CHAPTER 1

INTRODUCTION
Introduction
Over the past few years, India's grocery shopping pattern is shifting from
traditional shopping to online shopping' with the advent of internet and e-
commerce which led to the phenomenon called online grocery shopping behaviour.
Electronic grocery (e- grocery) is the process of ordering groceries from home in
an electronic way and either having them ordered at one’s house or collecting them
at a store or at a pick up point. As a result, internet shopping has been widely
accepted as a way of purchasing grocery products. It has become a more popular
means in the Internet world It also provides consumer more information and
choices to compare product and price, more choice, convenience, easier to find
anything online. Online shopping has been shown to provide more satisfaction to
modern consumers seeking convenience and speed .

The online grocery market constitutes a niche market subject to overall food and
grocery market in India. Nevertheless, online grocery shopping is a relatively new
environment that is rapidly gaining popularity in the country owing to rise in e-
commerce industry, growing urbanization, changing lifestyle of the consumers and
tech-savvy young generation who prefers to buy grocery products through online.
Given the phenomenal growth in e-commerce market, increasing consumer
awareness, rising disposable income and emergence of various technological
advancements, the online grocery stores are rapidly replacing physical stores
across India. Yet, online food and grocery penetration is less than 1 per cent. While
the market on the online platform is still in its nascent stage, India's online grocery
market is estimated to grow at a compounded annual growth rate of 62 per cent
during 2016-2022. Further, the online sales are expected to reach around 2 per cent
of the overall grocery market by 2020, creating a potential market size of around
USS 10

Online shopping is a mode of purchasing products and services by ordering them

via the Internet-based stores, which provides consumers with an easy access to
products and price information, and facilitates product comparison.
Online grocery shopping refers to ordering grocery products via the Internet and
the subsequent delivery of the ordered goods at home. It is also defined as a
number of experiences including information search, web site
browsing/navigation, ordering, payment, customer service interactions, delivery,
post- purchase problem resolution, and satisfaction with every purchase

Online grocery markets in India

India online grocery market has undergone rapid urbanization and the increasing
working population with their changing lifestyle and time constraints for grocery
shopping have resulted in penetration of smart phones and online payment
methods.

India online grocery market was worth USD 3.8 billion in 2021 and is further
projected to reach USD 34.6 billion by the year 2028, growing at the CAGR of
37.10% in the forecast period. The increasing popularity of online grocery in India
is attributed to rapid urbanization and the increasing working population with their
changing lifestyle and time constraints for grocery shopping. Furthermore, the
growing penetration of smart phones and online payment methods is also
influencing the growth of the India online grocery market

Online Grocery - Overview

The online grocery refers to the purchase of food and other household necessities
through online platforms and websites. These shopping services can be offered by
both completely online platforms that do not have a physical presence as well as
brick and mortar stores. The online grocery offers various benefits such as saving
time and money by avoiding the line in stores and cutting gas as well as parking
costs, offering bulk buying at ease, discounts on several products, etc.
Growth drivers of the e-grocery market in India:

Over the course of the past few years, the landscape for new businesses that sell
groceries online in India has undergone profound transformation. Around three to
four years ago, the topic of conversation centred on supermarkets closing their
doors. Now that a significant segment of the Indian populace is beginning to utilize
the internet, the market is poised to become an interesting arena and to experience
exponential growth in India

Online purchasing is the process of buying goods or services over the internet. It is
a form of electronic commerce (e-commerce) that allows consumers to directly buy
goods or services from a seller without an intermediary service. Online shoppers
can visit web stores from the comfort of their home and shop as by sitting in front
of the computer. Online stores are usually available 24 hours a day and many
consumers have internet access both at work and at home. So it is very convenient
for them to shop Online.
Advantages to online purchasing including:

 Convenience: Online shoppers can shop from the comfort of their own home,
at any time of day or night.
 Variety: Online stores offer a wider variety of products than traditional brick-
and-mortar stores.
 Prices: Online prices are often lower than those in brick-and-mortar stores.
 Customer service: Many online retailers offer excellent customer service,
including live chat and 24/7 support.

However, there are also some risks associated with online

shopping, including:

 Security: There is always a risk of credit card fraud when shopping online.
 Returns: It can be difficult to return items that you purchase online.
 Shipping: Shipping costs can be high, especially for international orders.

Overall, online shopping is a convenient and affordable way to buy goods and
services. However, it is important to be aware of the risks involved and to take
steps to protect yourself.

Here are some tips for safe online purchasing:

 Only shop from reputable retailers.

 Use a secure payment method, such as PayPal or a credit card with fraud
protection.
 Read the return policy carefully before making a purchase.
 Be aware of the shipping costs.
 Keep track of your orders.

If you follow these tips, you can enjoy the benefits of online shopping without
having to worry about the risks.
Determinant factors on online purchasing on groceries:

 Convenience: Online grocery shopping offers a great deal of convenience for

consumers. They can shop from the comfort of their own homes, without
having to schlep to the store. This is especially appealing for busy people who
don't have a lot of time to shop.
 Time savings: Online grocery shopping can save consumers a lot of time.
They don't have to spend time driving to the store, finding parking, and
walking through the aisles. They can simply add items to their cart and
checkout online.
 Price: Online grocery shopping can be a great way to save money. Many
online retailers offer discounts and promotions that can't be found in brick-
and-mortar stores.
 Product selection: The product selection on online grocery retailers is often
wider than what you'll find in a traditional grocery store. This is because
online retailers can offer a wider variety of products from a wider range of
suppliers.
 Delivery options: Online grocery retailers offer a variety of delivery options,
so consumers can choose the one that best suits their needs. Some retailers
offer same-day delivery, while others offer next-day delivery.
 Customer service: Online grocery retailers offer excellent customer service.
They are typically very responsive to customer inquiries and complaints.

In addition to these factors, there are a number of other factors

that can influence a consumer's decision to shop for groceries
online. These include:

 Demographics: Younger consumers are more likely to shop for groceries

online than older consumers.
 Location: Consumers who live in urban areas are more likely to shop for
groceries online than consumers who live in rural areas.
 Technology adoption: Consumers who are more comfortable with technology
are more likely to shop for groceries online.
Overall, the determinant factors of online purchasing of grocery are convenience,
time savings, price, product selection, delivery options, and customer service.
These factors are likely to continue to drive the growth of online grocery shopping
in the years to come.

E-Commerce:

The E-commerce sector in India is rapidly growing at a very quick pace in the new
days and up to this present day. This relentless growth of E-commerce is changing
the way people assume, search, perform and bring up a yield. Most consumers are
adopting new technologies in shopping and with many of them being liberal
thinkers, want fast and efficient shopping while also considering other shopping
attributes. Majority of companies in the small scale, medium scale and large-scale
sectors own a website in order to improve their business and they do so by
employing online advertisements, online promotional events/activities thus taking
a "digital" leap in the business cycles. The convenience, needs, wants and comfort
of the consumers and their buying behaviour and the process of buying is the
source of the relentless growth of E-commerce. Online shopping is growing very
rapidly in present days. People are changing the way they shop for goods or
services. There has been a tremendous shift from traditional shopping to online
shopping. When it comes to online grocery shopping, due to consumers' busy work
schedule, the innovative shoppers or early adopters are finding ways for the
changing technology to help them in newer ways of shopping. The emerging
online grocery shopping is being increasingly adopted by many consumers in
urban areas.

The Indian population has several options to choose from when it comes to grocery
shopping From small Kirana shops in the streets, large shopping stores in the
malls, to a great number of online portals, the competition in the retail market is
excessively high. The organised sector typically employs informal labour, and the
owners of such stores hold unlimited and personal liability as it is either the family
business, or run by a sole proprietor (Mehra 2014; 78). The retailer shops can be
classified as formal or informal, and organised or unorganised (Kohli and
Bhagwati 2011). All the small retailers like paan shops, fruits and vegetables stalls,
pushover carts, etc. form part of the unorganised sector. Shops like Kirana stores,
small pharmacy shops. small bakeries, and appliance stores, although form a part
of the organised sector, however still fall in the category of informal sector. The
stores that fall under the category of both formal and organised sectors are the big
retail stores operating as limited companies, trusts or corporations running super
markets, hyper markets, etc. The unorganised sector discussed above accounts for
more than 93% of the total grocery sale in the Indian market. The reason for a large
amount of sale attributed to the unorganised sector is because of the legacy they
hold as a result of long-time span of experience and goodwill among the people of
India. While the unorganised sector still holds more than 90% of the grocery retail
market, the recent trends have shown that a substantial number of consumers have
shifted to the online sale of groceries due to the convenience and efficiency it
offers. With increasing working hours, and with women holding similar positions
at the workplace as men, online shopping offers the flexibility and comfort that the
consumer requires nowadays.

Theoretical Framework

The Specification of Online Grocery Purchasing

One of the sorts of business to facilitate is growing at a rate that is considered to be

among the quickest at the present time is making purchases over the internet.
Additionally, the number of people who buy their groceries online is increasing at
an annual rate in India.Because of this, there has been a rise in interest in analysing
the shopping patterns of individuals who do their grocery shopping via the internet.
The level of specificity that is present in online grocery shopping is astounding,
with customers exhibiting behaviour and attitudes that are distinct from those they
display when purchasing more complex products. One example of this is that
customers behave and think differently when shopping for groceries online than
when shopping for other types of products. When it comes to nutrition-related
purchases, customers are not as engaged in the process as they are with other kinds
of product purchases since nutrition-related purchases tend to be more of an
impulse buy. Consumers have a greater opportunity to verify and investigate the
products that they buy as a result of the decreased social and financial risk
associated with purchasing nutrition as well as the regularity, frequency. and
repetition of such purchases. The combination of these factors usually leads to
unplanned and rash choices in retail. The individuals in charge of marketing adopt
a broad variety of tactics in attempt to persuade clients to buy their goods,
particularly in circumstances in which customers do not genuinely require the
things that are being sold to them.

Customers are able to make purchases at supermarket e-shops at any time, from
any location, and can purchase anything they want; there are no restrictions related
to localization or business hours. The procedure of making purchases is shortened
in comparison to conventional supermarkets. Because customers have already
spent some time in traditional shops, they do not need to invest as much time in
"getting to know" the range as they would if it were their first-time shopping in a
typical store. The selection of food items that may be purchased via the internet is
comparable to that which is available at conventional marketplaces. When there is
a smaller selection of brands available for a certain product category, it encourages
customers to choose things sold under the retailer's own brand name. Electronic
supermarkets do not significantly diverge from one another in terms of price (about
7 percent including delivery costs). However, each store follows a unique set of
guidelines when it comes to coordinating the shipping process. For instance, when
shopping at certain retailers. it is not possible to make a purchase and then receive
the item on the same day. Furthermore, during the Christmas season, customers are
required to make a delivery service request at least two weeks in advance