UNIVERSITY OF MUMBAI

PROJECT WORK

ON

CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING

SUBMITTED BY

Mr SHAIKH SAUD ZAHID

UNDER THE GUIDANCE OF

Mr. RAHUL MUKHERJEE

BACHELOR OF ACCOUNTING AND FINANCE

SEMESTER VI (TYBAF)

ROLL NO – 42

(Academic Year 2018-19)

REENA MEHTA COLLEGE OF COMMERCE AND

MANAGEMENT STUDIES (Bhayandar West)
 CERTIFICATE

This is to certify that Mr. SHAIKH SAUD ZAHID ROLL NO 42 third year
BACHELOR OF ACCOUNTING & FINANCE, semester 6 year 2018-19, has
successfully completed the project on CONSUMER PERCEPTION TOWARDS
ONLINE SHOPPING under the guidance of Mr. RAHUL MUKHERJEE.

_________________ _______________________

Course Coordinator Principal

(Mrs. Urmila Chauhan) (Dr.(Mrs.) Satinder Kaur Gujral)

_________________ _______________________

Project Guide. EXTERNAL Examiner

(Mr. Rahul Mukherjee)

 DECLARATION

I, SHAIKH SAUD ZAHID THE STUDENT OF REENA MEHTA COLLEGE OF

COMMERCE AND MANAGEMENT STUDIES STUDYING IN TYBAF
HEREBY DECLARE THAT I HAVE COMPLETED THIS PROJECT REPORT ON
“CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING” DURING
THE ACADEMIC YEAR 2018 -19. THE INFORMATION SUBMITTED IS TRUE
AND ORIGINAL TO THE BEST OF MY KNOWLEDGE.

___________________
SHAIKH SAUD ZAHID

Name of the Student:_Shaikh Saud Zahid

Roll No: 42

Reena Mehta College of Commerce and Management Studies.

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 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the
depth is so enormous.
I would like to acknowledge the following as being idealistic channels and
fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.

I would like to thank my Principal, Dr.(Mrs.) Satinder Kaur Gujral for

providing the necessary facilities required for completion of this

project.

I take this opportunity to thank our Coordinator Mrs. Supriya singh,

for her moral support and guidance.

I would also like to express my sincere gratitude towards my project

guide Adil Ilyas Shaikh whose guidance and care made the project
successful.
I would like to thank my College Library, for having provided
various reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my
Parents and Peers who supported me throughout my project.

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 INDEX

SR. PAGE
NO PARTICULARS NO
1 INTRODUCTION
EXECUTIVE SUMMERY 7
LITERATURE REVIEW 9
RESEARCH OBJECTIVES 12
RESEARCH DESIGN AND METHODOLOGY 13
SCOPE OF THE RESEARCH 14
2 BACKGROUND OF TOPIC
INDUSTRY INTRODUCTION 15
MODELS OF E-COMMERCE 16
ONLINE SHOPPING IN INDIA 18
RECENT DEVELOPMENTS 23
GIANT PLAYERS IN INDIAN ONLINE 25
SHOPPING
ONLINE GROCERY SHOPPING 30

INDIAN PLAYERS IN ONLINE GROCERY 31

SHOPPING
3 PROFILE OF THE ORGANISATION
IMRB INTERNATIONAL 39
4 THEORIES OF THE STUDY
INTRODUCTION TO THE STUDY 42
AIDA PRINCIPLE IN ONLINE SHOPPING 45
PORTER’S FORCE MODEL IN ONLINE 46
SHOPPING
MARKETNG MIX (7P) IN ONLINE MARKETING 50
6 CONCLUSION AND OBSERVATION
FINDING 66
OBSERVATION 67
RECOMMENDATIONS 68
CONCLUSION 69
7 APPENDICES
QUESTIONNAIR E 70
BIBLIOGRAPHY 74

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6
 Executive Summary

Internet and Information technology have made tremendous contributions for business
transformation witnessed nowadays all over the world. This has given birth to E commerce
which encompasses several pre purchase and post purchase activities leading to exchange of
products or service or information over electronic systems such as the internet and the other
Telecommunication networks.

Analyzing the competitive advantage of E-Commerce it is observed that E-Commerce enables

simpler, faster and efficient business transactions. For developing country like India, E-
Commerce offer considerable opportunity for growth.

E-commerce leads to a boon for the current economic down turn. As India’s e-commerce
market is worth about Rs 50,000 crores in 2012. About 80% of this is travel related (airline
tickets, railway tickets, hotel bookings, online mobile recharge etc.).

Online retailing comprises about 15%.India has close to 10 million online shoppers and is
growing at an estimated40-45%perannum.

The rapid growth of e-commerce in India is being driven by greater customer choice and
improved convenience.

The project was undertaken under the supervision of NiralaImexInc who currently has their
business operation in Taiwanese market in selling of Indian grocery items to the local retailers &
wholesaler in the Taiwanese market.

The company has proposed a plan to launch an online grocery store in the Indian market for
which the project was undertaken was to determine whether online grocery shopping will be
beneficial to the user with respect to questionnaire which will be analyzed in three parts.

The project will first study the attitude of customers towards online shopping, also
determining the factors which influence the consumer to purchase goods

The second half of the project will depict the attributes of online shopping influencing the
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purchase decision by the respondent. It will also determine the issues regarding the online
shopping.

The third part of the project determines the purchase decision with respect to grocery. It will
determine the place preference of grocery shopping with respect to price, quality, variety,
proximity and offers/ discounts.

The project will also recommend the business operational plan which works with contracting
dealership with the local kirana stores.

8
 Literature Review

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

Murali krishnan 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 ecommerce
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 ecommerce
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

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 Research Objectives

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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 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 samplesizeof200
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 there search is 200 in the area of
Mumbai

Parameters of Interests: The major parameter of interest is the sub group of people
who are working professional and web savvy having an experience in online shopping.
The two other subsidiary parameters of interest are:
other respondent should also have an experience grocery shopping.
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

13
 Scope Of The Research

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 whether grocery online shopping is beneficial for the user.

To analyze which factors influence the user to buy online grocery.

Limitations:

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
orretailers’perception towards online shopping which acts asan agent
to the online retail industry to support its business operations.

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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, there by 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 decadeince business-to-consumer E-commerce first evolved.
Scholars and practitioners of electronic commerce constantly strive to gain an improved
insight into consumer behavior in cyberspace.

Along with the development of E-retailing, researchers continue to explain E-consumers

behavior from different perspectives. Many of their studies have posited new emergent
factors or assumptions which are based on the traditional models of consumer behavior, and
then examine their validity in the Internet context.

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 Models of E-commerce
Business-to-Business (B2B):

B2B e-commerce is simply defined as e-commerce between companies. This is the typeof e-
commerce that deals with relationships between and among businesses. About 80%of e-
commerce is of this type, and most experts predict that B2B ecommerce will continue to grow
faster than theB2C 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 (ore-tailing). Thus, the more common B2C business models are the online retailing
companies such as flipkart.comAmazon.com, snapdeal. Com etc

Business-to-Government (B2G):

Business-to-governmente-commerceorB2G is generally defined as commerce between

companies and the public-sector 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.

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Web-based purchasing policies increase the transparency of the procurement process (and
reduce the risk of irregularities). To date, however, the size of theB2Gecommercemarket as a
component of total e-commerce is insignificant, as government e-procurement systems remain
undeveloped.

Consumer-to-Consumer (C2C):

Consumer-to-consumer-commerce or C2C is simply commerce between private individuals or

consumers. This type of e-commerce is characterized by the growth of electronic market
places 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.
Online auction site eBay, Yahoo! Auctions are a couple of examples of C2Cwebsites.

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 Buzz City'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, MobileCommerceis 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, MobileCommerceis 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 cellphones.

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

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 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 onlyabout10%(or about 121 million users) asagainstabout81%in the US and
36%in China. However this number continues to rise at a consistent pace because offalling
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 touch1.2 billion by2015. Of these about 27million 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 threeyears.

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.
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 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 Guptais 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 helpedto increasee-
commerce up take.

Currently only about 10million 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 150million
users that are ‘ready ’fore-commerce.

More importantly there port indicates that urban Indian consumers are now confident enough to
make online purchases of up to US$500 as againstUS$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 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.

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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
ecommerce 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.

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

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 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 your online web store if you can meet the
following:
• 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.

The birth and growth of Internet has been the biggest event of the century. E-commerce in
India has come a long way from a timid beginning in the 1999-2000 to a period where one
can sell and find all sorts of stuff from a high end product to a meager peanut online. Most
corporations are using Internet to represent their product range and services so that it is

22
accessible to the global market and to reach out to a larger range of their audience.
Computers and the Internet have completely changed the way one handles day-to-day
transactions; online shopping is one of them. The Internet has brought about sweeping
changes in the purchasing habits of the people. In the comfort of one's home, office or cyber
cafe or anywhere across the globe, one can log on and buy just about anything from apparel,
books, music and diamond jewellery to digital cameras, mobile phones, MP3 players, video
games, movie tickets, rail and air tickets. Ease, simplicity, convenience and security are the
key factors turning the users to buy online.

E-commerce revenues in the country are projected to reach Rs 2,300 crore in the year 2006-
07, growing at 95 per cent over 2004-05(Source: Internet and Mobile Association of India,
IAMAI). This pertains to the business-to-consumer (B2C) segment. It may be too early to do
a comparison with the e-commerce scenes in countries such as the US where billions of
dollars are spent online but the business in India is growing exponentially every year, albeit
from a smaller base, the total revenues have reached a respectful size.

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 Recent Developments

The number of users logging on to the Internet is growing by leaps and bounds. The number
of Indians who are online is expected to touch to 100 million by 2007-08, from the present
38.5 million according to the research conducted by IAMAI. The numbers indicate a growing
sense of comfort with the use of Internet for shopping. Accompanying this growth, there is an
increasing maturity in the way people use the Internet. It's a classical curve. Online users
typically start by using e-mail, gradually move on to browsing for news, information and
entertainment, and finally graduate to shopping and conducting business online. Online sales
have registered a huge jump and what was a concept five years ago is now beginning to hit
the mainstream levels. Roughly 10 percent of the world's population more than 627 million
people have shopped online at least once, in India it is just sprouted and beginning to perish.
Internet is now going beyond the simple exchange of information to a shopping paradise.
This medium is far bigger than expected, but many retailers and marketers are not using it to
its full potential.

Indian customers are increasingly getting comfortable with online shopping, and there is a
higher acceptability for the concept. India has 25 million Internet users and more is now
turning to online shopping. There has been an influx of online shopping sites in India with
many companies hitching onto the Internet bandwagon. The revenues from online shopping
are expected to more than double by 2006-07. According to IAMAI, the average number of
transactions per month in India has gone up from 2 lakh in 2003-04 to 4.4 lakh in 2004-05
and has doubled to 7.95 lakh transactions per month in the year 2005-06. The online sales
during the festival season had increased rapidly especially during Diwali and Ramzan which
recorded a sales of Rs115 crore, a 117 per cent increase from the Rs53 crore in the year 2004-
05(source IAMAI). These figures clearly show that online shopping has truly come of age
and consumers are keen to shop on the net. Effective customer communication on products
plus reduced shipping costs and timely delivery has helped online marketers to seize a slice
of the Rs 115 crore sales.

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Online shopping has become the latest trend among shoppers. Indians are becoming more
comfortable with e-commerce. The consumer’s attitude has been evolving towards online
purchases. It has become increasingly positive over the years. The attitudes that drive people
to shop online, such as
convenience, price comparison and choice are improving tremendously in India.
Though a miniscule amount in the global context, the Indian online shoppers’ population
would make its presence felt quite remarkably. The potential of the Indian e-market can be
gauged from the fact that 16 percent of Indian consumers want to buy online in the next six
months, making it the third most online-potential country after Korea (28 percent) and
Australia (26 percent) (Source:IMRB). This is an indication of a growing breed of Indian
consumers who are not only better equipped but also more confident of the online
transactions. Indian businesses have also grown mature enough to move up the IT curve and
they are considering Business to consumer (B2C) e-commerce a viable revenue model. Some
of the companies that have benefited are baazee.com, indiatimes.com, rediff.com,
indiamart.com, fabmart.com, traveljini.com and sifymall.com.
Indiamart.com has witnessed a growth of more than ten times in just two years in its online
gifts domain. In the online travel domain, the company was able to generate an average
$8,000 worth of room bookings/month for its premium client. It is expected to touch $15-
20,000/month/client by the year-end, which is over 100 percent growth (Source: Indiamart).
Brick-and-mortar businesses are also building up e-commerce revenues. In the year 2005-06
Samsung India recorded a 120 percent jump in online buying from its site over the year 2004
05 (Source: Samsung). Nirula’s witnessed more than double growth in its B2C e - commerce
revenues in the year 2005-06 and is positive for the next one to two years (Source: Nirula’s).
Companies like eBay India have seen a large increase in the number of sellers and buyers
from B and C cities and in a year the eBay community (buyers and sellers) base has increased
to 1.7 million users, which shows that more Indians are shopping online (Source: eBay).
Online sales are currently marked by a single digit growth, but the leading garment retail
like Pantaloon, Shoppers’ Stop and Globus have already made business strategies to enter
into the world of e-retailing. Famous apparel brand Zodiac has already started online stores.
The main motive of these retailers through online sales is to reach the global markets and the
small towns where they do not have the outlets. Thus the India's Internet shopping sector is
preparing for a massive growth, which is fueled by increasing broadband usage and growing
e-commerce.

25
GAINT PLAYERS IN INDIAN ONLINE SHOPPING

Flipkart.com is an e-commerce website founded

by Sachin Bansal and Binny Bansal in 2007. Both
are from IIT Delhi Alumni and also worked in
Amazon.com.

Flipkart.com ranks #502 in world according to

Alexa traffic rankings. In Google
It forms advertising revenue of $4.8 million. It
receives 2.2 million page views in a day and
generates $6,574 in advertising revenue every
day. Moreover it has certain losses 0.60% in
traffic ranking. Loading time of an average page is
2.1 sec as it is much faster than 29% of sites
around the world. The mode of payments include
Credit card, Debit card, Net banking, e
vouchers, cash on delivery.

26
 eBay is an online shopping website a consumer
to consumer corporation which helps the people
and businessman to buy and sell products
worldwide. It is operated to almost 30 countries.
eBay ranks #544 among Alexa traffic ranking. In
Google it has page rank #6.
revenue inculcated was about $4.4 Million.
Moreover it receives 2 million page views per day
which generates $6,066 in the advertisement
revenue. Recently it has shown 15.13% growth in
traffic rank. The page loading time is upto 2 sec
which is likely faster than 24% sites across the
world.

Snapdeal deals with online marketing of

products including Mobiles, Electronics, Fashion
accessories, Apparel, Footwear, Kids, Home and
Kitchen, Sports, Books; and services like
Restaurants, Spas & Entertainment. It was
launched by KunalBahl, a Wharton graduate
and RohitBansal, alumnus of IIT Delhi, in
February 2010.
It ranks #576 in the world as per Alexa traffic
ranking. It ranks # 5 in Google PageRank. The
advertising revenue is about $4.2
receives 1.9 million page views in a day and
generates $5,729 in advertising revenue. It has
suffered loss of 4.16 % in traffic ranking. The
loading time of an average page is 1.6 sec which
is faster than 46% of sites across the world.
27
 It is an online shopping commerce for Home;
Lifestyle & Fashion e-retailer founded in 2009
BigShoeBazaar.com has a user base of about 1.5
million people. Yebhi.com offers lifestyle &
Home products and products form a range of
some 250 brands to its customers dealing in
Shoes, Apparels, Bags, Mobiles, Cameras,
Sunglasses, Watches, Home furnishing, Home
decor, Home ware, Lingerie and Fragrances.

It ranks #1,782 among Alexa traffic ranking. It

ranks #4 in Google page ranking. Advertising
revenue is about $1.4 million. It receives 617,284
page views per day generating $1,852 in
advertising revenue. It has recently shown 6.70
Growth among traffic ranking. The page loading is
about 2 sec which is faster than 39% of site
around the world.

The International giant e-commerce retailer

recently stepped into India with a Indian
version site www.amazon.in, since the
launch, amazon.in has seen a nice growth
in the number of customers. Amazon.com
too had a huge number of Indian customers
even before it launched store in India. The
store hosts wide range of products like
Electronics, Mobiles, Laptops, Books,
Fashion, Jewellery, Kitchenware and more

28
 A reputed online shopping retail website having
headquarter in Gurgaon,Shopclues.com maintains
more than 12,000 merchants who are registered with
the company. It is one of the top ecommerce websites
in India, which deals in more than 2 million products.
They guarantee authenticity of products, warranty and
even ensure lowest price. They even have a record of
catering to more than 42 million online visitors. The
company has even more than 350 registered
employees across the country. They offer wide range
of branded products to consumers from every corner
of the country.

Shopclues.com initiate free delivery services at the

doorsteps of customers through reputed courier
services to nearly 10,000 cities across the country.
They even initiate a 30-day return guarantee if unable
to meet customer satisfaction. One of the
leading online shopping companies in India,
Shopclues.com accepts online payment through major
credit and debit cards, including net banking services.
The online shopping website service employs more
than 400 personnel for effective handling of the
business and is even funded by national institutional
investors.

29
 Myntra is an Indian ecommerce site. It is
regarded as India’s top 3rd online site to shop
products. Myntra allows its users to chose
varieties of dress. One can choose any type of
dress of any brand from Myntra. The best thing
about Myntra is its product quality and service.
Now, Myntra is merged into Flipkart to compete
Amazon, but myntra.com is still running as a
separate website and entity. Buying clothes and
gifts online can be best done via Myntra.

HomeShop18 is the online & on - air retail

marketing and distribution venture of
Network18 Group that was launched as
India’s first 24 hour Home Shopping TV
channel on April 9, 2008. HomeShop18 offers
innovative, differentiated and demonstrative
retail experiences on TV and internet and has
emerged as the largest multimedia retailer in
India with a user base of 2.5 million users and
some prestigious awards.
HomeShop18 is a venture of the Network 18
Group, India’s fastest growing media and
entertainment group that operates India’s
leading business news television channels
like CNN-IBN, CNBC TV18 and CNBC
Awaaz .

30
 Online Grocery Shopping

Proving that no sector of the retail market is safe from the online shopping revolution, it is now
possible for the humble hometown grocery store to become digitized and available on your
smartphone, tablet, or computer. Just think: no more long checkout lines, counting the number
of items to see if you qualify for the Express Lane, forgetting your grocery list at home, or
carrying heavy bags up your front steps. Online grocery shopping is dramatically changing the
consumer’s relationship with the food market and making a service that may have once felt
luxurious into an everyday convenience.

Ordering Food Online

An online grocery store is a website that allows users to purchase food over the Internet to
be delivered to the person at a later time. Ordering food on the Internet is similar to ordering any
other product--the desired food items can be searched for specifically, or one can
browse through listings of products or sections, similar to sections one might walk through at an
actual grocery store. The products offered by an online grocery store are identical to a normal
grocery store. When one has finished shopping, checkout is made with a credit card, and the
buyer must specify certain hours that he will be available to receive the food for delivery. Since
Internet groceries must deliver the food to the customers, they typically pay a fee for delivery
based on the amount of food they buy.

Benefits of Online Grocery Shopping

The primary benefit of online grocery shopping is convenience. By ordering online, one can
quickly search for the products she needs and order them without having to physically walk
through expansive aisles. It also saves travel expenses and time going to the grocery store.
Considering the wide availability of the Internet, it also means grocery shopping can be done
from remote locations or in the middle of doing other tasks. For instance, using an online grocery
store can allow a person to do all her grocery shopping during her lunch break at work. It is also
very useful for those without a caror who may be physically unable to move around easily, since
the food is delivered right to their doors. The use of online-based
grocery stores is increasing in popularity as more and more people be come comfortable with
using the Internet to make purchases.
31
Disadvantages of Online Grocery Shopping

Perhaps the largest disadvantages of shopping online are that it costs extra money, since food
must be delivered, and that the food ordered is not obtained immediately. If someone were
making a certain recipe and discovered he needed an additional ingredient, he would probably
not be able to order it online and get it quickly enough to finish his dish. In the same way, it
forces a person to plan his food buying in advance of when he will need it--if delivery will
take a day or two, a person needs to plan to have an extra day or two of essential foods
available be fore he runs out. Another disadvantage is that online shopping forces the
customer to be home during a certain period to collect the food when it is delivered. Also,
online grocery stores will often only cover specific delivery areas.

How Does Online Grocery Shopping Work?

Following are the basic parameter that determines the working of online grocery shopping.

Creating the Website

The most important part of online grocery shopping is the website itself. The website should
have a complete list of groceries that are able to be delivered as well as the prices for each item.

This website should then have a "shopping cart" where a user can add items to a list of things to
be ordered, as well as view and edit items that she is planning to purchase. Finally, this website
should have the ability for the user to enter her address and pay for the order.

32
Filling the Order and Shipping

The next step is to take the submitted order and use it to collect and deliver the items on the
list.Ingeneral, fulfillment of the grocery order needs to bed one manually by a stock boyor other
employee.

This process can be made easier by having a well-organized room where the products can be
easily and efficiently located. The stock person should also check to make sure that the items
placed in the order match the list that the user created.

Then, once the order has-been compiled, the collection of food needs to be placed in a
vehicle and delivered to the customer.

Restocking and Processing Payments

Clearly, it is critical to ensure that all the items listed on the website are in stock and able to be
shipped. As a result, the stock room needs to be carefully checked to ensure inventory levels are
sufficient.

Also, it is important to have the ability to obtain and process payments made by credit card.
Also, in order to encourage repeat customers, it can be helpful to require customers to have a
username, which would allow information to be stored. This can also help create
"suggested” carts of food items they commonly purchase.

33
 Indian Players in Online Grocery Shopping
Fresh Daily

Fresh NDailyis Mumbai’s first online fruits and vegetable store. Our endeavor is to service you
at the comfort of your home with the best quality products and at the best possible
prices.

They procure goods directly from the farmers/ brand owners and ensure there are no
intermediaries. Moreover, unlike a physical store–supermarket/neighborhood kirana
store/ sabziwala – we are an online store. This means that the cost structure is very lean: low
rental costs, low manpower costs, low overheads etc. The prices are there for the most
competitive.

Thirty-year-old Vikas Chauhan, who quit an ITcompany, has a delivery van that procures
vegetables from local mandi, brands them with FreshnDailypackets and delivers to areas it has
identified as key zones. It has just two delivery boys who supply in key zones. For the rest, it has
tied up with small nook and corner shops. At Ghatkopar, for example, the helper of the corner
mobile recharge shop collects the vegetables from the delivery van and delivers door to door.
FreshnDaily pays the errand boy a monthly salary and the mobile shop gets the boy’s services
for free. The shop even gets an incentive when deliveries cross Rs 5,000 aday.
Zopnow

Zopnow.com, an online retail store exclusively aims to cater grocery and FMCG need of people
launched its service in Bangalore. Zopnow with punch line “Be Lazy, Buy Easy” plans to deliver
grocery items at consumer’s doorstep in less than 3 hours or at a predefined time specified by the
customer.

34
However, currently zopnow’s is offering 1501 products to some selected areas of south Bangalore.
Zop now is founded by serial entrepreneur B.K BirlaandMukesh Singh, erstwhile CTO,
Makemytrip.

According to company website, it wants to build a customer centric online store that will leverage
the hybrid model of online, call center, mobile application and physical touch. Zopnow claims to
deliver great customer experience by providing customers, a convenient way to shop and in the
process cut down the time at the checkout counter, traffic and parking.

At present Zopnow offers cash on delivery (COD) option and are in the process of adding card,
debit card, Sodexho and Ticket Restaurant vouchers, however Sodexho and Ticket Restaurant
vouchers would be applicable only for food items. It offers free shipment for minimum order value
of INR 500 and above, however shipping cost of INR 30 is added to all shipment below INR 500.

35
Aaramshop.com

New-Delhi based start-up Aaramshop.com has launched an e-commerce site for buying groceries.
Still in beta, the website only caters to New Delhi residents and yet to be commercially launched.

Daily essentials such as laundry supplies, cereals, butter, jam, rice, atta (flour), lentils, cooking oil,
biscuits, chocolates, sweets, milk, spices, coffee and tea are available on the website. The website
allows you to search for the nearest neighborhood local grocery stores – either by name, by pin
codes, location, maps or view all the ‘Aaramshops’ available and select one. Once this shop is
selected, delivery timings can be chosen. Once the user selects the items needed, adds them to the
shopping bag and checks out, a confirmation e-mail and text message is sent with the amount and
time of delivery.

There is no online bank transaction involved and the user has to pay cash on delivery of goods by
the shop.

They targets 25 to 45 year old urban, well-educated and tech-savvy females and males. Currently
operating in Delhi, they have plans to expand its services in 12 cities including Mumbai, Bangalore,
Pune Hyderabad and other metros in coming months. The sales force of six people will tie-up with
retailers. They claim to have roped in more than 100 kirana stores in its network and is adding a
considerable number to it daily and have over 100 FMCG brands and 32 categories of products.

Vijay Singh, Founder and CEO, AaramShop.com, said that the portal will keep the consumer much
more informed about various other brands that are available for the same product and also their
pricing to enable them to opt for a much better choice for the same. Other than using Facebook to
buy grocery items, users can directly access Aaramshop.com to order items from nearby grocery
stores. The user will be required to create a user identity or become a member of AaramShop.com
by filling in the required details.

36
Farm2Kitchen.com

Farm2Kitchen Team is lead by SeemaDholi (Founder &CEO), a woman entrepreneur who is

committed to betterment of lives for Indian families. She started Farm2Kitchen with only one
mission -To enhance the. quality of life for Indian families and provide the best
customer service possible.

Farm2kitchen.com, which deals only in organic groceries and textiles, and caters to Gurgaon and
surrounding areas. Founder SeemaDholi, who hails from Pearl Academy of Fashion
and has several other ventures in her basket, such as Divavee and Fashion Per Inch India, wants
to educate local consumers about the benefits of organic groceries and then spread the message
to the rest of the country. Set up in 2011, Farm2kitchen is now looking for funds
but even before that, Seem a wants to expand operations and go pan-India.

They support organic farming & agriculture as organic farming is a holistic approach to food
production, making use of crop rotation, environmental management and good animal
husbandry to control pests and diseases.

Some of the cities which will be covered underFarm2Kitchen's umbrella for organic food are-
Organic food stores/shops in New Delhi, Mumbai, Chennai, Kolkata, Bangalore, Gurgaon,
Hyderabad, Pune, Aurangabad, Ahmedabad, Kolkata, Nasik, Vadodara,
Gandhinagar(Gujarat),Visakhapatnam, Chandigarh, Bhopal, Jaipur, Lucknow, Dehradun,
Thiruvananthapuram.

37
Veggibazaar.com

Takes orders online and delivers the very next day. This not only ensures freshness of the
products—an essential feature of the company—but also means that he does
not have to worry about bulk storage space and associated facilities, which is a huge saving.

Vegetables reach the company's Alwarpet office in Chennai by6.30 a.m. the following day and,
after a quality check, they are sorted, cleaned, chopped, packed and delivered between
3 p.m. and 9 p.m. Venkatesan has 25 employees to do these jobs. Clients can pay online
through debit/credit cards or pay cash on delivery.

Venkatesan has also started providing additional facilities, such as nutritional specific
packages and loyalty points which customers can redeem against future purchases.

38
MyGrahak

MyGrahak is an online grocery store from Rei Six Ten Retail Ltd. A retail chain network of
about 350 stores in the NCR, Punjab, Baddi and Nagpur. This is one of the first attempts from a
retail grocery giant to enter the online space and leverage their existing network of
offline stores. Mr. Ambuj Jhunjhunwala is the founder &CEO ofMyGrahak.com

MyGrahak covers the basic FMCG categories of food, non-food and grocery. The delivery is
currently offered in Delhi-NCRonly. The site comes with the regular frills of an online
store, viz. discount on all product (min. 4%), 48hrs delivery, CoD, customer support etc..
The portal boasts of 7000+products.

Key figures of My Grahak

5000 transactions per month growing at over30%month on month

Loyalty rate – repeat purchases have increased to50%from 30% in last 2months

8,500 registered families

39
 Company Profile

IMRB is the vision of Mr. Subhas Ghoshal, the legendary head of HTA (now JWT). We are born
out of conviction that good advertising can only be built on sound consumer insight. We are the
University of the Indian market research. We are one of the top 20 Market Research companies in
the world. IMRB was set up in 1970, a full 37 years after BMRB was set up in UK by JWT.

We are a part of WPP which is formed by Sir Martin Sorrell in 1985. WPP is a £8.68 billion;
revenue company with 138,000 employees in 2400 offices across 107 countries. Kantar is WPP’s
research, insight & consultancy network. Kantar was founded in 1993, is now the world’s fourth
largest research conglomerate.

Our Methods and Philosophy

Our perspective is unique. Our approach is refreshing. And our solutions provide a comprehensive
response to our client’s needs, not packaged data but custom solutions for clients. We offer services
with the integration of qualitative and quantitative tools.
We are designed in India for India, our measures and scales are created to maximize sensitivity. We
work together with TGI, Web-I, IMRB Retail, Market Pulse, ITOPS and ICUBE. Our passion is to
drive your business growth by combining consumer understanding and brand knowledge with
intuition and innovation

Our Achievements - Our Goals

IMRB has demonstrated its vision and leadership in the Indian market by establishing several
industry wide measurement and rating systems. Notable amongst these is our pioneering role in
establishing India’s first TV rating system (TAM) and the creation of social economic classification
(SEC) system in India.
40
We have won several prestigious awards. Amongst them the most noteworthy being the MR
Agency of the year from 2005-2009. We have presented cutting edge research for several years at
international forums including ESOMAR and won awards for our efforts. We have also been
awarded the WPP’s Atticus award jointly with JWT.

Abacus Research

Abacus Research looks after the domestic and International Field and tab business. They service
Clients and Research Agencies which have their own Research set up and only want the data
collected and clean data sent to them. Abacus Research has a team of expert Project Management
Executives led by a seasoned and highly experienced Operations Director . This team also has the
experience of managing the largest number of automotive clinics and have a protocol set up for the
same. Abacus Research also runs FlexiBus – a study which gives Clients’ the advantage and of
quick turnaround on a few critical questions and the flexibility to study the Target Group in markets
of their choice at the cost of an Omnibus

41
Company Introduction

NIRALA GROUP is an ambitious innovative company since 1952 that is attempting to expand their
business around the world. NIRALA GROUP is an conglomerate company headquartered in
Manmade, Maharashtra India. The subsidiaries are as following Nirala Stores, Nirala Enterprises,
Nirala Traders, Nirala Ice Factory, NiralaImpex Inc.

Nirala Stores is an Indian electronics retail store based in Manmad. Nirala Stores was started as a
small Radio showroom in Manmad by Himat Singh Kant in 1952.Later on it diversified into
consumer durables.

NiralaImpexInc are the importer and exporter of Indian grocery products, currently situated in
Manmad district, in Maharashtra.

NiralaImpexInc has its business operation in Taiwan, where it sells Indian products produced by
local dealers in India, which are sold in Taiwanese market. In Taiwanese market they have the
contract of supply of Indian grocery items with hotels, retailers & wholesaler of grocery products.

They are planning to launch a similar business in India, by selling the Indian grocery product in
Indian market through online shopping website portals.

Nirala Group intends to grow at more than 20% per year through solid customer service, a great
sales plan, proven competitive strategies, and a group of people that bring dynamic energy to the
company and the sales process

42
 THEORIES OF THE STUDY

INTRODUCTION TO THE STUDY

The Internet has entered the mainstream consciousness over the past decade. This has
happened primarily because the web has got a graphical interface and Internet has
moved from governmental control to private hands. The activities which are
happening on the Internet are email and instant messaging, general web surfing or
browsing, reading news, hobby searches, entertainment searches, shopping and buying
online, medical information searches, travel information searches, tracking credit
cards, and playing games.

Communication i.e. email, chat or instant message is the basic activity for which
Internet is used. It is the single most important reason for people to go online. E-mail
provides the opportunity to communicate more often with a much broader circle of
people than one can reach by telephone or by mail in a convenient way. In India too
email constitutes the major activity on the Internet. It was found that more elderly
people are increasingly using email as compared to the younger generations.

In India the top five online activities are e-mail, surfing, chatting, search and job
search. Some of the sites, which are commonly used for these particular activities, are:

➢ Yahoo -Most preferred communication portal, tops for email and chat

➢ India times –Best event and sports news provider.

➢ Naukri -Best recruitment portal

➢ Google-Best information domain

➢ Shaadi -Best for matrimonial services

➢ eBay-Best online shopping portal

43
 • Rapid growth of cybercafés across India

• Access to Information
• The increase in number of computer users

• Reach to net services through broadband

• Middle-class population with spending power is growing. There are about 200
million of middle-class population good spending powers. These people have
very little time to spend for shopping. Many of them have started to depend on
internet to satisfy their shopping desires.

The figures from IAMAI show that the internet users in India will grow to 200 million
by 2010. Around 25% of regular shoppers in India are in the 18-25 age groups, and
46% are in the 26-35-year range.

• Indian online matrimonial sector is worth around $230 million.

• Worldwide e-commerce is only growing at the rate of 28%, since India being a
younger market, the growth of e-commerce is expected at 51% in the coming years.

• In line with global trends finally India has also started shopping online these
days. As per the study by IAMAI online shopping in India has rose from $11million
in 1999-2000 to $522 million in 2008 and it is expected to rise above $700 million by
end March 2010.

• Indians are also Shopaholics like other Asians. There is a strong booming
young adult population in India with good levels of disposable income.

In India

Over $50 Billion and growing rapidly - Most popular online shopping products
include: books (45%), electronic gadgets (42%), railway tickets (38%), accessories
apparel (35%), apparel (35%), gifts (34%), computer and peripherals (32%), airline
tickets (28%), music downloads (21%), movie downloads (21%), hotel rooms (22%),
magazines (18%), tools (16%), home appliances (16%), toys (16%), jewelry (17%), movie ticket
(15%), etc.

44
Payments

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

• Billing to mobile phones and landlines

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

• Cheque / Check

• Debit card

• Direct debit in some countries

• Electronic money of various types

• Gift cards

• Postal money order

• Wire transfer/delivery on payment

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

45
 AIDA PRINCIPLE IN ONLINE MARKETING

1.AWARENESS

2.INTREST

3.DESIRE

4.ACTION

❖ A – Awareness

Initial point where where your brand and/or business is recognised and
acknowledged.

❖ I – Interest

Generating thoughts and discussion about your brand.

❖ D – Desire

Communicate your messages through the use of social media and email marketing.

❖ A – Action

The stage where the conversion is complete and back to the “Interest” stage to
retain them. Your website is responsible for this stage

46
 PORTER 5 FORCE ANALYSIS IN ONLINE SHOPPING

Porters Five Forces is a framework for describing factors that affect the profitability and
attractiveness of industries. Named after Michael E. Porter, this model identifies and analyzes
5 competitive forces that shape every industry, and helps determine an industry's weaknesses
and strengths.

1. Supplier Power

2. Buyer Power

3.Competitive Rivalry

4.Threat of Substitutes

5. Threat of New Entry

1. Supplier Power
Here we assess how easy it is for suppliers to drive up prices. This is driven by the
number of suppliers of each key input, the uniqueness of their product or service, their
strength and control over us,
on. The fewer the supplier choices we have, and the more we need suppliers' help, the
more powerful the suppliers are.

2. Buyer Power
This is driven by the number of buyers, the importance of each individual buyer to
one’s business, the cost to them of switching from one’s products and services to those
of someone else, and so on. If you deal with few, powerful buyers, then they are often
able to dictate terms to you.

47
3.Competitive Rivalry
What is important here is the number and capability of your competitors. If you have
many competitors, and they offer equally attractive products and services, then you'll
most likely have little power in the situation, because suppliers and buyers will go
elsewhere if they don't get a good deal from you. On the other hand, if no-one else can
do what you do, then you can often have tremendous strength.

4. Threat of Substitutes
This is affected by the ability of your customers to find a different way of doing what
you do – for example, if you supply a unique software product that automates an
important process, people may substitute by doing the process manually or by
outsourcing it. If substitution is easy and substitution is viable, then this weakens your
power
.

5. Threat of New Entry

Power is also affected by the ability of people to enter your market. If it costs little in
time or money to enter your market and compete effectively, if there are few
economies of scale in place, or if you have little protection for your key technologies,
then new competitors can quickly enter your market and weaken your position. If you
have strong and durable barriers to entry, then you can preserve a favorable position
and take fair advantage of it.

48
Porter’s five forces for Online Retailer

Supplier power:
Here, suppliers are the manufacturers of finished products. For any product, there are
many suppliers online, so they can’t show power on online retail companies. For
example, if you take computers category, there are many suppliers like Dell, Apple,
Lenovo, and Toshiba everyone wants to sell their products through online retails like
Flipkart, Amazon, Snapdeal etc. Selling online saves a lot of money for the
manufacturers, and as many people nowadays prefer purchasing product through
online stores, Companies cannot afford to lose this channel. So, in this industry the
supplier power is low.

Buyer power:
Buyers in this industry are customers who purchase products online. Since this
industry is flooded with so many players, buyers are having lots of options to choose.
With many competitors like Amazon.com, eBay, Snapdeal etc. Customers get a wide
range of choices. Customer would prefer the one who would provide goods at
reasonable price, deliver it fast and provide them with other benefits like Cash on
Delivery, EMI facilities, other offers etc. Here Buyers have more power .

Competitive Rivalry:
Competition is very high in this industry with so many players like Jabong, Snapdeal,
Amazon, Homeshop18 etc. Many competitors means more choices for the customer to
choose from. This also increases the cost incurred by the company to stay in the
customer’s mind i.e. on Promotions and Advertisements etc. Giving the customer
better deals, making customer’s experience delightful and continuous innovation can
help a company to stay at top even with tons of competitors around.

Threat of New Entrants:

Threat of new entrants is very high in this online retail industry because of following
reasons:

• Indian government has allowed 51% FDI in multi-brand online retail and 100%
FDI in single brand online retail. So, this means foreign companies can come
and start their own online retail companies.

• There are very less barriers to entry like less capital required to start a business,
less amount of infrastructure required to start business. All you need is to tie up
with suppliers of products and you need to develop a website to display
products so that customers can order products, and a tie up with online payment
gateway provider like bill desk.

• Industry is also going to grow at a rapid rate. It is going to touch 76 billion $ by

2021. Industry is going to experience an exponential growth rate. So, obviously
no one wants to miss this big opportunity.
49
With the new entrants like Jabong, Snapdeal etc. rapidly racing towards the top Position.

• Substitute for this industry as of now is physical stores. Their threat is very low
for this industry because customers are going for online purchases instead of
going to physical stores as it will save time, effort, and money. With the advent
and penetration of internet and smart phones, future in retail belongs to online
retail.

• When we compare relative quality, relative price of product a person buys

online with physical store, both are almost same and in some cases, online
retail store offers more discounts and this attracts the customer to purchase
products online.

50
 MARKETING MIX OF ONLINE SHOPPING :

The elements of marketing mix are also being applied for online marketing. Marketing
mix is essential for analyzing the business. Marketer analyses the parameters then
select appropriate strategy in order to face the market complexion effectively. The 7Ps
of marketing is being applied in the online marketing industry. The effect of
marketing mix is being explained below diagram :

51
 Analysis and Findings

Personal Information:
Gender:
Gender
Male Female Total
29 21 50

42%

58% Male
Female

Illustration:

The above diagram depicts that out of the total 50 respondent 42% of the respondent were
female as the objective was to study the consumer behavior with respect to online grocery, as
grocery is more shopped by female respondent.

52
Age Brackets

Age
18- 25-
24 30 30 & Above Total

23 19 8 50

16%
46%
18- 24
25- 30
38%
25- 30 & Above

Illustration:

The38 %of the respondent were among30 &above age bracket as these
respondents are well-educated and web savvy.
Another 46%of the respondent were ranging from 18-24 age bracket and the
remaining16%wererespondent were ranging from 25-30 age bracket, as these
respondents are ready to adapt changes.

53
Occupation
Occupation
Service Business Total

31 19 50

38%

Service
62%
Business

Illustration:

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

54
Annual Income Level

Annual Income Level

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

6%

46%

1-5 Lakhs
48%
5-10 Lakhs
10 & above

Illustration:

From the above pie chart we can determine that 48 % of the respondent have around5-10 lakhs of
annual income which indicates majority of the respondent have spending power to purchase grocery
items.

55
Q.1.Which item you shop online?

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

Apparels Books Electronic Food Games Music Other

12 7 14 4 8 3 2

16

14

12

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 preferred with the respondent ranging the age bracket
between

56
 Q.2.How much money do you spent in online shopping?

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

12 17 9 12

18
16
14
12
10
8
6
4
2
0
100-500 500-1000 1000-5000 5000 & above

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.

57
Q.3.When do you feel the need to shop online?

When I need When I want When I need to When I don’t Other

home delivery Something compare prices have the time to
Unique & find things in
Special different
markets
17 12 6 10 5

18
16
14
12
10
8
6
4
2
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.

58
Q.4.What features in online shopping website attracts you?

Design of website Discounts Advertisement Variety Value of

offered money

13 12 16 6 3

18
16
14
12
10
8
6
4
2
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.

59
Q.5. While shopping what affects your satisfaction the most?

Very Important Somewhat Important Not Important

Website User 23 17 4
Friendly
Cash on delivery 27 29 3
Credit/Debit Card 22 22 3
payment
Offers & Discounts 21 19 1
Free Shipping 29 12 2

30
25
20
15
10
5 Very Important
0
Somewhat 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.

60
 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.

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.

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.

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.

61
Q.6. What are your issues regarding online shopping?

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

No Possibility of Product highly Too much Security Physical

guarantee forgery priced clutter issue examination
12 13 11 7 5 2

14

12

10

0
No Possibility of Product Too much Security Physical
guarantee forgery highly priced clutter issue examination

Illustration:

The other factor which demotivates the user to shop online is the security issue,
which consists of issues like phishing, hacking of accounts etc.

62
Q7.Where do you shop for grocery items?

Local Kirana Ration Shop Sabzi Mandi Supermarkets

22 7 14 14

25

20

15

10

0
Local Kirana Ration Shop Sabzi Mandi Supermarkets

Illustration:

The above graph depicts that most of the respondents shop from supermarket for
grocery items. The reason for shopping from the particular shopping Centre can be
depicted below.

63
 Q.8.Ifgiven an option to buy grocery online will you buy online?

Yes No Maybe
17 22 11

22%
34%

Yes
No

44% Maybe

Illustration:

The remaining percentage of the respondent may or may not buy grocery online due the
factors like physical examination and security issues.

The above graph depicts that around 34%ofrespondent are willing to buy grocery
online if the option is given.

64
 Q.9.Do you think buying grocery online is beneficial? If yes, why do you think is
beneficial?

Yes No Total
34 16 50

32%

Yes
68% No

Illustration:

The above diagram depicts that most of the respondent think that buying grocery is
beneficial which can be determined from the next question.

The remaining respondent thinks that online grocery shopping will be not beneficial due
the factors like forgery products, highly priced products and no guarantee of the
product.

65
Q10. If yes, why do you think is beneficial?

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

Easy to order Variety Discount & Saves time Avoid long

Offers queues
17 12 13 5 3

18
16
14
12
10
8
6
4
2
0
Easy to order Variety Discount & Offers Saves time Avoid long 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 grocery items.

The next relating aspect why consumer will shop grocery online as it will allow the
user to avoid long queues resulting in reduction in time spent in shopping.

The other factors why online grocery shopping will be beneficial as it will allow the
user to shop all the grocery at a particular place with discounts and offers

66
 FINDINGS

The findings show that Internet usage has increased over the years and it is leading to an
increase in online shopping and also shows the consumers attitude and perception towards
online shopping. Communication still forms the major activity among the large number of
online shoppers as 32% of regular online shopper use Internet for communication as
compared to shopping (10%).

Online shopping is affected by demographics as it has been seen that more males are
shopping online as compared women online shoppers and there is a positive relation between
education and income levels with respect to the increased online shopping behavior.

The most important motivating factor, which influenced the online shopping, was
convenience followed by time saving and price. Regular online shoppers considered
convenience as the main motivating factor while buying and were less price sensitive. But the
online marketers should attempt to differentiate their products or services making the
comparison easier. The marketers should bring out innovative ways so that the consumers can
do more online shopping while taking the full advantage of rich information, easy access and
convenience of the Internet.

One of the main concerns among the online shoppers was privacy and security. Another
reason that hindered online shopping was the touch factor. Consumers still preferred the
experience they get from traditional stores like feeling the store’s atmosphere, interacting
with a salesperson, and seeking sensory stimulation. This might hinder the use of certain
goods like grocery and apparel, as the touch factor is the main factor, which drives the
shopping for these goods. The future of online shopping is bright especially in the categories
of travel, books, electronic gadgets and gifts.

67
 Observation

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
grocery online if the option is give.

The data also determines the factors which will be beneficial for the consumer to
shop grocery online which are variety at one shop, saves times and avoid long
Queues.

68
 Recommendations:

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 e-commerce way of Grocery shopping, the firm should start
up by bringing existing retailers online.
➢ For the purchase of the grocery 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 grocery website, as they
don’t have to stock any inventory of grocery 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 grocery item
which reduces the operating cost to a great extent.
• It will develop a better relationship between their neighborhood retailer and the consumers.
• It will allow more user interference, when the consumer can order their grocery 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, Ganapati, Holi etc., also special packages should be created
as monthly ration.

69
 Conclusion

From the above data analyses is 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,freehome delivery, website user friendliness and cash of delivery
payment option.

The hypothesis is framed for the project Consumer Perception towards Online Grocery
Shopping was “Online grocery 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 grocery online rather than shopping of grocery with the traditional method.

Out of the agreed respondent to buy online grocery, most of the respondent would
think that it would be beneficial to shop grocery 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 is 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.

70
 Questionnaire on Online Grocery 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

71
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

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 bydifferent 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)

72
Q5. While shopping what affects your satisfaction the most?

Feature design Very Somewhat Not

Important Important Important
Website User
Friendly
Cash on
delivery
Credit/Debit
Card payment
Offers &
Discounts
Free Shipping

Q6. What are your issues regarding online shopping?

□No guarantee
□Possibility of forgery
□Product highly priced
□Too much clutter
□Security issue
□Physical examination
□Any other(Please specify)

Q7. Where do you shop for grocery items?

□Local Kirana
□Ration Shop
□Sabzi Mandi
□Supermarkets

73
Q9. If given an option to buy grocery online will you buy online?
□Yes
□No
□Maybe

Q10. Do you think buying grocery 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)

74
 Bibliography

Reference B ooks:

Marketing Management - Philip Kotler

Basic of Marketing - Dr. P. C. Pardeshi
Selling - Cynthia L. Greene

Reference Links:

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

http://online.wsj.com/article/SB10001424052702303816504577308652286295634.html

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/

www.flipkart.com

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