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EJISDC (2014) 65, 4, 1-17

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ONLINE RETAILING IN INDIA: LINKING INTERNET USAGE, PERCEIVED RISKS,
WEBSITE ATTRIBUTES AND PAST ONLINE PURCHASE BEHAVIOUR
Priya Mary Mathew
Pearl Academy,
New Delhi, India
priya.711@gmail.com

Sita Mishra
Institute of Management Technology,
Ghaziabad, India
sitamish@gmail.com

ABSTRACT
With the number of Internet users exceeding 200 million, as reported on October 2013, ecommerce holds great promise in India. However, converting e-users into e-consumers still
remains a challenging task for e-retailers. Although Internet penetration has deepened in
India, yet capitalising the market potential depends largely on how Indian online users
actually use the Internet. This research study examines drivers of online purchase in India. As
these variables do not impact online purchase behaviour independently, we have attempted to
establish interrelationship of these variables (Internet usage, perceived risk, website attributes,
influence of past online shopping experience on perceived risks) to understand buying
behaviour. A structured questionnaire was administered for online consumers using field and
online survey mediums and response of 484 users was obtained. Findings show that Indian
online users had high level of perceived risks and these perceived risks increase despite users
have online buying experience. However, their attitude towards future intention to do online
purchase was not influenced by perceived risks related to Internet. These findings are contrary
to past studies, indicating that Indian online users have a unique attitude formation towards
Internet usage.
KEYWORDS: Internet usage, Perceived risks, Website attributes, Past online purchase
behaviour, Online retail, India
1.
INTRODUCTION
Global e-commerce sales are on the rise and business-to-consumer e-commerce sales are
expected to cross 1 trillion euro ($1.25 trillion) mark by 2013 (IMRG report, 2012).
According to eMarketer report, B2C ecommerce sales in Asia-Pacific grew more than 33% to
$332.46 billion in 2012. The region is expected to increase sales by more than 30% to over
$433 billion in year 2013. Among the BRIC (Brazil, Russia, India and China) Nations, India
has been the fastest growing market adding over 18 million Internet users and growing at an
annual rate of 41%. According to Forrester report (2012), the e-commerce market in India is
set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57% between 201216.
E-retailing in an emerging market as India is a highly unexplored industry. As the
Internet penetration is increasing in India, so does the prospect of e-retail. Indian e-commerce
industry is going relentlessly and e-retail forms an important part of it. E-commerce broadly
encompasses of travel retailing followed by e-retailing. Travel e-commerce has been above
global averages and continues to soar in terms of visitation and transactions. E-retail growth
has been facilitated by several players getting funded, aggressive marketing, the consumer
need and convenience to buy these products online. Although in 2012, the size of India’s ecommerce market was USD10B, while that of the Internet retail market was USD0.6B, this is
changing now. It is expected to reach USD76B by 2021 (Technopak report, 2012). The
primary reason for the growth of e-retail in India is the growth of Internet users, across all the
diverse areas in India. According to latest report released by the Internet and Mobile
Association of India (IAMAI) and IMRB International (formerly “Indian Market Research
The Electronic Journal of Information Systems in Developing Countries
www.ejisdc.org

only 9% of the users are conducting online transactions. it is worthwhile to study these inter relationships in Indian context. Despite high awareness of Internet and high e-usage in India. the environment or the buying process (Ko et al. Specifically. The Internet in India took more than a decade to move from 10 million to 100 million and only 3 years from 100 to 200 million.. the total number of Internet users has crossed a figure of 200 million in October. Research suggests mixed responses of online studies. A website is perhaps the only way an online store communicates with its customers. website attribute and past online shopping experience are linked with each other. 2013 reports). Indian consumers are known for their prudence about quality and price of the products they purchase. The large Internet user market despite a low penetration level also suggests that the online market of India has business potential. This present study tried to explore online behaviour of Indian users and understand how Internet usage and perceived risks. consequently e-retailing is a challenging way to consumers to buy. or 465 million. Consumers look for cues from the online environment to make sure that they will not experience a loss while making a purchase online (Chang and Chen. Despite contradicting findings. Now. India’s demography and urbanisation are also supporting growth of e-retailing.EJISDC (2014) 65. In next ten years. By 2020. 4. Apart from increase in number of Internet users. over 40% of Indian population would have been born after Internet’s inception and thus Internet penetration is expected to be high. A study by Zhou et al. compared to the current 31% (375 Mn).org . 1-17 2 Bureau”). Indians largely use the Internet for communication.ejisdc. the translation of e-users toe-customers is low because of high perceived risks. At present. social media is also an imperative driver of Internet use in India. 2004). McQuitty and Peterson (2000) stated that online shoppers can seek virtually any product at any time and from any location. (2008) indicate that there is a significant inter-relationship between prior online buying experience and future intent to do online shopping. mostly in the form of email. Youth of India continues to form the major segment of the total online users (IAMAI 2012. With the augmentation of e-retailing. 2013. The Internet has reached small cities and towns of India. the standard of urban living and spur will result in the growth of rretail. consumers have to contend with risks they perceive about the product. 35%. while Kuhlmeir and Knight (2004) in their study established that there is no significant relationship. this current study examines the online consumer behaviour of active Indian online users in terms of The Electronic Journal of Information Systems in Developing Countries www. of Indians will reside in urban India. 2008).

product and service information online prior to purchasing from non-Internet-based sellers. they mentioned that domain-specific innovativeness is a moderator of the relationship between Internet usage and the adoption of the Internet for shopping.1 The Concept of Internet Usage Internet usage is defined as the approximate time. 2. Citrin et al. which likely leads to more frequent Internet purchasing. Spending money online increases with time spent online. 2010). 1989). the Internet tends to amplify some of the uncertainties involved with consumer buying process. Perceived risks generally play an imperative role in the purchase decision-making process. usefulness and subjective norms as major determinants of online shopping is in continuance. the greater is the intent to do online purchase in future and the greater the chance of making a purchase online. Further. it was established that the period of Internet usage significantly influenced whether those shopping on the Internet searched for. perceived risks. Loshe et al. Further. Further. Similarly. in hours. Al-maghrabi and Dennis (2010) carried out a study in Saudi Arabia and found that that users who are comfortable with the Internet are more likely to adopt ecommerce. Their findings pointed out that Internet usage and domain-specific innovativeness have a direct influence on the adoption of online shopping. (1999) mentioned in their study that number of months online as well as length of time spent online is an important predictor of online buying behavior. that an online user spends on a daily basis using the Internet. Studies on the influencers of Internet usage have shown that perceived usefulness and ease of use encourages online users to use Internet for longer duration (Davis. (2000) showed that the longer the Internet usage. website attributes. Plessis et al. 2. Bauer (1960) was one of the first researchers to introduce the concept of perceived risk: “consumers perceive uncertainty in The Electronic Journal of Information Systems in Developing Countries www. (1998) established in their study that perceived usefulness has consistently strong effects on Internet usage. Consumers perceive a higher level of risk when they buy on the Internet as compared to traditional offline retail formats (Lee & Tan. influence of past online buying experience on perceived risk and influence of perceived risks on intent to do online purchase in future.org . Bellman et al. THEORETICAL DEVELOPMENT In this section we have reviewed the literature related to Internet usage. medium and light web users of the Internet.EJISDC (2014) 65. 2. Korgaonkar and Wolin (2002) categorised consumers as heavy.2 The Concept of Perceived Risks Even though e-retailing is considered to offer a number of benefits to consumers. (2000) took up two measures of innovativeness to explicate consumer adoption of online shopping. 1-17    3 Analyzing their Internet usage pattern and establishing a relationship with perceived risk Exploring the influence of past online shopping experience on perceived risks and preference of website attributes Examining the influence of perceived risks on intent to do online purchase in future. 4. perceived enjoyment. On account of numer of hours spent per day on Internet. Teo et al. or considered searching for. (2004) carried out a study with 1005 respondents in South Africa and found that the period of Internet usage significantly influenced the decision to purchase through the Internet. whereas the impacts of perceived ease of use and perceived enjoyment are partially supported.ejisdc. and seems to contend with other forms of online entertainment and social networking (Hannah and Lybecker. They explored a more positive attitude toward Internet advertising. 2003).

e-retailers should identify elements enhancing trust among potential customers. Demangeot and Broderick.EJISDC (2014) 65. and the content elements including the aesthetic aspects of the online presentation and the marketing mix (Loebbecke. Various types of risk identified were relative to physical. 2001). found privacy and security risks as two wellperceived risks in case of online shopping. (2005) found that privacy risks have a negative association with online purchasing behavior and discourage Internet users from shopping online frequently and for splurging significantly. Liebermann and Stashevsky (2002) also found that privacy and security as two major risk factors during online shopping. 2012). 1-17 4 contemplating a particular purchase intention. 1964. Perceived risk in e-commerce has a negative effect on shopping behaviour on the Internet. while studying the association between perceived risks and purchase intentions. Cunningham.org . (2002) found that perceptions of the website design and quality were vital predictors of trusting beliefs in the retailer and in The Electronic Journal of Information Systems in Developing Countries www. Chang and Chen (2008) described that web site quality affect consumers' perceived risk and in turn. 2002). 2003). time. 1967). McKnight et al. It was in 1999 that Mitchell advocated that perceived risk was dominant at explaining consumers’ behaviour because consumers were more often motivated to avoid mistakes than to maximise utility in purchasing. 2003. consumer purchase intention. Herrero Crespo et al. Miyazaki and Fernandez (2001). Ko et al. financial risk. Doolin et al.” Perceived risk has been described as feelings of uncertainty and possible adverse consequences about some future event (Cox and Rich. Aladwani and Palvia (2002) set out to develop a sound instrument to measure website quality from the users’ perspective and identified four underlying dimensions: technical adequacy. Similarly. They described three major forms of risk on Internet business viz. Online shopping elements can be related with consumers’ perceptions of functional and utilitarian dimensions such as “ease of use” and “usefulness”. content quality. Consequently. (2009) ascertained that economic and performance risk facets have a larger influence than social and time dimensions on Internet shopping adoption. Consumers appreciate simplicity or clear visual design in e-retailing websites because they reduce the perceived risks of wasted time. 2. Bhatnagar et al. Chen and Chang. Security and privacy have an impact on consumer trust in shopping on the Internet (Lee and Turban. (2000) explained that the likelihood of purchasing on the Internet decreases with increase in product risk. (2004) described it is as a combination of uncertainty with the possibility of serious outcome. 2003. safety.ejisdc. 2007). If consumers find a company’s website safe and easy to use. the site’s usability and inter activity. they may be more likely to make more purchases from it. Some of the elements identified as website attributes are: third-party approvals and endorsements. the credibility of the online vendor. specific content and appearance. deception and frustration (Wang and Emurian. Similarly. The outcome may make consumers unhappy and regretful. financial and performance dimensions (Lim.3 Dimensions of Website Attributes In recent times. the effect of online environment cues and website attributes on consumer purchase has received increasing managerial and research attention. product risk and information risk (security and privacy).. Forsythe and Shi (2003) established the effect of performance. and their perceptions of emotional and hedonic dimensions such as “enjoyment” (Menon and Kahn. Lack of trust is one of the most commonly mentioned causes for consumers not shopping on the Internet. However. 2005). lower levels of privacy risk not essentially result in greater attitude toward Internet shopping (Amoroso and Hunsinger. 2003. attitude toward usage behaviour and intention to adopt e-commerce (Zhang et al. Forsythe and Shi. time and economic risks on buying frequency during Internet shopping. 2008). 4. Vijayasarathy & Jones (2000) found that perceived risk influenced both attitudes toward online shopping and intention to shop online.

it led online users to ‘continue to shop’ on the Internet in the future. online purchases must be delivered in a timely manner. its impact on involvement was mediated by exploratory potential. relationships between past web-shopping experience. 1999). The study concluded that the past online purchase experience reduced perceived risk of consumers significantly. online retailers must be trustworthy. delivered products must match those described on the Website.4 Influence of Past Online Buying Experience on Perceived Risk Many studies have measured prior online shopping experience. Mitchell (1999) described that a low level of perceived risk is expected to promote purchase intentions and reactions to actual sales. So et al.ejisdc. Doolin et al. 2. transaction and fulfilment factors on e-retailing experience and found that the transaction has the greatest impact among the three factors. Ueltschy et al. Other studies (Shim et al.org . Eastlick and Lotz. products purchased online must be delivered undamaged. attitude towards web-shopping. it did not produce involvement directly.EJISDC (2014) 65. They examined the general attitude towards web-shopping. and influences of promotional offers and product categories on web-shopping intentions. 1986). Monsuwe’et al. The willingness to buy online can increase only with decrease in level of perceived risk and increase in perceived trust. past webshopping experiences and past experience with the web. which is defined as the past history of the online user for actual product or service purchase. They found web-shopping intentions are directly affected by web-search behaviour and webshopping adoption decisions and are indirectly affected by web-shopping attitudes. personal information provided for online purchases must be confidential. They examined eight specific perceived risks viz. The study indicated that the online purchase intention is influenced by all factors of perceived risks. using Internet medium from an e-retailer. Choi and Lee (2003) had measured impact of perceived risks on online purchase intention as regards to apparel shopping. (2005) investigated web-shopping behaviour in Hong Kong. credit card information used for online purchases must be secure. 2004) established that when prior online experience was satisfactory. product returns must be easy for online purchases and contacting customer service must be easy for online purchases. 1-17 5 consumer intentions to buy from the website. (2005) did research with the aim to show influence of Internet consumers’ perceived risk. Past literature studies have shown that perceived risk was evidently linked to customers’ satisfaction levels and repeat purchase intentions. 1999. 2001. 4. Chen and Barnes (2007) investigated how online consumers develop their initial trust and purchase intentions and it was found that both online initial trust and familiarity with online purchasing have a positive impact on purchase intention.5 Influence of Perceived Risks on Intent to do Online Purchase in Future Even after two decades of studies. It is demonstrated by many research findings that prior online shopping experiences have a direct impact on Internet shopping intentions (Weber and Roehl. perceived benefits and past Internet shopping experience on the future online shopping behaviour. Results indicated sense-making potential produced utilitarian value. (2004) investigated relationship of perceived consumer risk in relation to Internet purchasing to determine if experience in online purchasing reduced perceived risks. The study concluded that perceived risks were negatively and perceived benefits of Internet shopping were positively associated with amount and frequency of online purchases made. Lack of pre-purchase inspection of the product quality influences consumers’ purchase intentions with a high level of perceived risk (Festervand et al. 2. Chen and Chang (2003) measured the effect of interactivity. Mishra and Mathew (2013) in their The Electronic Journal of Information Systems in Developing Countries www. Rather. encouraging online browsers to become online buyers is still a dilemma for many online businesses (Hahn and Kim 2009).. Demangeot and Broderick (2007) investigated how consumers perceive online shopping environments in terms of their sensemaking and exploratory potential.

org .9 Characteristic % Annual Household Income Less than 5 lakhs 33 5 to 12 lakhs 38 12 to 20 lakhs 17 More than 20 lakhs 12 Internet Usage (hours per day) Less than 2 hours per day 30.3 15. information quality.ejisdc. National reports have declared that 75 percent of Indian online users are in 35 major cities of India. Privacy of Personal Information (Gefen. Faridabad. Mumbai. 2007).1 More than 12 hours per day 1. 4. The second criterion was that the respondent must be using the Internet for some purpose regularly (whether for emailing.2 2 to 4 hours per day 47 5 to 7 hours per day 13.5 3. 21 to 30: 31 and above.7 Based on extensive literature review the questionnaire comprised of statements related to following factors: Credit card information (Pennanen. Table 1 depicts demographic profile of respondents. Jaipur. Trustworthiness of online retailer The Electronic Journal of Information Systems in Developing Countries www. The first criterion was that the respondents must be exposed to the Internet at least two hours per week.2 0.2 33.7 14. 1-17 6 previous study found that Indian online users had high level of perceived risks. 2004). information search or buying).3 No 38. The major data for this study were obtained from cities such as Delhi. Chandigarh.2 7. RESEARCH METHODOLOGY This section explains the methodology adopted in this study and describes sampling procedures.5 5. Kolkatta. 3. Chennai. 3. Out of 600 filled questionnaires. 484 were found usable for data analysis. highest fear being related to the delivery of products purchased online.6 28.6 53. Hyderabad and Cochin.3 0. Walczuch and Lundgren. Gurgaon. data analysis techniques used for analyzing online retailing data. decision variables.EJISDC (2014) 65. social networking.4 Prior online purchase experience Yes 61.1 Sampling Procedure The respondents were selected using a criteria-based reference sampling technique. The third and final criterion was based on IAMAI report that the respondent must be based in an Indian urban metropolitan city that had considerable penetration of Internet. product range and after online sales service are most preferred website attributes which influence Indian online users. et al. 2000.K. The quota decided was that one third of sample will be selected from each of these age groups :18 to 21 . Apart from this. Table 1: Demographic Profiling of the Sample Characteristics Summary (n=484) Characteristic Gender Male Female Age (years) 18 to 21 22 to 25 26 to 29 30 to 39 40 to 49 50 to 60 Profession Student Part time employment Employed/Businessmen Home maker Retired % 45 55 37. The next level of stratification was based on age groups.3 8 to 12 hours per day 8.

between perceived risk and Internet usage. 1-17 7 (Chaudhuri and Holbrook.ejisdc. the average time of Internet usage of Indian online users is 2. Eight website attributes.9 d. 4. Regression analysis technique was used to explore and determine the relationships between the various decision variables. and Internet buying behaviours The Electronic Journal of Information Systems in Developing Countries www. p=0. a further analysis was done between average values of all eight perceived risks along with the Internet usage. The findings revealed that certain types of perceived risks amongst Indian online users that decreased with increase in Internet usage and these were: online retailers must be trustworthy.05). 4. perceived risks of Internet buying.1 Internet usage The analysis of Internet usage (depicted in Table 2) reflected that less than a half of the respondents (47%) access Internet for 2 to 4 hours per day.772 to 0.0 13. α > 0.08.EJISDC (2014) 65. FINDINGS AND ANALYSIS This section discusses Internet usage.70) was attained in all sections of the questionnaire. So.org . online purchases must be delivered in a timely manner.2 Relationship of Perceived Risk with Internet Usage and Actual Purchase With increase in Internet usage perceived risks should decrease. of low degree (r= -0. SPSS software was used to carry out the analysis. Park and Jun (2003) examined differences in Internet usage. Product returns must be easy for online purchases (Hahn and Kim 2009) and Contacting customer service must be easy for online purchases (Chang and Chen 2008). The value of Cronbach's Alpha varied from 0. Thus.1 Significance Results t=21. The relationship between perceived risks and Internet usage was examined using correlation analysis (shown in Table 3).4 4.860 for different sections.2 Data Analysis Methods Descriptive analysis was conducted on the data and non-parametric methods were used.2 47. 2001). 2001. 3. product returns must be easy for online purchases and contacting customer service must be easy for online purchases. The pilot study was done on a sample of 45. which are relevant to online retailers to entice online users. Internet innovativeness. However. Delivered products must match those described on the website (Chang and Chen 2008). none of these correlations were found to be significant.05 Tests 1. prior online buying behaviour and future online purchase intent by sampled Indian online users. 4. The results revealed that there is a negative correlation. were included and the respondents were asked to rank each attribute (1 being the highest rank and 8 being the lowest). a high scale of reliability (Cronbach's Alpha. As per reliability test.3 8.=483 p<0.f. Table 2 : Internet Usage of Indian Online users Variables Findings Percentage Daily Internet Usage Less than 2 hours per day 2 to 4 hours per day 5 to 7 hours per day 8 to 12 hours per day More than 12 hours per day 30.6 hours daily. while a third (30%) use Internet for less than 2 hours per day and about one fifth (22%) use Internet for more than 5 hours per day. Ruyter et al. Products purchased online must be delivered undamaged (Li and Zhang 2002). Timely delivery of online purchases (Li and Zhang 2002).

product range. Internet usage has significant influence on the behaviour of the online consumer. Such a user’s preference for the following website attributes decreases: recommendation from relatives. 1-17 8 between Korea and America. (2tailed) 0. with increasing usage. With increase in Internet usage.05 Sig. online users learn more about how to evaluate websites on their own by comparing information quality. tend to prefer attributes which enhance utilitarian value and are less enamoured of website attributes that enhance entertainment (hedonic value). recommendation from other buyers and product range. rather than by depending on others.06 5 Delivered products must match those described Positive on the Website 0.75 0. Table 3: Correlations of Internet Usage (in hours per day) with Perceived risk Perceived Risks Type of correlation with Internet Pearson usage Correlation 1 Credit card information used for online Positive purchases must be secure 0.EJISDC (2014) 65. visual design. fun and website atmosphere. Results showed that there were significant differences in Internet usage and the perceived risks of Internet shopping. which revealed that some website attributes were very important for Indian online users irrespective of Internet usage and this is: recommendation by others (buyers and relatives). When we compare the two ‘types’ of website attributes according to increasing and decreasing preferences. This indicates that with increasing Internet usage.03 6 Products purchased online must be delivered Positive undamaged 0. visual design and after sales service start influencing as significant factors.04 7 Product returns must be easy for online Negative purchases -0. 4. This result was further analysed using factor analysis (see Table 5).35 0. but no significant differences in Internet buying intentions or online buying experience between Korean and American consumers.49 0.54 0.ejisdc.02 4 Online purchases must be delivered in a timely Negative manner -0.36 4.3 Relationship between Website Attributes and Internet Usage Time spent on Internet is called Internet usage.23 0. the online user prefers information quality. The results (see Table 4) revealed that Internet usage influences the ranking of preferred website attributes. This shift in preference of website attributes with Internet usage suggests that the confidence of the online Internet shopper increases with greater Internet usage.org .67 0.05 8 Contacting customer service must be easy for Negative online purchases -0.. The Electronic Journal of Information Systems in Developing Countries www. we find that online users. product range etc.96 0. When the duration of Internet usage increases. after sales service.02 2 Personal information provided for online Nil purchases must be confidential 0 3 Online retailers must be trustworthy Negative -0. information quality.

6 Decreases Relatives Fun 174.4 187.org .9 157.4 189.2 Decreases Table 5 : Factor analysis of Website Attributes based on Internet usage (n=484) Less than 2 2 to 4 hours 5 to 8 hours More than 8 hours hours Recommendati Recommendation Recommendation Info Quality on Relatives Buyers Buyers Recommendati Recommendation Recommendation Product Range on Buyers Relatives Relatives After online sales After online sales Factor 1 Visual Design service service Website Atmosphere After online sales service Percentage 25 23 27 30 of variance Website Recommendation Visual Design Visual Design Atmosphere Relatives Recommendation Info Quality Product Range Info Quality Buyers Factor 2 Website Product Range Info Quality Atmosphere Visual Design Percentage 21 20 23 26 of variance Factor 3 Website Fun Fun Fun The Electronic Journal of Information Systems in Developing Countries www.5 187.9 158.4 174.1 Increases Website 175.6 181.8 Decreases Atmosphere After Online 193.6 181.5 193.1 196.7 165.ejisdc. 8= least rank) based on Internet usage (n=484) Internet Usage Less than 2 2 to 4 hours 5 to 8 hours More than 8 Preference hours hours of website attributes with increase in Internet usage  Visual Design 179.3 187.3 219.1 189.8 151.8 183.5 187.7 160.EJISDC (2014) 65.4 186.4 Increases Product Range 184.2 152.0 184. 4.8 181.9 167.4 Increases Buyers Recommendation 179.6 Increases Sales Service Recommendation 175.0 160.4 Decreases Info Quality 198. 1-17 9 Table 4: Ranking of Website Attributes (1= highest rank.

with a significant F statistic at 95 percent confidence level.4 5. as Internet use increases. The data collected was analysed for testing this association applying the correlation statistics.7 in one year. 1-17 10 Atmosphere Percentage 15 18 16 of variance *Extraction Method: Principal Component Analysis. lower will be the intention to do online purchase in future. the tendency as well as the intention to purchase online increases (Brown et al. perceived The Electronic Journal of Information Systems in Developing Countries www. 2= (7=most likely. Table 6: Relationship between Internet Usage. 2002. 3. On examining how Internet usage influenced the intention to purchase of online users to purchase online in the near future. 2003.7 6. 1=least likely) Less than 2 30 1.0 17. the actual online purchase jumped from ‘never purchased online’ (1. The finding (see Table 7) revealed that though there is positive correlation between all the perceived risks and intention to purchase.4 Relationship between Frequency of Online Purchase Experience.7 3.000 0. future online purchase intent and Internet usage (depicted in Table 6).51 and the R square was 0.5 5.9 4.25.7 Wallis Test chi-square Sig 0. months (7=most once.EJISDC (2014) 65. These results indicate that in case of Indian online users. the study found that the intention to purchase also increased (3. as the Internet usage of Indian online users increase from 2 hours to more than 8 hours daily. 1=never) 1=least likely) likely.4 to 6.7 6.0 5 to 8 hours 11 2.4 16.465) than daily Internet usage (Standardised B coefficient=0. frequency of Purchase intent Purchase intent usage per sample actual online in next one year in next three day purchase (3=more.7).7) to purchased ‘more than once’ (2. but the degree of correlation is very low.7 3. 4.2 More than 8 8 2. Actual Online Buying Behavior and Future Purchase Intention Internet Percentage of Avg. 2003).org . The value of regression coefficient value was 0. Park and Jun. Future Online Purchase Intention and Internet Usage We have examined the interrelationship among three variables frequency of online purchase experience.1 hours Kruskal 20.5 Influence of Perceived Risks on Intention to do Online Purchase in Future Literature indicated that higher the perceived risk. Kruskal Wallis tests were applied to the data collected and findings indicated that. Foucault and Scheufele.001 The relationship between the above three factors of online buying were further analysed with the help of step-wise multiple regression.7 to 6.4 4. Prior research has also established that. 4.4 hours 2 to 4 hours 51 1.112).1 in three months) with an increase in Internet usage.ejisdc. 17 4. The regression analysis showed that the intention to purchase in the next three months was influenced more by prior online purchasing experience (standardised B coefficient=0.

58. There was a steep increase in degree of perceived risks after an online purchase experience.35 Never 6. the perceived risks increased to 6. 8= least rank) based on Past Online Experience The Electronic Journal of Information Systems in Developing Countries www.03 4.ejisdc.58 Only once 6.05) 0.02 Correlation (Significant at p=0. This behaviour is different from the findings done in other countries of similar nature. The unique behaviour as shown by Indians is may be due to their ‘risk averse’ nature due to a collectivist culture of India.al.38 to 6.05). This can be accounted to the poor experience of online purchase.38 F 4. level of perceived risks dips by 6.13. These results were contradictory to prior studies (Doolin et.04 Intention to purchase in next three months 0. After buying experience. So the ranking of website attributes was analysed along with the past online buying experience. Table 9: Ranking of Website Attributes (1= highest rank.org . On careful examination it was noted that.10 Sig 0.35 when an online user buys a product for the first time. Table 7: Correlation Matrix between the Perceived Risks and Intention to Do Online Purchase in Future Perceived Risk (Average) Intention to purchase in next one year 0. using correlation and ANOVA.EJISDC (2014) 65. 4. The findings displayed (see Table 8) that perceived risk level is positively correlated with frequency of online buying (r=0.13 4. Table 8: Relationship between Prior online purchase and Perceived risks Prior Online Purchase experience Average Perceived Risks More than once 6.7 Influence of Past Online Shopping Experience on Preference of Website Attributes Online experience during a shopping event is an important determinant of whether the online navigation (browsing) will lead to a successful purchase transaction (buying). 1-17 11 risks related to Internet are not influencing their attitude towards future intention to do online purchase.6 Influence of Past Online Shopping Experience on Perceived Risks Experience in online shopping could influence the level of perceived risk. Analysis was done with collected data in this research. p<0. 2005).

8 5.9 2.554 .3* 5. We found that with increasing online shopping experience. This finding is similar to that of preference for certain website attributes with Internet usage.5 2.5 3.9* Effect on Ranking Increased Increased Decreased Increased Decreased The results (Table 9) reveal that.4 4.615 16. The results of regression analysis for the impact of risks factors and website attributes on actual purchase behaviour significantly support the overall model with F value of 16.69 94 1. Website attributes were found to have positive effect on actual purchase but their impact is not significant (β = 0.016 . Adjusted R-Square = . website attributes and actual online purchase behaviour. online users preferred attributes which enhanced utilitarian value to those which enhanced entertainment (hedonistic) value. with increase in online shopping experience (from ‘never’ to ‘more than once’).8 Relationship of Perceived Risk Factors and Website Attributes with Actual Online Purchase Behaviour Multiple regression analysis was used to test the relationships among risk factors. This implies that consumers are affected by perceived risks when it comes to actual online purchase and less the perceived risks more will be the actual purchase. Once Visual Design Info Quality Product Range Website Atmosphere After Online Sales Service Recommendation Buyers Recommendation Relatives Fun 4.4 2.000 Residual 104.23 2 24.3 2.4* Yes.580) (Table 10).EJISDC (2014) 65.8 4. Adjusted R2 (0. p < 0.98 (p < 0.2 4. product range and after online-sales service.252 .8 4.32) indicates that the variance in actual purchase is substantially explained by perceived risks factors and website attributes.012).136 -2.1 4.32 Variables Standardized coefficient β t Sig perceived risk factors -. The relationship between perceived risks and actual online purchase is significant and these factors have negative effect on actual purchase (β = -. They also reveal that preference for the following website attributes decrease with increase in past online shopping experience: web atmosphere and fun. Table 10 : Results of Regression Analysis for Actual Online Purchase as Dependent Variable and Risk Factors and Website Attributes as Independent Variables Sum of squares Degrees of Mean Squares F Sig Freedom Regression 49.98 .5* 4.45 Total 153.012 website attributes .8 4.00) (Table 10).ejisdc.580 The Electronic Journal of Information Systems in Developing Countries www. More than Once 4. 1-17 12 Past Online Experience Never Yes. 4.28.136.16.5 5.8 4. 4.93 96 R Square =.org .3 5. the preference for the following website attributes increases: information quality.2 4. This shift in preference of website attributes with online shopping suggests that the confidence of the online shopper increases with actual experience of online shopping.9 4.8 2.3* 3. p < 0.7 2.

Past online shopping did not decrease level of perceived risk in Indian online users. When an online retailer has a good reputation. Constantinides. unlike past studies by Hahn and Kim (2009). trust is a vital factor for consumers to make purchase decision since consumers often perceive risks involved in online transactions. This is not entirely because of pure web-based retailers. confidentiality of personal information and trust in e-retailers. This contradicts the conclusions of past studies such as Liebermann and Stashevsky (2002) and Doolin et al. This indicates that the collectivist nature of Indian society helps individual online users to overcome their perceived risks related to online shopping and they still will intend to do online shopping. but also due to multichannel distribution which provides the retail company with a competitive edge by operating two or more retail channels. DISCUSSIONS AND CONCLUSIONS There is clearly evident that the trend to conduct e-retailing is growing in all markets. This finding was similar to that conducted by Demangeot and Broderick (2007). hedonic value (fun element) and confidence building attributes (recommendations and after sales service). Thus. These were: utilitarian value attributes (product range and information quality). consumers still have confidence in online transaction. Success of online channel necessitates the need to reduce perceived risks on consumer shopping attitude and behaviour. similar to study done by Park and Jun (2003). perceived risks were negatively related with actual behaviour. This development is closely associated to the recognition that the Internet is a retailing platform capable of attracting and maintaining customers.EJISDC (2014) 65. something that is important for reducing uncertainties and building trust and confidence in the electronic marketplace.’s study that concentrated only in one of Indian states (Punjab). This study was aimed to investigate the interrelationship between Internet usage. Of these utilitarian attributes were found to be most preferred. as in other parts of the world. This information provides marketers the importance of consumers risk perception in order to adopt adequate risk-reduction strategies in the Internet shopping environment. 1-17 13 5. The study identified four basic attributes preferred by Indian online users. online business is steadily increasing in last few years. the need to predict consumers’ behavioural intentions to use the Internet for purchasing purposes has multiplied. The Electronic Journal of Information Systems in Developing Countries www. perceived risks. if they need to give out their personal information such as credit card numbers. website attributes and past on line purchase behaviour in India. Zhou et al. This finding was similar to that of Kuhlmeir and Knight (2004). even if risks are high.. In India. During online shopping. India does not have an adequate legal framework to support online consumers. perceived risks did not show negative correlation with future purchase intent. 4. Also. 2008). Unlike Kiran et al. 2004. Kiran et al (2008) studied Indian Internet consumer’ behaviour and also investigated consumer perception and attitude formation based on factor analysis. The study established that the highest perceived risks regarding online shopping that Indian online users have are those related to security of credit card information. marketers should be encouraged to minimize the perceived product risks so as to enhance trust of Indian consumers’ towards online purchasing.ejisdc. There is a need for legal frameworks that provide for the legal recognition of electronic documents and signatures and penalise common crimes and offences committed in cyberspace. This study established that consumers may feel uncertain about purchasing products online. However. experiential value attributes value attributes (web atmosphere and visual design). this current study took a better representative of Indian online users from metropolitan cities. including India. The preference for the website attributes changed with Internet usage and past online buying experience. (2005). This was similar to findings of other past studies (Liebermann and Stashevsky 2002.org . In fact the study revealed very low positive degree of correlation between perceived risks and future intent. Under such a circumstance.

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