Mentoring Report

0n
Consumer Buying Pattern In Online
Shopping

“Submitted in the Partial Fulfillment for

the Requirement of Post
Graduate Diploma in Management”
(PGDM IB)

Submitted to: Name:

Gopika Kumar
Roll no.
Project guide:
Abhijit Sharma Batch: 2016-18

Jagannath International Management School

Kalkaji, New Delhi
 Declaration

I of PGDM (IB) hereby declare:

I. Is my original work.

II. The information given above is correct.

III. I shall abide by the terms and conditions for sanction of the Post
graduate diploma in management.

IV. I have uploaded the desired documents in support of my claim.

Date: Signature of the candidate

Name of student
Acknowledgement
 Executive Summary

The objective of this study is to investigate how different online decision-

making processes used by consumers, influence the complexity of their
online shopping behavior.

During an online experiment, questions were asked about the online

shopping behavior. Significant differences were observed between
parameters for decision-making process and their online shopping
behavior. Managerial and theoretical implications of these results are
provided.

In day to day life, we will need to buy lots of goods or products from a shop.
It may be food items, electronic items, house hold items etc. Nowadays, it
is really hard to get some time to go out and get them by ourselves due to
busy life style or lots of works.

In order to solve this, B2C E-Commerce websites have been started. Using
these websites, we can buy goods or products online just by visiting the
website and ordering the item online by making payments online.

This existing system of buying goods has several disadvantages also. It

requires lots of time to travel to the particular shop to buy the goods. Since
everyone is leading busy life nowadays, time means a lot to everyone.

In this report, a sample of 300 people taken is analyzed regarding their

online shopping behavior. With the above background in mind this research
had been conducted to gain inside into the online behavior of consumers.
The objective is to explore the factors which influence purchase &
psychographic profile of consumer group.
 Research Methodology

Research objectives


Participants and apparatus

Survey was taken in India by sending questionnaire as many as possible
only those participants who had completed the questionnaire will be
accounted as a valid survey.

There are 300 participants who had completed the questionnaire.

Research Methods:
The research method of this study is survey method. Its collects information
from participants through questionnaire

The purpose of the research is to analyze the current and future behavior
of consumer in online shopping. These behavior includes attitude, believes,
attribute, motivation and behavior of sampled participants.
After questionnaire sent out, the data was analyzed and quantitative
research method was used. Researchers used excel and word programs
through analyze the outcome.

Questionnaire Design
The design of the questionnaire is very reliable on what data need to be
collected.

The questions asked in questionnaire aim on the impact of internet

shopping. Also the current economic status of India due to demonetization
is considered that how it has impacted the online shopping behavior.

The following information gathered:

 Product Category Preferred

 Experience of Internet Use
 Attitude towards Internet Shopping
 Barriers of Internet Shopping

In addition, some demographic data was also collected from the

respondents such as Age.

Hardcopies of questionnaire were distributed among the various age’s

groups in order to find the correct data regarding the impact of online
shopping.

After the Finished questionnaire, all data was gathered, some of the
information may not be expectable for research due to lack of answers for
the important questions. They were ignored and rest of the sample was
taken into consideration.

The complete questionnaire is given in the Appendix.

 Key drivers for success for e-commerce

Reduction in operational cost as the entire business can be moved online,

the need for physical stores has become obsolete. Less infrastructural
investment and associated labour costs drives up the profit margin.
It is far easier and quicker to compare prices of goods online, equipping the
customer with the information to decide the right price or terms for
themselves. With services like COD, customers can trust the process of
going online and purchasing.

Market penetration also becomes far more achievable with e-commerce; it

is possible for a merchant in Mumbai to extend his reach to north-eastern
cities or even rural villages that are now connected by the online network.

E-commerce facilitates shopping anytime, anywhere and for almost

anything desired. Busy consumers prefer this to the restrictions of when a
mall/shop is open and the need to physically travel to a shop.

Online business takes shopping a step further by taking itself to the

customer creating conveniences of shopping anywhere and at anytime.

In India, with the increasing propensity of social media, businesses have

now begun to engage their customers on social networking portals such as
Facebook. These are likely to be rapidly developing marketing channels for
the future.
“These businesses are difficult to turn into profitable ventures due to the
low margins and the logistics costs involved.”

Gaurav Saraf, director of Epiphany Ventures says that, the concept of

online grocery shopping faces the problem of turning their business into
profitable ventures as the concept is new in the market which leads to low
margin along with low margin high cost is involved when it comes to
logistics. In addition to these problems the perishable items such as fruits &
vegetables have a short shelf life, if these items are not delivered before
the expiry of their shelf life it would could cause wastage and also add up
the cost. From the above comment a conclusion is arrived that these
business ventures have a very thin margin when it comes to business
operations.
 “Connecting the local kirana stores with the buyers while storing
inventories on the Cloud”

Vijay Singh, CEO & MD of Aaramshop.com says that in order to reduce the
cost to their business operation they applied the concept of cloud
computing, where it connects the local kirana shops with the buyers. It
enables the business to reduce the inventory cost as all the inventories are
handled by the local vendor.
“Create a work-life balance”
Vijay Singh, CEO & MD of Aaramshop.com states that the concept of
online grocery shopping creates the work-life balance in urban areas where
the urban couples are busy in their work culture and cannot give time
towards their daily life needs.
“It is a difficult venture and these challenges make investors more cautious
while evaluating such initiatives”
Singhal of SAIF Partners, explains that the it is difficult for the investor to
invest in these type of business where the market is extremely fragmented.
Such a venture can only survive on repeat purchases and that’s what one
needs to target. If a company knows what it needs to stock, how much it
needs to stock and where it needs to deliver, the business will become
simpler to manage and run. The firm needs to find a strong value
proposition and target market to survive the cut-throat competition
The solution to the above problem stated can be that in order to survive in
the market the business should target the satisfied consumer to create
repeat purchases. Also inventory management should be applied to these
organizations it will enable them to what it need to stock, how much it
needs to stock and where it needs to deliver, this will allow to operates its
business operation smoothly.
 Online Shopping In India

The Indian economy is slated to grow by upward of 6 % annually in

the next few years which is among the highest rates of any big
emerging economy. And quite a lot of this growth would be on the
back of domestic consumption of goods and services.
E-commerce is emerging as a great level given that organized retail is still
not ubiquitous across the length and breadth of the country with large retail
chains making up less than 10% of the market.

E-commerce is helping people in smaller towns in India access quality

products and services similar to what people in the larger cities have
access to. Its being forecast that close to 60% of online shoppers would
come from beyond the top eight large cities by end of this year.

Increasing internet penetration has helped to expand the potential

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

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

Innovation is helping e-commerce companies break the inertia for online

shopping by offering benefits to customers not traditionally available in a
brick and mortar store. Business models include no question asked return
policies ranging from 7 days to 30 days, free product deliveries and the
industry dynamics changing “cash on delivery” model. The last innovation
has really help unlock the potential as people can now order products and
pay when they get physical delivery of the product.

This has been a tremendous success because Indians are still reluctant to
give their credit/debit card details online and want to have the psychological
comfort that they would actually get the product once payment has been
made. These innovations have led to further innovations downstream as
ancillary businesses are developing to support these initiatives. Some
companies have begun to develop support mechanisms for the entire cash
on delivery model and are trying to reach the far flung corners of India,
including in the interiors where traditional logistics companies are still not
completely present. The logistics companies are also shoring up their act
and have started to build specific verticals and expertise to address the
requirements of e-commerce companies.

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

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

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

More importantly the report indicates that urban Indian consumers are
now confident enough to make online purchases of up to US$500 as
against US$40-100 in the recent past.

So not only are the numbers of online shoppers projected to increase but
there has been a real increase in the total value being spent online.

So what happens next for an industry which is retailing everything online-

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

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

Second, Venture Capitalists are starting to be choosy about which

business to invest in, basing their decisions on performance as opposed to
future predictions. Valuations which went through the roof are now
returning to normal levels. According to an Avendus report, about US$829
million was pumped in the sector in the first 10 months in 2011. However
this came down to US$16 million in December 2011 and went up only
marginally to US$24 million in January of this year.
Despite all of this, it’s been a very impressive story so far. The poster child
of the Indian e-commerce industry is Flipkart.com, a 4 year old venture
which modeled itself afterAmazon.com and is already commanding a
valuation of US$ 500 million and is targeting revenues of US$1 billion in the
next two to three years. All of this has caught the attention of Amazon.com
which entered the market in February this year. It came in through
Junglee.com, a price comparison site and is already amongst the top 10
sites in the country. Everyone is therefore trying to capitalize before the 800
pound gorilla comes in fully on its own which is expected to be sometime
around Q3/Q4 this year.
There is huge demand for top-notch professional grade web 2.0
consultancy and development. Very few companies have a long term
vision around customer acquisition, retention and constant
conversations. A lot more can be done in understanding the linkages
between design and functionality based on user experience and social
integration.
However to succeed in a tough market like India your company needs to
be open to long term strategic partnerships rather than an upfront “pay
for services” model. The upside would be worth its wait.

India has more than 3,311 running e-commerce centers, according to

research conducted by eBay India for its 2011 census. Indian web is
clouded with e-commerce (B2B, B2C, B2G, and C2C type business
models) start ups and increasing like mushrooms on lawn.

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

This paper examines the relationships between the operating

characteristics of the consumer purchase decision process and the channel
switching intentions of consumers. A theoretical model that explains
consumer channel switching intentions is constructed and tested based on
a sample of 300 actual consumers. The analysis indicates that the overall
perception of the consumer tendency from offline to online is approximately
80%.
Factors Relevant to Purchase Decision Process

Based on the consumer purchase decision process, five factors that

potentially affect consumers’ intentions to shop online and offline are
identified. These factors are: channel risk perceptions, price search
intentions, search effort, evaluation effort, and delivery time. Again, using
consumers’ offline perceptions on these factors as points of reference, the
differences in these factors between online and offline channels are
incorporated into a model for explaining their channel switching tendency.

It is well established in marketing and consumer behavior literature that the

consumer purchase decision process includes five stages: problem
recognition, information search, evaluation of product options, purchase
decision, and post-purchase support. The purchase process starts when a
consumer recognizes a problem or a need. Since the desire to buy a
product/service is largely subconscious (e.g., thirst, hunger, or admiration
of a neighbor’s new car) and the utility from consuming the product/service
itself is the same no matter whether the consumer obtains this
product/service from a physical store or from an online store, it should play
a very minor, if any, role in driving the consumer to purchase online.

The next stage is information search. Information search (including price

and product information) usually incurs search effort. When purchasing a
product from a brick-and-mortar store, a consumer has to spend time
browsing the aisles. If consumer cannot find a suitable product at the store
(e.g., high prices and/or no favorable product attributes) he must keep
spending effort on additional searches. In contrast, online shopping can
dramatically reduce search effort for price and product information with just
a few clicks. Specifically, the relative ease of online search for better prices
motivates consumers to shop online. Consequently, consumers who have
stronger price search intentions may find online shopping more attractive
than offline shopping.

The third stage of the purchase decision process is the evaluation of

product options, which incurs evaluation effort. It involves examining and
comparing product attributes such as price, brand, quality, and others.
Despite the reduced search costs for price information, consumers may
feel troubled in evaluating non-price attributes online. The color and style of
a product may not be exactly as it appears when displayed on the
computer screen. Product quality may be hard to evaluate online as well. It
is especially true for the “feel and touch” product categories. For example,
consumers may be apprehensive about buying something without touching
or feeling it because of quality uncertainty. Therefore, the online medium
can facilitate information search but impede evaluation of product options in
terms of non-price attributes.

During the evaluation stage, consumers will also evaluate their perceived
risk associated with online shopping. Risk perceptions are considered to
influence consumers’ evaluation and choice behavior. Research has shown
that a consumer’s decision to modify, postpone, or avoid a purchase
decision is heavily influenced by his perceived risk. Online shopping might
be perceived to be riskier, thus reducing the overall utility that a consumer
can obtain from shopping online. However, a consumer perceiving a certain
amount of online shopping risk may or may not avoid the risk. Researchers
define perceived risk in terms of uncertainty and consequences,these two
components of risk, uncertainty and consequences, have been found in
research on risk perceptions in non-marketing contexts as well. According
to risk theory, perceived risk increases with a higher level of uncertainty
and/or a greater chance associated with negative consequences. For
example, if a consumer is considering buying an unfamiliar bottle of wine
for a dinner party, the perceived risk associated with that purpose could
arise because he does not know how the wine will taste (uncertainty) and is
worried about his guests’ reactions if it is not a good wine (negative
consequences). Thus, whether a consumer is willing to bear a particular
risk depends on his perceptions on the likelihood of the occurrence of the
risk and on the importance, or severity of the possible negative
consequences, of such risk. Consequently, this study conceptualizes a
consumer’s channel risk perceptions as the interaction effect of the
likelihood and the importance of a risky situation perceived by the
consumer when buying through that channel.

After a purchase decision has been made, the product still has to be
physically delivered (except digitized products/services, of course) if the
purchase is made online. Since consumers tend to maximize utility subject
to time constraints, the efficiency of delivery becomes a real concern to
both consumers and online retailers. Online retailers often experience low
customer satisfaction due to their poor fulfillment of on-time delivery. Since
different consumers value the speed of delivery differently, time-sensitive
consumers may favor a traditional channel simply because it saves delivery
time. To account for the effects of waiting problem associated with delivery
on channel preference, delivery time is included in our model.
Channel Risk Perceptions

While the Internet allows consumers to shop at the convenience of remote

locations, they may be apprehensive about making purchase online if they
perceive risk associated with online shopping. Interestingly, some models
of online buying behavior have excluded perceived risk as a predictor of
online shopping, although others see risk reduction as a key to increase
consumers’ participation in e-commerce. Consumers’ perceived risk
associated with online shopping has received limited attention despite its
potentially important implications for online shopping. Some early research
suggests that risk perceptions may play a minor role in the adoption of
online shopping, but several recent industry and government-related
studies have nevertheless considered consumers’ risk perceptions to be a
primary obstacle to the future growth of e-commerce.

Five components of perceived risk have been proposed in the literature:

financial, performance, physical, psychological, and social. Financial risk
stems from paying more for a product than being necessary or not getting
sufficient value for the money spent. Consumers generally address this
problem by shopping around for a more satisfactory price. Performance
risk, sometimes referred to as quality risk, is based on the belief that a
product will not perform as well as expected or will not provide the benefits
desired. Physical risk involves the potential threat to consumer safety or
physical health and well-being. Psychological risk arises from the likelihood
that the purchase fails to reflect one’s personality or self-image. Social risk
is concerned with an individual’s ego and the effect that the consumption is
observable by others and has on the opinions of reference groups. For
shopping, the effect of physical risk is minimum, since shopping activities
usually do not involve physical risk. Note that perceived security of online
transactions and concerns for privacy should be included as elements of
performance risk in online shopping. Thus, except for physical risk, the
other four types of risk represent the four critical sources of channel risk
perceived by consumers.

Of course, different individuals have different levels of risk perceptions

toward online shopping. Here, these risk perceptions are associated with
the Internet as a purchasing medium rather than the consequences of
purchasing a particular product. Research has indicated that perceptions of
risk can be extended beyond the product to the shopping medium itself.
Such concerns are likely to affect consumer behavior on the Internet and
may help to explain why most consumers still use the Internet for browsing
rather than buying. The amount of risk perceived has been suggested to be
a major factor in deciding whether a consumer would shop via a certain
retail channel. Based on these perceptive, consumers who perceive lower
risk online than offline are more likely to switch to online channels than
those risk-laden consumers, resulting in the following hypothesis:

H1 (Channel Risk Perceptions): Consumers who perceive lower risk in

conducting purchases online than offline are more likely to switch to online
channels.

Price Search Intentions

With the advent of the Internet, consumers expect to find lower prices more
easily in the online environment than in the offline environment. Search
engines and agent technologies would dramatically reduce search costs,
prices would plummet, and deep discounting is prevalent online. Because
of this heightened expectation for lower prices online, consumers would
demonstrate higher price search intentions over the Internet than when
shopping in traditional stores. This would have a positive impact on
consumers’ tendency to switch from offline to online channels, because the
Internet provides a single source for consumers to evaluate their price
consideration sets, instead of searching for prices in many traditional
stores. Thus, it is held that consumers with greater positive perceived
differences in price search intentions between online and offline channels
would exhibit a higher tendency to switch to online channels.

H2 (Price Search Intentions): Consumers who perceive higher price

search intentions in conducting purchases online than offline are more
likely to switch to online channels.

Search and Evaluation Efforts

On the Internet, search effort (for price and non-price information) is

dramatically reduced. This should have a positive impact on consumers’
intentions to switch to online shopping. The widespread availability of
information on the Internet is one of the reasons why many buyers view
search and purchase on the Internet as a utilitarian activity. Many online
buyers revel in the fact that they can get information directly without having
to go through a salesperson who usually has very limited information
compared to a web site. On the other hand, it may be fairly difficult to
evaluate certain types of product information online, thus impeding
consumer channel switching. This is especially true for shopping “look and
feel” products. Pictures and animation certainly help but only to a very
limited extent. Alternative technologies such as online customization tools
will also assist, but, for example, unless the consumer feels the swatch of
the fabric for the suit, a purchase decision is difficult. Thus, it is proposed
that when consumers perceive increasingly less search and evaluation
efforts required for shopping online than offline, they also exhibit a higher
tendency to switch to online shopping.
(Search Effort): Consumers who perceive lower search effort in
conducting purchases online than offline are more likely to switch to online
channels.

(Evaluation Effort): Consumers who perceive lower evaluation effort in

conducting purchases online than offline are more likely to switch to online
channels.

Delivery Time

Most online transactions still involve physical product delivery, and the
efficiency of delivery can become a real burden for both consumers and
online retailers. Among the dot-coms, their inexperience in real-world
operations, marketing, and administration has left many online shoppers
complaining about late or nonexistent deliveries. Online retailers often
experience low customer satisfaction due to their poor fulfillment of on-time
delivery. The speed at which ordered items are delivered is important. If
timing is so important and one of the major benefits offered by e-commerce
is its “convenience” (time-related) for shopping, then shortening delivery
time should increase the utility (benefits) of consumers (especially for time-
sensitive consumers) and thereby motivate them to purchase online. Thus,
it is expected that consumers with less concern about delivery time will be
more inclined to switch to shopping online, as suggested by the following
hypothesis.

H5 (Delivery Time): Consumers who perceive shorter delivery time in

conducting purchases online than offline are more likely to switch to online
channels.
Data and Methodology

Four product categories, books, flight tickets, wine, and stereo systems,
were chosen and available in both online and offline channels. Wine and
stereo systems are experience goods whereas books and flight ticket are
search goods. It is clear that the quality and taste of wines and the sound
quality of stereo systems are difficult to evaluate and compare online. On
the other hand, the quality of books is relatively easier to evaluate over the
Internet, since once a book title has been chosen, the book itself is
basically identical across retailers. The quality of flight tickets is also easy
to evaluate prior to purchase, e.g., number of connections, length of
connection, flexible departure/return time, and same day/staying overnight.
Note that these products were also selected on the basis of price level.
Books and wine are low-priced products while flight tickets and stereo
systems are relatively high-priced ones.

Channel Switching Tendency

To analyze consumers’ tendency of switching from offline to online

channels, a binary switching variable was coded 1 if online purchase
intentions were greater than offline purchase intentions and zero otherwise.
At the aggregate level, the analysis indicated that the overall channel-
switching tendency from offline to online was approximately 52% across
the four product categories. As Table 3 shows, the order of switching
tendency (flight tickets, books, stereo systems, wine) is consistent with the
products’ search and experience attributes. These results suggest that
books and flight tickets should be more successful in alluring consumers to
switch from physical to online channels, whereas wine and stereo systems
dominated by experience attributes (taste and sound quality) should fare
less well in inducing channel switching. Our findings support that
merchandises purchased on the basis of search attributes are more
amenable to electronic retailing, whereas merchandises purchased on the
basis of experience attributes are more likely to be purchased in physical
stores.
 Models of E-commerce

Business-to-Business (B2B):

B2B e-commerce is simply defined as e-commerce between companies.

This is the type of e-commerce that deals with relationships between and
among businesses. About 80% of e-commerce is of this type, and most
experts predict that B2B ecommerce will continue to grow faster than the
B2C segment. Eg: indiamart.com, eindiabusiness.com, tradeindia.com

Business-to-consumer (B2C):

Business-to-consumer e-commerce, or commerce between companies

and consumers, involves customers gathering information; purchasing
physical goods (i.e., tangibles such as books or consumer products) or
information goods (or goods of electronic material or digitized content,
such as software, or e-books); and, for information goods, receiving
products over an electronic network.

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

Business-to-Government (B2G):

Business-to-government e-commerce or B2G is generally defined as

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

Web-based purchasing policies increase the transparency of the

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

Consumer-to-Consumer (C2C):

Consumer-to-consumer e-commerce or C2C is simply commerce

between private individuals or consumers. This type of e-commerce is
characterized by the growth of electronic marketplaces and online
auctions, particularly in vertical industries where firms/businesses can
bid for what they want from among multiple suppliers. It perhaps has the
greatest potential for developing new markets.
Online auction site eBay, Yahoo! Auctions are a couple of examples of C2C
websites.

M-commerce

M-commerce (mobile commerce) is the buying and selling of goods and

services through wireless technology-i.e., handheld devices such as
cellular telephones and personal digital assistants (PDAs).

Mobile Commerce is any transaction, involving the transfer of ownership

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

Mobile Commerce in India

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

In India, Mobile Commerce is still in the development phase as the use of

mobile phones for carrying out transactions is very limited. However, the
development is taking place at a nice speed and in the coming years,
Mobile Commerce is most likely to make its presence feel as companies
and businesses have started understanding the benefits of Mobile
Commerce.
Some of the companies have even incorporated this technology. Airtel,
ICICI, Reliance are some of the companies/businesses that are using this
technology as their users are allowed to make limited purchases from their
phones. For now, the users are mainly allowed to pay phone bills, utility
bills, book movie tickets, book travel tickets with their cell phones.

However, more services will be introduced in coming years. Security is

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

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

Pros of Online Retail

There are some fantastic benefits to selling online. Setting up an online
store comes with significantly lower startup costs than a traditional
physical store, with no need to pay for a large physical space and all of
the ongoing costs that can entail. As a result, you can get started quickly,
with less capital investment and start selling straight away.
Customers also appreciate the convenience of eCommerce. Being able
to shop from home without direct sales pressure, and with the ability to
browse in your own time can make the process much more appealing to
some customers. Then having products delivered straight to their
door, within a few days and even at a time to suit the customer, can be
even more attractive.

From a retailer’s point of view, being able to accurately track the

customer’s interactions with your store across multiple different platforms
gives you access to data that can elevate marketing efforts above
anything a traditional store could manage.
 Cons of Online Retail
While an online store can be quicker and simpler to set up than a
physical one, not having a location can make it more costly to drive
customers through to your store. You’ll have to accept that a larger
marketing budget is required, compared to a bricks-and-mortar store.
You’ll need to allocate more resources and time to marketing in order to
let customers know you exist and are open for business.

It’s also more difficult to build meaningful interactions with your

customers as there’s no face to face interaction. You’ll need to go the
extra mile to give customers confidence in your store and assure them
you’re a trustworthy brand.

Pros of Offline Retail

The advantages of offline retail are well cemented. It remains the most
popular shopping channel for consumers and can’t currently be matched
by online when it comes to customer experience. With a traditional
bricks-and-mortar store, you can craft a unique experience for your
customers and express your brand in a creative way.

Having an offline store also gives you instant access to passing trade,
without having to invest in a marketing budget. Having a great store
location can make you easily visible to your target market and can build
your brand locally. Even for an ecommerce retailer, having a physical
store is a brilliant way to express a vision for your brand, sell an
experience to your customers and reach new markets.
 Cons of Offline Retail
Just as the pros of offline retail are well known, so are the cons when
compared to ecommerce. Higher setup and running costs are very likely.
Traditional stores generally have higher running costs than online
retailers, with electricity, water, rent and more to pay for every month.
This allows less room for error when it comes to your initial financial
investment. With an offline store, you can see funding dry up very quickly
if you’re not careful.

Also, just as location can be a virtue, it can also be a curse

for some bricks-and-mortar stores. Not picking the correct location could
seriously hamper your success, no matter how great your product
offering is. You also have no control over what goes on around your
store. A competitor could open next door and eat away at your
business or the up-keep of the area might not be desirable and potential
customers could move away.
Advantages of Online Shopping Vs Offline Shopping-

Convenience – Online shopping is much more convenient than offline

shopping. Instead of taking out your car and visiting shop to shop you can
just sit in the comfort of your home and shop. Once you have decided on
what you want to buy the payment process is seamless and the orders are
delivered right at your doorstep.

Variety – The kind of variety that a customer gets online is hard to match
by any brick and mortar store. The online retailer’s stock products from all
the major brands and a customer can find any product in their listing no
matter how hard to find it is in the offline stores. With no constraints
regarding physical space or display online retailers features as many
products as they can cater.

Pricing – Online retailers get an inherent advantage in pricing as they don’t

have to bear expenses like paying rent of a store, bills etc. they can pass
these price savings directly to customers and generally offer products at a
lower price than the offline retailers. Even when shipping costs are included
the prices are generally better than offline stores if one includes the
additional transportation and other cost involved in going to a store.

Discreet shopping – While purchasing some products, customers don’t

feel comfortable at an offline store, shopping online is discreet and some
online portals also provide discreet shipping.

Offers – Apart from offering products at lower prices most offline stores
also regularly come up with discount offers in association with banks,
brands etc. which entails customers to get additional savings while buying
products online. Offline stores / showrooms generally offer discounts during
stock clearance or when the manufacturer of products offers a discount.

Some best Indian online store such as myntra, jabong, flipkart, and snap
deal.
 Disadvantages of Online Shopping Vs Offline Shopping-

Instant Gratification – Customers buying offline get their products as soon

as they pay for it but those who buy online have to wait for their products to
get delivered. Under normal circumstances waiting a day or two doesn’t
matter much but when a customer wants instant gratification or in
emergency situations buying through a brick and mortar store becomes
necessary.

Touch and Feel – At a brick and mortar retail store a customer gets to see,
touch and in some cases also try the product before buying which helps the
customer in making an informed decision as to whether the product will suit
their need or not, this even reduces the chance of return and exchange.
While buying a product offline if a customer doesn’t get the product they
expected, the process of return and exchanges can be quite time
consuming and frustrating.
 Advantages of online shopping over offline shopping

1. Happiness:

Wasn’t shopping supposed to make you feel happy about yourself?

Remember last time you did some shopping and actually felt happy about
it.

2. You can actually experience the product:

When was the last time you bought something online? Except for a few
people who stalk online fashion sites for offers and discounts, most of the
people still buy their clothes in physical stores.

3. Personalized attention and recommendation from sales staff:

Don’t you feel like a princess when the salesman at the shop drapes the
clothes around you and you can actually see how does that dress look on
you.

4. Can’t rely on online for immediate purchase needs:

Planning to go to a surprise party and don’t have any dress fit for the
occasion! You can head off to a nearby store and buy that special one for
the occasion. Online shopping won’t save you in such urgent situations.

5. No need to keep looking for when the prices are falling:

Do you always fear that you should wait unless the price drops the next day
on e-commerce? With their ever changing price, you never know what is
the actual price of the cloth.

6. No need to wait for a week for a dress which you have ordered:

In traditional shopping, if you purchase something you carry the items as

you get out of the shop and feel great about it.

7. Returns! They just suck in e-commerce:

Even though all e-commerce firms say that they are making returns easier,
it still is a complicated process.
 Online vs offline

The advancement of technology has changed the way many businesses

sell products and how the consumer shops for those products. Machinery
helps businesses keep up with the demand by aiding in mass production,
while the introduction of the internet makes the products accessible to
consumers all over the world. This is done with a new trend called online
shopping.

Both traditional shopping and online shopping offer good products and
relatively convenient service; however, it is the preference of the individual
consumer as to which is the preferred method of shopping.

Online shopping offers an alternative to the consumer by basically

eliminating the time it takes to drive through traffic to the store, then fighting
crowds of people while in the store. Products are viewed from the comforts
of home by way of the consumer’s computer screen.

Traditional shopping requires the consumer to drive to sometimes multiple

stores, then search through isles, racks, and shelves for the desired item.
Meanwhile, most online stores offer a search engine, which allows the
consumer to go directly to the item, then browse through the choices
offered.

Both online and traditional shopping offer sales, but online shopping also
offers auction style selling, where the consumer can bid on an item and
possibly purchase for much lower than the retail price.

Online shopping can also be useful in finding hot items that often sell out in
stores. Since the consumer is not limited to stores located within driving
range, it is possible to browse the stock of many stores all over the country,
or for that matter, all over the world. This makes it easier to locate that
“impossible to find” item. Much like traditional shopping, any item desired
can be found and purchased; however, the major difference is all the items
are in one central location, available 4 hours a day, making shopping easier
to fit into a busy lifestyle.

Traditional shopping also has its advantages. As opposed to online

shopping, the consumer has multiple payment options, making the need to
carry a credit card less important. A traditional shopper can pay by check,
cash, or even layaway, which allows the consumer to make payments on a
future purchase.

Furthermore, a traditional shopper has the advantage of inspecting the item

before purchasing. An online shopper must purchase the product and have
it shipped to them before actually getting to see if the product was exactly
what they wanted. The traditional shopper can compare with similar
products, and even test the item before finalizing the purchase, thus
lowering the chances of returning the item later.

The return process can be difficult for either type of shopper. The traditional
shopper must drive back to the location of the purchase and wait in line to
return the undesired product. Although this can be time consuming, the
major advantage is that most stores give refunds fairly easily and most of
the time the refund is instant. On the other hand, the online shopper must
send the item back to the distributor and wait for what could be weeks for
the refund. The refund usually does not include the shipping cost, which the
distributor keeps. Even though the consumer does not have to drive, the
hassle can be just as frustrating.

Ultimately, both methods of shopping have their advantages. To find which

method works best, the individual consumer must decide what is more
important.
If the consumer would rather avoid busy highways and crowds, and shop
any hour of the day, then online shopping is the way to go. However, if the
consumer prefers the physical activity, interaction with others, and the
ability to compare products first hand, then traditional shopping is still the
better choice.
Questionnaire Analysis
 Q1 what kind of sample is taken?

AGE BRACKET

Interpretation
This question was used in order to ensure we appeal to the most suitable
audience and we also wanted to have a wider knowledge about what other
types of audience may think.

We targeted all age groups so that we can have a clear view of buying
behaviour of people in online shopping.

This will also allow us to compare the answers between the different ages
and therefore we identify what tastes differ due to generation.

Here we observed that almost all people aged between 25-35 opted online
shopping over traditional shopping.
 Q2. Where do you find the variety of
products?

Interpretation
One can get several brands and products from different sellers at one
place. You can get in on the latest international trends without spending
money on travel.

Here 84% respondents find variety of products online.

One can shop from retailers in other parts of the country or even the world
without being limited by geographic area. These stores offer a far greater
selection of colors and sizes than you will find locally.

If you find that the product you need is out of stock online, you can take
your business to another online store where the product is available.
 Q3. Commodities people prefer to buy on
internet

Interpretation
In this question, we wanted to know the preferences of commodities that
people prefer to buy online.

We found that Electronics are leading the Race in online pattern.

Q4. Motivation factor that affects people buy
products online

Interpretation:
Price (92 out of 300): The factor that influences the most to buy a product.
Everybody wants a good quality product at minimum price and various
offers or discounts online attracts and influence the buying behavior.

Convenience (74 out of 300): 24*7 availability of products and services

online saves time and make it easy for people to shop.

Quality (65 out of 300): More companies are offering their

products/services over the Internet, as the number of Internet users are
growing rapidly and online technologies are improving so a standard quality
check and measure is attained.
 Q5. Problems faced while shopping online

Interpretation:
The above data determines that delivery of product on time is one of the
biggest issues in online shopping (93 out of 300 respondents).

Physical examination that is the tangibility of the product is also an

important issue when it comes to online shopping. People lose trust on the
seller so it hinders sales (73 out of 300 respondents).

People are not sure of the quality are offered due to duplicity in products
and also many cyber crimes. So if one seller on a marketplace sells fake
goods, the entire marketplace becomes a trap in the eyes of online buyers.

If an item you ordered arrives damaged, it may not meet the ‘consumer
guarantee’ of acceptable quality. So it must be fit for the, durable and free
from defects. Other factors which demotivate the user to shop online are:
product damage, non delivery etc.
 Q6. Heavy discounts affect the purchasing
capacity of consumer

Interpretation:
One advantage of shopping online is being able to quickly seek out deals
for items or services provided by many different vendors.

From the above diagram we can determine that people prefer online
shopping when discounts offered are offered to them. Various deals like
“big billion sale” etc. attracts consumers to shop.

Search engines, online price comparison services and discovery

shopping engines can be used to look up deals of sellers of a particular
product.

Some retailers (especially those selling small, high-value items like

electronics) offer free shipping on sufficiently large orders.

Another major advantage for retailers is the ability to rapidly switch

suppliers and vendors without disrupting users' shopping experience.
 Q7. Barriers for Online Shopping

Interpretation:
When it comes to spending money, people have pretty comfort zones.

The most common Barrier faced is Risk of Debit/Credit Card Information.

One is not protected against the fraud when you use the debit card and
leakage of such information leads to access to entire bank account. So,
never store your payment information with a site that isn't secure

Barrier like lack of trust, many consumers has an insecure image of

Internet in their mind. Some of the dangers while shopping online are E-
vendors impersonator or defects in the products etc.

All these issues incorporate together and make difficult the consumer’s
belief in online shopping.
 Ques8 Effect of Demonetization on online
shopping

Interpretation:
Post the demonetization announcement; CoD faced a major hit while major
e-commerce platforms such as Amazon, Flipkart, Snapdeal etc all faced an
onslaught as many of their shoppers canceled their orders immediately.

Cashless Becomes the New Norm..

The cash crunch caused due the bold move by the Indian Government has
driven people towards digital payment methods such as mobile wallets,
Internet banking, and debit/credit cards. The country is essentially put on
the fast track towards becoming a cashless society.

So here in our study 59% of people said that demonetization has increased
their online shopping pattern as they support cashless economy.
 Q9 What if the product has same price both
in shop and online portal, from where will
you buy?

Interpretation:
If the price is same, the majority of people said “I shop where it is most
convenient.” While some people cited location as a convenience factor, it’s
not the only one.

Some other convenience factors included:

 How fast you can complete a purchase
 How easy items are to find
 Can I get everything in one place?
These parameters were achieved by online platforms.
So here 77% of respondents preferred online shopping over traditional
shopping.
Online shoppers also value convenience, which means that online
merchants find new ways to offer the same convenience like after sales
services, free shipping, and free products. For eg. If one buys a mobile
phone he gets a mobile cover or a power bank free which deal is not
available in offline stores.

Q10 Payments methods preferred when

shopping on internet

Interpretation:
As cash on delivery (Cod) is the safest mode to pay for a product, so
people prefer it (55%). They pay the money and check the product quality
and performance.

First great thing about COD is trust. You can trust the company because
you are paying after your receive the product at your doorstep. All the major
online shopping websites in India like Flipkart, Jabong, Myntra etc offer you
cash on delivery which is very good.

Next is debit card with 20% people preferring because cashless, hassle
free, safe and secure.
Next leading player is net banking. It is fast and efficient. Funds get
transferred from one account to the other very fast. As they are secured
with 3D passwords so hacking of e wallet is tough and security is achieved.

Q11 People who prefer cashless economy

Interpretation:
Payment through mobile wallets will become the most preferred online
shopping payment method. This is due to the fact that wallet payments are
snappy, safe and make for easy refunds. Here 63% of respondents prefer
cashless economy.

Online shopping portals will do well by partnering with mobile wallets and
giving wallet offers to their customers. Such a move will indubitably
increase sales on these websites.

The ubiquity to pay for online shopping through digital methods like
debit/credit cards, wallets, and net banking will drive people towards these
channels and lead to the growth of this method.

It will also benefit e-commerce platforms by cutting handling costs and risks
related to cash. In the coming years, as digital payment methods better
penetrate, CoD will be as good as extinct – a change that is good for e-
commerce companies as well as users.

Q12 payment method used for cashless online

shopping

Interpretation:
Paytm is an Indian electronic commerce and payment system, it was
launched in 2010. It is the most widely used payment method in our study.

Reasons why people chose it: fast & safe, No need to carry debit or credit
card means less chances from being fraud, Easily return money to same
bank when you required money, Transfer money from Paytm to bank
account as low as 0%,

Next leading player is net banking. It is fast and efficient. Funds get
transferred from one account to the other very fast. As they are secured
with 3D passwords so hacking of e wallet is tough and security is achieved.
Next player is the freecharge 21% of people prefer it. It
provides online facility to recharge any prepaid mobile phone, postpaid
mobile, DTH & Data Cards in India.

Observations

Certain parameters which motivate the user to shop online are:

a. User friendliness of the website.

b. Discounts and offers offered by the website.
c. Cash on delivery form an important gateway in online transaction.
d. Free shipping is the most important factor which motivates the user to
shop online.
e. Physical examination is the important issues in the online shopping
which determines the tangibility of the product.
f. The data depicts that supermarket are the preferred shopping
destination as it offers all the basic aspect of the online shopping
which are price, quality variety, proximity to home, offers & discounts.
g. From the above data collection we can determine most of respondent
agree to buy online if the option is given.
h. The data also determines the factors which will be beneficial for the
consumer to shop online which are variety at one shop, saves times
and avoid long queues.
i. Due to demonetization, people now support cashless economy and
they have increased their online transactions.

Also, Online shopping portals will do well by partnering with mobile

wallets and giving wallet offers to their customers. Such a move will
indubitably increase sales on these websites. It will also benefit e-
commerce platforms by cutting handling costs and risks related to
cash
 Conclusion
 Internet and Information technology have made tremendous
contributions for business transformation witnessed nowadays all
over the world.
 This has given birth to E commerce which encompasses several pre
purchase and post purchase activities leading to exchange of
products or service or information over electronic systems such as
the internet and the other Telecommunication networks.
 From the above analysis it can be conclude that consumer buys
goods from the online shopping website on the basis of factors like
offers and discounts, variety of product available, free home delivery,
website user friendliness and cash on delivery payment option.
 It is safe to conclude that internet is a collection of new media that
had a huge
 Potential to be popular channel for electronic commerce. The internet
provides means to distribute Marketing information in ways similar to
conventional direct marketing like catalogs etc.
 The internet has other appealing properties to like it is cheap, it
shorten the time between purchase decision and Delivery.
 It also gives the customer certain extra benefits like the ability to
compare & discuss product.
 The overall result proves that the respondents have perceived online
shopping in a positive manner.
 So company should divide the policies and strategies to attract more
number of people.

Better understanding of consumer online shopping behavior will help

companies in getting more online Consumer & increasing their E-
Business revenues.
 Appendix

QUESTIONNAIRE

Q 1. Age: ☐15 – 25 ☐25-35 ☐35-45 ☐45 -60

Q 2. Do you prefer shopping online: ☐Yes ☐No

Q 3. How often do you use internet every day?

Less than an hour ☐1-2 hrs ☐2-3 hrs ☐3-4 hrs ☐4 hrs and above

Q 4. What type of commodity does your purchase through online shopping

Commodity YES NO
Electronics ☐ ☐
Furniture ☐ ☐
Medicines ☐ ☐
Groceries ☐ ☐
Cosmetics ☐ ☐
Apparels ☐ ☐

Q 5. What is your motivation for buying product through internet?

☐ Convenience ☐ Price ☐ saves time ☐ Superior quality ☐ any
other

Q 6. Have you faced any problem while conducting online purchase?

☐ Yes ☐No

If yes, what kind of problem: ☐ Delay in delivery

 ☐ Cheap quality of product
☐ Product damage
☐ Non-delivery

Q 7. Rank your favorite shopping sites (On the Scale of 1 – 5):-

Website Rank
Flipkart
Amazon
SnapDeal
Myntra
E-bay

Q 8. What are the barriers from your point of view of online shopping?

☐Risk of debit / credit card info

☐Risk of not getting what I paid for
☐Lack of trust
☐Complexity in shopping
☐Difficulty in returning products

Q 9. Please select your level of agreement towards the following questions

Perceptions Strongly Agree Indifferent Disagree strongly

Agree disagree
Online shopping products ☐ ☐ ☐ ☐ ☐
meet your expectations
Free Delivery of products ☐ ☐ ☐ ☐ ☐
influences you purchasing
power
Does customer review help ☐ ☐ ☐ ☐ ☐
you in buying products online

Q10. Do you find it easy to return or exchange the product when purchased online?
☐Yes ☐No

Q11. Where do you find Variety of products?

☐Retail Shop ☐online platform
Q12. Do heavy discounts affect the purchasing capacity of consumer?
☐Yes ☐No ☐No Effect

Q13. How do you Make Payments mostly when shopping on the internet?
☐Credit Card

☐Cash on Delivery

☐Net Banking

☐Debit Card
Q14. Is the product has same price both in shop and online portal, where do you prefer
buying?

☐Retailer ☐Internet

Q15. Is personal privacy & security the factors influencing your online shopping
decisions?

☐Yes ☐No

Q16. The description of the product online is accurate?

☐Yes ☐No

Q17. Does Online Shopping Reduce your monetary cost of traditional shopping to a
great extend?

☐Yes ☐No

Q18. Does Demonetization made an impact on online shopping?

☐Positively ☐Negatively

Q19. Do you prefer support Cashless shopping?

☐Yes ☐No
Q20. Demonetization has _______________ your online shopping?

☐Reduced ☐Increased ☐No Effect

Q21. Which Payment Method you are using for online Shopping in the era of
Demonetization?

☐Paytm ☐free charge ☐Jio Money ☐E-Wallet