Chapter I

Introduction

1.1 Overview
Internet is changing the way consumers shop and buy goods and services, and has rapidly
evolved into a global phenomenon. Many companies have started using the Internet with the
aim of cutting marketing costs, thereby reducing the price of their products and services
in order to stay ahead in highly competitive markets. Companies also use the Internet to
convey communicates and disseminate information, to sell the product, to take feedback and
also to conduct satisfaction surveys with customers. Customers use the Internet not only to
buy the product online, but also to compare prices, product features and after sale service
facilities the will receive if they purchase the product from a particular store. Many
experts are optimistic about the prospect of online business.
In addition to the tremendous potential of the E-commerce market, the Internet provides a
unique opportunity for companies to more efficiently reach existing and potential customers.
Although most of the revenue of online transactions comes from business -to- business
commerce, the practitioners of business-to-consumer commerce should not lose confidence .It
has been more than a decade since business-to-consumer E-commerce first evolved. Scholars
and practitioners of electronic commerce constantly strive to gain an improved insight into
consumer behavior in cyberspace. Along with the development of E-retailing, researchers
continue to explain E-consumers 'behavior from different perspectives. Many of their studies
have posited new emergent factors or assumptions which are based on the traditional models
of consumer behavior, and then examine their validity in the Internet context.

1.2Theoretical Foundation
The Internet has developed into a new distribution channel and online transaction are rapidly
increasing. This has created a need to under how the consumers perceive online purchasing.
Price, Trust and Convenience were identified as important factors. Price was considered as
to be a most important factor for a majority of the students.
paradigm shift of the traditional way people shop.

The internet has created a

A consumer is no longer bound to

opening a times or specific location. So he can become active at virtually any time any
place and purchase the products or services.
The internet is relatively a new medium for communication and the information exchange
that has present in everyday life. The number

of internet user is constantly increasing which

is also signifies that online purchasing is increasing. The rapid increasing is explained by the
consumer behavior. The internet is considered a mass medium that provides the consumers
with purchase characteristics as no other medium.

Certain characteristics

are making it

more convenient for the consumer compared to the traditional way of shopping, such as
the ability to any time view and purchase products visualize the needs with products and
discuss products with other consumers. Online shopping is the process of consumer go
through the when they decide the shop on the internet. The internet has developed into a
new distribution channel and the evaluation of this channel. E-commerce has now identified.
Using the internet to shop online has become one of the primary reasons to use the internet
combined with searching for products and finding the information about them. Therefore
internet develop the Companies also use

the

disseminate information, to sell the product, to

Internet

to convey, communicate and

take

feedback and also to conduct

satisfaction surveys with customers. Customers use the Internet not only to buy the product
online, but also to compare prices, product features and after sale service facilities they will
receive if they purchase the product from a particular store. Many experts are optimistic about
the prospect of online business.
Due to the rapid development of the technologies surrounding the Internet, a company that
is interested in selling products from its web site will constantly has to search for an edge in
the fierce competition. Since there are so many potential consumers, it is of the out most
importance to be able to understand what the consumer wants and needs.

1.3 Online Shopping In India

It is a fact that a great online shopping revolution is expected in India in the coming years.
There is a huge purchasing power of a youth population aged 18 -40 in the urban area.

1.3.1 Rising Connectivity

If we observe the growth of Internet Subscribers, it is getting doubled year by year. The
usage of internet in India is only 4% of the total population. This is also getting increased
day by day as the costs of computers are decreasing and net penetration is increasing. The
cost of internet usage is also getting lower, with good competition among the providers. WiFi & Wimax system has also started in India. This will increase the usage as it goes more
on wireless internet. Indians are proving every time that they can beat the world when it
comes to figures of online shopping. More and more Indians are going to online shopping
and the frequency of India's online buying is crossing the overall global averages.

1.3.2 Few Factors That Boost Online Shopping in India

) Rapid growth of cyber cafes across India
) Access to Information
) The increase in number of computer users
) Reach to net services through broadband
) Middle-class population with spending power is growing. There are about 200 million of
middle-class population good spending powers. These people have very little time to spend for
shopping. Many of them have started to depend on internet to satisfy their shopping desires

1.3.3 Few Facts about Online Shopping

The figures from IAMAI show that the internet users in India will grow to 200

million by

2010. Around 25% of regular shoppers in India are in the 18-25 age groups, and 46% are in the
26-35 year range.
) Indian online matrimonial sector is worth around $230 million
) Worldwide E-commerce is only growing at the rate of 28%, since India being a younger
market, the growth of e-commerce is expected at 51% in the coming years.
) In line with global trends finally India has also started shopping online these days.

As per the study by IAMAI online shopping in India has rose from
$11million in 1999-2000 to $522 million in 2007 and it is expected to rise above
$700 million by end March 2010.

1.3.4 Changing Attitude towards Online Shopping:

"Awareness, Future Demand Focus for Emerging Markets & Current Issues" Malls

springing up everywhere and yet people are E -shopping! And not in small numbers
either. Consumers are more rational nowadays and have ability to get the choices from the
market. Awareness among the consumers is spread through internet. The number of internet
users is increasing day by day which attracts people who have an option to buy online. It was
never thought that Indians would go in for e-shopping in such a big way

1.4 E-Commerce Briefing

E-Commerce is a huge domain on conducting business over internet and e-retailing is part of it.
When we discuss on digitally / Internet enabled commercial transactions between organizations
and individuals using latest web technologies as per the policies of the Organization it takes the
form of e-business. Nowadays, 'e' is gaining momentum and most of the things if not everything
is getting digitally enabled. Thus, it becomes very important to clearly understand different
types of commerce or business commonly called as e-Commerce.
There are mainly five types of e-commerce models
1. Business to Consumer (B2C)
This model involves organizations as business houses and consumers and customers. This is the
most common model in e-commerce. In this model, online businesses sell to individual
consumers. When B2C started, it had a small share in the market but after 1995 its growth was
exponential. In this business model the business house will have a e-commerce website which
will list all their product categories with detailed information about products with
photographs, flash animation and comparing similar products etc., for quick decision making
over web. E.g. An online Music portal selling CD's / DVD's and streaming Audio on the web e.g.
www.imusti.com.
2. Business to Business (B2B)
It is the largest form of e-commerce involving business of trillions of dollars. In this form,
the buyers and sellers are both business entities and do not involve an individual consumer. It is
like the manufacturer supplying goods to the retailer or wholesaler. E.g. www.indiaplaza.in is a
online store, which sells popular branded products to consumer, where its supply chain network
directly linked to Manufacturer. Hence Business to business model.
3. Consumer to Consumer (C2C)
E-Bay is an excellent example for this model an auction site where a consumer can sell their
antique or old used items at discounted price to others, rest of the consumers who are all
interested in those items will bid for that. This auction will happen for a time period and ends;
now the highest bidder will make payment and buy the product. Here e-bay plays a role of
having / facilitating a platform to make consumer to consumer transactions.
4. M-Commerce
Now a day's all business executives were busy and want to do financial transaction without going
physically to bank. Example: Consumer want to pay their utility payments viz., Insurance
premium, Telephone bills, Income taxes etc., Transfer money to anybody in this world via
mobile banking (e.g. ICICI Bank iMobile) opens up the new technology of ecommerce as
Mobile commerce. Further the regular online stores were also optimizing their site user
interface design in order to make consumers shop from their mobile devices viz., iPad, iPhone,
Android enabled phones, and Microsoft windows mobile 6.x enabled devices.
6

There are other types of e-commerce business models too like Business to Employee (B2E),
Government to Business (G2B) and Government to Citizen (G2C) but in essence they are similar
to the above mentioned types. Moreover, it is not necessary that these models are dedicatedly
followed in all the online business types. It may be the case that a business is using all the
models or only one of them or some of them as per its needs.

1.5 E-RETAILING Business Plan

To start an e-Retailing business, an organization or an individual should have the below.
1. A Unique Idea I Product to sell
When all Personal computer assemblers sell PC's and Servers in a traditional way, Michael Saul
Dell, founder CEO of Dell Inc., got a unique idea of selling PC's over web. Beyond this he
allowed users to choose all components one by one based on their interests and requirements and
delivered and assembled PC over web, which was a grand success.
2. A Perfect Business Plan
Is all about the e-Retailing business idea, Product or services, people involved, their expertise, a
Project report with all standard projected statements prepared by a professional team, Competitor
analysis, Capital investment, Loans, Business location, Government regulations & policies,
Technology plans, and IT infrastructure required.
3. Technology Plans
Organization may start off in a small way and then based on the response they can get more
funding and grow in a big way.

They need to finalize an attractive easy to remember domain name e.g.

www.dell.com .

Need to finalize a hosting server to book web space from their various plans e.g.
www.Hostmonster.com to start with and later go for their own scalable IT infrastructure
setup based on the response and growth.
Need to Acquire IT team for developing e-Commerce website or to outsource the work. Also
we can think of using Open source like OS Commerce a popular e- Commerce application and
Open source CRM application for customer relationship.
If we are going to develop from the scratch on our own technology, the below website
development process will be followed as per Fig. 3. Web site development process.
Compare and finalize Payment gateway based on their initial setup fee / transaction fee the
popular payment gateway service providers are CC Avenue, ICICI, Bill desk, Pay pal and few
more players.
Once the website is launched, related internet marketing, popularly called as SEO (search
engine optimization) work to be started to increase the popularity and visitors of the site.
Plan and organize supply chain management to deliver product or service to the online users
who place orders.

Post Sales support plans.

4. E-RETAILERS BACK OFFICE MANAGEMENT

There will be a huge team working on the back end systems of the web site which is called as
control panel / system admin.
In which a group of people will be updating the product categories, products, prices,
specifications and many other information before it's getting listed in the website.
Other than this to attract more users, the Marketing team will often send mailers / newsletters by
giving more offers.
For a basic idea below image depicts the minimum required pages for a e-Retailers web site.

Figure-1

5. Payment Gateway
Now the e-Retailers web site is ready with products listed and when the online users orders the
product online, the Retailers should link the Bank account with 3rd party payment gateway, to
which the payment will be credited.
6. HOW AN E-COMMERCE SITE WORKS
Normally a user will get to know about a online shopping web site through many ways, most
frequently all online users will find websites on the go by using Google search or any other
search engines.
When they see the web site information link, they click to it, complete the website registration
process if any, choose the products they are interested, compare similar products specification
cost etc., and confirm the items selected and finalize the invoice and make payment via their
debit card / credit card bank account or via Pay Pal or Google checkout.
Once the payment is received the merchant will receive the payment, start processing the order,
and ship the product to the user's delivery / shipping address.
8

Further if the product is carrying warranty, post sales support and service should be facilitated to
the customer in order to create good word of mouth and get a good returning customer base
which is the key success factor for the e-Retailer.
Let me illustrate the buying process in the image below:

Figure-2

1. Online visitor of the site, will pick up the items to be purchased.

2. Confirming / finalizing the item list selected and checkout.
3. Enter the credit / debit card / Pay Pal information to make the payment.
4. User payment information is getting checked with banker via payment gateway and once its
authenticated.
5. The payment will be credited to retailer account and an Order confirmation is shown to the
visitor along with order details and shipping information.
The visitor will also be notified on the purchase made via email.
The visitor will be able to track their order status and an SMS / email update will be
frequently sent to visitor on the product or service delivery.

Chapter II
Review of literature

10

When it comes to India, though, you cant just go by numbers and comparisons. The thing we
repeatedly hear is that India is a unique market with unique challenges, which also means it
creates unique opportunities. Given all this, who are going to be these successful e-Commerce
players of tomorrow?
I think the successful companies of tomorrow are going to look different from the ones that are
on the top now. Theres going to be 100-200 million new e-Commerce customers that are going
to be up for grabs in the next few years. Another way to look at it is that in 80% of the eCommerce shoppers of 2016 still are available to be nabbed by e-Commerce sites. And theyre
going to come from predominantly two categories. First, from Tier-2 and Tier-3 cities as the
logistics and connectivity there improve and second, young people that get jobs/pocket-money
and start shopping online.

2.1 GLOBAL PERSPECTIVES

Chanaka Jayawardhena, Len Tiu Wright and Charles Dennis
The research carried out by them on "Consumers Online: Intentions, Orientations,
Segmentation". This paper reflects the purchase intentions of online retail consumers,
segmented by their purchase orientation. These findings indicate that consumer purchase
orientations in both the traditional world and on the Internet are largely similar. Therefore,
both academics and businesses are advised to treat the Internet as an extension to existing
traditional activities brought about by advances in technology, i.e. the multi-channel approach.

Ruby Roy Dholakia and Kuan pin Chiang

The research carried out by them on "Factors Driving Consumer Intention to Shop Online".
This study empirically examined the influence of convenience, price, and product type on
consumers intention to shop online. The results of the study indicate that convenience
influences consumers intention to shop online. When consumers perceive shopping offline
as inconvenient, they are more likely to shop on the Internet.

11

 Vanitha Swaminathan and Andrew J. Rohm

The research carried out by them on "A Typology of online shoppers based on shopping
motivation". This study represents an important first step in extending the general shopping
literature to the context of online shopping. Variety seeking and convenience were found to
be significant motivating factors in the online shopping context. Time savings and
recreational motives were significant motives in the offline but not the online context,
suggesting that these factors may serve to differentiate the shopping types across these
channels

Lohse, G.L., Bellman & E.J. (Murdoch Research University)

The research carried out by them on "Consumer buying Behavior on the internet. This
research lays out the importance on U.S. Customers perspective about the Online Shopping &
Various other factors which motivates them & restraint them from online shopping & various
other classification of the classes according to their needs Demographic factors.

2.2 INDIAN PERSPECTIVES

Shubham Goswami & Meera Mathure
The research carried out by them on "Retail Goes Online: An Indian Perspective". Compared
to countries like United Kingdom, United States, Australia, Canada and others, India is still
in its nascent stage of e-shopping. But the real growth that online retailers are betting on in
India is an increase in buying in smaller towns and cities that have no access to modern
retail. There are divergent views on the future of e-retailing in India. Some experts are of
the opinion that the giant, big brand retailers would dominate the small ones due to their
wider investment capacities. It would be next to impossible for the small retailers and the
kiranas to prove their existence in the battlefield of online retailing.
Another viewpoint is that there would be an exponential growth in the online retailing
business in India. Though much is yet to be achieved, remember E-tailing is a new industry
in India. With broadband internet access still accessible to entire population, this industry
may see an explosive growth. Most growth drivers are in Indias favor demographics,
economy, changing lifestyle, exposure to new ideas. It is just a question of creating a
12

sustainable eco system for E-tailing, which is at an inflection point.

Shweta Sharma & Sugandha Mittal
The research carried out by them on "Prospects of Ecommerce in India"
This Paper put emphasis on how a developing country can become industrialized and
modernized if it can extensively apply IT to enhance productivity and international
competitiveness, develop e- commerce and e-governance applications. An information-based
society or knowledge based society is composed of IT products, IT applications in society and
economy as a whole. Many countries in Asia are taking advantage of e-commerce through
opening of economies, which is essential

for

promoting

competition

and diffusion of

Internet technologies. Large enough to have a critical mass of 10 to 20 million users to be able
to make an impact on e-commerce and e-governance. In the next 3to 5 years, India will have
30 to 70 million Internet users which will equal, if not surpass, many of the developed
countries. Internet economy will then become more meaningful in India. With the rapid
expansion of internet, ecommerce, is set to play a very important role in the 21st century, the
new opportunities that will be thrown open, will be accessible to both large corporations and
small companies.

Alka Raghunath & Murli Dhar Panga

The research carried out by them on "Problems & Prospects of E-commerce"
This paper focuses on with the development of computer technology, the World Wide Web
has become the connection medium for the networked world. Computers from locations that
are geographically dispersed can talk with each other through the Internet. As with any new
technology, there are positives and negatives associated with its use and Adoption. Finally, an
e-marketplace can serve as an information agent that provides buyers and sellers with
information on products and other participants in the market.

E-commerce creates new opportunities for business; it also creates new opportunities for
education and academics. It appears that there is tremendous potential for providing e-business
education.

13

Scott M. Smith, Chad R. Allred, William R. Swinyard (2008) in their

research paper they

discusses online shopping in context of diffusion of innovation

theory. It proposes that online shopping is a discontinuous innovation whose adoption rate
is influenced by several of Rogers' (2004) diffusion deterrents. A new 12 item 'Computer
Competence Index' (CCI) is proposed and tested using data from an internet - administered US
probability study of 1800 online users. E-Shoppers are profiled using a tertile split of the CCI.
Each tertile's demographics,
purchase

computer activities, computer - oriented lifestyles, and online

activities

are

reported.

14

A.M. Sakkthivel (2009) in their research paper aims to identify the impact of
demographics

on consumer

buying behaviour

towards online purchase

of different

products based on the involvement and investment (High, Medium and Low). It attempts to
unearth the impact of the demographics on online purchase which is at present relatively
limited. It would help the marketers to identify the demographic profile of consumers
which is otherwise not known due to the intangible nature of internet. The findings would
help the marketers to design their offerings based on the demographic profile of online
consumers and would help the online marketers to identify and segment the online consumers
which will enhance their focus and eventually leads to financial growth.

Jianwei Hou, Cesar Rego (2007) in their study in traditional auctions, it is often
assumed that bidders are a homogenous group. However, since most online bidders are
average consumers instead of professional bidders, we suspect that online bidders are a
heterogeneous group. The purpose of this paper is to explore the types of online bidders
based on their real bidding behaviour in the context of consumer -to-consumer online
auction market. A cluster analysis is employed and four types of online bidders are
finally identified in a private value auction, namely, goal -driven bidders, experiential
bidders, focused bidders, and opportunistic bidders. The profile and performance of each
group are also discussed.

David Anderson (0 2 . 0 2 . 2 0 0 6 ) in their research carried out by a consumer

behaviour researcher at Henley Management College has investigated what drives people to
search online. The findings reveal that convenience, time-efficiency and personal control
are the key drivers for consumers to search online, rather than cost. It also shows that the
relationship between traditional and online retailing outlets needs to be more unified Eshopping has changed the face of retail, and surfers are now looking for spring sale
bargains. This is following a bumper e-Christmas, where Internet shopping soared almost
50% during the 10-week run-up to Christmas 2005 (IMRG).

However, the new findings reveal that convenience and personal control are the key
drivers for consumers to search online. Dr Susan Rose, from Henley Management College,
15

said: "What motivates online shoppers is the ability to shop, where, when and how they
like. Nowadays people can shop over their Shreddies in the morning. The research, that
analyses data from 304 electrical goods Internet shoppers, provides businesses with a
guide to getting the information highway buzzing with potential customers. Big-ticket
items such as digital TVs, cameras, or iPods now feature on our e - shopping list. The
Internet provides a rich source of information about brands and retail channels that enable us
to search and find information to help us with our final purchase decision. For businesses
there are some steps to help them embrace the Internet revolution with success. A
key factor driving Internet use for 'online window shopping' is its usefulness in our
personal lives. The Internet frees time and makes the information search process, Research
suggests that people search online for some goods, yet buy from a traditional high street
retailer, or look around for goods in shops, then take their search online. In turn, it is
essential for retailers who operate both on and off line to ensure that they embrace a joined
up process that appears seamless to the customer. Some retailers have still to successfully
unite the two retailing methods - this is key to contemporary customer service. Factors
such as how much the medium challenges us mentally and our confidence to navigate and
understand the technology can turn us on or off the idea of browsing online for products. A
clear divide is appearing between the occasional online shopper and the regular experienced
user. Concerns about how easy the system is to use have almost disappeared for online
shopping

enthusiasts,

but for occasional

users e-tailing sites need to be easy to

navigate. Websites must be accessible and operate efficiently. The research found that the
expectation of getting a good financial deal is still a strong motivator to seek out products
online, but this is secondary to the importance but, many people steer clear of electronic
buying because of security worries. Only once online retailers can reassure customers about
fraud and privacy, will the online shopping curve really take off. Worries about the risk
involved, in terms of financial transaction and privacy remain. A move from 'big brands'
to 'bargains' may only take place once.

Rajeev Kamineni (JAN 1999) in their study The World Wide Web can change human
behaviour and human interactions to a large extent. Web based shopping behaviour is one
major example to point out the trends in this direction. This study is of a very exploratory
16

nature and it intends to establish the differences between several web - based shoppers
from

different parts of the world. Several critical factors associated with online shopping
behaviour will be explored. A cross cultural data set will be collected and an illustrative
description of the shoppers will be provided. As a final step the cross cultural differences
between several shoppers will be explored. One question which will run as a theme
throughout the course of this paper is, "Will the traditional consumer behaviour theory and
research be altered by the advent of web based shopping?"
There is a huge difference between a physical store and its electronic counterpart. A help
button on the home page of the web-shopping site replaces the sales clerks' friendly advice
and service. The familiar layout of the physical store becomes a maze of pull down
menus, product indices and search features. Now more than ever, the promise of electronic
commerce and online shopping will depend to a great extent upon the interface and how
people interact with the computer. At the same time, there are some inherent difficulties in
maintaining an online inventory. In a regular store, the managers can pull out a product
from the shelf if they feel that it is not fast moving or has no demand. This is a privilege
that cannot be extended to the online retail store.

Anita Desai (2003) in her study E-tailing is the practice of selling retail goods on the
internet.

It is the abbreviated

version

of "electronic

retailing"

which

essentially

constitutes business to consumer transaction. While the concept of online retailing or e tailing is no longer in its nascent stage; it continues to evolve, as advanced e-commerce
applications act as a potent catalyst in the development of e-tailing.
The idea of online retailing or e-tailing which almost every net-savvy individual is
familiar with; offers a convenient mode of shopping online and the consumer gets to
choose from a diverse range of products and services as opposed to the analogous
physical shopping experience. Furthermore, online retailers or e-tailers get to expose and
sell their products to a global audience through their e-stores. (Also termed as online stores,
internet shops, web shops etc.)
17

The E-commerce industry plays a vital role in its growth and development. The consumer or
buyer is usually provided with detailed information and description of the product
which helps them make a judicious choice before making an online purchase. For
consumers who face a paucity of time or want a diverse range of products to choose
from, e-tailing proves to be an ideal option. Every e-tailer wants his/her share of domain
amidst the vast World Wide Web galaxy. Due to the intense competitor quotient involved,
every e-tailer out there wants to offer their customer/buyer a smooth and pleasant
shopping experience. Therefore, e-tailing is just not restricted to putting up products
for sale for consumers to buy. As consumers today are well -informed, it is understood that
they would make a well informed decision as well. This involves a fair amount of product
research,

price

comparison

and

checking

the

credibility

of

the

e-store.

18

This section will provide all information regarding the thesis background, purpose, research
questions, limitations of survey and theories. It presents the introduction of consumer
behavior, online shopping, and consumer behavior towards online shopping in India.

2.3 Background
2.3.1 Consumer Behavior
"Consumer behavior is the study of individuals, groups, or organizations and the processes
they use to select, secure, and dispose of products, services, experiences, or ideas to satisfy
needs and the impacts that these processes have on the consumer and society."

(Kuester,

2012)
With the reference of above cite; Consumer behavior of every individual is different from other
depending on buying choices which is influenced by buying habits and choices that are turn
tampered by psychological and social drivers that affect purchase decision process.
(Brassington, F. and Pettitt, S., 2000)
"We're not aware of changing our minds even when we do change our minds. And most
people, after they change their minds, reconstruct their past opinion - they believe they
always thought that." (KEYS, 2011)
As quoted above, consumer behavior about decision making is difficult to define and is a
system of short cuts and rule of thumb which is unpredictable. The short cuts in decision
making vary from person to person and focusing on the past experience of consumers; we
can predict the future trends by bringing profitable products and services into the market. In
this modern world, the popularity of interactive media like the World Wide Web is
increasing day by day with rapid pace. With reference to marketing it is continuously
realized that the main two factors observed due to WWW are 1)Most of the companies
are doing their
business online and make their website as showroom of their product and services. 2)
Fast increment of consumer segments due to increase needs and demand including online
shopping as well. (Ha'ubl, 2000, p. 5).

19

2.3.2 ECommerce I online shopping

Internet makes life simple and innovative. People are doing business online and trade has
become more easy and fast due to this. Internet provides new ways to promote business.
Website becomes the essence of online business as to show their services and products.
Internet gathers all competitors and consumers in one place. It brings new lane to promote,
advertise products and services in market (Barry Silverstein, 2002, p. 3).

Total global E-commerce sale in 2011 have grown to Euro 690 billion (USD 961 billion) and
recorded an increase of 20 % with an estimation of increase in the coming years and to
cross the 1 trillion Euro mark in 2013. Asia pacific region is leading in terms of growth as
compared to mature markets like US, UK, Japan and European countries. Asia Pacific
recorded 130 % growth specially China in 2011. The online retailing is becoming an integral
part of an economy and country and worldwide increasingly seeing trust and confidence in
purchasing online. (AadWeening, 2012)

"E-commerce is benefiting from several positive trends, including the continued rollout of
broadband, increasing user comfort shopping online and the decline of certain brick-and-mortar
retailers," (Imran Khan, 2011, P.416 ).

Online consumers are always seeking new products, new attractiveness and the most
important thing being price compatibility with their budget. The internet is the best way to save
time and money through purchasing online within their range of budget at home or in
anywhere. Online consumers don't have limits to online shopping. They also use internet for
comparison of prices of goods and services, news, visit social networks and search
information and so on. The recession has so much impact on online consumer behavior
(Rodriguez, 2009, p. 3). Online shopping behavior depends on four factors such as Shopping
motives, personality variables, internet knowledge and experience and last factor is
shopping incentives.

These are key determinants to influence the behavior of online consumers. Online seekers are
the main sources of online shopping. Online shoppers always want to seek information within
few clicks and reach to the most relevant information according to their requirements such as
competitive brands, best price offers, product specification and consumer word-of-mouth.
20

2.3.3 Consumer Behavior over Internet

According to Consumer Behavior Report, "One in four consumers indicated that they spend
more time online because of the tough economy and 53 percent of consumers said they
spend about the same amount of time online".

(Adapted from Price Grabber 2009 survey) Figure-3

According to PriceGrabber survey, consumers are divided by age wise and then take into
account the online shopping to analysis the scenario. After survey it is clearly shown that
older aged online consumers are totally different from younger online consumers. Why is it
that? The answer is that older online consumers have the sense of saving and purchasing
while younger online consumers have no experience and don't have enough maturity to buy
goods with planned spending.

(Rodriguez, 2009). With the help of below table, it is clearly demonstrated.

21

Figure-4

(Adapted from Price Grabber 2009 Survey)

The online shopping trend around the world spread very fast.

"The

Neilson Company

conducted a survey in 2010 and polled over 27,000 internet users in 55 market from Asia
Pacific, Europe, Middle East, North America and South America to look at how consumers
shop online" (Nielson, 2010). Globally online shopping is made on books and cloths as per
survey data. Most people are interested to purchase and bought usually books and cloths.
Airline tickets, books, tours and hotel reservations are also commonly bought through
internet which indicates the progress and stability of economy.

2.4 Problems
There are billions of people online and each of them is potential online consumer for a
company which providing online services and goods. Now a day, there are rapid and fast
developments in information technologies industry. According to Keynote, "Online retail
competition is heating up as consumer's behavior savvier on the Web". Competition increases
day by day due to increase attention of consumers
retailer

is

based

on

towards

online

shopping.

The

best

their experiences on web. Online consumers also increase their

expectations and they are set by their experience with online retailers across the Web. Brown
says in his interview, "It is becoming increasingly imperative for retailers to provide a strongly
positive online shopping experience".

22

It is very important to know that what kind of things and strategies help to increase sales in
this fierce competition in market with high expectation of online consumers. "Our research
shows that the sites that perform best in customer experience have a significant advantage in
driving online sales."
To enhance and attract online customer it is very important to know about their behavior and
understand what they require and need. Since online shopping is the new medium of shopping
with new demands of consumers. All customers have their own desires and demands for
products so that it is very crucial for all online retailers to identify and know about their
online consumers (Hasslinger, 2007, p.18).

Online shopping and online consumer behavior depend on these factors such as Website
visibility, online shops credibility, information comparison, payment security, privacy,
website interface, convenient time, education level and experience of network (Na Wang
1, 2008, p. 4). Culture, social, personal, psychological behavior also affects the consumer
behavior in online shopping. Online shopping is based on individual to individual perceptions.

Consumer behavior in online shopping and in traditional shopping is very different. Both
include social, cultural, personal and psychology etc. factors but traditional shopping is much
more influenced by these factors as compared to online shopping. The reason is that online
consumers are restricting with social cultural environment and psychological factors. Online
shopping basically based on individual thinking point of view and his personal perceptions.
Online shopping makes its own character for its development (Na Wang 1, 2008, p. 4).

The problem is that most of the online sellers don't know about the social and cultural
norms about India and Indian consumer behavior as we have discussed above that consumer
behavior is based on perceptions, its education, language, age, economic factor, income
distribution, facility available in society and other factor as well which we will discuss in the
light of the questionnaire. Therefore in this thesis, we will provide solution to online sellers in
India to promote their goods and services in the light of consumer behavior theories with the
help of survey.

23

Chapter III
Research Design

24

In this chapter, I'll present how I conducted the research to collect the primary data and reach
to the conclusion of the research and will also explain which different types of
methodology that were used.

The research is of deductive in nature and primary motive is to collect data and analyze it. By
doing it, factors which influence online consumer behavior such as website quality, consumer
concern in online shopping (Privacy, trust factor, delivery and return quality of goods and
services) and consumer characteristics ( demographics, race, culture, technology awareness)
will be derived. Then, we collect primary data with the help of survey. The main purpose
of the survey was to collect data about online purchasing of in Gujarat.

3.1 Rationale:
My research will focus on the Prospects of E-Retailing in the Indian market as it is the
new form of retail which is flourishing very rapidly in Indian economy & it explores
huge potential in the Indian market. Researching the Prospects of E-Retailing through
their potential & different Problems faced by the Online Retailers & Customers will be
the Prima Facie of the research to get the in depth about the Indian Ecommerce &
Several factors affecting its growth.

3.2 Objectives of the study: Primary Objective:- Studying the Consumer Behavior towards E-Retailing in

Gujarat.
Secondary Objectives:-

I.
II.

To get the In depth view of the Indian customers about the E-retailing
Figuring out the Factors affecting the Indian customers which motivates
them and restricts them from Online Shopping.

25

3.3 Research Purpose:

As said in the Introduction that due to increasing globalization; the importance of online
business is increasing and making it more fast and convenient for consumers. So the
research question of this study is how consumers behave while shopping online?
On the base of research question, the purpose of this research is to identify and get insight
into consumer behavior towards online shopping with respect to India economy, Identify
factors which influence online shopping and consumer behavior in Gujarat.

3.4 Choice of Methodology

The main purpose of study was to study the consumer behavior who purchase from online in
Gujarat with the help of internet. Online consumer behavior is influenced by many factors
when making online purchase. In order to provide good piece of work and build
understanding in this subject we conducted initial research in literature on consumer behavior
and e-commerce. We have reviewed those theories and related studies that had similar
areas to focus and give particular attention to their consequences.

For this research it is decided to use questionnaire approach that would be filled by people
in Gujarat.
This study is based on exploratory study but developed through exploratory study that's why
research starts out with gaining knowledge regarding consumer behavior and then move
towards online consumer behavior. With the help of this knowledge and theories it will
identify those factors that are of importance when online consumer is making purchasing
especially in Gujarat. Then this data used in order to find relationships, means, standard
deviation and correlation between these variables.

26

3.5 Research Approach

There are two types of research approaches commonly used, one is inductive approach and
second one is deductive approach. In Inductive approach, the purpose of research would be to
formulate a theory with the help of data while in deductive approach; the purpose of research
would be to apply theory on gathered data (Saunders, 2003, p. 105). In inductive way
theory would follow data vice versa as in deductive approach (Saunders, 2003, p. 106).

In

this research deductive approach was chosen for the study, research will find out online
consumer behavior theories and factor affecting the online consumer's behavior in chapter 3
then in chapter 4 collected primary data is explained with questionnaire.

3.6 Research Strategy

There are two ways to collect data, when collecting data to approach the purpose of a
research. Data collected from any sources that has been published already in any form is
known as secondary data published research or printed material. Secondary Data already
exists; it was gathered for previous purpose. It is not gathered for particular basis study; on the
other hand, primary data is gathered for a particular research (Gilbert A Churchill, 2009, p.
142).

Primary data can be collected through interviews, observations, experiments and

questionnaire.
In research, the main concern is to collect primary data and analyze questionnaire and
respondents in order to analyze factors involved in online shopping of electronic goods
and how these are related to respondents. The primary data is conducted in a way that it will
be able to approach the research and conclude answers to research questions. In Chapter
4, Questionnaire will be explained in more detail.

3.7 Sample Selection

The factor that intended to examine can be applied to and investigated in Gujarat population
that uses the internet and buys goods. Since there are time and resource constraint that is
why specific population had been approached in order to generalize the results includes 217
respondents
71 were simply excluded from the research as the contacted persons have not used the
internet for shopping and they have no knowledge or access to the online shopping so 146
Respondents

are

studied

for

analysis

and

research.
27

3.8 Type of Sampling

"Convenience sampling is the non-probability sampling techniques where subjects are
selected because of their convenient accessibility and proximity to the research"
(RESOURCES, 2012). It is the easiest way to analyze the data. In this method; specify
number of sampled unit and don't concern with having numbers that matched the
proportions in the population, this method is the nonprobability analogue of stratified random
sampling in that it is important to assure that smaller group should accurately represented to
sample taken (Base, 2006).
Data is collected from as many respondents as possible but since the study is about
Gujarat people so it is assumed that there will be little variation in population making
it more approved generalized to the response rate. The sampling method for people
took also place on a convenience basis since the people that agree to answer the
questionnaire are those that were chosen.

3.9 Questionnaire format

In order to create questionnaire, the basis were built by deciding on the main variables that
needed to be investigated. These were;
General Variable:

Demographics

Personal information

Social characteristics

Attitude towards online shopping

Identified Variables:
1. Consumer Behavior in Buying Process

Purchase Idea

Factors Influencing consumer behavior in purchase

2. Customer concern in online shopping

Pricing

Privacy & Security

Brand consciousness and trust

28

Delivery and Return Policy

29

The questionnaire was distributed to 146 educated individuals who are at least use to
English language and confirmed to be regular or experienced users of the Internet.
Three types of mechanism were practiced to send the questionnaire to respondents: emails,
online link at Google docs and hand delivery. Subjects were requested to e-mail the filled
questionnaire back to the researcher, go through the provided link of Google docs and
submit or provide the hard copy filled questionnaire.

3.10 Research Hypothesis:

Ho1: There is no significant difference between gender and attitude towards online shopping.

Ho2: There is no significant difference between age and attitude towards online shopping.

Ho3: There is no significant difference between Education and attitude towards online
shopping.

30

3.11 Research Questionnaire

In the research questionnaire (Appendix 1), four main segments categorized as general
demographics

variables,

identified

variables,

Indian

consumers concern in online

purchasing and post purchase behavior are highlighted through following such as;
1. Which gender is the most rely on the online shopping in Gujarat?
2. Which income class in more inclined toward online shopping in this State?
3. What is majority of consumers' level of education?
4. What factor consumer are preferring during online purchasing?
5. What Products they actually buy from online?
6. Are they inclined towards specific Retailer?
7. In what way they prefer to make the payment?
8. Which factors influence consumer behaviors in the process of purchasing?
9. What are the features that consumer concern towards online shopping?
10. Do consumers have fear towards online shopping and why?

3.12 Limitation
There are number of factors that affect the behavior of online consumers in India's
market. But in this research, main focus is to study the behavior of the consumers in the
process of purchasing from online stores. There are many theories and models that identify
the consumer. This research is limiting itself on the scenario to identify consumer behavior
variables in the buying process in Gujarat. Consumer behavior would be changed according
kinds of goods and products. Therefore, different factors have different importance in the eye
of consumer based on quality and kinds of goods. Therefore, this research limits itself only
to consumer behavior in online shopping in Gujarat.

31

Chapter IV
Analysis & Interpretation

32

4.1 Results
In this chapter the results from the questionnaire and the distribution of collected data
among the respondents has been discussed and presented.
The questionnaire was designed to collect the primary data and further on to analyse the
data and how consumers behave against the importance of price, convenience, trust,
loyalty when they purchase

online. The questionnaire

was divided to, first, the

demographics segmentation among the respondents and second to, collect the data about the
factors like price, convenience, brand consciousness, safety, trust which effect directly or
indirectly to the decision making process and ultimately highlight the typical behavior of
consumer while shopping online.
The questionnaire as you know divided into four main segments such as general, Consumer
Behavior in Buying Process, Customer concern in online shopping and Experience. In general,
we have received following responses such as;

33

4.2 SPSS Analysis

Factor Analysis
Rotated Component Matrix

It saves your time

Component
1
2
0.256 0.772

it takes more time to search specific product

0.365

0.704

0.178

It gives me ease of shopping at home

0.423

0.804

0.136

It does not require travelling to far off distance

0.235

0.725

0.42

Speed of internet affects your online shopping

0.162

0.188

0.782

It takes a long time to deliver products

0.094

0.123

Shopping 24x7

0.832

0.276

0.847
0.038

Ease to make payment assistance

0.767

0.353

0.138

Lack of physical evidence affects my purchase decision

0.783

0.413

0.03

I think that online shopping results in monetary benefits

0.852

0.298

0.128

can customize the products according to my specification

0.826

0.22

0.273

get better discounts & offers on internet

0.858

0.209

0.034

The actual products do no match the products shown on

0.788

0.332

0.182

Wide choices of brands to choose

0.849

0.247

0.189

I do not get much variety in products

0.286

0.22

0.273

3
0.054

Interpretation: As we can see in the table, in the Factor 1, 3 items that are having max
value shows the monetary benefits and wide variety of brands. So, this factor is labelled as
Money & Assortment Benefits.
On the Factor 2 Column, 3 items having max value above 0.5 shows time & convenience
shopping. This factor is labelled as Efficient & Convenient Benefits
On the Factor 3, 2 items showing that internet speed and long delivery time issues which are
important. This factor is labelled as Connectivity & Delivery Issues

34

Gender Analysis
gender * Consumer_behavior Cross tabulation
Consumer_behavior
Dont shop online

shop
Count

Total

85

40

125

% within gender

68.0%

32.0%

100.0%

% within Consumer_behavior

58.2%

56.3%

57.6%

% of Total

39.2%

18.4%

57.6%

61

31

92

% within gender

66.3%

33.7%

100.0%

% within Consumer_behavior

41.8%

43.7%

42.4%

% of Total

28.1%

14.3%

42.4%

146

71

217

67.3%

32.7%

100.0%

100.0%

100.0%

100.0%

67.3%

32.7%

100.0%

male

gender
Count

female

Count
% within gender
Total
% within Consumer_behavior
% of Total

Chi-Square Tests
Value

Pearson Chi-Square
Continuity Correction
Likelihood Ratio

Asymp. Sig. (2-

Exact Sig. (2-

Exact Sig. (1-

sided)

sided)

sided)

.792

.014

.907

.069

.793

.069
b

df

Fisher's Exact Test

.884

Linear-by-Linear Association

.069

N of Valid Cases

217

.453

.793

Interpretation: As we can see in the above tables, .453 > 0.05, so null hypothesis is not
rejected and there is no significance difference between the gender & online shopping
behavior.

35

Age Group Analysis

Age_Group * Consumer_Behavior Crosstabulation
Consumer_Behavior
shop online

Total

don't shop
online

Count
% within Age_Group
18-25

% within
Consumer_Behavior
% of Total
Count
% within Age_Group

26-30

% within
Consumer_Behavior
% of Total

120

54

174

69.0%

31.0%

100.0%

82.2%

76.1%

80.2%

55.3%

24.9%

80.2%

14

21

66.7%

33.3%

100.0%

9.6%

9.9%

9.7%

6.5%

3.2%

9.7%

12

58.3%

41.7%

100.0%

4.8%

7.0%

5.5%

3.2%

2.3%

5.5%

10

50.0%

50.0%

100.0%

3.4%

7.0%

4.6%

2.3%

2.3%

4.6%

146

71

217

67.3%

32.7%

100.0%

100.0%

100.0%

100.0%

67.3%

32.7%

100.0%

Age_Group
Count
% within Age_Group
31-35

% within
Consumer_Behavior
% of Total
Count
% within Age_Group

36 & above

% within
Consumer_Behavior
% of Total
Count
% within Age_Group

Total

% within
Consumer_Behavior
% of Total

36

Chi-Square Tests
Value

df

Asymp. Sig. (2sided)

.568

Likelihood Ratio

1.922

.589

Linear-by-Linear Association

1.891

.169

Pearson Chi-Square

N of Valid Cases

2.021

217

Interpretation: As we can see in the above tables, .568 > 0.05, so null hypothesis is not
rejected and there is no significance difference between the age & online shopping behavior.
So there is no effect of age on the consumer behavior towards online shopping .

37

Education level Analysis

Education * Consumer_Behavior Cross tabulation
Consumer_Behavior
Shop online

Total

don't shop
online

Count
% within Education
Post Graduate

% within
Consumer_Behavior
% of Total
Count
% within Education

Graduate

% within
Consumer_Behavior
% of Total

73

32

105

69.5%

30.5%

100.0%

50.0%

45.1%

48.4%

33.6%

14.7%

48.4%

62

28

90

68.9%

31.1%

100.0%

42.5%

39.4%

41.5%

28.6%

12.9%

41.5%

11

54.5%

45.5%

100.0%

4.1%

7.0%

5.1%

2.8%

2.3%

5.1%

11

45.5%

54.5%

100.0%

3.4%

8.5%

5.1%

2.3%

2.8%

5.1%

146

71

217

67.3%

32.7%

100.0%

100.0%

100.0%

100.0%

67.3%

32.7%

100.0%

Education
Count
% within Education
Matriculation

% within
Consumer_Behavior
% of Total
Count
% within Education

intermediate

% within
Consumer_Behavior
% of Total
Count
% within Education

Total

% within
Consumer_Behavior
% of Total

38

Chi-Square Tests
Value

Df

Asymp. Sig. (2sided)

.316

Likelihood Ratio

3.330

.343

Linear-by-Linear Association

2.433

.119

Pearson Chi-Square

N of Valid Cases

3.537

217

Interpretation: As we can see in the above tables, .316 > 0.05, so null hypothesis is not
rejected and there is no significance difference between the Education & online shopping
behavior.

39

Income Analysis
Income * Consumer_Behavior Cross tabulation
Consumer_Behavior
shop online

Total

don't shop
online

Count
% within Income
upto 15000

% within
Consumer_Behavior
% of Total
Count
% within Income

Income

15000-25000

% within
Consumer_Behavior
% of Total
Count
% within Income

25000 & above

% within
Consumer_Behavior
% of Total
Count
% within Income

Total

% within
Consumer_Behavior
% of Total

29

14

43

67.4%

32.6%

100.0%

19.9%

19.7%

19.8%

13.4%

6.5%

19.8%

86

42

128

67.2%

32.8%

100.0%

58.9%

59.2%

59.0%

39.6%

19.4%

59.0%

31

15

46

67.4%

32.6%

100.0%

21.2%

21.1%

21.2%

14.3%

6.9%

21.2%

146

71

217

67.3%

32.7%

100.0%

100.0%

100.0%

100.0%

67.3%

32.7%

100.0%

40

Chi-Square Tests
Value

Df

Asymp. Sig. (2sided)

Pearson Chi-Square

.001

Likelihood Ratio

.999

.001

.999

Linear-by-Linear Association .000

.997

N of Valid Cases

217

Interpretation: As we can see in the above tables, .999 > 0.05, so null hypothesis is not
rejected and there is no significance difference between the Income & online shopping
behavior.
From this we can say that there is no effect of income on the consumer behavior towards
online shopping.

41

Chart-1

Gender Analysis

42%
58%

Female
Male

Interpretation: From the above figure, we can easily analyze that majority of the males are
respondents of the survey as compared to females, we have 58% of males and 42%
percentage of females have participated in this survey. The survey was conducted in the cities
of Gujarat.

42

Chart-2

Age Analysis
18%
18-25 years

31%

26-30 years
31-35 years

23%

36 & above

28%

Interpretation: From the figure named as age wise analysis, it is clear that in this survey
we have age group of 18-25 with percentage 31% which is the highest percentage among
other age distribution. In age distribution of 26-30 we have 28% and 23% fall in 31-35
age segment. So overall all the segments are actively engaged in online shooping.

43

Chart-3

Level of Education

Graduate

45%
53%

Intermediate
Matriculation
Post Graduate

1%
1%

Interpretation: The highest frequency 53% among the respondents falls under the category
of PG level of studies followed by the 45% who has the Graduate degree. A very nominal
percentage of almost 1% categorized in the matriculation and intermediate level of studies.
This shows that online shopping behavior found mostly in educated class of peoples.
.

44

Chart-4

Income Analysis

20%

21%
> 15000
15000-25000
25000 or Above

59%

Interpretation: From the survey it was analysed that the highest frequency in income
distribution fall between 15k to 25k category which are doing Post Graduation or joined the
firms after graduation and after that both the other categories showing somewhat similar
responses.

45

Chart-5

Frequency Of Shopping

32%

39%

Frequently (once a month)

Once in a year
Once in six month

29%

Interpretation: In this question, we get somewhat similar responses from our respondents and
it is pretty hard to find the clear demarcation between the options. But we have got the majority
of customers are purchasing frequently followed by those who are shopping half yearly. This
clearly shows that the trend of online shopping frequency is on the move.

46

Chart-6

Time Initiation of Shopping

30%

31%

1-3 years
Less than 1 year
More than 3 years

39%

Interpretation: From the above figure, it is clear that from 39% of respondents have
been doing online shopping from less than a year, it indicates that people in the cities are not
addicted to online shopping and just currently involve in it. While 31% respondents
have been doing online shopping since 1 to 3 years and 30% have been doing online
shopping more than 3 years. In the next question survey it is analysed that what things people
in Gujarat are buying from online source.

47

Chart-7

Things which Customers Prefer to shop the

most
8%

22%

20%
22%
28%

Books

Clothes & Accessories

Mobiles & Electronics

Footwears

Music & Softwares

Interpretation: From the above chart, total 146 respondents who had made online
purchasing out of which 28% respondents bought Mobiles & Electronic products. It is the
highest frequency followed by clothes products & Books of 22% each. 20% customers are
engaged in footwear shopping and the rest 8% are Music and software buyers.

48

Chart-8

Most Shopped Online Sites

25%

28%

Flipkart
Snapdeal
Myntra

13%

14%
20%

Homeshop18
Others

Interpretation: In this question, we get the responses that Flipkart is the most preferred option
for online shoppers with 28% followed by the others sites (i.e. Shopclues, Ebay, Indiatimes etc.)
with 25%.
Other solid online shopping players are Myntra, Snapdeal & Homeshop18 having the response
of 20%, 14% & 13% respectively.

49

Chart-9

Payment Mode Analysis

8%
Cash on Delivery

41%

51%

Debit/Credit card
Netbanking

Interpretation: In this chart we can analyse different payment methods as being preferred by
the online shoppers in Gujarat. Still COD i.e. Cash on Delivery holds the maximum response of
51% which shows that still in terms of payment, customers are hesitated towards the other
payment mode & COD will remain favourite for Indian Customers on the whole. But due to the
awareness and special offers, Debit/Credit card usage also increased as shown in the chart with
41% followed by Net banking having mere 8%.

50

Chart-10

Reasons For Shopping

5%
Saves Time

10%

23%

Saves Money
Much Easier Shopping
More Efficient

30%
26%

Friend Referrals
Others

6%

Interpretation: This chart helps to show us the consumer behavior towards the various
reasons which they are considering while shopping online.
As we can see, most respondents have said that it is efficient way of shopping with 30%
followed by 26% & 23% which are also very important reasons that why they are preferring to
shop online with the reasons such as Saves Money & Time respectively.
Other reasons with their values are shown in the chart.

51

Chart-11

Features valued by Customers

5425

4987 5149
4049

5085
3531

5245

4956
3604 3852

3340 3528 3291

Interpretation: Now this chart reflects the different features which are valued by the
customers while shopping online. From the Graph, it is clear that all the factors are important in
the mind of the customers but they mostly value the Company Profile & Brand identity
having the highest value & Personalized offers as provided by the online retailers. Afterwards
cost of delivery, Customer service & privacy protection are most important issues which are
followed by others as shown.

52

Chart-12

Things Which E-Retailers must Improve

14%

21%

After Service

8%

Website Security
Delivery on Time
Packing of Products

57%

Interpretation: This chart highlights the various factors which should be considered & taken
well care of by the E-Retailers to ensure the overall good experience in the mind of the
customers. This factors should be improved by the online retailers to nurture the loyalty of
customers and provide impetus to them to go for online shopping.
As we can see, Delivery on time is clearly the issue which should be focussed by the E-Retailers
with 57% responses followed by after sales service & Packing of products with 21% & 14%
respectively.

53

Chart-13

Do they Continue to Shop Online?

5%
Yes
No

95%

Interpretation: From the sample size of 217, 146 respondents are doing online shopping
which shows that about 67% i.e. 2/3 of respondents are done online shopping in the past.
From that 2/3 respondents, 95% of respondents are said that they will continue to shop online in
the future.

54

Chart-14

Barriers in Online Shopping

3146
2892

2200

2300

1944
1500

Bad Customer
Service

High Shipping Warranty Claims Refund Policy

Cost

1617

Long Delivery
Low
Product Non
time
Trustworthiness performance as
shown

Interpretation: Now in succession of the previous question, the remaining 5% which said that
they wont shop online again in the future. This responses are backed by some barriers which
have faced by those respondents which have created negative image of online shopping.
Such barriers are shown above in the chart with Long Delivery time being the major barrier with
highest value followed by Refund policy issues. Other factors such as Low Trustworthiness,
Warranty claims, Bad customer service, Product failure to meet the expectations as being shown
further aggregate to the woes of the customers.

55

Chapter V
Conclusion

56

5.1 Conclusion
This study was accomplished to determine the consumer behavior in Gujarat towards online
shopping. Online shopping is increasing in India but acceleration of online shopping is not as
rapid as compared to other developed countries like USA and UK. In research,

online

consumer behavior theories applied named as goal oriented online buyer and experimental
motives of online shopping and highlighted into consumer characteristics, online consumer
behavior, factor predicting online shopping and consumer mind-set in online shopping.
TAM (Technology Acceptance Model) and TRM (Theory of Reasoned Action) identifies
factors such as internal beliefs, attitudes, and intention for online shopping; study revealed
that online shopping is mostly influenced by social network/circles and personal experience.
Consumers are doing online shopping because of convenience and time saving. "Search as
recreation" mind set in is studied under experimental online shopping behavior.
The survey questionnaire was prepared and distributed among personal contacts and
received 146 responses. The questionnaire format have three main segments such as general,
identified variables then in last customer concern in online shopping. From the survey it
is accessed that online shopping is more popular among the males as in Gujarat most online
shopping was made by males with 58% and majority of the respondents were young; aged
between 18 to 25 years old with 31% weightage and income distribution fell into r a n g e
o f 1 5 k t o 2 5 k as lower middle class while majority of the respondent are educated and
have done Post Graduation & graduation..
But the majority of Customers are not doing online shopping with 67% and those who are
doing online shopping falls under the category of frequent buyer category who shop something
within a month so it is evident that the trend of online shopping is becoming popular in the
economy as whole.
The online shopping is getting popular among the young generation as they feel it more
Efficient, time saving and Money Saving. It is analysed from the survey that when a consumer
makes a mind to purchase online, he or she is affected by multiple factors. The main crucial
identified factors are time saving, the best price. The best price factor is popular among
people because generally in online markets prices are lower as against the physical
markets. . To purchase online things the customers still mainly prefers the Cash on Delivery
57

method. The most preferred sites for the customers are Flipkart & Myntra due to their world
class services on offerings.

58

The main barrier in the process of online shopping is the safety issue & Long Delivery time.
Customers are afraid to share their personal information and financial information on internet
due to which consumers are reluctant to make online purchasing and the waiting time also do
the same, then second the most familiar barrier is the Refund Policy & thereafter Low
trustworthiness on online stores therefore, sellers have to make proper strategies to increase
the consumer's level of trust on them.

59

Chapter VI
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60

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63

Chapter VII
APPENDIX

64

Annexure
Name =
1. What is your Gender?
a) Male

b) Female

2. Your Age?
a) 18-25

b) 26-30

c) 31-35

d) 36 or more

3. What is your level of Education?

a) Matriculation

b) Intermediate

c) Bachelors

d) Masters or Above

4. What is your Monthly Income?

a) > R s 15,000

b) Rs. 15,000 to Rs. 25,000

c) Rs. 25,000 or more

5. How frequently do you Shop Online?

a) Frequently (once a month)

b) Once in six month

c) Once a year

6. For how long have you been shopping online?

a) Less than a year

b) 1 to 3 years

c) More than 3 years

7. What products do you normally shop online? (You can select more than 1)
a) Books
b) Mobile / Computer / Camera (Electronics Products)
c) Clothes
d) Music, Softwares
65

e) Other (Please Specify)

8. Which Online Retailer do you prefer? (Rank according to preferences where 5 =Max & 1=Min)
a) Flipkart

___

b) Snapdeal

___

c) Myntra

___

d) Homeshop18

___

e) Others _____________

___

9. How do you make online payment while shopping?

a) Debit/Credit Card

b) Cash On Delivery

c) Net banking

d) Others

14. The actua

site.

15.I do not ge
1

Strongly Agree Can't

agree

say

Disagree Strongly
Disagre
e

1.It saves your time

2.It does not require travelling to far off distance
3.It takes a long time to deliver products
4.It takes more time to search specific product
5.Speed of internet affects your online shopping
6.It gives me ease of shopping at home
7.Shopping 24x7
8.Ease to make payment assistance
9. get better discounts & offers on internet
10.do not think that online shopping results in monetary
benefits
11. can customize the products according to my
specification
12. Lack of physical evidence affects my purchase decision.
13.Wide choices of brands to choose
66

11. Do you think the following need to be improved for e-commerce websites?
Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

After service
Website
security
Delivery on
time Packaging
of products
12. Do you intend to continue purchasing products from the Internet in the near future?
a)

Yes

b) No

13. If no, what reasons may cause you not to use the internet for shopping? (You can select more than 1)
Low trustworthiness

___

Bad customer service

___

Product doesnt perform as expected

___

Long delivery time

___

High Shipping Cost

___

Refund Policy

___

Warranty and claims

___

67

68