CUSTOMERS BEHAVIOUR TOWARDS ONLINE SHOPPING IN INDIA

DR. VIJENDRA PRATAP SINGH SHAILENDRA SINGH KUSHWAH

Assistant Professor (HINDI) Assistant Professor (Economics)
Govt. P.G.College,Jalesar,Etah (U.P.) Govt. P.G.College,Jalesar,Etah (U.P.)
Email-vickysingh4675@gmail.com Email- sskushwah82@yahoo.com
Mobile No. 7500573935

__________________________________________________________________________________
-: Abstract:-
Due to technological advancement, the concept of competitive advantage is eluding day by day business has been marked
with a high degree of dynamism. In this monopolistic competitive market every company is having almost the same technology and
this has generated a herd of standardized products with difference on only one front i.e. the brand name, which can attract people very
easily. This has resulted in the concept of luring the maximum customers by becoming more and more innovative. How much
receptive company can become to their needs and aspirations. All these have force the companies to register their presence at every
nook and corner and take the help of latest of the technology in this endeavor. The one such technology is "Online shopping”. For this
purpose and making it popularized online shopping stores exhibit their programmes not only on internet website also on different
television channel. This paper is being written keeping in view attitude of common people of India towards online shopping.
Circumstance, comparison to other part of world, in India is very much different. Issues of literacy, Aquitaine with internet use,
computer literacy plays vital role in this regard. This paper is no where related to field work or survey it only reflect attitude of
common people as experienced in day to day life.

Keywords- BCG, WWW, Online shopping, B2B, B2C, conventional shopping, Goggling, E-Business, e-tailing, e-
customers

__________________________________________________________________________________________________
Introduction:-

In Today’s world of Information and technology, Internet has been proved most powerful information media for sharing our
thoughts and knowing very easily about world. There is a big influence of technique on our daily life. Electronic devices, multimedia
and computers are things we have to deal with everyday. Especially the Internet is becoming more and more important for nearly
everybody as it is one of the newest and most forward-looking media and surely “the” medium of the future.
“Shopping in simple sense is a retailer or shop is a business that presents a selection of goods or services and offers to sell
them to customers for money or other goods. Shopping is an activity in which a customer browses the available goods or services
presented by one or more retailers with the intent to purchase a suitable selection of them. In some contexts it may be considered a
leisure activity as well as an economic one.”(http://en.wikipedia.org/wiki/Shopping) The process of browsing or purchasing items in
exchange for money.( http:// www. businessdictionary.com/definition/shopping.html)

“Online shopping is the process of buying goods and services from merchants over the Internet. Since the emergence of the
World Wide Web, merchants have sought to sell their products to people who spend time online. Shoppers can visit web stores from
the comfort of their homes and shop as they sit in front of the computer. Consumers can buy a huge variety of items from online
stores, and just about anything can be purchased from companies that provide their products online. Books, clothing, household
appliances, toys, hardware, software, and health insurance are just some of the hundreds of products consumers can buy from an
online store.” .(http://www.wisegeek.org/what-is-online-shopping.htm)

While be discuses online shopping it is commonly understood that this is the media through which goods or assistance
material are purchased online using internet devices. Online shopping has grown in popularity over the years throughout the world.
People find it convenient and easy to bargain shop from the comfort of their home or office or any accessing point. This is an act of
purchasing products or services over the Internet. Main enticing factor of online shopping is its alleviation the need to wait in long
lines or search from store to store for a particular item.

People purchases goods of their need from different places. It may be a fun for wealthy people while for most of the buyers it
a media to fulfill their needs or requirements for their life. Everywhere in the world paying and taking goods is the most common
feature for all classes.

Brief History of online shopping:-

This concept was first demonstrated before the World Wide Web (www) was in use with real time transaction processed from
a domestic television. The technology used was called Videotext and was first demonstrated in 1979 by M. Aldrick who designed and
installed systems in the United Kingdom. By 1990 T. Berners-Lee created the first WWW server and browser and by 1995 Amazon
expanded its online shopping experiences (Parker-Hall, 2009). (International Journal of Humanities and Social Science Vol. 2 No. 4
[Special Issue – February 2012])
 “Online shopping became popular during the Internet boom in 1999-2000. Amazon.com, the online bookstore founded by
Jeff Bezos, created history by becoming the first bookstore with a presence only on the Internet. Following the success of Amazon,
many bookstores with a physical presence also created an online presence on the Internet. Later, portals such as Yahoo.com and
MSN.com also started online shopping channels where people could buy more than just books. Closer home, portals such as
Indiatimes.com and Rediff.com came up with similar options for the Indian
consumer.”(http://articles.economictimes.indiatimes.com/2006-12-25/news/27439230_1_online.shopping.online.presence.online.
purchase)

One of the first known Web purchases took place in 1994. It was a pepperoni pizza with mushrooms and extra cheese from
Pizza Hut, a somewhat appropriate purchase for the early days of the Internet. Practically wide sense Amazon.com opened for
business on July 16, 1995. (http://content.time.com/time/business/article/0, 8599, 2004089, 00.html)

What can be purchased through Online Shopping:-

Main feature behind the online shopping is the terms B2B and B2C are short forms for Business-to-Business (B2B) and
Business-to-Consumer (B2C). Both describe the nature and selling process of goods and services. While B2B products and services
are sold from one company to another, B2C products are sold from a company to the end user. The main difference between B2B and
B2C is who the buyer of a product or service is. The purchasing process is different in both cases and the following is a list of key
differences between them.
Any B2C product or service could also be a B2B product, very few B2B products or services will be used by consumers. For
example, toilet paper, a typical B2C product, can be seen as a B2B product if it is bought in larger quantities by a hotel for their
restrooms and guestrooms. However, few people will buy an excavator for their private use. Most B2B products are purchased by
companies to be used in their own manufacturing, producing goods and services to be sold on. The value added product can then be
either sold to yet another company; or to the consumer. Any consumer product would have gone through numerous value add
processes before it is being purchased by the final user. Numerous suppliers from various industries would have contributed to the
finished product. For instance, a can of soft drink will require different companies to provide the can, water, sugar, other ingredients,
label-printing, packaging, transportation and paint for the printing. The can itself is made from aluminum that needs to be processed
and extracted. Only the very last transaction in the sales/ purchase chain is a true B2C relationship.
( http://en.wikipedia.org/wiki/Business-to-business)
People can purchase almost anything online, starting with groceries and greeting cards to cell phones and ring tones for the cell
phones, everything can be purchased online. While most people still find it convenient to buy their groceries from the neighborhood
shop, many people are purchasing rail, air tickets, theater ticket, bust ticket and valuable aids over the Internet. In addition, people and
corporate as well, are also purchasing a variety of services online, such as a broking service or job search service. Even servant may be
booked through internet.
Use of internet has revolutionized the way of shopping because people have numerous advantages and benefits of online
shopping. Day by day percentage of online customers is increasing as they are finding it comfortable than conventional shopping.
There are many reasons why people think buying good and commodities on the internet. Some of them may be seen as under-

 Convenience:-
Convenience is the most important factor for every act of a person. In conventional shopping people have to roam here and
there for their selection of material. Sometimes people have to face waiting and long line until shop assistant is ready to help
a buyer. Going market and purchasing a material proves very tiery and tedious with much kind of pollution i.e. sound
pollution, crowd pollution, air pollution etc.

In online shopping one can avail privilege of shopping round the clock. Even in midnight one can explore for his desired
material and that is also without delay and waiting. There is no better place to buy information of products like e-books. This
information’s are very useful to choose and evaluate a product before purchasing.
Travel is the most popular category for online purchases. Not surprisingly, the maximum number of online transactions in
India is made at irctc.co.in, the site of the Indian Railways, where train tickets as well as air tickets can be purchased online.

People can go to the airline's website and book their ticket or go to the online equivalent of a travel agent, travel sites like
Makemytrip.com and travel.indiatimes.com that offer a choice of multiple airlines and the best deals in each. Overseas,
Expedia.com is one of the most popular travel sites, where one can book your travel and hotel stay. Expedia.com has tie-ups
with a large number of hotel chains and because of the large number of customers who come to the site for their bookings,
Expedia.com is able to offer very good discounts. This type of facilities is not possible in conventional shopping. One must
have to move to the travel agent or window for booking ticket or a room in hotel.

 Decision of Price and Price Comparison :-

In conventional shopping method deciding price prove a difficult task. People find them confusing after hearing so many
differences in price of same good in different shops. While in online shopping discloser of price is the most fascinating factor
it has proven media of cheap and better prices because product comes to a buyer from manufacturer or seller without
middlemen involved. Many online shops offer discount coupons and rebates. Apart from this online store is only required to
 collect sales tax if they have a physical location in a state even after people buy from a store across the world. In conventional
shopping tax may vary and price decided by a retailer also differs. Online shops make comparison and research of various
products and their prices possible. Online store also provides people ability to share information and reviews with other
shoppers and friends. In traditional shopping purchaser has no such choice he/she has to select the material available at
retailer. If one is intended to compare prices than he/she has to move so many shops than only this thing may be possible with
lot of expense of time. In addition, online shopping consumer is relaxed and satisfied that same product is available at same
price for all consumers so there is no need of doubt and confusion on prices which play vital role in online shopping.

 Variety :-
Selection of variety of material is also remarkable feature of online shopping. One can get several brands and product from
different seller at one place. Latest international trends without spending money of airfare are easily available in online store.
If a person shop online, he or she can shop from retailer in other parts of the country or even the world without being limited
by geographic area. These online stores offer a far greater selection of colors and size than you will find locally. Simply it can
be said that Shelf space in a brick and mortar store is limited, which means that your variety of goods is limited. Not so with
an online store. Plus, if a person doesn’t see what he wants in one store online, he can simply move on to the next one.
Purchaser has the power to do that but in conventional leaving a store put people in uncomfortable condition.

 Sent Gifts :-
Sending a gift to a friend or family or relatives is very easy process in online shopping, no matter where ever they stay. One
can be very free from making excuse for not sending a gift on occasions like birthday, wedding anniversary, marriage or any
special day due to distance.

 Less Expense :-
In conventional shopping people tend to spend a lot more than required shopping expenses on various items while in online
shopping picketing a particular selected item is possible without any problem and hesitation as here no body shop assistant is
going to ask what more you want or anything else sir.

In India also some big cities provides this type of facilities for public.It has the world's third-largest Internet user-base with
over 137 million as of June 2012.It has made life so easy going that if anybody has needed information about anything in the world if
not hundred percent up to a good extent one can find it over internet. People have acquired the habit of 'Goggling' it on the web;
within a few seconds the screen displays the desired information. Many of us cannot imagine life without the social networking sites.
The Internet has indeed made the world a small place and living life easier. And the rapid progress of technology has made it possible
to access the Internet from anywhere through plenty of means. It has such a plethora of uses that we use it for one purpose or the other
daily. It is even 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. The number of
Internet users in India is expected to nearly triple from 125 million in 2011 to 330 million by 2016, says a report by Boston Consulting
Group (BCG). This rise in Internet penetration will lead an increase in digital influence on people's purchase decisions. 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 particular store. Many experts are optimistic about the prospect of online business.

On-line shopping is a recent phenomenon in the field of E-Business and is definitely going to be the future of shopping in the world.
Most of the companies are running their on-line portals to sell their products/services on-line. Though online shopping is very
common outside India, its growth in Indian Market, which is a large and strategic consumer market, is still not in line with the global
market. The potential growth of on-line shopping has triggered the idea of conducting a study on on-line shopping in India.

From our personal experience it is very much uncomfortable in local shopping areas. Hence it has been in the insight that
why people waste time and money in conventional shopping. I started online shopping from beginning of 2000 and still it is
continued. As a common customer sometimes I feel online shopping is very good in all sense and equally sometimes it seems bad with
various aspects. I feel the need of this common behavioral research is to identify and get insight into what main factors the online
consumer takes into consideration when most he or she buys products on internet. What affects their shopping behavior, basic need of
this research is to find out what are the main factors affect the online consumer when considering and making a purchase over Internet
in Indian context. No doubt several researches have been completed in this field but most of them are based on subject matter research
and very few have taken common men behavior for their study in general. Everybody cannot be an expert of commerce and
economics but a common men has to live and utilize the things and media equally. Hence it paper is dedicated to very common and
ground root user of internet and online shopping. We have tried to cover following points-

1. To study the online shopping behavior of customers in Indian context.

2. To study the factors influencing online shoppers and consumers in Indian context.
3. To study the challenge with regards to online shopping in Indian context.
 4. To examine whether customers prefer online shopping to physical stores in Indian context.

LITERATURE REVIEW

There are a number of research works have been done by researchers but only a few has been given, related to the paper.
Brown (1987) has suggested that the costs of a retail format refer to consumers‟ costs. Consumers incur non-monetary costs -
time, effort and psychological costs - as well as monetary costs. Savings in non-monetary costs are especially emphasized by non-store
formats. Their appeal to consumers has been the ease and convenience of shopping, freed from location and other constraints.

According to Rao (1999), E-commerce offers increased market activity for retailers in the form of growing market access and
information and decreased operating and procurement costs. The consumers can gain better prices due to the competition and also can
enrich their knowledge on goods and services.

Zhang and von Dran (2000) have found that certain aesthetic elements of a web-site are considered as purchase motivators,
while other aesthetic elements serve as hygienic factors (i.e., necessities) in purchase decisions from e-retailers. The colour and
background images of web-page are also found to affect consumer choice.
Tractinsky and Rao (2001) have argued that computer users, particularly those who seek online substitutes to the physical shopping
experience, would value aesthetic designs just like consumers of other commodities.

Ratchford et al. (2001) have told that through Internet, consumers can gather information about merchandise and they
compare a product across suppliers at a low cost. They also can effectively analyze the offerings and easily locate a low price for a
specified product.

Eroglu et al. (2001) have advocated that the most important thing in the traditional retailing is physical store setting.
According to them, it is largely determined by the cost of real estate and the various physical objects required creating different
sounds, aromas, colours and lighting.

Online constraints tend to be related to the screen resolution and the hardware that exists at the consumer end of the channel.
The hedonic factors in designing the web-site interface can be enhanced with symbolic, nonverbal elements, which can be created by
images, colours, fonts and videos and music. Zeithaml (2002) has defined that the success of e-tailing depends on the efficient web
site design, effective shopping and prompt delivery. The other e-store services are delivery on real time, return and replacement
process, period of filling out online orders form, speed of response time to e-customers‟ queries.

Kim and Lee (2002) have suggested that the design of e-store influences consumers‟ access to e-store. In the e-store, website
design, design of product and service comparison and information, time to complete online order form, easy of searching product and
service, screen layout, screen complexity, page composition, information retrieval methods, information display, use of colour and
background, assistance to the user and speed of accessing the e-store are notable factors attracting e-customers.

Doolin (2004) has specifically pointed out that e-tailing is the sale of products and services to individual customers.
According to him, the definition of e-tailing encompasses the sales of products or services online.

Rabinovich (2004) and Cao and Zhao (2004) have identified the challenges of e-tailing industry. This challenge begins with
the response time of the web-server; moves to the amount of time the customer must wait until the order ships, and also includes the
time the shipping process takes.
Delone and Reif (2004) have found that at present customers are more likely to continue shopping online when they have a
greater experience of online shopping. It is also found that young adults have a more positive attitude towards online buying.

Lavie and Tractinsky (2004) have expressed the expressive aesthetics of web-sites that convey a sense of creativity and
uniqueness. This type of aesthetics is likely to serve an important role when shopping for specialty goods. The expressive design is
relevant to specialty goods because of their unique characteristics that emphasised the shopping experience.
Bauer et al., (2006) have compared the services of online retail service vs. traditional retail services. They have identified
that the online retail services are broken into two rather distinct phases: the client interaction phase taking place online and the
fulfilment phase taking place offline. They also have suggested that web-site quality is a matter of delivering both hedonic and
utilitarian elements.

The online shopping behavior of customers in Indian context.

Online shopping in India:-
Though world is changing shopping tradition rapidly but in India online shopping is still not that much popular. Number of
customers who are opting online shopping store is increasing but slowly. Traditional or conventional methods of shopping are more
popular in India. People are aware of conventional methods of shopping hence here are glancing at online means of shopping. Online
shopping trends in India have continued to evolve over the last few years only, providing residents with the means to shop from the
comfort of their own home for goods, apparel, electronics and so much more. Many of those who own computers within India have
taken the steps to start shopping online with ease. While this may not have been the first country to introduce e-shopping, India is
catching up quick with growth and advances being made each and every day. Many different retailers from across the world are
stepping up their game and offering their services to Indian residents. Some sites may offer free shipping to India while others have a
small extra shipping fee. In-store pickup may also be available for those shopping online at stores that are commonly found within
India. The possibilities are endless when opting to do your shopping online.

According to the report titled “From Buzz to Bucks: Capitalizing on India’s “Digitally Influenced” Consumers,”, 40 per cent
of India's 90 million urban Internet users say that online activities such as product research and price comparison influence what they
buy. The digital influence, currently affecting $30 billion of urban consumer spending is expected to greatly accelerate over the next
four years.To determine how Internet use affects buying decisions, BCG's Centre for Consumer and Customer Insight surveyed 25,000
Indian consumers on their online activities during each step of the purchase cycle, in 101 different product categories.“We found that
the growing digital influence is particularly important in categories such as appliances and consumer electronics, in which 40 to 60 per
cent of buyers have access to the Internet, and more than a third of them are relying on the Internet for product research or price
comparison,” said Arvind Subramanian, a BCG partner and co-author of the report.
The demographics of Indian Internet use revealed that men are far more likely than women to be on the Internet (32 percent
versus 12 per cent) and more than three times likely to be digitally influenced (14 per cent versus 4 per cent). Although higher income
levels are well represented online, even 18 per cent of the lower-income “strugglers” (whose annual household income is less than Rs
1.5 lakh) have Internet access, and 6 percent are engaged in commercial activity online, the report said. The report also showed that
only 30 per cent of online buyers were drawn to Internet shopping for discounts. A higher proportion (37 per cent) valued the
convenience of shopping from home, and 29 per cent said that they appreciated the expanded variety of products available online
compared with what is available at brick-and-mortar stores.
In contrast to more advanced e-commerce markets, digitally influenced consumers in India rely on company websites for
detailed product information as frequently as they refer to third-party sites for comparative research and online purchases.
Overall, the Internet has the highest penetration among people ages 18 to 24 (48 per cent) and the lowest among those older
than 54 (6 percent). The Internet is projected to reach small towns and the low rungs of the economic ladder more quickly than retail
chains will, bridging geographic barriers and feeding the growing appetite for consumer goods, the report said.
Current trends in online shopping in India show that the majority of buyers choose to shop at websites that allow them to
purchase a wide variety of items from a range of different stores rather than one, select retailer. When purchasing electronics and other
goods, many Indian shoppers rely on opinions and online reviews from other users from around the world. In a recent study, it has
been determined that within the next year alone, eight out of every ten Indian consumers will make at least one purchase on the
internet.
Companies are facing a tough competition in this dynamic arena of business. They are always looking for new avenues so
that they can increase contact with consumers and in for this they are letting no stone unturned. In this regard only, the latest trend is
online shopping. Nowadays, the concept "DIC" i.e. double income couples are becoming all the more prominent in India. With the
long working hours and increased distances to travel, they are not having enough time to devote it to shopping as people don't feel like
going out for buying day to day things after a very hectic day at office. They want to reserve it for other works like socializing,
entertainment etc. Now the companies are coming up with the ways so that this section of society can be tapped to the maximum and
only way to attract them is a convenient way of shopping any time and what can be more convenient for them than a shop which is
just a click away and that too at any time 24 x 7. Moreover, this is located in the virtual world and can be accessed any time when you
are watching your favorite TV show or having a coffee break at office. This is the online shopping concept.

Factors influencing consumers’ online trust in e-tailing which are discussed below.
1. TRUST:
When any market develops, there is a fine balance between demand and supply. In India what We have observed is that
whenever a trend starts several people jump in and soon supply starts to exceed demand and that causes all kinds of issues in the
market. Classic example is the real-estate market in cities like Pune where prices were artificially pushed up by the builder-agent
nexus and then when the recession hit, we have a situation of too much inventory, declining prices etc. I believe the e-commerce space
will see a lot of bad business practices adopted by the "me too" guys trying to survive the game.
Online shopping provides all type of goods to be available in the virtual world. It is just like a shop in the neighborhood,
selling all type of goods but with some prominent differences. Here one can access these shops any time without stepping out of their
home/office or any convenient place.
The primary reason for online risk perception being high among the consumers stems from the lack of trust in online
shopping. Trust is one of the most frequently cited reasons for consumers not willing to purchase online and plays a critical role in
facilitating online transactions. In the anonymous digital world trust is critical for building relationship with customers and at the same
time extremely difficult to build in the minds of the consumers.
In a digital world where physical interaction is more or less absent, and product qualities and benefits must be presented in a
convincing way over the wired network, building trust becomes increasingly important. Customers tend to choose a provider that
represents a set of attributes that can be trusted. If consumers trust E-trailers then they will feel comfortable in doing transactions and
disclosing personal information to them. Engendering trust in consumers is one of the challenges that online firms have to confront. So
it is of utmost importance for the online merchants to understand the factors influencing online consumers’ trust in e-tailing.
Snap deal has torn away from the rest of the market. Most of the other players are trailing this market and some like Toggle closed
shop.

2. INTEGRITY :-
This is the most important factor influencing consumers’ online trust. Integrity is consistency of actions, values, methods,
principles, expectations, and outcomes. Integrity is regarded as the honesty and truthfulness of the E-trailer’s actions. There are fifteen
loads to this factor.

3. SECURITY AND PRIVACY :-

Security crimes the protection against danger, loss, and Privacy means the state of being free from unsanctioned intrusion.
There are four loads to this factor namely privacy policy clearly stated, secured online payment process, privacy policy can be found
easily in the web site, and security seal of trusted third party. Consumers’ perception of risk reduces drastically if they feel that the
online merchant does not compromise with their security and privacy concerns.

4.USEFUL INFORMATION:-
Useful information can be used advantageously, beneficially, or for several purposes. The variables that load this factor are
detail information about the product, and ability of the web site in providing information tailored to customers’ needs. In the online
market place where physical interaction is more or less absent, consumer’s confidence can be gained by providing extensive
information about the marketer’s offerings and at the same time filtering the information content according to the consumer’s needs.

5. CONVENIENCE IN USE:-
Convenience is anything that saves or simplifies work, adds to one's ease or comfort. This factor contains the variables web
content easy to read and understand, and site map available. If the E-tailer’s web site is not convenient to use then the consumers will
feel uncomfortable and may perceive the web site not easy to use resulting in dissatisfaction.

6.WEB DESIGN:-
While design is the art and process of integrating individual elements of design into a pleasing unity. There are two loads to
this factor namely; web design is the creation of web sites focusing on both the aesthetics and the mechanics of a web site's operation.
It focuses on the look and feel of the web site web content visually appealing, and web site has a professional look. A visually
appealing web site with a professional look generates the “feel-good factor” among the consumers and reflects the brand image of the
E-tailor or befitting the business it carries out.

7. MOUTH TO MOUTH PUBLICITY:-

Word of mouth creates awareness, perceptions, attitudes, and behavior. Word-of-mouth promotion is important for every
business, as each happy customer can bring in dozens of new ones. Mouth publicity had been proved very effective means of
publicity, which is also without any investment. If we talk of investment that is product and good service. Recently, I went to a
aayurvedacharya, some about 90 km from my place, there I came to see that most of the customers, who came for treatment were due
to mouth to mouth publicity. One patient got relief; he told to some other one, this is how chain go on.

8. LOGISTICS AND SUPPLY CHAIN:-

India's logistics sucks. We still have 3rd world logistics. A large part of the ecommerce success in the developed nations was
because they already had rock-solid logistics in place. In the US fedex, ups and USPS were already around nationwide and goods
could be moved within 24 hours between 5000 miles. In India trying to find an address or a location is a nightmare. We don't even
have a properly standardized "physical postal address system". Every time someone ships a product to me we invariably get a call
from the courier company asking for directions even though we live in a very prominent address in the city. This just surfaces some
of the basic issues that face India. Courier companies don't even have bar code readers to scan the packages in transit. In the US, the
logistics companies use very sophisticated technology keep the customer informed of the transit of a package. High quality global
journalism requires investment.

Companies such as daily deals website Snapdeal.com and Redbus.com, an intercity travel website, have also seen their
revenues grow more than 200 times in three years on the back of a growing culture of shopping online, not just in Mumbai or Delhi,
but also in mid-tier cities like Hyderabad and Jaipur. But having to rely on third-party logistics, poor road transportation, and
sometimes a lack of addresses poses difficulties in delivering to more remote cities, while millions of potential customers go untapped
due to minimal financing for broader marketing.
It is fairly easy to operate in one city but to reach mid-tier cities is far more problematic for any of the new entrants in this
sector. Many companies now some sort of consolidation because they will not be able to raise money as easily as last year or meet
projections.
Industry members remain confident about the sector given rapidly increasing internet usage in India, especially via cheap
smart phones, and as the government stalls on reforming India’s largely un-organized physical retail space.All of this are important as
it plays directly into the overall customer experience of ecommerce. We have ways to go before we can see WOW levels of customer
experience in this industry. Companies like Flip kart are doing a great job working around the issues in the logistics industry by
setting up their own logistics .Largely the other 99% of the players will not be able to solve the logistic issues that exist in the market

9. PAYMENT AND COMMISSION:-

Large volume of transactions in India is cash-based transactions. A small fraction of Indians have virtual payment instruments
like credit cards or bank accounts. Almost everyone has started COD in India and for the right reasons. However, my thesis here is
that this is incredibly hard to scale. As humans are involved in the collection of cash etc, fraud rates will be very high which will dip
into the margin levels of the ecommerce players.
This is a major challenge and results in poor customer experience. The payment gateway vendors and banks suck at
technology. Payment gateway error rates are high (>25% of transactions fail at the gateway). RBI has made it really hard for anyone to
use virtual mediums of payments (credit/debit cards, cash transfers etc). Payment gateway's and banks also charge way too much
Largely we are a cash driven economy. Commission on each transaction which is bad for the smaller players - which eats into their
margins significantly. The mode of cash payment are favored by people because why they can bargain also and nothing as commission
charges are applicable.
Internet is changing the way consumers shop for goods and services, and has rapidly evolved into a global phenomenon.
There are 38.5 million Indians online as per the latest forecast from Internet and Mobile Association in India. The current growth rate
is 54% and it is expected to accelerate further. Driven by the need to save time by urban India and ever increasing population with
internet access, E-Commerce Industry in India was worth Rs. 7080 crores at the end of 2006-07. E-tailing is the biggest part of
electronic commerce and was worth of Rs. 850 crores in the year 2006-07 and contributed around 12% to the total E-Commerce. This
segment was expected to rise by 30% to Rs. 1105 crores at the end of 2007-08. Online shopping is truly catching on in India. Every
day air and railway tickets worth INR 300 million are sold online.
Analysts reckon online retail accounts for only 1 per cent of India’s $450bn consumer market, but they project growth of 14
per cent over the next decade as millions of young, tech-savvy Indians adapt to the virtual shopping experience. The sheer amount of
effort taken to get a gateway and the failing transactions. This is an issue, but since it is all online and I trust RBI a lot with their
efficiency, I expect this to improve very fast. In the long run, I DO NOT believe that COD is the way to go.

10. MARKET SIZE/CLV/MARGINS:-

Much of the optimism about the online sector is based on the immense popularity of the cash-on-delivery model, which
caters to customers without bank accounts or credit cards. Avendus Capital says up to 80 per cent of online purchases rely on this
method of payment. The downside emerges when customers refuse to pay due to delays in delivery or simply a change of heart,
causing up to 30 per cent of goods to be returned, says Aashish Bhinde, executive director at Avendus Capital.
Besides the incremental cost, [the cash on delivery model] is often indicative of lower buyer commitment, and ... managing
the reverse logistics significantly adds to the cost. In addition, the convenience and choice that such a model offers customers comes at
the expense of working capital that companies could otherwise pump into improving and expanding delivery networks or much-
needed advertising to build a loyal customer base.
we believe that while India is indeed a large market, the Customer Lifecycle Value will be very low (similar to the mobile
industry - India has the lowest levels of ARPU anywhere in the world). Ecommerce players will have to resort to deep discounting to
build scale. Amazon had to do this for 9 years. In India the margins will be extremely thin due to the inefficiencies in all the
underlying infra for e-commerce like logistics, payments and cash collection. For Flipkart to be successful not only do they have to be
an online retailer but they have to build a UPS and a paypal and a physical cash collection system that works (which doesn't exist in
developed countries as ecomm players dont support COD ). That is a mammoth task to pull off for a small startup.

CHALLENGES FACE BY INDIAN CUSUMERS:-

While online shopping is a good place for bargain hunting and to get products at a very competitive price, it somehow has not
worked its charm in India. The main reason for this is that Indian consumers do not get any real value or incentive from this trend.
Also they are wary about fraud, delivery and customer service which is not far from the truth. Following are some of the few
challenges we face:

1. SPREAD OF INTERNET:-
The history of the Internet in India started with launch of services by VSNL on 15 August 1995. They were able to add about
10,000 Internet users within 6 months. However, for the next 10 years the Internet experience in the country remained less attractive
with narrow-band connections having speeds less than 56 kbit/s (dial-up).This bottleneck was removed in 2010 when the government
auctioned 3G spectrum followed by an equally high profile auction of 4G spectrum that set the scene for a competitive and invigorated
wireless broadband market. Now Internet access in India is provided by both public and private companies using a variety of
technologies and media including dial-up (PSTN), xDSL, coaxial cable, Ethernet, FTTH, ISDN, HSDPA (3G), WiFi, WiMAX, etc. at
a wide range of speeds and costs. The country has the world's third largest number of Internet users with over 121 million users (59%
of whom only access the Internet via mobile devices) in December 2011.
As of December 2011, total Internet connections stood at 22.39 million, with estimated users exceeding 121 million. The
number of broadband subscribers at the end of May 2013 was 15.13 million. Cumulative Annual Growth rate (CAGR) of broadband
during the five-year period between 2005 and 2010 was about 117 per cent. DSL, while holding slightly more than 75% of the local
broadband market, was steadily losing market share to other non-DSL broadband platforms, especially to wireless broadband.
 One of the major issues facing the Internet segment in India is the lower average bandwidth of broadband connections
compared to that of developed countries. According to 2007 statistics, the average download speed in India hovered at about 40 KB
per second (256 kbit/s), the minimum speed set by TRAI, whereas the international average was 5.6 Mbit/s during the same period. In
order to attend this infrastructure issue the government declared 2007 as "the year of broadband". To compete with international
standards of defining broadband speed the Indian Government has taken the aggressive step of proposing a $13 billion national
broadband network to connect all cities, towns and villages with a population of more than 500 in two phases targeted for completion
by 2012 and 2013. The network was supposed to provide speeds up to 10 Mbit/s in 63 metropolitan areas and 4 Mbit/s in an additional
352 cities. Also, the Internet penetration rate in India is one of the lowest in the world and only accounts for 8.4% of the population
compared to the rate in OECD counties, where the average is over 50%.
Another issue is the digital divide where growth is biased in favour of urban areas; according to 2010 statistics, more than 75
per cent of the broadband connections in the country are in the top 30 cities. Regulators have tried to boost the growth of broadband in
rural areas by promoting higher investment in rural infrastructure and establishing subsidized tariffs for rural subscribers under the
Universal service obligation scheme of the Indian government. The biggest problem in making online shopping a success in India is
the limited spread of internet services. Due to low usage rate of internet online shopping will take time to become a common way to
shop.

2. LANGUAGE BARRIER:-
As most of the online shopping portals are in English, so this has also posed a great problem in front of the prospective
buyers. In a country like India where English is not in mother tongue and mass people use their mother tongue or regional language,
its such a wide use in internet many times creates problem due to lack of understanding on the part of the customers. Even people
educated in Indian languages are not in position to use internet as it is in English mostly. Now days some web portals have started
Hindi version also. It may increase but most to the people found online shopping difficult due to language. As it is known that there 22
constitutional approved languages in India. Beside there are many other regional languages too, which cover good area of customers.
Urban people may be found conversant in more than one language but people rural area are dependant mostly on one language. That is
also most of the time their mother tongue.

3. PLASTIC MONEY:-
Less prevalence of credit card is on more reason for the consumer remaining away from this modern means of shopping.
Although many sites are also accepting cheque, cash on delivery and bank demand drafts but still a larger section of the service
provider rest on this plastic money. In Urban area people use bank cards and habit also has been developed among them to use plastic
money but in rural area it is in very less percentage. Improper function of plastic money encashment machines, lack of knowledge,
poor internet connectivity, improper security means are big hurdles for propagation of latest shopping methods.

4. INEFFICIENT AND DELAYED SERVICE:-

Many cases of delayed delivery, damaged or inferior goods, quality issues and even instances of cheating where the goods
were never shipped have been reported. The much proclaimed ease and convenience comes with a heavy price and overall, Consumers
do not have a good experience with the results of online shopping. Delivery of goods is also up to main cities, small cities like Tehsil
places of other small towns and villages are not covered for supply of goods.

5. OVERPRICING OF PRODUCTS:-
Most of the goods are overpriced and if at all any products are priced at a reasonable rate, its quality is compromised. Besides
that, there is no feature like exciting prices, killer deals, delivery guarantee, after sales support nor replacement warranty. Shipping
charges also make it overprized. If a customer use conventional method of shopping, he or she can have goods on its basic price.

6. RETURN AND EXCHANGE OF GOODS:-

When anyone buy goods online she or he has additional rights to return them because decision for purchase of any goods is
based on a brief description or a photograph – so what you receive isn't always quite what you’d expected. Under the Consumer
Contracts Regulations people have the right to return your order up to 14 days from the day you receive your goods. Many online
retailers extend this even further so be sure to read the terms and conditions carefully as you may have longer to return unwanted
items. But problems begin when people are not having knowledge of returning it. If a goods has been returned refund delayed. Many
times it is found that money has not been refunded. Although there is consumer protection court but charges for filing complaint or
case it not within reach of common people. Sometimes refundable money is less than charges of court. So, people decided not to shop
online.
There is also one problem if material has been delivered to a customer, but due to family problems he or she did not find time
to return goods in recommend time. Some companies advise to return good through registered post with clearly statement on the
invoice the reason for return and whether you require a refund or exchange, we are only able to exchange items for the same product.
Personalized Items are non-returnable. Some goods are non-returnable for hygiene reasons. Please note that this does not affect your
statutory rights.
MEASURES TO BE TAKEND TO MAKE IT POPULAR IN INDIA

1. E-commerce awareness:-
One of the biggest challenges for Online Shopping has been the skepticism surrounding security aspects of e-commerce,
which has lowered confidence levels. Only remedy to this is to strengthen the transaction security to gradually build up confidence in
online payment.

2. Varied payment options:-

In order to attract more and more customers' e-tailers has to increase the payment options as there are only small sections of
people in India who are having credit cards so this also hampers some who are willing to shop online. More options like -on-delivery,
money transfer, cheques or demand drafts, end-to-end payment should be made available to the customer who can adopt the best-
suited method.

3. Awareness regarding security measure:-

Security issues still continues to be a major drawback and trends like AVS (Address Verification System), PIN for credit
cards, smart cards, digital signatures, e-cards, and easier intra- and inter-bank transactions online need to be made more prominent.
Teaching Consumers to transact only on secure internet connections is also necessary.

4. Highlight the benefit of shopping at home:-

Potential customers should be convinced of the benefits of shopping from home without having the pain of going out in the
crowded places.

5. Make the prices more competitive:-

The price offered for online shopping should be made more competitive as compared to the price s of the goods available in
the shops then only the customers will feel motivated to buy online.

6. Stress on the special offers:-

Customers should be made aware about the varied sales promotion schemes, which will make this online buying more
attractive and popular among the buyers.

7. Emphasis on after sale service:-

As the biggest hindrance in the path of online shopping becoming more popular is the question "who is to blame" if the
product is not functioning well? Therefore, there should be more stress on the quality of products and the durability of the products,
which are offered for sales and along with that assurance for after sales service.

8. Cyber law due diligence in India:-

It is another area that e-commerce and online shopping platforms must take care of. Cyber law due diligence for Indian
companies is one of the most frequently litigated aspect in India. Lack of cyber law awareness and cyber due diligence awareness is
the main reason that many websites and companies have found themselves in the net of Indian laws.
Online shopping and e-commerce in India must be encouraged but at the same time legal and cyber security issues must also
be taken seriously. Online payment players and e-commerce stakeholders must keep these aspects in mind while doing business in
India. There is no sense in ignoring legal issues of online shopping in India.

Five Tips for Online Shopping Safety:-

One of the coolest capabilities enabled by the Internet is that when you’re using it, you’re not bound by geographical
location. This is especially handy when you’re shopping. Before the Internet, you were pretty much stuck with the selection and prices
in the stores around your home. Now, you can shop anywhere, anytime, and you can be competitive about it.
Of course, there are some risks that come with shopping online, too. Although identity theft is more common in the real world, it still
happens online pretty frequently, as does credit card fraud. So staying safe while you’re shopping online is paramount. Here are five
tips for shopping safely online:
1. Choose Credit Over Debit:-
You probably don’t often hear advice to use a credit card instead of a debit card or cash, but if you can do it
responsibly, you absolutely should. Credit cards offer protection from identity theft that debit cards don’t. For example, with
a credit card, your liability for fraudulent charges caps at $50 as long as you report the fraud within 30 or 60 days (depending
on the company). However, if you’re using your debit card online and someone gains access to it, they can clean out your
checking account before you even learn there’s a problem. It’s likely you’ll get part of that money back, but possible that it
can take a while, and that you won’t get it all. So, use a credit card instead and pay the bill off monthly.
2. Disposable Is Better:-
Even better than using a credit card is to use a disposable credit card. Disposable credit cards work just like most gift
cards. You add a specified dollar amount to the card, and it’s good until that is gone. Once it’s gone, you can add more, or
purchase a new one. And both Visa and American Express now offer these cards in varying amounts, so they’re easy to get
 hold of. The bonus is that if the number from a disposable credit card is stolen, it’s anonymous, and criminals can’t gain
access to anything more than the dollar amount that’s still available on the card.
3. Verify Website Security:-
The variety that’s available when shopping online can be dizzying, but it doesn’t stop at just the products and prices
that are available online. There are also different levels of security that are available online, and you want to be aware of
them. Some online web sites don’t offer secure shopping. That means that savvy criminals can capture everything that you
enter onto a form on those sites, including your personal and credit information. If you’re going to shop online, limit yourself
to secure sites. You can tell if a site is secure by the URL. A secure web site starts with HTTPS:// instead of HTTP://. Secure
sites will also have a small lock icon in the lower right corner of the screen.

3. Don’t Shop Publicly:-

If you plan to do any shopping online, do it at home. At home, you can shop in your pajamas and you can do it any
time of the day or night. You also know who accesses your computer at home. If you’re using a public computer—at the
library, at a cyber café, or at work—to do your shopping, you have no control over who might be using that computer as well.
You also don’t have any control over what kind of spyware or malware might be infecting that computer. So, just don’t do it.
Shop at home. It’s much safer.
4. Don’t Store Information Elsewhere:-
Many shopping sites, even the major ones, offer you the ability to save your credit card information on their servers
to speed the shopping process. Think Amazon.com’s OneClick shopping. It’s definitely faster, but there are some risks to
maintaining your personal information elsewhere. If a company that you’re shopping with has a data breach, your personal
information could be put at risk. It takes a little longer, but instead of storing your information on some server that you have
no control over, just enter it yourself each time you shop. Price and selection are two of the best benefits to shopping online.
But don’t let the benefits lull you into complacency. Take the time to shop securely, and use caution with the sites that you
choose to shop on. Then, not only can you find great deals, but you can do it without the worry that your identity will be
stolen in the process.

Conclusion
E-commerce players in India are still not adhering to e-commerce laws and regulations of India. For instance, Indian e-
commerce, FDI regulations and cyber due diligence are still not complied with by many national and international e-commerce
players. Even foreign direct investment (FDI), taxation and other regulations are not followed by many national and international e-
commerce players in true letter and spirit. For instance, Indian government has already referred the cases of Flipkart and Snapdeal to
the Enforcement Directorate for alleged violation of foreign direct investment (FDI) regulations. Similarly, a probe against Walmart in
India for market access lobbying has been ordered by Indian government.

Online shopping has come up as a boon for all type of consumers and it has something to offer for everyone. Despite of this fact that it
is highly convenient and time saving and to certain extent it is also cost cutting exercise as one need not to step out of his / her home
for doing shopping. The main area of concern is the limited internet usage and language problem. A lot of stress need to be given on
these two parameters so that this IT revolution can be of use to everyone in India and then only it can be a success in true sense of
terms. Otherwise, it will just end up being a style statement of few who wants to be away from the crowd and then it will lose its
applicability in the real world.

References:-

Books and Journals:-

1. Belanger, F., Hiller, J.S., & Smith, W.J. (2002). Trustworthiness in Electronic Commerce: the role of privacy, security,
and site attributes. Journal of Strategic Information Systems, 11, 245-270.
2. Bellman, S., Lohse, G. and Johnson, E. (1999).„Predictors of online buying behaviour,‟ Communications of the ACM, 42
(12), 32-38.
3. Brown, Stephen (1987): “Institutional change in retailing: A review and synthesis”, European Journal of Marketing, vol.
21, no. 6, pp. 5-36
4. Bruke , R.R. (1999) : “Retailing: Confronting the challenges that face bricks –and-mortar stores”, Harvard Business
Review , vol. 24, July – August , no. 4, pp.160-77
5. Cao, Y. & Zhao, H. (2004): “Evaluations of E-tailer's Delivery Fulfillment: Implications of Firm Characteristics and Buyer
Heterogeneity”, Journal of Service Research, no. 6, pp. 347-360
6. Deighton. J. (1997): “Exploring the implication of the Internet for consumer marketing”, J. Acad Mark Sci, vol. 25, no.
4, pp. 347-51
7. Delone, H.W. and McLean R.E. (2004) : “Measuring e-Commerce Success: Applying Information Systems Success Model ”,
International Journal of Electronic commerce, vol 9, no 1, pp 31
8. Dennis, C., Fenech, T. and Merrilees, B. (2004): “e-retailing”, Routledge, Taylor and Francis Group, London
9. Doolin, B., Dillon, S., Thompson, F. and Corner, J.L. (2005): “Perceived risk, the internet shopping experience and
online purchasing behaviour: A New Zealand perspective”, Journal of Global Information Management”, vol 13, no 2,
ABI/INFORM Global, pp 66
10. Dowlatshahi, S. (2000), “Developing a theory of reverse logistics”, Interfaces, Vol. 30 No. 3, pp. 143-55
11. Eroglu, S. A., Machleit, K. A. & Davis, L. M. (2001): “Atmospheric qualities of online retailing: A conceptual model
and implications”, Journal of Business Research, vol. 54, pp.77-184
12. Evanschitzky, H. Iyer, G. R., Hesse, J., Ahlert, D. (2004): “E-satisfaction: A re-examination” Journal of
Retailing, vol. 80, no. 3, p. 239
13. Feare, T. (2002): “Hot spots in e-fulfillment”, Modern Materials Handling, Vol. 57 No. 6, pp. 5-19
14. Forger, G. (2000): “The secret to e-success”, Modern Materials Handling, vol. 55 no. 6, pp. 8-12
15. Gehrt, Kenneth C., Laura J. Yale and Dianna A. Lawson (1996): "The Convenience of Catalog Shopping: Is There More
to It than Time?" Journal of Direct Marketing, vol. 10, no. 4, pp. 19-28
16. Hein, K. (2000): “Online booksellers cash in on “Harry Potter” mania”, iMarketing News, vol. 2, p. 25
17. Huduck, B. (1998): “No silver bullet”, July/August, available at: www.opsandfulfillment.co
18. Kim, S.Y., Lim,Y. J. (2001): “Consumers' Perceived Importance of and Satisfaction with Internet Shopping”, Electronic
Markets, vol.11, no. 3, pp. 148-154
19. Kolesar, M.B., Galbraith, R.W. (2000): A services-marketing perspective on E-retailing: Implications for E-retailers
and directions for further research”, Internet Research-Electronic Networking, vol. 10, no. 5, pp. 424-438
20. Krueger, M. (2000): “E-fulfillment solutions”, Manufacturing Systems, vol. 18 no. 12, pp. 60-4
21. Lam, S. Y., Chau, A. W.-L. & Wong, T. J. (2007): “Thumbnails as online product displays: How consumers process
them”, . Journal of Interactive Marketing, vol. 21, pp. 36-59
22. Lavie, Talia & Noam Tractinsky (2004): “Assessing Dimensions of Perceived Visual Aesthetics of Web Sites.”
International Journal of Human-Computer Studies, vol. 60, pp. 269-298
23. Levy, M. & Weitz, B.A. (1995): “Retailing Management”, 2nd edn. Irwin, Chicago
24. Lim, H., Dubinsky, A.J. (2004): “Consumers' perceptions of e-shopping characteristics: an expectancy- value approach”,
Journal of Services Marketing, vol. 18, no. 7, pp. 500-513
25. Peterson, R., Balasubramanian, S. & Bronneaberg, B.J. (1997): “Exploring the implications of the internet for consumer
marketing”, Journal of the Academy of Marketing science, vol 25, no 4, pp 329- 346
26. Rabinovich, E. (2004): “Internet Retailing Intermediation: A Multilevel Analysis of Inventory Liquidity and Fulfillment
Guarantees”, Journal of Business Logistics, vol. 25, pp. 139-170
27. Raman, A. (1998): „The Importance of Retail Operations: Implications for e-tail‟, A Presentation at the Round Table on
e-tailing: The Future of Selling Online, Global Digital Community Sandbox, New York Information Technology Center, 55 Broad
St, 10 July
28. Rao, B.(1999): “Developing an effective e-tailing strategy”, Electronic markets, vol. 9, no1, pp 89-92
29. Rao. B. (1999): “The Internet and the revolution in distribution: A cross-industry Examination”, Technology in Society,
vol. 21, no. 3, pp. 287-306
30. Ratchford , B.T. , Talukdar ,D.& Lee , M.S. (2001): “ A model of consumer choice of the Internet as an information
source”, International Journal of Electronic commerce , vol. 5, no. 3, pp. 7-21
31. Tractinsky, N. and V. Srinivasan, R. (2001):. "Social Dimensions of Internet Shopping: Theory-Based Arguments for
Web-Store Design." Human Systems Management, vol.20, pp.195-121
32. Tractinsky, N. A. Cokhavi, M. K. & T. Sharfi (2006): "Evaluating the Consistency of Immediate Aesthetic Perceptions of
Web Pages." International Journal of Human-Computer Studies, vol 64: 1971- 1983
33. Turban, E., King, D., Lee, J. & Viehland, D. (2006): “Electronic Commerce A managerial perspective”, International
Edition, Prentice Hall
34. Wang, F. and Head, M. (2002): “E-tailing: An analysis of web impacts on the retail market”, Journal of Business
Strategies, vol 19, no 1, ABI/INFORM Global, p. 73
35. Zeithaml, V.A. (2002): “Service excellent in electronic channels”, Managing Service Quality, vol. 12, no.3, pp.135-138
36. Zhang, Ping and Gisela M. von Dran. 2000. "Satisfiers and Dis-satisfiers: A Two-Factor Model for Website Design
and Evaluation", Journal of the American Society for Information Science, vol. 5, no. 14, pp. 1253–1268
37. End of catalogue shopping in India? Written by Amit Agarwal on January 29, 2009, http://www.labnol. org/india/
corporate/end-of-catalogue-shopping-in-india/6869/
38. India and China to rule online shopping world by 2010,26/12/08, The Hindustan Times.
Online shopping: sales in Asia may rise 20% a year, Thu, Feb 19 2009. 39.
http://www.livemint.com/2009/02/18223749/Online-shopping-sales-in-Asia.html
39. Online Shopping India: Proving to be a Boon for India, http://www.articlesbase.com/shopping-articles/online-shopping-india-
proving-to-be-a-boon-fo r-india-762348.html

Web:-
http://www.businessdictionary.com/definition/online-shopping.html
http://www.wisegeek.org/what-is-online-shopping.htm
http://www.thelawdictionary.org
http://content.time.com/time/business/article/0,8599,2004089,00.html
http://articles.economictimes.indiatimes.com
http://gaikwad.in/facts-and-problems-about-ecommerce-and-online-shopping-in-india/
http://www.moneycontrol.com
http://www.mapsofindia.com