“A CONSUMER BUYING BEHAVIOUR TOWARDS ONLINE SHOPPING”

Dissertation Report submitted in Partial fulfillment of the requirement for the

Award of the degree of
MASTER OF BUSINESS ADMINISTRATION
of
BANGALORE UNIVERSITY

By
Mr. Akash Kumar Prasad
19SBCMD005

Under the guidance of

Dr. Venkatesh Arakeri

Bannerghatta Main Road, Bangalore - 560083

2021
“A CONSUMER BUYING BEHAVIOUR TOWARDS ONLINE SHOPPING”

Dissertation Report submitted in Partial fulfillment of the requirement for the

Award of the degree of
MASTER OF BUSINESS ADMINISTRATION
of
BANGALORE UNIVERSITY

By
Mr. Akash Kumar Prasad
19SBCMD005

Under the guidance of

Dr. Venkatesh Arakeri

Bannerghatta Main Road, Bangalore - 560083

2021
 STUDENT DECLARATION

I hereby declare that the Dissertation report titled “A CONSUMER BUYING BEHAVIOUR
TOWARDS ONLINE SHOPPING” submitted in partial fulfillment of the requirement of degree of
Master of Business Management in Bangalore University, has been prepared by me during the
academic year 2019-2021 under the Guidance Dr. Venkatesh Arakeri in Department of Management .

I further declare that this Dissertation Report is the outcome of my own efforts and that is not submitted
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Place: Bangalore Mr. Akash Kumar Prasad

Date: 30-1-2021 19SBCMD005
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Place: Bangalore
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 ACKNOWLEDGEMENT

I owe a deep sense of gratitude to those who have contributed to the successful completion of this
endeavor and take this opportunity with much pleasure to thank all the people who have helped us
through the course of journey towards producing this Dissertation report.

At the onset, I express my gratitude to the Almighty God for his abundant grace, blessings and goodwill
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I am grateful to my guide Dr. Venkatesh Arakeri, AMC College for their constant support,
encouragement and guidance.

I am grateful to who gave his valuable time for the interaction and allowed me to carry out this project.

I would also like to thank all who helped me directly or indirectly in completing this project
successfully.

Akash Kumar Prasad

19SBCMD005
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 TABLE OF CONTENTS

SL. NO. Particulars Pg.no

1. INTRODUCTION 01

1.1 Introduction to study 01-02

1.2 Background of the study

2 RESEARCH METHODOLOGY 03

2.1 Problem Statement 03

2.2 Objective of the study 04

2.3 Scope of the study 04

2.4 Limitations 05

2.5 Review of literature 05-08

3 INDUSTRY AND COMPANY PROFILE

3.1 Industry profile 26

3.2 Company profile – Flipkart 34

3.3 Flipkart- vision and mission 35

3.4 SWOT Analysis 35-37

eBay- company 38-39

Vision and mission 40

Organizational structure 40

SWOT Analysis 41-43

Company – Amazon 44-45

Vision and mission 45

Organizational structure 45-46

SWOT Analysis 46
GRAPH GRAPH NAME & TABLE NAME PAGE
NO. NO.

3.1 Showing the gender of respondents 50

3.2 Showing different age group of the respondents 51

3.3 Showing the occupation of the respondents 52

3.4 Showing the monthly income of the respondents 53

3.5 Showing respondents favorite online sites. 54

3.6 Showing In general preference of shopping 55

3.7 Showing Kind of problems faced shopping online 56

3.8 Showing how often do respondents use internet every day 57

3.9 Showing What influences respondents towards online shopping 58

3.10 Showing How often do respondents use internet for shopping. 59

3.11 Showing Internet used pre purchase to collect information 60

3.12 Showing amount spend on a single online purchase. 61

3.13 Level of agreement to the factors. 62-63

3.14 Level of agreement to the factors. 64-65

5 Chapter -5 Findings and suggestions 66

Executive Summary

The Consumer Behavior for marketing research aims at understanding of factors influencing
consumer behavior which can be used in the development of more effective marketing strategies
in the future.

The research focused on finding out the Online shopping Behavior of consumers (consumer
buying behavior) between the age group of 18 to 50 years. The stated objective of the study was
further broken down to secondary objectives which aimed at finding information regarding the
popular product categories, frequency of purchases, average spending, factors affecting buying
decision process etc.

Research was carried out with well structured questions to satisfy at least one of the objectives
of the research. The response format was of mixed variety which also helped in better
determination of outcomes.

The relationship between two variables “kind of problems faced by shopping online” and “kind
of products and services purchased online” on income, occupation and age was done. The
analysis give significant relationship between the factors and variables. Although there is a
strong interdependence between a few variables yet when taken collectively they do show high
relationship. Graphs were used for analyzing the causal relationship between different pairs of
factors. Chi-square was also applied to a pair of factors. Analysis found out few of the major
factors such as Value for Money, Trust, and Connected Up to date and convenience for shopping
which has their impact on today’s online shopping.
 CHAPTER 1 - INTRODUCTION

INTRODUCTION

Consumers are playing an important role in online shopping. Understanding the mechanisms of virtual
shopping and the behavior of the online consumer is a priority issue for practitioners competing in the fast
expanding virtual marketplace. This topic is also increasingly drawing the attention of researchers. These
development are gradually transforming e-commerce into a mainstream business activity while at the same
time online consumers are maturing and virtual vendors realize the importance and urgency for a
professional and customer-oriented approach. Yet the Internet meltdown at the end of the 1990s and plenty
of more recent anecdotal and empirical evidence indicate that many online firms still do not completely
understand the needs and behavior of the online consumer while many of them “... continue to struggle
with how effectively to market and sell products online”. The study identifies two groups of uncontrollable
factors – consumer characteristics and environmental influences – as well as three groups of controllable
ones (1) Product/service characteristics. (2) Medium characteristics. (3) Merchant/intermediary
characteristics. This classification underlines the fact that most researchers endorse the suggestion that –
like in traditional markets – the interaction of controllable and uncontrollable factors underpins also the
online decision-making process.
As of 203, India was the third-largest online market with more than 154 million internet users, ranked only
behind China and the United States and declaring itself as a market not to be ignored on the global stage.
Of the millions of internet users in India, 38 percent of those who use the internet at home or at work come
from the 25-34 age bracket, a percentage which was higher than any other age group surveyed.
Furthermore, men dominated internet usage with 61 percent to women’s 39 percent. It has been seen that
due to excess use of internet by the young generation, the buying patterns have been changed. It has
changed the way goods are purchased and sold, resulting to the exponential growth in the number of online
shoppers. Attitude toward online shopping and goal to shop online are not only affected by ease of use,
usefulness, and enjoyment, but also by other factors like consumer individuality, situational factors,
product distinctiveness, previous online shopping understanding and faith in online shopping. Therefore,
understanding whom are the ones consuming and why they choose to use or keep away from online
shopping. Many companies have their online buying portal providing the platform to consumers to buy the
products online.

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The Internet boom changed the way people shop, and today it is rare to find a retailer that does not have an
online presence of some sort. But online sales are very different from real-world sales — and making sure
the experience is consistent with in-store is crucial.

Online shopping (sometimes known as e-tail from "electronic retail" or e-shopping) is a form of
electronic commerce which allows consumers to directly buy goods or services from a seller over the
internet using a web browser.

An online shop evokes the physical analogy of buying products or services at a bricks-and- mortar retailer
or shopping center; the process is called business-to-consumer (B2C) online shopping. In the case where a
Business buys from another business, the process is called business-to-business (B2B) online shopping.

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 CHAPTER 2 – RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
The research was done through survey method. The collection of data was done through questionnaire,
interview and related websites. The sample size taken for the research was 106. The area of the survey
consisted of Bangalore city. The collection of data was done with structured questionnaire.
This chapter aims to understand the research methodology establishing a framework of evaluation and
revaluation of primary and secondary research. The techniques and concepts used during primary research
in order to arrive at findings; which are also dealt with and lead to a logical deduction towards the analysis
and results.
Tools for data collection
 Sampling Units: The sampling units constitutes of people of all ages, groups, male and female
respondents in Bangalore
 Sample size: A sample of 106 respondents
 Sampling technique: convenient random sampling
 Hypothesis testing: chi-square
 Collection and Sources of data: This survey involves collecting both primary data and secondary data.
The primary data has been collected through questionnaires and the secondary data has been collected
through magazines, journals and internet.

PROBLEM STATEMENT

It has been established that the consumer buying behavior is the outcome of the needs and wants of the
consumer and they purchase to satisfy these needs and wants. Although it sounds simple and clear, these
needs can be various depending on the personal factors such as age, psychology and personality. Also
there are some other external factors which are broad and beyond the control of the consumer.
“The purpose of this research is to understand on what parameters does consumers purchase online and
also their preference and what motivates consumers to shop online for different products. Due to the rapid
increase in the E-commerce there is a significant effect on retail stores which creates major differences in
the market. The differences in the market because of the online retailers mainly effect the retail stores in
day-to-day business.
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 RESEARCH OBJECTIVES
Scope of the study

The Consumer Behavior aims at giving us an understanding of factors influencing consumer

behavior which can be used in the development of more effective marketing strategies in the future.

The study has been under taken to analyze the consumer buying behavior towards online shopping
in Bangalore. The results are limited by the sample size 106 number and therefore the opinion of
the only selected customers is taken in to consideration the responses are collected only from those
people who prefer to shop online.

Objectives

The objective of the study are:

 To identify the factors which impact their choice of a particular online e-commerce seller.

 To analyze the online retail marketing in India and its impact on buying behavior of customers.

 To understand the major challenges faced while buying though online shopping.

 To identify the Situational factors impacting consumer shopping behavior

Hypothesis

H0: There is no significant factors which affect customer buying behavior towards online
shopping.

H1: There is significant factors which affect customer buying behavior towards online shopping.

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LIMITATIONS OF THE STUDY

 Since the sample size was only 106 we cannot come to an appropriate conclusion of the
research and a certain degree of bias is bound to be present from the customer’s perspective.

 In some cases, the respondent ware not giving us the proper reply. He/she might think that
this is only wastage of time or this might create some problem etc. And as a result he/she has
given some fake answers and fills the questionnaire very casually.
 It is possible that some potential source might have remained untapped.

 Since the result has been drawn on the basis of the information provided by the respondents
therefore there is a chance of error.
 Research restricted only to Bangalore.

LITERATURE REVIEW

INTRODUCTION

The topic of consumer behavior is one of the massively studied topics by the researchers and
marketers in the past and still being studied. Researchers show different reasons as to why
consumer behavior has been the topic of many academics and researchers. One of the common
views is that understanding consumer behavior has become a factor that has a direct impact on
the overall performance of the businesses (Kotler and Keller, 2012). Another view suggests that
understanding consumer behavior has become crucial especially due to fierce competition in
retail industry in the UK and worldwide (Lancaster et al, 2002). This chapter will introduce some
other areas of research background of consumer behavior addressing the works of
researchers and marketers. Moreover, consumer decision making process, in particular, five
stages of consumer decision making process will be discussed in detail.

It is worth noting that consumer buying behavior is studied as a part of the marketing and its
main objective it to learn the way how the individuals, groups or organizations choose, buy use
and dispose the goods and the factors such as their previous experience, taste, price and branding
on which the consumers base their purchasing decisions (Kotler and Keller, 2012).

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One of such studies of consumer buying behavior has been conducted by Acebron et al (2000).
The aim of the study was to analyze the impact of previous experience on buying behaviour of
fresh foods, particularly mussels. In their studies the authors used structural equation model in
order to identify the relationship between the habits and previous experience on the consumer
buying decision. Their findings show that personal habits and previous experience on of the
consumers have a direct impact on the consumers’ purchase decision in the example of
purchasing fresh mussels. They also found that the image of the product has a crucial impact on
the purchasing decision of the consumer and further recommended that the product image should
continuously be improved in order to encourage the consumers towards purchasing.

Another study conducted by Variawa (2010) analyzed the influence of packaging on consumer
decision making process for Fast Moving Consumer Goods. The aim of the research was to
analyze the impact of packaging for decision making processes of low-income consumers in
retail shopping. A survey method has been used in order to reach the research objectives. In a
survey conducted in Star Hyper in the town of Canterville 250 respondents participated. The
findings of the research indicate that low-income consumers have more preferences towards
premium packaging as this can also be re-used after the product has been consumed. Although
the findings indicate that there is a weak relationship between the product packaging and brand
experience. However, it has been proven by the findings of the research that low-income
consumers have greater brand experience from the purchase of ‘premium’ products when
compared to their experience from purchasing ‘cheap’ brand products.

Lee (2005) carried out study to learn the five stages of consumer decision making process in the
example of China. The researcher focuses on the facts that affect the consumer decision making
process on purchasing imported health food products, in particular demographic effects such as
gender, education, income and marital status. The author employed questionnaire method in
order to reach the objectives of the research. Analysis of five stages of consumer decision
making process indicate that impact of family members on the consumer decision making
process of purchasing imported health food products was significant.

The author further explains this by the fact Chinese tradition of taking care of young and old

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family members have long been developed and marriage is considered to be extremely important
in Chinese tradition. This reflects in the findings of the study that the purchase of imported
health food products made by a person for the people outside the family is declined significantly
by both male and female Chinese after they get married.

Five Stages Model of consumer decision making process has also been studied by a number of
other researchers. Although different researchers offer various tendencies towards the definitions
of five stages, all of them have common views as they describe the stages in similar ways. One
of the common models of consumer decision making process has been offered by Blackwell et al
(2006). According to him, the five stages of consumer decision making process are followings:
problem/need recognition, information search, evaluation of alternatives, purchase decision
made and post-purchase evaluation.

Each stage is then defined by a number of researchers varying slightly but leading to a common
view about what each stage involves. For example, according to Bruner (1993) first stage, need
recognition occurs when an individual recognizes the difference between what they have and
what they want/need to have. This view is also supported by Neal and Questel (2006) stating that
need recognition occurs due to several factors and circumstances such as personal, professional
and lifestyle which in turn lead to formation of idea of purchasing.

In the next stage, consumer searches information related to desired product or service (Schiffman
and Kanuk, 2007). Information search process can be internal and external. While internal search
refers to the process where consumers rely on their personal experiences and believes, external
search involves wide search of information which includes addressing the media and advertising
or feedbacks from other people (Rose and Samouel, 2009).

Once the relevant information about the product or service is obtained the next stage involves
analyzing the alternatives. Kotler and Keller (2005) consider this stage as one of the important
stages as the consumer considers all the types and alternatives taking into account the factors
such as size, quality and also price.

Backhaus et al (2007) suggested that purchase decision is one of the important stages as this
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stage refers to occurrence of transaction. In other words, once the consumer recognized the need,
searched for relevant information and considered the alternatives he/she makes decision whether
or not to make the decision. Purchasing decision can further be divided into planned purchase,
partially purchase or impulse purchase as stated by Kacen (2002) which will be discussed further
in detail in the next chapters.

Finally, post-purchase decision involves experience of the consumer about their purchase.
Although the importance of this stage is not highlighted by many authors Neal et al (2004)
argues that this is perhaps one of the most important stages in the consumer decision making

Process as it directly affects the consumers’ purchases of the same product or service from the
same supplier in the future.

The most noteworthy writers that serve as academic advocates of The Five Stage Model of
consumer decision making include Tyagi (2004), Kahle and Close (2006) Blackwell et al.
(2006), and others.

It is important to note that The Five Stage Model is not the only model related to consumer
decision-making, and there are also a range of competing models that include Stimulus-
Organism-Response Model of Decision Making developed by Hebb in 1950’s, Prescriptive
Cognitive Models, The Theory of Trying (Bagozzi and Warsaw, 1990), Model of Goal Directed
Behavior (Perugini and Bagozzi, 2001) and others. All of these models are analyzed in great
detail in Literature Review chapter of this work.

8|Page
1.1 Factors Impacting Consumer Buyer Behaviour

It has been established that the consumer buying behaviour is the outcome of the needs and
wants of the consumer and they purchase to satisfy these needs and wants. Although it sounds
simple and clear, these needs can be various depending on the personal factors such as age,
psychology and personality. Also there are some other external factors which are broad and
beyond the control of the consumer.

A number of researches have been carried out by academics and scholars on identifying and
analyzing those factors affecting the consumers’ buying behaviour and as a result, various types
of factors have been identified. These factors have been classified into different types and
categories in different ways by different authors. For instance, Wiedermann et al (2007)
classified them into internal and external factor. On the other hand, Winer (2009) divided them
into social, personal and psychological factors. Despite the fact that they have been classified
into different groups by different authors they are similar in scope and purpose (Rao, 2007).

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There is a wide range of factors that can affect consumer behaviour in different ways. These
factors are divided by Hoyer et al. (2012) into four broad categories: situational, personal, social
and cultural factors.

Situational factors impacting consumer behaviour may include location, environment, timing and
even weather conditions (Hoyer et al., 2012). In order to benefit from situational factors major
retailers attempt to construct environment and situations in stores that motivate perspective
customers to make purchase decision. Range of available tools to achieve such an outcome
include playing relaxing music in stores, producing refreshing smells in stores and placing bread
and milk products in supermarkets towards the opposite end of stores to facilitate movement of
customers throughout the store to make additional purchases etc.

The temporary nature of situational factors is rightly stressed by Batra and Kazmi (2008).

Personal factors, on the other hand, include taste preferences, personal financial circumstances
and related factors. The impact of personal factors on consumer decision-making is usually
addressed by businesses during market segmentation, targeting and positioning practices by
grouping individuals on the basis of their personal circumstances along with other criteria, and
developing products and services that accommodate these circumstances in the most effective
manner.

According to Hoyer et al. (2012) social factors impacting consumer behaviour arise as a result of
interactions of perspective consumers with others in various levels and circumstances. Targeting
members of society perceived as opinion leaders usually proves effective strategy when
marketing products and services due to the potential of opinion leaders to influence behaviour of
other members of society as consumers.

Lastly, cultural factors affecting consumer behaviour are related to cross-cultural differences
amongst consumers on local and global scales. Culture can be defined as “the ideas, customs,
and social behaviour of a particular people or society” (Oxford Dictionaries, 2015) and the

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 tendency of globalization has made it compulsory for cross-cultural differences amongst
consumers to be taken into account when formulating and communicating marketing messages.

Online Shopping Behavior

Identifying pre-purchase intentions of consumers is the key to understand why they ultimately
do or do not shop from the Web market. One stream of research under online consumer behavior
consists of studies that handle the variables influencing these intentions. A compilation of some
of the determinants researchers have examined are: transaction security, vendor quality, price
considerations, information and service quality, system quality, privacy and security risks, trust,
shopping enjoyment, valence of online shopping experience, and perceived product quality.
(Liao and Cheung, 2001; Saeed et al., 2003; Miyazaki and Fernandez, 2001; Chen and Dubinsky,
2003).

The lists of factors having a positive or negative impact on consumers’ propensity to shop do not
seem to be very different from the considerations encountered in offline environments. However,
the sensitivities individuals display for each variable might be very different in online
marketplaces. Factors like price sensitivity, importance attributed to brands or the choice sets
considered in online and offline environments can be significantly different from each other
(Andrews and Currim, 2004). Uncertainties about products and shopping processes,
trustworthiness of the online seller, or the convenience and economic utility they wish to derive
from electronic shopping determine the costs versus the benefits of this environment for
consumers (Teo et al., 2004). Further studies aiming to complete the full set of factors
influencing consumers’ prepurchase intentions are still much awaited.

The Online Purchasing Process

Many studies frequently mention that there is a vast amount of window shopping taking place
online but the number or the rate of surfers who turn into purchasers or regular buyers are very
low (Mayer, 2002; Betts, 2001; Oliver, 1999). This might happen because of the lack of
consumer intention to purchase an offering from the online environment at the outset. It might
also happen because of various problems that arise during online shopping driving the consumer
to abandon the task in the middle. Therefore, while one stream of research should identify the

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reasons behind the purchase reluctance of consumers, another area of concentration should be
why people abandon their shopping carts and stop the purchasing process in the middle. Such
attempts can help to understand how to turn surfers into interactors, purchasers, and finally,
repeat purchases by making them enter into continuous interaction with this environment
(Berthon, 1996).

Common reasons for purchase reluctance are the difficulties and costs of distance shipping,
inadequate amount of purchase related information, troubles experienced after the purchase such
as delivery or refund problems, general security fear, and various perceived risks such as
financial, product-related or psychological risks (Mayer, 2002; Chen and He, 2003). On the other
hand, the reasons of abandoning purchases are much more technical such as unexpected shipping
costs or transaction complexity (Harvard Business Review, 2000). In other words, some
consumers accept to shop from the Internet in principle but technical complexities or ineffective
systems discourage them.

Regardless of the pessimistic state of events, marketers should not be hopeless about the future.
Once the risks consumers perceive about shopping through the Web are reduced, the
environment still promises a high potential for selected consumer segments. Studies show that
consumers who search for product related information through the Web have stronger intentions
to make purchases online (Shim et al., 2001).

1.2 Marketing mix and consumer behaviour

Marketing mix or 4Ps of marketing is one of the major concepts in the field of marketing and
each individual element of marketing mix can be adopted as an instrument in order to affect
consumer behaviour.

Importance of the marketing mix can be explained in a way that “successful marketing depends
on customers being aware of the products or services on offer, finding them available in
favorably judging that practitioners of the offering in terms of both price and
performance” (Meldrum and McDonald, 2007, p.4).

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Core elements of marketing mix consist of product, price, place and promotion. Marketing mix
has been expanded to comprise additional 3Ps as processes, people and physical evidence.

Product element of marketing mix relates to products and services that are offered to customers
to be purchased. Products can have three levels: core, actual and supporting products. For
example, core product in relation to mobile phones can be explained as the possibility to
communicate with other people in distance. Actual product, on the other hand, relates to specific
brand and model of a mobile phone, whereas augmented product may relate to product insurance
and one-year warranty associated with the purchase of a mobile phone.

Price represents another critically important element of marketing and four major types of
pricing strategies consist of economy, penetration, skimming, and premium pricing strategies
(East et al., 2013).

Place element of marketing mix relates to point of distribution and sales of products and services.
Advent of online sales channel has changed the role of place element of marketing mix to a
considerable extent.

Promotion element of marketing mix refers to any combination of promotion mix integrating
various elements of advertising, public relations, personal selling and sales promotions to
varying extents (Kotler, 2012).

Processes, on the other hand, refer to business procedures and policies related to products and
services. For example, integration of a greater range of payment systems such as PayPal, SAGE
Pay and Visa in online sales procedures may have positive implications on the volume of sales
by creating payment convenience to customers.

People element of marketing mix is primarily related to skills and competencies of the workforce
responsible for customer service aspect of the business. Importance of people element of
marketing mix in general, and providing personalized customer services in particular is greater
today than ever before.

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 Physical evidence relates to visual tangible aspects of a brand and its products. For instance, for a
large supermarket chain such as Sainsbury’s physical evidence is associated with design and
layout of a store, quality of baskets and trolleys, layout of shelves within the store etc.

It can be forecasted that further intensification of competition in global markets and more
intensive search of businesses for additional bases for competitive advantage may result in
emergence of additional ‘P’s to compliment the framework of marketing mix in the future.

1.3 EXTERNAL INFLUENCE

FAMILY

Family is considered as the most important consumer consumption organization in society, and
members of a family constitute the most influential primary reference group. Family members
play certain roles in the decision-making process, namely the information gatherer who has the
influence on how and where information is gathered, the influencer who has the influence on
different brands are evaluated, the decision maker who has the influence on which product will
be bought, the purchasing agent who makes the purchase, and the user of the product.

There are two families in the buyer’s life. The family of orientation consists of parents and
children (single-parent families and childless families are included). From parents, an individual
acquires an orientation toward religion, economics, personal ambition, and self-worth. Such
influence on behavior can be significant and continuous even though the buyers do not interact
often with their parents.

Another more direct influence on daily buying behavior is the family of procreation, namely
one’s spouse and children. For example, in the India, the involvement in good purchasing has
varied by product category. The wife is usually the main purchasing agent of the family. That is,
nowadays, traditional purchasing roles are changing. Marketers shall see both men’s and
women’s needs as possible targets. As for smartphone, in an urban population of the country

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 every member of family usually has a smartphone. Normal mobile is usually owned by everyone
and they are slowly switching to smartphones.

SOCIAL STATUS

Different products and stores are perceived by consumers to be appropriate for certain social
classes (Munson and Spivey, 1981). Working class consumer tends to evaluate products in more
utilitarian terms such as sturdiness or comfort rather than style or fashion. They are less likely to
experiment with new products or styles. Each individual’s social status or personality also
influences the consumption behavior. Personality can be defined as a set of unique human
psychological traits such as confidence, autonomy, adaptability and defensiveness that leads to
regular and continuous responses to external stimuli. A brand also has personality, a Brand
personality can be considered as the individual set of traits that we can attribute to a certain
brand. Buyers are more likely to choose brands that reflect their own. Usually, such possessions
would be more obvious for public products than for private products available in market
(Solomon, 2006).

Occupation and the social class have a powerful impact on buyer’s decision. The different
categories of social class are as following:

Upper class- they are social elite, leaders in business

Upper middle class- they are mainly professionals and business people
Middle class- they are the white-collar workers and small business owners
Working class- they are blue-collar workers
Lower class- they are the unskilled, poorly educated and socially disadvantaged people.

People who are from an upper-class family will undoubtedly consume more on products and
services while people from a lower class will spend more cautiously and wisely on products and
services in market.

The increase in Indian economic activities naturally has led to creation of employment and
business opportunities, which in turn has resulted in a substantial rise in the disposable incomes
of the people particularly, the middle class. An ever greater section of the Indian populous is
making their entry into the middle class by virtue of their earning potential. With increasing
disposable incomes, higher levels of aspiration and propensity for a better lifestyle - the middle

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 class is the key beneficiary of majority of the products and services marketed in India.
Considering the size of the country and its population, the market size for goods and services in
India is huge and it is still growing.

CULTURE

Culture is the accumulation of shared meaning, rituals, norms and traditions among the members
of an organization or society. A consumer’s culture determines the overall priorities he/she
attaches to different activities and product. It also determines the success or failure of specific
products and services in the market. A product that provide benefit consistent with those desired
by members of a culture at any point in time has much better chance of attaining acceptance in
the marketplace. Culture can be considered as a lifestyle which is then passed on from one
generation to the other generation. Culture is not static. It is continually evolving, synthesizing
old ideas with new ones. As of the historic factor that Iranian plateau, Central Asia, Arabia,
Afghanistan and the West have invaded India thousands of years ago as a result Indian people
and culture have been influenced extremely and produced a remarkable ethnic and cultural
fusion. 4 main languages are spoken in the country. English is the most vital language for
national, politics and commercial communication. Although 81% of the people are of Hindu
religion, India is the home of Muslims (1% of people) one of the world’s largest Muslim
populations. The population also includes Christians, Sikhs, Buddhists, Sikhs and Parsis (Cia.gov
2014).

DEMOGRAPHIC

An age cohort consists of people of similar ages who have undergone similar experience. They
share many common memories about culture heroes, importance of historic event and so on.
Marketers often target products or services to one or more specific age cohorts. They recognize
that the same offering will probably not appeal to people of different ages, nor will the language
and image they use to reach them. Important age cohort includes teenager, 18-29 year olds, baby
boomers and the elderly. Teenagers are making transaction from childhood to adulthood, and
their self-concept tends to be unstable. They are receptive that help them to be accepted and
enable to assert their independence. Baby boomers are the most powerful age segment because

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 of their size and economic clout. As this group has aged their interests have changed and
marketing priorities have changed as well.

Total population of India is 1.2 billion and age structure from age 15 to 54 consist of 69% of
total population in which approx. 376 million are male and approx. 357 million are female. As
for smartphone market it is very huge demographic.

REFERENCE GROUP

A reference group is an actual or imaginary individual or group conceived of having significant

relevance upon an individual evaluations, aspiration or behavior. Reference group influences
consumers in three ways. These influences are informational, utilitarian, and value expressive.
Although two or more people are normally required to form a group, the term reference group is
often used bit more loosely to describe any external influence that provides social cues.
Reference group that affect the consumption can include parents, fellow enthusiast, team
members, classmate etc.

A reference group can take the form of a large, formal organization that has a recognised
structure, regular meeting times and officers, or it can be small and informal, such as a group of
friends or student living in hostels. In smartphone market, companies tend to have more control
over their influencing of formal group because they are more easily identifiable and accessible.

1.4 INTERNAL INFLUENCE

PERCEPTION

Perception refers to the many different ways that an individual can sense external information,
select particular sources of information and how they interoperate this information (Belch and
Belch, 2009, p118). This means that the people who have the same motivation and are in the
same situation may not act the same because they perceive the situation differently. Perception is
the process by which people select, organize, and interpret information to form the image of
certain things. People perceive the same situation differently because they interpret and organize
information uniquely. In smartphone market, perceptions are more important than the reality, as
it affect consumer’s actual behavior. There are three processes that explain why people from
different perceptions with the same object.

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SELECTIVE DISTORTION

Selective distortion presents the tendency for people to interpret information that match to the
presumptions. Consumers often distort information to support their existing belief and
expectations. Selective distortion can be helpful with strong brands when consumers interpret
neutral or ambiguous brands information and make it more positive.

SELECTIVE ATTENTION

Selective attention is the process that people screen most stimuli out as the capacity to process
stimuli is limited. For instance, average Indians may be exposed to over 1,500 ads, which
indicate that marketers have to try their best to attract consumers’ attention. People are more
likely to notice stimuli that relate to a current need, that they anticipate, and whose deviations are
large in relationship to the normal size of the stimuli.

SELECTIVE RETENTION

Selective retention implies the tendency that people forget much of the information that they are
exposed, but they still retain information that matches their attitudes and beliefs. It explains why
repletion is necessary to avoid information to be neglected.

INFORMATION RESEARCH

Mihart (2012) discuss how information search usually starts with an “internal search” and a
customer will identify products that they are already aware of known as the evoked set. The
“external search” aspect of information search relates to information obtained from external
sources, which can include packaging and marketing communications. Once the problem has
been recognized, consumer will need adequate information to resolve it. Information search is
the process by which the consumer surveys his or her environment for appropriate data to make a
reasonable decision. A consumer may recognize a need and then search the marketplace for
specific information related to the product. Information sources can be roughly broken down into
two kinds: internal and external. Internal search is the use of own memory band to assemble the
information about the different product alternatives whereas External search are the information
obtained from advertisements, friends etc. There are many Information sources by which a

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 person can get the information like friends, family, neighbors, websites, trader, and display in
shops, promotions and mass media. In case of smartphone Information about the product is
collected via many source like, Friend and family, online review of the product etc.

1.5 EVALUATION OF ALTERNATIVES

According to Belch and Belch (2009) this part of the decision making process refers to when a
customer refers back to the evoked set‟ to evaluate whether or not another product can help solve
their problem”. In evaluation of stage, the product the product alternatives that are considered
comprise the individual’s evoked set. Consumers will improve their own evaluation standard
based on the information they acquired in from information search. Members of the evoked set
usually share some characteristics; they are categorized similarly. The way products are mentally
grouped influences which alternatives will be considered, and some brand are more strongly
associated with these categories than are others.

1.6 CONSUMER DECISION MAKING

Consumers purchase products or services which they necessarily do not need. However when the
actual need arises, the consumer goes through a process before making the buying decision.
Problem recognition, information search, evaluation of alternatives and product choice are steps
recognised for this process (Solomon et al.2002). Studies show that the clothes increase the
feeling of belonging to a society and impacts purchasing behaviour. The bigger the fashion
involvement in a society is the more people buy clothes (O’Cass 2000)

PROBLEM RECOGNITION

This occurs when a consumer notice that a need has become dissatisfied. Problem can arise
either through need recognition or opportunity recognition; when a person is for example
running out of something needed or a need is dissatisfied, the consumers actual state moves
downward, however when a consumer sees the possible opportunity to purchase something new
or better the ideal state moves upward. Marketers use either primary demand, which encourages
a consumer to buy any brand, or secondary demand where consumers are to purchase a specific
brand. Companies try to differentiate their products and services over competitors (Solomon et
al. 2002 p. 239-240)

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INFORMATION SEARCH

This is the process when a consumer starts to look information about the product or service. This
can be identified as the pre-purchase search since the consumers has already identified to
problem which is tries to resolve. The consumers’ on-going search helps marketers to capture
their attention. Consumers are exposed to advertising incidentally or deliberately, depending on
the motivation to search information (Solomon et al.2002 p. 241).

EVALUATION OF ALTERNATIVES

Consumers must choose which product or service they decide to purchase. The evaluation of
alternatives is processed through identifying the evoked set which are products our memory has
registered, inept set which are the alternatives consumer are aware of but for some reason do not
consider buying which can be characterised as inert set; product that are not considered to be
purchased at all ( Solomon et al 2002)

PRODUCT CHOICE

Consumers have to consider and evaluate which satisfies their need the best. The market beliefs
of consumers are that they might get better value for their money from certain shops or brands.
Choosing the product requires usually evaluating the alternatives, however this can be influenced
by previous shopping experiences, beliefs of the product that advertisers have put forth and
information given about it. People tend to think that higher price means better value and quality
(Solomon et al.2002)

Purchase decision

Factors such as mood, behavioural and perceptual affect consumer state of mind the volume of
buying. The shopping experience influences on consumer satisfaction and how we use the
product. A satisfied client is more likely to purchase again. The below shows the issues related to
purchase and post-purchase activities (Solomon et al)

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(Figure showing the consumer state of purchase, which leads to satisfaction)

ONLINE SHOPPING ORIENTATIONS

Kim and LaRose (2004) have defined shopping orientation as a shopper's attitude toward
shopping activity that may vary with the situation rather than an invariant personality trait of the
shopper. They have cited the categorization given by Bellenger, Robertson and Greenberg (1977)
which classifies shoppers on the basis of their shopping orientation into convenience versus
recreation oriented. Kim and LaRose (2004) also posit that shoppers may possess multiple
orientations depending upon the expected outcome of a shopping experience and may
demonstrate a regulated/utilitarian or an unregulated/recreational shopping orientation depending
upon the environmental stimuli. Their study also shows that these two shopping orientations are
not mutually exclusive and interactive web features may draw shoppers with convenience
orientation into unregulated buying.

Li, Kuo and Rusell (2006) have also studied the impact of shopping orientations on online
consumer behavior along with other factors like demographics, channel knowledge and
perceived channel utilities. Primary data was collected by a research company using an online
survey of 999 U.S. Internet users. They have classified Internet users as frequent, occasional and
non-buyers. Findings indicated that frequent web buyers have a higher degree of perceived
channel utility for the purpose of communication, distribution and accessibility. Similarly
channel knowledge also has a positive effect on the Internet buying and it also has a reciprocal
influence on the perceived channel utilities. Their study also indicates that frequent web buyers
value convenience more than experience (touch and feel of the product) whereas those who are
non-web buyers have a higher degree of experience orientation. Recreation and economy
orientation are found to be similar for the three types of Internet buyers. The study of the

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 demographic factors revealed that male are more frequent web buyers than women, better-
educated consumers shop more frequently online and consumers with higher income are more
likely to be in frequent web buyer category. Age was not significant as far as frequency of web
buying was concerned.

WEB EXPERIENCE

The literature review done by Constantinides (2004) helps in identifying the web experience
components and their role as the first step in shaping the online consumer's behavior. He has
added web experience as a controllable element in his model depicting factors that influence the
online buying behavior. He has further explained web experience factor by classifying it in three
sub-categories which are the building blocks of the web experience. These three sub-categories
are Functionality factors (usability and Interactivity), Psychological factors (trust) and Content
factors (aesthetics and Marketing Mix).

TRUST AS A FACTOR

Studies also indicate that trust remains a crucial factor in e-commerce and in influencing the
purchase decision of online shoppers. Consumers prefer to shop from trusted websites.
Researches reveal that trust is a factor which also helps in forming long-term customer
relationships (Dwyer, Schurr & Oh, 1987; Gefen & Straub, 2003; Kim, Xu & Koh, 2004). Some
researchers like Lee (2002), Liebermann and Stashevsky (2002), McKnight et al.(2002), Suh and
Han(2002) and Liang and Lai(2002) have even argued that a new step has been added to the
online buying process and that is the step of building trust or confidence (as cited by
Constantinides, 2004). The available literature explains that trust facilitates e-commerce and
online transactions, but at the same time the consumer's lack of trust in online vendors continues
to remain a hindrance in the growth of e-commerce. (Ba & Pavlou, 2002; Gefen and Straub,
2003; Gefen, Karahanna & Straub, 2003; Kim, Xu & Koh, 2004; Lim, Sia, Lee & Benbasat,
2006; Pavlou & Gefen, 2004). Gefen (2002) and Kim, Xu & Koh (2004) have stated that a key
challenge to e-commerce is that creating trust typically requires multiple interactions and
superior service over a period of time (as cited by Lowry et al., 2008).

Brand has also been established as one of the factors influencing the customer trust for a website
(Bart, Shankar, Sultan & Urban, 2005; Yoon, 2002). Ward and Lee(2000) conducted a research

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 to examine whether consumers use brands as sources of information when shopping on Internet
and they concluded that branding can facilitate consumers' acceptance of e-commerce. Lowry,
Vance, Moody, Beckman & Read (2008) have studied the impact of "branding alliances and
web-site quality" on the consumer trust of e-commerce websites. They explored the usage of
branding alliances and website quality by the less familiar websites to enhance the consumer
trust and suggested that branding and web-site quality can significantly increase the initial
consumer trust in the e-commerce websites.

ONLINE MERCHANTS AND INTERMEDIARIES CHARACTERISTICS

Researchers such as Hoffman and Novak (1996) and Spiller and Lohse (1998) have
suggested a broad classification of Internet retail stores as well as the key attributes and
features of online stores. These studies provided us with a better insight into the study of
online merchant and intermediary characteristics. In the current study, we included
factors like service quality, privacy and security control, brand/reputation,
delivery/logistic, after sales services and incentive in our framework of online consumer
behavior.

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Figure: Framework of online consumer behaviour

These five domain areas were integrated into our base model (MIAC) to form a
framework for the study of online consumer behavior. This proposed framework not
only provides us with a cohesive view of online consumer behavior, but also serves as a
salient guidance for researchers in this research area.

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 Chapter -3

INDUSTRY & COMPANY PROFILE

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INDUSTRY
India has an internet user base of about 354 million as of June of 2015. Despite being the second
largest user base in world, only behind China (650 million, 48% of population), the penetration
of e-commerce is low compared to markets like the United States (266 M, 84%), or France (54
M, 81%), but is growing at an unprecedented rate, adding around 6 million new entrants every
month. The industry consensus is that growth is at an inflection point.

In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-
retail activities.[4] Demand for international consumer products (including long-tail items) is
growing much faster than in-country supply from authorised distributors and e-commerce
offerings.

Several Indian e-commerce companies have managed to achieve billion-dollar valuations,

including Flipkart, Snapdeal, InMobi, Quikr, OlaCabs, Jabong, Shopclues and Paytm.

Market size and growth

India's e-commerce market was worth about $3.9 billion in 2009, it went up to $12.6 billion in
2013. In 2013, the e-retail segment was worth US$2.3 billion. About 70% of India's e-commerce
market is travel related. According to Google India, there were 35 million online shoppers in
India in 2014 Q1 and is expected to cross 100 million mark by end of year 2016. CAGR vis-à-vis
a global growth rate of 8–10%. Electronics and Apparel are the biggest categories in terms of
sales.

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Key drivers in Indian e-commerce are:

 Large percentage of population subscribed to broadband Internet, burgeoning 3G internet

users, and a recent introduction of 4G across the country.

 Explosive growth of Smartphone users, soon to be world's second largest smartphone user
base.

 Rising standards of living as result of fast decline in poverty rate.

 Availability of much wider product range (including long tail and Direct Imports) compared
to what is available at brick and mortar retailers.

 Competitive prices compared to brick and mortar retail driven by disintermediation and
reduced inventory and real estate costs.

 Increased usage of online classified sites, with more consumer buying and selling second-
hand goods

 Evolution of Million-Dollar startups like Jabong.com, Saavn, Makemytrip, Bookmyshow,

Zomato Etc.

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by
2016 and $850 Bn by 2020, – estimated CAGR of 10%. According to Forrester, the e-commerce
market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57%
between2012–16.

As per "India Goes Digital", a report by Avendus Capital, a leading Indian Investment Bank
specializing in digital media and technology sector, the Indian e-commerce market is estimated
at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion

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(87%) of this market today. Online travel market in India is expected to grow at a rate of 22%
over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing
industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and estimated to grow to Rs 53,000
Crore ($11.8 billion) in 2015.

Overall e-commerce market is expected to reach Rs 1,07,800 crores (US$24 billion) by the year 2015
with both online travel and e-tailing contributing equally. Another big segment in e-commerce is
mobile/DTH recharge with nearly 1 million transactions daily by operator websites.

New sector in e-commerce is online medicine. Company like Reckwing-India, Buyonkart,

Healthkart already selling complementary and alternative medicine where as NetMed has started
selling prescription medicine online after raising fund from GIC and Steadview capital citing
there are no dedicated online pharmacy laws in India and it is permissible to sell prescription
medicine online with a legitimate license.

PAYMENT

Online shoppers commonly use a credit card or a PayPal account in order to make payments.
However, some systems enable users to create accounts and pay by alternative means, such as:

 Billing to mobile phones and landlines

 Cash on delivery (C.O.D.)
 Cheque / Check
 Debit card
 Direct debit in some countries
 Electronic money of various types
 Gift cards
 Postal money order
 Wire transfer/delivery on payment
 Invoice, especially popular in some markets/countries, such as Switzerland
 Bitcoin or other cryptocurrencies

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 Some online shops will not accept international credit cards. Some require both the purchaser's
billing and shipping address to be in the same country as the online shop's base of operation.
Other online shops allow customers from any country to send gifts anywhere.

The financial part of a transaction may be processed in real time (e.g. letting the consumer know
their credit card was declined before they log off), or may be done later as part of the fulfillment
process.

DESIGN

Customers are attracted to online shopping not only because of high levels of convenience, but
also because of broader selections, competitive pricing, and greater access to
information Business organizations seek to offer online shopping not only because it is of much
lower cost compared to bricks and mortar stores, but also because it offers access to a worldwide
market, increases customer value, and builds sustainable capabilities.

INFORMATION LOAD

Designers of online shops are concerned with the effects of information load. Information load is
a product of the spatial and temporal arrangements of stimuli in the webstore. Compared with
conventional retail shopping, the information environment of virtual shopping is enhanced by
providing additional product information such as comparative products and services, as well as
various alternatives and attributes of each alternative, etc.

Two major dimensions of information load are complexity and novelty. Complexity refers to the
number of different elements or features of a site, often the result of increased information
diversity. Novelty involves the unexpected, suppressed, new, or unfamiliar aspects of the site.
The novelty dimension may keep consumers exploring a shopping site, whereas the complexity
dimension may induce impulse purchases

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MARKET DYNAMICS
In the past few years, Indian Retail sector has seen tremendous growth in the organised segment.
Major domestic players have stepped into the retail arena with long term, ambitious plans to
expand their business across verticals, cities and formats.

Companies like Tata, Reliance, Adani Enterprise and Bharti have been investing considerably in
the booming Indian Retail market. Along with these giant retailers, a number of transnational
brands have also entered into the market to set up retail chains in close association with bigger
Indian companies.

High consumer spending over the years by the young population (more than 31% of the country
is below 14 years) and sharp rise in disposable income are driving the Indian organised retail
sector’s growth. Even Tier I & Tier II cities and towns are witnessing a major shift in consumer
preferences and lifestyles, the result of which, they have emerged as attractive markets for
retailers to expand their presence.

The Indian retail sector is highly fragmented and the unorganized sector has around 13 million
retail outlets that account for around 95-96% of the total Indian retail industry. However, going
forward, the organized sector’s growth potential is expected to increase due to globalization,
high economic growth, and improved lifestyle.

Although the growth potential in the sector is immense, there are obstacles too, that could slow
the pace of growth for new entrants. Rigid regulations, high personnel costs, real estate costs,
lack of basic infrastructure, and highly competitive domestic retailer groups are some such
challenges.

Key drivers of the Indian Retail Industry

 Emergence of nuclear families

 An increase in the double-income households trend
 Large working population

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 Reasonable Real estate prices
 Increase in disposable income and customer aspiration
 Demand as well as increase in expenditure for luxury items
 Growing preference for branded products and higher aspirations
 Growing liberalization of the FDI policy in the past decade
 Increasing urbanisation,
 Rising affluence amid consumers Bottlenecks
 A long way to meet international standards
 Lack of efficient supply-chain management
 Lack of required retail space
 No fixed consumption pattern
 Shortage of trained manpower
 Lack of proper infrastructure and distribution channel

Emerging sectors/trends in Indian retailing

Within retail, the emerging sectors would be food and grocery, apparel, electronics, e-commerce,
fashion and lifestyle.

Incorporation of technology in the organized retail segment has been something to reckon with in
the past few years. Use of computers for merchandise planning and management, control of
inventory costs and supplies and replenishment of goods done electronically, internal store
billing, etc. has changed the face of product retailing.

Online retail business is the next gen format which has high potential for growth in the near
future. After conquering physical stores, retailers are now foraying into the domain of e-retailing.
The retail industry is all set to test waters over the online medium, by selling products through
websites. Food and grocery stores comprises the largest chunk of the Indian retail market.

An emerging trend in this segment is the virtual formats where customer orders are taken online
through web portals which are delivered at the door step the very same day or the following day.

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 This trend has been catching up with most of the large sized retail chains that have their
websites.

ADVANTAGES
CONVENIENCE

Online stores are usually available 24 hours a day, and many consumers have Internet access
both at work and at home. Other establishments such as internet cafes and schools provide
internet access as well. In contrast, visiting a conventional retail store requires travel and must
take place during business hours.

In the event of a problem with the item (e.g., the product was not what the consumer ordered, the
product was not satisfactory), consumers are concerned with the ease of returning an item in
exchange for either the correct product or a refund. Consumers may need to contact the retailer,
visit the post office and pay return shipping, and then wait for a replacement or refund. Some
online companies have more generous return policies to compensate for the traditional advantage
of physical stores. For example, the online shoe retailer Zappos.com includes labels for free
return shipping, and does not charge a restocking fee, even for returns which are not the result of
merchant error. (Note: In the United Kingdom, online shops are prohibited from charging a
restocking fee if the consumer cancels their order in accordance with the Consumer Protection
(Distance Selling) Act 2000).

INFORMATION AND REVIEWS

Online stores must describe products for sale with text, photos, and multimedia files, whereas in
a physical retail store, the actual product and the manufacturer's packaging will be available for
direct inspection (which might involve a test drive, fitting, or other experimentation).

Some online stores provide or link to supplemental product information, such as instructions,
safety procedures, demonstrations, or manufacturer specifications. Some provide background
information, advice, or how-to guides designed to help consumers decide which product to buy.

Some stores even allow customers to comment or rate their items. There are also
dedicated review sites that host user reviews for different products. Reviews and even some

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 blogs give customers the option of shopping for cheaper purchases from all over the world
without having to depend on local retailers.

In a conventional retail store, clerks are generally available to answer questions. Some online
stores have real-time chat features, but most rely on e-mails or phone calls to handle customer
questions.

PRICE AND SELECTION

One advantage of shopping online is being able to quickly seek out deals for items or services
provided by many different vendors (though some local search engines do exist to help
consumers locate products for sale in nearby stores). Search engines, online price comparison
services and discovery shopping engines can be used to look up sellers of a particular product or
service.

Shipping costs (if applicable) reduce the price advantage of online merchandise, though
depending on the jurisdiction, a lack of sales tax may compensate for this.

Shipping a small number of items, especially from another country, is much more expensive than
making the larger shipments bricks-and-mortar retailers order. Some retailers (especially those
selling small, high-value items like electronics) offer free shipping on sufficiently large orders.

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

vendors without disrupting users' shopping experience

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COMPANY ANAYSIS

FLIPKART

Flipkart was founded in 2007 by Sachin Bansal and Binny Bansal, both alumni of the Indian Institute
of Technology Delhi. They had be en working forAmazon.com previously. The business has
formally incorporated as a company in October 2008 as Flipkart Online Services Pvt, ltd. During its
initial years, Flipkart focused only on books, and soon as it expanded, it started offering other
products like electronic goods, Air Conditioners, Air coolers, stationery supplies and life style
products and e- books. The first product sold by them was the book “Leaving

Microsoft To Change The World” bought by VVK.Chandra from Andhra Pradesh Flipkart now
employs more than 4,500 people and is ranked among the top 10 Indian websites. Flipkart's
offering of products on Cash on Delivery is considered to be one of the main reasons behind its
success. Flipkart also allows other payment methods— Credit or Debit card transactions, net
banking, e—gift voucher and Card Swipe on Delivery.

In October and November .2011, Flipkart acquired the websites Mime360.com] and
Chakpak.com. Later, in February 2012, the company revealed its new Flyte Digital Music Store.
Flyte, a legal music download service in the vein of iTunes and Amazon.com offered DRM-free
MP3 downloads. But it was shut down on 17 June 2013 as paid song downloads did not get
popular in India due to. the advent of free music streaming sites.

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VISION AND MISSION

Vision

Is “To become Amazon of India”.

Mission

Their mission revolves round “Providing delightful customer experience”.

ORGANIZATIONAL STRUCTURE:

As a result of its rapid growth, Flipkart had consistently revised its organizational structure from a flat
hierarchy-less to a matrix archetype. The case highlights a dilemma about Flipkart’s
futuristic organizational structure that ensures optimal performance in ever changing competitive
landscape.

SWOT Analysis:
Strength:
1. India’s Largest E-commerce Retailer:
Flipkart is the India’s largest E-commerce company &had sold GMV (gross merchandising value) of $1
billion till now.
2. Experienced founders:
The founders of Flipkart, Sachin & Binny Bansal are EX-Amazon employees. Having prior experience in
the E-Commerce industry helped the founders to work strategically and differentiate their business in a
highly competitive market.
3. Acquisition:
With its series of acquisitions like Letsbuy.co, Chakpak.com, weread.com, Mine360 & The recent one
Myntra in 2014 has helped the company to expand in the E-Commerce space & used the capabilities and
existing resources of acquired companies.
4. High Brand recall:
Flipkart has established itself as a renowned E-Commerce company in India through its presence on social
media. Brand activities like the” Big billion day” have really increased the brand recall of the company.

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Weakness:
1. Limited Distribution channel reach:
Although its logistics arm has kept cost’s low, the reach has been affected which is a weakness for
Flipkart. Due to use of outsourcing, Global giants like Amazon & eBay can deliver the product anywhere
in the country. However, Flipkart is still struggling in this field.

2. Cost of Acquisition:
Due to stiff competition in the market & low customer retention, the cost of acquisition is high because
Flipkart acquires a lot of customers through online advertising.

3. Power in the hand of buyers:

Since this industry is flooded with many players, buyers have a lot of options to choose. Switching
costs are also less for customers since they can easily switch a service from one online retail company to
another. Same products will be displayed in several online retail websites. 

OPPORTUNITIES:

1. Expansion of business: 

By targeting other emerging markets company can increase their revenues as well as it can

have Economies of scale.
2. Expanding their Product categories: 
This will increase their customer base & at the same time will reduce the cost of acquisition and
customer switch.
3. Changing mentality of Indian customers: 
With increasing numbers of customers getting comfortable with online shopping & increase in numbers
of Internet users in India, there is huge potential in this Industry.

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4.Supply chain:
By optimizing their supply chain they can compete with the other players & can manage the loosing sales
on account of not making the product available due to delivery constraints.

THREATS:
1. Competition: 
Stiff competition from the global players like Amazon, eBay as well as local player like Snapdeal, Tolexo
and Shopclues who are continuously trying to eat each other’s market share.

2. Government regulations

 On the issues related to FDI in multi branding retail has been a big hurdle in the success of the E-
commerce industry in India.

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E Bay

eBay is one of India's leading online marketplace. It is an online marketplace where anyone can
trade practically anything. It is a platform for the sale of goods and services by a diverse
community of individuals and businesses. eBay users trade in more than 50,000 categories
including collectibles, antiques, sports memorabilia, computers, IT and office, art, antiques, toys,
dolls, stamps, comics, magazines, music, pottery, glass, photography, electronics, jeweler and
gemstones, claims the company.

eBay Inc. is an American multinational internet consumer-to Consumer Corporation,

headquartered in San Jose, California. It was founded by Pierre Omidyar in 1995, and became a
notable success story of the dot-com bubble, it is now a multi-billion dollar business with
operations localized in over thirty countries. The company manages eBay.com, an online auction
and shopping website in which people and businesses buy and sell a broad variety of goods and
services worldwide. In addition to its auction-style selling‘s, the website has since expanded to
include "Buy It Now" standard shopping; shopping by UPC, ISBN, or other kind of SKU (via
Half.com); online classified advertisements (via Kijiji or eBay Classifieds); online event ticket
trading (via StubHub); online money transfers (via PayPal) and other service.
more recent strategy involves the company increasingly leveraging the relationship between the
eBay auction site and PayPal: The impact of driving buyers and sellers to use PayPal means not
only does eBay turn buyers into clients (as a pure auction venue its clients used to be
predominantly sellers) but for each new PayPal registration it achieves via the eBay auction site
it also earns offsite revenue when the resulting PayPal account is used in non-eBay transactions.
In its Ql 2008 results. Total payment volume via PayPal increased 17%, but off the eBay auction
site it was up 61%.

For most Ii ting categories. eBay sellers are permitted to offer a variety of payment systems such

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 its escrow. Com, Paypal.,Paymate.,Propay,and Moneybookers.

Escrow.com is eBay's approved escrow site. The transactions processed through Escrow.com
largely are in relation to eBay Motors: they are not restricted to this type of listing however.

eBay runs an affiliate program under the name eBay Partner Network. eBay affiliate marketers were
originally paid a percentage of the eBay seller's transaction fees. with commissions ranging from
50% to 75% of the fees paid for an item purchased. In October 2009. EBay changed to an affiliate
payout system that it calls Quality Click Pricing. In which affiliates are paid an amount determined
by an undisclosed algorithm. The total earnings amount is then divided by the number of clicks the
affiliate sent to eBay and is reported as Earnings per Click. Or EPC‘.

On April 18. 2012 eBay reported a 29% 01 revenue increase to $3.3 billion compared to their 01
in 2011. Net income “as reported to be at $570 million for the quarter.

Items
Millions of collectibles. Decor, appliances. Computers, furnishings. Equipment. Domain names.
Vehicles, and other miscellaneous items are listed, bought. Or sold daily on eBay. In 2006. EBay
launched its Business & Industrial category. Breaking into the industrial surplus business. Generally.
Anything can be auctioned on the site as long as it is not illegal and does not violate the eBay
Prohibited and Restricted Items policy. Services and intangibles can be sold. Too. Large international
companies. Such as IBM, sell their newest products and offer services on eBay using competitive
auctions and fixed—priced storefronts. Separate eBay sites such as eBay US and eBay.

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VISION
 “To be the world’s favorite destination for discovering great value and unique selection.” 

MISSION

“To provide a global trading platform where practically anyone can trade practically anything.”

ORGANIZATIONAL STRUCTURE
eBay has found success as an Internet based company, where so many other companies have failed,
revolutionizing business approach to organizational structure and design. The company’s business model
has challenged traditional production strategies through changing what it means to be customer-oriented.
This is most profoundly exemplified by the impact of the external community on the internal structure of
eBay’s organization, in turn, redefining corporate internal alignment. All facets of eBay’s organizational
design reflect a strict commitment to maintaining a company culture that has been the foundation for the
websites success. The result of such an approach is reflected in the shared values that transcend normal
corporate-customer boundaries by having the external community define internal culture.
The functional format of eBay’s business is to provide a forum where anybody can trade anything with
anyone, which has led eBay to become the largest person-to-person Internet trading community. Even
through the company’s business model is facilitated by the auctions provided, they are recognized as
nothing more than a platform enabler. The true foundation of eBay’s operations focuses on providing users
with a unique sense of community, an unparalleled method in production strategy that guides the
development of the website making it distinctively user-powered. As such, the internal community culture
was designed to mirror the external community culture through preserving a strong set of values.

SWOT Analysis

STRENGTH

 Leading Brand

eBay is the leading online auction and e-commerce brand and serves almost 97 million users.

 Huge Presence in the Market 

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 eBay is an early online business entry that has localized operation in about 30 countries. It is a
recognized brand name.
 Various Integrated Services 
eBay has various integrated services in one place. Online purchase, ticket tracking, online payments,
online money transfers, and many more.
 Strong International Presence 
eBay has a wide range of international presence thereby providing services to a larger consumer
base.
 Trusted Brand 
eBay is a trusted online business company and has visibility among many people across the globe.
It is also the most preferred brand in the market and has a large market value.

WEAKNESS:

 Fake or Fraud Sellers 

There exist a lot of fake or fraud sellers who get connected with eBay. The company has tried best
but still unable to eradicate these kinds of sellers fully. This is, in fact, a great weakness for the
brand and hits the brand value as well.
 Intense Competition 
eBay has strong competition in this field as many new startups are emerging in this area. eBay also
has a lesser presence in the physical markets.
 Technology Malfunction 
Any disturbance in the technology will affect the business to a huge extent. This is a great weakness
for the business.
 Limited Sensory Experience –
eBay websites provide a limited sensory experience to customers at the time of their virtual
shopping trip. It may affect customer satisfaction levels when purchasing sensory goods like clothes
and food.

OPPORTUNITIES:
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  Non-Internet Markets 

Those markets that are devoid of the internet are usually untapped in the eBay website. eBay should
find out ways to bring them into the website and this will provide a huge opportunity for the
business.
 Non-Willing Customers 
Customers who are unwilling in online shopping can be persuaded for the same. This will provide a
huge opportunity for the business.
 Bulk Selling 
eBay can partner with other companies for bulk selling.
 New Global Business Market 
eBay could make use of the new global business markets opening in India and China.
 Mobile Technologies 
eBay may benefit from the increasing use of mobile technologies among customers.

Threats
 Security Threats 
eBay website can be subject to online frauds and there can be security breaches that can affect the
eBay business.
 Illegal Entities 
There can be a lot of risk being involved with many illegal entries. This is a serious threat to the
business and can affect them in many ways.
 Increased Competition 
New emerging competition in the field of online commerce is a big threat to the business.
 Various Government Policies & Taxations 
Various government policies and taxations that are being passed time and now, can affect the
business margins and operations.

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Amazon

Amazon.in is the world leader in e-commerce market recently started operation in India, now
Indians can buy Books, CD3 and Electronic at cheaper price from Amzon.in. For limited time
they offering free shipping.

Amazon.com, Inc. is an American international electronic commerce company with headquarters

in Seattle, Washington, United States. It is the world's largest online retailer. Amazon.com
started as an online bookstore, but soon diversified, selling DVD’s, VHS’s, CD’s, video and
MP3 downloads/streaming, software, video games, electronics, apparel, furniture, food, toys, and
jewelry. The company also produces consumer electronics—notably the Amazon Kindle e-book
reader and the Kindle Fire tablet computer—and is a major provider of cloud computing
services.
Amazon has offices, fulfillment centers, warehouses, customer service centers and software
development centers across North America, Latin America, Europe, Africa, and Asia.

Amazon's initial business plan was unusual; it did not expect to make a profit for four to five years.
This "slow" growth caused stockholders to complain about the company not reaching profitability
fast enough to justify investing in or to even survive in the long-term. When the dot-' com bubble
burst at the start of the 21st Century, destroying many e-companies in the process, Amazon survived,
and grew on past the bubble burst to become a huge player in online sales. It finally turned its first
profit in the fourth quarter of 2001: $5 million (i.e., 1¢ per share), on revenues of more than $1
billion. This profit margin, though extremely modest, proved to skeptics that Bezos' unconventional
business model could succeed. In 1999, Time magazine named Bezos the 'Person of the Year,
recognizing the company's success in popularizing online shopping
Fulfillment centers are located in the following cities, often near airports. These centers also
provide warehousing and order-fulfillment for third-party sellers.

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 Warehouses are large and each has hundreds of employees. Employees are responsible for four
basic tasks: unpacking and inspecting incoming goods; placing goods in storage and recording
their location; picking goods from their computer recorded locations to make up an individual
shipment; and shipping. A central computer which records the location of goods and maps out
routes for pickers plays a central role; employees carry hand-held computers which communicate
with the central computer and monitor their rate of progress. A picker with their cart may walk
10 or more miles a day

MISSION AND VISION

Mission:

We strive to offer our customers the lowest possible prices, the best available selection, and the utmost
convenience.

Vision:

To be Earth’s most customer-centric company, where customers can find and discover anything they might
want to buy online.

Organizational Structure

Amazon organizational structure has the following three key features:

1. Hierarchical corporate structure.

Hierarchical structure at Amazon has developed due to the immense size of the business. The largest
internet retailer in the world by revenue employs more than 64700 people worldwide.
2. Flexibility of the business.
It is important to note that despite its large size, unlike many other companies with hierarchical
organizational structure, Amazon remains highly flexible to adapt to frequent changes in the external
marketplace. 

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3.Stability in the top management.
 
Stability is one of the key features of Amazon. Specifically, the largest internet company by revenue in the
experiences “very little turnover among its most important power players, with many of them having been
at the company for years, if not decades.

SWOT Analysis:

Strength
 Strong brand name
 Brand valuation
 Customer oriented
 Differentiation and innovation
 Cost leadership
 Large number of third-party sellers

Weakness:
 Easily imitable business model
 Losing margin in few areas
 Product flops and failures
 Unfair use of third party data
 Declining consumer safety.

Opportunities
 Expanding physical stores
 Self driving technology
 More acquisitions
 Launch of electrical rickshaw in India

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Threats
 Few controversies
 Government regulations
 Links to exploitative labor
 Aggressive competition
 Fake reviews.

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MYNTRA

Myntra.com is an Indian online shopping retailer of fashion and casual lifestyle products,
headquartered in Bangalore. Myntra.com is leading online retailer of lifestyle and fashion
products. Myntra offers T-shirts, Shoes, watches and more at discounted price. It is an online
shopping destination for fashion and lifestyle products. It lets you shop online from the latest
catalog of original branded products in apparel, footwear and accessories for men, women and
kids.

Myntra was established by Mukesh Bansal, Ashutosh Lawania, and Vineet Saxena in February
2007. All three are IIT alumni, and have worked for several start-ups. Myntra is headquartered in
Bangalore and has been funded by Venture Capital funds like Tiger, Kalaari, IDG & Accel
Partners. From 2007 to December 2010, Myntra.com was in the business of personalization of
products online. The products ranged from T-shirts, mugs, greeting cards, calendars, key chains,
diaries etc. However, in 2010, the company repositioned itself and expanded its catalogue to
retail fashion and lifestyle products.

VISION AND MISSION

Vision:
To make the world a more stylish, colorful and happier place.

Mission:
Use technology to democratize fashion & lifestyle and help people look good.

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SWOT Analysis
Strength

1.Merger with Flipkart has increased its strength and capacity

2. Retention of its independence even after merger.
3.Offering of  more than 1.5 lakhs products with over 1000 brands
4. Efficient supply chain and delivery capability helps it to cater to 90,000+ locations.
4.”End of season sale” –a huge success, Rs.90 crore worth of goods sold
5.Good advertising and marketing campaigns on TV, internet and print

Weakness

Intense competition means limited market share growth

Opportunities

1. Selling private labels can increase their margin

2.Partmership with celebrity designers, Bollywood movies can increase its fashion appeal.
3.Bridal collection to tap the big wedding market in India
4. Expansion into global markets can boost business

Threats

1.Global competitors like Amazon slowly making its foray

2. Fashion segment is becoming popular leading to increased competition
3. Economic fluctuations and unfavourable government policies
4. Adding to its niche proposition is its app only business decision and closing website might prevent it
from capturing the growing online space.

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 CHAPTER – 4

Data Analysis and Interpretation

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1.GENDER

Table 3.1 The table showing the number of male and female representatives in the
responses obtained

Gender Respondents Percentage

Male 80 75%
Female 26 25%

Fig 3.1 Showing Gender

Gender
100
80
80
60
40 26
20
0
MaleFemale

Sales

ANALYSIS
Out of 106 respondents surveyed 25 percentage were female and remaining 75 percentage were
male.

INTERPRETATION
The responses collected consisted of both male and female respondents and
majority of them were male employees.

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51 | P a g e
 1. Age Group

Table 3.2 Showing different age group of the representatives in the responses
obtained
Age group Respondents Percentage
Below 18 0 0%
18-30 88 83%
31-50 18 17%
51 and above 0 0%

Fig 3.2 Showing Different Age group

Age Group
51 and above0

31-503

18-30 88

Below 180

0 10 20 30 40 50 60 70 80 90 100

ANALYSIS
Out of 106 respondents surveyed ,83 Percent of them fall under 18-30 age group and 17 Percent
fall under 31-50 age group, 0 percent fall under 31-50 age group and 0 Percent fall under 51 &
above.

INTERPRETATION
Above table gives us the information about the age group of the respondents and majority are the
young generation who prefer online shopping.

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 2. OCCUPATION
Table 3.3 Showing the occupation of the respondents
Occupation Respondents Percentage
Student 44 41%
Employed 38 36%
Self Employed 13 12%
Others 11 10%

Fig 3.3 Showing occupation

OCCUPATION
OTHER 11
S
SELFEMPLOYED 13

EMPLOYE 38
D
STUDEN 44
T
0 5 10 15 20 25 30 35 40 45 50

ANALYSIS
Out of 106 respondents 41 percent of the respondents are students and 36 percent of them are
employed and 12 percent are self-employed 10 percent fall under category of others

.INTERPRETATION
The response says that majority are the working people and students prefer online shopping and
self-employed person do not prefer shopping online.

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 3. MONTHLY INCOME
Table 3.4 showing the monthly income of the respondents (in rupees)
Monthly income No of respondents Percentage
Less than 20000 40 38%
20000-30000 24 23%
30000-40000 30 28%
40000 & Above 12 11%

Fig 3.4 bar graph shows the monthly income

Monthly Income

40000 & Above 12

30000-40000 30

20000-30000 24

less than 20000 40

0 5 10 15 20 25 30 35 40 45

ANALYSIS
Out of 106 respondents 38 percent of them falls in less than 20000 , 23 percent of them earn
20000-30000 , 28 percent earn 30000-40000 and 11 percent of them earn more than 40000 &
above.

INTERPRETATION
As per the graph, respondents are classified based on their monthly income.

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 4. Your preferred online sites.

Table 3.5 Table Showing respondents for preferred online sites.

Favorite site Respondents Percentage

Flipkart 36 34%
Amazon 32 30%
Jabong 11 10%
Snap deal 21 19%
Others 6 7%

Fig 3.5 Showing favorite online shopping site.

Series 1

6
21 36

11

32

FlipkartAmazonJabongSnapdealothers

ANAYSIS

Out of 106 respondents, 3percentagre respondents like flipkart as a platform to shop online, 10 %
respondents say Jabong as their favorite, 19% respondents say Snapdeal as their favorite , 30 %
respondents say amazon as their favorite site and 6 % say others

INTERPRETATION

As per the graph, we can conclude that Flipkart is the favorite website among the online
shoppers.

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 5. Your preferred online shopping commodity
Table 3.6 Showing In general, preferred online shopping commodities :( select
only one)
Product/ commodity Respondents Percentage
Groceries 06 6%
Cosmetics 07 7%
Books/CDs 18 17%
Clothes 28 26%
Electronic gadgets 26 25%
Cinema, Airplane/railway 21 20%
ticket
Fig 3.6 Showing the different types of commodities purchased

6, 6%
7, 7%
Groceries Cosmetics Books/CDs
21, 20%
Clothes
Electronic gadgets
18, 17%
Cinema, Airplane/railway ticket
26, 24%
28, 26%

ANALYSIS
Out of 106 respondents 6 percent shop groceries,7 percent shop cosmetic,17 percent shop
books/cd’s,26 percent shop clothes,25 percent shop electronic gadgets and 20 percent shop
cinema, air and railway tickets online.

INTERPRETATION

Above graph shows the different types of commodity purchased through online , most of the
respondents prefer to buy clothes.

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 6. What kind of Problems you have faced shopping online.

Table 3.7 Showing what kind of problem have customers faced shopping
online?

Problems faced shopping online Respondents Percentage

Delay in delivery 35 33%
Cheap quality of product 24 23%
Damage 11 10%
Non-delivery 7 7%
Others 29 27%

Fig 3.7 Showing kind of problems faced shopping online.

Series 1
40 35

30 24 29
20
11
10
7
0
Delay in
delivery Cheap quality
Damage
of product Non-delivery
Others

ANALYSIS

Out of 106 respondents 33 percent delay in delivery 23 percent Cheap quality of product 10
percent Damage,4 percent Non-delivery and 5 percent Others.

INTERPRETATION: As per the graph, respondents are classified on the basis of problems
faced while shopping through online, respondents faced inconvenience of delay in product
delivery.
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58 | P a g e
 7. How often do you use internet every day.

Table 3.8 showing how often do respondents use internet every day?

Time Respondents Percentage

Less than 1 hour 9 08%
1-2 hours 29 27%
2-3 hours 17 16%
3-4 hours 14 13%
More than 4 hours 37 36%
Fig 3.8 Showing Number of hours internet used everyday

MORE THAN 4 HOURS 37

3-4 HOURS 14

2-3 HOURS 17

1-2 HOURS 29

LESS THAN 1 HOUR 9

0 5 10152025303540

ANAYSIS
Out of 106 respondents 8 percent use internet less than 1hour, 27 percent use for 1-2hours, 16
percent use 2-3hours, 13 percent use 3-4hours, 36 percent use for more than 4hours every day.

INTERPRETATION

As per the graph, respondents use internet more than four hours every day, which helps to
understand the level of impact of internet in their life.

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 09. What influences you towards online shopping?
Table 3.09 what influences customers towards online shopping.

Factors No of respondents Percentage

Loyalty 6 6%
Choice of products and variety 57 53%
Comfortable atmosphere 15 14%
Discounts offers 17 16%
Services quality 11 10%
Fig3.9 pie chart shows influences customers towards online shopping

6%

10% Loyalty
16%
Choice of products and
14% 54% variety
Comfortable atmosphere
Discounts offers
Services quality

ANALYSIS

From the above response we can infer that 53% people surveyed are influenced for shopping
online due to the variety and choices among the products, 16% people are influenced because of
discount offers, 14% people are influenced due to the comfortable atmosphere while they are
shopping online, 10% people are influenced due to the service quality provided by the retailer
and only 6% people are influenced due to loyalty of the information provided by the services
provider.

INTERPRETATION: As per the graph, we find that majority of customers shop on choice of
products and verity available on the online.

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 10. How often do you use internet for shopping

Table 3.10 showing how often do respondent use internet for shopping?

DURATION Respondents Percentage

Very often 37 35%
Often 29 27%
Neutral 17 16%
Sometimes 14 14%
Never 9 8%

Fig 3.10 Showing how often internet is used for shopping.

40
35
30
25
20
37
15 29
10
17
14
5 9
0
Very oftenOftenNeutralSometimesNever

ANALYSIS

Out of 106 respondents 35 percent of them use internet very often, 27 percent of them use often,
16 percent of says neutral, 13 percent of them use sometimes and 8 percent of them says never.

INTERPRETATION

As per the graph, we can observe that people very often prefer to shop on internet. Hence it plays
a vital role in the area of shopping.

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 11. Have you used internet prior to a purchase for collecting information?

Table 3.11 Showing use of internet prior to a purchase for collecting

information?

Information Respondents Percentage

Yes 85 80%
No 21 20%

Fig3.11 Showing use of internet for information of the product.

NO 21

YES
85
0
20
40
60
80
100

ANALYSIS

Out of 106 respondents 80 percent of them says they use internet for information of the product

prior shopping online and 20 percent says they do not use internet for information of the product.

INTERPRETATION

As per the graph we can conclude that majority of the people use internet for
gathering of information about product.

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 12. How much do you spend on a single online purchase?

Table 3.12 Showing approximate amount respondents would spend on a single

online purchase.

Amount spent Respondents Percentage

Less than 1000 32 30%
1000-3000 31 29%
3000-5000 17 16%
5000-10000 11 10%
More than 10000 13 12%

Fig 3.12 Showing approximate amount you would spend on a single online
purchase.

40 32 31

20 17
11 13
0

Less than 1000-3000

1000 3000-5000
5000-10000
More than
10000

ANALYSIS

Out of 106 Respondents 30 percent of them spend less than 1000, 29 percent spend 1000-2000 in
a single transaction, 16 percent spend 3000-5000, 10 percent spend 5000-10000 and 12 percent
spend more than 10000 on a single online shopping transaction.

INTERPRETATION

As per the graph, we can come to a conclusion that people are not ready to spend
more on online purchasing of product.

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13. Your level of agreement to the following questions.

Table 3.13 Showing level of agreement for the following questions.

Factors Strongly Agree Neutral Disagree Strongly

Agree Disagree
shopping online saves 38 61 3 2 2
time
It is convenient to shop 40 37 17 10 2
at any time of the day
I prefer 22 41 20 15 8
traditional/conventional
shopping to online
shopping.
Online shopping will 22 45 25 10 4
eventually supersede
traditional shopping.

I prefer cash on 42 38 12 8 6
delivery than payment
via credit/debit card.

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Fig 3.13 Showing level of agreement for the following questions.

Chart Title
I prefer cash on delivery

online shopping will eventually supersede traditional shopping

I prefer taditional shopping It is convenient to shop at any of

the day
shopping online saves time

0 1020 30 40 50 60 70

strongly agree2disagreeneutralagreestrongly agree

ANALYSIS

Out of 106, 80 percent agree shopping on internet saves time, 38 percent strongly agree to shop
on internet anytime of the day, 39 percent agree to shop online than traditional shopping, 42
percent agree online shopping will eventually supersede traditional shopping, 44 percent agree to
the point it takes long time to delivery products, 40 percent agree to pay cash on delivery of the
product than credit/online payment , 41 percent strongly to buy products online only if there is a
provision of cash on delivery.

INTREPRETATION

From the above graph we find out that majority of customers like to shop online
and save their time than going on shops and engage most of their times in regular
market searching the product.

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14. What prevents you from shopping through the internet ?

Table 3.14 Showing How important are each of the following factors in
refraining you from shopping on the internet.

Strongly Agree Neutral Disagree Strongly

Agree Disagree

Time duration to 25 48 23 3 7
receive the product
Risk of credit card 26 41 27 7 5
transactions
Difficulty in returning 27 37 33 7 2
products/items
Risk of losing privacy 15 39 37 10 5
Lack of trust 22 38 36 6 4
worthiness of vendors

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 Fig 3.14 Showing factors in refraining you from shopping on the internet.

4
6
LACK OF TRUST WORTHINESS OF VENDORS 36
38
22
5
10
RISK OF LOSING PRIVACY 37
39
15
2
7
DIFFICULTY IN RETURNING PRODUCTS/ITEMS 33
37
27
5
7
RISK OF CREDIT CARD TRANSACTIONS 27
41
26
7
3
WAITING TO RECEIVE THE PRODUCT 23
48
25
0
0
0
0
0
0 10 20 30 40 50 60

ANALYSIS

Out of 106 respondents,45 percent agree they need to wait to receive the product, 37 percent
agree there is risk in credit card transaction, 35 percent agree to there is difficulty in returning the
product, 37 percent agree to risk in losing privacy,36 percent agree to there is lack of trust
worthiness of vendors.

Interpretations
From the above graph we can find that major reason prevents the customers from buying
through is the waiting time in the delivery of the product.

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 CHAPTER 5

SUMMARY OF FINDINGS

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69 | P a g e
SUMMARY OF FINDINGS

The present study has brought some novel contributions towards the knowledge of online
shopping and found the reasons for the shift in buying behavior from the traditional shopping to
online shopping in India

FINDINGS OF THE STUDY

 The consumer behavior of Indian consumer is changing dramatically. Online shopping has
truly revolutionized and influenced our society as a whole. This use of technology has opened
new doors and opportunities that enable for a more convenient lifestyle today.
 Availability, variety, choice, availability, convenience, quick and better services, schemes,
offers and discounts, value for money are some of the significant reasons in online shopping that
influenced Indian consumers to prefer online shopping.
 Online shopping is growing in Indian culture because of the shift in modern culture. This is
because of awareness, dual spousal income and increasing role of females in the society. In
Indian culture, Youngers whether it is male or female do prefer more online shopping than
others. They do not hesitate in placing the order of products through online shopping.
 33percentage of the respondent have faced delay in delivery of the commodity when they
have shopped online.
 Youth do prefer more online shopping because they are risk takers and know the procedure of
online shopping.
 The demographic factors like age, income, occupation, education and ability to use the
internet is having a significant association with online shopping. There is a positive relationship
between occupations, education with online shopping.
 Respondents share a high rate of risk in using credit card transactions.
 Respondents agree to the point of difficulty in returning the product
 Respondents strongly agree and are willing to purchase only if there is provision of home
delivery.
 Respondents agree to the point Lack of trust worthiness on vendors, as many frauds and
unbranded goods are sold online by unrecognized vendors.

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 In India, still people are averse to online shopping because of various reasons like product
delivery, see and touch before buy, online frauds, shipping charges, difficulty in returning faulty
products, bargaining reasons etc.
 In the study respondents spend 3000 rupees average in online shopping per transaction.
 Flipkart has been the most trusted and favorite website used by the consumers.

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 CHAPTER 6
CONCLUSIONS AND SUGGESTIONS

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Suggestion:

 E-commerce Companies should have more risk reduction activities as perceived risk could
strongly influence consumers online purchase decisions.
 People are averse to online shopping because there is a difficulty in returning the faulty
products. Hence the companies should make the arrangement so that try and buy facility is
available at the customer doorstep and one can return if the product is faulty.
 Online stores should use effective implementation of website factors such as information
design, features, communication, privacy and security, as a marketing tool by which trust
towards the website can be created among the consumers and subsequently enhance purchase
intention.
 Most of the people feel that products available through online shopping are costly because
of the shipping charges whereas in the traditional shopping there are no such charges. So the
companies should provide the facility of free delivery in order to create excitement among non-
users.
 Online websites should pay more attention to the female segments as results prove that
females shop more in online shopping as compared to men. So companies should devise the
policies and strategies to attract more number of people in this segment in future also.
 Websites should be made more attractive and appealing to the buyer in order to retain the
potential shoppers. Moreover, the sellers should ensure that the shopper easily and quickly gets
to the final shopping-cart web page, instead of undergoing a series of clicks from one webpage to
another.
 There is still low level of computer accessibility and lack of awareness of online shopping
even in the educated. There is a barrier in experiencing online shopping. Hence the companies
should make the people aware through different ways.
 Further, some kind of legal framework should be setup in order to check online frauds.
Moreover, the complaints related to online shopping should be heard by setting up some body.

CONCLUSION

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 The research concludes that most of the Respondents prefer online shopping where in
Males prefer to shop online as compared to females. The respondents those who use internet
more than 4 hours a day were found to prefer online shopping.

The following factors found to be significant for online shopping are Price
Consciousness, Convenience and Variety, Easy Payment options and Challenges of Online
Shopping. Most of the consumers prefer to buy selected products online because they get heavy
discounts when compared to store purchases. Hence consumers do feel that there are good
websites available which can be trusted for purchases.

The consumers perceive that shopping online gives them a variety of options to choose
from. Shopping online is very convenient as one has to just open a laptop or PC to shop rather
than getting ready and pass through rush hour traffics. Shopping online saves time and money
along with lesser effort is required in comparison to store purchases. Consumers feel that
carrying cash or credit cards all the way to the store is meaning less if one can purchase the same
product from their home. The educated consumers are aware of the buying procedures online
which they feel are pretty simple.

Also important to the customer is the feeling of controlled mode of delivery of product.
Options such as “special delivery instructions,” the ability to schedule a late delivery, or having a
delivery window give the consumers the control they need to better their shipping experience.

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BIBILIOGRAPHY

Books referred
 Leon G.Schiffman,leslie lazar kanuk and S.Ramesh kumar ‘Consumer Behavior’ Published
by pearson,10th Edition
 Rajendra Nargundkar ‘Marketing Research Text and cases” Published by MC Graw
Hill,3rd Edition

 Solomon, M.R. (1983), “The World of Products as Social Stimuli: A Symbolic

Interactionism Perspective”, Journal of Consumer Research, 10, December, pp. 319-329

 Aaker, D. A. and Keller, K. L. (1990). Consumer evaluations of brand extensions. Journal

of Marketing. 54(1), 27-41.

 Kotler, P., Armstrong, G., Brown, L., Chandler, S. A. (1998), Marketing, (4th edn),
Prentice Hall, Sydney

Magazines referred:
 Internet Shopping “An OFT market shopping” June 2007
 Indian Journal of Marketing, volume 43, August 2013

Website referred:
 en.wikipedia.org/wiki/Online shopping
 Indiatoday.intoday.in>Business>India
 http://www.nextbigwhat.com/online-shopping-india-297/

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APPENDIX

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Questionnaire.
1. Name:

2. Gender:

 Male
 Female

3. Age group:

 Below 18
 18-30
 31-50
 51and above

4. Occupation:

 Student
 Employed
 Self Employed
 Others

5. Monthly income:

 Less than Rs.20000

 20000-30000
 30000-40000
 40000 & Above

6. Select your favorite online sites.

 Flipkart.com
 Amazon.com
 jabong.com
 snapdeal.com
 others

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7. What type of commodity did you purchase through online shopping...?

 Groceries
 Cosmetics
 Books/CDs
 Clothes
 Electronic gadgets
 Cinema, Airplane/railway ticket

8. What kind of problem have you faced shopping online?

 Delay in delivery
 Cheap quality of product
 Damage
 Non-delivery
 Others

9. How often do you use internet every day?

 Less than one hour

 1-2 hours
 2-3 hours
 3-4 hours
 More than 4 hours.

10. What influences you towards online shopping?

 Loyalty
 Choice of product and variety
 Comfortable atmosphere
 Discount Offers
 Service quality

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11. How often do you use internet for shopping?

 Very often
 Often
 Neutral
 Sometimes
 Never

12. Do you use internet prior to a purchase for collecting information?

 Yes
 No

13. Select an approximate amount you would spend on a single online purchase:

 Less than 1000

 1000-3000
 3000-5000
 5000-10000
 More than 10000

14. Please select your level of agreement to the following questions.

Strongly Agree Neutral Disagree Strongly

agree Disagree
shopping online saves
time
It is convenient to shop
at any time of the day
I prefer
traditional/conventional
shopping to online
shopping.

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Online shopping will
eventually supersede
traditional shopping.

I prefer cash on
delivery than payment
via credit/debit card.
.

15. What prevents you from shopping through the internet?

Strongly Agree Neutral Disagree Strongly

agree Disagree
Time duration to
receive the product
Risk of credit card
transactions
Difficulty in returning
products/items
Risk of losing privacy

Lack of trust worthiness

of vendors

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