since online shopping is growing tremendously in the
current business scenario it is imperative to study how consumers' make purchase
decisions on the Internet. With the advent of Internet shopping, consumers are faced
with an overwhelming amount of product offerings, and consequently have a greater
degree of freedom to choose among many different alternatives. Internet shopping
carries a number of different characteristics than traditional shopping methods.

In India the Internet has taken root and grown along many fronts in the past decade.
The research assumes significance since marketers have endeavored to cater to this
growing segment of consumers. Research undertaken within India on the profile of
Internet shoppers is piecemeal and incomplete. This empirical research intends to
explore into this issue, this study among the Internet users will help marketers to
plan highly focused online campaigns in the future.

6
2.0 LITERATURE REVIEW

The current literature on consumer online purchasing decisions has mainly concentrated on

identifying the factors which affect the willingness of consumers to engage in Internet shopping.

In the domain of consumer behavior research, there are general models of buying behavior that

depict the process which consumers use in making a purchase decision. These models are very

important to marketers as they have the ability to explain and predict consumers’ purchase

behavior.

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 behaviors [Schiff man et al., 2001].

The traditional framework for analysis of the buyer decision process is a five-step model. Given

the model, the consumer progresses firstly from a state of felt deprivation (problem recognition),

to the search for information on problem solutions. The information gathered provides the basis

for the evaluation of alternatives. Finally, post-purchase behavior is critical in the marketing

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

7
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

8
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.

9
1.1.6 Factors That Boost Online Shopping in India

 Rapid growth of cybercafés 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.

1.1.7 Few Facts about Online Shopping

The figures from IAMAI show that the internet users in India will grow to 200 million by 2010.

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

year range.

 Indian online matrimonial sector is worth around $230 million.Worldwide 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.

10
 In line with global trends finally India has also started shopping online these days. As per

the study by IAMAI online shopping in India has rose from $11million in 1999-2000 to $522

million in 2008 and it is expected to rise above $700 million by end March 2010.

 Indians are also Shopaholics like other Asians. There is a strong booming young adult

population in India with good levels of disposable income.

11
HYPOTHESIS:
Keeping in mind the above objectives and in order to address the problem in the
most effective manner the following hypotheses have been formulated:

 There is no significant difference between the frequency of online buying


among male & females Indian consumers.
 There is no significant difference between the Indian consumers educational
background and their online purchase intention.
 There is no significant difference between the income of regular online
shopper and occasional online buyer.
 There is no significant difference between the convenience orientation of
consumers who make frequent online purchases or those who purchase
occasionally.
 There is no significant difference in the dominance of usage of shopping
online between the Generation Y shoppers (those born after 1977) and other
online buyers, that is, people over 45 years of age.

12
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 Research Framework

Eleven different factors were identified by studying the existing models of consumer

attitudes(Refer Annexure 1, 2) that play an important role in online purchase, then a model was

proposed leading to online shopping.

13
The data was collected only through Questionnaires. The sample size was 100. And random

sampling was done among the internet users.

4.3.1 Proposed Model

After examining the 10 empirical studies, we identify a total of eleven interrelated factors for

which the empirical evidences show significant relationships. These ten factors are perceived

usefulness, perceived ease of use, perceived enjoyment, information on online shopping, security

and privacy, quality of internet connection, attitude towards online shopping, intention to shop

online, online shopping decision making, online purchasing, and consumer satisfaction.

Six (perceived usefulness, perceived ease of use, perceived enjoyment, information on online

shopping, security and privacy, quality of internet connection )are found to be ordinarily

independent and five (attitude toward online shopping, intention to shop online, decision making,

online purchasing, and consumer satisfaction) are ordinarily dependent variables.

Consumer satisfaction is considered to be a separate factor in this study. It can occur at all

possible stages depending on consumer’s involvement during the online shopping process. The

relationships between satisfaction, attitude, intention, decision making and online purchasing are

proposed to be two-way relationships due to the reciprocal influences of each on the other. In

addition, three of the antecedents, perceived usefulness, perceived ease of use, perceived

enjoyment , have been found to have direct impact on consumer satisfaction.

Perceived Usefulness

Perceived usefulness is defined as the degree to which a person believes that using a particular

system would increase his or her job performance. It is an important factor affecting acceptance
14
of an information system, because the ultimate aim of any person is the superior job

performance.

Perceived Ease of Use

This is an important factor that affects the acceptance of a particular information system. It is

defined as the degree to which a person believes that using a particular information system

would be free of effort. Hence an application perceived to be easier to use would more likely be

accepted by the user.

Perceived Enjoyment

Enjoyment refers to the extent to which the activity of using a computer is perceived to be

enjoyable in its own rights. This is seen as an intrinsic source of motivation to use a particular

application.

Amount of Information

Amount of information is defined as the information which is available for the product which a

person wants to buy through online shopping. This factor eases the decision of the user to

actually buy the product or not, or which product to buy. This factor becomes even more

important in case of High Involvement product.

Security and Privacy

Security and privacy are the main factors which hinder the growth of online shopping. The user

is concerned about his ID and Password which can be stolen by persons with wrong intentions

15
and then misuse it. At the same time they are concerned that their personal information may be

sold to the third party which poses a serious threat to their privacy.

Quality of Internet Connection

Not only is the presence of internet connection necessary but also its Quality is important to shop

online. This is an important factor which determines whether the user would shop online or not

because presence of internet is a basic necessity for this mode of shopping

Attitude and perception towards online shopping

Consumer’s attitude and perception toward online shopping have gained a great deal of attention

in the empirical literature. It is believed that consumer attitudes will affect intention to shop

online and eventually whether a transaction is made. It refers to:-

1) The consumer’s acceptance of the Internet as a shopping channel

2) Consumer attitudes toward a specific Internet store (i.e., to what extent consumers think that

shopping at this store is appealing).

Intention to shop online

Consumer’s intention to shop online refers to their willingness to make purchases in an Internet

store. Commonly, this factor is measured by consumer’s willingness to buy and to return for

additional purchases. The latter also contributes to customer loyalty. Consumer’s intention to

shop online is positively associated with attitude towards Internet buying, and influences their

decision-making and purchasing behavior. In addition, there is evidence of reciprocal influence

between intention to shop online and customer satisfaction.

16
Online shopping decision making

Online shopping decision-making includes information seeking, comparison of alternatives, and

choice making. The results bearing on this factor directly influence consumer’s purchasing

behavior. In addition, there appears to be an impact on user’s satisfaction. Though it is important,

there are only five studies that include it.

According to Haubl and Trifts (2000), potential consumers appear to use a two-stage process in

reaching purchase decisions.

Initially, consumers typically screen a large set of products in order to identify a subset of

promising alternatives that appears to meet their needs. They then evaluate the subset in greater

depth, performing relative comparisons across products based on some desirable attributes and

make a purchase decision.

Online purchasing

This is the most substantial step in online shopping activities, with most empirical research using

measures of frequency (or number) of purchases and value of online purchases as measures of

online purchasing; other less commonly used measures are unplanned purchases

Online purchasing is reported to be strongly associated with the factors of personal

characteristics, vendor/service/product characteristics, website quality, attitudes toward online

shopping, intention to shop online, and decision making (Andrade 2000; Bellman et al. 1999)

Consumer satisfaction

17
It can be defined as the extent to which consumer’s perceptions of the online shopping

experience confirm their expectations. Most consumers form expectations of the product, vendor,

service, and quality of the website that they patronize before engaging in online shopping

activities.

These expectations influence their attitudes and intentions to shop at a certain Internet store, and

consequently their decision-making processes and purchasing behavior. If expectations are met,

customers achieve a high degree of satisfaction, which influences their online shopping attitudes,

intentions, decisions, and purchasing activity positively. In contrast, dissatisfaction is negatively

associated with these four variables (Ho and Wu 1999; Jahng et al. 2001; Kim et al. 2001).

Information on
online shopping
Attitude Intention Decision Online
towards to shop Making Purchase
Security & Privacy
online online
shopping

Perceived Usefulness

Perceived Ease of use


CONSUMER SATISFACTION

Perceived Enjoyment

18
4.4 Data Collection Method-

4.4.1 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

This was done by going directly to the respondents or through mails.

4.4.2 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.

19
DATA ANALYSIS

The objectives of the research were studied with respect to a regular online shopper who shopped

more than once because they would be the right respondent to give an insight about the online

shopping. Therefore it is firstly important to understand who is a regular online shopper. In the

survey the respondents where asked the following questions which helped to know about a

regular shopper.

1) FOR FACTORS AFFECTING ONLINE SHOPPING

Respondents were asked to rate the factors influencing online shopping purchase behavior. In all

six different factors were taken in questionnaire for getting the responses of consumers .Here are

those factors:

 Information about online products and services

 Perceived usefulness

 Ease of use

 Perceived enjoyment

 Security

 Quality of internet

Factor analysis was done using SPSS to extract the most important benefits derived by

customers’ point of view from the usage of online shopping.

20
Interpretation:

The value of KMO test is coming out to be 0.667, which suggests the validity for factor analysis.

The principal component analysis is giving 72.584 as commutative % which is good enough

because data redundancy is less. Two components have been extracted with Eigen values more

than 1 after principal component analysis and rotated component analysis.

The output value shows that following factors can be safely extracted after factor analysis:

 Information about online products and services(Extracted from component 2)

 Perceived usefulness (Extracted from component 1)

 Ease of use(Extracted from component 1)

 Perceived enjoyment(Extracted from component 1)

The principal component analysis is giving 78.065 as commutative % which is good enough

because data redundancy is less.

Three components have been extracted with eigen values more than 1 after principal component

analysis and rotated component analysis.

The output value shows that following factors can be safely extracted after factor analysis:

 Not sure of product quality (Extracted from component 1)

 Transactions/credit card misuse (Extracted from component 1)

21
 Have to wait for delivery (Extracted from component 1)

 Significant discounts are not there (Extracted from component

2) FOR FACTORS CONCERNING ONLINE SHOPPING

Respondents were asked to rate the factors of concern for online shopping purchase behaviour.In all

six different factors were taken in questionnaire for getting the responses of consumers .Here are those

factors:

 Not sure of product quality

 Cannot bargain/negotiate

 Not sure of security of transactions/credit card misuse

 Need to touch and feel the product

 Significant discounts are not there

 Have to wait for delivery

22
Payments

Online shoppers commonly use a credit card 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

Some sites will not accept international credit cards, some require both the purchaser's billing

address and shipping address to be in the same country in which site does its business, and still

other sites allow customers from anywhere to send gifts anywhere. The financial part of a

transaction might be processed in real time (for example, letting the consumer know their credit

card was declined before they log off), or might be done later as part of the fulfillment process.

23
ADVANTAGES

Convenience

Online stores are usually available 24 hours a day, and many consumers have Internet access

both at work and at home. Other establishments such as internet cafes and schools provide access

as well. A visit to a conventional retail store requires travel and must take place during business

hours.

In the event of a problem with the item it is not what the consumer ordered, or it is not what they

expected—consumers are concerned with the ease with which they can return an item for the

correct one or for a refund. Consumers may need to contact the retailer, visit the post office and

pay return shipping, and then wait for a replacement or refund. Some online companies have

more generous return policies to compensate for the traditional advantage of physical stores. For

example, the online shoe retailer Zappos.com includes labels for free return shipping, and does

not charge a restocking fee, even for returns which are not the result of merchant error. (Note: In

the United Kingdom, online shops are prohibited from charging a restocking fee if the consumer

cancels their order in accordance with the Consumer Protection (Distance Selling) Act 2000).

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).

24
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.

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.

25
Another major advantage for retailers is the ability to rapidly switch suppliers and vendors

without disrupting users' shopping experience..

DISADVANTAGES

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 has prompted some

U.S. states to require disclosure to consumers when this happens. Computer security has thus

become a major concern for merchants and e-commerce service providers, who deploy

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

26
increase the confidence of the online shoppers; the existence of many different seals, or seals

unfamiliar to consumers, may foil this effort to a certain extent. A number of resources offer

advice on how consumers can protect themselves when using online retailer services. These

include:

 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

27
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 customers information can be accessible to anyone who knows how to

obtain it. Most large online corporations are inventing new ways to make fraud

more difficult, however, the criminals are constantly responding to these developments with new

ways to manipulate the system. Even though these efforts are making it easier to protect yourself

online, it is a constant fight to maintain the lead. It is advisable to be aware of the most current

technology and scams out there to fully protect yourself and your finances.One of the hardest

areas to deal with in online shopping is the delivery of the products. Most companies offer

shipping insurance in case the product is lost or damaged; however, if the buyer opts not to

purchase insurance on their products, they are generally out of luck. Some shipping companies

will offer refunds or compensation for the damage, but it is up to their discretion if this will

happen. It is important to realize that once the product leaves the hands of the seller, they have

no responsibility (provided the product is what the buyer ordered and is in the specified

condition).

28
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.

Privacy

Privacy of personal information is a significant issue for some consumers. Different legal

jurisdictions have different laws concerning consumer privacy, and different levels of

enforcement. Many consumers wish to avoid spam and telemarketing which could result from

supplying contact information to an online merchant. In response, many merchants promise not

to use consumer information for these purposes, or provide a mechanism to opt-out of such

contacts.

Many websites keep track of consumers shopping habits in order to suggest items and other

websites to view. Brick-and-mortar stores also collect consumer information. Some ask for

address and phone number at checkout, though consumers may refuse to provide it. Many larger

stores use the address information encoded on consumers' credit cards (often without their

29
knowledge) to add them to a catalog mailing list. This information is obviously not accessible to

the merchant when paying in cash.

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

30
I Have you purchased anything online ever?

Fig. 1 Total Purchase Online

NO
35%

YES
65%

The research showed that 65% of the Internet users had shopped online while 35% had not

bought anything. This is mainly because of the changing lifestyle and taste patterns. As the life is

getting more and more fast paced more people are moving on to shop online mainly because of

convenience. This shows that a more Internet users are using it as a shopping medium and there

is a huge potential in this sector but one should not be carried away by this figures. There could

be a possibility that only a small section of the online shoppers are shopping or only a particular

category of good had brought about this huge number. As a result the entire analysis was done

in case of a regular online shopper to understand the shopping behavior of the online shoppers.

The following question helped to understand who is a regular online shopper among the 65%

who had indulged into online shopping.

31
II How frequently did you purchase online?

Fig. 2 Frequency of Online Purchase

80% 74%
70%
60%
50%
40%
30%
20% 12%
9%
10% 5%

0%
Only Once 2-4 times 5-6 times More than 6
times

This helped to understand the purchasing behavior of the online shoppers. It was seen that 14%

of the online shoppers had shopped more than five times and 74% had shopped 2-4 times. The

frequency shows the acceptance of Internet as a shopping medium. Though only a small amount

of the online shoppers had purchased more than 6 times but still there is a huge opportunity in

the Internet arena. The 65% of the online shoppers who had shopped more than once were

considered as regular shopper and the entire analysis was based on these regular shoppers.

32
5.1 The Internet Usage

It is necessary to study the amount of time spend by the regular shoppers on the world wide web

because this would give us clear picture as to understand whether usage and time spent by the

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

Fig. 3 Online Shopping & Internet usage by years

90%
78%
80%
70%
60%
50%
40%
30%
20% 14%
10% 6%
2%
0%
Less 1–3years 3–5years More than
than1year 5years

The diagram shows that shopping has increased with the usage of Internet over the years.

Regular shoppers who have been using Internet for more than one year had shopped to 98% and

regular shoppers who have been using Internet for more than five years have shopped to 78%.

Internet is not a new concept for these regular online shoppers and they have been using it for

more than 5 years now. The increased usage over the years has lead to an increase in shopping,

as these regular shoppers are able to make use of the various e-commerce activities.

33
Fig. 4 Online Shopping & Internet usage by hours a week

40% 36%
35%
30% 28%

25%
20%
20%
15% 12%
10%
4%
5%
0%
0-5 6 - 10 11 - 15 16 - 20 More
hours a hours a hours a hours a than 20
week week week week hours a
week

The research shows that 36% of the online shopping had been done who use Internet for more

than 20 hours a week and 96% of the shopping has been done by regular shoppers who have

been using Internet for more than 5 hours a week. As more the regular online shopper are using

the Internet it is seen that they end up buying more also. This shows that Internet is becoming an

integral part of the daily activity of the regular online shopper. The regular online shoppers who

have been using Internet for more than 20 hours are more comfortable and confident as a result

they purchase more online as compared to who use Internet for less number of hours. The study

shows that the growing usage of Internet has lead to increase in online shopping as seen above.

There is a positive relation between increase usage of Internet and online purchase. The

marketers should capture this enormous growth, which can be brought by the penetration of

broadband and lowering the prices of computers. Thus increase in usage of Internet over the

years and the more time spent has lead to an increase in shopping. But one needs to know

whether online shopping is an integral part of regular shoppers or not this understood as follows.

34
5.2 The web online activity

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

shopper.

Fig. 5 Online Activities

10%
32%
Shopping
20% Communication

Finance

24%
14%
Inf ormation
Entertainment
Gathering

The Internet offers four basic services communication (socializing service with peer group or

core group (email) or with new groups of people (chat), information services, entertainment

services and commerce services and shopping. The research shows 32% of the regular online

shoppers use Internet for communication while only 10% uses it for shopping which shows that

communication still forms the major activity among the regular online shoppers.

35
Fig. 6 Online Activities by Age

70%

60% 18-30 years


50%
31-40 years
40%

30% 41-50 years


20%
above 50
10% years
0%
communication Information Finance Shopping
gathering

This classification further provides an insight that Internet is mainly used as a means of

communication in respect all the age groups of the regular online shoppers. It contributes to 60%

of the major activity among the regular online shoppers who lie between the age group 18-30

years. It could be seen that shopping as a basic activity on the Internet contributes to the

minimum. Internet as a medium of shopping is maximum used by regular online shoppers

between the age group18-30 years, which is 18% while above 50 years it is used just to 2%. The

increase in usage among the 18-30 years is basically due to high awareness. The marketers

should focus mainly on the age group between 18-30, as they are the main drivers for growth.

Thus the research shows that though the regular shoppers are using the Internet for quiet some

time now but shopping still remains a small part of the major activity

36
Fig. 7 Online Activities by Time

90%
80%
70%
60% Communication

50% Information

40% Entertainment

30% Finance

20% Shopping

10%
0%
0-5 hours 6-10 hours 11-15 16-20 more than
hours hours 20 hours

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

unlike the occasional online buyers. In 0-5 hours a week they spend 77% of their time in

communication, which includes email, and chat as the major activity with shopping which does

not seem to exist at all. Information search constitute 20% of the time. The information search

increases as the regular online shoppers tries to figure out ways to surf the Internet and access the

information they require. It is true that more regular online shoppers use Internet shopping sites

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. The time

spent on entertainment increases marginally to 18%. As the people spend more time it has been

37
seen that activities like shopping and finance related needs increases. The regular online

shoppers who use the Internet for more than 20 hours a week has shown that they have indulged

into more shopping i.e.10%. It is true that as the regular online shoppers spends more time on the

Internet there is a possibility that they would end up buying more as they are ease with the use of

internet. Increased usage of Internet is positively related to the buying behavior on the Internet.

Analysis-

It is true that increase in internet has lead to an increase in the online shopping as 78% of the

online shopping has been done by the regular online shopper who have been using internet for

more than five years and 36% of the online shopping have been done among the regular shopper

who uses the Internet for more than 20 hours a week. Thus increase in usage of Internet has lead

to an increase in online shopping. But shopping still constitute a small amount of the major

activity on the internet as 32% of the regular online shoppers uses Internet for communication

while only 10% uses it for shopping. Communication still constitutes the major activity on the

Internet.

5.3 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.

38
Fig. 8 Online Shopping & Gender

28%
Female

72%
Male

Among the 65% of the online shopping, males (72%)had purchased more as compared to women

(28%). This shows that it is true that more males are shopping online as compared to women.

This is mainly because women still like to feel, see and touch the product before buying. It was

noticed that some of them felt shopping as a reason to go out with the family and spend time

together, which was not possible in case of online shopping. As more and more Indian women

are flocking to Internet there is a possibility that they might end up in a purchase. Also an

increase in the spending power in the hands of the women might lead to an increase in the online

shopping. The research showed that 28% of the women who shopped online fall mostly in the

service and executive class with an income above Rs10,000. The marketers should make sure

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

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

39
Fig. 9 Online Shopping & Educational Qualification

3%
8%
Non
Matriculate
Matriculate

54% 35%

Postgraduate Graduate

Educational difference is a significant demographic variable, which shows that regular shoppers

who were better educated made more purchases online. 89% of the shopping has been done by

the regular shopper whose is educated with a graduate or postgraduate degree. This shows that

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 matriculate (8%) and non matriculate

(3%).

40
Fig. 10 Online Shopping & Income

40 38

35

30

25 less5000
21
5000-10000
20
10000-25000
14 15
15 above25000
11
10 8
5 5
5 3 2 3
1 1 1 1 1
0
Student Service/Executive Business Others

Income and buying behavior are positively related. It was seen that a regular online shopper with

a higher income had purchased more online as compared to lower income online shopper. This

trend was seen in all segment of the population. It is true that more the income in the hands of

the population they would indulge in shopping. The service class had done the major purchase in

all the various levels of income. It can be seen that hardly any purchase is done among the

regular online shopper whose income lies below Rs5000.

Analysis-

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

interpreted that online shopping is effected by demographics like gender, education and income

levels. Among the 65% of the online shopping, males (72%)had purchased as compared to

41
women (28%). There is a positive relation between education and income of the online shoppers.

89% of the online shopping was done among the regular shoppers who were educated with a

graduate or postgraduate degree compared to 11% shopping who were matriculate and non-

matriculate. A 60% of the shopping was done by the regular shopper who had income more than

Rs 25,000 than 40% who had income less than Rs.25,000.

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 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.

42
Fig. 11 Online Shopping & Motivating Factors

7%

Product 32%
Comparison Convenience

26%

Saves Time

12%

Superior
23%
selection
Price

It is believed that consumers whether online shoppers or non-online shoppers value price to

convenience but the study contrast this popular belief. The study showed that 32% of the

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

while 23% of the shopping had been done for whom price was the main orientation for shopping

online. Other motivating forces, which had lead to online shopping, were saves time (26%),

product availability and superior selection (12%), and product comparison (7%). Convenience

here is characterized as ease of purchase, home delivery and ability to shop 24x7. These factors

motivate the regular online shopper to buy over the Internet and regular online shoppers who

value convenience are more likely to buy on the web, as compared to occasional online shoppers.

Every connection is a potential for net shopping. Therefore the companies should attract and

retain its regular online shoppers, as the Internet is a tangled jungle of web sites, which is

possible at a click of a mouse. They should design strategies and develop products keeping in

mind the convenience factors.

43
Fig. 12 Barriers to Shopping Online

7% 33%
9% Others Privacy &
Unfamiliar
Security

14%

Hassle of

returning

16%
21%
Lack of
Inability to
Customer
touch & feel
Service

The main areas for concern in respect of the regular online shoppers while shopping were

privacy and security (33%). Most of them still preferred the conventional method of shopping

like the touch and the feel factor (21%). They felt that it is possible to see, feel, touch and try the

products before buying in a shopping store as compared to Internet shopping. Other reasons that

concern the regular online shoppers were inability to reach the customer service (16%), hassle of

returning the product (14%), technical foul –ups, hesitant in purchasing from an unfamiliar

source and person and delivery costs. The marketers should formulate such strategies so that the

privacy and security concern can be taken care off.

44
Fig. 13 Convenience- The Motivating Factor

80%
74%
70%

60%

50% 48%
purchase
40%

30% convenience
27%
20% 20%

10% 12%
9%
5% 5%
0%
Only once 2-4 times More than More than
5 times 6 times

It has been seen that there is a positive correlation between the frequency of purchase and the

convenience factor for buying in the Internet arena. The regular online shopper who had

purchased more than 6 times (9%) for them convenience is the most important motivating factor

(48%)for shopping on the Internet. Convenience has been characterized as ease of purchase,

home delivery and ability to shop 24x7. The online shopper believes that large amount of

information about the product and the ability to compare prices is available at a click of a mouse

thus making the entire shopping experience very convenient. Thus the marketers to should keep

the convenience factor in mind while providing the goods and services.

45
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.

Table 1 Future Categories of Goods

Railway tickets 83%

Airline tickets 80%

Electronic Gadgets 50%

Books 43%

Gifts 33%

Movies tickets 30%

Jewellery 23%

Computer Software 20%

Hotel Rooms/Car Rental 20%

Event Tickets 13%

Toys 13%

Infant / Child items 10%

Food / Groceries 7%

Accessories apparel 3%

CD/Videos 3%

46
Magazines 3%

Home tools and products 3%

Sporting goods 3%

The table I shows that shows that there is a future growth in the electronic gadget and book

categories also apart from railway and airline tickets, which continues to be on the priority list.

There is a growth in these categories because traditionally products like audio-video, apparel,

and computer accessories were purchased through catalogs and other forms of direct mail but

toady online shopping serves a convenient means of distribution channel. Another reason for the

growth in these categories is because of well-established sites for travel, audio-video (e.g., CD-

Now), and computers (e.g.www.dell.com, www.sonyvaio.com), which lure the consumers to buy

these products. These goods do well because consumers are not bothered much about the touch

and feel factors, which generally drive the shopping in India unlike categories like apparels and

groceries where it still remain an important factor while purchasing. It is difficult to change the

set mindset of consumers for certain categories of goods but still companies should keep

innovating and find means and ways to attract more online shopping.

Analysis-

There is a future growth in online shopping which can be especially seen in the travel arena with

railway 83% and airlines 80%, electronic gadgets (50%)and books (43%). Gifts also seem to

show a growth in the coming years. Thus the marketers should mainly focus on these growing

categories of goods, which would drive the online shopping in the future.

47
Fig. 15 Present & future categories of Goods

120%

100%

80%

60%

40%

20%

0%
Books Railway Airline Electronic Gifts Movies
tickets tickets Gadgets tickets

Present Future

It is seen that railway tickets 70% and airline tickets 93% are the most popular categories among

the online shoppers followed by books and electronic gadgets. This is the main category, which

is bringing about online shopping culture among the regular online shoppers. The companies

should bring out innovative ways so that there is a growth in other categories of goods also. The

entire shopping culture among the regular shoppers is brought mainly by the travel categories

followed by electronic gadgets. The graph shows that online shopping is tend to grow in the

coming years as consumers want to buy more in the future.

48
6.0 FINDINGS

The findings show that Internet usage has increased over the years and it is leading to an increase

in online shopping and also shows the consumers attitude and perception towards online

shopping. Communication still forms the major activity among the large number of online

shoppers as 32% of regular online shopper use Internet for communication as compared to

shopping (10%).

Online shopping is affected by demographics as it has been seen that more males are shopping

online as compared women online shoppers and there is a positive relation between education

and income levels with respect to the increased online shopping behaviour.

The most important motivating factor, which influenced the online shopping, was convenience

followed by time saving and price. Regular online shoppers considered convenience as the main

motivating factor while buying and were less price sensitive. But the online marketers should

attempt to differentiate their products or services making the comparison easier. The marketers

should bring out innovative ways so that the consumers can do more online shopping while

taking the full advantage of rich information, easy access and convenience of the Internet.

One of the main concerns among the online shoppers was privacy and security. Another reason

that hindered online shopping was the touch factor. Consumers still preferred the experience they

get from traditional stores like feeling the store’s atmosphere, interacting with a salesperson, and

seeking sensory stimulation. This might hinder the use of certain goods like grocery and apparel,

as the touch factor is the main factor, which drives the shopping for these goods. The future of

online shopping is bright especially in the categories of travel, books, electronic gadgets and

gifts.

49
CHANGING ATTITUDE TOWARDS ONLINE SHOPPING:

Malls malls springing up everywhere and yet people are e-shopping! And not in small numbers

either. E-commerce figures are going through the roof, according to Assocham (Associated

Chambers of Commerce & Industry of India). Today (2008-09) the figures are touching Rs. 2200

crore, but are expected to increase by 150 percent by 2009-10 - to Rs 5,500 crores! And two

metros - Delhi and Mumbai are driving the growth:

LOGGING ONTO E-SALES

CITY Share in 08-09 Projection for 09-10

Mumbai 24% 40%

Delhi 20% 30%

Chennai 7% 11-12%

Kolkata 7% 10-11%

Bangalore 6% 9%

It was never thought that Indians would go in for e-shopping in such a big way. Ticketing, travel

bookings and even books and movies seem fine to buy online. Knowing that in India sizes vary

from brand to brand and quality is inconsistent, even of some electronic items, how is it that

there are people buying these items online?

50
Well, Assocham says that books are the hottest selling item on the internet. In fact most products

bought and sold off online are: books, electronic gadgets and railway tickets. However, people

are also buying clothes; gifts, computer and peripherals, and a few are buying home tools and

products, home appliances, toys, jewelry, beauty products and health and fitness products.

Traffic for e-commerce sites is mostly coming from the two metros of Delhi and Mumbai.

Here are few reasons for this:

1. Convenience

It is the major reason. Both the cities are spread out over a large area and the best stores in

both these cities are often concentrated in certain ‘posh’ areas. In Mumbai for example

there are certain items you get only in Crawford market which is at the other end of town in

South Mumbai. And demographics show that the population of Mumbai is now

concentrated in the suburbs. Of course, huge malls have come up in the suburbs as well,

and India’s biggest mall Nirmal Lifestyle is in far-flung Mulund but often you find a better

choice of sizes and styles choice in other malls, say Phoenix (central Mumbai). And though

both Mumbai and Delhi have transport system, few people like to travel for two hours just

to get to a shop at the other end of town. Clearly the transport systems leave much to be

desired. In Delhi, safety is also an issue for women traveling alone in the evenings.

2. Literacy Rate and the Cities’ Internet Savvy Population

Most cities in India have a higher literacy rate as compared to the national average of 64.8

percent. In fact Mumbai has a highest literacy even amongst the cities (86 per cent). Delhi

51
too has a high literate population (81.2 per cent). Oddly, although Bangalore has a higher

literacy rate than Delhi, at 83 per cent, the city’s share of e-commerce is not very high.

Kolkatta too has a literacy rate (80.8 per cent) and so does Chennai (80.1 percent.) If one

compares these rates to literacy rates of cities like Patna (62.9 percent), Jaipur (67 percent),

Indore (72 percent) or Warangal (73 percent) its clear why its the metros which are going

to continue to lead e-shopping.

3 .Home delivery concept

In any case, home delivery is a concept that Indians are familiar with and love. The mall craze

has started only now. Earlier it was a choice between sweating it out in small crowded markets,

or asking a friendly neighbourhood kirana (grocer) to deliver groceries home and this system is

still thriving.

4. Increase in the Internet users

Increasing penetration of Internet connectivity and PCs has led to an increase in the Internet

users across India. The demographic segments that have witnessed maximum growth comprise

college going students and young persons. These segments are the users of advanced applications

and technologies online and are most likely to be heavy E-Commerce users.

1. Increase in the number of buyers and sellers

The success of a marketplace depends on the presence of a large number of buyers and a

large number of sellers. In addition to online buyers, many offline stores have begun to sell

52
their products in the online marketplace. The greater the number of sellers and buyers, the

faster the market grows.

53
8.1 Barriers to the Growth of Online Market

8.1.1 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.

8.1.2 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.

8.1.3 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.

54
8.1.4 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.

8.1.5 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.

8.1.6 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.

55
LIMITATIONS, PERILS AND DANGERS OF ONLINE SHOPPING

Scams and internet fraud is no more news in the internet world. Scammers have gone deep

online. Millions of dollars are reported every day of the year to be lost by innocent souls. Men

and women are duped online every day without any form of comfort in their lives. Since the

internet is for all and sundry, excessive exposure to it could be dangerous and risky. The problem

with online shopping ranges from A to Z. They are avoidable if they are known. It should be

clear that not everybody online is there to buy or sell real products. Some are there for fraud and

online scams. I am a victim of such disaster before I learnt my lesson in the hard way. Internet

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 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.

56
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.

57
0 LIMITATION

Every study will have its problems and limitations at some point during the project. This study is

no different. The use of a non-probalistic sample in the research was a major limitation because

there was no way to make sure that the sample taken represented the total population of the

Internet users. A non-probability sample lacks the accuracy and precision that a probability

sample might offer. Though this samples provided a better insight about the online shoppers but

there could be a possibility that a respondent may have done online shopping but is not a regular

Internet user. It was seen that some respondents were biased towards some questions. Another

major limitation encountered doing the research assignment was the issue regarding the time.

Limitation of the study is the selection of the existing studies. Owing to time limitation, only a

few number of journals were searched. This may leave some other prominent empirical studies

out. In addition, owing to the multidisciplinary nature of online shopping, it would be very

interesting to compare IS literature to other disciplines that study online shopping attitudes and

behavior.

58
CONCLUSION:

Increased Internet penetration, a hassle free shopping environment and high levels of Net

savviness see more and more Indians shopping online. .

BARRIERS TO GROWTH OF ONLINE MARKET

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.

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.

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

59
of transactions is increasing, the value of the products sold is continuously falling owning to high

competition and leaner margins.

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.

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.

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

er

60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76