Evolotion of Eretailin in india

8/10/2019 Evolotion of Eretailin in india

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Project Synopsis

CUSTOMERS ATTITUDE TOWARD ON - LINE RETAILING...A Virtual Shopping Experience

Prepare !yNa"e# $ij% $o&nRo'' No# ()***+,(

ACNOWLEDGEMENT


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The success of any project study depends upon a number of factors amongwhich the proper guidance from the experts in the industry and a facultyplays an important role. I take this opportunity to coney my sincerethanks and gratitude to all those who hae directly or in directly helpedand contributed towards the completion of this project. I take here a great

opportunity to express my sincere and deep sense of gratitude to our S!"Edulight #entre $rofessor %angi& for giing me an opportunity to work onthis project.

/y $ij% $o&n

Abstract


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In the era of globali'ation electronic marketing is a great reolution. (er

the last decade maximum business organi'ations are running with

technological change. (nline shopping or marketing is the use of

technology )i.e.& computer* for better marketing performance. And

retailers are deising strategies to meet the demand of onlineshoppers they are busy in studying consumer behaior in the +eld of

online shopping& to see the consumer attitudes towards online

shopping. Therefore we hae also decided to study consumer,s attitudes

towards online shopping and speci+cally studying the factors in-uencing

consumers to shop online.

The sample si'e selected for this research is // and we hae usedconenience sampling techni0ue. (ur +ndings indicated that amongthe four factors selected for this research the most attractie and

in-uencing factor for online shoppers in India is 1ebsite2esign34eatures& following conenience the second most in-uencing andthirdly time saing. 5esults hae also showed that security is of importantconcern among online shoppers in India. The research has also found thatthere are some other factors which in-uence online shoppers including&less price& discount& feedback from preious customers and 0uality ofproduct. 4or the second research 0uestion i.e. who are online shoppers interm of demography6 the correlation results for the age and attitudestowards online shopping has showed that elderly people are not so keento shop online. 1hereas for education it is concluded that higher

education makes online shopping less attractie& for the income thecorrelation results are so weak hence we could not conclude anything outof it. It is expected that this study will not only help retailers in India todeise successful strategies for online shoppers but it will also proide abase for similar studies in the felid of consumer attitudes towards onlineshopping.


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Index

Intro%ction

C&apter *6 5etail !arket Eolution in India

C&apter 0#Eolution of E 7 5etailing in India

C&apter #5esearch !ethodology

C&apter ,# (nline Shopping In India

C&apter (# #hange in Attitude towards (nline

Shopping

C&apter 1# $roposed !odel

C&apter )# 4actors a8ecting Indian consumers online

buying behaiorC&apter 2# 5esearch 5eport by 9uxtconsult

Conc'%sion

/i!'io3rap&y


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Intro%ction

Internet is changing the way consumers shop and buys goods and serices&and has rapidly eoled into a global phenomenon. !any companies haestarted using the Internet with the aim of cutting marketing costs& thereby

reducing the price of their products and serices in order to stay ahead inhighly competitie markets. #ompanies also use the Internet to coney&communicate and disseminate information& to sell the product& to takefeedback and also to conduct satisfaction sureys with customers.

#ustomers use the Internet not only to buy the product online& but also tocompare prices& product features and after sale serice facilities they willreceie if they purchase the product from a particular store. !any expertsare optimistic about the prospect of online business.

In addition to the tremendous potential of the E7commerce market& theInternet proides a uni0ue opportunity for companies to more e:cientlyreach existing and potential customers. Although most of the reenue ofonline transactions comes from business7to7business commerce& thepractitioners of business7to7consumer commerce should not losecon+dence.

It has been more than a decade since business7to7consumer E7commerce

+rst eoled. Scholars and practitioners of electronic commerce constantly

strie to gain an improed insight into consumer behaior in cyberspace.

Along with the deelopment of E7retailing& researchers continue to explainE7consumers, behaior from di8erent perspecties. !any of their studies

hae posited new emergent factors or assumptions that are based on the

traditional models of consumer behaior& and then examine their alidity in

the Internet context. E7commerce and e ; marketing are the two important

terms in the new Internet 7 based business domain.

E-co""erce6 It can be de+ned as a way of conducting business by

companies and customers performing electronic transactions through the

Internet.

E-"ar4etin3# It can be de+ned as the promotion of products or serices

through the Internet whereas< e7tailing can be de+ned as selling products

and serices by using the Internet.

Wan3 506607has proided a broad de+nition of e7 tailing by de+ning it as

the selling of goods and serices to the consumer market ia the internet.


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According to Turban et al. )=//>*& e7tailing is de+ned as retailing conducted

online& oer the internet. In general& the actiities of e7tailing encompass

three main actiities.

They are6

)i* A product search facility )often referred as a product ealuation or

information gathering facility*

)ii* An on7line purchase function

)iii* A product deliery capability )?oalas and %albraith& =///*.

@ike general marketing actiities of an organi'ation& E7retailers hae alsostick to the same $Bs of marketing actiities. They are6 Pro%ct8 Price8

Pro"otion an P'ace. 1ith regard to the right products& e7stores can

o8er a larger spectrum of product o8ering like traditional retailers in

categories ranging from electronics to shoes. E7store is the Internet ersion

of stores that set up electronic store fronts on the Internet. It proides all

kinds of products and renders serice to the e7customer at the click of a

mouse button and makes money by selling products directly to e7

customers. 1hen it comes to the right price& e7stores can be operated with

low pro+t margin because of the lower cost and higher sales olume. As forthe right promotion& e7stores hae unlimited direct marketing& adertising

and selling opportunities. 4inally& with regard to the right place< the

location of e7stores is not important in the Internet and e7 customer can

connect and purchase products and serices from the Internet at any time

and place.

According to Li" an D%!ins4y)=//*& e7store is de+ned as a

commercial web site on which e7customers can shop and make purchases.

According to 5ao )CCC*& e7commerce o8ers increased market actiity for

retailers in the form of growing market access and information and

decreased operating and procurement costs. The consumers can gain

better prices due to the competition and also can enrich their knowledge

on goods and serices. According to a surey conducted by Internet and

!obile Association of India )IA!AI* and Indian !arket 5esearch Dureau

)I!5D*& the e7commerce market in India has garnered 5s. C=/ crore in


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=//7 /F& whereas e7 tailing market was only about 5s. G/ core*. In

general& e7tailing industry& from a business perspectie o8ers an

opportunity to cater to consumers across geographies& no operational

timings& unlimited shelf space ; and all this with miniscule 0uantity of

infrastructure. 4or a country like India& the growth in the e7 tailing market isdrien by the need to sae time by urban India. Desides with oer =.G

billion internet users& access to internet has also played an important role

in growing the markets.

#onsumer,s Bdecision7making process has considerably changed with the

introduction of the Internet as an alternatie channel for shopping. The new

wae of consumerism coupled with increasing urbani'ation and burgeoning

middle class with paradigm shifts in their demographic and psychographic

dynamics hae drien consumers fre0uently to use retail websites to

search for product information and3or make a purchase of products. In

India& the shift from physical stores to e7store takes place due to the in7

ade0uacy of time of consumers and the relatiely high disposable incomes

as well as due to a high need for labor7saing goods and serices )%ehrt&

Hale and @awson CC>*. Again on the recent report of Internet and !obile

Association of India )IA!AI*& the Indian e7commerce market will gallop at an

impressie growth rate of per cent to oer 5s >&/// crore in the year

=/. #omprising about F per cent of the total e7commerce in the

country& the online trael market& which includes booking rail and airtickets& hotel accommodations and tour packages& is estimated to grow by

G/ per cent and touch 5s &FC/ crore by 2ecember& =/. E7tailing sector

in India is expected to grow by per cent and touch 5s =&>G/ crore in the

year =/. Dullish on the growth prospects of the online market& the Indian

retail market has obsered that online spending has been skewed toward

certain products in e7tailing. E7tailing& which includes purchases of durable

products such as electronic items& home and kitchen appliances& as well as

personal items like apparels and jewelry& constitutes F per cent of the

oerall e7commerce market in India. The top E7tailers in India areindiatimes.com& fabmart.com& redi8shopping.com. They hae managed to

retain their lead due to innoatie business strategies& supply chain model

and changing urban lifestyles.


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C&apter *6 5etail !arket Eolution in India


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A7 Retai' Mar4et O9er9ie: inInia)#ontd.*


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C&apter 0# Eolution of E 7 5etailing in India

T&e rapi 3ro:t& o; e-co""erce in Inia# (er the last two decades&

rising internet and mobile phone penetration has changed the way we

communicate and do business. E7commerce is relatiely a noel concept. It

is& at present& heaily leaning on the internet and mobile phone reolutionto fundamentally alter the way businesses reach their customers.

1hile in countries such as the "S and #hina& e7commerce has takensigni+cant strides to achiee sales of oer G/ billion "S2 in reenue& theindustry in India is& still at its infancy. Joweer oer the past few years& thesector has grown by almost GK #A%5 from .F billion "S2 in =//C to anestimated =.> billion "S2 in =/.Industry studies by IA!A= I indicate that online trael dominates the e7commerce industry with an estimated /K of the market share. Joweer&

e7retail in both its forms< online retail and market place& has become thefastest7growing segment& increasing its share from /K in =//C to anestimated FK in =/ #alculations based on industry benchmarksestimate that the number of parcel check7outs in e7commerce portalsexceeded // million in =/. Joweer& this share represents a minisculeproportion )less than K* of India,s total retail market& but is poised forcontinued growth in the coming years. If this robust growth continues oer


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the next few years& the si'e of the e7retail industry is poised to be / to =/billion "S2 by =/7=/=/. This growth is expected to be led by increasedconsumer7led purchases in durables and electronics& apparels andaccessories& besides traditional products such as books and audio7isuals.

E-co""erce 'o3istics "oe's a raica' s&i;t ;ro" re3%'ar'o3istics6

The strong emergence of e7commerce will place an enormous pressure on

the supporting logistics functions. The proposition of e7commerce to thecustomer is in o8ering an almost in+nite ariety of choices spread oer anenormous geographical area. 4irms cannot compete solely based on sheerolumes in today,s eer7eoling& information symmetric and globalisedworld of e7commerce. Instead& the realm of competition has shifted todeliering to eer shortening deliery timeliness& both consistently andpredictably. Legligible or 'ero deliery prices& doorstep deliery&traceability solutions and conenient reerse logistics hae become themost important elements of di8erentiation for proiders. 1hile the currentlogistics challenges relating to manufacturing and distribution of consumer

products and organi'ed retail are well7known& the demands of e7commerceraise the associated complexities to a di8erent leel. E7commerce retailersare well aware of these challenges and are cogni'ant of the need to inestin capital and operational assets.


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Reac&in3 t&e c%sto"er Goin3 !eyon t&e traitiona'e


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demand schedulesand forecasts& shipment schedulesand promotion plansamong all thestakeholders of the supply chain will formthe backbone ofan e7retailer.

C&apter # 5esearch !ethodology

2i8erent techni0ues such as Nuestionnaires& Interiews and (bserations&

etc. hae been used by earlier studies for inestigating attitudes in online

shopping among di8erent demographic regions& arying age groups&

tastes& expectance& interests& etc. 4or this study& a 0uestionnaire based

surey design is chosen as it allows comparatiely huge population simplyand e:ciently. 2ata has been gathered from the sample population of //

students& G/ housewies& and& G/ persons from general public through

0uestionnaire 7 based surey. The 0uestionnaire was presented in a straight

line to target groups of di8erent programs of the uniersity. This is a surey

7 based research and is carried out through a 0uestionnaire& which was

circulated among =// students of di8erent programs& G/ housewies& and


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G/ persons from general public through 0uestionnaire 7based surey. The

0uestionnaire was based on G7 point liker scale. They asked to point out the

degree of their agreement or disagreement on a statement ranging from

)strongly agree* to G )strongly disagree*. 4irst part consists of

demographic ealuation using Dasic Nuestions about name& Sex& Age&(ccupation& Income etc. Second part consists of perceied knowledge

about internet. It represents inclination for the usage of Internet for

shopping online. Third part of the 0uestionnaire consists of issues inoled

in uncertainty and objecties to shop online. The physiographic& emotional&

social& and demographic risks and experiences a:liated with online

shopping. (ther 0uestions consist of Internet bene+ts or damages& which

includes personal Internet support& priacy& -ow of data and training

among securing the personal data. It has to examine four groups of

ariables )i.e.& customer attributes& appropriate factors& perceieduncertainty factors& and medium3control adance factors* that forecast

three types of online shopping acillation )i.e.& oerall hesitation& shopping

cart rejection& and uncertainty at the +nal payment stage*. 1e found that

di8erent sets of interruption causes are related to di8erent phases of online

shopping uncertainty. The study concludes with suggestion for arious

delay7reduction deices to help consumers close their online decision

hesitation. The 0uestionnaire is distributed among the people of di8erent

demographics. Students of J$ uniersities and housewies from Summer

hill. This ensured the alidity of the responses and research.


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C&apter ,# (nline Shopping In India

It is a fact that a great online shopping reolution is expected in India inthe coming years. There is a huge purchasing power of a youth populationaged F7/ in the urban area.If we obsere the growth of Indian online transactions from the aboegraph& it is getting doubled year by year.

The usage of internet in India is only K of the total population. This is alsogetting increased day by day as the costs of computers are decreasing andnet penetration is increasing. The cost of internet usage is also gettinglower& with good competition among the proiders. 1i74i O 1imax is alsogetting tested in Dangalore and other cities in India. This will increase theusage as it goes more on wireless internet.Indians are proing eery time that they can beat the world when it comesto +gures of online shopping. !ore and more Indians are going to onlineshopping and the fre0uency of India,s online buying is crossing the oerallglobal aerages.

=actors T&at /oost On'ine S&oppin3 in Inia5apid growth of cybercafPs across IndiaQ Access to InformationQ The increase in number of computer usersQ 5each to net serices through broadbandQ !iddle7class population with spending power is growing. There areabout =// million of middle7class population good spending powers. Thesepeople hae ery little time to spend for shopping. !any of them haestarted to depend on internet to satisfy their shopping desires.

=e: =acts A!o%t On'ine S&oppin3


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The +gures from IA!AI show that the internet users in India will grow to=// million by =//.Around =GK of regular shoppers in India are in the F7=G age groups& and>K are in the =>7G7year range.

Q Indian online matrimonial sector is worth around R=/ million.Q 1orldwide e7commerce is only growing at the rate of =FK& since India

being a younger market& the growth of e7commerce is expected atGK in the coming years.

Q In line with global trends +nally India has also started shopping onlinethese days. As per the study by IA!AI online shopping in India hasrose from Rmillion in CCC7=/// to RG== million in =// and it isexpected to rise aboe R// million by end !arch =//.

Q Indians are also Shopaholics like other Asians. There is a strong

booming young adult population in India with good leels ofdisposable income.

Indians are also Shopaholics like other Asians. There is a strong boomingyoung adult population in India with good leels of disposable income.IL2IA 7 (er RG/ Dillion and growing rapidly 7 !ost popular online shoppingproducts include6 books )GK*& electronic gadgets )=K*& railwaytickets )FK*& accessories apparel )GK*& apparel )GK*& gifts)K*& computer and peripherals )=K*& airline tickets )=FK*& musicdownloads )=K*& moie downloads )=K*& hotel rooms )==K*& maga'ines

)FK*& tools )>K*& home appliances )>K*& toys )>K*& jewelry )K*&moie ticket )GK*& beauty products )=K*& health and +tness products)=K*& apparel gift certi+cates) K* and sporting goods )K*.

There are oer =/ million people online in India and this is expected togrow to =// !illion by the end of =//


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C&apter (# C&an3e in Attit%e to:ars On'ine S&oppin3

E7commerce +gures are going through the roof& according to Assocham)Associated #hambers of #ommerce O Industry of India*. Today )=//7/F*the +gures are touching 5s. ==// crore& but are expected to increase byG/ percent by =//F7/C ; to 5s G&G// crores And two metros 7 2elhi and!umbai are driing the growth6 !alls malls springing up eerywhere and

yet people are e7shopping And not in small numbers either.

@(%%IL% (LT( E7SA@ES #ITH Share in /7/F $rojection for /F7/C!umbai =K /K2elhi =/K /K#hennai K 7=K?olkata K /7KDangalore >K CK

It was neer thought that Indians would go in for e7shopping in such a big

way. Ticketing& trael bookings and een books and moies seem +ne tobuy online. ?nowing that in India si'es ary from brand to brand and0uality is inconsistent& een of some electronic items& how is it that thereare people buying these items online

1ell& Assoc ham says that books are the hottest selling item on theinternet. In fact most products bought and sold o8 online are6 books&electronic gadgets and railway tickets. Joweer& people are also buying


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clothes< gifts& computer and peripherals& and a few are buying home toolsand products& home appliances& toys& jewelry& beauty products and healthand +tness products.

Tra:c for e7commerce sites is mostly coming from the two metros of 2elhi

and !umbai.

Jere are few reasons for this

*.Con9enienceIt is the major reason. Doth the cities are spread out oer a large area andthe best stores in both these cities are often concentrated in certain Mposh,areas. In !umbai for example there are certain items you get only in#rawford market which is at the other end of town in South !umbai.And demographics show that the population of !umbai is now

concentrated in the suburbs. (f course& huge malls hae come up in thesuburbs as well& and India,s biggest mall Lirmal @ifestyle is in far7-ung!ulund but often you +nd a better choice of si'es and styles choice in othermalls& say $hoenix )central !umbai*. And though both !umbai and 2elhihae transport system& few people like to trael for two hours just to get toa shop at the other end of town. #learly the transport systems leae muchto be desired. In 2elhi& safety is also an issue for women traeling alone inthe eenings.

=* Literacy Rate an t&e Cities> Internet Sa99y

Pop%'ation!ost cities in India hae a higher literacy rate as compared to the nationalaerage of >.F percent. In fact !umbai has a highest literacy eenamongst the cities )F> per cent*. 2elhi too has a high literate population)F.= per cent*. (ddly& althoughDangalore has a higher literacy rate than 2elhi& at F per cent& the city,sshare of e7commerce is not ery high.


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?olkatta too has a literacy rate )F/.F per cent* and so does #hennai )F/.percent.* If one compares these rates to literacy rates of cities like$atna )>=.C percent*&

9aipur )> percent*&Indore )= percent* or 1arangal ) percent* its clear why its the metros

which are going to continue to lead e7shopping.

7 ?o"e e'i9ery conceptIn any case& home deliery is a concept that Indians are familiar with andloe. The mall cra'e has started only now. Earlier it was a choice betweensweating it out in small crowded markets& or asking a friendlyneighbourhood kirana )grocer* to delier groceries home and this system isstill thriing. In any case& home deliery is a concept that Indians arefamiliar with and loe. The mall cra'e has started only now.Earlier it was achoice between sweating it out in small crowded markets& or asking a

friendly neighbourhood kirana )grocer* to delier groceries home and thissystem is still thriing.

,7Increase in t&e Internet %sersIncreasing penetration of Internet connectiity and $#s has led toan increase in the Internet users across India. The demographicsegments that hae witnessed maximum growth comprise college goingstudents and young persons. These segments are the users of adancedapplications and technologies online and are most likely to be heayE7#ommerce users.

(7Increase in t&e n%"!er o; !%yers an se''ersThe success of a marketplace depends on the presence of a largenumber of buyers and a large number of sellers. In addition to onlinebuyers& many oUine stores hae begun to sell their products in the onlinemarketplace. The greater the number of sellers and buyers& the faster themarket grows.

$5(2"#T $5E4E5EL#ES #ITH 1ISE

Q Dangalore loes to buy books& electronic gadgets& computer

peripherals& gifts moies& bookings&actually just about eerthing.Q 1ell& ?olkatta prefers to buy music and moies onlineQ !umbai leads in all categories& except jewellery.Q 2elhites seem to prefer buying jewellery online as compared to any

other city


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C&apter 1# $roposed !odelAfter examining the / empirical studies& we identify a total of eleeninterrelated factors for which the empirical eidences show signi+cantrelationships. These ten factors are perceied usefulness& perceied easeof use& perceied enjoyment& information on online shopping&security andpriacy&0uality of internet connection& attitude towards online shopping&intention to shop online& online shopping decision making& onlinepurchasing& and consumer satisfaction. Six )perceied usefulness&perceied ease of use& perceied enjoyment& information on onlineshopping& security and priacy& 0uality of internet connection *arefound to be ordinarily independent and +e )attitude toward onlineshopping& intention to shop online& decision making& onlinepurchasing& and consumer satisfaction* are ordinarily dependent ariables.#onsumer satisfaction is considered to be a separate factor in this study. Itcan occur at all possible stages depending on consumer,s inolementduring the online shopping process. The relationships between satisfaction&attitude& intention& decision making and online purchasing are proposed to


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be two7way relationships due to the reciprocal in-uences of each on theother. In addition& three of the antecedents& perceied usefulness&perceied ease of use& perceied enjoyment & hae been found to haedirect impact on consumer satisfaction.

Percei9e Use;%'ness$erceied usefulness is de+ned as the degree to which a person belieesthat using a particular system would increase hs or her job performance. Itis an important factor a8ecting acceptance of an informationsystem&because the ultimate aim of any person is the superior jobperformance.

Percei9e Ease o; UseThis is an important factor that a8ects the acceptance of a particularinformation system.It is de+ned as the degree to which a person belieesthat using a particular information system would be free of e8ort. Jencean application perceied to be easier to use would more likely be acceptedby the user.

Percei9e Enjoy"entEnjoyment refers to the extent to which the actiity of using a computeris perceied to be enjoyable in its own rights.This is seen as an intrinsicsource of motiation to use a particular application.

A"o%nt o; In;or"ationAmount of information is de+ned as the information which is aailable forthe product which a person wants to buy through online shopping.Thisfactor eases the decision of the user to actually buy the productornot& or which product to buy. This factor becomes een moreimportant in case of Jigh Inolement product.

Sec%rity an Pri9acy

Security and priacy are the main factors which hinder the growth of(nline shopping. The user is concerned about his I2 and $assword whichcan be stolen by persons with wrong intentions and then misuse it. At thesame time they are concerned that their personal information may be soldto the third party which poses a serious threat to their priacy.

@%a'ity o; Internet Connection


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Lot only is the presence of internet connection neccessary but also itsNuality is important toshop online.This is an important factor whichdetermines whether the user would shop online ornot because presence ofinternet is a basic neccessity for this mode of shopping.

ATTITUDE TOWARDS ONLINE S?OPPING

#onsumer,s attitudes toward online shopping hae gained a greatdeal of attention in the empirical literature. It is belieed thatconsumer attitudes will a8ect intention to shop online and eentuallywhether a transaction is made. It refers to6* The consumer,s acceptance of the Internet as a shopping channel

=* #onsumer attitudes toward a speci+c Internet store )i.e.& to what extentconsumers think that shopping at this store is appealing*.

INTENTION TO S?OP ONLINE#onsumer,s intention to shop online refers to their willingness to makepurchases in an Internet store. #ommonly& this factor is measured byconsumer,s willingness to buy and to return for additional purchases. Thelatter also contributes to customer loyalty. #onsumer,s intention to shop


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online is positiely associated with attitude towards Internet buying& andin-uences their decision7making and purchasing behaior. In addition&there is eidence of reciprocal in-uence between intention to shop onlineand customer satisfaction.

ONLINE S?OPPING DECISION MAING

(nline shopping decision7 making includes information seeking&

comparison of alternaties& and choice making. The results bearing on

this factor directly in-uence consumer,s purchasing behaior. In

addition& there appears to be an impact on user,s satisfaction.

Though it is important& there are only +e studies that include it.

According to Jaubl and Trifts )=///*& potential consumers appear to use a

two7stage process in reaching purchase decisions. Initially& consumerstypically screen a large set of products in order to identify a subset of

promising alternaties that appears to meet their needs. They then

ealuate the subset in greater depth& performing relatie comparisons

across products based on some desirable attributes and make a purchase

decision.

ONLINE PURC?ASING

This is the most substantial step in online shopping actiities& with most

empirical research using measures of fre0uency )or number* ofpurchases and alue of online purchases as measures of online

purchasing< other less commonly used measures are unplanned purchases

(nline purchasing is reported to be strongly associated with the

factors of personal characteristics& endor3serice3product

characteristics& website 0uality& attitudes toward online shopping&

intention to shop online& and decision making )Andrade =///< Dellman et

al. CCC*

CONSUMER SATIS=ACTION

It can be de+ned as the extent to which consumer,s

perceptions of the online shoppingexperience con+rm their

expectations. !ost consumers form expectations of the product&

endor& serice& and 0uality of the website that they patroni'e


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before engaging in onlineshopping actiities. These expectations

in-uence their attitudes and intentions to shop at acertain Internet

store& and conse0uently their decision7making processes and

purchasingbehaior. If expectations are met& customers achiee a

high degree of satisfaction& whichin-uences their online shoppingattitudes& intentions& decisions& and purchasing actiitypositiely. In

contrast& dissatisfaction is negatiely associated with these four ariables

)Jo and1u CCC< 9ahng et al. =//< ?im et al. =//*.

C&apter )# 4actors a8ecting Indian consumers online buying

behaior

India has been gaining importance as a high potential lucratie market forglobal retailers. Since the recent economic reforms& Indian consumers hae


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just begun to understand bene+ts of using Internet for shopping. Joweer&the growing number of Internet users has not been re-ected to the onlinesales. Thus& it is important to identify factors a8ecting Indian consumers,online buying behaior in order to +nd the way to stimulate their onlineshopping behaior. The purpose of this study is to identify factors a8ecting

Indian consumers, attitude toward shopping online by inestigating Indianconsumers, risk perceptions about shopping online. #onstructs testedincluded preiously identi+ed factors )conenience risk& product risk&+nancial risk& perceied behaior control& return policy& subjectie norm&attitude& and technology speci+c innoatieness* and Indian7speci+cfactors )concerns associated with deliery of an ordered product and cyberlaws& shipping fees& and after serice* speci+cally deeloped for this study.

The concerns associated with deliery of product& social and perceiedbehaioral control hae been found to be signi+cant factors a8ectingattitude toward using Internet for shopping. In terms of gender di8erence&

perceied risks )product& conenience& +nancial& and non7deliery* andtechnology speci+c innoatieness were found to be signi+cant for malesand& for females& conenience risk and attitude towards online shoppingwere signi+cant factors.

@iterature reiew

T&eory o; P'anne /e&a9ior 5TP/7Theory of $lanned Dehaior )T$D* explains behaiors oer which indiiduals

hae incomplete oluntary control )A'jen& CFG& CC< A'jen O 4ishbeinCF/*.Attitude toward a behavior and subjective normInnoatie!arketing& Volume F& Issue =& =/=about engaging in a behaior are supposed to in-uence intention.Attitudedepicts an indiidual,s feelings& inclination or disinclination towardsperforming a behaior. A prospectie technology user,s oerall attitudestoward using a gien technologybased system )i.e.& Internet* or procedurerepresents major determinants as to whether or not he3she will ultimatelyuse the system )2ais& CC*. Subjectivenorms reeal the indiidual,sperceptions of the in-uence of signi+cant others )e.g.& family& friends&

peers& etc.*. (thers, opinions about online shopping as well as onlinereiews will in-uence online shopping behaior. T$D additionally includesperceivedbehavior control oer engaging in behaiors& suggesting thathuman behaioral decision making is a8ected by the consumer,s ability toperform the behaior. The ability to shop online )e.g.& Internet accessibility&credit card ownership& etc.* might refrain a consumer from shopping online.

Di%sion o; inno9ation.


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The concept of innoation has receied a great deal of attentionparticularly in the information technology and marketing research )AgarwalO $rasad& CCF< !idgley O 2owling& CF< 5ogers& CCG*. 5ogers )CCG*conceptuali'ed personal innoatienessW as the degree and pace ofadoption of innoation by an indiidual. #onsumers who are innoatie are

representatie as being highly abstract and possess a generali'edpersonality trait )Im& Dayus O !ason& =//*. Examples as to the leels ofabstraction inherent across the arious literatures utili'ing this perspectieinclude a willingness to changeW )Jurt et al.& C* and the receptiity tonew experiences and noel stimuli )%oldsmith& CF< @eaitt O 1alton&CG*. The Internet is a fairly new and considered to be innoation thatre0uires indiiduals to learn new skills in order to use the technology.2i8usion of innoation theory is applicable to understanding onlineconsumer behaior. #onsumers who are used to shopping in brick7andmortar stores may hae di:culty in changing habits and shopping online

)?aufman7 Scarborough O @ind0uist& =//=*. (n the other hand& consumerswho hae high leel of innoatieness may more likely to shop online.

Percei9e ris4s.(nline transaction inoles a temporal separation of payment and productdeliery. A consumer must proide +nancial information )e.g.& credit carddetails* and personal information )e.g.& name& address and phone number*for deliery in order to complete the purchasing process. 5isks perceied orreal& exist due to technology failure )e.g.& breaches in the system* orhuman error )e.g.& data entry mistakes*. The most fre0uently cited risks

associated with online shopping include+nancial risk )e.g.& Is my credit card information safe*& product risk )e.g.&Is the product the same 0uality as iewed on the screen*& conenience)e.g.& 1ill I understand how to order and return the merchandise* and non7deliery risk )e.g.& 1hat if the merchandise is not deliered* The leel ofuncertainty surrounding the online purchasing process in-uencesconsumers, perceptions regarding the perceied risks )Dhatnagar et al.&=///*.

Internet %sa3e in Inia.

(er the past few decades& the Internet has deeloped into a ast globalmarket place for the exchange of goods and serices in the world. In manycountries& the Internet has been adopted as an important medium& o8eringa wide assortment of products with = hour aailability and wide areacoerage. Indians use the Internet for e7mail and I! )CFK*< job search)GK*< banking )=K*< bill payment )FK*< stock trading )GK*< andmatrimonial search )GK* etc. )4eb& =//> data*


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)www.internetworlstats.com*. The growth rate of electronic commerce inIndia& howeer& has yet been much below anticipation< its proportion oftotal retail business is still small due to its certain limitations )Sylke et al.&=//*. #ompared to deeloped countries )e.g.& "nited States of America*&Indian telecommunications infrastructure is weak. Thus consumers

throughout the country are not as prone to shop online as a moretechnologically adanced country )Dellman& @ohse and 9ohnson CCC*. India,s low credit cardpenetration may be another barrier to online shopping. 4inally& India,sdistribution system is unable to proide timely and reliable deliery ofproducts. This limitation is further exacerbated when the return of productspurchased online is taken into consideration )Dingi& Ali O ?hamalah& =///

for online shopping )Tan& CCC*. 4inancial risk is de+ned as the risk inoledin conducting +nancial transaction through the internet. $reious researchfound +nancial risk being a primary reason consumers choose not to shoponline )!iya'aki O 4ernande'& =//< Teo& =//=*. #onsumers are likely to behesitant to shop online when they hae concerns associated with +nancialrisks& such as the loss of credit card information& theft of credit card
http://www.internetworlstats.com/http://www.internetworlstats.com/


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information& or oercharge )Dhatnagar& !isra O 5ao& =///< 4orsythe OShi& =//*. This leads to the deelopment of Jypothesisa. Hypothesis 1a: The risk of losing money and nancialdetails will havenegative inuence on attitudetowards online shopping!

"roduct risk is de+ned as the risk of receiing the product that is di8erentfrom what,s perceied to be in the product description!This could beresulted from the 0uality of the retailer,s product description and the isualrepresentation of the product& signi+cantly in-uencing the consumer,sability to understand the product. Inability of physical product examinationand insu:cient product information on screen may increase concerns ofconsumers. The issues surrounding product risk associated with onlineshopping resulted in the following hypothesis. Hypothesis 1b: The productrisk will have negativeinuence on the attitude of online shopping!#onvenience risk is de+ned as the discontent comes from shopping ia the

Internet. 2iscomfort in online shopping is associated with the stepsre0uired to complete personal details to processes the check7out forms.

The ease of shopping at the online retailer,s

Ser9ice an in;rastr%ct%ra' 9aria!'es.Additional challenges for e7commerce di8usion in deeloping countries likeIndia are the lack of telecommunications infrastructure throughout thecountry )e.g.& low computer usage and Internet penetration along with thelack of 0uali+ed sta8 to deelop and support e7commerce sites )Dingi et al.&=///< Jo8man& CCC*. These concerns may no longer be signi+cant

deterrent for online shopping in many deeloped countries. The concernsassociated with deliery of the product ordered& such as shipping fees&delayed deliery and3or not receiing a product ordered. This is due tomost India,s postal careers being unreliable except for the goernmentowned one that is pricey. Thus& online shoppers are forced to choose thepricey postal career for more secure deliery or to take a risk of notgetting the product deliered when choosing other careers. Jypothesis dwas deeloped considering India,s insecure ine:cient deliery system.

Hypothesis $: The fear of delayed product delivery or not getting it

delivered%losing it in transit will have negative inuence on attitudetowards shopping online!

Tec&no'o3y speci


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context& domain speci+c innoatieness is de+ned to be technologyspeci+c innoatieness. Shopping online for the most Indian shoppersmean going outside their usual shopping routine. 1hile the online shoppingo8ers consumers a wide breadth and depth of merchandise o8erings& italso re0uires them to ac0uire new technology skills in order to seek&

ealuate and ac0uire products. 5esearch has reealed that online shoppinginnoatieness is a function of attitude towards the online enironment andindiidual personal characteristics )!idgley O 2owling& CF< Eastlick&CC< Sylke& Delanger O #omunale& =//< @assar et al.& =//G*. Innoatieconsumers are more inclined to try new actiities )5obinson& !arshall OStamps& =//< 5ogers& CCG*. Adoption of online shopping is depiction ofindiidual,s innoatie characteristic )Eastlick& CC*. It is expected thatperson,s technology speci+c innoatieness has a propensity to shoponline.

C&apter 2# 5esearch 5eport by 9uxtconsult

Indian E7#omm. 5eport 4inds Jeay Spenders 2riing Sales

Dy 2ein #omiskey

August >& =//

A Surey by Indian research organi'ation 9uxtconsult found that more andmore Indian Internet users are opening their wallets online. 1hile such

hurdles as limited broadband access and security concerns remain& the

report +nds there are currently more than / million shoppers online in

India. 1hile current trends point to increased e7commerce growth in India&

the online marketplace in the country of more than billion people is still

relatiely small. 9uxtconsultXs surey found that / percent of all urban

Internet users buy online& while = percent of the sales originate through

just +e percent of consumers. The surey was conducted in April =//

and sampled more than /&/// users. YThis section of buyers spends G&///rupees or more per month on the net&Y states the report. YIt is interesting

to note that two out of eery three heay spenders are also Xnetholics&X

those who are on the net for more than three hours per day...(f all those

who buy online& only =G percent are spending more than &/// rupees per

month while the )remaining* G percent bill less than &/// rupees per


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month.Y )&/// Indian rupees is currently e0ual to approximately R= "S.*

The report also found that buying and search patterns among Indians di8er

between genders. Y1hile percent of male users buy online& only

percent of urban female users are consumers as well. 1omen

tend to search more. 2efying their more common attitude towardsshopping& women are more guarded when it comes to the online market&Y

says 9uxtconsult. Y2epending on the product type& nine percent to =G

percent are buying online& whereas to percent are searching the net

for product information&Y it says. Security 4ears $ersist 9uxtconsult says the

motiation for Indian users to make purchases online aries& but users fear

compromised personal information is still a great risk when it comes to e7

commerce. YThe single biggest motiation for buying online for net users is

saing time. Thirty7two percent of them look to shop online with this

purpose. #onenience of shopping X=xX and home deliery are othermajor incenties&Y says the report. YJoweer& the concern of possible

misuse of credit car or personal information is extremely signi+cant

among online buyers& with almost GG percent of them oicing their

concern. #learly& tackling and countering the issue of online safety +gures

as an imminent challenge for net marketers.Y Dooks& #2s Top the @ist The

products that are purchased most online in India& according to 9uxtconsult&

are books and #2s 7 making up =G percent of all online purchases.

YIronically& computer hardware and software& despite haing the home

adantage are among one of the least bought products online& with only percent buying them&Y says the report. YIn sum& the online market in India

is blossoming but is yet to take o8 in a considerable way. The Internet is

still being used more for searching than buying products and serices.

Though a noticeable proportion of net users are also net consumers&

essentially& at present only a small tribe among them is driing online

shopping momentum&Y says 9uxtconsult.

Q A new trend in this space is that of !eta search engines. Ixigo

and E'eego are two players in this space. A !eta search engine searchesall the online trael sites )including the airlines sites as well* and displays

the best deals for the user.

Q Trael websites& such as !ake !y Trip India $t. @td and Hatra (nline

$t. @td& are battling to win oer India,s 5s>&/// crore )R// million*

religious trael market (pportunity in (nline Trael Industry6 R=billion


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Q (nline trael company !ake!yTrip )!!T* has recorded sales of 5s.

/// crore for the +nancial year ending !arch =//F& as per a release.

/ARRIERS TO GROWT? O= ONLINE MARET

Cons%"er /ias

#onsumers often display a bias for brands that they know well and hae

had a good experience in the past. Thus products of brands with a

faorable bias will score oer the products of less popular brands. A few

would risk to buy expensie jewelry from an unknown jeweler online.

Lac4 o; BTo%c& =ee'-Try> Eperience

The customer is not sure of the 0uality of the product unless it is

deliered to him and post deliery of the product& it is sometimes a lengthy

proces to get a faulty or the unsuitable product changed. Thus& unless the

delierables are as per the customers expectations& it is hard to infuse

more credibility in the e7Tailing market.


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Mo%ntin3 Co"petiti9e Press%res

To attract customers& the competing online players are adopting all means

to proide products and serices at the lowest prices. This has resulted in

making the consumers choice7spoilt& who in turn surf arious websites to

spot the lowest price for the product. Thus& although the number of

transactions is increasing& the alue of the products sold is continuously

falling owning to high competition and leaner margins.

Seasona'ity#

eTailing !arket is faced by seasonal -uctuations. As told by an Industry

player& August to 4ebruary is the peak seasons for sale& while !arch to

9uly is the dry seasons for saleW. 2uring the peak season& occasions that

drie the sales are 2iwali& 5akhi& Valentines 2ay& Lew Hear& #hristmas&!other,s 2ay& 4riendship 2ay etc are. (n these occasions younger

generations prefers buying and sending gifts online.

Crei!i'ity in Pay"ent Syste"

(nline frauds and breach are the biggest barriers to online sales. As a

result& prospectie buyers prefer staying away from reealing their credit

card and bank details.

Unti"e'y De'i9ery o; Pro%cts

It might take a few minutes to search& book and pay for products and

serices online& but the deliery of the product may take unreasonable

time.


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CONCLUSION

Increased Internet penetration& a hassle free shopping enironment

and high leels of Let sainess see more and more Indians shopping

online.Dut at the same time the companies need to reduce the risks

related to consumer incompetence by tactics such as making

purchase websites easier to naigate& and introducing Internet kiosks&

computers and other aids in stores.

The goal is not to conert all shoppers to online purchasing& but to showthem it,s an option. In addition to aboe& e8orts need to be taken to

educate the online buyers on the steps that need to be undertaken while

making an online purchase. !oreoer& the feedback of an online buyer

should be captured to identify -aws in serice deliery. This can be

done through online communities and blogs that sere as adertising


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and marketing tools and a source of feedback for enterprises. 1e found

that it is a challenge for E7marketers to conert low fre0uency 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 bene+ts it currently o8ers. The 0uality ofproducts o8ered online and procedures for serice deliery are yet to be

standardi'ed. Till the same is done& the buyer is at a higher risk of frauds.

/i!'io3rap&y

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Evolotion of Eretailin in india