Dissertation Report On CONSUMER PERCEPTION ON ONLINE SHOPPING

By

SHIKHA MBA-IV sem 0903870045

Prof. Neha P. Shrotiya
ITS, Mohan Nagar Ghaziabad In Partial Fulfillment of Award of Master of Business Administration

Under the Supervision of

DECLARATION 1

I, Gurmeet Singh student of Masters of Business Administration from Amity Business School, Amity University Uttar Pradesh hereby declare that I have completed Dissertation on “
STUDY OF CHANGING ATTITUDE OF INDIAN CONSUMERS TOWARDS ONLINE SHOPPING

” as part of the course requirement.

I further declare that the information presented in this project is true and original to the best of my knowledge.

24/03/09 Noida

Gurmeet Singh A0101907148 MBA (G) 2007-09

CERTIFICATE 2

I Ms.Rushina Singhi hereby certify that Gurmeet Singh, student of Masters of Business Administration at Amity Business School, Amity University Uttar Pradesh has completed dissertation on “Study of changing attitude of Indian consumers towards online shopping”, under my guidance.

This Dissertation is prepared in partial fulfillment of Master of Business Administration to be awarded by Amity University, Uttar Pradesh.

To the best of my knowledge, this piece of work is original and no part of this report has been submitted to any other Institute/University earlier.

Date Singhi

Ms.Rushina

Lecturer Amity Business School Amity University

3

the project would not have been successful. Gurmeet Singh A0101907148 MBA (G) BATCH OF 2009 4 . Ms. Rushina Singhi for his constant support and guidance.ACKNOWLEDGEMENT I express my sincere gratitude to my Dissertation Guide. I am also indebted to my parents and friends for their direct or indirect support and cooperation. without whose cooperation. this project would not have been successfully completed I owe my enormous intellectual debt towards my guide. Without his help and cooperation. who have augmented my knowledge in the field of Marketing I thank all the respondents.

and then they can further develop their marketing strategies to convert potential customers into active ones. perceived usefulness. A model was developed indicating online shopping behavior and acceptance among customers in India. and the relationships between these factors and the type of online buyers. This research found that information. This project is a part of study. which influence consumer perceptions of online purchasing. perceived enjoyment and security/privacy are the five dominant factors. Factor analysis technique in SPSS was used to classify these factors which buyers keep in mind while shopping online. and focuses on factors which online Indian buyers keep in mind while shopping online. CHAPTER -1 INTRODUCTION 5 . If E-marketers know the factors affecting online Indian behavior. The model was tested with a survey sample (n=150). ease of use. while retaining existent online customers.ABSTRACT The growing use of Internet in India provides a developing prospect for online shopping.

Many of their studies have posited new emergent factors or assumptions that are based on the traditional models of consumer behavior. Many experts are optimistic about the prospect of online business. and then examine their validity in the Internet context.Internet is changing the way consumers shop and buys goods and services. Along with the development of E-retailing. but also to compare prices. thereby reducing the price of their products and services in order to stay ahead in highly competitive markets. It has been more than a decade since business-to-consumer E-commerce first evolved. 6 . Many companies have started using the Internet with the aim of cutting marketing costs. Customers use the Internet not only to buy the product online. to take feed back and also to conduct satisfaction surveys with customers. Scholars and practitioners of electronic commerce constantly strive to gain an improved insight into consumer behavior in cyberspace. to sell the product. the practitioners of business-to-consumer commerce should not lose confidence. the Internet provides a unique opportunity for companies to more efficiently reach existing and potential customers. product features and after sale service facilities they will receive if they purchase the product from a particular store. communicate and disseminate information. In addition to the tremendous potential of the E-commerce market. Companies also use the Internet to convey. Although most of the revenue of online transactions comes from business-to-business commerce. researchers continue to explain E-consumers’ behavior from different perspectives. and has rapidly evolved into a global phenomenon.

Wi-Fi & Wimax is also getting tested in Bangalore and other cities in India. Factors That Boost Online Shopping in India • Rapid growth of cybercafés across India 7 . If we observe the growth of Indian online transactions (Info by: IAMAI). More and more Indians are going to online shopping and the frequency of India’s online buying is crossing the overall global averages.Online shopping in India It is a fact that a great online shopping revolution is expected in India in the coming years. This will increase the usage as it goes more on wireless internet. it is getting doubled year by year. Indians are proving every time that they can beat the world when it comes to figures of online shopping. The usage of internet in India is only 4% of the total population. There is a huge purchasing power of a youth population aged 18-40 in the urban area. with good competition among the providers. This is also getting increased day by day as the costs of computers are decreasing and net penetration is increasing. The cost of internet usage is also getting lower.

Worldwide e-commerce is only growing at the rate of 28%.• • • • Access to Information The increase in number of computer users Reach to net services through broadband Middle-class population with spending power is growing. since India being a younger market. and 46% are in the 26-35year range. 8 . Around 25% of regular shoppers in India are in the 18-25 age groups. These people have very little time to spend for shopping. . Many of them have started to depend on internet to satisfy their shopping desires. • • Inline with global trends finally India has also started shopping online these days. Few Facts about Online Shopping The figures from IAMAI show that the internet users in India will grow to 200 million by 2010. the growth of e-commerce is expected at 51% in the coming years. • Indian online matrimonial sector is worth around $230 million. There are about 200 million of middle-class population good spending powers. 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.

There is a strong booming young adult population in India with good levels of disposable income. There are over 120 million people online in India and this is expected to grow to 200 Million by the end of 2010 . electronic gadgets (42%). apparel gift certificates( 11%) and sporting goods (7%). magazines (18%).Most popular online shopping products include: books (45%). airline tickets (28%). tools (16%). hotel rooms (22%). jewelry (17%). gifts (34%). home appliances (16%). toys (16%). CHAPTER-2 LITERATURE REVIEW 9 .Over $50 Billion and growing rapidly . IN INDIA . apparel (35%).• Indians are also Shopaholics like other Asians. movie downloads (21%). beauty products (12%). movie ticket (15%). computer and peripherals (32%). music downloads (21%). accessories apparel (35%). health and fitness products (12%). railway tickets (38%).

post-purchase behavior is critical in the marketing perspective. the relevant market structures and the characteristics of the product in question. there are general models of buying behavior that depict the process which consumers use in making a purchase decision. [1997] commented that it is an early stage in Internet development in terms of building an appropriate dedicated model of consumer buying behavior. to the search for information on problem solutions. Consumers' attitude 10 . The information gathered provides the basis for the evaluation of alternatives.The current literature on consumer online purchasing decisions has mainly concentrated on identifying the factors which affect the willingness of consumers to engage in Internet shopping. The traditional framework for analysis of the buyer decision process is a five-step model. Decision sequences will be influenced by the starting point of the consumer. The classic consumer purchasing decision-making theory can be characterized as a continuum extending from routine problem-solving behaviors. as it eventually affects consumers’ perception of satisfaction/dissatisfaction with the product/service. Nevertheless.. These models are very important to marketers as they have the ability to explain and predict consumers’ purchase behavior. the consumer progresses firstly from a state of felt deprivation (problem recognition). Finally. In the domain of consumer behavior research. Peterson et al. This classic five stage model comprises the essence of consumer behavior under most contexts. 2001]. through to limited problem-solving behaviors and then towards extensive problem-solving behaviors [Schiff man et al. Given the model. the management of marketing issues at each stage in the virtual environment has to be resolved by individual E-marketers.

the security of online transaction systems and the uncertainty of product quality. Jarvenpaa et al. 2005 Todd [1997] proposed a model of attitudes and shopping intention towards Internet shopping in general. One of the consequences of trust is that it reduces the consumer’s perception of risk associated 11 .towards online shopping is a prominent factor affecting actual buying behavior. VOL. the shopping process. Among those factors the risk perception of users was demonstrated to be the main discriminator between people buying online and people not buying online. Trust is interwoven with risk [McAllister. [2000]. in which perceptions of the store's reputation and size were assumed to affect consumer trust of the retailer. The model included several indicators. In another study. Source: Jarvenpaa Journal of Electronic Commerce Research. affordability of merchandise. Consumer risk perceptions and concerns regarding online shopping are mainly related to aspects involving the privacy and security of personal information. control over. In the research conducted by Vellido et al. nine factors associated with users' perception of online shopping were extracted. [2000] concluded that the attitude and the risk perception affected the consumer's intention to buy from the store. 6. the value of the product. Jarvenpaa et al. and inversely related to the perception of the risks involved in buying from that store. and NO. customer service and ease of use of the shopping site. 1995]. [2000] tested a model of consumer attitude towards specific webbase stores. The level of trust was positively related to the attitude toward the store. the shopping experience. and convenience of. the quality of service offered by the website and the risk perceptions of Internet retail shopping.2. Other discriminating factors were. belonging to four major categories.

1994]. Mayer et al. rather than just maximize profit. Benevolence is the extent to which the seller is perceived by the buyer as wanting to ‘do well’. there is not much information available to the buyer regarding the seller. competencies and characteristics that a seller has in a specific domain. 12 . In Internet shopping.with opportunistic behavior by the seller [Ganesan. In this context. [1995] developed a model which combines traditional marketing philosophy on consumer motivation to buy and the trust model. Mayer et al. as trust is regarded as an important factor under conditions of uncertainty and risk in traditional theories. trust propensity. sellers need to convince buyers of the competence of their companies in the Internet shopping business. Lack of trust is frequently reported as the reason for consumers not purchasing from Internet shops. A buyer with a high propensity to trust will more likely be a potential customer than a buyer with a lower propensity. prior to purchase. is an important antecedent of trust. benevolence and integrity constitute the main elements of trustworthiness. which is a personality trait possessed by buyers. Sellers have to convince buyers that they genuinely want to do good things for buyers. [1995] proposed that ability. In this model. Ability refers to skills.

CHAPTER-3 13 .

To study the consumer’s attitude towards mobile advertising 14 . Objectives of the Study The objective of this study is to synthesize the representative existing literature on consumer online shopping attitudes and behavior based on an analytical literature review. The specific objectives of this research are: 1. which in turn provides E-marketers with a constructional framework for fine-tuning their E-businesses’ strategies. 2. But at present the marketer does not know the attitude of consumers towards online shopping and what are the factors that shape the consumer’s attitude towards online shopping. To identify the factors that can explain the differences in online buying behavior among different online buyers. 3.Project Profile Problem Definition Online selling can be a very effective tool for a marketer to reach his customers. this study attempts to provide a comprehensive picture of the status of this subfield and point out limitations and areas for future research. then he really can use internet in the most effective manner to market his products. In doing so. Also what are key concerns from the point of view of consumer while online shopping? If the marketer gets to know these factors. To identify key factors influencing online shopping purchase behavior. The purpose of this research study is to investigate online consumer behavior. So this study makes attempts to solve this problem.

The Geographical area covered was Sec-18 Noida. It is especially important to know what is the consumers’ attitude towards online shopping. The Study was conducted among the Internet users. Cannaught place. Sec-29 Noida. The Study was based on a Schedule of Questions. benefits perceived by them and what factors attract them towards online shopping. Rationale of Study Selling on internet has a large potential due to the very high targeting possibilities As a result of this exceptional development. the online selling industry is becoming interested in the use of internet to reach their customers.Scope of the Study 1. Hence a better understanding of online shopping is critical to the effective use of this channel of approach to the consumer. 15 . Delhi. 2. 3. Karol Baugh.

16 .

4 & 5 ) that play an important role in online purchase. So this study makes attempts to solve this problem.CHAPTER -4 Research Methodology Phase 1: Problem definition: Online selling can be a very effective tool for a marketer to reach his customers. then a model was proposed leading to online shopping. But at present the marketer does not know the attitude of consumers towards online shopping and what are the factors which shape the consumer’s attitude towards online shopping. 17 . then he really can use internet in the most effective manner to market his products. Phase 2: Determination of information needs and sources: The following was the information required: • • • • What is consumer’s attitude towards online shopping? What are the key concern areas for consumers while online shopping? Which factors shape the consumer’s attitude towards online shopping? How has been recent shift taking place in online shopping? Phase 3: Research Framework: Eleven different factors were identified by studying the existing models of consumer attitudes(Refer Annexure3. Also what are key concerns from the point of view of consumer while online shopping? If the marketer gets to know these factors.

intention to shop online. And random sampling was done among the internet users. have been found to have direct impact on consumer satisfaction. online purchasing. online purchasing. The analysis of the data was carried out using SPSS software and the various tools used were Cross Tabs. perceived enjoyment. we identify a total of eleven interrelated factors for which the empirical evidences show significant relationships. information on online shopping. decision making and online purchasing are proposed to be two-way relationships due to the reciprocal influences of each on the other. perceived usefulness. quality of internet connection. quality of internet connection )are found to be ordinarily independent and five (attitude toward online shopping. information on online shopping. security and privacy. and Factor analysis. and consumer satisfaction) are ordinarily dependent variables.The data was collected only through Questionnaires. In addition. The relationships between satisfaction. and consumer satisfaction. three of the antecedents. perceived ease of use. perceived ease of use. intention. PROPOSED MODEL After examining the 10 empirical studies. Consumer satisfaction is considered to be a separate factor in this study. online shopping decision making. perceived enjoyment. These ten factors are perceived usefulness. decision making. Six (perceived usefulness. perceived ease of use. It can occur at all possible stages depending on consumer’s involvement during the online shopping process. perceived enjoyment . The sample size was 150. security and privacy. attitude. attitude towards online shopping. 18 . intention to shop online.

This is seen as an intrinsic source of motivation to use a particular application. 19 .Perceived Usefulness Perceived usefulness is defined as the degree to which a person believes that using a particular system would increase his or her job performance. Perceived Ease of Use This is an important factor that affects the acceptance of a particular information system. This factor becomes even more important in case of High Involvement product. This factor eases the decision of the user to actually buy the product or not. Hence an application perceived to be easier to use would more likely be accepted by the user. Perceived Enjoyment Enjoyment refers to the extent to which the activity of using a computer is perceived to be enjoyable in its own rights. because the ultimate aim of any person is the superior job performance. It is an important factor affecting acceptance of an information system. It is defined as the degree to which a person believes that using a particular information system would be free of effort. or which product to buy. Amount of Information Amount of information is defined as the information which is available for the product which a person wants to buy through online shopping.

The latter also contributes to customer loyalty. Consumer’s intention to 20 .Security and Privacy Security and privacy are the main factors which hinder the growth of online shopping. to what extent consumers think that shopping at this store is appealing).. Commonly. this factor is measured by consumer’s willingness to buy and to return for additional purchases. It refers to:1) The consumer’s acceptance of the Internet as a shopping channel 2) Consumer attitudes toward a specific Internet store (i. It is believed that consumer attitudes will affect intention to shop online and eventually whether a transaction is made. The user is concerned about his ID and Password which can be stolen by persons with wrong intentions and then misuse it. At the same time they are concerned that their personal information may be sold to the third party which poses a serious threat to their privacy. Quality of Internet Connection Not only is the presence of internet connection necessary but also its Quality is important to shop online.e. This is an important factor which determines whether the user would shop online or not because presence of internet is a basic necessity for this mode of shopping Attitude towards online shopping Consumer’s attitudes toward online shopping have gained a great deal of attention in the empirical literature. Intention to shop online Consumer’s intention to shop online refers to their willingness to make purchases in an Internet store.

Initially. and influences their decision-making and purchasing behavior. vendor/service/product characteristics. consumers typically screen a large set of products in order to identify a subset of promising alternatives that appears to meet their needs. there appears to be an impact on user’s satisfaction. there is evidence of reciprocal influence between intention to shop online and customer satisfaction. Though it is important. with most empirical research using measures of frequency (or number) of purchases and value of online purchases as measures of online purchasing. Online purchasing This is the most substantial step in online shopping activities. In addition. Bellman et al. They then evaluate the subset in greater depth. website quality. 1999) 21 . performing relative comparisons across products based on some desirable attributes and make a purchase decision. According to Haubl and Trifts (2000). other less commonly used measures are unplanned purchases Online purchasing is reported to be strongly associated with the factors of personal characteristics. and decision making (Andrade 2000. comparison of alternatives. In addition.shop online is positively associated with attitude towards Internet buying. and choice making. intention to shop online. The results bearing on this factor directly influence consumer’s purchasing behavior. Online shopping decision making Online shopping decision-making includes information seeking. attitudes toward online shopping. potential consumers appear to use a two-stage process in reaching purchase decisions. there are only five studies that include it.

Consumer satisfaction
It can be defined as the extent to which consumer’s perceptions of the online shopping experience confirm their expectations. Most consumers form expectations of the product, vendor, service, and quality of the website that they patronize before engaging in online shopping activities. These expectations influence their attitudes and intentions to shop at a certain Internet store, and consequently their decision-making processes and purchasing behavior. If expectations are met, customers achieve a high degree of satisfaction, which influences their online shopping attitudes, intentions, decisions, and purchasing activity positively. In contrast, dissatisfaction is negatively associated with these four variables (Ho and Wu 1999; Jahng et al. 2001; Kim et al. 2001).

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Information on online shopping Security & Privacy

Attitude towards online shoppin g

Intention

to shop online

Decisio n Making

Online
Purchase

Perceived Usefulness Perceived Ease of use Perceived Enjoyment

CONSUMER SATISFACTION

Phase 4: Sampling Design: Sample Universe
The sample universe includes the people of NCR region.

Sample Size
The sample size of the participants was of 150 customers
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Phase 5: Data Collection:
A Survey method was undertaken to complete this project. For this Structured Questionnaire was designed using various scaling techniques. The Questionnaire (shown in Annexure) was used mainly to test the model proposed for Attitude towards online shopping. Likert five point scales ranging from Strongly Agree to strongly disagree was used as a basis of Questions. The data collection was done over a period of 8 weeks This was done by going directly to the respondents or through mails.

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FACTOR ANALYSIS 1) FOR FACTORS AFFECTING ONLINE SHOPPING Respondents were asked to rate the factors influencing online shopping purchase behavior.CHAPTER-5 ANALYSIS The Research was conducted by mode of questionnaire and respondents obtained following results after analyzing the sample size of 150 questionnaires.Here are those factors: • • • • • • Information about online products and services Perceived usefulness Ease of use Perceived enjoyment Security Quality of internet 25 . In all six different factors were taken in questionnaire for getting the responses of consumers . The analysis was done using factor analysis and cross tabs.

667 Sampling Adequacy.000 Communalities 26 . RESULTS OF FACTOR ANALYSIS KMO AND BARTLETT'S TEST Kaiser-Meyer-Olkin Measure of . 15 .193 Sphericity Square df Sig.Factor analysis was done using SPSS to extract the most important benefits derived by customers’ point of view from the usage of online shopping. Chi83. Bartlett's Test of Approx.

000 Percieved usefulness Ease of use 1.572 . Total Variance Explained 27 .000 .763 .673 connection Extraction Method: Principal Component Analysis.Initial Information 1.812 .675 .000 Extraction .260 1.000 Percieved 1.000 enjoyment Security 1.000 Quality of internet 1.

276 22.592 90.853 42.308 Cumulat ive % 40.253 .584 Rotation Sums of Squared Loadings % of Varianc Total 2.178 6 .505 28 .584 1.338 5 .Extraction Sums of Initial Eigenvalues % of Compo Varianc Cumulat Squared Loadings % of Varianc Cumulat ive % 42.276 72.797 .840 96.584 nent Total e ive % Total e 1 2.822 100.350 5.563 Percieved usefulness Ease of use .746 4 .836 Percieved enjoyment Security .853 72.732 3 .571 42.338 e 40. Component Matrix (a) Component 1 2 Information .886 -.571 42.853 2.853 2 1.417 1.695 11.000 Extraction Method: Principal Component Analysis.355 .184 19.732 72.201 .365 -.970 16.184 19.166 -.162 78.229 3.

Rotated Component Matrix(a) Component 1 2 Information .362 Percieved usefulness Ease of use . a 2 components extracted.139 .Quality of internet .873 Percieved enjoyment Security .463 -.819 connection Extraction Method: Principal Component Analysis.054 .040 .684 .213 29 .664 .890 .456 .

The principal component analysis is giving 72. Two components have been extracted with Eigen values more than 1 after principal component analysis and rotated component analysis.334 2 -.790 connection Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.334 . Interpretation: The value of KMO test is coming out to be 0. Rotation Method: Varimax with Kaiser Normalization.943 .667.222 . Component Transformation Matrix Componen t 1 2 1 . The output value shows that following factors can be safely extracted after factor analysis: 30 . a Rotation converged in 3 iterations.Quality of internet -.584 as commutative % which is good enough because data redundancy is less. which suggests the validity for factor analysis.943 Extraction Method: Principal Component Analysis.

• • • • • Information about online products and services(Extracted from component 2) Perceived usefulness (Extracted from component 1) Ease of use(Extracted from component 1) Perceived enjoyment(Extracted from component 1) 2) FOR FACTORS CONCERNING ONLINE SHOPPING Respondents were asked to rate the factors of concern for online shopping purchase behaviour.In all six different factors were taken in questionnaire for getting the responses of consumers .Here are those factors: • • • • • • Not sure of product quality Cannot bargain/negotiate Not sure of security of transactions/credit card misuse Need to touch and feel the product Significant discounts are not there Have to wait for delivery 31 .

292 20.437 40.625 40.625 2.092 Rotation Sums of Squared Loadings % of Cumulative not sure of product quality .809 13.636E-15 100.165 6 -2.024 .964 1 2.964 cannot bargain/negotiate -.000 have to wait for delivery .556 there 5 .93361.004 of .357 17.728 -.065 -.292 60.RESULTS OF FACTOR ANALYSIS Component Matrixa Initial Eigenvalues 1 Total Variance Explained Extraction Component Sums of Squared 2 Loadings3 % Cumulative -.418 1.145 1. -.021 17.000 16 a.221 1.182EExtraction Method: Principal Component Analysis.052 need to touch and feel20.065 product 1.004 .013 significant discounts are not -.211 . 3 components extracted.491 91.045 % of Variance 40.021 17.065 1.625 20. -3.235 Variance % -.437 transactions/credit card mis use 2 1.226 3 Total 2.284 32 .507 8.649 78.055 40.428 .444 100.052 78.416 Cumulative % 40.428 the .161 Total Component Total Variance % not sure of security of .625 40.721 .055 -. Extraction Method: Principal Component Analysis.226 61.796 4 .013 78.

089 -.115 -.236 .069 .152 .953 transactions/credit card mis use need to touch and feel the .220 3 . Rotation Method: Varimax with Kaiser Normalization. 33 .050 . Rotation Method: Varimax with Kaiser Normalization.762 .077 -.152 2 .972 Extraction Method: Principal Component Analysis.953 -.992 -. Rotation converged in 4 iterations.050 3 .087 there have to wait for delivery .793 -.103 .046 product significant discounts are not -. a.Rotated Component Matrixa Component 1 not sure of product quality cannot bargain/negotiate .973 -.966 . Component Transformation Matrix Compon ent 1 2 3 1 .213 .059 Extraction Method: Principal Component Analysis.085 2 .010 .048 .765 not sure of security of .

Interpretation: The principal component analysis is giving 78. The output value shows that following factors can be safely extracted after factor analysis: • • Not sure of product quality (Extracted from component 1) Transactions/credit card misuse (Extracted from component 1) Have to wait for delivery (Extracted from component 1) Significant discounts are not there (Extracted from component 2) • • 34 .065 as commutative % which is good enough because data redundancy is less. Three components have been extracted with eigen values more than 1 after principal component analysis and rotated component analysis.

35 .CROSS TABS 1) BETWEEN TIME OF LAST PURCHASE AND METHOD OF PAYMENT Interpretation: The most common method of payment is by debit card/credit card for the purchase over internet irrespective of the time of purchase of internet. Second most common method is cash on delivery.

2) BETWEEN TIME OF LAST PURCHASE AND DECISION FACTOR FOR SELECTING SITE FOR SHOPPING ONLINE Interpretation: 36 .

Also when people come across any special offer that helps in decision making for online purchase.The most common factor for making decision for online purchase is through information by search engine. 3) BETWEEN TIME OF LAST PURCHASE AND AGE GROUP 37 .

4) BETWEEN TIME OF LAST PURCHASE AND MONTHLY INCOME 38 . That means youngsters are getting attracted towards concept of online shopping.Interpretation: People below the age group of 40 are more actively involved in online shopping.

000-50. This explains the fact why online shopping is becoming popular amongst younger workforce earning between 20k-50k.Interpretation: People earning between Rs. 39 .000 is more keen towards online shopping. 20.

security and privacy. This may leave some other prominent empirical studies out. demographics. three out of the five dependent variables (consumer attitudes. may influence consumer’s satisfaction. and behavior. and online purchasing. The role of the external environment. Owing to time limitation. information on online shopping. More importantly. This seems to constitute the main stream of research in this area. website quality. online shopping decision making. quality of internet connection) receive the most attention. Any number of factors. only a few number of journals were searched. and consumer satisfaction are less well represented in the proposed model.LIMITATIONS OF THIS STUDY Limitation of the study is the selection of the existing studies. the extent to which customers are 40 . IMPLICATIONS AND RECOMMENDATIONS FOR FUTURE RESEARCH As the proposed model indicates. intention. In addition. owing to the multidisciplinary nature of online shopping.. perceived ease of use. intentions. perceived enjoyment. attitude towards online shopping. It is found that personal characteristics such as vender/service/product characteristics and website quality significantly affect online shopping attitudes. and purchasing behavior) and three out of the five independent variables (perceived usefulness. intention to online shopping. online shopping decision making. it would be very interesting to compare IS literature to other disciplines that study online shopping attitudes and behavior. including vender/service/product characteristics.

satisfied is directly related to attitudes toward online shopping or toward specific Internet stores.Delhi and Mumbai are driving the growth: CITY Mumbai Delhi Chennai Kolkata Bangalore LOGGING ONTO E-SALES Share in 08-09 Projection for 09-10 24% 40% 20% 30% 7% 11-12% 7% 10-11% 6% 9% 41 . but are expected to increase by 150 percent by 2009-10 . GENERAL DISCUSSIONS CHANGING ATTITUDE TOWARDS ONLINE SHOPPING: Malls malls springing up everywhere and yet people are e-shopping! And not in small numbers either. Today (2008-09) the figures are touching Rs. 2200 crore.to Rs 5. The relative importance of this factor in determining such consumer behavior as repeat purchases suggests that further research on consumer satisfaction with online shopping needs to be conducted. according to Assocham (Associated Chambers of Commerce & Industry of India). E-commerce figures are going through the roof.500 crores! And two metros .

However. Knowing that in India sizes vary from brand to brand and quality is inconsistent. travel bookings and even books and movies seem fine to buy online. people are also buying clothes. few people like to travel for two hours just 42 . jewelry. Convenience It is the major reason. say Phoenix (central Mumbai). computer and peripherals. Both the cities are spread out over a large area and the best stores in both these cities are often concentrated in certain ‘posh’ areas. Assocham says that books are the hottest selling item on the internet.It was never thought that Indians would go in for e-shopping in such a big way. electronic gadgets and railway tickets. Of course. home appliances. toys. huge malls have come up in the suburbs as well. Ticketing. and India’s biggest mall Nirmal Lifestyle is in far-flung Mulund but often you find a better choice of sizes and styles choice in other malls. beauty products and health and fitness products. And demographics show that the population of Mumbai is now concentrated in the suburbs. Here are few reasons for this: 1. In fact most products bought and sold off online are: books. Traffic for e-commerce sites is mostly coming from the two metros of Delhi and Mumbai. even of some electronic items. gifts. And though both Mumbai and Delhi have transport system. and a few are buying home tools and products. how is it that there are people buying these items online? Well. In Mumbai for example there are certain items you get only in Crawford market which is at the other end of town in South Mumbai.

The mall craze has started only now. Delhi too has a high literate population (81. Indore (72 percent) or Warangal (73 percent) its clear why its the metros which are going to continue to lead e-shopping. at 83 per cent.8 per cent) and so does Chennai (80. Increase in the Internet users 43 . home delivery is a concept that Indians are familiar with and love. although Bangalore has a higher literacy rate than Delhi. or asking a friendly neighbourhood kirana (grocer) to deliver groceries home and this system is still thriving.9 percent). 2. 3 .to get to a shop at the other end of town.8 percent. Oddly.2 per cent). Literacy Rate and the Cities’ Internet Savvy Population Most cities in India have a higher literacy rate as compared to the national average of 64.) If one compares these rates to literacy rates of cities like Patna (62. the city’s share of e-commerce is not very high. In Delhi. Earlier it was a choice between sweating it out in small crowded markets. safety is also an issue for women traveling alone in the evenings. Jaipur (67 percent). Kolkatta too has a literacy rate (80. In fact Mumbai has a highest literacy even amongst the cities (86 per cent). 4.1 percent.Home delivery concept In any case. Clearly the transport systems leave much to be desired.

The greater the number of sellers and buyers.Increasing penetration of Internet connectivity and PCs has led to an increase in the Internet users across India. In addition to online buyers. 44 . These segments are the users of advanced applications and technologies online and are most likely to be heavy ECommerce users. Increase in the number of buyers and sellers The success of a marketplace depends on the presence of a large number of buyers and a large number of sellers. The demographic segments that have witnessed maximum growth comprise college going students and young persons. the faster the market grows. many offline stores have begun to sell their products in the online marketplace. 5.

bookings. Report Finds Heavy Spenders Driving Sales By Devin Comiskey August 16. 45 . computer peripherals. Delhites seem to prefer buying jewellery online as compared to any other city Indian E-Comm. Kolkatta prefers to buy music and movies online Mumbai leads in all categories. the report finds there are currently more than 10 million shoppers online in India. While current trends point to increased e-commerce growth in India.PRODUCT PREFERENCES CITY WISE • Bangalore loves to buy books. gifts movies. 2008 A Survey by Indian research organization Juxtconsult found that more and more Indian Internet users are opening their wallets online. electronic gadgets. While such hurdles as limited broadband access and security concerns remain. the online marketplace in the country of more than 1 billion people is still relatively small. actually just about everything. • • • Well. except jewellery.

.) The report also found that buying and search patterns among Indians differ between genders. nine percent to 25 percent are buying online. "While 43 percent of male users buy online." says Juxtconsult.Juxtconsult's survey found that 40 percent of all urban Internet users buy online." (1. SECURITY FEARS PERSIST Juxtconsult says the motivation for Indian users to make purchases online varies. "It is interesting to note that two out of every three heavy spenders are also 'netholics." states the report. The survey was conducted in April 2008and sampled more than 30.000 users. Women tend to search more. "This section of buyers spends 5.000 Indian rupees is currently equal to approximately $23 US. only 25 percent are spending more than 1.Of all those who buy online.' those who are on the net for more than three hours per day.000 rupees per month. whereas 33 to 47 percent are searching the net for product information. but users fear compromised personal information is still a great risk when it comes to e-commerce. 46 . women are more guarded when it comes to the online market. Defying their more common attitude towards shopping. only 31 percent of urban female users are consumers as well.000 rupees per month while the (remaining) 75 percent bill less than 1. while 42 percent of the sales originate through just five percent of consumers.." it says. "Depending on the product type.000 rupees or more per month on the net.

"However. Clearly. "Ironically. are books and CDs . A Meta search engine searches all the online travel sites (including the airlines sites as well) and displays the best deals for the user. the concern of possible misuse of credit car or personal information is extremely significant among online buyers. such as Make My Trip India Pvt.making up 25 percent of all online purchases. with almost 55 percent of them voicing their concern. computer hardware and software.000 crore ($400 million) religious travel market • Opportunity in Online Travel Industry: $2billion 47 . according to Juxtconsult. Ixigo and Ezeego are two players in this space. are battling to win over India’s Rs16. Thirty-two percent of them look to shop online with this purpose. The Internet is still being used more for searching than buying products and services. at present only a small tribe among them is driving online shopping momentum. essentially." says Juxtconsult. Though a noticeable proportion of net users are also net consumers."The single biggest motivation for buying online for net users is saving time. Ltd." says the report. with only 13 percent buying them." says the report. the online market in India is blossoming but is yet to take off in a considerable way. despite having the home advantage are among one of the least bought products online. • Travel websites. Convenience of shopping '24x7' and home delivery are other major incentives. LATEST • A new trend in this space is that of Meta search engines. tackling and countering the issue of online safety figures as an imminent challenge for net marketers. "In sum." Books. Ltd and Yatra Online Pvt. CDs Top the List The products that are purchased most online in India.

48 .• Online travel company MakeMyTrip (MMT) has recorded sales of Rs. 1000 crore for the financial year ending March 2008. as per a release.

it is hard to infuse more credibility in the e-Tailing market. BARRIERS TO GROWTH OF ONLINE MARKET Consumer Bias Consumers often display a bias for brands that they know well and have had a good experience in the past. Thus. it is sometimes a lengthy process to get a faulty or the unsuitable product changed. Lack of ‘Touch –Feel-Try’ Experience The customer is not sure of the quality of the product unless it is delivered to him and post delivery of the product.CHAPTER-6 CONCLUSION & SUGGESTIONS CONCLUSION: Increased Internet penetration. A few would risk buying expensive jewelry from an unknown jeweler online. Thus products of brands with a favorable bias will score over the products of less popular brands. . unless the deliverables are as per the customers expectations. a hassle free shopping environment and high levels of Net savviness see more and more Indians shopping online. Mounting Competitive Pressures 49 .

During the peak season. Mother’s Day. who in turn surf various websites to spot the lowest price for the product. Thus. although the number of transactions is increasing. Thus. Friendship Day etc are. the online retailing raises more issues than the benefits it currently offers. book and pay for products and services online. the value of the products sold is continuously falling owning to high competition and leaner margins. Valentines Day. occasions that drive the sales are Diwali.To attract customers. Seasonality E-Tailing Market is faced by seasonal fluctuations. New Year. Credibility in Payment System Online frauds and breach are the biggest barriers to online sales. Rakhi. It is a challenge for E-marketers to convert low frequency online buyers into regular buyers through successful website design and by addressing concerns about reliable performance. Untimely Delivery of Products It might take a few minutes to search. “August to February is the peak seasons for sale. the competing online players are adopting all means to provide products and services at the lowest prices. but the delivery of the product may take unreasonable time. This has resulted in making the consumers choice-spoilt. As a result. On these occasions younger generations prefers buying and sending gifts online. prospective buyers prefer staying away from revealing their credit card and bank details. As told by an Industry player. 50 . Christmas. while March to July is the dry seasons for sale”.

6. but to show them it’s an option. computers and other aids in stores. 2005 Research report by IMNAI & Pinstrom Research report By: Thijs L.By Susan McGinley • The State of E-Commerce: Online Shopping Trends.University of Groningen. The Netherlands 51 • • • . the feedback of an online buyer should be captured to identify flaws in service delivery.2.By James Maguire Journal of Electronic Commerce Research. and introducing Internet kiosks. REFERENCES • Consumer online shopping attitudes and behavior: an assessment of research . This can be done through online communities and blogs that serve as advertising and marketing tools and a source of feedback for enterprises. Broekhuizen . VOL. efforts need to be taken to educate the online buyers on the steps that need to be undertaken while making an online purchase. The goal is not to convert all shoppers to online purchasing.by: Na Li and Ping Zhang . J. NO.RECOMMENDATIONS: The companies need to reduce the risks related to consumer incompetence by tactics such as making purchase websites easier to navigate. Moreover. In addition to above.Syracuse University • Consumer attitudes toward shopping venues affect marketing strategies .

research by Emerald Research report By: IAMAI 52 .• • Framework for consumers’ intentions to shop online.

One month ago b. Books c. Computer software l. Videos / DVDs / Games d. Which method (or methods) of payment did you use to make your last purchases over the Internet in the past 3 months? a. other items g. Event Tickets k. Tours / Hotel Reservations j. Credit /Debit Card b. Yes b. When was the last time you made a purchase over the Internet? a. Two months ago c. Groceries n. Sporting Goods 4. Electronic Equipment h. Computer Hardware i. In the past 3 months what items have you purchased on the Internet? a. Music b. Cosmetics / Nutrition Supplies m. Cash on Delivery . No 2. Airline Tickets / Reservations e. Have you ever made a purchase over the Internet? a. Bank Transfer 53 c. Clothing / Accessories / Shoes f. More than two months ago 3.ANNEXURE 1 Questionnaire 1.

Do you have enough information about online products and services? Totally disagree Totally agree 7. Same store I buy from offline f. Money Transfer e. TV/print or other advertising 6. Other Method 5. Online Advertising b. Personal recommendation c. Online shopping is useful: Totally disagree Totally agree 8. Search engine d. Special offer I saw e.d. What helps you decide which site to use for shopping online? a. Online shopping is enjoyable: Totally disagree 54 Totally agree . Online shopping is easy to do: Totally disagree Totally agree 9.

10. Quality of internet connection is good: Totally disagree Totally agree 55 . Online shopping is secure: Totally disagree Totally agree 11.

000-50. 20. please tell if these concern you when you are making a purchase over the Internet. For each of the following. Great deal a) Not sure of product quality b) Cannot bargain/Negotiate c) Not sure of security of transactions /Credit card misuse d) Need to touch and feel the product e) Significant discounts are not there f) Have to wait for delivery Fair amount A little Not at all NAME: AGE: below 23 yrs 23 yrs.000 Rs.40 yrs 40 yrs-55yrs 55yrs and above GENDER: Male/ Female MONTHLY INCOME: below Rs. 50.000 Rs.12. 20.000 and above 56 .

which is avoidance coping. 57 . A person who is pessimistic toward online shopping will think of the drawbacks to it and decide to purchase in physical stores instead.CONTACT NO: EMAIL ID: ANNEXURE:2 Different models of consumer attitude towards online shopping By:Mary Ann Eastlick This chart shows how consumer attitude toward online shopping can lead either to approach coping (wanting to shop online) or to avoidance coping (deciding not to search or shop online). Someone who is optimistic toward the benefits of online shopping will develop approach coping.

ANNEXURE:3 FRAMEWORK FOR CONSUMERS’ INTENTIONS TO SHOP ONLINE Source: research by Emerald 58 .

ANNEXURE:4 59 .

By: Thijs L.236 crores (US $ 52 m) Over 1 billion 308 million 60 . The Netherlands ANNEXURE:5 Marketing Trends in India Online Travel Industry Searches by Indians every month Searches by Indians that result in sponsored links shown.8 million Over 40. every month Total clicks on sponsored links by Indian users in a month Number of advertisers targeting Indians web-users Total annualized spend by all advertisers targeting Indian users Total annualized spend by Indian advertisers targeting Indian users Most amount spent by one advertiser All brands that spend more than Rs. Broekhuizen University of Groningen.2 m) 291 Rs.9.7 crores (US $ 2.10 lakhs a year in India Rs. J.72 crores (US $ 16 m) Over 4.000 Rs.

Indian brands that spend more than Rs.62% ANNEXURE:6 Top Online Travel Industry using Search Engine Marketing and their annual spend in Rupees.266 ($ 5.16.10 lakhs a year in India Average number of key words bought by a brand Most key words bought by a brand Most clicks bought by a brand in a month Average cost per click paid by advertiser in India Highest cost per click paid by advertiser in India Average search campaign click-through rate 90 42 89.36) Rs. 61 .968 Rs.20 ($ 0.92) 0.377 599.

Keywords Portfolio: Online Travel India Firms Source: IMNAI & Pinstrom . 62 .

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