A DISSERTATION REPORT

ON

“CONSUMER’S PERCEPTION ON ONLINE SHOPPING”

Submitted for the partial fulfilment of award of

Master of Business Administration

Academic Session- (2009-11)

SUBMITTED TO: - SUBMITTED BY:-

Prof. Neha P. Shrotiya Shikha

MBA (2009-2011)

Roll No. 0903870045

Institute of Technology and Science-Management

& IT Institute, Mohan Nagar, Ghaziabad
 ACKNOWLEDGEMENT

I dedicate this page to all those who have silently or actively left indelible

mark on my project report, so that they may give credits which richly

deserve.

Talent & capabilities are of course necessary but opportunities & right

guidance is two very important backups without which any person cannot

climb the ladder for success. Proper guidance and direction is required in

order to achieve the goal & making optimum of each & every opportunity.

It is my great privilege to have summer training in such an estimated

business.

I am thankful from the core of my heart & express my feeling of gratitude

and acknowledgement to my “Project Mentor Prof Neha P. Shrotiya whose

constant support and faith in me always motivated me and their

knowledge and brilliance has pulled me out of doldrums in this project.

Mundane words are not enough to express our insufficient to express our

indebtedness towards “Dr. Raghvendra Dwivedi, Chairperson (MBA) and

Dr. Tanushree Sharma, Coordinator (MBA), ITS Ghaziabad” whose

enormous assistance helped me in the completion of project.

Shikha

MBA – IV sem

0903870045
 ABSTRACT

The growing use of Internet in India provides a developing prospect for

online shopping. If

E-marketers know the factors affecting online Indian behavior, and the

relationships between these factors and the type of online buyers, and

then they can further develop their marketing strategies to convert

potential customers into active ones, while retaining existent online

customers. This project is a part of study, and focuses on factors which

online Indian buyers keep in mind while shopping online.

This research found that information, perceived usefulness; ease of use;

perceived enjoyment and security/privacy are the five dominant factors,

which influence consumer perceptions of online purchasing.

A model was developed indicating online shopping behavior and

acceptance among customers in India. The model was tested with a

survey sample (n=100). Factor analysis technique in SPSS was used to

classify these factors which buyers keep in mind while shopping online.
TABLE OF CONTENTS
 CHAPTER - 1

INTRODUCTION

1.0 INTRODUCTION
Internet is changing the way consumers shop and buys goods and

services, and has rapidly evolved into a global phenomenon. Many

companies have started using the Internet with the aim of cutting

marketing costs, thereby reducing the price of their products and services

in order to stay ahead in highly competitive markets. Companies also use

the Internet to convey, communicate and disseminate information, to sell

the product, to take feed back and also to conduct satisfaction surveys

with customers.

Customers use the Internet not only to buy the product online, but also to

compare prices, product features and after sale service facilities they will

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

are optimistic about the prospect of online business.

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

Internet provides a unique opportunity for companies to more efficiently

reach existing and potential customers. Although most of the revenue of

online transactions comes from business-to-business commerce, the

practitioners of business-to-consumer commerce should not lose

confidence.

It has been more than a decade since business-to-consumer E-commerce

first evolved. Scholars and practitioners of electronic commerce constantly

strive to gain an improved insight into consumer behavior in cyberspace.

Along with the development of E-retailing, researchers continue to explain

E-consumers’ behavior from different perspectives. Many of their studies

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

traditional models of consumer behavior, and then examine their validity

in the Internet context.

1.1 ONLINE SHOPPING IN INDIA

The birth and growth of Internet has been the biggest event of the

century. E-commerce in India has come a long way from a timid beginning

in the 1999-2000 to a period where one can sell and find all sorts of stuff

from a high end product to a meager peanut online. Most corporations are

using Internet to represent their product range and services so that it is

accessible to the global market and to reach out to a larger range of their

audience.

Computers and the Internet have completely changed the way one

handles day-to-day transactions; online shopping is one of them. The

Internet has brought about sweeping changes in the purchasing habits of

the people. In the comfort of one's home, office or cyber cafe or anywhere

across the globe, one can log on and buy just about anything from

apparel, books, music and diamond jewellery to digital cameras, mobile

phones, MP3 players, video games, movie tickets, rail and air tickets.

Ease, simplicity, convenience and security are the key factors turning the

users to buy online.

E-commerce revenues in the country are projected to reach Rs 2,300 crore

in the year 2006-07, growing at 95 per cent over 2004-05(Source: Internet

and Mobile Association of India, IAMAI). This pertains to the business-to-

consumer (B2C) segment. It may be too early to do a comparison with the

e-commerce scenes in countries such as the US where billions of dollars

are spent online but the business in India is growing exponentially every

year, albeit from a smaller base, the total revenues have reached a

respectful size.

1.1.0 Recent Developments

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

bounds. The number of Indians who are online is expected to touch to 100

million by 2007-08, from the present 38.5 million according to the

research conducted by IAMAI. The numbers indicate a growing sense of

comfort with the use of Internet for shopping. Accompanying this growth,

there is an increasing maturity in the way people use the Internet. It's a

classical curve. Online users typically start by using e-mail, gradually

move on to browsing for news, information and entertainment, and finally

graduate to shopping and conducting business online. Online sales have

registered a huge jump and what was a concept five years ago is now

beginning to hit the mainstream levels. Roughly 10 percent of the world's

population more than 627 million people have shopped online at least

once, in India it is just sprouted and beginning to perish. Internet is now

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

This medium is far bigger than expected, but many retailers and

marketers are not using it to its full potential.

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 more than double by 2006-07. 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.

Online shopping has become the latest trend among shoppers. Indians are

becoming more comfortable with e-commerce. The consumer’s attitude

has been evolving towards online purchases. It has become increasingly

positive over the years. The attitudes that drive people to shop online,

such as convenience, price comparison and choice are improving

tremendously in India.
Though a miniscule amount in 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. Indian businesses have also grown

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

to consumer (B2C) e-commerce a viable revenue model. Some of the

companies that have benefited are baazee.com, indiatimes.com,

rediff.com, indiamart.com, fabmart.com, traveljini.com and sifymall.com.

Indiamart.com has witnessed a growth of more than ten times in just two

years in its online gifts domain. In the online travel domain, the company

was able to generate an average $8,000 worth of room bookings/month

for its premium client. It is expected to touch $15-20,000/month/client by

the year-end, which is over 100 percent growth (Source:Indiamart). Brick-

and-mortar businesses are also building up e-commerce revenues. In the

year 2005-06 Samsung India recorded a 120 percent jump in online buying

from its site over the year 2004-05 (Source: Samsung). Nirula’s witnessed

more than double growth in its B2C e-commerce revenues in the year

2005-06 and is positive for the next one to two years (Source: Nirula’s).

Companies like eBay India have seen a large increase in the number of

sellers and buyers from B and C cities and in a year the eBay community

(buyers and sellers) base has increased to 1.7 million users, which shows
that more Indians are shopping online (Source: eBay). Online sales are

currently marked by a single digit growth, but the leading garment

retailers like Pantaloon, Shoppers’ Stop and Globus have already made

business strategies to enter into the world of e-retailing. Famous apparel

brand Zodiac has already started online stores. The main motive of these

retailers through online sales is to reach the global markets and the small

towns where they do not have the outlets. Thus the India's Internet

shopping sector is preparing for a massive growth, which is fuelled by

increasing broadband usage and growing e-commerce.

1.1.1 Online Activities

The Internet has entered the mainstream consciousness over the past

decade. This has happened primarily because the web has got a graphical

interface and Internet has moved from governmental control to private

hands. The activities which are happening on the Internet are email and

instant messaging, general web surfing or browsing, reading news, hobby

searches, entertainment searches, shopping and buying online, medical

information searches, travel information searches, tracking credit cards,

and playing games.

Communication i.e. email, chat or instant message is the basic activity for

which Internet is used. It is the single most important reason for people to

go online. E-mail provides the opportunity to communicate more often

with a much broader circle of people than one can reach by telephone or

by mail in a convenient way. In India too email constitutes the major

activity on the Internet. It was found that more elderly people are

increasingly using email as compared to the younger generations.

In India the top five online activities are e-mail, surfing, chatting, search

and job search. Some of the sites, which are commonly used for these

particular activities, are:

 Yahoo -Most preferred communication portal, tops for email and chat

 Indiatimes –Best event and sports news provider.

 Naukri-Best recruitment portal

 Google-Best information domain

 Shaadi-Best for matrimonial services

 eBay-Best online shopping portal

(Source:IAMAI)

In India online trading, travel, recruitment, ticketing, real estate,

classifieds and social networking are a few spheres ripe for investment.

1.1.2 Employment

Today online job search market is expanding tremendously. According to

IAMAI the number of online job seekers had reached 6.5 million in 2005-06

and is expected to across 9.2 million in the year 2006-07. The market size

of the Indian online recruitment industry in 2005-06 was 145 crore and it

is estimated to reach Rs 241 crore for 2006-07 (source IAMAI) this is

mainly because of the increase in the internet penetration which has lead
to an increase in the users for whom net has become a convenient way to

meet their needs. Every year thousands of graduates pass out and look for

employment opportunities, for these job seekers Internet is the most

convenient (24 hour a day) and the comprehensive medium to research

and look for jobs. Internet is advantageous to both the job seekers (saves

time and cost) and to the recruiters (easy access to the best talent pool)

as a result there is a win a win situation.

1.1.3 Banking & Trading

The net banking is increasing and it is estimated that 4.6 million Internet

users are using Internet for banking purposes and it is expected to grow to

16 million plus by 2007-08 (Source IAMAI). Trading stocks is also becoming

a fast booming activity amongst the Indians. The traders feel that trading

through Internet is not that cheap but the convenience provided by online

trading is worth the costs involved. Traders can keep a regular check on

various stocks and it is easier to compare them. They can not only buy

and sell stocks but can also find the track record of various stocks, do

technical analysis, can access live news from international news agencies

such as Reuters, CNBC and can find opinions from other leading brokers

which help them do decide whether to buy or sell. More and more traders

today are making the immense use of these services, which shows that

there is a huge potential in this sector.

1.1.4 Matrimonial

As the popular adage goes, "Marriages are made in heaven" but today

with so many matrimonial portals in the market they help one find the
best match for themselves. Some of the popular marriage portals are

shaadi.com, bharatmatrimony.com, Yahoo India matrimony, MrnMrs.com,

Matricorp.com and jeevansaathi.com.

These marriage portals have increased because there is a rise in the

career orientation among youngsters and increasing work pressures have

resulted in less time for socializing. These youngsters are becoming more

independent and are now making their own decision in respect of choosing

their life partners. The marriage portals provide them the medium to

interact with the people who match their required profiles. These portals

not only help in finding a better match but also provide with services of

astrologers, decorators, wedding planners and caterers thus providing a

whole lot of services in one basket. More Indians are registering to these

matrimonial portals and there seems to be a huge growth in the coming

years.

1.1.5 Online Ticketing

The growth in the online travel business today is phenomenal. The Indian

online travel business is worth $350-400 million and is growing at 40-50

per cent year by year, as the online population of the country is estimated

to be 25 millions (Source:IMRB). There has been a significant increase in

online ticket booking in India with a double-digit growth, which has also

lead to an increase in Indian tourism. This growth in the travel industry has

definitely leaded to the increase in the travel portals. The scope for growth

is immense in this sector as more Indians are using the Internet.

Travel sites like MakeMyTrip.com (MMT) has been growing at about 20 per

cent month-on-month, for the last four months, selling 1,400 tickets a day

on an average (Source: MakeMyTrip.com). The online bookings in India

was mainly stared because of the low cost carriers like Air Deccan which

sells most of it tickets online. The revenue of the Indian Railway Catering

and Tourism Corporation (IRCTC) has also increased phenomenally

because of the online ticketing. The advantages of online ticketing are

both for providers and for consumers as the providers benefit from

infrastructure cost while for users it is a convenient way to book tickets.

Thus Internet has become an indispensable part of life and has reduced

the world to a global village. Many corporates are getting into this

bandwagon, as there seem to be a humongous growth in the coming

years. Airline, cinema, hotel bookings, etc are all increasingly going online.

The future of online business is bright therefore companies are providing

more convenient services to the consumers and thereby changing their

mindsets and attitudes towards life.

It is a fact that a great online shopping revolution is expected in India in

the coming years. There is a huge purchasing power of a youth population

aged 18-40 in the urban area.

If we observe the growth of Indian online transactions (Info by: IAMAI), it is

getting doubled year by year.

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

also getting increased day by day as the costs of computers are

decreasing and net penetration is increasing. The cost of internet usage is

also getting lower, with good competition among the providers. Wi-Fi &

Wimax is also getting tested in Bangalore and other cities in India. This will

increase the usage as it goes more on wireless internet.

Indians are proving every time that they can beat the world when it comes

to figures of online shopping. More and more Indians are going to online

shopping and the frequency of India’s online buying is crossing the overall

global averages.

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.

• 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.

In India

- Over $50 Billion and growing rapidly - Most popular online shopping

products include: books (45%), electronic gadgets (42%), railway tickets

(38%), accessories apparel (35%), apparel (35%), gifts (34%), computer

and peripherals (32%), airline tickets (28%), music downloads (21%),

movie downloads (21%), hotel rooms (22%), magazines (18%), tools

(16%), home appliances (16%), toys (16%), jewelry (17%), movie ticket

(15%), beauty products (12%), health and fitness products (12%), apparel

gift certificates( 11%) and sporting goods (7%).

There are over 120 million people online in India and this is expected to

grow to 200 Million by the end of 2010.

 CHAPTER - 2

LITERATURE REVIEW
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 towards

online shopping is a prominent factor affecting actual buying behavior.

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

NO.2, 2005)

Todd [1997] proposed a model of attitudes and shopping intention

towards Internet shopping in general. The model included several

indicators, belonging to four major categories; the value of the product,

the shopping experience, the quality of service offered by the website and

the risk perceptions of Internet retail shopping. In the research conducted

by Vellido et al. [2000], nine factors associated with users' perception of

online shopping were extracted. Among those factors the risk perception

of users was demonstrated to be the main discriminator between people

buying online and people not buying online.

Other discriminating factors were; control over, and convenience of, the

shopping process, affordability of merchandise, customer service and ease

of use of the shopping site. In another study, Jarvenpaa et al. [2000]

tested a model of consumer attitude towards specific webbase stores, in

which perceptions of the store's reputation and size were assumed to

affect consumer trust of the retailer. The level of trust was positively

related to the attitude toward the store, and inversely related to the

perception of the risks involved in buying from that store. Jarvenpaa et al.

[2000] concluded that the attitude and the risk perception affected the

consumer's intention to buy from the store.

Consumer risk perceptions and concerns regarding online shopping are

mainly related to aspects involving the privacy and security of personal

information, the security of online transaction systems and the uncertainty

of product quality. Trust is interwoven with risk [McAllister, 1995]. One of

the consequences of trust is that it reduces the consumer’s perception of

risk associated with opportunistic behavior by the seller [Ganesan, 1994].

Lack of trust is frequently reported as the reason for consumers not

purchasing from Internet shops, as trust is regarded as an important factor

under conditions of uncertainty and risk in traditional theories.

Mayer et al. [1995] developed a model which combines traditional

marketing philosophy on consumer motivation to buy and the trust model.

In this model, trust propensity; which is a personality trait possessed by

buyers; is an important antecedent of trust. In Internet shopping, there is

not much information available to the buyer regarding the seller, prior to

purchase. A buyer with a high propensity to trust will more likely be a

potential customer than a buyer with a lower propensity. Mayer et al.

[1995] proposed that ability, benevolence and integrity constitute the

main elements of trustworthiness. Ability refers to skills, competencies

and characteristics that a seller has in a specific domain. In this context,

sellers need to convince buyers of the competence of their companies in

the Internet shopping business. Benevolence is the extent to which the

seller is perceived by the buyer as wanting to ‘do well’. Sellers have to

convince buyers that they genuinely want to do good things for buyers,

rather than just maximize profit.

 CHAPTER - 3

PROJECT PROFILE
3.0 PROJECT PROFILE

3.1 Objective of the Study

The objective of this research study is to investigate online consumer

behavior, which in turn provides E-marketers with a constructional

framework for fine-tuning their E-businesses’ strategies. The specific

objectives of this research are:

1. To know the consumers awareness and perception about the

products and services provided on internet.

2. To know how it provides products and services and satisfies their

customers.

3. To know how it reduces the uncertainty in purchase decision

process.

3.2 Scope of the Study

1. The Study was conducted among the Internet users.

2. The Geographical area covered was Sec-18 Noida, Sec-29 Noida,

Cannaught place, Karol Baugh, Delhi.

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

3.4 Rationale of Study

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

possibilities As a result of this exceptional development, the online selling

industry is becoming interested in the use of internet to reach their

customers. Hence a better understanding of online shopping is critical to

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

especially important to know what is the consumer’s perception towards

online shopping, benefits perceived by them and what factors attract them

towards online shopping.

 CHAPTER - 4

RESEARCH METHODOLOGY
4.0 RESEARCH METHODOLOGY

4.1 Research Objective

To know and understand the consumer’s perception and awareness about

internet marketing/ shopping. This will help to know the attitude and

perception of consumers towards online shopping and what are the factors

which shape the consumer’s perception towards online shopping. Also

what are key concerns from the point of view of consumer while online

shopping.

4.2 Determination of information needs and sources

The following was the information required:

• What is consumer’s attitude towards online shopping?

• What are the key concern areas for consumers while online

shopping?

• Which factors shape the consumer’s attitude towards online

shopping?

• How has been recent shift taking place in online shopping?

4.3 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.

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 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 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.

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

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
towards Intention Decisio
Online
Security & online to shop n
Purchase
Privacy shoppin online Making
g

Perceived
Usefulness

Perceived Ease of CONSUMER

use SATISFACTION

Perceived
Enjoyment

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.

4.5 Sample Design

4.5.1 Sample Unit

For studying consumer perception on online shopping, samples were

selected from Delhi (East).

4.5.2 Sample Media

The respondents in the samples are reached through personal interviews.

4.5.3 Sampling Methods

Sampling methods fall under two broad categories-

a) Non-probability sampling methods.

b) Probability sampling methods.

4.5.4 Sample size- 100

4.5.5 Research place- NCR region

4.5.6 Sample Design

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

study.
 CHAPTER - 5

DATA ANALYSIS
5.0 DATA ANALYSIS

The objectives of the research were studied with respect to a regular

online shopper who shopped more than once because they would be the

right respondent to give an insight about the online shopping. Therefore it

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

survey the respondents where asked the following questions which helped

to know about a regular shopper.

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.

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.

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.

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

40% 36%
35%
28%
30%
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.

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.
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

Fig. 7 Online Activities by Time

90%

80%
70%

60% Comm unication

50% Inform ation

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 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.

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.

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%).

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 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.

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.

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.

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.

5.4.2 Satisfaction Index

It is important to understand the satisfaction level among the regular

online shoppers, which had lead to online shopping. This could be

understood by the satisfaction index and the frequency of purchase

among the shoppers.

Fig. 14 Satisfaction Index

2%
Highly
12%
Satisfied
Dissatisfied

31%
Neither 55%
Satified nor Satisfied
Dissatisfied

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

An important thing to be noted is that only 2% of the regular online

shoppers were highly satisfied while 31% of the regular online shoppers

were neither satisfied nor dissatisfied. This shows satisfaction level plays

an important role in online shopping with more regular shoppers falling

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

by the experience of shopping online. But the companies should take

measures so that the dissatisfied and the neither satisfied nor dissatisfied
category of regular online shoppers could be moved to satisfied or highly

satisfied. A note should be taken that only 2% of the regular online

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

which poise the regular shoppers from using the Internet frequently as a

shopping medium.

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

online shoppers purchase online. According to human psychology it is true

that frequency of purchase depends upon the satisfaction level received.

According to the figure 2 (already explained), a 74% of the regular online

shopper has purchased 2-4 times and 9% had purchased more than 6

times indicating that an increase in the confidence level and accepting the

Internet as a shopping medium. The increase in the frequency of shopping

was mainly because they were overall satisfied by the entire shopping

experience.

Analysis-It is seen that the main orientation for buying among the regular

online shoppers were convenience (32%), saves time (26%), price (23%),

product availability and superior selection (12%), and product comparison

(7%). The hypothesis stated that convenience is major factor motivating

the regular shopper was true as 75% of the regular online shoppers who

have shopped more than 5 times felt it was necessary as compared to

25% who shopped less than 5 times.

The barriers to online shopping as stated by the regular online shopper

were privacy and security (33%), inability to touch and feel the product

(21%), customer service problems (16%), hassle of returning the product

(14%), purchasing from unfamiliar source and person (9%) and other

problems (7%).

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

regular online shoppers that are satisfied tend to purchase more. It can

also be seen that 74% have shopped more 2-4 times and 11% had

shopped more than 5 times showing that satisfaction level plays an

important role in online shopping.

5.5 Future and growth of Online Shopping

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

online shoppers presently and the future of the various categories.

Fig. 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.

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%

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.
CHAPTER - 6
FINDINGS
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.
 CHAPTER - 7

GENERAL DISSCUSIONS
7.0 GENERAL DISCUSSION

7.1 Indian E-Comm. Report Finds Heavy Spenders Driving Sales

By Devin Comiskey

August 16, 2008

A Survey by Indian research organization Juxtconsult found that more and

more Indian Internet users are opening their wallets online. While such

hurdles as limited broadband access and security concerns remain, the

report finds there are currently more than 10 million shoppers online in

India. While current trends point to increased e-commerce growth in India,

the online marketplace in the country of more than 1 billion people is still

relatively small.

Juxtconsult's survey found that 40 percent of all urban Internet users buy

online, while 42 percent of the sales originate through just five percent of

consumers. The survey was conducted in April 2008and sampled more

than 30,000 users.

"This section of buyers spends 5,000 rupees or more per month on the

net," states the report. "It is interesting to note that two out of every three

heavy spenders are also 'netholics,' those who are on the net for more

than three hours per day...Of all those who buy online, only 25 percent are

spending more than 1,000 rupees per month while the (remaining) 75

percent bill less than 1,000 rupees per month." (1,000 Indian rupees is

currently equal to approximately $23 US.)

The report also found that buying and search patterns among Indians

differ between genders.

"While 43 percent of male users buy online, only 31 percent of urban

female users are consumers as well. Women tend to search more. Defying

their more common attitude towards shopping, women are more guarded

when it comes to the online market," says Juxtconsult.

"Depending on the product type, nine percent to 25 percent are buying

online, whereas 33 to 47 percent are searching the net for product

information," it says.

7.2 Security Fears Persist

Juxtconsult says the motivation for Indian users to make purchases online

varies, but users fear compromised personal information is still a great risk

when it comes to e-commerce.

"The single biggest motivation for buying online for net users is saving

time. Thirty-two percent of them look to shop online with this purpose.

Convenience of shopping '24x7' and home delivery are other major

incentives," says the report. "However, the concern of possible misuse of

credit card or personal information is extremely significant among online

buyers, with almost 55 percent of them voicing their concern. Clearly,

tackling and countering the issue of online safety figures as an imminent

challenge for net marketers."

7.3 Books, CDs Top the List

The products that are purchased most online in India, according to

Juxtconsult, are books and CDs - making up 25 percent of all online

purchases.

"Ironically, computer hardware and software, despite having the home

advantage are among one of the least bought products online, with only

13 percent buying them," says the report.

"In sum, the online market in India is blossoming but is yet to take off in a

considerable way. The Internet is still being used more for searching than

buying products and services. Though a noticeable proportion of net users

are also net consumers, essentially, at present only a small tribe among

them is driving online shopping momentum," says Juxtconsult.

LATEST

• A new trend in this space is that of Meta search engines. Ixigo and

Ezeego are two players in this space. A Meta search engine searches

all the online travel sites (including the airlines sites as well) and

displays the best deals for the user.

• Travel websites, such as Make My Trip India Pvt. Ltd and Yatra

Online Pvt. Ltd, are battling to win over India’s Rs16,000 crore ($400

million) religious travel market

• Opportunity in Online Travel Industry: $2billion

• Online travel company MakeMyTrip (MMT) has recorded sales of Rs.

1000 crore for the financial year ending March 2008, as per a

release.
 CHAPTER - 8

CONCLUSION
8.0 CONCLUSION

The e-commerce is one of the biggest things that have taken the business

by a storm. It is creating an entire new economy, which has a huge

potential and is fundamentally changing the way businesses are done. It is

believed that electronic commerce will become a huge industry in the

coming years and online shopping is now becoming a significant part of

the consumers daily life to meet their never ending requirements in a

convenient way.

Online shopping is picking up and is becoming a trend. More consumers

are indulging into Internet shopping as seen by the research because of

the value proposition it offers to a customer such as convenience, 24x7

shopping, doorstop delivery, a broad product selection and the ever-

expanding range of unique and unusual gift ideas as well as increased

consumer confidence in shopping on the internet is increasing. The main

motivating factor seen during the research was the convenience and

customer service which drives the people to online shopping as a result

today they are buying airline and railway tickets, books, home appliances,

electronic gadgets, movie tickets, etc by logging on to a web site, than

driving up to a store .As the research suggest that increase in usage of

internet increases the online shopping so there is a need to increase in

broadband penetration as it accelerates the growth of online trade. A huge

buyers and sellers across demographics are shopping online because of

the changing lifestyles and shopping habits but the majority of the users

are males. It was seen that despite the immense possibilities available on
the Internet it is mainly used for mailing, chatting and surfing. E-mail

applications still constitute the bulk of net traffic in the country.

Increased Internet penetration, a hassle free shopping environment and

high levels of Net savviness see more and more Indians shopping online.

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.

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.

 CHAPTER - 9

LIMITATION
9.0 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.

 CHAPTER - 10

RECOMMENDATIONS
10.0 RECOMMENDATION

Online shopping in India is poised for greater acceleration as PC and

Internet penetration grows. It is becoming one of the top Internet activities

and there is a huge growth in this business as more manufacturers and

providers are integrating the Internet into their sales model. But there are

many things that need to occur in online shopping to generate higher

revenues and the key to it lies in the hands of the marketers. To make

online shopping a boom following methods can be followed.

 India has a strong research and development (R&D) capability so

companies should innovate rapidly to take care of the security

issues. Technology like text to speech softwares should be

innovated to take care of the security concern.

 In India the total ownership of credit cards is small as compared to

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

online payment therefore alternative methods of payment like cash

on delivery (COD) where the end user pays cash after the product is

delivered and debit cards where the bank accounts are directly

debited should be used. Other technologies like encryption

technologies trusted third-party certifications; digital ID systems and

prepaid cards should be used.

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

of using credit cards online is that in case of disputed credit card

 payments for online transactions the onus is on the merchants to

prove that the transaction actually took place, as online users don't

physically sign a credit slip. As a result online users are protected

from fraudulent use of credit cards.

 There is a growth in the cellular phone market in India, more

merchants should make use of this device allowing the customers to

access the Internet and use it as mode of payment thereby

obviating the need for PCs and credit cards.

 It is not only important to pay strong attention to the security issue

and create new, innovative safeguards that protect consumers but

the merchants should promote these safeguards to the marketplace

and make the prospective consumers aware that the

communications, personal data, credit card accounts, and

transaction information can be protected.

 One of the factors that hinder Internet penetration in India is access.

More companies should adopt click and mortar model with the real

world operations to complement its online presence for e.g.

customers can walk to the office to access its services.

 Merchants should provide goods and services that offer the right

value for money. There should be transparency in policies (returns,

privacy, shipping, etc), insurance against fraud and a good after

sales services should be provided to consumers making it an

enjoyable experience.
 Consumers today demand a better, more efficient and less

cumbersome way to compare and buy products online. Innovative

service should be provided to consumers so that they can compare

products, which are available online using their mobile phones.

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

frustrating process. Therefore merchants should set themselves

apart from their competitors by factors other than price, constantly

innovate and move towards creating customer confidence to trade

online. They should provide massive selection at lower prices, offer a

personalized customer experience and their web sites should deliver

a shopping experience that addresses all of the consumer needs like

recommendation about the products, feedback from other

customers, etc.

 Vendors should educate the customers about e-commerce like

educating them on safety tips like reading the item description,

looking for a seller’s feedback score and asking questions, detecting

spoof mails and informing them about the new online crimes which

happen regularly.

 In India still the penetration of Internet has not happened the way it

should have been which hampers online shopping. Ecommerce

revolution can be brought about by providing more broadband

connections at affordable prices.

 There is a huge market for business in the rural India therefore

efforts should be such that to bring these people also into

experiencing online shopping. Companies should create more Indian

language software or content as Internet still is a primarily English

language world and language could be a barrier in rural India. Only

few language portals like webduniya.com exist today.

 Most of the Indians still like to see the product before buying; efforts

should be made to change this mindset of the people by making

them aware of the benefits of online shopping.

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

customers the convenience to shop anything on a single site like

ordering pizzas, movie tickets, groceries, etc rather than in scattered

places. The site should not only provide information content but also

tools to navigate and evaluate this information. The information on

the site should be just sufficient for the consumers to make a

decision and not to overload them with information, which results in

confusion.

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

Therefore Business to Consumers (B2C) sites should be designed in

such a way that consumers spend less time in finding information

they are looking for as delays in searching or loading a web page

might turn the consumers to other sites which have faster download

and display times.

  Since consumers control the experience they receive from shopping

over the Internet, there is a need to find ways of managing the

amount of information available over the Internet. Sites that are able

to offer this information and present it in a simple way to understand

will become the preferred destination for online shopping.

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

customer to trust the website with which they have electronic

transactions.

 Active participation from consumer marketing companies to

manufacturing industries is required to make online shopping a

booming sector.

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

while online shopping, are:

 Use a secure browser. The browser should comply with industry

security standards, such as Secure Sockets Layer (SSL).

 Consumers should shop with the known companies, as it is easy to

set up a shop online under any name. If they are not familiar with a

merchant they should ask for paper catalogue or brochure to get a

better idea about the merchandise and services and should find

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

also search for the reviews of the company.

 Read the privacy policy on the site of the companies before

shopping as this helps to know what information is being collected

and how it would be used.

 Keep a print record of the transactions this would come handy in

case of any fraud.

 One should find out how the company secures the financial and

personal information before paying the bills.

 The personal information should be kept private like address,

telephone numbers, email, etc. One should avoid using telephone

numbers or date of birth for establishing a password instead should

use a combination of numbers, letters and symbols.

 Proper research should be done about countries shopping laws and

merchant when shopping from other countries.

 CHAPTER - 11

EXECUTIVE SUMMARY
11.0 REFERENCES

 Prussakov Evgenii, Online shopping through consumer’s eyes, Am

Navigator, 2008.

 Price Lisa, The best of Online Shopping, Ballantine Books, 2001

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

 Lillian Clark and Peter Wright, A review of Common Approaches to

understanding Online Consumer Behaviour, PP- 5.87- 5.122

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

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

 Donthu, Naveen and Adriana Garcia (1999), The Internet Shopper,

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

 Research report By: IAMAI

 Emerald, Framework for consumers’ intentions to shop online,

research report

 Jarvenpaa Journal of Electronic Commerce Research, VOL. 6, and

NO.2, 2005

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

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

 http://www.ibimapublishing.com/journals/CIBIMA/2010/854516/8545

16.pdf
 CHAPTER - 12

ANNEXURE
12.0 ANNEXURE

12.1 Annexure 1

Different models of consumer attitude towards online shopping

By:Mary Ann Eastlick

This chart shows how consumer attitude toward online shopping can lead

either to approach coping (wanting to shop online) or to avoidance coping

(deciding not to search or shop online). Someone who is optimistic toward

the benefits of online shopping will develop approach coping. A person

who is pessimistic toward online shopping will think of the drawbacks to it

and decide to purchase in physical stores instead, which is avoidance

coping.
12.1 Annexure 2

FRAMEWORK FOR CONSUMERS’ INTENTIONS TO SHOP ONLINE

Source: research by Emerald

 CHAPTER - 13

QUESTIONNAIRE
13.0 QUESTIONNAIRE

Questionnaire

Kindly highlight/bold your answers.

1. Do you use Internet?

Yes No

2. How long have you been using Internet?

Less than 1 year 3 – 5 years

1 – 3 years More than 5 years

3. On the average, how much time (per week) do you spend in surfing

the Web?

0 – 5 hours 16 – 20 hours

6 – 10 hours More than 20 hours

11 – 15 hours

4. Have you purchased anything online ever?

Yes No
5. Which category (ies) of goods have you bought through Internet?

Books Railway tickets

Electronic Gadgets Airline tickets

CD/Videos Computer Hardware

Accessories apparel Computer Software

Gifts Magazines

Event Tickets Movies tickets

Hotel Rooms/Car Rental Office Supplies

Jewellery Food / Groceries

Infant / Child items Home tools and products

Sporting goods Health and fitness products

Toys Any other, specify………………

6. When did u shop for the first time?

Last 6 months

6 months- 1year

1-3 year

3-5 year
 More than 5 year

7. How frequently did you purchase online?

Only once

2-4 times

More than 5 times

More than 6 times

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

Highly Satisfied

Satisfied

Neither satisfied nor dissatisfied

Dissatisfied

Highly Dissatisfied

9. Where do you most often access the Internet?

Home Cyber-cafes

Office / College Any other, specify………

 10. What are the activities that you use Internet for? (Kindly rank them

between 1 to 5,with 1=most used, 2=used to a large extent, 3=used

to a good extent, 4=used sometimes, 5=rarely used)

Communication (E-mail, Instant Messaging, Bulletin Boards,

News Groups, Chat, etc.)

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

employment, etc.)

Entertainment (Games, Adult entertainment, Entertainment sites,

Sports, Music, Web page design, etc.)

Finance (Investment portfolio, financial research, online banking,

check stock/fund quotes, trading, etc.)

Shopping (Researching purchases, purchasing, auctions, Selling,

Classifieds, etc.)

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

internet in the near future?

Books Railway tickets

Electronic Gadgets Airline tickets

CD/Videos Computer Hardware

Accessories apparel Computer Software

 Gifts Magazines

Event Tickets Beauty products

Movies tickets Health and fitness products

Hotel Rooms/Car Rental Office Supplies

Jewellery Food / Groceries

Apparel gift certificates Pharmaceuticals

Infant / Child items Home tools and products

Sporting goods Home appliances

Toys Any other, specify………………

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

Convenience (ease of purchase, home delivery, ability to shop

24x7) Price

Saves time

Superior selection/Availability

Product comparison

Any other, specify………………

 13. What, according to you, are the most important barriers to purchase

online?

I am worried about giving out my credit card number

I don’t have a credit card

I don’t like providing personal information

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

familiar

I enjoy going out to do my shopping

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

Internet is too slow / Pages take too long to load

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

Delivery costs are too high

Prices are too high

Technical foul-ups prevent transactions from going through

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

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

through Internet

The process is expensive due to cost of access

 Any other, specify……………

PERSONAL DETAILS

14. Age:

Below 18 yrs

18 - 30 yrs

31 - 40 yrs

41 – 50 yrs

Above 50 yrs

2. Educational Background:

Non-Matriculate

Matriculate

Graduate

Postgraduate

3. Occupation:

Business/Self Employed

Service/Executive

Student
 Any other, specify………………

4. Gender:

Male

Female

5. Average Monthly Income:

Less than Rs. 5,000

Rs. 5,000 – Rs. 10,000

Rs. 10,000 – Rs. 25,000

Rs. 25,000 – Rs. 50,000

Above Rs. 50,000

Name: _____________________________

Contact No.: ______________________________

City: ______________________________