A STUDY ON CUSTOMERS ATTITUDE TOWARDS ONLINE

SHOPPING IN INDIA.

Report submitted to
Jamia Millia Islamia

In a partial fulfillment of the requirements for the award of the

degree of Master of Business Administration

By
Athar kamal khan
Roll No. 16-MBA-40
Enrolment No:-16-0155

Under the Supervision of

Dr. Kavita chauhan

Centre For Management Studies

Jamia Millia Islamia University
Jamia Nagar, New Delhi – 110025

April 2017
 ​ ​DECLARATION

I hereby declare that the project entitled ​“​A Study on Customers Attitude towards
Online Shopping in India​” submitted to CMS, Jamia Millia Islamia University, is a
record of the original work done by the undersigned under the guidance of Dr.Kavita
Chauhan The works of author/publications cited in this study have duly been
acknowledged at the relevant place.

Dated: Athar kamal khan

Place: New Delhi ​Name of the Student

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 ​ ​ACKNOWLEDGEMENTS

The outcomes and success of this project required a lot of assistance and guidance
from many people . Whatever I have done is due to their assistance and guidance.

Foremost, I am very thankful to my research mentor ​Dr.kavita Chauhan​ ​for his

guidance, motivation and generous supervision at each and every stage of this
research.

I would like to specially thank all my professors for having faith in my subject and
supporting me.

I sincerely thank our Director ​Dr. Amirul Hasan Ansari​ for his support to us.

I would like to thank entire team of CMS for being so helpful and supportive with my
research.

I am also grateful to my family and friends for their continuous support and
encouragement.

Dated: ​Athar kamal khan

Place: New Delhi ​ Name of the Student

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 ​ ​TABLE OF CONTENT

S.No TOPIC Page No.

1.. INTRODUCTION ​6
● Theoretical Foundation 8
● Trends of internet users and E-business 9
● Introduction to online shopping 10
● History of online shopping 10
● Need of internet shopping 11
● Issues in Internet shopping 11
● Payment option in online shopping 12

2. SCOPE OF STUDY 13
● Objective of study 14
● Methodology of study 14

3. DATA ANALYSIS AND INTERPRETATION 15

4. FINDING 19

5. CONCLUSION AND SUGGESTION. 20

6. QUESTIONNAIRE 21

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 ​Executive Summary

Internet is the rapidest growing media during the past decade. Especially, online
shopping is a rapidly growing e-commerce area. Online stores are usually available 24
hours a day, and many consumers have Internet access both at work and at home. A
successful web store is not just a good looking website with dynamic technical
features, listed in many search engines.

This study aims to establish a preliminary assessment, evaluation and understanding

of the characteristics of online shopping. Although the benefits of online shopping are
considerable, when the process goes poorly it can create a thorny situation.

A few problems that shoppers potentially face include identity theft, faulty products,
and the accumulations of spyware, as well as the precautions to be taken are studied
in this paper.

   
   
 
 
 
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CHAPTER I   
INTRODUCTION 

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1.1 Introduction

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,
communicate 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 they will receive if they purchase the product
from a particular store.Many experts are optimistic about the prospect of online business.

In addition to the tremendous potential of the E-commerce market, the Internet provides a
unique opportunity for companies to more efficiently reach existing and potential customers.
Although most of the revenue of online transactions comes from business-to-business
commerce, the practitioners of business-to-consumer commerce should not lose confidence.It
has been more than a decade since business-to-consumer E-commerce first evolved. Scholars
and practitioners of electronic commerce constantly strive to gain an improved insight into
consumer behavior in cyberspace. Along with the development of E-retailing, researchers
continue to explain E-consumers’ behavior from different perspectives. Many of their studies
have posited new emergent factors or assumptions which are based on the traditional model of
consumer behavior, and then examine their validity in the Internet context.

Earlier food, cloth and shelter were called as primary need but today one more need is added in
that is “internet”. Due to revolution in telecommunication sector internet has changed the way
consumers shop and buy goods and services. Both domestic companies as well as MNC ’s
have started using the Internet with an objective of cutting marketing costs and thereby
reducing the price of their products in order to stay ahead in heavy competition. 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. In addition to the tremendous potential of the
E-business market, the Internet provides a unique opportunity for companies to more efficiently
reach existing and potential customers.

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1.2 Theoretical foundation

The internet has developed an into a new distribution channel and online transaction are rapidly
increasing. This has created a need to understand how the consumers perceive online
purchasing.

Price, the trust, the convenience and the recommendations have been identified as important
factors. Price was considered to be the most fascinating and affecting factor for the majority of
students and the general public.The internet has created a paradigm shift of the traditional way
people shop. A consumer is no longer bound to opening a timer a time or specific location. So
he can become active at virtually any time any place and purchase the product or service.

The internet is relatively a 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 increase is explained by the consumer
behaviour.The internet is considered as mass medium that provides the consumer with
purchase characteristics as no other medium Online shopping is the process of consumer go
through the when they decide to shop on internet.

The internet has developed into a new distribution channel and the evolution of this
channel. E-commerce has now identified. Using the internet to shop online has become one
of the primary reason to use the internet combined with searching the product and finding
the information from them.

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1.3 Trends of Internet users and E-Business in India

In 2015, India had 408.4 million internet users. This figure is projected to grow to 635.8 million
internet users in 2021. Despite the untapped potential, India already is the second-largest
online market worldwide.

India is one of the fastest-growing e-commerce markets worldwide, with millions of new internet
users taking advantage of cheap mobile connections to send mobile messages, watch online
videos, use mobile services, and of course, to shop. As of 2017, 26 percent of the local
population was using the internet; almost ten times the audience size from a decade prior.
According to recent market research, mobile phone internet user penetration in India is
projected to reach 37.36 percent of the population in 2021, representing a huge potential in
terms of digital and mobile buyer audience. Total internet audiences in India are estimated to
surpass 635 million online users in 2021.

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1.4 Introduction to online shopping

Online shopping is the process whereby consumers directly buy goods or services from a seller
in real-time, without an intermediary service, over the Internet. It is a form of electronic
commerce. The sale or purchase transaction is completed electronically and interactively in
real-time such as in Amazon.com for new books. However in some cases, an intermediary may
be present in a sale or purchase transaction such as the transactions on eBay.com.

An online shop, e-shop, e-store, internet shop, webshop, webstore, online store, or virtual store
evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or in
a shopping centre. The process is called Business-to-Consumer (B2C) online shopping. This is
the type of electronic commerce conducted by companies such as Amazon.com. When a
business buys from another business it is called Business-to-Business (B2B) online shopping.

A large percentage of electronic commerce is conducted entirely in electronic form for virtual
items such as access to premium content on a website, but mostly electronic commerce
involves the transportation of physical items in some way. Online retailers are sometimes known
as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers are now
electronically present on the World Wide Web.

1.5 History Of Online Shopping

In 1990, Tim Berners-Lee created the first World Wide Web server and browser in UK. 1 It
opened for commercial use in 1991. In 1994 other advances took place, such as online banking
and the opening of an online pizza shop by Pizza Hut. 1 During that same year, Netscape
introduced SSL encryption of data transferred online, which has become essential for secure
online shopping. Also in 1994, the German company Intershop introduced its first online
shopping system. In 1995, Amazon launched its online shopping site, and in 1996, eBay
appeared.

Originally, electronic commerce was identified as the facilitation of commercial transactions

electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds
Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send
commercial documents like purchase orders or invoices electronically. The growth and
acceptance of credit cards, automated teller machines (ATM) and telephone banking in the
1980s were also forms of electronic commerce. Another form of e-commerce was the airline
reservation system typified by Sabre in the USA and Travicom in the UK.

From the 1990s onwards, electronic commerce would additionally include enterprise resource
planning systems (ERP), data mining and data warehousing.

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In 1990, Tim Berners-Lee invented the World Wide Web web browser and transformed an
academic telecommunication network into a worldwide everyman everyday communication
system called internet/www. Commercial enterprise on the Internet was strictly prohibited by
NSF until 1995.2 Although the Internet became popular worldwide around 1994 with the
adoption of Mosaic web 4 browser, it took about five years to introduce security protocols and
DSL allowing continual connection to the Internet. By the end of 2000, many European and
American business companies offered their services through the World Wide Web. Since then
people began to associate a word "ecommerce" with the ability of purchasing various goods
through the Internet using secure protocols and electronic payment services.

1.6 Need for Internet Shopping

Few developments have altered India‘s lifestyle more quickly and more completely than the
Internet. Online access has enabled people from all walks of life to bring entire libraries,
entertainment venues, post offices and financial centers to a workplace, to a desktop or to a
shirt pocket. The Internet‘s largest and most meaningful impact may very well be on the way
consumers shop for everything from gifts, gadgets and groceries to clothing, cars, and cruises.

The ease and selection that the Internet provides to shoppers has changed the face of retailing.
More and more, consumers visit a store‘s Website to make their choices before traveling to the
store itself; and in a rapidly swelling tide, many shoppers are bypassing the store altogether and
ordering online directly from the Web sites of their favorite brands and outlets. Companies like
Sephora, Sears and Crate & Barrel have increased the range and quantity of products available
at their online stores and are sending online coupons and sale announcements via E-mail
directly to their customers. Because online stores are open 24 hours a day, seven

Because online stores are open 24 hours a day, seven days a week, and their inventories are
often more complete than those of their brick-and-mortar counterparts, the Internet makes it
easy for shoppers to compare products within or between stores, to read product reviews from
other customers, to access vendor return policies and to find warranty information.

1.7 Issues in Internet Shopping

● Payment issues:​ COD is one of most popular way of payment for online shopping so
non-receipt of payment in case of cash on delivery is a major issue, credit/debit card
fraud using stolen information, payment gateway risks like hacking, fear of using
credit/debit cards online.

● Online security/Network operations: ​maximum number of entrepreneurs use

unauthorized/pirated software which is very risky and more prone to virus, malware and
Trojan attacks, intrusion attacks, identity theft, Fake orders.

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 ● Return/refund: ​return of used products, tampering with products in order to return it.

● Delivery logistics: ​products intentionally misplaced/not delivered, misappropriation/theft

of goods from warehouse, delivery of defective products.

● Supply of fake products by the merchants and increasing incidents of payment thefts.

● Internet is boundless with minimum regulation therefore protecting Intellectual property

Rights (IPR) is challenging and a growing concern. More clarity of Rules/ laws related to
ecommerce sector is the need of the hour.

1.8 Payment options in Online Shopping

Online shoppers commonly use a credit card to make payments, however some systems
enable users to create accounts and pay by alternative means, such as:

● Cash on delivery (C.O.D., offered by very few online stores)

● Cheque
● Debit card
● Direct debit in some countries
● Electronic money of various types
● Postal money order
● Wire transfer/delivery on payment
● Gift cards

Some sites will not accept international credit cards, some require both the purchaser's billing
address and shipping address to be in the same country in 19 which site does its business, and
still other sites allow customers from anywhere to send gifts anywhere. The financial part of a
transaction might be processed in real time (for example, letting the consumer know their credit
card was declined before they log off), or might be done later as part of the fulfillment process.

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 ​CHAPTER II  
SCOPE OF STUDY 

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It was proposed that instead of taking a wide coverage and making a broad study, this work
should narrow down its focus and go deep into inquiry.E-Business includes variety of products,
no. of companies and wide range of customer base present in industry. It is difficult to
researcher to do segment customers, companies and very important customers for selection as
a sample of study. Therefore the study undertaken by researcher was focused on “Attitude of
customers towards online shopping in India.

2.1 Objective of study

➢ To study present status of online shopping in India
➢ To analyze the factors those affects customers attitude towards online shopping
in India
➢ To study factors motivates customers attitude towards online shopping in India
➢ To study potential for development of online shopping in India

2.2 Methodology of study

Population of the study was restricted to users as well as non-users of products
purchased through online shopping.Samples for each population were being selected as
per convenience sampling method .

Sample size calculated for study was 100 consumers. First hand and Primary Information was
collected with the help of well structured Questionnaire. A well-structured objective type and
probing questionnaire was prepared. To collect personal views and to investigate the practical
aspect, personal Interview and observation technique was used.The Information collected
during data collection was coded first and tables were generated, analyzed and Interpreted with
the help of excel sheets in computer. On the basis of findings based on tabulated information
and Observations during data collection, conclusion was drawn.

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CHAPTER III 
DATA ANALYSIS AND INTERPRETATION 
 

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3.1 Table showing respondent’s status about use of Internet

➢ Interpretation

From the above data it is clear data it is clear that majority (82%) of respondents are
using internet whereas only 18% of respondents are not using internet.

3.2 Table showing respondent’s opinion about shopping method on regular basis

➢ Interpretation

From the above data it is clear data it is clear that majority (68%) of respondents are still
using traditional manual method of shopping on day today basis (regular basis) whereas
only 32% of respondents are using online shopping method on regular basis.

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3.3 Table showing respondent’s status about online purchase

➢ Interpretation

From the above data it is clear data it is clear that majority (64%) of respondents are
using online method of shopping and they continued that whereas 24% of respondents
used online shopping method earlier and they discontinued that and only 12% of
respondents have not used online shopping yet.

3.4 Table showing motive behind online shopping by respondents

➢ Interpretation

Respondents selected more than one motive to purchase online From the above data it
is clear that respondents ranked following reason for motive behind online purchase 01
to price followed by 2 for saves time, 3 for selection and availability, 4 for easy to
purchase and last 5 for avoid hassles of shopping in store .

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7.5 Table showing respondents overall satisfaction towards online shopping

➢ Interpretation

Majority(67%) of respondents are satisfied with online shopping whereas only 23% of
respondents shown dissatisfaction and only 13% are of opinion that they can’t say.

3.6 Table showing information about barriers to purchase online

➢ Interpretation

Respondents selected more than one barrier to purchase online From the above data it is
clear that respondents ranked following barriers for online Purchase 01 for like to see
product in personal before buy, 02 for wrong/bad product arrived & could not return , 03
for worried about giving credit card no., 04 for net connectivity , 05 for product is
expensive and 06 for other reasons.

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4.CONCLUSION

From the above statistics we may concluded that occupation of consumers is independent of
Purchase habit of consumers in online shopping.

5. FINDINGS

➢ Due to revolution in telecommunication sector no. of internet user increased in recent

time.

➢ Though usage of online shopping by customers is increased but still customers are giving
first preference to manual shopping for regular purchase.

➢ Majority of customers have used online shopping and shown willingness to continue but
very few of them have done online shopping earlier and not showing willingness to
continue.

➢ Respondents are preferring online shopping due to various motives like less price or
price discount, time saving, due to availability of no of sites rang and variety of products
are available and customers are having choice to purchase, customers found purchase
method very easy as websites are user-friendly and customers want to avoid hassles of
shopping in store.

➢ Majority of respondents are satisfied with online shopping .

➢ Following are barriers behind development of online shopping in large scale.

● Customers want to see product in personal before buy.
● Customers are having fear of receiving wrong or bad product and could not return.
● Customers are worried about giving credit card no.

➢ Occupation of respondent is independent of purchase habit. Occupation is not playing

any role in product choice

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 ​CONCLUSION AND SUGGESTIONS

An attempt was made to study the present status of online shopping 100 respondents were
selected.Opinion from these respondents was collected with the help of well-structured
questionnaire.With the help of Data analysis and interpretation finding were drawn and with the
help of findings following conclusion and suggestions were drawn.

Due to revolution in telecommunication sector no. of users of internet are increased in India in
recent time and customers are using internet for online shopping but still for regular purchase
most of customers first choice is manual shopping. To increase no. of customers for online
shopping there is need of extensive publicity and promotion by online shopping companies to
attract all class of customers.

Most of the customers are of opinion that shipping charges charged by companies are very
high, it is suggested to companies to either reduce shipping charges or delivery of product
should be given freely.
Companies may use it as one of the promotional activity. After research it is observed that
major hurdle behind development of online shopping is of customer awareness. Majority of
customers are not aware about various pre and post services rend by this online shopping
companies.

● Companies should aware customers regarding how security regarding customers credit
card no. is maintained by companies.
● Companies should made aware customers regarding return policy and procedure if
wrong or bad product arrived. Companies should make returning procedure simpler, like
few companies are asking customers to resend products if any wrong or bad product
arrived. Instead of these companies should collect product from customers and deliver
write product to them in minimum time.
● Most of customers want to see product before purchase to make sure that same product
arrived as per order. Most of companies are not having this facility. If companies want to
increase no. of customers they should provide this facility because in manual purchase
customers are getting chance to see and touch the product and this may be the
important reason behind customers first preference for manual shopping on regular
basis.
● In home and electronic appliances after sales service in very important aspect,
companies should inform customers regarding how to install and use the product or
send company representative for installation very soon after delivery. Companies should
inform customers regarding nearest service station if any problem arrived in product.
Majority of customers are preferring manual shopping for home and electronic
appliances in fear of after sales service.

From the above discussion, it is concluded that future of online shopping in India looks very
bright. Online shopping give customers best alternative to save money and time. Companies
Offers detail product information, easy mode of payment, facility of comparison of price and very
important completely hassle free shopping experience. Success of online shopping depends on
its popularity, its brand image and its unique promotional policies.

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QUESTIONNAIRE

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