Consumer Perception Towards Online Shopping Final Subhasish Patnaik

Retail

kool-subh
  • ACKNOWLEDGEMENT First and foremost, I would like to thank my respectable and learned guide, Mr. Purunendu Patra but for who’s untiring, persevering and unflinching help; this project would not have seen the light of day. It is he who initiated the development of the project and was thus instrumental in showing the right direction in the field of . He provided encouragement and boost in the transformation of my inherent internal knowledge into a real work for external audience. Lastly, I would like to bestow my regards and gratitude to the G.M.College, Autonomous, Sambalpur, specially Dr. S. Dash, HOD, Department of Professional Courses, which provided me this opportunity to undertake the Dissertation program on consumer perception towards online shopping for allowing me to go through this worthy dissertation programme. (Subhasis Pattnaik) PC13MBA005
  • CERTIFICATE OF THE GUIDE This is to certify that the dissertation report entitle “CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING” submitted by SUBHASISH PATNAIK bearing the Roll no- PC13MBA005 is his own work and has been carried out under my supervision. It is recommended that the candidate may now be evaluated for his dissertation work by the college. DATE; 06th April 2015 (PURNENDU KUMAR PATRA) PLACE: Sambalpur Signature:
  • DECLARATION I Subhasish Patnaik, Roll No. PC13MBA005, a student of Gangadhar Meher college(Auto), Sambalpur, hereby declare that the dissertation on “CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING” is done by me is an authentic work carried out for the partial fulfilment of the requirement for the award of the degree of MBA program in management under the guidance by Mr. PURNENDU KUMAR PATRA The matter embodied in the project work has not been submitted for the award of any other degree, diploma or any other similar title or prizes to the best of my knowledge and belief. Subhasish Patnaik Roll No. PC13MBA005 MBA 2nd Year .
  • CONTENTS CHAPTER – I INTRODUCTION 1 - 4 1.1 Significance of the study 1.2 Objective of the study 1.3 Scope of the study 1.4 Research objective 1.5 Limitation of the study CHAPTER – II REVIEW OF LITERATURE 5 - 10 2.1 National 2.2 International CHAPTER – III OVERVIEW OF THE INDUSTRY 11 – 18 3.1 Online shopping in india 3.2 Recent development 3.3 Gaint players in Indian online shopping CHAPTER – IV THEORIES OF THE STUDY 19 – 28 4.1 Introduction to the study 4.2 AIDA Principle in online shopping 4.3 Porters̕ 5 force model in online shopping 4.4 Marketing mix (7p) in online marketing 4.5 Models of online marketing
  • CHAPTER – V RESEARCH METHODOLOGY 29 – 35 5.1 Research objective 5.2 Determination of information needs and sources 5.3 Research framework 5.4 Data collection 5.4.1 Primary data 5.4.2 Secondary data 5.5 Sample design 5.5.1 Sample unit 5.5.2 Sample media 5.5.3 Sampling method 5.5.4 Sample size 5.5.5 Sample place 5.5.6 Sample design CHAPTER – VI DATA ANALYSIS 36 – 53 CHAPTER – VI FINDING 54 - 55 CHAPTER – VI SUGGESTION & CONCLUSION 56 - 61 CHAPTER – VII BIBLIOGRAPHY CHAPTER – IX ANNEXURES
  • A Study on Consumer Perception towards online shopping 1 Chapter 1 INTRODUCTION
  • A Study on Consumer Perception towards online shopping 2 1.0 INTRODUCTION Internet is changing the way consumers shop and buys 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’ behaviour from different perspectives. Many of their studies have posited new emergent factors or assumptions that are based on the traditional models of consumer behaviour, and then examine their validity in the Internet context. Online shopping is definitely a great way to shop with everything available on the websites. From clothes, gift items, food, home needs, medicines, and many more, this mode of shopping allows one to shop conveniently without hassle on spending hours in a supermarket or shopping areas. The Internet with its wide array of information nooks, allows the customer to go through various reviews of the product or service before actually heading for purchases. These online shopping websites also have daily deals for the customer looking for discounts and store offerings.
  • A Study on Consumer Perception towards online shopping 3 1.1 SIGNIFICANCE OF THE STUDY In recent years, online shopping has become very popular. The growth of technology has made these a part and parcel of everyday lifestyle. The advent of plastic money or the debit /credit card and the smooth access to the World Wide Web has brought the shops from around the world to the desktop. We personally have seen many of our friends surfing through various online shopping sites and purchasing things. Student community has become so strong that even the parents seek the help and advice of their children before conducting big purchases. This is solely because of their exposure to web and social media. Moreover, while it comes to personal purchases, students are very particular that they get best products available in the market and seek all the possible ways to secure the best products. This is where the role of online shopping sites emerges. Students who are well versed in the use of internet and active in social media, know about online markets and have tried at least some of them. The study is very relevant because it can give a clear picture of the future of online markets in India and the emerging trends in this particular field. The various factors that influence online shopping habits and its merits and demerits are also dealt with.The study also tries to have a comparison of online shopping habits among different age group as well as income group. 1.2 Objective of the Study The objective of this research study is to investigate online consumer behavior, which in turn provides E-marketers with a constructional framework for fine-tuning their E- businesses’ strategies. The specific objectives of this research are: 1. To know the consumers awareness and perception about the products and services provided on internet. 2. To know how it provides products and services and satisfies their customers. 3. To know how it reduces the uncertainty in purchase decision process. 1.3 Scope of the Study The theoretical scope of the study includes the popularity of online shopping, the need of virtual markets, their role in influencing the consumption pattern and habits, merits and demerits of e-markets, major players in online retailing etc. We can listed the scope as below :
  • A Study on Consumer Perception towards online shopping 4 1. The Study was conducted among the Internet users. 2. The Geographical area covered was Sambalpur. 3. The Study was based on a Schedule of Questions. 4. The scope of internet shopping 1.4RESEARCH OBJECTIVE 1. To analysethe consumer interest on online marketing. 2. To determine the factors affecting online buying. 3. To evaluate the growth of online marketing. 4. To forsee the demand of online shopping in india. 5. To study the impact of traditional retailer over the online retailer. 6. To gather information regarding growing sector for online purchasing. 7. To understand the barriers of online marketing. 8. To know the consumers awareness and perception about the products and services provided on internet 9. To examine what the consumer had bought and what they want to purchase in the near future. 1.5 LIMITATIONS OF THE STUDY Utmost care has been taken with regard to the collection, classification and analysis of data. However, the study is subjected to the following limitations: There were hardly any previous studies on the topic and it was a great challenge to deal with a fresh topic. 1. Lack of environmental support for the study on the topic. 2. Less sample size, as it is just survey with 100 respondent 3. Basically based on primary data , hence we can not argue that the research is applicable in each condition,time& place. 4. Short time duration, with in such short span of time it is too much difficult to analyse the topic. 5. Lack of customer support, while asking the consumer they were behaving rudely and not responding to the questions.
  • A Study on Consumer Perception towards online shopping 5 CHAPTER -2 LITRETURE REVIEW
  • A Study on Consumer Perception towards online shopping 6 CHAPTER-2 REVIEW OF LITRETURE A literature review is a select analysis of existing research which is relevant to your topic, showing how it relates to your investigation. It explains and justifies how your investigation may help answer some of the questions or gaps in this area of research. A literature review is not a straightforward summary of everything you have read on the topic and it is not a chronological description of what was discovered in your field. 2.1 NATIONAL REVIEW OF LITREATURE Rajeev Kamineni (2004) in his study finds that World Wide Web can change humanbehaviour and human interactions to a very large extent. Web based shopping behaviour is one major example to point out the trends in this direction. This study is of a very exploratory nature and it intends to establish the differences between several web-based shoppers from different parts of the world. Several critical factors associated with online shopping behaviour have been explored. A cross cultural data set has been collected and an illustrative description of the shoppers has been provided. As a final step the cross cultural differences between several shoppers explored. ArchanaShrivastava, UjwalLanjewar, (2011) in online buying, the rate of diffusion andadoption of the online buying amongst consumers is still relatively low in India. In view of above problem an empirical study of online buying behavior was undertaken. Based on literature review, four predominant psychographic parameters namely attitude, motivation, personality and trust were studied with respect to online buying. The online buying decision process models based on all the four parameters were designed after statistical analysis. These models were integrated with business intelligence, knowledge management and data mining to design Behavioral Business Intelligence framework with a cohesive view of online buyer behavior. For better understanding the factors of internet and consumer shopping behaviours towards internet shopping, this chapter would provide academic research reviews and
  • A Study on Consumer Perception towards online shopping 7 relative ideas expressed in the literature that associated with this subject. Furthermore, a number of hypotheses will be tested to answer the research questions that mentioned already in the introduction. Due to the recent research shows that internet shopping becomes a full and effective business model (Black, 2005), therefore there are several studies that already investigated more or less related on internet shopping and consumer behaviour. In the following chapter, some point of view will be taken from literatures, and needs careful review to achieve them as the basis of the subsequent research investigation. J.SINHA 2010The number of people engaged in various online activities is increasing every day. While the number of online shoppers is increasing, it is not proportional to that of brick-and-mortar shoppers. Research has tried to explain the dismal performance of online shopping as compared to the physical shopping format. Reasons for the lower level of Internet sales have been cited as being perceived risk in carrying out an online transaction, socio-psychological factors (Like - influence of friends and relatives) and infrastructural limitations (Availability of Internet, computers, credit-cards, cyber laws etc.). Under the purview of aforementioned factors this study tried understanding the online shopping behavior of Indian consumers. Socio-psychological factors and infrastructure have been found influential factors while the perceived risk surprisingly is not significant as a whole but at gender level there was significant difference between the online behavior of male and female due to risk perception. Lal studied the determinants of adoption of Information Technology (IT) in India. The study was based on 59 electrical and electronic goods manufacturing firmssituated in NOIDA. Semi-structured questionnaire were used to collect the data. The study examined the factors influencing the degree of IT adoption by firms. The factors included are entrepreneur characteristics measured by entrepreneur’s qualification, importance given to market share, R&D and quality consciousness, firm’s international orientation factors measured by import and export intensity, work force skill and firm size. The sample firms were divided into four categories depending on their intensity of IT.
  • A Study on Consumer Perception towards online shopping 8 2.2 INTERNATIONAL REVIEW OF LITREATURE E-Business probably began with electronic data interchange in the 1960s (Zwass, 1996). However, (Melao, 2008) suggests that it was only in the 1990s, primarily via the Internet, that e- Business has emerged as a core feature of many organizations. In his opinion, the hope was that e-Business would revolutionize the ways in which organizations interact with customers, employees, suppliers and partners. Some saw e- Business as part of a recipe to stay competitive in the global economy. Christy M. K. Cheung, Lei Zhu, Timothy Kwong, Glori a W.W. Chan, MoezLimayem,(2002) The topic of online consumer behavior has been examined under variouscontexts over the years. Although researchers from a variety of business disciplines have made significant progress over the past few years, the scope of these studies is rather broad, the studies appear relatively fragmented and no unifying theoretical model is found in this research area. In view of this, provide an exhaustive review of the literature and propose a research framework with three key building blocks (intention, adoption, and continuance) so as to analyze the online consumer behavior in a systematic way. This proposed framework not only provides us with a cohesive view of online consumer behavior, but also serves as a salient guideline for researchers in this area. Burke, R.R. (2002), Trust is a key factor that determines the success of Business toConsumer (B2C) e-commerce transactions. Previous researchers have identified several critical factors that influence trust in the context of online shopping. This research focuses on available security measures which assure online shopper_s safety and great sales promotions and online deals which stimulate customers to shop online. Abel Stephen (2003) in his paper represents the findings of research studies that address e-commerce design and associated consumer behavior. The innovation of e-commerce has affected not only the marketplace through the facilitation of the exchange of goods and services, but also human behavior in response to the mechanisms of online services. Researchers have identified and hypothesized on relevant subject matters ranging from Web usability, marketing channels and other factors influencing online buying behavior. Though researchers have focused on what appear different aspects of online buying behavior, their studies may be shown to be interrelated and interdependent, even to the extent of revealing constructs upon which e-commerce, in terms of future design and research, could be built. Balasubramanian, S., Konana, P. and Menon, N.M. (2003), In this environment, sometraditional service quality dimensions that determine customer satisfaction, such as thephysical appearance of facilities, employees, and equipment, and employees_ responsiveness and
  • A Study on Consumer Perception towards online shopping 9 empathy are unobservable. In contrast, trust may play a central role here in enhancing customer satisfaction. Model trust as an endogenously formed entity that ultimately impacts customer satisfaction, and we elucidate the linkages between trust and other factors related to the performance of the online service provider and to the service environment. The classic consumer purchasing decision-making theory can be characterized as a continuum extending from routine problem-solving behaviors, through to limited problem- solving behaviors and then towards extensive problem-solving behaviors [Schiff man et al., 2001]. The traditional framework for analysis of the buyer decision process is a five-step model. Given the model, the consumer progresses firstly from a state of felt deprivation (problem recognition), to the search for information on problem solutions. The information gathered provides the basis for the evaluation of alternatives. Finally, post-purchase behavior is critical in the marketing perspective, as it eventually affects consumers’ perception of satisfaction/dissatisfaction with the product/service. This classic five stage model comprises the essence of consumer behavior under most contexts. Nevertheless, the management of marketing issues at each stage in the virtual environment has to be resolved by individual E-marketers. Peterson et al. [1997] commented that it is an early stage in Internet development in terms of building an appropriate dedicated model of consumer buying behavior. Decision sequences will be influenced by the starting point of the consumer, the relevant market structures and the characteristics of the product in question. Consumers' attitude towards online shopping is a prominent factor affecting actual buying behavior. (Source: Jarvenpaa Journal of Electronic Commerce Research, VOL. 6, and NO.2, 2005) Todd [1997] proposed a model of attitudes and shopping intention towards Internet shopping in general. The model included several indicators, belonging to four major categories; the value of the product, the shopping experience, the quality of service offered by the website and the risk perceptions of Internet retail shopping. In the research conducted by Vellido et al. [2000], nine factors associated with users' perception of online shopping were extracted. Among those factors the risk perception of users was demonstrated to be the main discriminator between people buying online and people not buying online. Other discriminating factors were; control over, and convenience of, the shopping process,
  • A Study on Consumer Perception towards online shopping 10 affordability of merchandise, customer service and ease of use of the shopping site. In another study, Jarvenpaa et al. [2000] tested a model of consumer attitude towards specific webbase stores, in which perceptions of the store's reputation and size were assumed to affect consumer trust of the retailer. The level of trust was positively related to the attitude toward the store, and inversely related to the perception of the risks involved in buying from that store. Jarvenpaa et al. [2000] concluded that the attitude and the risk perception affected the consumer's intention to buy from the store. Consumer risk perceptions and concerns regarding online shopping are mainly related to aspects involving the privacy and security of personal information, the security of online transaction systems and the uncertainty of product quality. Trust is interwoven with risk [McAllister, 1995]. One of the consequences of trust is that it reduces the consumer’s perception of risk associated with opportunistic behavior by the seller [Ganesan, 1994]. Lack of trust is frequently reported as the reason for consumers not purchasing from Internet shops, as trust is regarded as an important factor under conditions of uncertainty and risk in traditional theories. Mayer et al. [1995] developed a model which combines traditional marketing philosophy on consumer motivation to buy and the trust model. In this model, trust propensity; which is a personality trait possessed by buyers; is an important antecedent of trust. In Internet shopping, there is not much information available to the buyer regarding the seller, prior to purchase. A buyer with a high propensity to trust will more likely be a potential customer than a buyer with a lower propensity. Purchase decisions are ultimately guided by consumers' perceptions of the product or service. Of course, the critical nature of perceptions as they relate to purchase behaviour has been repeatedly demonstrated in advertising and marketing research. Negative perceptions of the product, service, brand, or company almost always translate to a lost sale or, at a minimum, expressed lower intentions to purchase the advertised product or service. If the goal is to increase online spending among consumers, particularly female consumers, then consumers' perceptions of online shopping are ultimately matters the most. Presumably, the more positive consumers perceive the online buying experience the more likely they will make online purchases. The primary construct that we believe will have a bearing on perceptual differences between male and female internet shoppers is emotion. Related to emotion are two additional constructs, trust and convenience. (Robertson , Zielinski and Ward, 1984)
  • A Study on Consumer Perception towards online shopping 11 CHAPTER - 3 OVERVIEW OF THE INDUSTRY
  • A Study on Consumer Perception towards online shopping 12 OVERVIEW OF THE INDUSTRY 3.1 ONLINE SHOPPING IN INDIA The birth and growth of Internet has been the biggest event of the century. E-commerce in India has come a long way from a timid beginning in the 1999-2000 to a period where one can sell and find all sorts of stuff from a high end product to a meager peanut online. Most corporations are using Internet to represent their product range and services so that it is accessible to the global market and to reach out to a larger range of their audience. Computers and the Internet have completely changed the way one handles day-to-day transactions; online shopping is one of them. The Internet has brought about sweeping changes in the purchasing habits of the people. In the comfort of one's home, office or cyber cafe or anywhere across the globe, one can log on and buy just about anything from apparel, books, music and diamond jewellery to digital cameras, mobile phones, MP3 players, video games, movie tickets, rail and air tickets. Ease, simplicity, convenience and security are the key factors turning the users to buy online. E-commerce revenues in the country are projected to reach Rs 2,300 crore in the year 2006- 07, growing at 95 per cent over 2004-05(Source: Internet and Mobile Association of India, IAMAI). This pertains to the business-to-consumer (B2C) segment. It may be too early to do a comparison with the e-commerce scenes in countries such as the US where billions of dollars are spent online but the business in India is growing exponentially every year, albeit from a smaller base, the total revenues have reached a respectful size.
  • A Study on Consumer Perception towards online shopping 13 3.2 Recent Developments The number of users logging on to the Internet is growing by leaps and bounds. The number of Indians who are online is expected to touch to 100 million by 2007-08, from the present 38.5 million according to the research conducted by IAMAI. The numbers indicate a growing sense of comfort with the use of Internet for shopping. Accompanying this growth, there is an increasing maturity in the way people use the Internet. It's a classical curve. Online users typically start by using e-mail, gradually move on to browsing for news, information and entertainment, and finally graduate to shopping and conducting business online. Online sales have registered a huge jump and what was a concept five years ago is now beginning to hit the mainstream levels. Roughly 10 percent of the world's population more than 627 million people have shopped online at least once, in India it is just sprouted and beginning to perish. Internet is now going beyond the simple exchange of information to a shopping paradise. This medium is far bigger than expected, but many retailers and marketers are not using it to its full potential. Indian customers are increasingly getting comfortable with online shopping, and there is a higher acceptability for the concept. India has 25 million Internet users and more is now turning to online shopping. There has been an influx of online shopping sites in India with many companies hitching onto the Internet bandwagon. The revenues from online shopping are expected to more than double by 2006-07. According to IAMAI, the average number of transactions per month in India has gone up from 2 lakh in 2003-04 to 4.4 lakh in 2004-05 and has doubled to 7.95 lakh transactions per month in the year 2005-06. The online sales during the festival season had increased rapidly especially during Diwali and Ramzan which recorded a sales of Rs115 crore, a 117 per cent increase from the Rs53 crore in the year 2004- 05(source IAMAI). These figures clearly show that online shopping has truly come of age
  • A Study on Consumer Perception towards online shopping 14 and consumers are keen to shop on the net. Effective customer communication on products plus reduced shipping costs and timely delivery has helped online marketers to seize a slice of the Rs 115 crore sales. Online shopping has become the latest trend among shoppers. Indians are becoming more comfortable with e-commerce. The consumer’s attitude has been evolving towards online purchases. It has become increasingly positive over the years. The attitudes that drive people to shop online, such as convenience, price comparison and choice are improving tremendously in India. Though a miniscule amount in the global context, the Indian online shoppers’ population would make its presence felt quite remarkably. The potential of the Indian e-market can be gauged from the fact that 16 percent of Indian consumers want to buy online in the next six months, making it the third most online-potential country after Korea (28 percent) and Australia (26 percent) (Source:IMRB). This is an indication of a growing breed of Indian consumers who are not only better equipped but also more confident of the online transactions. Indian businesses have also grown mature enough to move up the IT curve and they are considering Business to consumer (B2C) e-commerce a viable revenue model. Some of the companies that have benefited are baazee.com, indiatimes.com, rediff.com, indiamart.com, fabmart.com, traveljini.com and sifymall.com. Indiamart.com has witnessed a growth of more than ten times in just two years in its online gifts domain. In the online travel domain, the company was able to generate an average $8,000 worth of room bookings/month for its premium client. It is expected to touch $15- 20,000/month/client by the year-end, which is over 100 percent growth (Source:Indiamart). Brick-and-mortar businesses are also building up e-commerce revenues. In the year 2005-06
  • A Study on Consumer Perception towards online shopping Samsung India recorded a 120 percent jump in online buying from its site over the year 2004 05 (Source: Samsung). Nirula’s revenues in the year 2005-06 and is positive for the next one to two years (Source: Nirula’s). Companies like eBay India have seen a large increase in the number of sellers and buyers from B and C cities and in a year the eBay community (buyers and sellers) base has increased to 1.7 million users, which shows that more Indians are shopping online (Source: eBay). Online sales are currently marked by a single digit growth, but the leading garment retail like Pantaloon, Shoppers’ Stop and Globus have already made business strategies to enter into the world of e-retailing. Famous apparel brand Zodiac has already started online stores. The main motive of these retailers through online sales is to reach t small towns where they do not have the outlets. Thus the India's Internet shopping sector is preparing for a massive growth, which is fuelled by increasing broadband usage and growing e-commerce. 3.3 GAINT PLAYERS IN INDIAN ONLINE FlipKart.com A Study on Consumer Perception towards online shopping Samsung India recorded a 120 percent jump in online buying from its site over the year 2004 05 (Source: Samsung). Nirula’s witnessed more than double growth in its B2C e 06 and is positive for the next one to two years (Source: Nirula’s). Companies like eBay India have seen a large increase in the number of sellers and buyers ties and in a year the eBay community (buyers and sellers) base has increased to 1.7 million users, which shows that more Indians are shopping online (Source: eBay). Online sales are currently marked by a single digit growth, but the leading garment retail like Pantaloon, Shoppers’ Stop and Globus have already made business strategies to enter retailing. Famous apparel brand Zodiac has already started online stores. The main motive of these retailers through online sales is to reach the global markets and the small towns where they do not have the outlets. Thus the India's Internet shopping sector is preparing for a massive growth, which is fuelled by increasing broadband usage and growing GAINT PLAYERS IN INDIAN ONLINE SHOPPING Flipkart.com is an e-commerce website founded by SachinBansal and BinnyBansal in 2007. Both are from IIT Delhi Alumni and also worked in Amazon.com. Flipkart.com ranks #502 in world according to Alexa traffic rankings. In Google It forms advertising revenue of $4.8 million. It receives 2.2 million page views in a day and generates $6,574 in advertising revenue every day. Moreover it has certain losses 0.60% in traffic ranking. Loading time of an average page is 2.1 sec as it is much faster than 29% of sites around the world. The mode of payments include Credit card, Debit card, Net banking, e vouchers, cash on delivery. 15 Samsung India recorded a 120 percent jump in online buying from its site over the year 2004- witnessed more than double growth in its B2C e-commerce 06 and is positive for the next one to two years (Source: Nirula’s). Companies like eBay India have seen a large increase in the number of sellers and buyers ties and in a year the eBay community (buyers and sellers) base has increased to 1.7 million users, which shows that more Indians are shopping online (Source: eBay). Online sales are currently marked by a single digit growth, but the leading garment retailers like Pantaloon, Shoppers’ Stop and Globus have already made business strategies to enter retailing. Famous apparel brand Zodiac has already started online stores. he global markets and the small towns where they do not have the outlets. Thus the India's Internet shopping sector is preparing for a massive growth, which is fuelled by increasing broadband usage and growing SHOPPING commerce website founded by SachinBansal and BinnyBansal in 2007. Both are from IIT Delhi Alumni and also worked in Flipkart.com ranks #502 in world according to Alexa traffic rankings. In Google page it ranks #6. It forms advertising revenue of $4.8 million. It receives 2.2 million page views in a day and generates $6,574 in advertising revenue every day. Moreover it has certain losses 0.60% in traffic ranking. Loading time of an average page is .1 sec as it is much faster than 29% of sites around the world. The mode of payments include Credit card, Debit card, Net banking, e-gift
  • A Study on Consumer Perception towards online shopping Ebay.in Snapdeal.com A Study on Consumer Perception towards online shopping eBay is an online shopping website a consumer to consumer corporation which helps the people and businessman to buy and sell products worldwide. It is operated to almost 30 countries. eBay ranks #544 among Alexa traffic ranking. In Google it has pagerank #6. revenue inculcated was about $4.4 Million. Moreover it receives 2 million pageviews per day which generates $6,066 in the advertisement revenue. Recently it has shown 15.13% growth in traffic rank. The pageloading time is upto 2 sec which is likely faster than 24% sites across the world. Snapdeal deals with online marketing of products including Mobiles, Electronics, Fashion accessories, Apparel, Footwear, Kids, Home and Kitchen, Sports, Books; and services like Restaurants, Spas & Entertainment. It was launched by KunalBahl, a Wharton graduate and RohitBansal, alumnus of IIT Delhi, in February 2010. It ranks #576 in the world as per Alexa traffic ranking.It ranks # 5 in Google PageRank. The advertising revenue is about $4.2 receives 1.9 million page views in a day and generates $5,729 in advertising revenue. It has suffered loss of 4.16 % in traffic ranking. The loading time of an average page is 1.6 sec which is faster than 46% of sites across the world. 16 is an online shopping website a consumer to consumer corporation which helps the people and businessman to buy and sell products worldwide. It is operated to almost 30 countries. eBay ranks #544 among Alexa traffic ranking. In Google it has pagerank #6. The advertising revenue inculcated was about $4.4 Million. Moreover it receives 2 million pageviews per day which generates $6,066 in the advertisement revenue. Recently it has shown 15.13% growth in traffic rank. The pageloading time is upto 2 sec s likely faster than 24% sites across the Snapdeal deals with online marketing of products including Mobiles, Electronics, Fashion accessories, Apparel, Footwear, Kids, Home and Kitchen, Sports, Books; and services like Spas & Entertainment. It was launched by KunalBahl, a Wharton graduate and RohitBansal, alumnus of IIT Delhi, in It ranks #576 in the world as per Alexa traffic ranking.It ranks # 5 in Google PageRank. The advertising revenue is about $4.2 million. It receives 1.9 million page views in a day and generates $5,729 in advertising revenue. It has suffered loss of 4.16 % in traffic ranking. The loading time of an average page is 1.6 sec which is faster than 46% of sites across the world.
  • A Study on Consumer Perception towards online shopping A Study on Consumer Perception towards online shopping It is an online shopping commerce for Home; Lifestyle & Fashion e-retailer founded in 2009 BigShoeBazaar.com has a user base of about 1.5 million people. Yebhi.com offers lifestyle & Home products and products some 250 brands to its customers dealing in Shoes, Apparels, Bags, Mobiles, Cameras, Sunglasses, Watches, Home furnishing, Home decor, Home ware, Lingerie and Fragrances. It ranks #1,782 among Alexa traffic ranking. It ranks #4 in Google page ranking. Advertising revenue is about $1.4 million. It receives 617,284 page views per day generating $1,852 in advertising revenue. It has recently shown 6.70 Growth among traffic ranking. The page loading is about 2 sec which is faster than 39% of s around the world. The International giant eCommerce retailer recently stepped into India with a Indian version site www.amazon.in, since the launch, amazon.in has seen a nice growth in the number of customers. Amazon.com too had a huge number of Indian customers even before it launched store in India. The store hosts wide range of products like Electronics, Mobiles, Laptops, Books, Fashion, Jewellery, Kitchenware and more A reputed online shopping retail website having headquarter in Gurgaon,Shopclues more than 12,000 merchants who are registered with the company. It is one of the top ecommerce websites in India, which deals in more than 2 million products. They guarantee authenticity of products, warranty and even ensure lowest price. They even have a record of catering to more than 42 million online visitors. The company has even more than employees across the country. They offer wide range of branded products to consumers from every corner of the country. 17 It is an online shopping commerce for Home; retailer founded in 2009 BigShoeBazaar.com has a user base of about 1.5 million people. Yebhi.com offers lifestyle & Home products and products from a range of some 250 brands to its customers dealing in Shoes, Apparels, Bags, Mobiles, Cameras, Sunglasses, Watches, Home furnishing, Home decor, Home ware, Lingerie and Fragrances. It ranks #1,782 among Alexa traffic ranking. It page ranking. Advertising revenue is about $1.4 million. It receives 617,284 page views per day generating $1,852 in advertising revenue. It has recently shown 6.70 Growth among traffic ranking. The page loading is about 2 sec which is faster than 39% of sites The International giant eCommerce retailer recently stepped into India with a Indian version site www.amazon.in, since the launch, amazon.in has seen a nice growth in the number of customers. Amazon.com e number of Indian customers even before it launched store in India. The store hosts wide range of products like Electronics, Mobiles, Laptops, Books, Fashion, Jewellery, Kitchenware and more A reputed online shopping retail website having Shopclues.com maintains more than 12,000 merchants who are registered with the company. It is one of the top ecommerce websites than 2 million products. They guarantee authenticity of products, warranty and even ensure lowest price. They even have a record of catering to more than 42 million online visitors. The company has even more than 350 registered employees across the country. They offer wide range of branded products to consumers from every corner
  • A Study on Consumer Perception towards online shopping A Study on Consumer Perception towards online shopping Shopclues.com initiate free delivery services at the doorsteps of customers through reputed courier services to nearly 10,000 cities across the country. They even initiate a 30-day return guarantee if unable to meet customer satisfaction. One of the leading online shopping companies Shopclues.com accepts online payment through major credit and debit cards, including net banking services. The online shopping website service employs more than 400 personnel for effective handling of the business and is even funded by national institutional investors. Myntra is an Indian ecommerce site. It is regarded as India’s top 3rd online site to shop products. Myntra allows its users to chose varieties of dress. One can choose any type of dress of any brand from Myntra. Th about Myntra is its product quality and service. Now, Myntra is merged into Flipkart to compete Amazon, but myntra.com is still running as a separate website and entity. Buying clothes and gifts online can be best done via Myntra. HomeShop18 is the online & on marketing and distribution venture of Network18 Group that was launched as India’s first 24 hour Home Shopping TV channel on April 9, 2008. HomeShop18 offers innovative, differentiated and demonstrative retail experiences on TV and internet and has emerged as the largest multimedia retailer in India with a user base of 2.5 million users and some prestigious awards. HomeShop18 is a venture of the Group, India’s fastest growing media and entertainment group that opera leading business news television channels like CNN-IBN, CNBC TV18 Awaaz . 18 initiate free delivery services at the doorsteps of customers through reputed courier services to nearly 10,000 cities across the country. day return guarantee if unable to meet customer satisfaction. One of the companies in India, Shopclues.com accepts online payment through major credit and debit cards, including net banking services. The online shopping website service employs more than 400 personnel for effective handling of the d by national institutional an Indian ecommerce site. It is regarded as India’s top 3rd online site to shop products. Myntra allows its users to chose choose any type of dress of any brand from Myntra. The best thing about Myntra is its product quality and service. Now, Myntra is merged into Flipkart to compete Amazon, but myntra.com is still running as a separate website and entity. Buying clothes and gifts online can be best done via Myntra. is the online & on-air retail marketing and distribution venture of Network18 Group that was launched as India’s first 24 hour Home Shopping TV channel on April 9, 2008. HomeShop18 offers innovative, differentiated and demonstrative TV and internet and has emerged as the largest multimedia retailer in India with a user base of 2.5 million users and is a venture of the Network18 Group, India’s fastest growing media and entertainment group that operates India’s leading business news television channels CNBC TV18 and CNBC
  • A Study on Consumer Perception towards online shopping 19 CHAPTER - 4 THEORIES OF THE STUDY
  • A Study on Consumer Perception towards online shopping 20 4.1 INTRODUCTION TO THE STUDY The Internet has entered the mainstream consciousness over the past decade. This has happened primarily because the web has got a graphical interface and Internet has moved from governmental control to private hands. The activities which are happening on the Internet are email and instant messaging, general web surfing or browsing, reading news, hobby searches, entertainment searches, shopping and buying online, medical information searches, travel information searches, tracking credit cards, and playing games. Communication i.e. email, chat or instant message is the basic activity for which Internet is used. It is the single most important reason for people to go online. E-mail provides the opportunity to communicate more often with a much broader circle of people than one can reach by telephone or by mail in a convenient way. In India too email constitutes the major activity on the Internet. It was found that more elderly people are increasingly using email as compared to the younger generations. In India the top five online activities are e-mail, surfing, chatting, search and job search. Some of the sites, which are commonly used for these particular activities, are: � Yahoo -Most preferred communication portal, tops for email and chat � Indiatimes –Best event and sports news provider. � Naukri-Best recruitment portal � Google-Best information domain � Shaadi-Best for matrimonial services � eBay-Best online shopping portal � Rapid growth of cybercafés across India � Access to Information
  • A Study on Consumer Perception towards online shopping 21 � The increase in number of computer users � Reach to net services through broadband � Middle-class population with spending power is growing. There are about 200 million of middle-class population good spending powers. These people have very little time to spend for shopping. Many of them have started to depend on internet to satisfy their shopping desires. The figures from IAMAI show that the internet users in India will grow to 200 million by 2010. Around 25% of regular shoppers in India are in the 18-25 age groups, and 46% are in the 26-35-year range. • Indian online matrimonial sector is worth around $230 million. • Worldwide e-commerce is only growing at the rate of 28%, since India being a younger market, the growth of e-commerce is expected at 51% in the coming years. • In line with global trends finally India has also started shopping online these days. As per the study by IAMAI online shopping in India has rose from $11million in 1999-2000 to $522 million in 2008 and it is expected to rise above $700 million by end March 2010. • Indians are also Shopaholics like other Asians. There is a strong booming young adult population in India with good levels of disposable income. In India Over $50 Billion and growing rapidly - Most popular online shopping products include: books (45%), electronic gadgets (42%), railway tickets (38%), accessories apparel (35%), apparel (35%), gifts (34%), computer and peripherals (32%), airline tickets (28%), music downloads (21%), movie downloads (21%), hotel rooms (22%), magazines (18%), tools (16%), home appliances (16%), toys (16%), jewelry (17%),
  • A Study on Consumer Perception towards online shopping 22 movie ticket (15%), etc. Payments 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: • Billing to mobile phones and landlines • Cash on delivery (C.O.D., offered by very few online stores) • Cheque/ Check • Debit card • Direct debit in some countries • Electronic money of various types • Gift cards • Postal money order • Wire transfer/delivery on payment 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 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.
  • A Study on Consumer Perception towards online shopping 4.2 AIDA PRINCIPLE IN ONLINE 1. ATTENTION 2.INTREST 3.DESIRE 4.ACTION 4.3 PORTER 5 FORCE ANALYSIS Porters Five Forces is a framework for describing factors that affect the profitability and attractiveness of industries. Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths. 1. Supplier Power 2. Buyer Power 3.Competitive Rivalry 4.Threat of Substitutes 5. Threat of New Entry 1. Supplier Power Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over us, on. The fewer the supplier choices we have, and the more we need suppliers' help, the more powerful the suppliers are. 2. Buyer Power This is driven by the number of buyers, the importance of each i one’s business, the cost to them of switching from one’s products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you. A Study on Consumer Perception towards online shopping PRINCIPLE IN ONLINE MARKETING : PORTER 5 FORCE ANALYSIS IN ONLINE SHOPPING Porters Five Forces is a framework for describing factors that affect the profitability and industries. Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over us, the cost of switching from one supplier to another, and so on. The fewer the supplier choices we have, and the more we need suppliers' help, the more powerful the suppliers are. his is driven by the number of buyers, the importance of each individual buyer to one’s business, the cost to them of switching from one’s products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you. 23 Porters Five Forces is a framework for describing factors that affect the profitability and industries. Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their the cost of switching from one supplier to another, and so on. The fewer the supplier choices we have, and the more we need suppliers' help, the ndividual buyer to one’s business, the cost to them of switching from one’s products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often
  • A Study on Consumer Perception towards online shopping 24 3. Competitive Rivalry What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength. 4. Threat of Substitutes This is affected by the ability of your customers to find a different way of doing what you do – for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power . 5. Threat of New Entry Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.
  • A Study on Consumer Perception towards online shopping 25 Porter’s five forces for Online Retailer Supplier power: Here, suppliers are the manufacturers of finished products. For any product, there are many suppliers online, so they can’t show power on online retail companies. For example, if you take computers category, there are many suppliers like Dell, Apple, Lenovo, and Toshiba everyone wants to sell their products through online retails like Flipkart,Amazon,Snapdeal etc. Selling online saves a lot of money for the manufacturers, and as many people nowadays prefer purchasing product through online stores, Companies cannot afford to lose this channel. So, in this industry the supplier power is low. Buyer power: Buyers in this industry are customers who purchase products online. Since this industry is flooded with so many players, buyers are having lots of options to choose. With many competitors like Amazon.com, eBay, Snapdeal etc. Customers get a wide range of choices. Customer would prefer the one who would provide goods at reasonable price, deliver it fast and provide them with other benefits like Cash on Delivery, EMI facilities, other offers etc. Here Buyers have more power. Competitive Rivalry: Competition is very high in this industry with so many players like Jabong, Snapdeal, Amazon, Homeshop18 etc. Many competitors means more choices for the customer to choose from. This also increases the cost incurred by the company to stay in the customer’s mind i.e. on Promotions and Advertisements etc. Giving the customer better deals, making customer’s experience delightful and continuous innovation can help a company to stay at top even with tons of competitors around. Threat of New Entrants: Threat of new entrants is very high in this online retail industry because of following reasons: � Indian government has allowed 51% FDI in multi-brand online retail and 100% FDI in single brand online retail. So, this means foreign companies can come and start their own online retail companies. � There are very less barriers to entry like less capital required to start a business, less amount of infrastructure required to start business. All you need is to tie up with suppliers of products and you need to develop a website to display products so that customers can order products, and a tie up with online payment gateway provider like bill desk. � Industry is also going to grow at a rapid rate. It is going to touch 76 billion $ by 2021. Industry is going to experience an exponential growth rate. So, obviously no one wants to miss this big opportunity. With the new entrants like Jabong, Snapdeal etc. rapidly racing towards the top Position.
  • A Study on Consumer Perception towards online shopping 26 Threat of substitutes: � Substitute for this industry as of now is physical stores. Their threat is very low for this industry because customers are going for online purchases instead of going to physical stores as it will save time, effort, and money. With the advent and penetration of internet and smart phones, future in retail belongs to online retail. � When we compare relative quality, relative price of product a person buys online with physical store, both are almost same and in some cases, online retail store offers more discounts and this attracts the customer to purchase products online. 4.4 MARKETING MIX OF ONLINE SHOPPING : The elements of marketing mix are also being applied for online marketing. Marketing mix is essential for analysing the business. Marketer analyses the parameters then select appropriate strategy in order to face the market complexion effectively. The 7Ps of marketing is being applied in the online marketing industry. The effect of marketing mix is being explained below diagram :
  • A Study on Consumer Perception towards online shopping 27 4.5 MODELS OF ONLINE SHOPING By:Mary Ann Eastlick This chart shows how consumer attitude toward online shopping can lead either to approach coping (wanting to shop online) or to avoidance coping (deciding not to search or shop online). Someone who is optimistic toward the benefits of online shopping will develop approach coping. A person who is pessimistic toward online shopping will think of the drawbacks to it and decide to purchase in physical stores instead, which is avoidance coping.
  • A Study on Consumer Perception towards online shopping FRAMEWORK FOR CONSUM Source: research by Emerald A Study on Consumer Perception towards online shopping FRAMEWORK FOR CONSUMERS’ INTENTIONS TO SHOP ONLINE Source: research by Emerald 28 HOP ONLINE
  • A Study on Consumer Perception towards online shopping 29 CHAPTER - 5 RESEARCH METHODOLOGY
  • A Study on Consumer Perception towards online shopping 30 5.0 RESEARCH METHODOLOGY 5.1 Research Objective To know and understand the consumer’s perception and awareness about internet marketing/ shopping. This will help to know the attitude and perception of consumers towards online shopping and what are the factors which shape the consumer’s perception towards online shopping. Also what are key concerns from the point of view of consumer while online shopping. 5.2 Determination of information needs and sources The following was the information required: • What is consumer’s attitude towards online shopping? • What are the key concern areas for consumers while online shopping? • Which factors shape the consumer’s attitude towards online shopping? • How has been recent shift taking place in online shopping? 5.3 Research Framework Eleven different factors were identified by studying the existing models of consumer attitudes(Refer Annexure 1, 2) that play an important role in online purchase, then a model was proposed leading to online shopping. The data was collected only through Questionnaires. The sample size was 100. And random sampling was done among the internet users. 5.3.1 Proposed Model After examining the 10 empirical studies, we identify a total of eleven interrelated factors for which the empirical evidences show significant relationships. These ten factors are perceived usefulness, perceived ease of use, perceived enjoyment, information on online shopping, security and privacy, quality of internet connection, attitude towards online shopping, intention to shop online, online shopping decision making, online purchasing, and consumer satisfaction. Six (perceived usefulness, perceived ease of use, perceived enjoyment, information on online
  • A Study on Consumer Perception towards online shopping 31 shopping, security and privacy, quality of internet connection )are found to be ordinarily independent and five (attitude toward online shopping, intention to shop online, decision making, online purchasing, and consumer satisfaction) are ordinarily dependent variables. Consumer satisfaction is considered to be a separate factor in this study. It can occur at all possible stages depending on consumer’s involvement during the online shopping process. The relationships between satisfaction, attitude, intention, decision making and online purchasing are proposed to be two-way relationships due to the reciprocal influences of each on the other. In addition, three of the antecedents, perceived usefulness, perceived ease of use, perceived enjoyment , have been found to have direct impact on consumer satisfaction. Perceived Usefulness Perceived usefulness is defined as the degree to which a person believes that using a particular system would increase his or her job performance. It is an important factor affecting acceptance of an information system, because the ultimate aim of any person is the superior job performance. Perceived Ease of Use This is an important factor that affects the acceptance of a particular information system. It is defined as the degree to which a person believes that using a particular information system would be free of effort. Hence an application perceived to be easier to use would more likely be accepted by the user. Perceived Enjoyment Enjoyment refers to the extent to which the activity of using a computer is perceived to be enjoyable in its own rights. This is seen as an intrinsic source of motivation to use a particular application. Amount of Information Amount of information is defined as the information which is available for the product which a person wants to buy through online shopping. This factor eases the decision of the user to actually buy the product or not, or which product to buy. This factor becomes even more important in case of High Involvement product.
  • A Study on Consumer Perception towards online shopping 32 Security and Privacy Security and privacy are the main factors which hinder the growth of online shopping. The user is concerned about his ID and Password which can be stolen by persons with wrong intentions and then misuse it. At the same time they are concerned that their personal information may be sold to the third party which poses a serious threat to their privacy. Quality of Internet Connection Not only is the presence of internet connection necessary but also its Quality is important to shop online. This is an important factor which determines whether the user would shop online or not because presence of internet is a basic necessity for this mode of shopping Attitude and perception towards online shopping Consumer’s attitude and perception toward online shopping have gained a great deal of attention in the empirical literature. It is believed that consumer attitudes will affect intention to shop online and eventually whether a transaction is made. It refers to:- 1) The consumer’s acceptance of the Internet as a shopping channel 2) Consumer attitudes toward a specific Internet store (i.e., to what extent consumers think that shopping at this store is appealing). Intention to shop online Consumer’s intention to shop online refers to their willingness to make purchases in an Internet store. Commonly, this factor is measured by consumer’s willingness to buy and to return for additional purchases. The latter also contributes to customer loyalty. Consumer’s intention to shop online is positively associated with attitude towards Internet buying, and influences their decision-making and purchasing behavior. In addition, there is evidence of reciprocal influence between intention to shop online and customer satisfaction. Online shopping decision making Online shopping decision-making includes information seeking, comparison of alternatives, and choice making. The results bearing on this factor directly influence consumer’s purchasing behavior. In addition, there appears to be an impact on user’s satisfaction. Though
  • A Study on Consumer Perception towards online shopping 33 it is important, there are only five studies that include it. According to Haubl and Trifts (2000), potential consumers appear to use a two-stage process in reaching purchase decisions. Initially, consumers typically screen a large set of products in order to identify a subset of promising alternatives that appears to meet their needs. They then evaluate the subset in greater depth, performing relative comparisons across products based on some desirable attributes and make a purchase decision. Online purchasing This is the most substantial step in online shopping activities, with most empirical research using measures of frequency (or number) of purchases and value of online purchases as measures of online purchasing; other less commonly used measures are unplanned purchases Online purchasing is reported to be strongly associated with the factors of personal characteristics, vendor/service/product characteristics, website quality, attitudes toward online shopping, intention to shop online, and decision making (Andrade 2000; Bellman et al. 1999) Consumer satisfaction It can be defined as the extent to which consumer’s perceptions of the online shopping experience confirm their expectations. Most consumers form expectations of the product, vendor, service, and quality of the website that they patronize before engaging in online shopping activities. These expectations influence their attitudes and intentions to shop at a certain Internet store, and consequently their decision-making processes and purchasing behavior. If expectations are met, customers achieve a high degree of satisfaction, which influences their online shopping attitudes, intentions, decisions, and purchasing activity positively. In contrast, dissatisfaction is negatively associated with these four variables (Ho and Wu 1999; Jahng et al. 2001; Kim et al. 2001).
  • A Study on Consumer Perception towards online shopping 34 5.4 Data Collection Method- 5.4.1 Primary Data It is original primary data, for specific purpose of research project. For this project, I have to use following common research instrument or tool- Questionnaire- Questionnaire development is the critical part of primary data collection method. For this I will prepare a questionnaire in such a way that it will be able to collect all relevant information regarding the project. The questionnaire was designed using various scaling techniques. The questionnaire was used mainly to test the model proposed for consumer perception towards online shopping. Likert five point scales ranging from Strongly Agree to strongly disagree was used as a basis of Questions. The data collection was done over a period of 8 weeks This was done by going directly to the respondents or through mails. Information on online shopping Security & Privacy Perceived Usefulness Perceived Ease of use Attitude towards online shopping Intention to shop online Decision Making Online Purchase CONSUMER SATISFACTION Perceived Enjoyment
  • A Study on Consumer Perception towards online shopping 35 5.4.2 Secondary Data It will be collected to add the value to the primary data. This may be used to collect necessary data and records by different websites, magazines, annual reports, journals, reference books, and newspapers, etc. 5.5 Sample Design 5.5.1 Sample Unit For studying consumer perception on online shopping, samples were selected from Sambalpur,Odisha. 5.5.2 Sample Media The respondents in the samples are reached through personal interviews. 5.5.3 Sampling Methods Sampling methods fall under two broad categories- a) Non-probability sampling methods. b) Probability sampling methods. 5.5.4 Sample size- 100 5.5.5 Research place-Sambalpur 5.5.6 Sample Design I have prepared this project as descriptive type, as the objective of the study.
  • A Study on Consumer Perception towards online shopping 36 CHAPTER - 6 DATA ANALYSIS
  • A Study on Consumer Perception towards online shopping 37 6.0 DATA ANALYSIS 6.1 THE INTERNET USAGE The objectives of the research were studied with respect to a regular online shopper who shopped more than once because they would be the right respondent to give an insight about the online shopping. Therefore it is firstly important to understand who is a regular online shopper. In the survey the respondents where asked the following questions which helped to know about a regular shopper. 1. Q.1 Do you use Internet? � Yes 98% � No 02% INTERPRETATION The above pie -chart represent that 98% consumers had used the internet. The uses of internet is a vital thing in todays competitive era. The rapid uses of computer has make the internet well known to others. While as the influence of social media and mobile internet makes the uses of internet more popular. The 02 % people were never uses the internet from the study of 100 individual respondent. Q.02 How long have you been using Internet? � Less than 1 year � 3 – 5 years yes no
  • A Study on Consumer Perception towards online shopping 38 � 1 – 3 years � More than 5 years INTERPRETATION The diagram shows that shopping has increased with the usage of Internet over the years. Regular shoppers who have been using Internet for more than one year had shopped to 98% and regular shoppers who have been using Internet for more than five years have shopped to 78%. Internet is not a new concept for these regular online shoppers and they have been using it for more than 5 years now. The increased usage over the years has lead to an increase in shopping, as these regular shoppers are able to make use of the various e-commerce activities. Q.3 On the average, how much time (per week) do you spend in surfing the Web? � 0 – 5 hours � 16 – 20 hours � 6 – 10 hours � More than 20 hours � 11 – 15 hours 2% 6% 14% 78% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Less than1year 1–3years 3–5years More than 5years
  • A Study on Consumer Perception towards online shopping 39 INTERPRETATION The research shows that 36% of the online shopping had been done who use Internet for more than 20 hours a week and 96% of the shopping has been done by regular shoppers who have been using Internet for more than 5 hours a week. As more the regular online shopper are using the Internet it is seen that they end up buying more also. This shows that Internet is becoming an integral part of the daily activity of the regular online shopper. The regular online shoppers who have been using Internet for more than 20 hours are more comfortable and confident as a result they purchase more online as compared to who use Internet for less number of hours.The study shows that the growing usage of Internet has lead to increase in online shopping as seen above. There is a positive relation between increase usage of Internet and online purchase. The marketers should capture this enormous growth, which can be brought by the penetration of broadband and lowering the prices of computers. Thus increase in usage of Internet over the years and the more time spent has lead to an increase in shopping. But one needs to know whether online shopping is an integral part of regular shoppers or not this understood as follows. 4% 12% 20% 28% 36% 0% 5% 10% 15% 20% 25% 30% 35% 40% 0 - 5 hours a w eek 6 - 10 hours a w eek 11 - 15 hours a w eek 16 - 20 hours a w eek More than 20 hours a w eek
  • A Study on Consumer Perception towards online shopping 40 Q.4 Have you purchased anything online ever? INTERPRETATION The research showed that 65% of the Internet users had shopped online while 35% had not bought anything. This is mainly because of the changing lifestyle and taste patterns. As the life is getting more and more fast paced more people are moving on to shop online mainly because of convenience. This shows that a more Internet users are using it as a shopping medium and there is a huge potential in this sector but one should not be carried away by this figures. There could be a possibility that only a small section of the online shoppers are shopping or only a particular category of good had brought about this huge number. As a resultthe entire analysis was done incase of a regular online shopper to understand the shopping behavior of the online shoppers. The following question helped to understand who is a regular online shopper among the 65% who had indulged into online shopping. NO 35% YES 65%
  • A Study on Consumer Perception towards online shopping 41 The web online activity The following classifications are done to study the online activities in case of a regular online shopper. Fig. 5 Online Activities The Internet offers four basic services communication (socializing service with peer group or core group (email) or with new groups of people (chat), information services, entertainment services and commerce services and shopping. The research shows 32% of the regular online shoppers use Internet for communication while only 10% uses it for shopping which shows that communication still forms the major activity among the regular online shoppers. Fig. 6 Online Activities by Age 10% Shopping20% Finance 14% Entertainment 24% Inf ormation Gathering 32% Communication 0% 10% 20% 30% 40% 50% 60% 70% communication Information gathering Finance Shopping 18-30 years 31-40 years 41-50 years above 50 years
  • A Study on Consumer Perception towards online shopping 42 This classification further provides an insight that Internet is mainly used as a means of communication in respect all the age groups of the regular online shoppers. It contributes to 60% of the major activity among the regular online shoppers who lie between the age group 18-30 years. It could be seen that shopping as a basic activity on the Internet contributes to the minimum. Internet as a medium of shopping is maximum used by regular online shoppers between the age group18-30 years, which is 18% while above 50 years it is used just to 2%. The increase in usage among the 18-30 years is basically due to high awareness. The marketers should focus mainly on the age group between 18-30, as they are the main drivers for growth. Thus the research shows that though the regular shoppers are using the Internet for quiet some time now but shopping still remains a small part of the major activity Fig. 7 Online Activities by Time It is evident that regular online shoppers also spend a major part of their time in communication unlike the occasional online buyers. In 0-5 hours a week they spend 77% of their time in communication, which includes email, and chat as the major activity with shopping which does not seem to exist at all. Information search constitute 20% of the time. The information search increases as the regular online shoppers tries to figure out ways to surf the Internet and access the information they require. It is true that more regular online shoppers use Internet shopping sites to 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0-5 hours 6-10 hours 11-15 hours 16-20 hours more than 20 hours Communication Information Entertainment Finance Shopping
  • A Study on Consumer Perception towards online shopping 43 gather information about products rather than to make a direct purchase. But it is to be noticed that as the time spend increases communication falls and other activity picks up like entertainment and finance. One could see from the graph that between 16-20 hours a week communication falls further but information search also falls as the regular online shoppers becomes more focused in their information search rather than wandering aimlessly in the Internet space. They continuously use search engines for routine information needs. The time spent on entertainment increases marginally to 18%. As the people spend more time it has been seen that activities like shopping and finance related needs increases. The regular online shoppers who use the Internet for more than 20 hours a week has shown that they have indulged into more shopping i.e.10%. It is true that as the regular online shoppers spends more time on the Internet there is a possibility that they would end up buying more as they are ease with the use of internet. Increased usage of Internet is positively related to the buying behavior on the Internet. Analysis- It is true that increase in internet has lead to an increase in the online shopping as 78% of the online shopping has been done by the regular online shopper who have been using internet for more than five years and 36% of the online shopping have been done among the regular shopper who uses the Internet for more than 20 hours a week. Thus increase in usage of Internet has lead to an increase in online shopping. But shopping still constitute a small amount of the major activity on the internet as 32% of the regular online shoppers uses Internet for communication while only 10% uses it for shopping. Communication still constitutes the major activity on the Internet.
  • A Study on Consumer Perception towards online shopping 44 6.2 Demographic Factors Online behavior is affected by demographics i.e. by gender, education and income. 6.2.1 Hypotesis 1. More male Internet users are frequent online buyers than female Internet users. 2. Regular online buyers are better educated than occasional online buyers. 3. Income is higher in case of a regular online shopper than occasional online buyer. Fig. 8 Online Shopping & Gender Among the 65% of the online shopping, males (72%)had purchased more as compared to women (28%). This shows that it is true that more males are shopping online as compared to women. This is mainly because women still like to feel, see and touch the product before buying. It was noticed that some of them felt shopping as a reason to go out with the family and spend time together, which was not possible in case of online shopping. As more and more Indian women are flocking to Internet there is a possibility that they might end up in a purchase. Also an increase in the spending power in the hands of the women might lead to an increase in the online shopping. The research showed that 28% of the women who shopped online fall mostly in the service and executive class with an income above Rs10,000. The marketers should make sure that they produce the item keeping in mind the needs of the women 28% Female 72% Male
  • A Study on Consumer Perception towards online shopping 45 population as they still continue to be an important decision maker when shopping for the family. Fig. 9 Online Shopping & Educational Qualification Educational difference is a significant demographic variable, which shows that regular shoppers who were better educated made more purchases online. 89% of the shopping has been done by the regular shopper whose is educated with a graduate or postgraduate degree. This shows that frequency of purchase is more in case of a higher educated regular shopper as compared to a online shopping done by a regular online shopper with matriculate (8%) and non matriculate (3%). Fig. 10 Online Shopping & Income 3% Non Matriculate 8% Matriculate 54% Postgraduate 35% Graduate 1 2 1 1 3 5 1 1 8 21 5 3 14 38 15 11 0 5 10 15 20 25 30 35 40 Student Service/Executive Business Others less5000 5000-10000 10000-25000 above25000
  • A Study on Consumer Perception towards online shopping 46 Income and buying behavior are positively related. It was seen that a regular online shopper with a higher income had purchased more online as compared to lower income online shopper. This trend was seen in all segment of the population. It is true that more the income in the hands of the population they would indulge in shopping. The service class had done the major purchase in all the various levels of income. It can be seen that hardly any purchase is done among the regular online shopper whose income lies below Rs5000. Analysis- Thus three hypotheses stated were true in case of the regular online shopper and it can interpreted that online shopping is effected by demographics like gender, education and income levels. Among the 65% of the online shopping, males (72%)had purchased as compared to women (28%). There is a positive relation between education and income of the online shoppers. 89% of the online shopping was done among the regular shoppers who were educated with a graduate or postgraduate degree compared to 11% shopping who were matriculate and non-matriculate. A 60% of the shopping was done by the regular shopper who had income more than Rs 25,000 than 40% who had income less than Rs.25,000. 6.3 Motivating & Satisfaction Factors To identify the factors which Internet users choose to buy or not buy online and how frequently they make such purchases. Analyzing the importance of satisfaction level in the online purchasing environment. 6.3.1 Hypothesis Consumers who make frequent online purchases are higher in convenience orientation than those who purchase occasionally.
  • A Study on Consumer Perception towards online shopping 47 Fig. 11 Online Shopping & Motivating Factors It is believed that consumers whether online shoppers or non-online shoppers value price to convenience but the study contrast this popular belief. The study showed that 32% of the shopping had been done by the regular shopper who think convenience is the main driving force while 23% of the shopping had been done for whom price was the main orientation for shopping online. Other motivating forces, which had lead to online shopping, were saves time (26%), product availability and superior selection (12%), and product comparison (7%). Convenience here is characterized as ease of purchase, home delivery and ability to shop 24x7. These factors motivate the regular online shopper to buy over the Internet and regular online shoppers who value convenience are more likely to buy on the web, as compared to occasional online shoppers. Every connection is a potential for net shopping. Therefore the companies should attract and retain its regular online shoppers, as the Internet is a tangled jungle of web sites, which is possible at a click of a mouse. They should design strategies and develop products keeping in mind the convenience factors. 32% Convenience 23% Price 12% Superior selection 26% Saves Time 7% Product Comparison
  • A Study on Consumer Perception towards online shopping 48 Fig. 12 Barriers to Shopping Online The main areas for concern in respect of the regular online shoppers while shopping were privacy and security (33%). Most of them still preferred the conventional method of shopping like the touch and the feel factor (21%). They felt that it is possible to see, feel, touch and try the products before buying in a shopping store as compared to Internet shopping. Other reasons that concern the regular online shoppers were inability to reach the customer service (16%), hassle of returning the product (14%), technical foul –ups, hesitant in purchasing from an unfamiliar source and person and delivery costs. The marketers should formulate such strategies so that the privacy and security concern can be taken care off. 7% Others9% Unfamiliar 14% Hassle of returning 16% Lack of Customer Service 21% Inability to touch & feel 33% Privacy & Security
  • A Study on Consumer Perception towards online shopping 49 Fig. 13 Convenience- The Motivating Factor It has been seen that there is a positive correlation between the frequency of purchase and the convenience factor for buying in the Internet arena. The regular online shopper who had purchased more than 6 times (9%) for them convenience is the most important motivating factor (48%)for shopping on the Internet. Convenience has been characterized as ease of purchase, home delivery and ability to shop 24x7. The online shopper believes that large amount of information about the product and the ability to compare prices is available at a click of a mouse thus making the entire shopping experience very convenient. Thus the marketers to should keep the convenience factor in mind while providing the goods and services. 6.3.2 Satisfaction Index It is important to understand the satisfaction level among the regular online shoppers, which had lead to online shopping. This could be understood by the satisfaction index and the frequency of purchase among the shoppers. 12% 74% 5% 9% 5% 20% 27% 48% 0% 10% 20% 30% 40% 50% 60% 70% 80% Only once 2-4 times More than 5 times More than 6 times purchase convenience
  • A Study on Consumer Perception towards online shopping 50 Fig. 14 Satisfaction Index A 55% of the regular online shoppers were satisfied with 12% dissatisfied. An important thing to be noted is that only 2% of the regular online shoppers were highly satisfied while 31% of the regular online shoppers were neither satisfied nor dissatisfied. This shows satisfaction level plays an important role in online shopping with more regular shoppers falling under the category of satisfied. This shows that they were overall satisfied by the experience of shopping online. But the companies should take measures so that the dissatisfied and the neither satisfied nor dissatisfied category of regular online shoppers could be moved to satisfied or highly satisfied. A note should be taken that only 2% of the regular online shoppers are highly satisfied which shows that there are still concerns, which poise the regular shoppers from using the Internet frequently as a shopping medium. Satisfaction level can also be measured by the frequency with which the online shoppers purchase online. According to human psychology it is true that frequency of purchase depends upon the satisfaction level received. According to the figure 2 (already explained), a 74% of the regular online shopper has purchased 2-4 times and 9% had purchased more than 6 times indicating that an increase in the confidence level and accepting the Internet as a shopping medium. The increase in the frequency of shopping was mainly because they were overall satisfied by the entire shopping experience. 2% Highly Satisfied 12% Dissatisfied 31% Neither Satified nor Dissatisfied 55% Satisfied
  • A Study on Consumer Perception towards online shopping 51 Analysis- It is seen that the main orientation for buying among the regular online shoppers were convenience (32%), saves time (26%), price (23%), product availability and superior selection (12%), and product comparison (7%). The hypothesis stated that convenience is major factor motivating the regular shopper was true as 75% of the regular online shoppers who have shopped more than 5 times felt it was necessary as compared to 25% who shopped less than 5 times. The barriers to online shopping as stated by the regular online shopper were privacy and security (33%), inability to touch and feel the product (21%), customer service problems (16%), hassle of returning the product (14%), purchasing from unfamiliar source and person (9%) and other problems (7%). Satisfaction level plays an important role in online shopping, as 55% of the regular online shoppers that are satisfied tend to purchase more. It can also be seen that 74% have shopped more 2-4 times and 11% had shopped more than 5 times showing that satisfaction level plays an important role in online shopping. 6.4 Future and growth of Online Shopping This can be understood by the categories of good bought by the regular online shoppers presently and the future of the various categories. Fig. 15 Present & future categories of Goods 0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 % 1 2 0 % B o o k s R a ilw a y t ic k e t s A ir lin e t ic k e t s E le c t r o n ic G a d g e ts G if t s M o v ie s t ic k e ts P re s e n t F u tu re
  • A Study on Consumer Perception towards online shopping 52 It is seen that railway tickets 70% and airline tickets 93% are the most popular categories among the online shoppers followed by books and electronic gadgets. This is the main category, which is bringing about online shopping culture among the regular online shoppers. The companies should bring out innovative ways so that there is a growth in other categories of goods also. The entire shopping culture among the regular shoppers is brought mainly by the travel categories followed by electronic gadgets. The graph shows that online shopping is tend to grow in the coming years as consumers want to buy more in the future. Table 1 Future Categories of Goods Railway tickets 83% Airline tickets 80% Electronic Gadgets 50% Books 43% Gifts 33% Movies tickets 30% Jewellery 23% Computer Software 20% Hotel Rooms/Car Rental 20% Event Tickets 13% Toys 13% Infant / Child items 10% Food / Groceries 7% Accessories apparel 3%
  • A Study on Consumer Perception towards online shopping 53 CD/Videos 3% Magazines 3% Home tools and products 3% Sporting goods 3% The table I shows that shows that there is a future growth in the electronic gadget and book categories also apart from railway and airline tickets, which continues to be on the priority list. There is a growth in these categories because traditionally products like audio-video, apparel, and computer accessories were purchased through catalogs and other forms of direct mail but toady online shopping serves a convenient means of distribution channel. Another reason for the growth in these categories is because of well-established sites for travel, audio-video (e.g., CD-Now), and computers (e.g.www.dell.com, www.sonyvaio.com), which lure the consumers to buy these products. These goods do well because consumers are not bothered much about the touch and feel factors, which generally drive the shopping in India unlike categories like apparels and groceries where it still remain an important factor while purchasing. It is difficult to change the set mindset of consumers for certain categories of goods but still companies should keep innovating and find means and ways to attract more online shopping. Analysis- There is a future growth in online shopping which can be especially seen in the travel arena with railway 83% and airlines 80%, electronic gadgets (50%)and books (43%). Gifts also seem to show a growth in the coming years. Thus the marketers should mainly focus on these growing categories of goods, which would drive the online shopping in the future.
  • A Study on Consumer Perception towards online shopping 54 CHAPTER – 7 FINDINGS
  • A Study on Consumer Perception towards online shopping 55 7.0 FINDINGS The findings show that Internet usage has increased over the years and it is leading to an increase in online shopping and also shows the consumers attitude and perception towards online shopping. Communication still forms the major activity among the large number of online shoppers as 32% of regular online shopper use Internet for communication as compared to shopping (10%). Online shopping is affected by demographics as it has been seen that more males are shopping online as compared women online shoppers and there is a positive relation between education and income levels with respect to the increased online shopping behaviour. The most important motivating factor, which influenced the online shopping, was convenience followed by time saving and price. Regular online shoppers considered convenience as the main motivating factor while buying and were less price sensitive. But the online marketers should attempt to differentiate their products or services making the comparison easier. The marketers should bring out innovative ways so that the consumers can do more online shopping while taking the full advantage of rich information, easy access and convenience of the Internet. One of the main concerns among the online shoppers was privacy and security. Another reason that hindered online shopping was the touch factor. Consumers still preferred the experience they get from traditional stores like feeling the store’s atmosphere, interacting with a salesperson, and seeking sensory stimulation. This might hinder the use of certain goods like grocery and apparel, as the touch factor is the main factor, which drives the shopping for these goods. The future of online shopping is bright especially in the categories of travel, books, electronic gadgets and gifts.
  • A Study on Consumer Perception towards online shopping 56 CHAPTER-8 SUGGESTION & CONCLUSION
  • A Study on Consumer Perception towards online shopping 57 8.1 SUGGESTION Online shopping in India is poised for greater acceleration as PC and Internet penetration grows. It is becoming one of the top Internet activities and there is a huge growth in this business as more manufacturers and providers are integrating the Internet into their sales model. But there are many things that need to occur in online shopping to generate higher revenues and the key to it lies in the hands of the marketers. To make online shopping a boom following methods can be followed. � India has a strong research and development (R&D) capability so companies should innovate rapidly to take care of the security issues. Technology like text to speech softwares should be innovated to take care of the security concern. � In India the total ownership of credit cards is small as compared to its population and there are also hesitant in using it as a mode of online payment therefore alternative methods of payment like cash on delivery (COD) where the end user pays cash after the product is delivered and debit cards where the bank accounts are directly debited should be used. Other technologies like encryption technologies trusted third-party certifications; digital ID systems and prepaid cards should be used. � The consumers should be made aware that one of the safety aspect of using credit cards online is that in case of disputed credit card payments for online transactions the onus is on the merchants to prove that the transaction actually took place, as online users don't physically sign a credit slip. As a result online users are protected from fraudulent use of credit cards. � There is a growth in the cellular phone market in India, more merchants should make use of this device allowing the customers to access the Internet and use it as mode of payment thereby obviating the need for PCs and credit cards. � It is not only important to pay strong attention to the security issue and create new, innovative safeguards that protect consumers but the merchants should promote these safeguards to the marketplace and make the prospective consumers aware that the communications, personal data, credit card accounts, and transaction information
  • A Study on Consumer Perception towards online shopping 58 can be protected. � One of the factors that hinder Internet penetration in India is access. More companies should adopt click and mortar model with the real world operations to complement its online presence for e.g. customers can walk to the office to access its services. � Merchants should provide goods and services that offer the right value for money. There should be transparency in policies (returns, privacy, shipping, etc), insurance against fraud and a good after sales services should be provided to consumers making it an enjoyable experience. � Consumers today demand a better, more efficient and less cumbersome way to compare and buy products online. Innovative service should be provided to consumers so that they can compare products, which are available online using their mobile phones. � Online shopping today is an incomplete, fragmented, and sometimes frustrating process. Therefore merchants should set themselves apart from their competitors by factors other than price, constantly innovate and move towards creating customer confidence to trade online. They should provide massive selection at lower prices, offer a personalized customer experience and their web sites should deliver a shopping experience that addresses all of the consumer needs like recommendation about the products, feedback from other customers, etc. � Vendors should educate the customers about e-commerce like educating them on safety tips like reading the item description, looking for a seller’s feedback score and asking questions, detecting spoof mails and informing them about the new online crimes which happen regularly. � In India still the penetration of Internet has not happened the way it should have been which hampers online shopping. Ecommerce revolution can be brought about by providing more broadband connections at affordable prices.
  • A Study on Consumer Perception towards online shopping 59 � There is a huge market for business in the rural India therefore efforts should be such that to bring these people also into experiencing online shopping. Companies should create more Indian language software or content as Internet still is a primarily English language world and language could be a barrier in rural India. Only few language portals like webduniya.com exist today. � Most of the Indians still like to see the product before buying; efforts should be made to change this mindset of the people by making them aware of the benefits of online shopping. � To make online shopping big the shopping web sites should give the customers the convenience to shop anything on a single site like ordering pizzas, movie tickets, groceries, etc rather than in scattered places. The site should not only provide information content but also tools to navigate and evaluate this information. The information on the site should be just sufficient for the consumers to make a decision and not to overload them with information, which results in confusion. � Convenience and time saving are the main reason to shop online. Therefore Business to Consumers (B2C) sites should be designed in such a way that consumers spend less time in finding information they are looking for as delays in searching or loading a web page might turn the consumers to other sites which have faster download and display times. � Since consumers control the experience they receive from shopping over the Internet, there is a need to find ways of managing the amount of information available over the Internet. Sites that are able to offer this information and present it in a simple way to understand will become the preferred destination for online shopping. � The key to selling to a customer which cannot be seen is to get the customer to trust the website with which they have electronic transactions. � Active participation from consumer marketing companies to manufacturing industries is required to make online shopping a booming sector.
  • A Study on Consumer Perception towards online shopping 60 Some of the things, which the consumers should take into considerations while online shopping, are: � Use a secure browser. The browser should comply with industry security standards, such as Secure Sockets Layer (SSL). � Consumers should shop with the known companies, as it is easy to set up a shop online under any name. If they are not familiar with a merchant they should ask for paper catalogue or brochure to get a better idea about the merchandise and services and should find about the company’s refund and return policies. Consumers should also search for the reviews of the company. � Read the privacy policy on the site of the companies before shopping as this helps to know what information is being collected and how it would be used. � Keep a print record of the transactions this would come handy in case of any fraud. � One should find out how the company secures the financial and personal information before paying the bills. � The personal information should be kept private like address, telephone numbers, email, etc. One should avoid using telephone numbers or date of birth for establishing a password instead should use a combination of numbers, letters and symbols. � Proper research should be done about countries shopping laws and merchant when shopping from other countries.
  • A Study on Consumer Perception towards online shopping 61 8.2 CONCLUSION This research shows that online shopping is having very bright future in India. Perception towards online shopping is getting better in India. With the use of internet, consumers can shop anywhere, anything and anytime with easy and safe payment options. Consumers can do comparison shopping between products, as well as, online stores. This study is mainly focus on the factors from the Internet and examines those factors that affect the consumer’s online shopping behaviours. The research focus on the Internet shopping (include the nature of Internet shopping, E-commerce website, and online security, privacy, trust and trustworthiness) and online consumer behaviours (include background, shopping motivation and decision making process). Those factors were looked at, and examined to reveal the influence at online consumer behaviours. In addition, the previous researches were used to help researchers understanding more comprehensively. Moreover, the customer’s purchase decision making process was also examined to identify the potential factors. The information search is the most important factor that helps the customers find the suitable products or services for their needs. Therefore, the online retailers have to enhance and improve the information supporting such as provide much detailed product information and use internal search engine in order to increase the efficient of information search. For the evaluation stage, customers more think a lot of the reputation from the E-commerce website, and the payment security for the purchase stage. At the post-purchase stage, the factor of after services which is the most concerned about. Overall, the factors from the Internet that influenced or prevented online consumer behaviours need to be carefully concerned by the online retailers, who can utilize the appropriate marketing communications to support the customer’s purchase decision making process and improve their performance.
  • A Study on Consumer Perception towards online shopping 62 BIBLOGRAPHY 1)Ramaswami&Namakumari, Marketing Management-Planning, Implementation and Control, MacMillan India Ltd, New Delhi 2)Bhatnagar, A, Misra, S., and Rao, H. R., ‘Online risk, convenience, and Internet shopping behavior,’ Communications of the ACM 2000 3)Alexandru M. Degeratu, ArvindRangaswamy and Jianan Wu (2000) Consumer ChoiceBehaviour in Online and Traditional Supermarkets: The Effects of Brand Name, Price, and other Search Attributes, International Journal of Research in Marketing, Vol. 17, No.1, p. 55-78. Available at: http://www.smeal.psu.edu/ebrc/publications/res_papers/1999_03.pdf 4)Aron M. Levin, Irwin P. Levin, and C. Edward Heath (2003) PRODUCT CATEGORYDEPENDENT CONSUMER PREFERENCES FOR ONLINE AND OFFLINE SHOPPING FEATURES AND THEIR INFLUENCE ON MULTI-CHANNEL RETAIL ALLIANCES, Journal of Electronic Commerce Research, VOL. 4, No. 3. Available at:http://www.csulb.edu/web/journals/jecr/issues/20033/paper1.pdf 5)Ali S S, Models in Consumer Buying Behaviour, Deep & Deep Publications. 6)Kothari C. R., Research Methodology Methods and Techniques, WishwaPrakashan, New Delhi. 7)www.wikipedia.com 8) www.amzon.com 9)www.flipkart.com
  • A Study on Consumer Perception towards online shopping 63 QUESTIONAIRE Kindly highlight/bold your answers. 1. Do you use Internet? � Yes � No 2. How long have you been using Internet? � Less than 1 year � 3 – 5 years � 1 – 3 years � More than 5 years 3. On the average, how much time (per week) do you spend in surfing the Web? � 0 – 5 hours � 16 – 20 hours � 6 – 10 hours � More than 20 hours � 11 – 15 hours 4. Have you purchased anything online ever? � Yes � No 5. Which category (ies) of goods have you bought through Internet? � Books � Railway tickets � Electronic Gadgets � Airline tickets � CD/Videos � Computer Hardware � Accessories apparel � Computer Software � Gifts � Magazines � Event Tickets � Movies tickets � Hotel Rooms/Car Rental � Office Supplies � Jewellery � Food / Groceries � Infant / Child items � Home tools and products
  • A Study on Consumer Perception towards online shopping 64 � Sporting goods � Health and fitness products � Toys � Any other, specify……………… 6. When did u shop for the first time? � Last 6 months � 6 months- 1year � 1-3 year � 3-5 year � More than 5 year 7. How frequently did you purchase online? � Only once � 2-4 times � More than 5 times � More than 6 times 8. Overall, were you satisfied with your experience of online shopping? � Highly Satisfied � Satisfied � Neither satisfied nor dissatisfied � Dissatisfied � Highly Dissatisfied 9. Where do you most often access the Internet? � Home � Cyber-cafes � Office / College �Any other, specify……… 10. What are the activities that you use Internet for? (Kindly rank them between 1 to 5,with 1=most used, 2=used to a large extent, 3=used to a good extent, 4=used sometimes, 5=rarely used)
  • A Study on Consumer Perception towards online shopping 65 Communication (E-mail, Instant Messaging, Bulletin Boards, News Groups, Chat, etc.) Information Gathering (Research, News, Sports scores, Search for employment, etc.) Entertainment (Games, Adult entertainment, Entertainment sites, Sports, Music, Web page design, etc.) Finance (Investment portfolio, financial research, online banking, check stock/fund quotes, trading, etc.) Shopping (Researching purchases, purchasing, auctions, Selling, Classifieds, etc.) 11. Which category (ies) of goods are you planning to buy through internet in the near future? � Books � Railway tickets � Electronic Gadgets � Airline tickets � CD/Videos � Computer Hardware � Accessories apparel � Computer Software � Gifts � Magazines � Event Tickets � Beauty products � Movies tickets � Health and fitness products � Hotel Rooms/Car Rental � Office Supplies � Jewellery � Food / Groceries � Apparel gift certificates � Pharmaceuticals � Infant / Child items � Home tools and products � Sporting goods � Home appliances � Toys � Any other, specify……………… 12. What is your main motivation for buying through Internet? � Convenience (ease of purchase, home delivery, ability to shop 24x7) � Price � Saves time � Superior selection/Availability
  • A Study on Consumer Perception towards online shopping 66 � Product comparison �Any other, specify……………… 13. What, according to you, are the most important barriers to purchase online? �I am worried about giving out my credit card number �I don’t have a credit card �I don’t like providing personal information �I don’t want to purchase from someone with whom I am not familiar � I enjoy going out to do my shopping �I like to see/touch the product in person, before I buy it �Internet is too slow / Pages take too long to load �I am worried about the cost/hassle of returning the product �Delivery costs are too high �Prices are too high �Technical foul-ups prevent transactions from going through �I can’t find anything that I want to purchase on the Internet �I don’t know how but I am uncomfortable about purchasing through Internet �The process is expensive due to cost of access �Any other, specify………… PERSONAL DETAILS 14. Age: � Below 18 yrs � 18 - 30 yrs � 31 - 40 yrs � 41 – 50 yrs � Above 50 yrs
  • A Study on Consumer Perception towards online shopping 67 15. Educational Background: � Non-Matriculate � Matriculate � Graduate � Postgraduate 16. Occupation: � Business/Self Employed � Service/Executive � Student � Any other, specify……………… 17. Gender: � Male � Female 18. Average Monthly Income: � Less than Rs. 5,000 � Rs. 5,000 – Rs. 10,000 � Rs. 10,000 – Rs. 25,000 � Rs. 25,000 – Rs. 50,000 � Above Rs. 50,000 Name: _____________________________ Contact No.: ______________________________ City: ______________________________
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  • ACKNOWLEDGEMENT First and foremost, I would like to thank my respectable and learned guide, Mr. Purunendu Patra but for who’s untiring, persevering and unflinching help; this project would not have seen the light of day. It is he who initiated the development of the project and was thus instrumental in showing the right direction in the field of . He provided encouragement and boost in the transformation of my inherent internal knowledge into a real work for external audience. Lastly, I would like to bestow my regards and gratitude to the G.M.College, Autonomous, Sambalpur, specially Dr. S. Dash, HOD, Department of Professional Courses, which provided me this opportunity to undertake the Dissertation program on consumer perception towards online shopping for allowing me to go through this worthy dissertation programme. (Subhasis Pattnaik) PC13MBA005
  • CERTIFICATE OF THE GUIDE This is to certify that the dissertation report entitle “CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING” submitted by SUBHASISH PATNAIK bearing the Roll no- PC13MBA005 is his own work and has been carried out under my supervision. It is recommended that the candidate may now be evaluated for his dissertation work by the college. DATE; 06th April 2015 (PURNENDU KUMAR PATRA) PLACE: Sambalpur Signature:
  • DECLARATION I Subhasish Patnaik, Roll No. PC13MBA005, a student of Gangadhar Meher college(Auto), Sambalpur, hereby declare that the dissertation on “CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING” is done by me is an authentic work carried out for the partial fulfilment of the requirement for the award of the degree of MBA program in management under the guidance by Mr. PURNENDU KUMAR PATRA The matter embodied in the project work has not been submitted for the award of any other degree, diploma or any other similar title or prizes to the best of my knowledge and belief. Subhasish Patnaik Roll No. PC13MBA005 MBA 2nd Year .
  • CONTENTS CHAPTER – I INTRODUCTION 1 - 4 1.1 Significance of the study 1.2 Objective of the study 1.3 Scope of the study 1.4 Research objective 1.5 Limitation of the study CHAPTER – II REVIEW OF LITERATURE 5 - 10 2.1 National 2.2 International CHAPTER – III OVERVIEW OF THE INDUSTRY 11 – 18 3.1 Online shopping in india 3.2 Recent development 3.3 Gaint players in Indian online shopping CHAPTER – IV THEORIES OF THE STUDY 19 – 28 4.1 Introduction to the study 4.2 AIDA Principle in online shopping 4.3 Porters̕ 5 force model in online shopping 4.4 Marketing mix (7p) in online marketing 4.5 Models of online marketing
  • CHAPTER – V RESEARCH METHODOLOGY 29 – 35 5.1 Research objective 5.2 Determination of information needs and sources 5.3 Research framework 5.4 Data collection 5.4.1 Primary data 5.4.2 Secondary data 5.5 Sample design 5.5.1 Sample unit 5.5.2 Sample media 5.5.3 Sampling method 5.5.4 Sample size 5.5.5 Sample place 5.5.6 Sample design CHAPTER – VI DATA ANALYSIS 36 – 53 CHAPTER – VI FINDING 54 - 55 CHAPTER – VI SUGGESTION & CONCLUSION 56 - 61 CHAPTER – VII BIBLIOGRAPHY CHAPTER – IX ANNEXURES
  • A Study on Consumer Perception towards online shopping 1 Chapter 1 INTRODUCTION
  • A Study on Consumer Perception towards online shopping 2 1.0 INTRODUCTION Internet is changing the way consumers shop and buys 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’ behaviour from different perspectives. Many of their studies have posited new emergent factors or assumptions that are based on the traditional models of consumer behaviour, and then examine their validity in the Internet context. Online shopping is definitely a great way to shop with everything available on the websites. From clothes, gift items, food, home needs, medicines, and many more, this mode of shopping allows one to shop conveniently without hassle on spending hours in a supermarket or shopping areas. The Internet with its wide array of information nooks, allows the customer to go through various reviews of the product or service before actually heading for purchases. These online shopping websites also have daily deals for the customer looking for discounts and store offerings.
  • A Study on Consumer Perception towards online shopping 3 1.1 SIGNIFICANCE OF THE STUDY In recent years, online shopping has become very popular. The growth of technology has made these a part and parcel of everyday lifestyle. The advent of plastic money or the debit /credit card and the smooth access to the World Wide Web has brought the shops from around the world to the desktop. We personally have seen many of our friends surfing through various online shopping sites and purchasing things. Student community has become so strong that even the parents seek the help and advice of their children before conducting big purchases. This is solely because of their exposure to web and social media. Moreover, while it comes to personal purchases, students are very particular that they get best products available in the market and seek all the possible ways to secure the best products. This is where the role of online shopping sites emerges. Students who are well versed in the use of internet and active in social media, know about online markets and have tried at least some of them. The study is very relevant because it can give a clear picture of the future of online markets in India and the emerging trends in this particular field. The various factors that influence online shopping habits and its merits and demerits are also dealt with.The study also tries to have a comparison of online shopping habits among different age group as well as income group. 1.2 Objective of the Study The objective of this research study is to investigate online consumer behavior, which in turn provides E-marketers with a constructional framework for fine-tuning their E- businesses’ strategies. The specific objectives of this research are: 1. To know the consumers awareness and perception about the products and services provided on internet. 2. To know how it provides products and services and satisfies their customers. 3. To know how it reduces the uncertainty in purchase decision process. 1.3 Scope of the Study The theoretical scope of the study includes the popularity of online shopping, the need of virtual markets, their role in influencing the consumption pattern and habits, merits and demerits of e-markets, major players in online retailing etc. We can listed the scope as below :
  • A Study on Consumer Perception towards online shopping 4 1. The Study was conducted among the Internet users. 2. The Geographical area covered was Sambalpur. 3. The Study was based on a Schedule of Questions. 4. The scope of internet shopping 1.4RESEARCH OBJECTIVE 1. To analysethe consumer interest on online marketing. 2. To determine the factors affecting online buying. 3. To evaluate the growth of online marketing. 4. To forsee the demand of online shopping in india. 5. To study the impact of traditional retailer over the online retailer. 6. To gather information regarding growing sector for online purchasing. 7. To understand the barriers of online marketing. 8. To know the consumers awareness and perception about the products and services provided on internet 9. To examine what the consumer had bought and what they want to purchase in the near future. 1.5 LIMITATIONS OF THE STUDY Utmost care has been taken with regard to the collection, classification and analysis of data. However, the study is subjected to the following limitations: There were hardly any previous studies on the topic and it was a great challenge to deal with a fresh topic. 1. Lack of environmental support for the study on the topic. 2. Less sample size, as it is just survey with 100 respondent 3. Basically based on primary data , hence we can not argue that the research is applicable in each condition,time& place. 4. Short time duration, with in such short span of time it is too much difficult to analyse the topic. 5. Lack of customer support, while asking the consumer they were behaving rudely and not responding to the questions.
  • A Study on Consumer Perception towards online shopping 5 CHAPTER -2 LITRETURE REVIEW
  • A Study on Consumer Perception towards online shopping 6 CHAPTER-2 REVIEW OF LITRETURE A literature review is a select analysis of existing research which is relevant to your topic, showing how it relates to your investigation. It explains and justifies how your investigation may help answer some of the questions or gaps in this area of research. A literature review is not a straightforward summary of everything you have read on the topic and it is not a chronological description of what was discovered in your field. 2.1 NATIONAL REVIEW OF LITREATURE Rajeev Kamineni (2004) in his study finds that World Wide Web can change humanbehaviour and human interactions to a very large extent. Web based shopping behaviour is one major example to point out the trends in this direction. This study is of a very exploratory nature and it intends to establish the differences between several web-based shoppers from different parts of the world. Several critical factors associated with online shopping behaviour have been explored. A cross cultural data set has been collected and an illustrative description of the shoppers has been provided. As a final step the cross cultural differences between several shoppers explored. ArchanaShrivastava, UjwalLanjewar, (2011) in online buying, the rate of diffusion andadoption of the online buying amongst consumers is still relatively low in India. In view of above problem an empirical study of online buying behavior was undertaken. Based on literature review, four predominant psychographic parameters namely attitude, motivation, personality and trust were studied with respect to online buying. The online buying decision process models based on all the four parameters were designed after statistical analysis. These models were integrated with business intelligence, knowledge management and data mining to design Behavioral Business Intelligence framework with a cohesive view of online buyer behavior. For better understanding the factors of internet and consumer shopping behaviours towards internet shopping, this chapter would provide academic research reviews and
  • A Study on Consumer Perception towards online shopping 7 relative ideas expressed in the literature that associated with this subject. Furthermore, a number of hypotheses will be tested to answer the research questions that mentioned already in the introduction. Due to the recent research shows that internet shopping becomes a full and effective business model (Black, 2005), therefore there are several studies that already investigated more or less related on internet shopping and consumer behaviour. In the following chapter, some point of view will be taken from literatures, and needs careful review to achieve them as the basis of the subsequent research investigation. J.SINHA 2010The number of people engaged in various online activities is increasing every day. While the number of online shoppers is increasing, it is not proportional to that of brick-and-mortar shoppers. Research has tried to explain the dismal performance of online shopping as compared to the physical shopping format. Reasons for the lower level of Internet sales have been cited as being perceived risk in carrying out an online transaction, socio-psychological factors (Like - influence of friends and relatives) and infrastructural limitations (Availability of Internet, computers, credit-cards, cyber laws etc.). Under the purview of aforementioned factors this study tried understanding the online shopping behavior of Indian consumers. Socio-psychological factors and infrastructure have been found influential factors while the perceived risk surprisingly is not significant as a whole but at gender level there was significant difference between the online behavior of male and female due to risk perception. Lal studied the determinants of adoption of Information Technology (IT) in India. The study was based on 59 electrical and electronic goods manufacturing firmssituated in NOIDA. Semi-structured questionnaire were used to collect the data. The study examined the factors influencing the degree of IT adoption by firms. The factors included are entrepreneur characteristics measured by entrepreneur’s qualification, importance given to market share, R&D and quality consciousness, firm’s international orientation factors measured by import and export intensity, work force skill and firm size. The sample firms were divided into four categories depending on their intensity of IT.
  • A Study on Consumer Perception towards online shopping 8 2.2 INTERNATIONAL REVIEW OF LITREATURE E-Business probably began with electronic data interchange in the 1960s (Zwass, 1996). However, (Melao, 2008) suggests that it was only in the 1990s, primarily via the Internet, that e- Business has emerged as a core feature of many organizations. In his opinion, the hope was that e-Business would revolutionize the ways in which organizations interact with customers, employees, suppliers and partners. Some saw e- Business as part of a recipe to stay competitive in the global economy. Christy M. K. Cheung, Lei Zhu, Timothy Kwong, Glori a W.W. Chan, MoezLimayem,(2002) The topic of online consumer behavior has been examined under variouscontexts over the years. Although researchers from a variety of business disciplines have made significant progress over the past few years, the scope of these studies is rather broad, the studies appear relatively fragmented and no unifying theoretical model is found in this research area. In view of this, provide an exhaustive review of the literature and propose a research framework with three key building blocks (intention, adoption, and continuance) so as to analyze the online consumer behavior in a systematic way. This proposed framework not only provides us with a cohesive view of online consumer behavior, but also serves as a salient guideline for researchers in this area. Burke, R.R. (2002), Trust is a key factor that determines the success of Business toConsumer (B2C) e-commerce transactions. Previous researchers have identified several critical factors that influence trust in the context of online shopping. This research focuses on available security measures which assure online shopper_s safety and great sales promotions and online deals which stimulate customers to shop online. Abel Stephen (2003) in his paper represents the findings of research studies that address e-commerce design and associated consumer behavior. The innovation of e-commerce has affected not only the marketplace through the facilitation of the exchange of goods and services, but also human behavior in response to the mechanisms of online services. Researchers have identified and hypothesized on relevant subject matters ranging from Web usability, marketing channels and other factors influencing online buying behavior. Though researchers have focused on what appear different aspects of online buying behavior, their studies may be shown to be interrelated and interdependent, even to the extent of revealing constructs upon which e-commerce, in terms of future design and research, could be built. Balasubramanian, S., Konana, P. and Menon, N.M. (2003), In this environment, sometraditional service quality dimensions that determine customer satisfaction, such as thephysical appearance of facilities, employees, and equipment, and employees_ responsiveness and
  • A Study on Consumer Perception towards online shopping 9 empathy are unobservable. In contrast, trust may play a central role here in enhancing customer satisfaction. Model trust as an endogenously formed entity that ultimately impacts customer satisfaction, and we elucidate the linkages between trust and other factors related to the performance of the online service provider and to the service environment. The classic consumer purchasing decision-making theory can be characterized as a continuum extending from routine problem-solving behaviors, through to limited problem- solving behaviors and then towards extensive problem-solving behaviors [Schiff man et al., 2001]. The traditional framework for analysis of the buyer decision process is a five-step model. Given the model, the consumer progresses firstly from a state of felt deprivation (problem recognition), to the search for information on problem solutions. The information gathered provides the basis for the evaluation of alternatives. Finally, post-purchase behavior is critical in the marketing perspective, as it eventually affects consumers’ perception of satisfaction/dissatisfaction with the product/service. This classic five stage model comprises the essence of consumer behavior under most contexts. Nevertheless, the management of marketing issues at each stage in the virtual environment has to be resolved by individual E-marketers. Peterson et al. [1997] commented that it is an early stage in Internet development in terms of building an appropriate dedicated model of consumer buying behavior. Decision sequences will be influenced by the starting point of the consumer, the relevant market structures and the characteristics of the product in question. Consumers' attitude towards online shopping is a prominent factor affecting actual buying behavior. (Source: Jarvenpaa Journal of Electronic Commerce Research, VOL. 6, and NO.2, 2005) Todd [1997] proposed a model of attitudes and shopping intention towards Internet shopping in general. The model included several indicators, belonging to four major categories; the value of the product, the shopping experience, the quality of service offered by the website and the risk perceptions of Internet retail shopping. In the research conducted by Vellido et al. [2000], nine factors associated with users' perception of online shopping were extracted. Among those factors the risk perception of users was demonstrated to be the main discriminator between people buying online and people not buying online. Other discriminating factors were; control over, and convenience of, the shopping process,
  • A Study on Consumer Perception towards online shopping 10 affordability of merchandise, customer service and ease of use of the shopping site. In another study, Jarvenpaa et al. [2000] tested a model of consumer attitude towards specific webbase stores, in which perceptions of the store's reputation and size were assumed to affect consumer trust of the retailer. The level of trust was positively related to the attitude toward the store, and inversely related to the perception of the risks involved in buying from that store. Jarvenpaa et al. [2000] concluded that the attitude and the risk perception affected the consumer's intention to buy from the store. Consumer risk perceptions and concerns regarding online shopping are mainly related to aspects involving the privacy and security of personal information, the security of online transaction systems and the uncertainty of product quality. Trust is interwoven with risk [McAllister, 1995]. One of the consequences of trust is that it reduces the consumer’s perception of risk associated with opportunistic behavior by the seller [Ganesan, 1994]. Lack of trust is frequently reported as the reason for consumers not purchasing from Internet shops, as trust is regarded as an important factor under conditions of uncertainty and risk in traditional theories. Mayer et al. [1995] developed a model which combines traditional marketing philosophy on consumer motivation to buy and the trust model. In this model, trust propensity; which is a personality trait possessed by buyers; is an important antecedent of trust. In Internet shopping, there is not much information available to the buyer regarding the seller, prior to purchase. A buyer with a high propensity to trust will more likely be a potential customer than a buyer with a lower propensity. Purchase decisions are ultimately guided by consumers' perceptions of the product or service. Of course, the critical nature of perceptions as they relate to purchase behaviour has been repeatedly demonstrated in advertising and marketing research. Negative perceptions of the product, service, brand, or company almost always translate to a lost sale or, at a minimum, expressed lower intentions to purchase the advertised product or service. If the goal is to increase online spending among consumers, particularly female consumers, then consumers' perceptions of online shopping are ultimately matters the most. Presumably, the more positive consumers perceive the online buying experience the more likely they will make online purchases. The primary construct that we believe will have a bearing on perceptual differences between male and female internet shoppers is emotion. Related to emotion are two additional constructs, trust and convenience. (Robertson , Zielinski and Ward, 1984)
  • A Study on Consumer Perception towards online shopping 11 CHAPTER - 3 OVERVIEW OF THE INDUSTRY
  • A Study on Consumer Perception towards online shopping 12 OVERVIEW OF THE INDUSTRY 3.1 ONLINE SHOPPING IN INDIA The birth and growth of Internet has been the biggest event of the century. E-commerce in India has come a long way from a timid beginning in the 1999-2000 to a period where one can sell and find all sorts of stuff from a high end product to a meager peanut online. Most corporations are using Internet to represent their product range and services so that it is accessible to the global market and to reach out to a larger range of their audience. Computers and the Internet have completely changed the way one handles day-to-day transactions; online shopping is one of them. The Internet has brought about sweeping changes in the purchasing habits of the people. In the comfort of one's home, office or cyber cafe or anywhere across the globe, one can log on and buy just about anything from apparel, books, music and diamond jewellery to digital cameras, mobile phones, MP3 players, video games, movie tickets, rail and air tickets. Ease, simplicity, convenience and security are the key factors turning the users to buy online. E-commerce revenues in the country are projected to reach Rs 2,300 crore in the year 2006- 07, growing at 95 per cent over 2004-05(Source: Internet and Mobile Association of India, IAMAI). This pertains to the business-to-consumer (B2C) segment. It may be too early to do a comparison with the e-commerce scenes in countries such as the US where billions of dollars are spent online but the business in India is growing exponentially every year, albeit from a smaller base, the total revenues have reached a respectful size.
  • A Study on Consumer Perception towards online shopping 13 3.2 Recent Developments The number of users logging on to the Internet is growing by leaps and bounds. The number of Indians who are online is expected to touch to 100 million by 2007-08, from the present 38.5 million according to the research conducted by IAMAI. The numbers indicate a growing sense of comfort with the use of Internet for shopping. Accompanying this growth, there is an increasing maturity in the way people use the Internet. It's a classical curve. Online users typically start by using e-mail, gradually move on to browsing for news, information and entertainment, and finally graduate to shopping and conducting business online. Online sales have registered a huge jump and what was a concept five years ago is now beginning to hit the mainstream levels. Roughly 10 percent of the world's population more than 627 million people have shopped online at least once, in India it is just sprouted and beginning to perish. Internet is now going beyond the simple exchange of information to a shopping paradise. This medium is far bigger than expected, but many retailers and marketers are not using it to its full potential. Indian customers are increasingly getting comfortable with online shopping, and there is a higher acceptability for the concept. India has 25 million Internet users and more is now turning to online shopping. There has been an influx of online shopping sites in India with many companies hitching onto the Internet bandwagon. The revenues from online shopping are expected to more than double by 2006-07. According to IAMAI, the average number of transactions per month in India has gone up from 2 lakh in 2003-04 to 4.4 lakh in 2004-05 and has doubled to 7.95 lakh transactions per month in the year 2005-06. The online sales during the festival season had increased rapidly especially during Diwali and Ramzan which recorded a sales of Rs115 crore, a 117 per cent increase from the Rs53 crore in the year 2004- 05(source IAMAI). These figures clearly show that online shopping has truly come of age
  • A Study on Consumer Perception towards online shopping 14 and consumers are keen to shop on the net. Effective customer communication on products plus reduced shipping costs and timely delivery has helped online marketers to seize a slice of the Rs 115 crore sales. Online shopping has become the latest trend among shoppers. Indians are becoming more comfortable with e-commerce. The consumer’s attitude has been evolving towards online purchases. It has become increasingly positive over the years. The attitudes that drive people to shop online, such as convenience, price comparison and choice are improving tremendously in India. Though a miniscule amount in the global context, the Indian online shoppers’ population would make its presence felt quite remarkably. The potential of the Indian e-market can be gauged from the fact that 16 percent of Indian consumers want to buy online in the next six months, making it the third most online-potential country after Korea (28 percent) and Australia (26 percent) (Source:IMRB). This is an indication of a growing breed of Indian consumers who are not only better equipped but also more confident of the online transactions. Indian businesses have also grown mature enough to move up the IT curve and they are considering Business to consumer (B2C) e-commerce a viable revenue model. Some of the companies that have benefited are baazee.com, indiatimes.com, rediff.com, indiamart.com, fabmart.com, traveljini.com and sifymall.com. Indiamart.com has witnessed a growth of more than ten times in just two years in its online gifts domain. In the online travel domain, the company was able to generate an average $8,000 worth of room bookings/month for its premium client. It is expected to touch $15- 20,000/month/client by the year-end, which is over 100 percent growth (Source:Indiamart). Brick-and-mortar businesses are also building up e-commerce revenues. In the year 2005-06
  • A Study on Consumer Perception towards online shopping Samsung India recorded a 120 percent jump in online buying from its site over the year 2004 05 (Source: Samsung). Nirula’s revenues in the year 2005-06 and is positive for the next one to two years (Source: Nirula’s). Companies like eBay India have seen a large increase in the number of sellers and buyers from B and C cities and in a year the eBay community (buyers and sellers) base has increased to 1.7 million users, which shows that more Indians are shopping online (Source: eBay). Online sales are currently marked by a single digit growth, but the leading garment retail like Pantaloon, Shoppers’ Stop and Globus have already made business strategies to enter into the world of e-retailing. Famous apparel brand Zodiac has already started online stores. The main motive of these retailers through online sales is to reach t small towns where they do not have the outlets. Thus the India's Internet shopping sector is preparing for a massive growth, which is fuelled by increasing broadband usage and growing e-commerce. 3.3 GAINT PLAYERS IN INDIAN ONLINE FlipKart.com A Study on Consumer Perception towards online shopping Samsung India recorded a 120 percent jump in online buying from its site over the year 2004 05 (Source: Samsung). Nirula’s witnessed more than double growth in its B2C e 06 and is positive for the next one to two years (Source: Nirula’s). Companies like eBay India have seen a large increase in the number of sellers and buyers ties and in a year the eBay community (buyers and sellers) base has increased to 1.7 million users, which shows that more Indians are shopping online (Source: eBay). Online sales are currently marked by a single digit growth, but the leading garment retail like Pantaloon, Shoppers’ Stop and Globus have already made business strategies to enter retailing. Famous apparel brand Zodiac has already started online stores. The main motive of these retailers through online sales is to reach the global markets and the small towns where they do not have the outlets. Thus the India's Internet shopping sector is preparing for a massive growth, which is fuelled by increasing broadband usage and growing GAINT PLAYERS IN INDIAN ONLINE SHOPPING Flipkart.com is an e-commerce website founded by SachinBansal and BinnyBansal in 2007. Both are from IIT Delhi Alumni and also worked in Amazon.com. Flipkart.com ranks #502 in world according to Alexa traffic rankings. In Google It forms advertising revenue of $4.8 million. It receives 2.2 million page views in a day and generates $6,574 in advertising revenue every day. Moreover it has certain losses 0.60% in traffic ranking. Loading time of an average page is 2.1 sec as it is much faster than 29% of sites around the world. The mode of payments include Credit card, Debit card, Net banking, e vouchers, cash on delivery. 15 Samsung India recorded a 120 percent jump in online buying from its site over the year 2004- witnessed more than double growth in its B2C e-commerce 06 and is positive for the next one to two years (Source: Nirula’s). Companies like eBay India have seen a large increase in the number of sellers and buyers ties and in a year the eBay community (buyers and sellers) base has increased to 1.7 million users, which shows that more Indians are shopping online (Source: eBay). Online sales are currently marked by a single digit growth, but the leading garment retailers like Pantaloon, Shoppers’ Stop and Globus have already made business strategies to enter retailing. Famous apparel brand Zodiac has already started online stores. he global markets and the small towns where they do not have the outlets. Thus the India's Internet shopping sector is preparing for a massive growth, which is fuelled by increasing broadband usage and growing SHOPPING commerce website founded by SachinBansal and BinnyBansal in 2007. Both are from IIT Delhi Alumni and also worked in Flipkart.com ranks #502 in world according to Alexa traffic rankings. In Google page it ranks #6. It forms advertising revenue of $4.8 million. It receives 2.2 million page views in a day and generates $6,574 in advertising revenue every day. Moreover it has certain losses 0.60% in traffic ranking. Loading time of an average page is .1 sec as it is much faster than 29% of sites around the world. The mode of payments include Credit card, Debit card, Net banking, e-gift
  • A Study on Consumer Perception towards online shopping Ebay.in Snapdeal.com A Study on Consumer Perception towards online shopping eBay is an online shopping website a consumer to consumer corporation which helps the people and businessman to buy and sell products worldwide. It is operated to almost 30 countries. eBay ranks #544 among Alexa traffic ranking. In Google it has pagerank #6. revenue inculcated was about $4.4 Million. Moreover it receives 2 million pageviews per day which generates $6,066 in the advertisement revenue. Recently it has shown 15.13% growth in traffic rank. The pageloading time is upto 2 sec which is likely faster than 24% sites across the world. Snapdeal deals with online marketing of products including Mobiles, Electronics, Fashion accessories, Apparel, Footwear, Kids, Home and Kitchen, Sports, Books; and services like Restaurants, Spas & Entertainment. It was launched by KunalBahl, a Wharton graduate and RohitBansal, alumnus of IIT Delhi, in February 2010. It ranks #576 in the world as per Alexa traffic ranking.It ranks # 5 in Google PageRank. The advertising revenue is about $4.2 receives 1.9 million page views in a day and generates $5,729 in advertising revenue. It has suffered loss of 4.16 % in traffic ranking. The loading time of an average page is 1.6 sec which is faster than 46% of sites across the world. 16 is an online shopping website a consumer to consumer corporation which helps the people and businessman to buy and sell products worldwide. It is operated to almost 30 countries. eBay ranks #544 among Alexa traffic ranking. In Google it has pagerank #6. The advertising revenue inculcated was about $4.4 Million. Moreover it receives 2 million pageviews per day which generates $6,066 in the advertisement revenue. Recently it has shown 15.13% growth in traffic rank. The pageloading time is upto 2 sec s likely faster than 24% sites across the Snapdeal deals with online marketing of products including Mobiles, Electronics, Fashion accessories, Apparel, Footwear, Kids, Home and Kitchen, Sports, Books; and services like Spas & Entertainment. It was launched by KunalBahl, a Wharton graduate and RohitBansal, alumnus of IIT Delhi, in It ranks #576 in the world as per Alexa traffic ranking.It ranks # 5 in Google PageRank. The advertising revenue is about $4.2 million. It receives 1.9 million page views in a day and generates $5,729 in advertising revenue. It has suffered loss of 4.16 % in traffic ranking. The loading time of an average page is 1.6 sec which is faster than 46% of sites across the world.
  • A Study on Consumer Perception towards online shopping A Study on Consumer Perception towards online shopping It is an online shopping commerce for Home; Lifestyle & Fashion e-retailer founded in 2009 BigShoeBazaar.com has a user base of about 1.5 million people. Yebhi.com offers lifestyle & Home products and products some 250 brands to its customers dealing in Shoes, Apparels, Bags, Mobiles, Cameras, Sunglasses, Watches, Home furnishing, Home decor, Home ware, Lingerie and Fragrances. It ranks #1,782 among Alexa traffic ranking. It ranks #4 in Google page ranking. Advertising revenue is about $1.4 million. It receives 617,284 page views per day generating $1,852 in advertising revenue. It has recently shown 6.70 Growth among traffic ranking. The page loading is about 2 sec which is faster than 39% of s around the world. The International giant eCommerce retailer recently stepped into India with a Indian version site www.amazon.in, since the launch, amazon.in has seen a nice growth in the number of customers. Amazon.com too had a huge number of Indian customers even before it launched store in India. The store hosts wide range of products like Electronics, Mobiles, Laptops, Books, Fashion, Jewellery, Kitchenware and more A reputed online shopping retail website having headquarter in Gurgaon,Shopclues more than 12,000 merchants who are registered with the company. It is one of the top ecommerce websites in India, which deals in more than 2 million products. They guarantee authenticity of products, warranty and even ensure lowest price. They even have a record of catering to more than 42 million online visitors. The company has even more than employees across the country. They offer wide range of branded products to consumers from every corner of the country. 17 It is an online shopping commerce for Home; retailer founded in 2009 BigShoeBazaar.com has a user base of about 1.5 million people. Yebhi.com offers lifestyle & Home products and products from a range of some 250 brands to its customers dealing in Shoes, Apparels, Bags, Mobiles, Cameras, Sunglasses, Watches, Home furnishing, Home decor, Home ware, Lingerie and Fragrances. It ranks #1,782 among Alexa traffic ranking. It page ranking. Advertising revenue is about $1.4 million. It receives 617,284 page views per day generating $1,852 in advertising revenue. It has recently shown 6.70 Growth among traffic ranking. The page loading is about 2 sec which is faster than 39% of sites The International giant eCommerce retailer recently stepped into India with a Indian version site www.amazon.in, since the launch, amazon.in has seen a nice growth in the number of customers. Amazon.com e number of Indian customers even before it launched store in India. The store hosts wide range of products like Electronics, Mobiles, Laptops, Books, Fashion, Jewellery, Kitchenware and more A reputed online shopping retail website having Shopclues.com maintains more than 12,000 merchants who are registered with the company. It is one of the top ecommerce websites than 2 million products. They guarantee authenticity of products, warranty and even ensure lowest price. They even have a record of catering to more than 42 million online visitors. The company has even more than 350 registered employees across the country. They offer wide range of branded products to consumers from every corner
  • A Study on Consumer Perception towards online shopping A Study on Consumer Perception towards online shopping Shopclues.com initiate free delivery services at the doorsteps of customers through reputed courier services to nearly 10,000 cities across the country. They even initiate a 30-day return guarantee if unable to meet customer satisfaction. One of the leading online shopping companies Shopclues.com accepts online payment through major credit and debit cards, including net banking services. The online shopping website service employs more than 400 personnel for effective handling of the business and is even funded by national institutional investors. Myntra is an Indian ecommerce site. It is regarded as India’s top 3rd online site to shop products. Myntra allows its users to chose varieties of dress. One can choose any type of dress of any brand from Myntra. Th about Myntra is its product quality and service. Now, Myntra is merged into Flipkart to compete Amazon, but myntra.com is still running as a separate website and entity. Buying clothes and gifts online can be best done via Myntra. HomeShop18 is the online & on marketing and distribution venture of Network18 Group that was launched as India’s first 24 hour Home Shopping TV channel on April 9, 2008. HomeShop18 offers innovative, differentiated and demonstrative retail experiences on TV and internet and has emerged as the largest multimedia retailer in India with a user base of 2.5 million users and some prestigious awards. HomeShop18 is a venture of the Group, India’s fastest growing media and entertainment group that opera leading business news television channels like CNN-IBN, CNBC TV18 Awaaz . 18 initiate free delivery services at the doorsteps of customers through reputed courier services to nearly 10,000 cities across the country. day return guarantee if unable to meet customer satisfaction. One of the companies in India, Shopclues.com accepts online payment through major credit and debit cards, including net banking services. The online shopping website service employs more than 400 personnel for effective handling of the d by national institutional an Indian ecommerce site. It is regarded as India’s top 3rd online site to shop products. Myntra allows its users to chose choose any type of dress of any brand from Myntra. The best thing about Myntra is its product quality and service. Now, Myntra is merged into Flipkart to compete Amazon, but myntra.com is still running as a separate website and entity. Buying clothes and gifts online can be best done via Myntra. is the online & on-air retail marketing and distribution venture of Network18 Group that was launched as India’s first 24 hour Home Shopping TV channel on April 9, 2008. HomeShop18 offers innovative, differentiated and demonstrative TV and internet and has emerged as the largest multimedia retailer in India with a user base of 2.5 million users and is a venture of the Network18 Group, India’s fastest growing media and entertainment group that operates India’s leading business news television channels CNBC TV18 and CNBC
  • A Study on Consumer Perception towards online shopping 19 CHAPTER - 4 THEORIES OF THE STUDY
  • A Study on Consumer Perception towards online shopping 20 4.1 INTRODUCTION TO THE STUDY The Internet has entered the mainstream consciousness over the past decade. This has happened primarily because the web has got a graphical interface and Internet has moved from governmental control to private hands. The activities which are happening on the Internet are email and instant messaging, general web surfing or browsing, reading news, hobby searches, entertainment searches, shopping and buying online, medical information searches, travel information searches, tracking credit cards, and playing games. Communication i.e. email, chat or instant message is the basic activity for which Internet is used. It is the single most important reason for people to go online. E-mail provides the opportunity to communicate more often with a much broader circle of people than one can reach by telephone or by mail in a convenient way. In India too email constitutes the major activity on the Internet. It was found that more elderly people are increasingly using email as compared to the younger generations. In India the top five online activities are e-mail, surfing, chatting, search and job search. Some of the sites, which are commonly used for these particular activities, are: � Yahoo -Most preferred communication portal, tops for email and chat � Indiatimes –Best event and sports news provider. � Naukri-Best recruitment portal � Google-Best information domain � Shaadi-Best for matrimonial services � eBay-Best online shopping portal � Rapid growth of cybercafés across India � Access to Information
  • A Study on Consumer Perception towards online shopping 21 � The increase in number of computer users � Reach to net services through broadband � Middle-class population with spending power is growing. There are about 200 million of middle-class population good spending powers. These people have very little time to spend for shopping. Many of them have started to depend on internet to satisfy their shopping desires. The figures from IAMAI show that the internet users in India will grow to 200 million by 2010. Around 25% of regular shoppers in India are in the 18-25 age groups, and 46% are in the 26-35-year range. • Indian online matrimonial sector is worth around $230 million. • Worldwide e-commerce is only growing at the rate of 28%, since India being a younger market, the growth of e-commerce is expected at 51% in the coming years. • In line with global trends finally India has also started shopping online these days. As per the study by IAMAI online shopping in India has rose from $11million in 1999-2000 to $522 million in 2008 and it is expected to rise above $700 million by end March 2010. • Indians are also Shopaholics like other Asians. There is a strong booming young adult population in India with good levels of disposable income. In India Over $50 Billion and growing rapidly - Most popular online shopping products include: books (45%), electronic gadgets (42%), railway tickets (38%), accessories apparel (35%), apparel (35%), gifts (34%), computer and peripherals (32%), airline tickets (28%), music downloads (21%), movie downloads (21%), hotel rooms (22%), magazines (18%), tools (16%), home appliances (16%), toys (16%), jewelry (17%),
  • A Study on Consumer Perception towards online shopping 22 movie ticket (15%), etc. Payments 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: • Billing to mobile phones and landlines • Cash on delivery (C.O.D., offered by very few online stores) • Cheque/ Check • Debit card • Direct debit in some countries • Electronic money of various types • Gift cards • Postal money order • Wire transfer/delivery on payment 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 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.
  • A Study on Consumer Perception towards online shopping 4.2 AIDA PRINCIPLE IN ONLINE 1. ATTENTION 2.INTREST 3.DESIRE 4.ACTION 4.3 PORTER 5 FORCE ANALYSIS Porters Five Forces is a framework for describing factors that affect the profitability and attractiveness of industries. Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths. 1. Supplier Power 2. Buyer Power 3.Competitive Rivalry 4.Threat of Substitutes 5. Threat of New Entry 1. Supplier Power Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over us, on. The fewer the supplier choices we have, and the more we need suppliers' help, the more powerful the suppliers are. 2. Buyer Power This is driven by the number of buyers, the importance of each i one’s business, the cost to them of switching from one’s products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you. A Study on Consumer Perception towards online shopping PRINCIPLE IN ONLINE MARKETING : PORTER 5 FORCE ANALYSIS IN ONLINE SHOPPING Porters Five Forces is a framework for describing factors that affect the profitability and industries. Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over us, the cost of switching from one supplier to another, and so on. The fewer the supplier choices we have, and the more we need suppliers' help, the more powerful the suppliers are. his is driven by the number of buyers, the importance of each individual buyer to one’s business, the cost to them of switching from one’s products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you. 23 Porters Five Forces is a framework for describing factors that affect the profitability and industries. Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their the cost of switching from one supplier to another, and so on. The fewer the supplier choices we have, and the more we need suppliers' help, the ndividual buyer to one’s business, the cost to them of switching from one’s products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often
  • A Study on Consumer Perception towards online shopping 24 3. Competitive Rivalry What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength. 4. Threat of Substitutes This is affected by the ability of your customers to find a different way of doing what you do – for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power . 5. Threat of New Entry Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.
  • A Study on Consumer Perception towards online shopping 25 Porter’s five forces for Online Retailer Supplier power: Here, suppliers are the manufacturers of finished products. For any product, there are many suppliers online, so they can’t show power on online retail companies. For example, if you take computers category, there are many suppliers like Dell, Apple, Lenovo, and Toshiba everyone wants to sell their products through online retails like Flipkart,Amazon,Snapdeal etc. Selling online saves a lot of money for the manufacturers, and as many people nowadays prefer purchasing product through online stores, Companies cannot afford to lose this channel. So, in this industry the supplier power is low. Buyer power: Buyers in this industry are customers who purchase products online. Since this industry is flooded with so many players, buyers are having lots of options to choose. With many competitors like Amazon.com, eBay, Snapdeal etc. Customers get a wide range of choices. Customer would prefer the one who would provide goods at reasonable price, deliver it fast and provide them with other benefits like Cash on Delivery, EMI facilities, other offers etc. Here Buyers have more power. Competitive Rivalry: Competition is very high in this industry with so many players like Jabong, Snapdeal, Amazon, Homeshop18 etc. Many competitors means more choices for the customer to choose from. This also increases the cost incurred by the company to stay in the customer’s mind i.e. on Promotions and Advertisements etc. Giving the customer better deals, making customer’s experience delightful and continuous innovation can help a company to stay at top even with tons of competitors around. Threat of New Entrants: Threat of new entrants is very high in this online retail industry because of following reasons: � Indian government has allowed 51% FDI in multi-brand online retail and 100% FDI in single brand online retail. So, this means foreign companies can come and start their own online retail companies. � There are very less barriers to entry like less capital required to start a business, less amount of infrastructure required to start business. All you need is to tie up with suppliers of products and you need to develop a website to display products so that customers can order products, and a tie up with online payment gateway provider like bill desk. � Industry is also going to grow at a rapid rate. It is going to touch 76 billion $ by 2021. Industry is going to experience an exponential growth rate. So, obviously no one wants to miss this big opportunity. With the new entrants like Jabong, Snapdeal etc. rapidly racing towards the top Position.
  • A Study on Consumer Perception towards online shopping 26 Threat of substitutes: � Substitute for this industry as of now is physical stores. Their threat is very low for this industry because customers are going for online purchases instead of going to physical stores as it will save time, effort, and money. With the advent and penetration of internet and smart phones, future in retail belongs to online retail. � When we compare relative quality, relative price of product a person buys online with physical store, both are almost same and in some cases, online retail store offers more discounts and this attracts the customer to purchase products online. 4.4 MARKETING MIX OF ONLINE SHOPPING : The elements of marketing mix are also being applied for online marketing. Marketing mix is essential for analysing the business. Marketer analyses the parameters then select appropriate strategy in order to face the market complexion effectively. The 7Ps of marketing is being applied in the online marketing industry. The effect of marketing mix is being explained below diagram :
  • A Study on Consumer Perception towards online shopping 27 4.5 MODELS OF ONLINE SHOPING By:Mary Ann Eastlick This chart shows how consumer attitude toward online shopping can lead either to approach coping (wanting to shop online) or to avoidance coping (deciding not to search or shop online). Someone who is optimistic toward the benefits of online shopping will develop approach coping. A person who is pessimistic toward online shopping will think of the drawbacks to it and decide to purchase in physical stores instead, which is avoidance coping.
  • A Study on Consumer Perception towards online shopping FRAMEWORK FOR CONSUM Source: research by Emerald A Study on Consumer Perception towards online shopping FRAMEWORK FOR CONSUMERS’ INTENTIONS TO SHOP ONLINE Source: research by Emerald 28 HOP ONLINE
  • A Study on Consumer Perception towards online shopping 29 CHAPTER - 5 RESEARCH METHODOLOGY
  • A Study on Consumer Perception towards online shopping 30 5.0 RESEARCH METHODOLOGY 5.1 Research Objective To know and understand the consumer’s perception and awareness about internet marketing/ shopping. This will help to know the attitude and perception of consumers towards online shopping and what are the factors which shape the consumer’s perception towards online shopping. Also what are key concerns from the point of view of consumer while online shopping. 5.2 Determination of information needs and sources The following was the information required: • What is consumer’s attitude towards online shopping? • What are the key concern areas for consumers while online shopping? • Which factors shape the consumer’s attitude towards online shopping? • How has been recent shift taking place in online shopping? 5.3 Research Framework Eleven different factors were identified by studying the existing models of consumer attitudes(Refer Annexure 1, 2) that play an important role in online purchase, then a model was proposed leading to online shopping. The data was collected only through Questionnaires. The sample size was 100. And random sampling was done among the internet users. 5.3.1 Proposed Model After examining the 10 empirical studies, we identify a total of eleven interrelated factors for which the empirical evidences show significant relationships. These ten factors are perceived usefulness, perceived ease of use, perceived enjoyment, information on online shopping, security and privacy, quality of internet connection, attitude towards online shopping, intention to shop online, online shopping decision making, online purchasing, and consumer satisfaction. Six (perceived usefulness, perceived ease of use, perceived enjoyment, information on online
  • A Study on Consumer Perception towards online shopping 31 shopping, security and privacy, quality of internet connection )are found to be ordinarily independent and five (attitude toward online shopping, intention to shop online, decision making, online purchasing, and consumer satisfaction) are ordinarily dependent variables. Consumer satisfaction is considered to be a separate factor in this study. It can occur at all possible stages depending on consumer’s involvement during the online shopping process. The relationships between satisfaction, attitude, intention, decision making and online purchasing are proposed to be two-way relationships due to the reciprocal influences of each on the other. In addition, three of the antecedents, perceived usefulness, perceived ease of use, perceived enjoyment , have been found to have direct impact on consumer satisfaction. Perceived Usefulness Perceived usefulness is defined as the degree to which a person believes that using a particular system would increase his or her job performance. It is an important factor affecting acceptance of an information system, because the ultimate aim of any person is the superior job performance. Perceived Ease of Use This is an important factor that affects the acceptance of a particular information system. It is defined as the degree to which a person believes that using a particular information system would be free of effort. Hence an application perceived to be easier to use would more likely be accepted by the user. Perceived Enjoyment Enjoyment refers to the extent to which the activity of using a computer is perceived to be enjoyable in its own rights. This is seen as an intrinsic source of motivation to use a particular application. Amount of Information Amount of information is defined as the information which is available for the product which a person wants to buy through online shopping. This factor eases the decision of the user to actually buy the product or not, or which product to buy. This factor becomes even more important in case of High Involvement product.
  • A Study on Consumer Perception towards online shopping 32 Security and Privacy Security and privacy are the main factors which hinder the growth of online shopping. The user is concerned about his ID and Password which can be stolen by persons with wrong intentions and then misuse it. At the same time they are concerned that their personal information may be sold to the third party which poses a serious threat to their privacy. Quality of Internet Connection Not only is the presence of internet connection necessary but also its Quality is important to shop online. This is an important factor which determines whether the user would shop online or not because presence of internet is a basic necessity for this mode of shopping Attitude and perception towards online shopping Consumer’s attitude and perception toward online shopping have gained a great deal of attention in the empirical literature. It is believed that consumer attitudes will affect intention to shop online and eventually whether a transaction is made. It refers to:- 1) The consumer’s acceptance of the Internet as a shopping channel 2) Consumer attitudes toward a specific Internet store (i.e., to what extent consumers think that shopping at this store is appealing). Intention to shop online Consumer’s intention to shop online refers to their willingness to make purchases in an Internet store. Commonly, this factor is measured by consumer’s willingness to buy and to return for additional purchases. The latter also contributes to customer loyalty. Consumer’s intention to shop online is positively associated with attitude towards Internet buying, and influences their decision-making and purchasing behavior. In addition, there is evidence of reciprocal influence between intention to shop online and customer satisfaction. Online shopping decision making Online shopping decision-making includes information seeking, comparison of alternatives, and choice making. The results bearing on this factor directly influence consumer’s purchasing behavior. In addition, there appears to be an impact on user’s satisfaction. Though
  • A Study on Consumer Perception towards online shopping 33 it is important, there are only five studies that include it. According to Haubl and Trifts (2000), potential consumers appear to use a two-stage process in reaching purchase decisions. Initially, consumers typically screen a large set of products in order to identify a subset of promising alternatives that appears to meet their needs. They then evaluate the subset in greater depth, performing relative comparisons across products based on some desirable attributes and make a purchase decision. Online purchasing This is the most substantial step in online shopping activities, with most empirical research using measures of frequency (or number) of purchases and value of online purchases as measures of online purchasing; other less commonly used measures are unplanned purchases Online purchasing is reported to be strongly associated with the factors of personal characteristics, vendor/service/product characteristics, website quality, attitudes toward online shopping, intention to shop online, and decision making (Andrade 2000; Bellman et al. 1999) Consumer satisfaction It can be defined as the extent to which consumer’s perceptions of the online shopping experience confirm their expectations. Most consumers form expectations of the product, vendor, service, and quality of the website that they patronize before engaging in online shopping activities. These expectations influence their attitudes and intentions to shop at a certain Internet store, and consequently their decision-making processes and purchasing behavior. If expectations are met, customers achieve a high degree of satisfaction, which influences their online shopping attitudes, intentions, decisions, and purchasing activity positively. In contrast, dissatisfaction is negatively associated with these four variables (Ho and Wu 1999; Jahng et al. 2001; Kim et al. 2001).
  • A Study on Consumer Perception towards online shopping 34 5.4 Data Collection Method- 5.4.1 Primary Data It is original primary data, for specific purpose of research project. For this project, I have to use following common research instrument or tool- Questionnaire- Questionnaire development is the critical part of primary data collection method. For this I will prepare a questionnaire in such a way that it will be able to collect all relevant information regarding the project. The questionnaire was designed using various scaling techniques. The questionnaire was used mainly to test the model proposed for consumer perception towards online shopping. Likert five point scales ranging from Strongly Agree to strongly disagree was used as a basis of Questions. The data collection was done over a period of 8 weeks This was done by going directly to the respondents or through mails. Information on online shopping Security & Privacy Perceived Usefulness Perceived Ease of use Attitude towards online shopping Intention to shop online Decision Making Online Purchase CONSUMER SATISFACTION Perceived Enjoyment
  • A Study on Consumer Perception towards online shopping 35 5.4.2 Secondary Data It will be collected to add the value to the primary data. This may be used to collect necessary data and records by different websites, magazines, annual reports, journals, reference books, and newspapers, etc. 5.5 Sample Design 5.5.1 Sample Unit For studying consumer perception on online shopping, samples were selected from Sambalpur,Odisha. 5.5.2 Sample Media The respondents in the samples are reached through personal interviews. 5.5.3 Sampling Methods Sampling methods fall under two broad categories- a) Non-probability sampling methods. b) Probability sampling methods. 5.5.4 Sample size- 100 5.5.5 Research place-Sambalpur 5.5.6 Sample Design I have prepared this project as descriptive type, as the objective of the study.
  • A Study on Consumer Perception towards online shopping 36 CHAPTER - 6 DATA ANALYSIS
  • A Study on Consumer Perception towards online shopping 37 6.0 DATA ANALYSIS 6.1 THE INTERNET USAGE The objectives of the research were studied with respect to a regular online shopper who shopped more than once because they would be the right respondent to give an insight about the online shopping. Therefore it is firstly important to understand who is a regular online shopper. In the survey the respondents where asked the following questions which helped to know about a regular shopper. 1. Q.1 Do you use Internet? � Yes 98% � No 02% INTERPRETATION The above pie -chart represent that 98% consumers had used the internet. The uses of internet is a vital thing in todays competitive era. The rapid uses of computer has make the internet well known to others. While as the influence of social media and mobile internet makes the uses of internet more popular. The 02 % people were never uses the internet from the study of 100 individual respondent. Q.02 How long have you been using Internet? � Less than 1 year � 3 – 5 years yes no
  • A Study on Consumer Perception towards online shopping 38 � 1 – 3 years � More than 5 years INTERPRETATION The diagram shows that shopping has increased with the usage of Internet over the years. Regular shoppers who have been using Internet for more than one year had shopped to 98% and regular shoppers who have been using Internet for more than five years have shopped to 78%. Internet is not a new concept for these regular online shoppers and they have been using it for more than 5 years now. The increased usage over the years has lead to an increase in shopping, as these regular shoppers are able to make use of the various e-commerce activities. Q.3 On the average, how much time (per week) do you spend in surfing the Web? � 0 – 5 hours � 16 – 20 hours � 6 – 10 hours � More than 20 hours � 11 – 15 hours 2% 6% 14% 78% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Less than1year 1–3years 3–5years More than 5years
  • A Study on Consumer Perception towards online shopping 39 INTERPRETATION The research shows that 36% of the online shopping had been done who use Internet for more than 20 hours a week and 96% of the shopping has been done by regular shoppers who have been using Internet for more than 5 hours a week. As more the regular online shopper are using the Internet it is seen that they end up buying more also. This shows that Internet is becoming an integral part of the daily activity of the regular online shopper. The regular online shoppers who have been using Internet for more than 20 hours are more comfortable and confident as a result they purchase more online as compared to who use Internet for less number of hours.The study shows that the growing usage of Internet has lead to increase in online shopping as seen above. There is a positive relation between increase usage of Internet and online purchase. The marketers should capture this enormous growth, which can be brought by the penetration of broadband and lowering the prices of computers. Thus increase in usage of Internet over the years and the more time spent has lead to an increase in shopping. But one needs to know whether online shopping is an integral part of regular shoppers or not this understood as follows. 4% 12% 20% 28% 36% 0% 5% 10% 15% 20% 25% 30% 35% 40% 0 - 5 hours a w eek 6 - 10 hours a w eek 11 - 15 hours a w eek 16 - 20 hours a w eek More than 20 hours a w eek
  • A Study on Consumer Perception towards online shopping 40 Q.4 Have you purchased anything online ever? INTERPRETATION The research showed that 65% of the Internet users had shopped online while 35% had not bought anything. This is mainly because of the changing lifestyle and taste patterns. As the life is getting more and more fast paced more people are moving on to shop online mainly because of convenience. This shows that a more Internet users are using it as a shopping medium and there is a huge potential in this sector but one should not be carried away by this figures. There could be a possibility that only a small section of the online shoppers are shopping or only a particular category of good had brought about this huge number. As a resultthe entire analysis was done incase of a regular online shopper to understand the shopping behavior of the online shoppers. The following question helped to understand who is a regular online shopper among the 65% who had indulged into online shopping. NO 35% YES 65%
  • A Study on Consumer Perception towards online shopping 41 The web online activity The following classifications are done to study the online activities in case of a regular online shopper. Fig. 5 Online Activities The Internet offers four basic services communication (socializing service with peer group or core group (email) or with new groups of people (chat), information services, entertainment services and commerce services and shopping. The research shows 32% of the regular online shoppers use Internet for communication while only 10% uses it for shopping which shows that communication still forms the major activity among the regular online shoppers. Fig. 6 Online Activities by Age 10% Shopping20% Finance 14% Entertainment 24% Inf ormation Gathering 32% Communication 0% 10% 20% 30% 40% 50% 60% 70% communication Information gathering Finance Shopping 18-30 years 31-40 years 41-50 years above 50 years
  • A Study on Consumer Perception towards online shopping 42 This classification further provides an insight that Internet is mainly used as a means of communication in respect all the age groups of the regular online shoppers. It contributes to 60% of the major activity among the regular online shoppers who lie between the age group 18-30 years. It could be seen that shopping as a basic activity on the Internet contributes to the minimum. Internet as a medium of shopping is maximum used by regular online shoppers between the age group18-30 years, which is 18% while above 50 years it is used just to 2%. The increase in usage among the 18-30 years is basically due to high awareness. The marketers should focus mainly on the age group between 18-30, as they are the main drivers for growth. Thus the research shows that though the regular shoppers are using the Internet for quiet some time now but shopping still remains a small part of the major activity Fig. 7 Online Activities by Time It is evident that regular online shoppers also spend a major part of their time in communication unlike the occasional online buyers. In 0-5 hours a week they spend 77% of their time in communication, which includes email, and chat as the major activity with shopping which does not seem to exist at all. Information search constitute 20% of the time. The information search increases as the regular online shoppers tries to figure out ways to surf the Internet and access the information they require. It is true that more regular online shoppers use Internet shopping sites to 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0-5 hours 6-10 hours 11-15 hours 16-20 hours more than 20 hours Communication Information Entertainment Finance Shopping
  • A Study on Consumer Perception towards online shopping 43 gather information about products rather than to make a direct purchase. But it is to be noticed that as the time spend increases communication falls and other activity picks up like entertainment and finance. One could see from the graph that between 16-20 hours a week communication falls further but information search also falls as the regular online shoppers becomes more focused in their information search rather than wandering aimlessly in the Internet space. They continuously use search engines for routine information needs. The time spent on entertainment increases marginally to 18%. As the people spend more time it has been seen that activities like shopping and finance related needs increases. The regular online shoppers who use the Internet for more than 20 hours a week has shown that they have indulged into more shopping i.e.10%. It is true that as the regular online shoppers spends more time on the Internet there is a possibility that they would end up buying more as they are ease with the use of internet. Increased usage of Internet is positively related to the buying behavior on the Internet. Analysis- It is true that increase in internet has lead to an increase in the online shopping as 78% of the online shopping has been done by the regular online shopper who have been using internet for more than five years and 36% of the online shopping have been done among the regular shopper who uses the Internet for more than 20 hours a week. Thus increase in usage of Internet has lead to an increase in online shopping. But shopping still constitute a small amount of the major activity on the internet as 32% of the regular online shoppers uses Internet for communication while only 10% uses it for shopping. Communication still constitutes the major activity on the Internet.
  • A Study on Consumer Perception towards online shopping 44 6.2 Demographic Factors Online behavior is affected by demographics i.e. by gender, education and income. 6.2.1 Hypotesis 1. More male Internet users are frequent online buyers than female Internet users. 2. Regular online buyers are better educated than occasional online buyers. 3. Income is higher in case of a regular online shopper than occasional online buyer. Fig. 8 Online Shopping & Gender Among the 65% of the online shopping, males (72%)had purchased more as compared to women (28%). This shows that it is true that more males are shopping online as compared to women. This is mainly because women still like to feel, see and touch the product before buying. It was noticed that some of them felt shopping as a reason to go out with the family and spend time together, which was not possible in case of online shopping. As more and more Indian women are flocking to Internet there is a possibility that they might end up in a purchase. Also an increase in the spending power in the hands of the women might lead to an increase in the online shopping. The research showed that 28% of the women who shopped online fall mostly in the service and executive class with an income above Rs10,000. The marketers should make sure that they produce the item keeping in mind the needs of the women 28% Female 72% Male
  • A Study on Consumer Perception towards online shopping 45 population as they still continue to be an important decision maker when shopping for the family. Fig. 9 Online Shopping & Educational Qualification Educational difference is a significant demographic variable, which shows that regular shoppers who were better educated made more purchases online. 89% of the shopping has been done by the regular shopper whose is educated with a graduate or postgraduate degree. This shows that frequency of purchase is more in case of a higher educated regular shopper as compared to a online shopping done by a regular online shopper with matriculate (8%) and non matriculate (3%). Fig. 10 Online Shopping & Income 3% Non Matriculate 8% Matriculate 54% Postgraduate 35% Graduate 1 2 1 1 3 5 1 1 8 21 5 3 14 38 15 11 0 5 10 15 20 25 30 35 40 Student Service/Executive Business Others less5000 5000-10000 10000-25000 above25000
  • A Study on Consumer Perception towards online shopping 46 Income and buying behavior are positively related. It was seen that a regular online shopper with a higher income had purchased more online as compared to lower income online shopper. This trend was seen in all segment of the population. It is true that more the income in the hands of the population they would indulge in shopping. The service class had done the major purchase in all the various levels of income. It can be seen that hardly any purchase is done among the regular online shopper whose income lies below Rs5000. Analysis- Thus three hypotheses stated were true in case of the regular online shopper and it can interpreted that online shopping is effected by demographics like gender, education and income levels. Among the 65% of the online shopping, males (72%)had purchased as compared to women (28%). There is a positive relation between education and income of the online shoppers. 89% of the online shopping was done among the regular shoppers who were educated with a graduate or postgraduate degree compared to 11% shopping who were matriculate and non-matriculate. A 60% of the shopping was done by the regular shopper who had income more than Rs 25,000 than 40% who had income less than Rs.25,000. 6.3 Motivating & Satisfaction Factors To identify the factors which Internet users choose to buy or not buy online and how frequently they make such purchases. Analyzing the importance of satisfaction level in the online purchasing environment. 6.3.1 Hypothesis Consumers who make frequent online purchases are higher in convenience orientation than those who purchase occasionally.
  • A Study on Consumer Perception towards online shopping 47 Fig. 11 Online Shopping & Motivating Factors It is believed that consumers whether online shoppers or non-online shoppers value price to convenience but the study contrast this popular belief. The study showed that 32% of the shopping had been done by the regular shopper who think convenience is the main driving force while 23% of the shopping had been done for whom price was the main orientation for shopping online. Other motivating forces, which had lead to online shopping, were saves time (26%), product availability and superior selection (12%), and product comparison (7%). Convenience here is characterized as ease of purchase, home delivery and ability to shop 24x7. These factors motivate the regular online shopper to buy over the Internet and regular online shoppers who value convenience are more likely to buy on the web, as compared to occasional online shoppers. Every connection is a potential for net shopping. Therefore the companies should attract and retain its regular online shoppers, as the Internet is a tangled jungle of web sites, which is possible at a click of a mouse. They should design strategies and develop products keeping in mind the convenience factors. 32% Convenience 23% Price 12% Superior selection 26% Saves Time 7% Product Comparison
  • A Study on Consumer Perception towards online shopping 48 Fig. 12 Barriers to Shopping Online The main areas for concern in respect of the regular online shoppers while shopping were privacy and security (33%). Most of them still preferred the conventional method of shopping like the touch and the feel factor (21%). They felt that it is possible to see, feel, touch and try the products before buying in a shopping store as compared to Internet shopping. Other reasons that concern the regular online shoppers were inability to reach the customer service (16%), hassle of returning the product (14%), technical foul –ups, hesitant in purchasing from an unfamiliar source and person and delivery costs. The marketers should formulate such strategies so that the privacy and security concern can be taken care off. 7% Others9% Unfamiliar 14% Hassle of returning 16% Lack of Customer Service 21% Inability to touch & feel 33% Privacy & Security
  • A Study on Consumer Perception towards online shopping 49 Fig. 13 Convenience- The Motivating Factor It has been seen that there is a positive correlation between the frequency of purchase and the convenience factor for buying in the Internet arena. The regular online shopper who had purchased more than 6 times (9%) for them convenience is the most important motivating factor (48%)for shopping on the Internet. Convenience has been characterized as ease of purchase, home delivery and ability to shop 24x7. The online shopper believes that large amount of information about the product and the ability to compare prices is available at a click of a mouse thus making the entire shopping experience very convenient. Thus the marketers to should keep the convenience factor in mind while providing the goods and services. 6.3.2 Satisfaction Index It is important to understand the satisfaction level among the regular online shoppers, which had lead to online shopping. This could be understood by the satisfaction index and the frequency of purchase among the shoppers. 12% 74% 5% 9% 5% 20% 27% 48% 0% 10% 20% 30% 40% 50% 60% 70% 80% Only once 2-4 times More than 5 times More than 6 times purchase convenience
  • A Study on Consumer Perception towards online shopping 50 Fig. 14 Satisfaction Index A 55% of the regular online shoppers were satisfied with 12% dissatisfied. An important thing to be noted is that only 2% of the regular online shoppers were highly satisfied while 31% of the regular online shoppers were neither satisfied nor dissatisfied. This shows satisfaction level plays an important role in online shopping with more regular shoppers falling under the category of satisfied. This shows that they were overall satisfied by the experience of shopping online. But the companies should take measures so that the dissatisfied and the neither satisfied nor dissatisfied category of regular online shoppers could be moved to satisfied or highly satisfied. A note should be taken that only 2% of the regular online shoppers are highly satisfied which shows that there are still concerns, which poise the regular shoppers from using the Internet frequently as a shopping medium. Satisfaction level can also be measured by the frequency with which the online shoppers purchase online. According to human psychology it is true that frequency of purchase depends upon the satisfaction level received. According to the figure 2 (already explained), a 74% of the regular online shopper has purchased 2-4 times and 9% had purchased more than 6 times indicating that an increase in the confidence level and accepting the Internet as a shopping medium. The increase in the frequency of shopping was mainly because they were overall satisfied by the entire shopping experience. 2% Highly Satisfied 12% Dissatisfied 31% Neither Satified nor Dissatisfied 55% Satisfied
  • A Study on Consumer Perception towards online shopping 51 Analysis- It is seen that the main orientation for buying among the regular online shoppers were convenience (32%), saves time (26%), price (23%), product availability and superior selection (12%), and product comparison (7%). The hypothesis stated that convenience is major factor motivating the regular shopper was true as 75% of the regular online shoppers who have shopped more than 5 times felt it was necessary as compared to 25% who shopped less than 5 times. The barriers to online shopping as stated by the regular online shopper were privacy and security (33%), inability to touch and feel the product (21%), customer service problems (16%), hassle of returning the product (14%), purchasing from unfamiliar source and person (9%) and other problems (7%). Satisfaction level plays an important role in online shopping, as 55% of the regular online shoppers that are satisfied tend to purchase more. It can also be seen that 74% have shopped more 2-4 times and 11% had shopped more than 5 times showing that satisfaction level plays an important role in online shopping. 6.4 Future and growth of Online Shopping This can be understood by the categories of good bought by the regular online shoppers presently and the future of the various categories. Fig. 15 Present & future categories of Goods 0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 % 1 2 0 % B o o k s R a ilw a y t ic k e t s A ir lin e t ic k e t s E le c t r o n ic G a d g e ts G if t s M o v ie s t ic k e ts P re s e n t F u tu re
  • A Study on Consumer Perception towards online shopping 52 It is seen that railway tickets 70% and airline tickets 93% are the most popular categories among the online shoppers followed by books and electronic gadgets. This is the main category, which is bringing about online shopping culture among the regular online shoppers. The companies should bring out innovative ways so that there is a growth in other categories of goods also. The entire shopping culture among the regular shoppers is brought mainly by the travel categories followed by electronic gadgets. The graph shows that online shopping is tend to grow in the coming years as consumers want to buy more in the future. Table 1 Future Categories of Goods Railway tickets 83% Airline tickets 80% Electronic Gadgets 50% Books 43% Gifts 33% Movies tickets 30% Jewellery 23% Computer Software 20% Hotel Rooms/Car Rental 20% Event Tickets 13% Toys 13% Infant / Child items 10% Food / Groceries 7% Accessories apparel 3%
  • A Study on Consumer Perception towards online shopping 53 CD/Videos 3% Magazines 3% Home tools and products 3% Sporting goods 3% The table I shows that shows that there is a future growth in the electronic gadget and book categories also apart from railway and airline tickets, which continues to be on the priority list. There is a growth in these categories because traditionally products like audio-video, apparel, and computer accessories were purchased through catalogs and other forms of direct mail but toady online shopping serves a convenient means of distribution channel. Another reason for the growth in these categories is because of well-established sites for travel, audio-video (e.g., CD-Now), and computers (e.g.www.dell.com, www.sonyvaio.com), which lure the consumers to buy these products. These goods do well because consumers are not bothered much about the touch and feel factors, which generally drive the shopping in India unlike categories like apparels and groceries where it still remain an important factor while purchasing. It is difficult to change the set mindset of consumers for certain categories of goods but still companies should keep innovating and find means and ways to attract more online shopping. Analysis- There is a future growth in online shopping which can be especially seen in the travel arena with railway 83% and airlines 80%, electronic gadgets (50%)and books (43%). Gifts also seem to show a growth in the coming years. Thus the marketers should mainly focus on these growing categories of goods, which would drive the online shopping in the future.
  • A Study on Consumer Perception towards online shopping 54 CHAPTER – 7 FINDINGS
  • A Study on Consumer Perception towards online shopping 55 7.0 FINDINGS The findings show that Internet usage has increased over the years and it is leading to an increase in online shopping and also shows the consumers attitude and perception towards online shopping. Communication still forms the major activity among the large number of online shoppers as 32% of regular online shopper use Internet for communication as compared to shopping (10%). Online shopping is affected by demographics as it has been seen that more males are shopping online as compared women online shoppers and there is a positive relation between education and income levels with respect to the increased online shopping behaviour. The most important motivating factor, which influenced the online shopping, was convenience followed by time saving and price. Regular online shoppers considered convenience as the main motivating factor while buying and were less price sensitive. But the online marketers should attempt to differentiate their products or services making the comparison easier. The marketers should bring out innovative ways so that the consumers can do more online shopping while taking the full advantage of rich information, easy access and convenience of the Internet. One of the main concerns among the online shoppers was privacy and security. Another reason that hindered online shopping was the touch factor. Consumers still preferred the experience they get from traditional stores like feeling the store’s atmosphere, interacting with a salesperson, and seeking sensory stimulation. This might hinder the use of certain goods like grocery and apparel, as the touch factor is the main factor, which drives the shopping for these goods. The future of online shopping is bright especially in the categories of travel, books, electronic gadgets and gifts.
  • A Study on Consumer Perception towards online shopping 56 CHAPTER-8 SUGGESTION & CONCLUSION
  • A Study on Consumer Perception towards online shopping 57 8.1 SUGGESTION Online shopping in India is poised for greater acceleration as PC and Internet penetration grows. It is becoming one of the top Internet activities and there is a huge growth in this business as more manufacturers and providers are integrating the Internet into their sales model. But there are many things that need to occur in online shopping to generate higher revenues and the key to it lies in the hands of the marketers. To make online shopping a boom following methods can be followed. � India has a strong research and development (R&D) capability so companies should innovate rapidly to take care of the security issues. Technology like text to speech softwares should be innovated to take care of the security concern. � In India the total ownership of credit cards is small as compared to its population and there are also hesitant in using it as a mode of online payment therefore alternative methods of payment like cash on delivery (COD) where the end user pays cash after the product is delivered and debit cards where the bank accounts are directly debited should be used. Other technologies like encryption technologies trusted third-party certifications; digital ID systems and prepaid cards should be used. � The consumers should be made aware that one of the safety aspect of using credit cards online is that in case of disputed credit card payments for online transactions the onus is on the merchants to prove that the transaction actually took place, as online users don't physically sign a credit slip. As a result online users are protected from fraudulent use of credit cards. � There is a growth in the cellular phone market in India, more merchants should make use of this device allowing the customers to access the Internet and use it as mode of payment thereby obviating the need for PCs and credit cards. � It is not only important to pay strong attention to the security issue and create new, innovative safeguards that protect consumers but the merchants should promote these safeguards to the marketplace and make the prospective consumers aware that the communications, personal data, credit card accounts, and transaction information
  • A Study on Consumer Perception towards online shopping 58 can be protected. � One of the factors that hinder Internet penetration in India is access. More companies should adopt click and mortar model with the real world operations to complement its online presence for e.g. customers can walk to the office to access its services. � Merchants should provide goods and services that offer the right value for money. There should be transparency in policies (returns, privacy, shipping, etc), insurance against fraud and a good after sales services should be provided to consumers making it an enjoyable experience. � Consumers today demand a better, more efficient and less cumbersome way to compare and buy products online. Innovative service should be provided to consumers so that they can compare products, which are available online using their mobile phones. � Online shopping today is an incomplete, fragmented, and sometimes frustrating process. Therefore merchants should set themselves apart from their competitors by factors other than price, constantly innovate and move towards creating customer confidence to trade online. They should provide massive selection at lower prices, offer a personalized customer experience and their web sites should deliver a shopping experience that addresses all of the consumer needs like recommendation about the products, feedback from other customers, etc. � Vendors should educate the customers about e-commerce like educating them on safety tips like reading the item description, looking for a seller’s feedback score and asking questions, detecting spoof mails and informing them about the new online crimes which happen regularly. � In India still the penetration of Internet has not happened the way it should have been which hampers online shopping. Ecommerce revolution can be brought about by providing more broadband connections at affordable prices.
  • A Study on Consumer Perception towards online shopping 59 � There is a huge market for business in the rural India therefore efforts should be such that to bring these people also into experiencing online shopping. Companies should create more Indian language software or content as Internet still is a primarily English language world and language could be a barrier in rural India. Only few language portals like webduniya.com exist today. � Most of the Indians still like to see the product before buying; efforts should be made to change this mindset of the people by making them aware of the benefits of online shopping. � To make online shopping big the shopping web sites should give the customers the convenience to shop anything on a single site like ordering pizzas, movie tickets, groceries, etc rather than in scattered places. The site should not only provide information content but also tools to navigate and evaluate this information. The information on the site should be just sufficient for the consumers to make a decision and not to overload them with information, which results in confusion. � Convenience and time saving are the main reason to shop online. Therefore Business to Consumers (B2C) sites should be designed in such a way that consumers spend less time in finding information they are looking for as delays in searching or loading a web page might turn the consumers to other sites which have faster download and display times. � Since consumers control the experience they receive from shopping over the Internet, there is a need to find ways of managing the amount of information available over the Internet. Sites that are able to offer this information and present it in a simple way to understand will become the preferred destination for online shopping. � The key to selling to a customer which cannot be seen is to get the customer to trust the website with which they have electronic transactions. � Active participation from consumer marketing companies to manufacturing industries is required to make online shopping a booming sector.
  • A Study on Consumer Perception towards online shopping 60 Some of the things, which the consumers should take into considerations while online shopping, are: � Use a secure browser. The browser should comply with industry security standards, such as Secure Sockets Layer (SSL). � Consumers should shop with the known companies, as it is easy to set up a shop online under any name. If they are not familiar with a merchant they should ask for paper catalogue or brochure to get a better idea about the merchandise and services and should find about the company’s refund and return policies. Consumers should also search for the reviews of the company. � Read the privacy policy on the site of the companies before shopping as this helps to know what information is being collected and how it would be used. � Keep a print record of the transactions this would come handy in case of any fraud. � One should find out how the company secures the financial and personal information before paying the bills. � The personal information should be kept private like address, telephone numbers, email, etc. One should avoid using telephone numbers or date of birth for establishing a password instead should use a combination of numbers, letters and symbols. � Proper research should be done about countries shopping laws and merchant when shopping from other countries.
  • A Study on Consumer Perception towards online shopping 61 8.2 CONCLUSION This research shows that online shopping is having very bright future in India. Perception towards online shopping is getting better in India. With the use of internet, consumers can shop anywhere, anything and anytime with easy and safe payment options. Consumers can do comparison shopping between products, as well as, online stores. This study is mainly focus on the factors from the Internet and examines those factors that affect the consumer’s online shopping behaviours. The research focus on the Internet shopping (include the nature of Internet shopping, E-commerce website, and online security, privacy, trust and trustworthiness) and online consumer behaviours (include background, shopping motivation and decision making process). Those factors were looked at, and examined to reveal the influence at online consumer behaviours. In addition, the previous researches were used to help researchers understanding more comprehensively. Moreover, the customer’s purchase decision making process was also examined to identify the potential factors. The information search is the most important factor that helps the customers find the suitable products or services for their needs. Therefore, the online retailers have to enhance and improve the information supporting such as provide much detailed product information and use internal search engine in order to increase the efficient of information search. For the evaluation stage, customers more think a lot of the reputation from the E-commerce website, and the payment security for the purchase stage. At the post-purchase stage, the factor of after services which is the most concerned about. Overall, the factors from the Internet that influenced or prevented online consumer behaviours need to be carefully concerned by the online retailers, who can utilize the appropriate marketing communications to support the customer’s purchase decision making process and improve their performance.
  • A Study on Consumer Perception towards online shopping 62 BIBLOGRAPHY 1)Ramaswami&Namakumari, Marketing Management-Planning, Implementation and Control, MacMillan India Ltd, New Delhi 2)Bhatnagar, A, Misra, S., and Rao, H. R., ‘Online risk, convenience, and Internet shopping behavior,’ Communications of the ACM 2000 3)Alexandru M. Degeratu, ArvindRangaswamy and Jianan Wu (2000) Consumer ChoiceBehaviour in Online and Traditional Supermarkets: The Effects of Brand Name, Price, and other Search Attributes, International Journal of Research in Marketing, Vol. 17, No.1, p. 55-78. Available at: http://www.smeal.psu.edu/ebrc/publications/res_papers/1999_03.pdf 4)Aron M. Levin, Irwin P. Levin, and C. Edward Heath (2003) PRODUCT CATEGORYDEPENDENT CONSUMER PREFERENCES FOR ONLINE AND OFFLINE SHOPPING FEATURES AND THEIR INFLUENCE ON MULTI-CHANNEL RETAIL ALLIANCES, Journal of Electronic Commerce Research, VOL. 4, No. 3. Available at:http://www.csulb.edu/web/journals/jecr/issues/20033/paper1.pdf 5)Ali S S, Models in Consumer Buying Behaviour, Deep & Deep Publications. 6)Kothari C. R., Research Methodology Methods and Techniques, WishwaPrakashan, New Delhi. 7)www.wikipedia.com 8) www.amzon.com 9)www.flipkart.com
  • A Study on Consumer Perception towards online shopping 63 QUESTIONAIRE Kindly highlight/bold your answers. 1. Do you use Internet? � Yes � No 2. How long have you been using Internet? � Less than 1 year � 3 – 5 years � 1 – 3 years � More than 5 years 3. On the average, how much time (per week) do you spend in surfing the Web? � 0 – 5 hours � 16 – 20 hours � 6 – 10 hours � More than 20 hours � 11 – 15 hours 4. Have you purchased anything online ever? � Yes � No 5. Which category (ies) of goods have you bought through Internet? � Books � Railway tickets � Electronic Gadgets � Airline tickets � CD/Videos � Computer Hardware � Accessories apparel � Computer Software � Gifts � Magazines � Event Tickets � Movies tickets � Hotel Rooms/Car Rental � Office Supplies � Jewellery � Food / Groceries � Infant / Child items � Home tools and products
  • A Study on Consumer Perception towards online shopping 64 � Sporting goods � Health and fitness products � Toys � Any other, specify……………… 6. When did u shop for the first time? � Last 6 months � 6 months- 1year � 1-3 year � 3-5 year � More than 5 year 7. How frequently did you purchase online? � Only once � 2-4 times � More than 5 times � More than 6 times 8. Overall, were you satisfied with your experience of online shopping? � Highly Satisfied � Satisfied � Neither satisfied nor dissatisfied � Dissatisfied � Highly Dissatisfied 9. Where do you most often access the Internet? � Home � Cyber-cafes � Office / College �Any other, specify……… 10. What are the activities that you use Internet for? (Kindly rank them between 1 to 5,with 1=most used, 2=used to a large extent, 3=used to a good extent, 4=used sometimes, 5=rarely used)
  • A Study on Consumer Perception towards online shopping 65 Communication (E-mail, Instant Messaging, Bulletin Boards, News Groups, Chat, etc.) Information Gathering (Research, News, Sports scores, Search for employment, etc.) Entertainment (Games, Adult entertainment, Entertainment sites, Sports, Music, Web page design, etc.) Finance (Investment portfolio, financial research, online banking, check stock/fund quotes, trading, etc.) Shopping (Researching purchases, purchasing, auctions, Selling, Classifieds, etc.) 11. Which category (ies) of goods are you planning to buy through internet in the near future? � Books � Railway tickets � Electronic Gadgets � Airline tickets � CD/Videos � Computer Hardware � Accessories apparel � Computer Software � Gifts � Magazines � Event Tickets � Beauty products � Movies tickets � Health and fitness products � Hotel Rooms/Car Rental � Office Supplies � Jewellery � Food / Groceries � Apparel gift certificates � Pharmaceuticals � Infant / Child items � Home tools and products � Sporting goods � Home appliances � Toys � Any other, specify……………… 12. What is your main motivation for buying through Internet? � Convenience (ease of purchase, home delivery, ability to shop 24x7) � Price � Saves time � Superior selection/Availability
  • A Study on Consumer Perception towards online shopping 66 � Product comparison �Any other, specify……………… 13. What, according to you, are the most important barriers to purchase online? �I am worried about giving out my credit card number �I don’t have a credit card �I don’t like providing personal information �I don’t want to purchase from someone with whom I am not familiar � I enjoy going out to do my shopping �I like to see/touch the product in person, before I buy it �Internet is too slow / Pages take too long to load �I am worried about the cost/hassle of returning the product �Delivery costs are too high �Prices are too high �Technical foul-ups prevent transactions from going through �I can’t find anything that I want to purchase on the Internet �I don’t know how but I am uncomfortable about purchasing through Internet �The process is expensive due to cost of access �Any other, specify………… PERSONAL DETAILS 14. Age: � Below 18 yrs � 18 - 30 yrs � 31 - 40 yrs � 41 – 50 yrs � Above 50 yrs
  • A Study on Consumer Perception towards online shopping 67 15. Educational Background: � Non-Matriculate � Matriculate � Graduate � Postgraduate 16. Occupation: � Business/Self Employed � Service/Executive � Student � Any other, specify……………… 17. Gender: � Male � Female 18. Average Monthly Income: � Less than Rs. 5,000 � Rs. 5,000 – Rs. 10,000 � Rs. 10,000 – Rs. 25,000 � Rs. 25,000 – Rs. 50,000 � Above Rs. 50,000 Name: _____________________________ Contact No.: ______________________________ City: ______________________________
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