CHAPTER I

INTRODUCTION

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INTRODUCTION

Online shopping is a form of electronic commerce which allows consumers to directly

buy goods or services from a seller over the Internet using a web browser. Consumers find a
product of interest by visiting the website of the retailer directly or by searching among

alternative vendors using a shopping search engine, which displays the same product's
availability and pricing at different e-retailers. As of 2016, customers can shop online using a
range of different computers and devices, including desktop computers, laptops, tablet computers
and smartphones.

An online shop evokes the physical analogy of buying products or services at a regular "bricks-
and-mortar" retailer or shopping center; the process is called business-to-consumer (B2C) online
shopping. When an online store is set up to enable businesses to buy from another businesses, the
process is called business-to-business (B2B) online shopping. A typical online store enables the
customer to browse the firm's range of products and services, view photos or images of the
products, along with information about the product specifications, features and prices.

Online stores typically enable shoppers to use "search" features to find specific models, brands or
items. Online customers must have access to the Internet and a valid method of payment in order
to complete a transaction, such as a credit card, an Interac-enabled debit card, or a service such
as PayPal. For physical products (e.g., paperback books or clothes), the e-tailer ships the
products to the customer; for digital products, such as digital audio files of songs or software, the
e-tailer typically sends the file to the customer over the Internet. The largest of these online
retailing corporations are Alibaba, Amazon.com, and eBay

With the development of modern technology, Internet offers people more and more convenience.
With the help of the Internet, people can do a lot of things without going out, like paying bills,
watching movies, study online and so on. Among those, the most attractive one for people is
doing shopping online. Online shopping does have many advantages but everything has two
sides, some people think that it also has many disadvantages.

Online shopping attracts people because it has many advantages. Nowadays, more and more
people, especially for the office worker, don’t have that much free time to go shopping they’re
busy working, studying and doing other important things. So online shopping becomes the most
convenient and best way for the office worker. Many people choose shopping online also

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because they can’t stand that crowded and noisy environment. For shopping online, they just
need to choose the article they want and pay online, and then shopping is finished. To most
people, shopping is not a hard and anguished job anymore, they can just stay at home, click the
mouse, spend several minutes to get what they want without stepping out of the room or standing
in line for checking.

Well doing shopping online is not always a perfect thing, it also has disadvantages. It seems easy
and quick, but there’s always a trap online. If you are careless, it will bring you some troubles.
For example, if you order a cloth online, at the moment you get the item, you may find that the
color is different from what you saw online, or the size is either too small or too big because it is
not available to try on before ordering, or the material of the cloth is not what you want. There
are also many swindlers waiting for you to bargain with. You would pay for the article but
couldn’t get anything ultimately.

So online shopping is offering convenience as well as disadvantages. On one hand, we enjoy

shopping without going out. On the other hand, we need to be very careful when choosing and
trading online.

Shopping through the Web simply works for people with a valid credit card or a debit card. First,
an online shopper needs to create a personal account which includes a username and a password.
It is very important for the customer to save the account information in a safe place in order not
to lose it, or allow other people to use it under their personal name. After creating an online
account for the specific site, the customer will start enjoying the wide variety of products and
items that are available online. The customer will then click on the wanted item in order to add it
to the personal shopping bag or basket.

After doing all the previous steps, the customer should take into consideration the safety of the
specific site. To be sure if the website is a safe place to share your credit card information, the
customer should look at the link in the browser. For a safe purchase, the customer should find the
beginning of the link starting with https, and not http. Having the website starting with https,
means that this specific webpage will safely secure the customer’s credit card information.

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After checking the safety of the webpage, the customer should then be ready to enter the credit
card information. For most online shopping websites, security is considered a very important
factor, and several safety questions should be answered by the customer. After the person is done
with completing the credit card information, he/ she is asked to make sure that the purchase is
complete and ready to be ordered. After ordering the item or the product, the customer needs to
wait for ten to twenty days to receive the specific order. The delivery time depends on the
location of the item, as well as the provided home address of the customer. If someone has not
tried online shopping yet, it is worth experiencing it. Most probably, the experience will be
highly enjoyed.

ADVANTAGES OF ONLINE SHOPPING

Incredible convenience: In comparison to a brick and mortar store with fixed hours, online
shoppers can choose any time of the day or night to get on the Web and shop. This is especially
useful for moms with small children, people that are home-bound, or simply in times of
inclement weather.

Price comparisons: When you visit a store, you most likely have to settle for whatever price the
vendor has placed on a particular item. Not so with online shopping - you have the ability to
compare prices from hundreds of different vendors (see The Top Nine Comparison Shopping
Sites).

Infinite choice: Shelf space in a brick and mortar store is limited, which means that your variety
of goods is limited. Not so with an online store. Plus, if you don't see what you want in one store
online, you can simply move on to the next one - you've got the power to do that.

Easy access to consumer reviews: It's easy to access consumer reviews for pretty much any
product you can think of online, which makes for more informed purchases.

No pressure sales: We've all been awkwardly propositioned by eager salespeople. You don't
have to put up with that online.

These are just some of the advantages of online shopping. Are there disadvantages? Let's look at
a few that might deter some customers from buying goods online:

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You can't try things on. If you're buying a clothing item, you don't have the ability to feel the
material, try it on, and see how it's made. Unless you know your measurements and are familiar
with the brand of clothing offered, this could end up being a bad experience.

You can't talk to someone immediately. If you have a question about what you're looking at, you
probably will have to wait at least 24 hours to get a question answered (however, many sites
have "instant chat" enabled that take care of this issue).

Privacy and security: Privacy and security are legitimate concerns for any online shopper, but
there are precautions you can take to make sure your transaction is a safe one. For example,
paying attention to HTTPS protocols, installing free spyware removal tools, knowing how to
identify online scams and hoaxes, surfing anonymously, and keeping your Web usage private are
all smart ways to address any privacy and security issues.

LIMITATIONS OF ONLINE SHOPPING

1. YOU DO NOT PHYSICALLY SEEN THE ITEMS:

Normally when we shop from a regular store, we can see the item and at least visually inspect
that it looks fine. You can select a co lour, size and can even speak to a sales person to clarify
doubts regarding an item. I feel the biggest disadvantage of online shopping is we do not
physically see the item till it arrives. May be you have seen it in the nearby mall but there is a
possibility that the particular piece you have ordered may be defective. Misinterpretation or
misunderstanding of items bought online is a common problem. Usually the photo of items you
see online are much better than once you have the item in front of you.

2. WAIT FOR THE ITEMS TO ARRIVE:

Once you place you order the waiting game starts. You have to wait for a few days for the item
to arrive which can be quite frustrating. Most experts believe that we are most excited about your
"buy" in the first few days, so by the time your item arrives you will most likely be less excited
then getting the item on same day you made the payment.

3. CHANCES OF MISHANDLING WHILE SHIPPING / DELIVERY RISKS:

What if the item you are expecting never arrives, you will be lost in a series of phone calls to the
seller and the courier company. What if you are not at home during the time of delivery and the

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courier company leaves the package on your door and a passerby decides to steal it? What if the
shipping company broke your stuff and you realize it after opening it when the courier man has
already gone away. The seller might claim that you broke it.

4. SHIPPING CHARGES:

Only a few sites offer free shipping, some others will ship for free only if your total purchase
price exceeds a certain amount. Shipping fee is often a big discouragement for online shoppers.

5. RETURNING MERCHANDISE:

Even if the seller agrees to take back the defective merchandise, you often have to pay the cost of
shipping it back. Additionally you have to call and convince the people regarding the reason of
your return. Some good sites do have excellent return policy, but not everyone.

COMPARISON BETWEEN ONLINE SHOPPING AND OFFLINE

SHOPPING

Offline shopping is becoming rather polar. Customers either want service, or they really *don't*
want service. It's not that customers are unclear about whether they want to purchase, it's that
they are absolutely clear about why they are shopping. They either have a purchase in their
minds, or they are shopping predominantly as a form of therapy, and simply wish to interact with
the goods. Customers have reached a position where if shopping is entirely experience oriented
and not goal oriented, then they find sales assistants a *disincentive* to enter a store. As they
grow in sophistication, customers' respect for, and tolerance of sales assistants is actually
reducing.

So essentially the changes I see are a marked separation of goal oriented shoppers and
experience oriented shoppers. Shoppers who have a specific purchasing goal in mind are time
conscious and want service immediately, and at the lowest possible price. Shoppers who are
experience-oriented find sales assistants irritating and officious. And I think the internet and
online shopping is actually contributing to this polarisation process.

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 NEED FOR THE STUDY
The purpose of this study is to explore the influences of online shopping perceived benefits
namely Convenience, Pricing and Wider Selection towards Online Customer Satisfaction and
Word of Mouth. The data has been collected on convenience from 200 respondents who
experienced at least one online shopping in the last year.

Online shopping is considered to be a very helpful way of buying products through the internet
especially during the holidays and clearance seasons. It allows customers to enjoy a wide variety
of products and items not only from a specific store, but from a diverse storage that includes all
kinds of items. Online shopping also provides customers with a good customer service that also
occurs online.

Many people around the world prefer to shop online and buy products from several brands and
companies that they cannot find or are not available for purchase in their home countries.
Nowadays, and with the help of the new technology and the support of the internet, people from
all around the world started to purchase items online by simply sitting in their homes.

Purchasing items and products through the Web is a very easy task to do. It is now playing a very
important role in everybody’s life especially elderly people, as well as people with a very busy
life schedule. It provides a very comfortable service for its customers, by being able to save the
item in the personal shopping bag, and buy it later on.

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 OBJECTIVES OF THE STUDY:

 To study attitude of customers towards online shopping. 


 To find out the preferences of the consumer regarding the attributes of
online shopping website. 

 To identify the issues faced by the user while online shopping. 

 To determine the parameters for choosing the particular shopping centre for
purchase of grocery items. 

 To determine whether online grocery shopping will be beneficial and on
what factors. 


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 SCOPE OF THE STUDY:
 To determine which factor influences the consumer to go for online shopping. 

 To find out which feature of the website attracts the user to purchase the
product from the online shopping website. 

 To find out the weather online shopping is beneficial for the user. 

 To analyse which factors influence the user to buy online grocery. 


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 RESEARCH DESIGN AND METHODOLOGY:

The sources of data used in this project report are both primary and secondary data.
1. Primary data
Primary data consists of original information gathered from sample size of
200 respondents residing in Mumbai, India.

2. Secondary data
Secondary data consists of information that already exists and that was
collected in the past for some other purposes.

Sample Design:
 Size of Sample: The sample size selected for the research is 200 in the
area of Mumbai 

 Parameters of Interests: The major parameter of interest is the subgroup of
people who are working professional and web savvy having an experience in
online shopping. The two other subsidiary parameters of interest are: 
O The respondent should also have an experience grocery shopping. 
O And the female respondent who have an online shopping experience. 

Sampling Technique:
 Quota Sampling: 
Quota sampling is a method for selecting survey participants. In quota sampling, a
population is first segmented into mutually exclusive sub-groups, just as in stratified
sampling. Then judgment is used to select the subjects or units from each segment
based on a specified proportion

Over here the sample are taken who working, having an experience in online
shopping and are web savvy. Also women respondent are taken as they are the user
who shop for grocery items than the male.

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Data Collection Tool Used:
 Questionnaire 
The data collection tool used for the research is “Questionnaires” to get the primary
data for the empirical research on consumer preference on online grocery shopping. 

The Questionnaire which is attached in the next page consists of a number of
questions printed in a definite order on a form which the respondents read. 

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 LIMITATIONS OF THE STUDY:
 The first limitation caused during the market research was to find out the
respondent who shop online and are web savvy. 

 The second limitation caused during the research was searching the
women respondents who shop grocery products along with the
experience of online shopping. 

 Other limitation caused in the market research was that the research will only
study the consumer perception towards online grocery shopping and not the
dealers, wholesalers or retailers‟ perception towards online shopping which acts
as an agent to the online retail industry to support its business operations. 

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 CHAPTER II
REVIEW OF LITERATURE

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 LITERATURE REVIEW
"India is among the fastest-growing markets and has been identified as one
of the significant potential markets for the company,"

Muralikrishnan B., country manager at eBay's India explains that Indian consumers
toward buying high margin products such as clothes and shoes as is the trend among
eBay shoppers in the West rather than electronic gadgets and books, which are the most
popular choices now but command lower profit margins and are less frequent purchases.

He depicted that India's nascent e-commerce market, which till recently was largely
limited to people buying train, flight and movie tickets, is in the middle of a surge as a
younger, tech-savvy middle class increasingly takes to shopping online in a country
seeing rapid growth in Internet usage.

Consulting firm Technopak predicts a $70-billion annual market by 2020, up from

$600 million now, which is just 0.05% of global online shopping. EBay itself
estimates India's online shopping market in 2012 will grow close to 100%.

“E-commerce: A boon for the current economic downturn”

First Data Corporation and ICICI Merchant Services, has laid down some facts that e-
commerce market in India had clocked close to Rs 50,000 cores by the end of 2011.

Even though there are less than 10 million internet users who are actually engaging in
e-commerce activities, there are about 150 million internet users in India or around 75
million households that are ready for e-commerce.

With entry and operational costs being comparatively low than the other countries like US,
the second half of 2011 and the beginning of the current calendar have seen the launch of a
good number of new e-commerce sites spanning across a variety of businesses – women‟s
fashion, men‟s fashion, shoes, followed by accessories, groceries, sports, toys, home
furnishings, jewellery, automotive, bicycles, electronics and electrical equipment etc.

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KEY DRIVERS FOR SUCCESS FOR E-COMMERCE
Reduction in operational cost as the entire business can be moved online, the need for
physical stores has become obsolete. Less infrastructural investment and associated
labour costs drives up the profit margin.

It is far easier and quicker to compare prices of goods online, equipping the customer
with the information to decide the right price or terms for themselves. With services like
COD, customers can trust the process of going online and purchasing.

Market penetration also becomes far more achievable with e-commerce; it is possible
for a merchant in Mumbai to extend his reach to north-eastern cities or even rural
villages that are now connected by the online network.

E-commerce facilitates shopping anytime, anywhere and for almost anything desired.
Busy consumers prefer this to the restrictions of when a mall/shop is open and the need
to physically travel to a shop. Online business takes shopping a step further by taking
itself to the customer creating conveniences of shopping anywhere and at anytime.

In India, with the increasing propensity of social media, businesses have now begun to
engage their customers on social networking portals such as Facebook. These are
likely to be rapidly developing marketing channels for the future.

“These businesses are difficult to turn into profitable ventures due to the low margins and
the logistics costs involved.”
Gaurav Saraf, director of Epiphany Ventures says that, the concept of online grocery shopping
faces the problem of turning their business into profitable ventures as the concept is new in the
market which leads to low margin along with low margin high cost is involved when it comes to
logistics. In addition to these problems the perishable items such as fruits & vegetables have a
short shelf life, if these items are not delivered before the expiry of their shelf life it would could
cause wastage and also add up the cost. From the above comment a conclusion is arrived that
these business ventures have a very thin margin when it comes to business operations.

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“Connecting the local kirana stores with the buyers while storing inventories on the Cloud”
Vijay Singh, CEO & MD of Aaramshop.com says that in order to reduce the cost to
their business operation they applied the concept of cloud computing, where it
connects the local kirana shops with the buyers. It enables the business to reduce the
inventory cost as all the inventories are handled by the local vendor.

“Create a work-life balance”

Vijay Singh, CEO & MD of Aaramshop.com states that the concept of online grocery
shopping creates the work-life balance in urban areas where the urban couples are
busy in their work culture and cannot give time towards their daily life needs.

“It is a difficult venture and these challenges make investors more cautious while
evaluating such initiatives”
Singhal of SAIF Partners, explains that the it is difficult for the investor to invest in these
type of business where the market is extremely fragmented.

Such a venture can only survive on repeat purchases and that‟s what one needs to target.
If a company knows what it needs to stock, how much it needs to stock and where it needs
to deliver, the business will become simpler to manage and run. The firm needs to find a
strong value proposition and target market to survive the cut-throat competition

The solution to the above problem stated can be that in order to survive in the market
the business should target the satisfied consumer to create repeat purchases. Also
inventory management should be applied to these organizations it will enable them
to what it need to stock, how much it needs to stock and where it needs to deliver,
this will allow to operates its business operation smoothly.

HISTORY
History of Online Shopping

The growth of the interment as a secure shopping channel has developed since 1994, with the
first sales of Sting album 'Ten Summoner's Tales'. Wine, chocolates and flowers soon followed

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and were among the pioneering retail categories which fueled the growth of online shopping.
Researchers found that having products that are appropriate for e-commerce was a key indicator
of Internet success. Many of these products did well as they are generic products which shoppers
didn't need to touch and feel in order to buy. But also importantly in the early days there were
few shoppers online and they were from a narrow segment: affluent, male, 30+. Online shopping
has come along way since these early days and -in the UK- accounts for significant percents
(depending on product category as percentages can vary).

GROWTH IN ONLINE SHOPPERS

As the revenues from online sales continued to grow significantly researchers identified different
types of online shoppers, Rohm & Swaninathan identified four categories and named them
"convenience shoppers, variety seekers, balanced buyers, and store-oriented shoppers". They
focused on shopping motivations and found that the variety of products available and the
perceived convenience of the buying online experience were significant motivating factors. This
was different for offline shoppers, who were more motivated by time saving and recreational
motives.

DIGITAL HIGH STREET 2020

English entrepreneur Michael Aldrich was a pioneer of online shopping in 1979. His system
connected a modified domestic TV to a real-time transaction processing computer via a domestic
telephone line. He believed that videotex, the modified domestic TV technology with a simple
menu-driven human–computer interface, was a 'new, universally applicable, participative
communication medium — the first since the invention of the telephone.' This enabled 'closed'
corporate information systems to be opened to 'outside' correspondents not just for transaction
processing but also for e-messaging and information retrieval and dissemination, later known as
e-business. His definition of the new mass communications medium as 'participative'
[interactive, many-to-many] was fundamentally different from the traditional definitions of mass
communication and mass media and a precursor to the social networking on the Internet 25 years
later. In March 1980 he launched Redifon's Office Revolution, which allowed consumers,
customers, agents, distributors, suppliers and service companies to be connected on-line to the

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corporate systems and allow business transactions to be completed electronically in real-time.
During the 1980s he designed, manufactured, sold, installed, maintained and supported many
online shopping systems, using videotex technology. These systems which also provided voice
response and handprint processing pre-date the Internet and the World Wide Web, the IBM PC,
and Microsoft MS-DOS, and were installed mainly in the UK by large corporations.

The first World Wide Web server and browser, created by Tim Berners-Lee in 1990, opened for
commercial use in 1991. Thereafter, subsequent technological innovations emerged in 1994:
online banking, the opening of an online pizza shop by Pizza Hut, Netscape's SSL v2 encryption
standard for secure data transfer, and Intershop's first online shopping system. The first secure
retail transaction over the Web was either by NetMarket or Internet Shopping Network in 1994.
Immediately after, Amazon.com launched its online shopping site in 1995 and eBay was also
introduced in 1995. Alibaba's sites Taobao and Tmall were launched in 2003 and 2008,
respectively. Retailers are increasingly selling goods and services prior to availability through
"pretail" for testing, building, and managing demand.

INTERNATIONAL STATISTICS
Statistics show that in 2012, Asia-Pacific increased their international sales over 30% giving
them over $433 billion in revenue. That is a $69 billion difference between the U.S. revenue of
$364.66 billion. It is estimated that Asia-Pacific will increase by another 30% in the year 2013
putting them ahead by more than one-third of all global ecommerce sales. The largest online
shopping day in the world is Singles Day, with sales just in Alibaba's sites at US$9.3 billion in
2014.

CUSTOMERS

Online customers must have access to the Internet and a valid method of payment in order to
complete a transaction. Generally, higher levels of education and personal income correspond to
more favorable perceptions of shopping online. Increased exposure to technology also increases
the probability of developing favorable attitudes towards new shopping channels. In a December
2011 study, Equation Research surveyed 1,500 online shoppers and found that 87% of tablet
owners made online transactions with their tablet devices during the early Christmas shopping
season.

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PRODUCT SELECTION
Consumers find a product of interest by visiting the website of the retailer directly or by
searching among alternative vendors using a shopping search engine. Once a particular product
has been found on the website of the seller, most online retailers use shopping cart software to
allow the consumer to accumulate multiple items and to adjust quantities, like filling a physical
shopping cart or basket in a conventional store. A "checkout" process follows (continuing the
physical-store analogy) in which payment and delivery information is collected, if necessary.
Some stores allow consumers to sign up for a permanent online account so that some or all of
this information only needs to be entered once. The consumer often receives an e-mail
confirmation once the transaction is complete. Less sophisticated stores may rely on consumers
to phone or e-mail their orders (although full credit card numbers, expiry date, and Card Security
Code, or bank account and routing number should not be accepted by e-mail, for reasons of
security).

PAYMENT

Online shoppers commonly use a credit card or a PayPal account in order 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.)
 Cheque/ Check
 Debit card
 Direct debit in some countries
 Electronic money of various types
 Gift cards
 Postal money order
 Wire transfer/delivery on payment
 Invoice, especially popular in some markets/countries, such as Switzerland
 Bitcoin or other cryptocurrencies
Some online shops will not accept international credit cards. Some require both the purchaser's
billing and shipping address to be in the same country as the online shop's base of operation.

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Other online shops allow customers from any country to send gifts anywhere. The financial part
of a transaction may be processed in real time (e.g. letting the consumer know their credit card
was declined before they log off), or may be done later as part of the fulfillment process.

PRODUCT DELIVERY

Once a payment has been accepted, the goods or services can be delivered in the following ways.
For physical items:

 Shipping: The product is shipped to a customer-designated address. Retail package

delivery is typically done by the public postal system or a retail courier such as FedEx, UPS,
DHL, or TNT.
 Drop shipping: The order is passed to the manufacturer or third-party distributor, who then
ships the item directly to the consumer, bypassing the retailer's physical location to save
time, money, and space.
 In-store pick-up: The customer selects a local store using a locator software and picks up the
delivered product at the selected location. This is the method often used in the bricks and
clicks business model.

For digital items or tickets:

 Downloading/Digital distribution: The method often used for digital media products such as
software, music, movies, or images.
 Printing out, provision of a code for, or e-mailing of such items as admission tickets and scrip
(e.g., gift certificates and coupons). The tickets, codes, or coupons may be redeemed at the
appropriate physical or online premises and their content reviewed to verify their eligibility
(e.g., assurances that the right of admission or use is redeemed at the correct time and place,
for the correct dollar amount, and for the correct number of uses).
 Will call, COBO (in Care Of Box Office), or "at the door" pickup: The patron picks up pre-
purchased tickets for an event, such as a play, sporting event, or concert, either just before
the event or in advance. With the onset of the Internet and e-commerce sites, which allow
customers to buy tickets online, the popularity of this service has increased.

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SHOPPING CART SYSTEMS
Simple shopping cart systems allow the off-line administration of products and categories. The
shop is then generated as HTML files and graphics that can be uploaded to a webspace. The
systems do not use an online database. A high-end solution can be bought or rented as a stand-
alone program or as an addition to an enterprise resource planning program. It is usually installed
on the company's web server and may integrate into the existing supply chain so that ordering,
payment, delivery, accounting and warehousing can be automated to a large extent. Other
solutions allow the user to register and create an online shop on a portal that hosts multiple shops
simultaneously from one back office. Examples are Big
Commerce, Shopify and FlickRocket. Open source shopping cart packages include advanced
platforms such as Interchange, and off-the-shelf solutions such

as Magento, osCommerce, Shopgate, PrestaShop, and Zen Cart. Commercial systems can also be
tailored so the shop does not have to be created from scratch. By using an existing framework,
software modules for various functionalities required by a web shop can be adapted and
combined.

DESIGN
Customers are attracted to online shopping not only because of high levels of convenience, but
also because of broader selections, competitive pricing, and greater access to information.
Business organizations seek to offer online shopping not only because it is of much lower cost
compared to bricks and mortar stores, but also because it offers access to a worldwide market,
increases customer value, and builds sustainable capabilities.

INFORMATION LOAD
Designers of online shops are concerned with the effects of information load. Information load is
a product of the spatial and temporal arrangements of stimuli in the web store. Compared with
conventional retail shopping, the information environment of virtual shopping is enhanced by
providing additional product information such as comparative products and services, as well as
various alternatives and attributes of each alternative, etc. Two major dimensions of information
load are complexity and novelty. Complexity refers to the number of different elements or
features of a site, often the result of increased information diversity. Novelty involves the
unexpected, suppressed, new, or unfamiliar aspects of the site. The novelty dimension may keep

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consumers exploring a shopping site, whereas the complexity dimension may induce impulse
purchases.

CONSUMER NEEDS AND EXPECTATIONS

According to the output of a research report by Western Michigan University published in 2005,
an e-commerce website does not have to be good looking with listing on a lot of search engines.
It must build relationships with customers to make money. The report also suggests that a
website must leave a positive impression on the customers, giving them a reason to come back.
Dyn, an Internet performance management company conducted a survey on more than 1400
consumers across 11 countries in North America, Europe, Middle-East and Asia and the results
of the survey are as follows:

 Online retailers must improve the website speed

 Online retailers must ease consumers fear around security

These concerns majorly affect the decisions of almost two thirds of the
consumers. User interface
The most important factors determining whether customers return to a website are ease of use
and the presence of user-friendly features. Usability testing is important for finding problems and
improvements in a web site. Methods for evaluating usability include heuristic evaluation,
cognitive walkthrough, and user testing. Each technique has its own characteristics and
emphasizes different aspects of the user experience.

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 CHAPTER III
THE INDUSTRY AND COMPANY
PROFILE

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 INDUSTRY INTRODUCTION

Internet is changing the way consumers shop and buy goods and services, and has
rapidly evolved into a global phenomenon. Many companies have started using the
Internet with the aim of cutting marketing costs, thereby reducing the price of their
products and services in order to stay ahead in highly competitive markets.

Companies also use the Internet to convey communicates and disseminate information, to
sell the product, to take feedback and also to conduct satisfaction surveys with customers.
Customers use the Internet not only to buy the product online, but also to compare prices,
product features and after sale service facilities the will receive 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 behaviour 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 which are based on the traditional models of
consumer behaviour, and then examine their validity in the Internet context.

MODELS OF E-COMMERCE
BUSINESS-TO-BUSINESS (B2B):
B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-
commerce that deals with relationships between and among businesses. About 80% of e-

24
commerce is of this type, and most experts predict that B2B ecommerce will continue to grow
faster than the B2C segment. Eg: indiamart.com, eindiabusiness.com, tradeindia.com etc.

BUSINESS-TO-CONSUMER (B2C):
Business-to-consumer e-commerce, or commerce between companies and
consumers, involves customers gathering information; purchasing physical goods (i.e.,
tangibles such as books or consumer products) or information goods (or goods of
electronic material or digitized content, such as software, or e-books); and, for
information goods, receiving products over an electronic network.

It is the second largest and the earliest form of e-commerce. Its origins can be traced
to online retailing (or e-tailing). Thus, the more common B2C business models are
the online retailing companies such as flipkart.com Amazon.com, snapdeal.com etc

BUSINESS-TO-GOVERNMENT (B2G):
Business-to-government e-commerce or B2G is generally defined as commerce
between companies and the public sector. It refers to the use of the Internet for public
procurement, licensing procedures, and other government-related operations. This
kind of e-commerce has two features: first, the public sector assumes a pilot/leading
role in establishing e-commerce; and second, it is assumed that the public sector has
the greatest need for making its procurement system more effective.

Web-based purchasing policies increase the transparency of the procurement process (and
reduce the risk of irregularities). To date, however, the size of the B2G ecommerce market as
a component of total e-commerce is insignificant, as government e-procurement
systems remain undeveloped.

CONSUMER-TO-CONSUMER (C2C):
Consumer-to-consumer e-commerce or C2C is simply commerce between private
individuals or consumers. This type of e-commerce is characterized by the growth of
electronic marketplaces and online auctions, particularly in vertical industries where
firms/businesses can bid for what they want from among multiple suppliers. It
perhaps has the greatest potential for developing new markets.

25
Online auction site eBay, Yahoo! Auctions are a couple of examples of C2C websites.

M-COMMERCE
M-commerce (mobile commerce) is the buying and selling of goods and services
through wireless technology-i.e., handheld devices such as cellular telephones and
personal digital assistants (PDAs).

Mobile Commerce is any transaction, involving the transfer of ownership or rights to

use goods and services, which is initiated and/or completed by using mobile access to
computer-mediated networks with the help of an electronic device.

MOBILE COMMERCE IN INDIA

Mobile is growing in India with more than 800 million subscribers across the country.
The advancement in terms of adoption of smart phones with 3G enabled services is
happening at a rapid pace. This of course has opened up the gates to mobile advertising,
mobile application development and mobile commerce in India. According to BuzzCity's latest
report, India is top performing mobile advertising region in the whole of Asia. The growth in
mobile advertising globally is tremendous with ads served on a year-on-year growth of 139%.
With respect to some number crunching, more than 126 billion ads were served in 2011,
compared with 52 billion in 2010.

In India, Mobile Commerce is still in the development phase as the use of mobile phones for
carrying out transactions is very limited. However, the development is taking place at a nice
speed and in the coming years, Mobile Commerce is most likely to make its presence feel as
companies and businesses have started understanding the benefits of Mobile Commerce.

Some of the companies have even incorporated this technology. Airtel, ICICI, Reliance are
some of the companies/businesses that are using this technology as their users are allowed to
make limited purchases from their phones. For now, the users are mainly allowed to pay phone
bills, utility bills, book movie tickets, book travel tickets with their cell phones.

However, more services will be introduced in coming years. Security is one of the main

26
concerns of Mobile Commerce as it‟s very important to offer secure transactions and this
is the reason why Mobile Commerce is still in the development phase in India.

For now, users are mainly allowed to do Mobile Banking i.e. to access the bank account with a
cell phone in order to pay the utility bills. With the current rate of development, users will be
soon allowed to purchase products, advertise, to take part in auctions and pay bills with the
help of a cell phone, while they are on the move.

ONLINE SHOPPING IN INDIA

The Indian economy is slated to grow by upward of 6 % annually in the next few
years which is among the highest rates of any big emerging economy. And quite a lot
of this growth would be on the back of domestic consumption of goods and services.

E-commerce is emerging as a great level given that organized retail is still not ubiquitous across
the length and breadth of the country with large retail chains making up less than 10% of the
market. E-commerce is helping people in smaller towns in India access quality products and
services similar to what people in the larger cities have access to. It‟s being forecast that
close to 60% of online shoppers would come from beyond the top eight large cities by end of
this year.

Increasing internet penetration has helped to expand the potential customer pool. Internet
penetration is only about 10% (or about 121 million users) as against about 81% in the US
and 36% in China. However this number continues to rise at a consistent pace because of
falling prices for broadband connections.

Indians are also increasingly taking to mobile devices for not only search but shopping as
well. The number of smartphone users is rapidly increasing in India and with 4G services
about to take off it‟s expected to get even more people going online. There are
currently about 900 million mobile subscribers and this number is expected to touch 1.2
billion by 2015. Of these about 27 million are estimated to be active mobile internet users.
More importantly, 20% users indicated intent to buy products through their mobile phones
as against the current 4% and this number is expected to only increase in the next two to

27
three years.

Innovation is helping e-commerce companies break the inertia for online shopping by
offering benefits to customers not traditionally available in a brick and mortar store. Business
models include no question asked return policies ranging from 7 days to 30 days, free
product deliveries and the industry dynamics changing “cash on delivery” model. The last
innovation has really help unlock the potential as people can now order products and
pay when they get physical delivery of the product.
This has been a tremendous success because Indians are still reluctant to give their
credit/debit card details online and want to have the psychological comfort that they would
actually get the product once payment has been made. These innovations have led to
further innovations downstream as ancillary businesses are developing to support these
initiatives. Some companies have begun to develop support mechanisms for the entire
cash on delivery model and are trying to reach the far flung corners of India, including in
the interiors where traditional logistics companies are still not completely present. The
logistics companies are also shoring up their act and have started to build specific verticals and
expertise to address the requirements of e-commerce companies.

Divyan Gupta is the Founder and CEO of Keshiha Services Pvt. Ltd, a company with interests
in the internet, telecom, healthcare, education and advanced technology businesses has stated
that, acceptance of online shopping as a secure shopping mode is has also helped to increase e-
commerce uptake.

Currently only about 10 million people do online transactions out of an approximate

population of 200 million credit and debit card holders. However the latest industry report by
First Data Corporation and ICICI Merchant Services indicate that there are about 150 million
users that are „ready‟ for e-commerce.

More importantly the report indicates that urban Indian consumers are now confident enough
to make online purchases of up to US$500 as against US$40-100 in the recent past. So not
only are the numbers of online shoppers projected to increase but there has been a real
increase in the total value being spent online. So what happens next for an industry which is

28
retailing everything online- from flowers to baby products to books, coupons, apparels, music
and electronic items to even houses, cars and jewelry? While this e-commerce play is not like
the earlier dot com bubble, there are clear signs that order might be coming in amidst all the
noise that is out there.

First a slow but sure consolidation is starting to take place in the industry. Experts say that over
the next 12-18 months there would be a couple of multi-product generalists who would be
successful along with a leader in single product category.

Second, Venture Capitalists are starting to be choosy about which business to invest
in, basing their decisions on performance as opposed to future predictions. Valuations
which went through the roof are now returning to normal levels. According to an
Avendus report, about US$829 million was pumped in the sector in the first 10 months
in 2011. However this came down to US$16 million in December 2011 and went up
only marginally to. US$24 million in January of this year.

Despite all of this, it‟s been a very impressive story so far. The poster child of the Indian e-
commerce industry is Flipkart.com, a 4 year old venture which modeled itself
afterAmazon.com and is already commanding a valuation of US$ 500 million and is
targeting revenues of US$1 billion in the next two to three years. All of this has caught
the attention of Amazon.com which entered the market in February this year. It came in
through Junglee.com, a price comparison site and is already amongst the top 10 sites in
the country. Everyone is therefore trying to capitalize before the 800 pound gorilla
comes in fully on its own which is expected to be sometime around Q3/Q4 this year.

There is huge demand for top-notch professional grade web 2.0 consultancy and development.
Very few companies have a long term vision around customer acquisition, retention and
constant conversations. A lot more can be done in understanding the linkages between design
and functionality based on user experience and social integration. However to succeed in a
tough market like India your company needs to be open to long term strategic partnerships
rather than an upfront “pay for services” model. The upside would be worth its wait.

29
India has more than 3,311 running e-commerce centres, according to research conducted
by eBay India for its 2011 census. Indian web is clouded with e-commerce (B2B, B2C,
B2G, and C2C type business models) start ups and increasing like mushrooms on lawn.

India- an upcoming super power has more than100 million internet users which is
keep on growing by introduction of 2G and 3G. They want to be online always by
any internet enabled gadgets. People are moving from street bargaining to online
web bargaining. The common Indian Mentality of “seeing and believing” or “how it
will look” is changing by introducing some creative business models like “cash on
delivery” by major e-commerce sites.

FACTORS WITH RESPECT TO WOMEN IN ONLINE SHOPPING

Shopping has been an obsession of women across the globe. A new shop in the neighborhood,
a new shopping mall in the area, a new brand launched – women are first to know and first to
go. When it comes to shopping, women are more organized (45% of women come to retail
stores with shopping-lists as compared 27% of men), regularized and they show some definite
trends in their buying behaviors. A woman is more likely to spend time in a retail store (29%) as
compared to her male counterpart (23%). When a woman visits a retail store or any physical
retail store she will consider a few important factors such as:
 How conveniently the store is located 
 Behaviour of the staff 
 Cleanliness (most of women are obsessed with it) 
 Products put at an easy reach so that she can check the label, feel it (if required)
and physically compare it with a similar product from a different manufacturer 
 Overall aesthetic decoration of the store 
 And most importantly – freebies and discounts available with the products 

Naturally, the same woman when she would visit an online retail store will look for
these factors in her sub-conscious mind. She would love to get the same feeling as
she derives from the environment of her favorite retail store. She will unknowingly
demand these from your online shopping store. She would choose to stay and buy
from youronline webstore if you can meet the following:

30
 Save time: You should give her the navigational freedom and easy roam
around options in your store; give her instantly whatever she wants. 
 Get a better selection: Your product should be the best in the designated
price bracket 
 Complete product details: Do not describe your products in single words;
give as much detail as possible. 
 Better value/offer: Your freebies should be 'useful' enough and the discount
should be noticeable 
 Logistics: You must deliver the product right at her doorsteps and nowhere else! 
 Flexible return policy: Many times a woman takes a second opinion and you should
respect this nature. Be flexible if she asks you to replace what she has bought. 

31
 THE COMPANY PROFILE
Flipkart is an e-commerce company founded in 2007 by Sachin Bansal and Binny Bansal. The
company is registered in Singapore, but has its headquarters in Bangalore, Karnataka. Flipkart
has launched its own product range under the name "DigiFlip" with products including tablets,
USBs, and laptop bags.

In May 2014, Flipkart received $210 million from DST Global, in July 2014 it raised $1 billion
led by existing investors Tiger Global and South Africa's media group Naspers and in May 2015
it raised $550 million from some of its existing investors. Flipkart's last fundraising round in
May 2015 had pegged its valuation at $15 billion. In February 2016, Morgan Stanley, marked
down its investment value to $11 billion.

HISTORY

Flipkart (Company) was founded in 2007 by Sachin Bansal and Binny Bansal, both alumni of the
Indian Institute of Technology Delhi. They worked forAmazon.com, and left to create their new
company incorporated in October 2007 as Flipkart Online Services Pvt. Ltd. The first product
they sold was the bookLeaving Microsoft To Change The World to a customer from Hyderabad.
Flipkart now employs more than 33,000 people. Flipkart allows payment methods such as cash
on delivery, credit or debit card transactions, net banking, e-gift voucher and card swipe on
delivery.

After failure of its 2014 Big Billion Sale, Flipkart recently completed the second edition of Big
Billion Sale held between October 13 and 17 where it is reported that they saw a business
turnover of 300 million in gross merchandise volume.

BUSINESS STRUCTURE

In a report dated November 25, 2014, a leading media outlet reported that Flipkart were
operating through a complex business structure which included nine firms, some registered in
Singapore and some in India. In 2012 Flipkart co-founders sold WS Retail to a consortium of
investors led by Rajeev Kuchhal.

32
ACQUISITIONS

 2010: WeRead, a social book discovery tool.

 2011: Mime360, a digital content platform company.
 2011: Chakpak.com, a Bollywood news site that offers updates, news, photos and videos.
Flipkart acquired the rights to Chakpak's digital catalogue which includes 40,000
filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has categorically said that
it will not be involved with the original site and will not use the brand name.
 2012: Letsbuy.com, an Indian e-retailer in electronics. Flipkart has bought the company for
an estimated US$25 million. Letsbuy.com was closed down and all traffic to Letsbuy has
been diverted to Flipkart.
 2014: Acquired Myntra.com in an estimated ₹ 20 billion (2,000 crore, about US$319
million) deal.
 2015: Flipkart acquired a mobile marketing start-up Appiterate as to strengthen its mobile
platform.

INVESTMENTS

 In 2014, Flipkart invested $1 million in an Chennai-based electric vehicle (electric scooter,

electric motorcycle) startup Ather Energy.
 In 2015, Flipkart bought a minority stake in a Navigation and route optimization startup
MapmyIndia to help improve its delivery using MapmyIndia assets.

FINANCE

Initially, they had spent ₹ 400,000 only for making website to set up the business. Flipkart has
later raised funding from venture capital funds Accel India (US$1 million in 2009) and Tiger
Global (US$10 million in 2010 and US$20 million in June 2011). On 24 August 2012, Flipkart
announced the completion of its 4th round of $150 million funding from MIH (part of Naspers
Group) and ICONIQ Capital. The company announced, on 10 July 2013, that it has raised an
additional $200 million from existing investors including Tiger Global, Naspers, Accel Partners
and Iconiq Capital.

33
Flipkart's reported sales were ₹ 40 million in FY 2008–2009, ₹ 200 million in FY 2009–2010
and ₹ 750 million for FY 2010–2011. In FY 2011–2012, Flipkart is set to cross the ₹ 5 billion
(US$100 million) mark as Internet usage in the country increases and people get accustomed to
making purchases online. Flipkart projects its sales to reach ₹ 10 billion by year 2014. On
average, Flipkart sells nearly 10 products per minute and is aiming at generating a revenue of ₹
50 billion (US$0.81 billion) by 2015.

On November 2012, Flipkart became one of the companies being probed for alleged violations
of FDI regulations of the Foreign Exchange Management Act, 1999.

Flipkart reported a loss of ₹ 281 crore for the FY 2012-13. In July 2013, Flipkart raised USD
160 million from private equity investors.

In October 2013, it was reported that Flipkart had raised an additional $160 million from new
investors Dragoneer Investment Group, Morgan Stanley Wealth Management, Sofina SA and
Vulcan Inc. with participation from existing investor Tiger Global.

On 26 May 2014, Flipkart announced that it has raised $210 million from Yuri Milner’s DST
Global and its existing investors Tiger Global, Naspers and Iconiq Capital.

In early July 2014, it was also highly speculated that Flipkart was in negotiations to raise at least
$500 million, for a likely listing in the US for 2016.

On 29 July 2014, Flipkart announced that it raised $1 billion from Tiger Global Management
LLC, Accel Partners, and Morgan Stanley Investment Management and a new investor
Singapore sovereign-wealth fund GIC.

On 6 October 2014, Flipkart sold products worth INR 650Crore in 10 hours in a special one-day
event - "The Big Billion Day", claiming they had created e-commerce history, but their hard-won
reputation for good customer service suffered because of technical problems, and angry reactions
on social media from buyers disappointed with the pricing and availability of products. It
claimed to sell a whopping 5 lakh mobile handsets, five-lakh clothes and shoes and 25,000
television sets within hours of opening its discounted sale at 8 AM. In December 2014, After it
received $700 million from another funding, Flipkart had a market cap of $11 billion or
Rs.66000 crore. In May 2015 Flipkart has raised $550 million from some of its existing
investors, in a deal that raises the valuation of the privately held Indian startup to about $15
billion or Rs. 90,000 crore

34
On 20 December 2014, Flipkart announced filing application with Singapore-based companies'
regulator ACRA to become a public company after raising USD 700 million for long term
strategic investments in India following which its number of investors exceeded 50. The USD
700 million fund raised by Flipkart added new investors - Baillie Gifford, Greenoaks Capital,
Steadview Capital, T. Rowe Price Associates and Qatar Investment Authority - on company's
board.Its existing investors DST Global, GIC, ICONIQ Capital and Tiger Global also
participated in this latest financing round.

By August 2015, after raising $700 million, Flipkart had already raised a total of $3 billion, over
12 rounds and 16 investors.

REGULATORY ACTION AND LAWSUITS

The Government Of India informed the parliament in 2012, that it had asked the Enforcement
Directorate to investigate Flipkart Online Services. In August 2014, the Enforcement Directorate
claimed that it had found Flipkart to be in violation of the Foreign Exchange Management Act.

On November 30, 2012, Flipkarts offices were raided by the Enforcement Directorate.
Documents and computer hard drives were seized by the regulatory agency.

Delhi High Court observed violation of foreign investment regulations by E-Commerce firms
including Flipkart.

In January 2016, a public interest litigation came up for hearing which alleges Flipkart of
contravention of foreign investment norms. The court asked the Reserve Bank of India to
provide the latest circular on foreign investment policy.

In January, 2016, the Department of Industrial Policy and Promotion (DIPP) clarified that it does
not recognize the marketplace model of online retail.

In February 2016, Health Minister, J P Nadda, informed that the Maharashtra FDA had taken
action against Flipkart, among others, for selling drugs without valid license.

35
FLYTE DIGITAL MUSIC STORE

In October and November 2011, Flipkart acquired the websites Mime360.com and
Chakpak.com. Later, in February 2012, the company revealed its new Flyte Digital Music Store.
Flyte, a legalmusic download service in the vein of iTunes and Amazon.com, offered DRM-free
MP3 downloads. But it was shut down on 17 June 2013 as paid song downloads did not get
popular in India due to the advent of free music streaming sites.

EXCLUSIVE PRODUCT LAUNCHES

Motorola Mobility, previously owned by Google but then sold to Lenovo, in an exclusive tie up
with Flipkart launched its budget smartphone Moto G in India on 5 February 2014; more than
20,000 units were sold within hours of launch on Flipkart. After this Flipkart was looking for a
long term tie up with Motorola Mobility, They also launched their Android smartphone, the
Moto X, on 19 March 2014. Flipkart later sold the Moto E, cheaper than Moto G, from 13 May
2014.

The sale of high-end smartphone Xiaomi Mi3 produced by Xiaomi Tech was launched in India
on an exclusive tie-up with Flipkart. The first batch was sold out within 39 minutes on 22 July
2014, the second in 5 seconds on 29 July 2014. The sale was proceeded on pre-registration mode
where more than 150,000 buyers booked for the 5 August 2014 sale. This got sold off in less
than 2 seconds. Following this Xiaomi Tech sold 20,000 units in the next sale on 12 August
2014. On 2 September 2014 Flipkart held a flash sale of the Xiaomi Redmi 1S budget Android
smartphone which was launched in India in July 2014. 40, 000 units priced at Rs 5999 each were
sold within seconds. A further 40,000 units were sold within 4.5 seconds on Sept 9, 2014. The
third Redmi 1S sale on Sept 16, 2014 sold 40,000 units in 3.4 seconds; In the 4th round of sale of
Redmi 1S, 60,000 units sold in 5.2 seconds on Sept 23, 2014. On 30 September 2014 60,000
units sold in 13.9 seconds. Redmi Note in India exclusively through Flipkart; 50,000 units sold in
6 seconds on 2 December 2014.

IN-HOUSE PRODUCTS

 In July 2014 Flipkart launched its own set of tablet, mobile phones & Phablet. The first
among these series of tablet phones was Digiflip Pro XT 712 Tablet.

36
 In July 2014 Flipkart launched its first networking router, under its own brand name named
DigiFlip WR001 300 Mbit/s Wireless N Router.
 In September 2014 Flipkart launched its in-house home appliances and personal healthcare
brand Citron. The label includes a wide range of cooking utilities and grooming products.

CRITICISM

On 13 September 2014, a Flipkart delivery boy molested a house maid in Hyderabad. The house
maid's employer has been fighting against Flipkart for justice on this issue, and also for making
offline delivery services safe.

On 6 October 2014 Flipkart launched a promotion called 'Big Billion Day' with the intention to
increase the popularity of their website by targeting a billion sales in 1 day. This, even though
Flipkart achieved the target, led to public outcry and widespread criticism among consumers,
competitors and partners, heavily damaging its reputation. Many users could not place orders
because of high server load and errors which led to frustration among customers. Many users
who placed orders received emails stating that their orders were cancelled. Most of the products
were sold for less than cost price, and Flipkart was accused of killing competition. Major
competitors filed complaints against Flipkart to the commerce ministry, claiming that selling
products lesser than cost prices is against the commerce policy of the country. The Ministry said
that they would formulate new trade rules for electronic retail after this incident.

Flipkart received mass criticism on the subject of net neutrality after their announced partnership
with Airtel to use the Airtel Zero platform which would have made the Flipkart app free for
Airtel Users. On 14 April 2015 Flipkart retracted its decision to use Airtel Zero platform

AWARDS AND RECOGNITION

 In September 2015, Sachin Bansal and Binny Bansal entered Forbes India Rich List debuting
at the 86th position with a net worth of $1.3 billion each.
 Co-Founder of Flipkart, Sachin Bansal, got Entrepreneur of the Year Award 2012-2013 from
Economic Times, leading Indian Economic Daily.

37
 Flipkart.com was awarded Young Turk of the Year at CNBC TV 18's 'India Business Leader
Awards 2012' (IBLA).
 Flipkart.com- got Nominated for IndiaMART Leaders of Tomorrow Awards 2011.

MILESTONES

MANAGEMENT
Mr. Kalyan Krishnamurthy

Chief Executive Officer

Mr. Sachin Bansal

Co-Founder and Non-Executive Chairman

Mr. Binny Bansal

Co-Founder and Group Chief Executive Officer

Mr. Nitin Seth

Chief Operating Officer

Mr. Sameer Nigam

Chief Executive Officer of Payments Unit

38
CHAPTER IV DATA
ANALYSIS AND
INTERPRETATION

39
 DATA ANALYSIS AND INTERPRETATION

Personal Information:

Gender:

Gender
Male Female Total
90 110 200

Gender
Male Female

45%
55%

Illustration:

The above diagram depicts that out of the total 200 respondent 55% of the
respondent were female as the objective was to study the consumer behaviour with
respect to online grocery, as grocery is more shopped by female respondent.

40
Age brackets:

Age
18- 25-
24 30 30 & Above Total
75 50 75 200

Age brackets
18-24 25-30 30 & Above

38% 37%

25%

Illustration:

 The 38 % of the respondent were among 30 & above age bracket as

these respondents are well educated and web savvy. 


Another 37% of the respondent were ranging from 18-24 age bracket
and the remaining 25 % were respondent were ranging from 25-30 age
bracket, as these respond

41
OCCUPATION:

Occupation
Service Business Total
119 81 200

Occupation
Service Business

41%

59%

ILLUSTRATION:
For the research to be successful most of the respondent are working officials
who are educated and web savvy

42
ANNUAL INCOME

Annual Income Level

1-5 Lakhs 5-10 Lakhs 10 & above Total
76 82 42 200

Annual Income Level

1-5 Lakhs 5-10 Lakhs 10 & above

21%
38%

41%

ILLUSTRATION:

From the above pie chart we can determine that 41 % of the respondent have
around 5-10 lakhs of annual income which indicates majority of the respondent
have spending power to purchase grocery items.

43
Q1. Which item you shop online?

People may select more than one checkbox, so percentages may add up to
more than 100%.

Apparels Books Electronic Food Games Music Other Total

34 48 41 9 16 47 5 200

Items sold online

60

50

40

30

20

10

0
Apparels Books Electronic Food Games Music Other

ILLUSTRATION:
 The above diagram depicts that book has the highest number transaction in
online shopping. 
 Music is the second most item sold in the online shopping, along with electronics
appliances like hair dryer, mobile appliances, computer peripherals etc. 
 The other items that are sold in the online shopping are the apparels which are
more preferred by the female respondent. 
 Games are the items that are preffered with the respondent ranging the age
bracket between 
 The other items which are sold online are such as flowers, gifts and movie tickets. 

44
Q2. How much money do you spend in online shopping?

1000- 5000 &

100-500 500-1000 5000 above Total
12 28 53 7 200

Money Spent in Online Shopping

100-500 500-1000 1000-5000 5000 & above

7%
12%

28%
53%

ILLUSTRATION:
 The money spend in online shopping is ranging from INR 1000-5000, which
indicates the users are willing to pay more price when there is premium
quality products such as electronics, branded apparels, original music etc. 

45
Q3. When do you feel the need to shop online?

People may select more than one checkbox, so percentages may add up to
more than 100%.

When I want When I When I don‟t have

something need to the time to find
When I need uniques & compare things in different Total
home delivery special prices markets other
71 39 43 42 1 200

Need to Shop factors

80
70
60
50
40
30
20
10
0
When I need home When I want When I need to When I don’t have other
delivery something uniques compare prices the time to find
& special things in different
markets

ILLUSTRATION: 
 From the above we can depict the factor which motivates the respondent to
shop online is when they need home delivery. 

 The other factor which motivates to shop online when they compare
prices of different products at a same place. 

 The above graph also determines that people shop online when they don‟t have
the time to find things in the market for the product to be purchased. 

 Also respondent shop online when they want some unique & special product
which they cannot find in the offline market. 

46
 Q4. What features in online shopping attracts you?

People may select more than one checkbox, so percentages may add up to
more than 100%.

Design of Discounts Value of

website offered Advertisement Variety money Total
33 77 39 59 29 200

Online Shopping attraction factors

90
80
70
60
50
40
30
20
10
0
Design of website Discounts offered Advertisement Variety Value of money

ILLUSTRATION:
 From the above diagram we can determine that people prefer online
shopping when discounts offered are offered to them. 

 Also the variety of product offering to the customer also forms an important
factor which motivates the respondent to shop online. 

 The other factor that motivates the user to shop online is when the
product they purchase is of value of money. 

 Also the design of website along with the different advertisement
promotion motivates the user to shop online. 

47
 Q5. While shopping what effects the satisfaction the most?

Very Somewhat Not Total

Important Important Important
Website User Friendly 156 38 6 200

Adequate Search Option 92 106 2 200

Product Assortment 88 108 4 200

Cash on delivery 138 52 10 200

Net banking payment 96 90 14 200

Credit/Debit Card payment 84 104 12 200

Offers & Discounts 154 44 2 200

Free Shipping 156 40 4 200

Id & Password Confirmation 94 92 14 200

Order Confirmation Screen 106 88 6 200

Tracking of items 106 76 18 200

48
 While shopping what effects the satisfaction the most
90

80

70

60

50

40

30

20

10

Very Important Some what important Not important

ILLUSTRATION:

 The above diagram depicts that website user friendliness forms an important
factor when it comes to online shopping, more the website user friendliness will
determine more number of visits on a website which will in turn results an
increase in the sale truncations for the particular shopping site. 

 Adequate search option is the search bar which is used by the user to search
for a particular type of product in the website. The above graph depicts that
user feels that adequate search bar form neither important nor unimportant part
of the online shopping website. 



49
  Product assortment in a online shopping website helps the user to easily track
the product they are willing to buy. Eg. In apparels category products can be
assorted in categories like male & female, jeans or tops, salwar, kameez etc.
From the above graph we can determine product assortment form neither
important nor unimportant part of the online shopping website. 


 Cash on delivery forms an important aspect of the online shopping website in
Indian online shopping market, the above graph depicts that it does forms an
most important part on the online shopping. 


 The other mode of payment gateway through net banking and credit/debit
banking also forms an important part of the online shopping website. 


 The above graph depicts that along offers & discounts, free shipping also forms as the
most important factor for the online shopping website, which forms a motivating
factor for the user to shop. 


 When it comes to security aspect of the website Id & password forms an
important aspect of the online transaction. The other aspect order confirmation
is the like the shopping cart where the user gets the list of items he/she is
going to purchase which avoids unnecessary purchase of the product , also
forms an important part of the online shopping website. 


 When it comes to tracking of items service in online shopping most of the respondent
think that it is an important service which allows the user to track their items in transit. 

50
 Q6. Issues regarding online shopping

People may select more than one checkbox, so percentages may add up to more than 100%.

Product
No Possibility highly Too much Security Physical Total
guarantee of forgery priced clutter issue examination
26 19 8 17 44 74 200

Issues of Online Shopping

80
70
60
50
40
30
20
10
0

ILLUSTRATION:
 The above data determines that physical examination that is the tangibility
of the product is the important issue when it comes to online shopping. 

 The other factor which demotivates the user to shop online is the security
issue, which consists of issues like phishing, hacking of accounts etc. 

51
Q7. Where do you shop for utilities items?

People may select more than one checkbox, so percentages may add up to
more than 100%.

Local
Kirana Ration Shop Sabzi Mandi Supermarkets Total
34 12 20 85 200

Shopping Centres

90
80
70
60
50
40
30
20
10
0
Local Kirana Ration Shop Sabzi Mandi Supermarkets

ILLUSTRATION:

 The above graph depicts that most of the respondents shop from
supermarket for utilities items. The reason for shopping from the particular
shopping centre can be depicted below. 

52
 Q8. People may select more than one checkbox, so percentages may add
up to more than 100%.

Price Quality Variety Proximity Discounts/Offers

Local Kirana 47 34 22 85 25

Ration Shop 63 23 33 36 29

Sabzi Mandi 47 50 64 34 26

Supermarkets 65 77 80 58 73

Multiple Choices for Customers views

90

80

70

60

50

40

30

20

10

0
Local Kirana Ration Shop Sabzi Mandi Supermarkets
Price Quality Variety Proximity Discounts/Offers

53
ILLUSTRATION:
 The above graph depicts that, when it comes to price factor people prefer to
shop from supermarket and ration shop as these shopping centres offers
utilities items at wholesale prices. 

 User prefers to shop from supermarket when it comes to the quality of the product. 

 When it comes to availability of variety of utilities items offered at a
particular centre, user prefer supermarket centre of shopping. 

 From the above graph we can determine that user choose local kirana
stores for shopping utilities items as they are proximate to their home. 

 User prefer supermarket to shop utilities items as they offer more discounts &
offers compared to the other shopping centres. 

54
Q9. If given an option to you buy utilities online will you buy?

Yes No Maybe
Total
37 28 35 200

Option to buy utilities online

Yes No Maybe

35% 37%

28%

ILLUSTRATION:
 The above graph depicts that around 37% of respondent are willing to buy
utilities online if the option is given. 

 The remaining percentage of the respondent may or may not buy utilities online
due the factors like physical examination and security issues. 

55
Q10. Do you think buying utilities online is beneficial?

Yes No Total
116 84 200

Beneficial
Yes No

42%

58%

ILLUSTRATION:
 The above diagram depicts that most of the respondent think that buying
utilities is beneficial which can be determined from the next question. 

 The remaining respondent thinks that online utilities shopping will be not
beneficial due the factors like forgery products, highly priced products and no
guarantee of the product. 

56
Q11. If yes, why do you think is beneficial?

People may select more than one checkbox, so percentages may add up to
more than 100%.

Easy to Discount & Saves Avoid long

order Variety Offers time queues Total
46 39 35 71 58 200

Beneficial Factors
80
70
60
50
40
30
20
10
0
Easy to orderVariety Discount & Saves time Avoid long
Offers queues

ILLUSTRATION:
 The above graph depicts that user respondent think that online shopping
will be beneficial as it will save their time to shop for utilities items. 

 The next relating aspect why consumer will shop utilities online as it will allow the
user to avoid long queues resulting in reduction in time spent in shopping. 

 The other factors why online utilities shopping will be beneficial as it will allow
the user to shop all the utilities at a particular place with discounts and offers. 

57
 CHAPTER V
FINDINGS, SUGGESTIONS AND
CONCLUSIONS

58
 FINDINGS

 From the data collected above we can observe that there is an increase in the number of
respondent in online shopping as there is awareness about this concept in the market. 


 Certain parameters which motivates the user to shop online are: 

 User friendliness of the website. 

 Discounts and offers, offered by the website. 

 Cash on delivery form an important gateway in online transaction. 

 Free shipping is the most important factor which motivates the user to shop online. 


 Physical examination is the important issues in the online shopping
which determines the tangibility of the product. 

 The data depicts that supermarket are the preferred shopping destination as it
offers all the basic aspect of the online shopping which are price, quality variety,
proximity to home, offers & discounts. 

 From the above data collection we can determine most of respondent agree
to buy utilities online if the option is give. 

 The data also determines the factors which will be beneficial for the
consumer to shop utilities online which are variety at one shop, saves times
and avoid long queues. 

59
 SUGGESTIONS
BUSINESS OPERATIONAL

When it comes to operational aspects of the business, the firm should consider the
following business operation model:

 Instead of going the regular eCommerce way of Utilities shopping, the firm
should start up by bringing existing retailers online.

 For the purchase of the utilities item user can choose their nearby Kirana Store
from the listed stores along with a convenient time of the delivery.

 The local store would be informed about the order and it would be delivered
to the address at the time mentioned with the payment of cash only on delivery.

Following are the important aspects of the proposed business plan:

 The firm will have a low operating cost compared to other online utilities
website, as they don‟t have to stock any inventory of utilities products.

 The firm main cost will include cost of dealership from the local retailers.

 Other cost will include the cost related to website designing, HR personal,
computer database hardware & software, building cost etc.

 It will allow the firm to eliminate the cost of brand loyalty of the branded
utilities item which reduces the operating cost to a great extent.

 It will develop a better relationship between their neighbourhood retailer

and the consumers.

60
 It will allow more user interference, when the consumer can order their utilities
from the trusted local retailer, than unknown player in the market.

 Also it will protect the local retailer from diminishing from the market
due the presence of supermarket and foreign players in the market.

 In order to increase the productivity of the site, the firm should offer
special discounts with respect to seasons like Diwali, Ganpati, Holi etc, also
special packages should be created as monthly ration.

61
 CONCLUSION:

 From the above data analysis it can be conclude that consumer buys goods
from the online shopping website on the basis of factors like offers and
discounts, variety of product available, free home delivery, website user
friendliness and cash of delivery payment option. 

 The hypothesis framed for the project Consumer Perception towards Online Utilities
Shopping was “Online utilities shopping stores are beneficial for the consumer”. 

 From the above data analysis it can be determined that most of the respondent would
agree to buy utilities online rather than shopping of utilities with the traditional method. 

 Out of the agreed respondent to buy online utilities, most of the respondent would
think that it would be beneficial to shop utilities online on the basis of factors like
easy to order, variety, discounts/ offers, saves time and avoid long queues. 


 With above analysis we can thus prove the hypothesis to be positive. 

 The recommended business operation will not only beneficial for the
consumer but also to the firm, as it allows the firm to maintain its low operating
expenses and for the consumer 

62
BIBLIOGRAPHY

63
 BIOGRAPHY:

http://www.firstpost.com/tech/indias-e-commerce-market-to-touch-260-bn-by-
2025-report-255350.html

http://online.wsj.com/article/SB10001424052702303816504577308652286295634.h
tml

http://www.businessworld.in/businessworld/businessworld/content/Services-
Economy-Moves-Online.html?storyInSinglePage=true

http://trak.in/tags/business/2011/08/23/india-online-internet-users-survey-
report-2011/

http://www.boston.com/business/blogs/global-
business-hub/2012/03/the_sizzling_in.html

http://www.imediaconnection.in/article/806/Research/mobile-commerce-in-
india-buzzcitys-report.html

http://informationmadness.com/blog/965-mobile-commerce-in-india.html

http://www.sooperarticles.com/business-articles/e-business-articles/key-
success-online-retailing-appealing-women-128808.html

http://blog.dreamstarts.in/survival-of-e-commerce-startups-in-india/#more-161

http://www.vccircle.com/500/news/utilities-e-tailing-start-ups-a-dime-a-dozen-
but-investors-wary

64
QUESTIONNAIRE

65
 Questionnaire on Online Multi Utilities Store

Name:

Gender:-
□ Male
□ Female

Age:-
□ 18-24
□ 25-30
□ 30 and above

Occupation:-
□ Student
□ Service
□ Business

Income Level:-
□ 1 lakh – 5 lakhs
□ 5 lakhs – 10 lakhs
□ 10 lakhs and above

Q1. Which item you shop online?

□ Apparels
□ Books
□ Electronics
□ Food
□ Games
□ Music
□ Any other(Please specify)

Q2. How much money do you spent in online shopping? (Rupees)

□ 100 – 500
□ 500 – 1000
□ 1000 – 5000
□ 5000 & above

66
 Q3. When do you feel the need to shop online?
□ When I need home delivery
□ When I want something unique and special
□ When I need to compare prices
□ When I don‟t have the time to find things by different markets
□ Any other(Please specify)

Q4. What features in online shopping website attracts you?

□ The design of a website
□ Discounts offered
□ Advertisement
□ Variety
□ Value for money
□ Any other(Please specify)

Q5. While shopping what affects your satisfaction the most?

Feature Very important Somewhat important Not important

Design
User friendly
Adequate search option
Product assortments
Payment options
Cash on delivery
Net banking
Debit/ Credit Cards
Product Options
Offers & Discounts
Free Shipping
Security
Id & password
Order confirmation screen
Delivery
Tracking of items

Q6. What are your issues regarding online shopping?

□ No guarantee
□ Possibility of forgery
□ Product highly priced
□ Too much clutter
□ Security issue
□ Physical examination

67
 □ Any other(Please specify)

Q7. Where do you shop for utilities items?

□ Local Kirana
□ Ration Shop
□ Sabzi Mandi
□ Supermarkets

Q8. Tick more than one parameter for the particular shopping place
regarding why you choose certain utilities shops for shopping?

Shopping Parameters
Places Price Quality Variety Proximity to home Discounts/Offers
Local Kirana
Ration Shop
Sabzi Mandi
Supermarkets

Q9. If given an option to buy utilities online will you buy online?
□ Yes
□ No
□ May be

Q10. Do you think buying utilities online is beneficial?

□ Yes
□ No

Q11. If yes, why do you think is beneficial?

□ Easy to order
□ Variety at one shop
□ Discounts & offers
□ Saves time
□ Avoid long queues
□ Any other(Please specify)

68