ABSTRACT

In this research an attempt has been made to highlight the impact of the increasing trend of
online shopping over the various fixed shop retailers. Retailers comprise of a large section of the
population and a larger population is dependent upon these retailers. But the advent of e-
commerce (e-stores) with their attractive incentives and wide varieties has slapped on their face
the fear of uncertainty and helplessness. This study looks into the various aspects about how
retail businesses are being affected and also the various recovery mechanisms they are coming
up with to counter those e-stores in their race of survival. This research also unravels the effect
upon the profitability of the various concerns due to increasing trend for online shopping.
Although the periodicity of the study is less yet an effective attempt has been made to enlighten
the scenario along with concrete suggestions.

1
 INDEX

CHAPTER TOPIC PAGE NO

NO.
1 INTRODUCTION 1-23
1.1 Historical background
1.1.1 History of E-commerce
1.1.2 History of Retailing
1.2 Definition
1.2.1 E-commerce
1.2.2 Retailing
1.3 Brief profile about the study
1.4 Impact of Ecommerce on Markets and Retailers
2 RESEARCH METHODOLOGY 24-30
2.1 Objectives of the Study
2.2 Limitations Of the Study
2.3 Scope of Study
2.4 Significance of Study
2.5 Research Design
3 REVIEW OF LITERATURE 31-36
4 DATA ANALYSIS AND INTERPRETATION 37-54
5 CONCLUSION AND SUGGESTIONS 55-58
REFERENCES 59-61
ANNEXURE` 61-64

2
 LIST OF TABLES

TABLE NO DESCRIPTION PAGE NO

4.1 TABLE SHOWING AGE OF SAMPLES 37

4.2 TABLE SHOWING GENDER OF RESPONDENT 38

4.3 TABLE SHOWING NATURE OF BUSINESS OF 39
RESPONDENT
4.4 TABLE SHOWING YEARS OF BUSINESS OF THE 40
SAMPLE
4.5 TABLE SHOWING PROFIT BEFORE ONLINE BUSINESS 41
4.6 TABLE SHOWING ANY DECREASE IN AVERAGE 42
TURNOVER IN THE PAST THREE YEARS
4.7 TABLE SHOWING ANY DECREASE IN PROFIT MARGIN 43
4.8 TABLE SHOWING ANY INCREASE IN DISCOUNT 44
RATES OFFERED TO CUSTOMER IN RECENT TIMES
4.9 TABLE SHOWING WHETHER IT IS PROFITABLE TO 45
SELL AT ONLINE PRICES
4.10 TABLE SHOWING IMPACT ON BUSINESS 46
4.11 TABLE SHOWING EFFECT ON SALES OF THE 47
RESPONDENTS
4.12 TABLE SHOWING PROBLEMS FACED BY THE 48
RETAILERS
4.13 TABLE SHOWING REMEDIES TAKEN BY 49
RESPONDENTS
4.14 TABLE SHOWING REASONS BEHIND LOW PRICES OF 50
ONLINE PRODUCTS
4.15 TABLE SHOWING EFFECT OF COMPETITION 51
4.16 TABLE SHOWING REASONS FOR ONLINE SHOPPING 52
4.17 TABLE SHOWING INTENTION TO CONVERT OFFLINE 53
TO ONLINE BUSINESS
4.18 TABLE SHOWING SHUTTING DOWN OF OFFLINE 54
BUSINESS IN FUTURE

3
 CHAPTER 1

INTRODUCTION

E-commerce is buying and selling of goods and service online. Internet is the best source to
use this tool. Today the amount of trade that is conducted electronically using ecommerce
has increased with a wide spread usage of internet and technology. Through E- business
different types of business have gained an opportunity to increase their sale and can
maintain a direct relationship with the customers without any person between you and your
customer. Online shopping provides all types of goods available in the virtual world. More
and more consumers are turning to the World Wide Web (w.w.w) for their shopping needs
which gives them access to either local or international products with just a click of the
mouse. Online shopping is a form of e- commerce which allows consumers to directly buy
goods and services over the internet through a virtual shop. People find it convenient and
easy to shop from the comfort of their home or office. One of the great benefits of online
shopping is the ability to read product reviews written either by experts or fellow online
shoppers. In addition to online reviews, peer recommendations on online shopping pages or
social media websites play a key role for online shoppers. When they are researching future
purchases, 90% of all purchases made are influenced by social media, (Pick, 2015). The
number of customers of the company has augmented from one million users to 2.5 million
in India in the last four years. Some of the popular imported items imported by Indians
include home decor, branded and unbranded apparel, accessories, and technology products
like laptops, (Hiwarkar,T.2013).
E-commerce is transforming the offline shopping experience of customer to online by the help
of new technological Devices like 3G, 4G, WIFI is helping to increase the number of online
customers. Thus there has been an impact of the growing trend of online E-commerce, on retail
stops. This is because India slipped from 14th to 20th rank among the top developing Countries
in 2016 as per the global retailers of development index [GRDI].
4
The government’s most prestigious digital India project could take sector to new heights. But it
adversely is impacting on various shop retailers, malls, supermarkets, departmental stores,
kirana stops, etc.
Purchasing products or services over the Internet, online shopping has attained immense
popularity in recent mainly because people find it convenient and easy to shop from the
comfort of their home or office and also eased from the trouble of moving from shop to shop in
search of the good of choice. Online shopping (or e-tail from electronic retail or e-shopping) is
a form of e-commerce which allows consumers to directly buy goods and services over the
internet through a virtual shop. Some of the leading online stores currently in India are
Amazon, Flipkart, Snapdeal, Homeshop18, Myntra etc. Retail is a process of selling goods and
services to customers through multiple channel of distribution. Retail stores may be small or
big but they mostly operate in the same line as “purchasing to sale”. Retail form of business is
as old as civilization and is the most basic form of business. Types of Retail Stores are like-
Departmental Stores - A department store is a retail store which offers wide range of products
to the end-users under one roof. In a department store, the consumers can get almost all the
products they aspire to shop at one place only
Discount Stores - Discount stores also offer a huge range of products to the end-users but at a
discounted rate. The discount stores generally offer a limited range and the quality in certain
cases might be a little inferior as compared to the department stores.
Supermarket - A retail store which generally sells food products and household items, properly
placed and arranged in specific departments is called a supermarket. A supermarket is an
advanced form of the small grocery stores and caters to the household needs of the consumer.
Mom and Pop Store (also called Kirana Store in India) - Mom and Pop stores are the small
stores run by individuals in the nearby locality to cater to daily needs of the consumers staying
in the vicinity. They offer selected items and are not at all organized. Malls - Many retail stores
operating at one place form a mall. A mall would consist of several retail outlets each selling
their own merchandise but at a common platform.
The Internet has many advantages over retail stores. Firstly, the choice, whereas the bookstore
at the corner of the street or the nearby cloth store hardly offers 5000 references on its stalls or
20 designs of a particular garment of same size, Amazon has got hundreds of thousands of
variety. Internet is full of online retailers offering 10 times or even 100 times more products
5
than the average retailer can possibly dream of. For an e-commerce website, the costs of
storing and referencing a product represent a small fraction of the cost as compared to the cost
of storing and referencing a product for "physical" stores. From the customer satisfaction and
availability of services, online shopping is creating a major impact upon the retail stores.
This study looks into various aspects about how retail trade being affected and also the various
recovery mechanism to compete with E-commerce in their race of survival. It also reveals the
emerging E-stores impacting on the retailer’s Profitability and it also focuses on strategies need
to be adopted by retailers to over the competition in the globalized world.

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1.1 HISTORICAL BACKGROUND

1.1.1 HISTORY OF E-COMMERCE

The history of ecommerce started 40 years ago and, to this day, continues to grow with new
technologies, innovations, and thousands of businesses entering the online market each year.
Electronic Data Interchanges and teleshopping in the 1970s paved the way for the modern day
ecommerce store. The history of ecommerce is closely intertwined with the history of the
internet. Online shopping only became possible when the internet was opened to the public in
1991. Amazon.com was one of the first ecommerce sites in the US to start selling products
online and thousands of businesses have followed since. The convenience, safety, and user
experience of ecommerce have improved exponentially since its inception. This article will
address some of the key players and milestones of ecommerce.
Online shopping was invented and pioneered in 1979 by Michael Aldrich in the United
Kingdom. He connected a modified domestic television via a telephone line to a real-time multi-
user transaction processing computer. The system was marketed beginning in 1980 and offered
mainly business-to-business systems that were sold in the UK, Ireland, and Spain. One the
earliest consumer shopping experiences was Book Stacks Unlimited, an online bookstore created
by Charles M. Stack in 1992. Stack’s store began as a dial-up bulletin board two years before
Amazon was founded by Jeff Bezos. In 1994, Book Stacks Unlimited moved to the Internet as
Books.com and was eventually acquired by Barnes & Noble.
The first online transaction was, by some reports, marijuana sold by Stanford students to MIT
students via the Arpanet account at their artificial intelligence lab in 1972. However, the first
online shopping transaction on the Internet took place some 22 years later. With the headline
“The Internet is Open”, the August 12, 1994, issue of New York Times chronicled the sale
between two friends of a Sting CD. The Times said, “The team of young cyberspace
entrepreneurs celebrated what was apparently the first retail transaction on the Internet using a
readily available version of powerful data encryption software designed to guarantee privacy.”

7
1960 – 1982
Paving the way for electric commerce was the development of the Electronic Data Interchange
(EDI). EDI replaced traditional mailing and faxing of documents with a digital transfer of data
from one computer to another.
Trading partners could transfer orders, invoices and other business transactions using a data
format that met the ANSI ASC X12, the predominant set of standards in North America.

Once an order is sent, it is then examined by a VAN (Value-Added Network) and finally directed
to the recipient’s order processing system. EDI allowed the transfer of data seamlessly without
any human intervention.

Michael Aldrich, an English inventor, innovator and entrepreneur is credited with developing the
predecessor to online shopping. The idea came about during a stroll with his wife and Labrador
when Aldrich lamented about their weekly supermarket shopping expedition. This conversation
sparked an idea to hook a television to their supermarket to deliver the groceries. Immediately
after the discussion Aldrich quickly planned and implemented his idea.
In 1979 Aldrich connected a television set to a transaction processing computer with a telephone
line and created what he coined, “teleshopping,” meaning shopping at a distance.

1982 – 1990
It was apparent from the beginning that B2B online shopping would be commercially lucrative
but B2C would not be successful until the later widespread use of PC’s and the World Wide
Web, also known as, the Internet. In 1982, France launched the precursor to the Internet
called, Minitel.
The online service used a Videotex terminal machine that was accessed through telephone lines.
The Minitel was free to telephone subscribers and connected millions of users to a computing
network.

By 1999, over 9 million Minitel terminals had been distributed and were connecting
approximately 25 million users in this interconnected network of machines. The Minitel system
peaked in 1991 and slowly met its demise after the success of the Internet 3 years later.

8
Eventually, in 2011, France Telecom announced its shutdown of the Minitel service system.
Sadly, it had not become what it had hoped to be, the Internet.
In 1990 Tim Berners Lee, along with his friend Robert Cailliau, published a proposal to build a
“Hypertext project” called, “WorldWideWeb.” The inspiration for this project was modeled after
the Dynatex SGML reader licensed by CERN.

That same year, Lee, using a NeXTcomputer created the first web server and wrote the first web
browser. Shortly thereafter, he went on to debut the web on Aug. 6, 1991 as a publicly available
service on the Internet. When Berner’s Lee decided he would take on the task of marrying
hypertext to the Internet, in doing that, the process led to him developing URL, HTML and
HTTP.

When the National Science Foundation lifted its restrictions on commercial use of the NET in
1991, the Internet and online shopping saw remarkable growth. In September 1995, the NSF
began charging a fee for registering domain names. 120,000 registered domain names were
present at that time and within 3 years that number grew to beyond 2 million. By this time,
NSF’s role in the Internet came to an end and a lot of the oversight shifted to the commercial
sector.

The 1992 book, Future Shop: How Technologies Will Change The Way We Shop And What We
Buy, provided insight and predictions on the future of consumerism. An overview of the book
explains:
“For hundreds of years the marketplace has been growing more complex and more confusing for
consumers to navigate. Published in 1992, long before the Internet became a household word.
Future Shop argued that new information technologies, combined with innovative public
policies, could help consumers overcome that confusion. A prescient manifesto of the coming
revolution in e-commerce, Future Shop’s vision of consumer empowerment still resonates
today.”
From the beginning, there were many hesitations and concerns with online shopping but the
development of a security protocol – the Secure Socket Layers (SSL) – encryption certificate by
Netscape in 1994 provided a safe means to transmit data over the Internet. Web browsers were

9
able to check and identify whether a site had an authenticated SSL certificate and based on that,
could determine whether or not a site could be trusted.
Now, SSL encryption protocol is a vital part of web security and version 3.0 has become the
standard for most web servers today.

There is no denying the fact that e-commerce has re-entered India and is here to stay. Even the
small and medium retailers of the country want to ride the wave and are ready to make a fortune
out of the market place concept. It may be now that online shopping has become popular but the
concept of e-Commerce was introduced long back in the 20th century.

Circa 1991: Introduction of E-Commerce

The year 1991 noted a new chapter in the history of the online world where e-commerce became
a hot choice amongst the commercial use of the internet. At that time nobody would have even
thought that the buying and selling online or say the online trading will become a trend in the
world and India will also share a good proportion of this success.

Circa 2002: IRCTC teaches India to Book ticket online

India first came into interaction with the online E-Commerce via the IRCTC. The government of
India experimented this online strategy to make it convenient for its public to book the train
tickets. Hence, the government came forward with the IRCTC Online Passenger Reservation
System, which for the first time encountered the online ticket booking from anywhere at any
time. This was a boon to the common man as now they don’t have to wait for long in line, no
issues for wastage of time during unavailability of the trains, no burden on the ticket bookers and
many more. The advancements in the technology as the years passed on have been also seen in
the IRCTC Online system as now one can book tickets (tatkal, normal, etc.) on one go, easy
payments, can check the status of the ticket and availability of the train as well. This is a big
achievement in the history of India in the field of online E-Commerce.

Circa 2003: Introduction of Low Cost Airline with AirDeccan

After the unpredicted success of the IRCTC, the online ticket booking system was followed by the
airlines (like AirDeccan, Indian Airlines, Spice jet, etc.). Airline agency encouraged, web

10
 booking to save the commission given to agents and thus in a way made a major population of
the country to try E-Commerce for the first time. Today, the booking system is not just limited to
the transportation rather hotel bookings, bus booking etc. are being done using the websites like
Makemytrip and Yatra.

Circa 2007: The Deep Discounted model of Flipkart

The acceptance of the ecommerce on a large scale by the Indian people influenced other business
players also to try this technique for their E-businesses and gain high profits. Though online
shopping has been present since the 2000 but it gained popularity only with deep discount model
of Flipkart. In a way it re-launched online shopping in India. Soon other portals like Amazon,
Flipkart, Jabong, etc. started hunting India for their businesses.

Circa 2014: Current Scenario

Online shopping in its early stage was a simple medium for shopping with fewer options. The
users can just place an order and pay cash on delivery. But, in last few years this field has been
renovated to a high extent and hence fascinated many customers. Today, the online shopping has
become a trend in India and the reason behind the adoption of this technique lies in the attractive
online websites, user friendly interface, bulky online stores with new fashion, easy payment
methods (i.e. secure pay online via gateways like paypal or cash-on-delivery), no bound on
quantity & quality, one can choose the items based on size, color, price, etc.

Despite being a developing country, India has shown a commendable increase in the ecommerce
industry in the last couple of years, thereby hitting the market with a boom. Though the Indian
online market is far behind the US and the UK, it has been growing at a fast page.

Further, the addition of discounts, coupons, offers, referral systems, 30days return guarantee, 1-7
days delivery time, etc. to the online shopping and the E-Market have added new flavors to the
industry.
The Key drivers of in Indian ecommerce have been:

 Increasing broadband Internet and 3G penetration.

 Growing Living standards

11
 Availability of much wider product range
 Busy lifestyles and lack of time for offline shopping
 Increased usage of online categorized sites
 Evolution of the online marketplace model with websites like eBay, Flipkart, Snapdeal, etc.

1.1.2 HISTORY OF RETAILING

The origins of retailing in India can be traced back to the emergence of Kirana stores and mom-
and-pop stores. These stores used to cater to the local people. Eventually the government
supported the rural retail and many indigenous franchise stores came up with the help of Khadi
& Village Industries Commission. The economy began to open up in the 1980s resulting in the
change of retailing. The first few companies to come up with retail chains were in textile sector,
for example, Bombay Dyeing, S Kumar’s, Raymonds, etc. Later Titan launched retail
showrooms in the organized retail sector. With the passage of time new entrants moved on from
manufacturing to pure retailing.
Retail outlets such as Foodworld in FMCG, Planet M and Musicworld in Music, Crossword in
books entered the market before 1995. Shopping malls emerged in the urban areas giving a
world-class experience to the customers. Eventually hypermarkets and supermarkets emerged.
The evolution of the sector includes the continuous improvement in the supply chain
management, distribution channels, technology, back-end operations, etc. this would finally lead
to more of consolidation, mergers and acquisitions and huge investments.

12
1.2 DEFINITION

1.2.1 E-COMMERCE

A system for the buying and selling of goods and services using the Internet as the main
means of exchange.

Electronic commerce is usefully defined as:

The conduct of commerce in goods and services, with the assistance of telecommunications
and telecommunications-based tools

1.2.2 RETAILING

Retailing is a distribution process, in which all the activities involved in selling the
merchandise directly to the final consumer (i.e. the one who intends to use the product) are
included. It encompasses sale of goods and services from a point of purchase to the end user,
who is going to use that product.

The activities involved in the selling of goods to ultimate consumers for personal or
household consumption.

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1.3 BRIEF PROFILE ABOUT THE STUDY

Essentially, ecommerce (or electronic commerce) is the buying and selling of goods (or services)
on the internet.From mobile shopping to online payment encryption and beyond, ecommerce
encompasses a wide variety of data, systems, and tools for both online buyers and sellers.Most
businesses with an ecommerce presence use an ecommerce store and/or an ecommerce platform
to conduct both online marketing and sales activities and to oversee logistics and
fulfillment.Keep in mind that ecommerce has a few different spelling variations. All of these are
synonymous and correct –– their use is largely preference-based.

 E-Commerce
 eCommerce
 Ecommerce
 e-commerce
 e commerce

1.3.1 Types of Ecommerce

Generally, there are six main models of ecommerce that businesses can be categorized into:

1. B2C.
2. B2B.
3. C2C.
4. C2B.
5. B2A.
6. C2A.

14
1. Business-to-Consumer (B2C):

B2C ecommerce encompasses transactions made between a business and a consumer. This is one
of the most widely used sales models in the ecommerce context. When you buy shoes from an
online shoe retailer, it is a business-to-consumer transaction.

2. Business-to-Business (B2B):

B2B ecommerce relates to sales made between businesses, such as a manufacturer and a
wholesaler or retailer. This type of ecommerce is not consumer-facing and happens only between
business entities. Most often, business-to-business sales focus on raw materials or products that
are repackaged or combined before being sold to customers.

3. Consumer-to-Consumer (C2C):

One of the earliest forms of ecommerce is the C2C ecommerce business model. Customer-to-
customer relates to the sale of products or services between, you guessed it: customers. This
would include customer to customer selling relationships like those seen on eBay or Amazon, for
example.

4. Consumer-to-Business (C2B):

C2B reverses the traditional ecommerce model (and is what we commonly see in crowd funding
projects).C2B means Individual consumers make their products or services available for business
buyers. An example of this would be a business model like iStockPhoto, in which stock photos
are available online for purchase directly from different photographers.

5. Business-to-Administration (B2A):

This model covers the transactions made between online businesses and administrations. An
example would be the products and services related to legal documents, social security, etc.
15
6. Consumer-to-Administration (C2A):

Same idea here, but with consumers selling online products or services to an administration.C2A
might include things like online consulting for education, online tax preparation, etc.Both B2A
and C2A are focused around increased efficiency within the government via the support of
information technology.

1.3.2 The Impact of Ecommerce

The impact of ecommerce is far and wide with a ripple effect on everything from small
business to global enterprise and beyond.

1. Large retailers are forced to sell online:

For many retailers, the growth of ecommerce has expanded their brands’ reach and has
positively impacted their bottom lines. At a high level, retailers that fall into the middle
ground are the ones feeling the biggest changes in response to the impact of ecommerce.

2. Ecommerce helps small businesses sell directly to customers:

For many small businesses, ecommerce adoption has been a slow process. Slowly, small
business owners are launching ecommerce stores and diversifying their offerings, reaching
more customers, and better accommodating customers who prefer online/mobile shopping.

3. The rise of ecommerce marketplaces:

Ecommerce marketplaces have been on the rise around the world since the mid-1990s with
the launch of giants we know today as Amazon, Alabama, and others.

16
4. New jobs are created but traditional retail jobs are reduced:

Jobs related to e-commerce are up 2x over the last five years, far outpacing other types of
retail in regard to growth. However, growth in ecommerce jobs is only a small piece of the
employment puzzle overall.

A few quick facts on how ecommerce has impacted employment:

 Ecommerce jobs are up 334%, adding 178,000 jobs since 2002

 Most ecommerce jobs are located in medium to large metropolitan areas
 Most ecommerce companies have four or fewer employees

Scholars indicate that ecommerce will continue to directly and indirectly create new jobs in
the high-skill domains like the information and software sectors, as well as around increased
demand for productivity.

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1.3.3 Advantages of Ecommerce

Ecommerce has many different advantages – from faster buying to the ability to reach large
audiences 24/7.

1. Faster buying for customers:

For customers, ecommerce makes shopping from anywhere and at any time possible. That
means buyers can get the products they want and need faster without being constrained by
operating hours of a traditional brick-and-mortar store. Plus, with shipping upgrades that
make rapid delivery available to customers, even the lag time of order fulfillment can be
minimal.

2. Companies can easily reach new customers:

Ecommerce also makes it easier for companies to reach new customers all over the globe.
With the added benefit of social media advertising, brands have the potential to connect with
massive relevant audiences who are in a ready-to-buy mindset.

3. Lower operational costs:

Without a need for a physical storefront (and employees to staff it), ecommerce retailers can
launch stores with minimal operating costs. As sales increase, brands can easily scale up their
operations without having to make major property investments or having to hire large
workforces. This means higher margins overall.

4. Personalized experiences:

With the help of automation and rich customer profiles, you can deliver highly personalized
online experiences for your ecommerce customers. Showcasing relevant products based on
past purchase behavior, for example, can lead to higher AOV and makes the shopper feel like
you truly understand him/her as an individual.

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1.3.4 Disadvantages of Ecommerce

Although modern ecommerce is increasingly flexible today, it still has its own set of
disadvantages. Here are some of the downsides to ecommerce retail.

1. Limited interactions with customers:

Without being face-to-face, it can be harder to understand the wants, needs, and concerns of
your ecommerce customers. There are still ways to gather this data (survey data, customer
support interactions, etc.), but it does take a bit more work than talking with shoppers in
person on a day-to-day basis.

2. Technology breakdowns can impact ability to sell:

If your ecommerce website is slow, broken, or unavailable to customers, it means you can’t
make any sales. Site crashes and technology failures can damage relationships with
customers and negatively impact your bottom line.

3. No ability to test or try-on:

For shoppers who want to get hands-on with a product (especially in the realm of physical
goods like clothing, shoes, and beauty products) the ecommerce experience can be limiting.

19
1.3.5 Features

Most customers look for a few key features when evaluating an ecommerce website. These
are elements that improve the overall online shopping experience by making it highly
functional and user-friendly.

 Easy to use features: Simple navigation tools, easy checkout flows, etc.
 Mobile compatibility: Compatible and functional on all mobile devices
 Discount code and promotional capabilities: Allows shoppers to use discounts on-site
 Security features: Payment processing is secure and reliable
 Social proof: Validation from past customers and trusted sources
 User-generated content: Reviews, ratings, and photos that add to the ethos of
offerings

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DIFFERENT MARKETS AND RETAILERS IN INDIA

1.3.6 Markets

 Physical Markets:

Physical Market is a market where customers come physically in the market and face-
to-face interact with the seller and buys the product and service in the exchange of
money. Examples of physical markets are shopping malls, department stores etc.

 Non Physical Markets/Virtual Markets:

Non-Physical Market is the market in which customers does not go physically to the
seller and do not interact face-to-face. Customer buys the product on internet and
exchange the money electronically. Examples of these markets are Flip kart, Amazon,
eBay etc.

 Auction Market:

Auction market is the market in which the goods are sold to the highest bidder and
lower bidders are ignored.

 Market for Intermediate Goods:

In these market raw materials are sold by using them final product is made.

 Black Market:

In these market illegal goods like drugs, weapons, and alcohol is sold which is
supervised by illegal sellers.

 Knowledge Market:

In this market Information and knowledge based products are sold.

21
  Financial Market:

In this market liquid assets or money is exchanged. There are three types of financial
markets: Stock market, in which stocks are exchanged; Bond market, in which Debt
securities is exchanged in the form of the bond; Foreign exchange market, in which
currency exchanges and it is also called currency market.

1.3.7 Retailers

 Department Store:

Departmental store is a store which is a combination of multiple small stores under

one company which offers a wide variety of products. It adds value for the customers
due to offer a wide variety of products at a place.

 Supermarkets:
Supermarkets generally sell food and beverages but now due to customers need it also
sell fashion, electronic related items. It has a good buying power that why it sells at
low prices.

 Warehouse Retailers:

Warehouse retailers are situated at the place where the premises rent is very low so
that they can store, display and sell large amount of products.

 Specialty Retailers:

Specialty Retailers sell a special service or product and provide expert knowledge and
good service to customers. They add values by adding accessories and related
products in the same outlet.

 E-Tailer:

E-Tailers are those sellers who provide the facility to customers to buy the product
through internet and offers home delivery using which they can reach to customers

22
 within a big geographic area and can supply goods to them. They have low rent and
overhead that’s why they offer competitive prices.

 Convenience Retailer:

These retailers are available in residential areas and sells limited products at a
premium price because they add value of convenience.

 Discount Retailer:

Discount retailers are those retailers which offer discounts on less fashionable brands
by taking it from the suppliers and resell the product till end of line and return the left
products at the discounted price to the supplier.

23
1.4 IMPACT OF E-COMMERCE ON MARKETS AND RETAILERS

1.4.1 Impact on Markets

 Promotion of Products:

Through Ecommerce product can be promote in an interesting way and with lots of
information directly to the customers which reduces the cost of offline promotion
because internet can interact a lot of customers and save amount of cost of
advertisements can be used in different areas of business.

 Customer Service:

Customer service can be enhanced because customers can search detailed information
about product or marketplace which offers the product and can compare the prices of
different market places.

 Brand Image:

New business men can establish their brands on internet by using attractive images at
an affordable price.

 Advertisement:

Traditionally the advertisements were one- way to attract customers and let them
know about the new product or market place but now through e-commerce
advertisements are two-way in which customer can browse the market place and
product, can compare the prices and also can ask questions to the online retailers.

 Customization:

Customized products can be made available according to the needs of customers. It

will make a good place of business in market and new customers will be attracted.

24
  Order Making Process:

Traditionally to take orders from customers, intermediaries are used which takes a lot
of time and expenses but with e-commerce the order taking is so easy which reduces
a lot of time and expenses and they can make more sales.

 Customer Value:

Traditionally attaining a big value from the customers was the main interest. Only
customers were attracted and it was the biggest target but now sellers make long term
relationships with customers to attain long term value by offering them special
discounts.

1.4.2 Impact on Retailers

 Turnover:

Due to e-commerce the turnover of offline retailers has reduced which is a

warning signal for the enterprise.

 Profit Margin:

On the arrival of online shops in the market offline retailers are suffering from
pricing. To survive in market, they have to sell product in law prices which
covers only their operational costs and they do not get any profit margin.

 Discount:

Offline retailers sell their products at discounted rates because online stores offer
heavy discount to the customers and to stay in the market and to attract the
customers they have to sell the products at discounts.

25
 Variety of Stocks:
Variety of goods is offered by online stores to which offline retailers cannot
compete because at the end of year the left over stock can give a huge loss to the
retailer.
 Customer Services:
Offline retailers are providing different services at which online stores fails.
Repair and goods of services, home delivery and after sales services also like
online shops.
 Window Shopping:
Low prices offered by online stores leads to window shopping by customers at
physical stores and they buy product online. Due to which they have prospective
customer’s more than actual customers.
 Advertisement:
Offline retailers focus only on the advertisements so that they can attract
customers and increase their sales. They do not leave a single chance to advertise.

26
 CHAPTER 2
RESEARCH METHODOLOGY

2.1 OBJECTIVE

 To study the effect on profitability of retail stores due to advent of e-commerce.

 To analyze the effect of online shopping upon pricing patterns of retail stores.

 To know how online shopping is advantageous to customers compared to retail shopping.

 To examine problems faced by retailers.

27
2.2 LIMITATIONS OF THE STUDY

 The present study is confined to one particular area only that is Lalbaug, Mumbai and its
results cannot be generalized in other cities due to socio- cultural and economic
differences.

 The sample taken on judgment basis as respondents so selected belongs to middle or

higher income group or lower income group. Therefore, results are accordingly.

 Dynamic nature of retailers may make the study useless over time and place.

 Findings of today may become invalid at other point of time.

28
2.3 SCOPE FOR FURTHER RESEARCH

 Since the study is confined to Lalbaug, Mumbai only. The researchers may focus on other
parts of country to generalize the findings of the study.

 Interested researchers may concentrate on other markets to have in depth knowledge of

the urban areas.

 Inter-Regional Comparison can be made to study the topic in a comprehensive way.

2.4 SIGNIFICANCE OF STUDY

The study focuses on impact of online shopping on selective conventional retail stores. The study
was conducted in area of Lalbaug, Mumbai. The study shows how conventional retail stores are
affected through online shopping. The study also discussed the measures taken by retail stores to
overcome the problems faced by them due to the advent of online shopping.

29
2.5 RESEARCH DESIGN

The purpose of the methodology is to design the research procedure. This includes the overall
design, the data collection method and analysis procedure. Marketing research is the systematic
gathering recoding and analyzing of data about problem retaining to the marketing of goods and
services.
The essential purpose of any research is to provide information, which will facilitate the
identification of an opportunity of problem situation and to assist manager in arriving at the best
possible decisions when such situations are encountered.
Basically there are different types of researches, which according to their applicability, strength,
weaknesses, and requirements are used. Before selecting the type of research, their suitability
according to problem must be seen.

2.5.1 Type of Research:

There are various types of researches which can be conducted in order to understand the nature
of the problem. However the type of research design to be used depends totally on the nature of
research topic or research problem.
In this case, we will use a conclusive research design. This will include a descriptive research to
find out or describe certain aspects of the problem such as what are the significant impacts of
digital media on print media, the reaction of print media industry to this change, what measures
are they taking and of them what measures they have already taken to reduce the impact or
compete with the growing digital media industry. However with only descriptive research, we
will be unable to understand the reasons as to why this happened.
Hence, we will also undertake a casual research post data collection to investigate the cause-
effect relationship between the variables. We will try to understand what had a positive effect
and what had a negative effect on the companies. Both these researches will enable in
completing the objectives of this study in a justified manner.

30
 Data Collection:

The data required for the purpose of this research is both primary and secondary data.

 Primary Data:

Primary data means original data that has been collected specially for the purpose in
mind. It means someone collected the data from the original source first hand. Data
collected this way is called primary data.
The people who gather primary data may be an authorized organization, investigator,
enumerator or they may be just someone with a clipboard. Those who gather primary
data may have knowledge of the study and may be motivated to make the study a
success. These people are acting as a witness so primary data is only considered as
reliable as the people who gathered it.
Research where one gathers this kind of data is referred to as field research.
The primary data that we will be collecting will be from the user’s point of view and
their opinion. Our sample will be people from different occupations; different age-
groups and has different preferences relating to their choice of media for the daily
source of information.

 Secondary Data:

Secondary data is data collected from published sources like newspapers, magazines,
other printed and published sources. We will be observing and analyzing the financial
statements, tariff plans, revenue figures and try to find already published data related
to the problem.
Our focus will be on the data collection from authentic sources to make it more
reliable and so that better conclusions will be derived. The data collected shall pertain
to the companies doing print and digital media businesses on a global level.

31
 Method of Collecting Primary Data:

There are various methods of collecting primary data or first-hand information. For
this study, we will be using Sample Survey method.

What is sample survey method?

In statistics, survey sampling describes the process of selecting a sample of elements
from a target population to conduct a survey. The term "survey" may refer to many
different types or techniques of observation. In survey sampling it most often
involves a questionnaire used to measure the characteristics and/or attitudes of
people. Different ways of contacting members of a sample once they have been
selected is the subject of survey data collection. The purpose of sampling is to reduce
the cost and/or the amount of work that it would take to survey the entire target
population. A survey that measures the entire target population is called a census.
For this study, we will use survey sampling to understand the perspective of Indian
audience for print and digital media.

 Sample:

Our sample will include people from various walks in life, all over India, readers and
non-readers and will also include a small portion of participants from the media
industry.

 Data Representation:

The main portion of collecting the primary data is its representation in the form of
statistics. It is the display of summarized data. Data is initially collected from a given
source, whether they are experiments, surveys, or observation, and is presented in one
of four methods:

 Textual Method:

The reader acquires information through reading the gathered data.

32
 Tabular Method:

Provides a more precise, systematic and orderly presentation of data in rows or

columns.

 Semi-tabular Method:

Semi-tabular Method uses both textual and tabular methods.

 Graphical Method:

The utilization of graphs is most effective method of visually presenting statistical

results or findings.
While the other ways of representation of data may be used in the interpretation of
secondary data that has been collected from various sources, for the purpose of
primary data, we will use graphical methods of representation of data to show the
results of the survey that has been conducted. The data represented in the findings of
the survey is completely reliable data collected under my supervision whereas the
ones in secondary data have been published previously in other sources. The source
of such data will be mentioned later for future reference.

33
 CHAPTER 3
LITERATURE REVIEW

Cheema et al.( 2009 ) in their study on the topic “The trend of online shopping in 21st
century: Impact of enjoyment in TAM model” found that online shopping stores allow the
customer to obtain required information about their purchase which decreases the risk
associated with new shopping medium, leading to increase in the number of online
shoppers. The study revealed the insignificant relationshipof perceived usefulness with
online shopping intentions, which clearly means that the behavioral intentions of the sample
members towards online shopping was not due to its usefulness but they were attracted
towards the internet shopping for other reasons.

Saha (2015) in his paper on the topic “The impact of online shopping upon retail trade
business” highlighted the impact of the increasing trend of online shopping over the
various fixed shop retailers. The study found several driving factors which influence
consumers to shop online: e.g. price, convenience in shopping and wide range of available
products available online.

Hiwarkar (2013) examined in his study on the topic “E- Commerce impact on Indian
Market: a Survey on social impact” found that E-commerce is promising as a significant
instrument to make sure comprehensive growth. The conventional model of business is
undergoing an aquatic change due to evolution of online shopping. It was also found that
Safe and secure payment modes are vital along with the need to discover and popularize
innovations such as Mobile Commerce.

Lieber et al (2011) in their research paper “Online vs. Offline competition” discussed about the
offline and online segments. In their investigation they found that online connections already
exist but they are expanding further. Online channels have to yet establish themselves in some
markets but where they have been developed they grow faster than bricks and mortar
channels.

34
Shim et al (2000) in their article “Assessing the impact of internet shopping on store
shopping” found that consumers attitude towards the internet shopping and what factors that
influence consumers to purchase online. The study concluded that internet shoppers tend to
search for product information on the internet to a greater extent which is easily available
and is an important tool that directssales.

Hsiao and Ming Husing (2008) the study conducted on “shopping mode choice: Physical
store shopping verses e- shopping” The study considered the competition between store
shopping and e shopping by examining their relative advantages in some specific time and
cost attributes. It was found that purchasing online saves time and travel cost, which is
worth avoiding a shopping trip even though customers have to wait for the product till their
delivered.

Ashok Kumar Chandra (2013) highlighted that online shopping is becoming a trending
new retail shop in his article, “Factor affecting the online shopping behavior.” The article
was put forth to analyze the factors of online purchasing which promotes consumers for
online shopping. Attitude of apparel online shopping showed that different groups are
significantly different in their attitude about online shopping. The article suggested that the
government should have awareness programs for online shopping

You Quingheetal (2014) in their study titled “The Online Shopping Changed the Retail
Business Model.” found that online shopping has captured the minds of the people and
more people are turning to online shopping for their needs. Online shopping on a global
scale is the most popular wayto shop; it also reduced the need for shopping in the store
which helps people to save time and energy. The researchers have selected four factors on
consumer attitudes towards online shopping like convenience, website design, time saving
and security. Due to these factors consumers are more comfortable to shop online as
compared to retail shopping. They also notice that it has become a challenge for marketers
to understand the customer’s needs for online shopping.

35
Saha, Rathore (2014) in their paper on the topic “An Overview of Changing trend of
traditional retailing to I- retailing”, focused on how internet retailing differs from
conventional retailing. Many components of internet retail and traditional retail model are
common. E-retailing covers retailing by using latest technologies. The concept of E-
retailing has also been adopted by the conventional retailers. The most successful internet
retailers are those who are able to successfully transfer the element from traditional retailing
to the internet. The paper has been pioneering effort in understanding E-retailing concept.
The key focus of the paper was to nurture the retail online sector.

Chris Nickson (2015) in his topic on “Has Online Shopping made Lifestyle Easier” has
discussed about the widespread adoption of home computers and high-speed broadband
connections due to retailers offering goods online, having created a kind of shopping
revolution. Online shopping has offered immense choice for the buyers. The researcher
also felt that online shopping will not ever completely eliminate its physical counterpart.
There are still people who prefer to go to shop and buy their goods.

TabataBaei et al (2005) the article on the topic traditional shoppers and online shopping
speaks about the positive attitude of offline consumers towards online shopping. The
purpose of the article was to examine the online shopping behavior of consumers who still
shop from traditional stores besides the numerous benefits of online shopping. Online
shopping is a new experience and has greatly impacted the life of consumers within a short
period of time. According to the author it is expected to grow in years to come with
advancement in technology.

Katawetawarak et al (2011) on the topic "online shoppers behavior; influences of online

shopping decision studied online shopping behavior" found that online shopping provides
more satisfaction to modern consumers. The study first provided a theoretical and
conceptual background that gives the difference between offline and online consumer
behavior process. The study provided an overview of online shopping decision process by
comparing the offline and online decision making and identifying the factors that motivate
the online customers to decide to buy or not to buy online.
36
Dhorety Neil et al (2010) in their article "Internet retailing; the past the present and the
future". found that electronic intermediaries have played an increasingly important role by
making, ‘one-to-one' marketing a reality, competitive prices and perhaps most importantly
made the consumer more powerful. After going through the growth and impact of online
shopping, it concluded that the study has sought to highlight key issue and raised question
that should hopefully provide an important of departure for future studies.
Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer and Wood (1997) suggest that a key difference
between online and offline shopping is the ability of online shoppers to obtain more
information about both price and non-price information as a result of reduced search cost.
Because consumers are able to obtain more price information online and compare across online
retailers with a few clicks, they are more likely to shop online when the price of a product is
high rather than low as it saves consumers from having to go out to acquire the cheaperoptions.

Massagli, M. (2000) studied “E-Tail V/S Retail: The Future of Downtown Regional
Shopping Centre”. The objective was to explore potential impacts of E-Retailing on place based
shopping. The researcher has collected data by taking interview of professionals selected from
the field of retail, planning and real estate. The researcher has analyzed five factors. They are
experiential components, sense of place, community benefits, exterior &interior layout and
accessibility and convenience. The result revealed that E-Retailing couldn’t substitute the
traditional shopping. Further he said that in future both the retailing format will merge and
develop a hybrid retailformat.

Kim, D., Yang, Z., Jun, M. (2003).have studied Customers’ perceptions of online retailing
service quality and their satisfaction. The objective of their study was to identify key
underlying dimensions of online retailing service quality as perceived by online customers. For
the study purpose they have indentified six key online retailing service quality dimensions as
perceived by online customers which were reliable/prompt responses, access, and ease of use,
attentiveness, security, and credibility. They have prepared questionnaire as data collection tool
and done the survey of 260 full time and part time MBA students and undergraduate students of
USA. The finding of this research confirmed that there is a strong and positive relationship

37
between online retailers’ service quality and their customer satisfaction. They found that three
dimensions, reliable/prompt responses (service), attentiveness, and ease of use, had significant
impacts on both customers’ perceived overall service quality and their satisfaction. They also
suggest onlineretailersimplementinformationsystemsthatintegratealltheiroperations to improve
their delivery performance. Along with that online retailers must have enough staff members to
answer customers’ diverse questions via telephones and e- mail.

Rotem-Mindali, O., Salomon, and I. (2006).have studied The impacts of E-retail on the
choice of shopping trips and delivery: Some preliminary findings. The objective of the study
was to develop a conceptual model of the decisions households make with regard to
information gathering, purchase transactions and delivery mode. To collect data, they have
developed a structured questionnaire and respondents were asked to assess a large variety of
aspects concerning their shopping habits, preferences as well as attributes concerning their
accessibility to and usage of IT-based applications. They found that a number of respondents
use internet to collect the information before purchasing product. Study also revealed that the
major reason to purchase online was the cheaper price of the product followed by busy
schedule.

Sinha, P., Kar, S. (2007).studiedAn Insight into the Growth of New Retail Formats in India.
Their study investigates modern retail developments and growth of modern formats and
challenges and opportunities available to the retailers to succeed in India. They conclude that it
is not all about deciding the format but all about serving the consumer better, faster and at less
cost. The most important issue in e-tailing is credibility and trustworthiness of the supplier.
They added that consumer is the focus of retail business and the retailers should serve the
consumer better, faster and at less cost.

Devendra P.S (2007).has done study on Is Retailing in India Boon or Bane. He has done the
study with the help of secondary data. He found that rising disposable income in the middle
class and lower middle class with an increase in employment opportunities for young adults in
IT and IT enable sectors are the major reasons for growth in retail sector in India. He added that
along with serving the needs of upper class people, organized retailers should also focus on
38
satisfying needs of lower class people too.

Mohanty& Panda (2008).opines about retailing as a sector of India occupies important place
in the socio-economic growth strategy of the country. India is witnessing retailing boom being
propelled by increasing urbanization, rising purchasing power parity (PPP) of ever growing
India’s middle class, changing demographic profiles heavily tilted young population,
technological revolution, intense globalization driveetc.

Srivastava, R. (2008).studied Changing retail scene in India. The purpose of the study was to
study changes in retail taking place in India in view of many MNCs and large industries
entering into this segment. He has used secondary data for the study purpose and collected data
from industry sources which included national and international published sources from 1993-
2006. He found that there is an impact of modern retail on traditional retail players. He added
that malls with multiplexes such as cinema theatres, food courts, and play places for children
are becoming the centre for family outings. He further said that small retailers have also
improved their service to stay in the competition. Services like credit limits and home service
are helping them to hold on to their customers.

39
 CHAPTER 4:- DATA ANALYSIS AND INTERPRETATION

A retailer survey was conducted by interacting with the retailers to know the impact of
online shopping (e-commerce) on their business and to find out how they face such
competition. A survey was conducted on 50 retailers in Lalbaug area. The data was
tabulated and analyzed. Various tables and graph are projected that will make the analysis
easy to evaluate. Each question of the questionnaire was analyzed in detail to reveal vital
facts of the findings. The analysis and its interpretation are as follows:-

4.1 TABLE SHOWING AGE OF SAMPLES:

Age of Respondents Frequency Percentage

20-30 9 18.00
31-40 24 48.00
41& above 17 34.00
Total 50 100.00

4.1 GRAPH SHOWING AGE OF SAMPLES:

AGE OF SAMPLES

41& above

31-40
AGE OF SAMPLES

20-30

0 10 20 30

INTERPRETATION:-
Table shows that majority of the respondents (48%) belongs to the age group of 30-40
years whereas 34% belong to the age group of 41& above and the remaining 18%
belongs to the age group of 20-30 years.

40
4.2 TABLE SHOWING GENDER OF RESPONDENTS :

Gender Frequency Percent

Male 33 66.00
Female 17 34.00
Total 50 100.00

4.2 GRAPH SHOWING GENDER OF RESPONDENTS :

GENDER OF RESPONDENTS

40

30
GENDER OF
20 RESPONDENTS

10

0
Male Female

INTERPRETATION:-
According to table number 2, it can be noted that most of the samples interviewed were
males which accounts for 66% and the remaining 34% were females, which leads to a
conclusion that the involvement of females in the retail business is less as compared to
male.

41
4.3 TABLE SHOWING NATURE OF BUSINESS OF RESPONDENT:

Nature of Business Frequency Percent

General Stores 11 22.00
Electronics 12 24.00
Grocery 3 6.00
Garments 10 20.00
Pharmaceutical 7 14.00
Book stores 3 6.00
Others 4 8.00
Total 50 100.00

4.3 GRAPH SHOWING NATURE OF BUSINESS OF RESPONDENT:

NATURE OF BUSINESS

General Stores
Electronics
Grocery
Garments
Pharmaceuticals
Book stores
Others

INTERPRETATION:-
The retailer surveyed for the purpose were: 24% Electronics, 22% General stores, 20%
Garments, 14% Pharmaceuticals, 6% Book stores, 6% Grocery and 8% others, which
were selected at random after considering the prevailing trend of customers in the market.

42
4.4 TABLE SHOWING YEARS OF BUSINESS OF THE SAMPLE:

Years of Business Frequency Percent

Less than 1 year 4 8.00
Between 1-10 years 23 46.00
Between 10-20 years 13 26.00
More than 20 years 10 20.00
Total 50 100.00

4.4 GRAPH SHOWING YEARS OF BUSINESS OF THE SAMPLE:

YEARS OF BUSINESS
25

20

15

10 YEARS OF BUSINESS

0
Less than Between Between More
1 year 1-10 10-20 than 20
years years years

INTERPRETATION:-
The above table presents the number of years retailers are into business. The average
experience for doing business of the sample considered comes to 20 years.

43
4.5 TABLE SHOWING PROFIT BEFORE ONLINE BUSINESS:

Profit Margin Frequency Percent

5-10% 20 40.00
10-15% 22 44.00
15%& above 8 16.00
Total 50 100.00

4.5 GRAPH SHOWING PROFIT BEFORE ONLINE BUSINESS:

PROFIT MARGIN

15%& above

10-15%
PROFIT MARGIN

5-10%

0 5 10 15 20 25

INTERPRETATION:-
Before the introduction of online business the profit margin of the retailers was
reasonable i.e. on an average 15% and above. This is fairly a good return on investment
after meeting all the expenses.

44
4.6 TABLE SHOWING ANY DECREASE IN AVERAGE TURNOVER IN THE
PAST THREE YEARS

Decrease in turnover Frequency Percent

YES 40 80.00
NO 10 20.00
Total 50 100.00

4.6 GRAPH SHOWING ANY DECREASE IN AVERAGE TURNOVER IN THE

PAST THREE YEARS

DECREASE IN TURNOVER

40

30
DECREASE IN
20 TURNOVER

10

0
YES NO

INTERPRETATION:-
The above figures show the responses of retailers whether online shopping has decreased
in average turnover in past three years. 80% are in the favor that turnover has decreased
in past 3 years wherein 20% felt that there is no decrease in average turnover in past three
years.

45
4.7 TABLE SHOWING ANY DECREASE IN PROFIT MARGIN

Decrease in profit Frequency Percent

margin
YES 48 96.00
NO 02 4.00
Total 50 100.00

4.7 TABLE SHOWING ANY DECREASE IN PROFIT MARGIN

DECREASE IN PROFIT MARGIN

60

50

40

30 DECREASE IN PROFIT
MARGIN
20

10

0
YES NO

INTERPRETATION:-
In the above table, 96% of the respondents said that there is decrease in profit margin
due to e-commerce wherein only 4% felt that there is no decrease in profit margin.

46
 4.8 TABLE SHOWING ANY INCREASE IN DISCOUNT RATES OFFERED
TO CUSTOMER IN RECENT TIMES

Increase in discount Frequency Percent

rates
YES 37 74.00
NO 13 26.00
Total 50 100.00

4.8 GRAPH SHOWING ANY INCREASE IN DISCOUNT RATES OFFERED

TO CUSTOMER IN RECENT TIMES

INCREASE IN DISCOUNT RATES

40

30
INCREASE IN DISCOUNT
20 RATES

10

0
YES NO

INTERPRETATION:-
In the above table, 74% of the respondent said that they have increase the rates of
discount offered to customers so as to increase the sales and profit, wherein 26% of the
respondents said that they have not increased any discount rates.

47
4.9 TABLE SHOWING WHETHER IT IS PROFITABLE TO SELL AT ONLINE
PRICES

Profitable to sell at Frequency Percent

online prices
YES 10 20.00
NO 40 80.00
Total 50 100.00

4.9 GRAPH SHOWING WHETHER IT IS PROFITABLE TO SELL AT

ONLINE PRICES

PROFITABLE TO SELL AT ONLINE PRICES

YES
NO

INTERPRETATION:-
Generally online prices are lower than the offline retail business prices due to various
reasons. When asked whether they would like to sell the product at online price, majority
of them replied negatively because it was not a profitable idea.

48
4.10 TABLE SHOWING IMPACT ON BUSINESS

Impact on Business Frequency Percent

YES 34 68.00
NO 16 32.00
Total 50 100.00

4.9 GRAPH SHOWING IMPACT ON BUSINESS

IMPACT ON BUSINESS

YES
NO

INTERPRETATION:-
Majority of samples i.e. 68% agreed that their business has been affected by online
shopping. The fact is that consumers are aware about the various online stores and their
attractive prices and great discounts. This makes them to purchase online rather than to
buy from the traditional retailers who quote a higher price than the online retailers. This
has affected their businesses to a large extent.

49
4.11 TABLE SHOWING EFFECT ON SALES OF THE RESPONDENTS

Effect on Sales Frequency Percent

YES 34 68.00
NO 16 32.00
Total 50 100.00

4.11 GRAPH SHOWING EFFECT ON SALES OF THE RESPONDENTS

EFFECT ON SALES

YES
NO

INTERPRETATION:-
68% of the respondents agreed that their sales have decline due to e-commerce.

50
4.12 TABLE SHOWING PROBLEMS FACED BY THE RETAILERS

Problems faced by Frequency Percent

respondents
Less profit 40 80.00
Increasing debt 7 14.00
Verge of closure 3 6.00
Total 50 100.00

4.12 GRAPH SHOWING PROBLEMS FACED BY THE RETAILERS

PROBLEMS FACED BY RESPONDENTS

Less Profit
Increasing debt
Verge of Closure

INTERPRETATION:-
The above table shows that the impact of online business in terms of profit, debt and its
future. Majority of the respondents were of the opinion that their profitability has been
affected to large extent followed by increase in their debt. Some were even thinking to
close down their business due to stiff competition.

51
4.13 TABLE SHOWING REMEDIES TAKEN BY RESPONDENTS

Remedies taken by Frequency Percent

respondents
Reduce prices 22 44.00
Gift and Offers 20 40.00
Home delivery 6 12.00
Any Other 2 4.00
Total 50 100.00

4.13 GRAPH SHOWING REMEDIES TAKEN BY RESPONDENTS

REMEDIES TAKEN BY RESPONDENTS

25

20

15
REMEDIES TAKEN BY
10 RESPONDENTS
5

0
Reduce Gift and Home Any
prices Offers delivery other

INTERPRETATION:-
The above table shows undertaken the remedies taken by conventional retailers. The
competition faced by conventional retailers due to online business is increasing as a result
some retailers take remedies to face such competition. 44% of the retailers reduced their
prices, 40% give Gifts and Offers and 12% provide home delivery.

52
4.14 TABLE SHOWING REASONS BEHIND LOW PRICES OF ONLINE
PRODUCTS

Reasons behind low Frequency Percent

prices
Cheap quality products 28 56.00
Second hand products 6 12.00
Less number of middle 14 28.00
men
Any other 2 4.00
Total 50 100.00

4.14 GRAPH SHOWING REASONS BEHIND LOW PRICES OF ONLINE

PRODUCTS

REASONS BEHIND LOW PRICES

Cheap quality products

Second hand products

Less number of middle

men
Any other

INTERPRETATION:-
In the survey, 56% of the respondents responded cheap quality products to be reason
behind low prices of online products. Around 28% of the respondents were of the opinion
that prices of online products are low due to less number of middle men, whereas 12%
were of the view that the prices are low due to selling of second hand products.

53
4.15 TABLE SHOWING EFFECT OF COMPETITION

Effect of competition Frequency Percent

YES 42 84.00
NO 8 16.00
Total 50 100.00

4.15 GRAPH SHOWING EFFECT OF COMPETITION

EFFECT OF COMPETITION

YES
NO

INTERPRETATION:-
The above figures show the responses of retailers whether online shopping has increased
competition for them or not. 84% are in the favor that competition has increased on
account of online shopping wherein 16% felt that there is no competition.

54
4.16 TABLE SHOWING REASONS FOR ONLINE SHOPPING
Reasons people shop Frequency Percent
online
Low prices 20 40.00
Time saving 9 18.00
Variety of products 7 14.00
All of the above 14 28.00
Total 50 100.00

4.16 GRAPH SHOWING REASONS FOR ONLINE SHOPPING

REASONS PEOPLE SHOP ONLINE

20
18
16
14
12
10 REASONS PEOPLE SHOP
8 ONLINE
6
4
2
0
Low Time Variety of All of the
prices saving products above

INTERPRETATION:-
The table above highlights retailer opinion as to why consumers shop online. Out of the
50 retailers interviewed, 40% considered lower prices to be the main reason, 28% said
that lower prices, time and variety of products are reasons for people to shop online, 18%
were of the opinion that the time saving was the main reason and remaining thought that
variety of products played major role. In any case, the benefit available to customers may
be lower prices, variety of products, saving in time are the main reasons for online
shopping by the customers.

55
4.17 TABLE SHOWING INTENTION TO CONVERT OFFLINE TO ONLINE
BUSINESS

Like to convert offline Frequency Percent

stores to online business
YES 24 48.00
NO 26 52.00
Total 50 100.00

4.17 TABLE SHOWING INTENTION TO CONVERT OFFLINE TO ONLINE

BUSINESS

LIKE TO CONVERT OFFLINE STORES INTO

ONLINE BUSINESS

YES
NO

INTERPRETATION:-
After the introduction of online shopping, traditional retailers face number of problems
such as less profit. 48% of the retailers were of the opinion that in future they would like
to convert their retail store into online store. However, majority of them still wants to
continue with their traditional way of selling the products.

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 4.18 TABLE SHOWING SHUTTING DOWN OF OFFLINE BUSINESS IN
FUTURE

Shut down of business Frequency Percent

YES 23 46.00
NO 27 54.00
Total 50 100.00

4.18 TABLE SHOWING SHUTTING DOWN OF OFFLINE BUSINESS IN

FUTURE

SHUT DOWN OF BUSINESS

YES
NO

INTERPRETATION:-
Though there is competition, profits are decreased sales are affected due to online
business. Majority of the retailers still want to continue in the same spirit.

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 CHAPTER 5
CONCLUSIONS AND SUGGESTIONS

5.1 FINDINGS

 Majority of the respondents (48%) belongs to the age group of 30-40 years
whereas 34% belong to the age group of 41& above and the remaining 18%
belongs to the age group of 20-30 years.
 The samples interviewed were males which accounts for 66% and the remaining
34% were females, which leads to a conclusion that the involvement of females in
the retail business is less as compared to male.
 The retailer surveyed for the purpose were: 24% Electronics, 22% General stores,
20% Garments, 14% Pharmaceuticals, 6% Book stores, 6% Grocery and 8%
others, which were selected at random after considering the prevailing trend of
customers in the market.
 The average experience for doing business of the sample considered comes to 20
years.
 Before the introduction of online business the profit margin of the retailers was
reasonable i.e. on an average 15% and above. This is fairly a good return on
investment after meeting all the expenses.
 80% are in the favor that turnover has decreased in past 3 years wherein 20% felt
that there is no decrease in average turnover in past three years.
 96% of the respondents said that there is decrease in profit margin due to e-
commerce wherein only 4% felt that there is no decrease in profit margin.
 74% of the respondent said that they have increase the rates of discount offered to
customers so as to increase the sales and profit, wherein 26% of the respondents
said that they have not increased any discount rates.
 Generally online prices are lower than the offline retail business prices due to
various reasons. When asked whether they would like to sell the product at online
price, majority of them replied negatively because it was not a profitable idea.

58
 Majority of samples i.e. 68% agreed that their business has been affected by
online shopping. The fact is that consumers are aware about the various online
stores and their attractive prices and great discounts. This makes them to purchase
online rather than to buy from the traditional retailers who quote a higher price
than the online retailers. This has affected their businesses to a large extent.
 68% of the respondents agreed that their sales have decline due to e-commerce.
 The impact of online business in terms of profit, debt and its future. Majority of
the respondents were of the opinion that their profitability has been affected to
large extent followed by increase in their debt. Some were even thinking to close
down their business due to stiff competition.
 The competition faced by conventional retailers due to online business is
increasing as a result some retailers take remedies to face such competition. 44%
of the retailers reduced their prices, 40% give Gifts and Offers and 12% provide
home delivery.
 56% of the respondents responded cheap quality products to be reason behind low
prices of online products. Around 28% of the respondents were of the opinion that
prices of online products are low due to less number of middle men, whereas 12%
were of the view that the prices are low due to selling of second hand products.
 84% are in the favor that competition has increased on account of online shopping
wherein 16% felt that there is no competition.
 Out of the 50 retailers interviewed, 40% considered lower prices to be the main
reason, 28% said that lower prices, time and variety of products are reasons for
people to shop online, 18% were of the opinion that the time saving was the main
reason and remaining thought that variety of products played major role. In any
case, the benefit available to customers may be lower prices, variety of products,
saving in time are the main reasons for online shopping by the customers.
 After the introduction of online shopping, traditional retailers face number of
problems such as less profit. 48% of the retailers were of the opinion that in future
they would like to convert their retail store into online store. However, majority of
them still wants to continue with their traditional way of selling the products.

59
5.2 CONCLUSION

Majority of the respondents were from the age group of 31-40 years out of which 51% do
not shop online. Most of the respondents had a profit margin of 10-15% before the
introduction of online shopping. However emergence of online shopping affected their
business profitability. Many retailers turnover had decreased after the emergence of
online shopping despite the fact that 19% have established their business for more than
20 years. Almost all the retailers that are 83% were facing growing challenge on account
of online shopping of which the electronic retailers and garment retailers have been
severely affected. 62% of the retailers still felt that people prefer personal shopping so
they do not consider it profitable to sell their products at online prices. More than half of
the used sales promotional techniques to attract customers like reduction in prices, gifts
and offers, home delivery, etc. The 38% retailers, who were of the opinion that people
prefer online shopping, felt that low prices, variety of products and time saving are the
main factors for people to shop online. Cheap quality products was the main reason that
55% of the retailers felt that online prices are low. Despite people switching from offline
shopping to online shopping most of the retailers would not like to convert their retail
stores into online stores.

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5.3 SUGGESTIONS

Due importance should be given to customers and their basic needs should taken care of.
Retailers should offer gifts and discounts facilities during festival season. There should
be adequate sales girls/boys to attend the customers. Retailers should keep reasonable
price for the product. Depending upon the type of outlet home delivery option should be
available. General stores should keep the stock available as insufficient stock leads to
decrease in number of customers. Retailers must not stick to one type of sales promotion
techniques but try and adopt different techniques.
Retailer should treat each and every customers same way and give equal attention
irrespective of their status. Create new opportunities for customers to purchase more
frequently from stores. Retailers should keep goods return policies and cash back offer.
Use suggestion box, extend store hours and accept plastic money without any extra cost.
Trail facilities should be provided on clothing/footwear by all the websites. Fast delivery
or shipping of products may interest more customers. The exact date of delivery should
be given. There should not be hidden charges. Conventional retailers have no online
shopping facilities. So it will be better if they have it in order to keep up with market
competition. People fear of hack or fraud as far as using credit or debit card is concerned,
so more security should be provided.

61
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 ANNEXURE

QUESTIONAIRE
Hello I am Gauri Gathe, M.Com student. As a part of my curriculum, I am
working on a research project on a topic- “A STUDY ON IMPACT OF E-
COMMERCE ON RETAIL STORES”
To make this research successful, I request you to kindly fill the below
questionnaire.

A) PERSONAL QUESTIONS

1) NAME-
2) MOBILE NUMBER-
3) AGE-
o 20-30
o 31-40
o 41&ABOVE
4) GENDER-
o MALE
o FEMALE

B) SURVEY QUESTIONS

1) NATURE OF BUSINESS
o GENERAL STORES
o EECTRONICS
o GROCERY
o GARMENTS
o PHARMACEUTICALS
o BOOK STORES
o OTHERS

65
2) YEARS OF BUSINESS
o LESS THAN 1 YEAR
o BETWEEN1-10 YEARS
o BETWEEN 10-20 YEARS
o MORE THAN 20 YEARS
3) PROFIT MARGIN BEFORE ONLINE BUSINESS
o 5-10%
o 10-15%
o 15%&ABOVE
4) ANY DECREASE IN AVERAGE TURNOVER IN THE PAST THREE YEARS
o YES
o NO
5) ANY DECREASE IN PROFIT MARGIN
o YES
o NO
6) ANY INCREASE IN DISCOUNT RATES OFFERED TO CUSTOMER IN
RECENT TIMES
o YES
o NO
7) IS IT PROFITABLE TO SELL AT ONLINE PRICES1
o YES
o NO
8) IS THERE ANY IMPACT ON BUSINESS DUE TO E-COMMERCE
o YES
o NO
9) IS THERE ANY EFFECT ON SALES
o YES
o NO

66
10) PROBLEMS FACED BY RETAILERS
o LESS PROFIT
o INCREASING DEBT
o VERGE OF CLOSURE
11) WHAT REMEDIES DID YOU TAKE IN ORDER TO INCREASE SALES
o REDUCE PRICES
o GIFT AND OFFERS
o HOME DELIVERY
o ANY OTHER
12) REASONS BEHID LOW PRICES OF ONLINE PRODUCTS
o CHEAP QUALITY PRODUCTS
o SECOND HAND PRODUCTS
o LESS NUMBER OF MIDDLEMEN
o ANY OTHER
13) IS THERE ANY EFFECT ON COMPETITION
o YES
o NO
14) REASONS FOR ONLNE SHOPPING
o LOW PRICES
o TIME SAVING
o VARIETY OF PRODUCTS
o ALL OF THE ABOVE
15) ANY INTENTION TO CONVERT OFFLINE TO ONLINE BUSINESS
o YES
o NO

67