Online Shopping In India

2627 words (11 pages) Essay in Marketing

12/07/17 Marketing Reference this

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Online shopping is the process of researching and purchasing products or services over the Internet. The earliest online stores went into business in 1992, and online retailing took over a significant segment of the retail market during the first decade of the twenty-first century, as ownership of personal computers increased and established retailers began to offer their products over the Internet. 

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Consumers across the globe are increasingly swapping crowded stores for one-click convenience, as online shopping becomes a safe and popular option. Online shopping has some advantages over shopping in retail stores, including the ability to easily compare prices from a range of merchants, access to a wide selection of merchandise, being open 24*7 and the convenience of not having to drive to a physical store. But despite that the online shopping cannot replace the experience of shopping in a retail store or the entertainment value of going to a mall or market. A customer who knows exactly what he or she wants can look it up online, read and compare the information, and purchase from the site that offers the best price or service. But a shopper who is uncertain what to look for, or who just enjoys browsing through items on display, will prefer a retail store where the merchandise can be seen, handled and sample. The décor, music and arrangement of goods in a retail store creates a multi-dimensional shopping environment that cannot be duplicated online. For many people, going shopping at a mall, department store or market is a form of entertainment and a social experience. Many people who are currently unfamiliar with computers and do not feel comfortable using the Internet to shop are not likely to change their habits. 

The Future growth will come through improvements to the shopping process on existing Web sites; the implementation of more online shopping sites by existing retailers; the coming of age of a younger, more technology-oriented generation; and the introduction of novel goods, services and online shopping experiences. The growth of online shopping in developing nations like India will occur as more people acquire personal computers and credit cards.

Global Arena

Online shopping, or the use of the Internet to gather information on products and services, has already shown significant growth globally.

The Nielsen survey, the largest survey of its kind on the topic of Internet shopping habits, was conducted from October to November 2007 and polled 26,312 Internet users in 48 markets from Europe, Asia Pacific, the Americas and the Middle East. When The Nielsen Company conducted its first survey into online shopping habits two years ago, only 10 percent of the world’s online population (627 million) had made a purchase over the Internet. Within two years, this number has surged by approximately 40 percent – to a staggering 875 million. The burgeoning popularity of online shopping is a truly global phenomenon. Online shoppers can be found scattered across the globe, but the world’s most avid Internet shoppers hail from South Korea – 99 percent of Internet users in South Korea have shopped online. German, UK and Japanese consumers come in a close second. US consumers are slightly more recalcitrant, clocking in at number eight.

Indian Scenario

While the Internet and the World Wide Web are continuing to expand at a rapid pace, the development of electronic commerce has been slower. Surveys indicate many Indian Internet users employ the developing interactive medium to shop or browse for information on products and services, but a far smaller percentage has actually made purchases online.

The number of people and hosts connected to the net has increased worldwide. In India too, Internet penetration has became more widespread. Online shopping though a small proportion of the Internet activity is believed to increase in the coming years. Some of the prominent factors leading the change are greater Internet penetration, fall in prices of hardware, fall in the price of Internet communication, development of better and more reliable technologies, and increased awareness among the users. Some of the various ways in which online marketing is done in India are company websites, shopping portals, online auction sites, etc.

E-commerce may not have taken off in India the way it should have, yet prospects are bright. India is expected to be the third largest Internet market in the world in the next five years (Source Ac Nielson). The advantages are there for both buyers and sellers and this win-win situation is at the core of its phenomenal rise, as it is believed that e-commerce transactions will represent the largest revenue earner especially in the business to consumer (B2C) segment in India.

Indian customers are increasingly getting comfortable with online shopping, and there is a higher acceptability for the concept. India has 25 million Internet users and more is now turning to online shopping. There has been an influx of online shopping sites in India with many companies hitching onto the Internet bandwagon. The revenues from online shopping are expected to increase tremendously.

According to IAMAI, the average number of transactions per month in India has gone up from 2 lakh in 2003-04 to 4.4 lakh in 2004-05 and has doubled to 7.95 lakh transactions per month in the year 2005-06. The online sales during the festival season had increased rapidly especially during Diwali and Ramzan which recorded a sales of Rs115 crore, a 117 per cent increase from the Rs53 crore in the year 2004-05 (source IAMAI). These figures clearly show that online shopping has truly come of age and consumers are keen to shop on the net. Effective customer communication on products plus reduced shipping costs and timely delivery has helped online marketers to seize a slice of the Rs 115 crore sales. Though a miniscule amount in the global context, the Indian online shoppers’ population would make its presence felt quite remarkably. The potential of the Indian e-market can be gauged from the fact that 16 percent of Indian consumers want to buy online in the next six months, making it the third most online-potential country after Korea (28 percent) and Australia (26 percent) (Source:IMRB). This is an indication of a growing breed of Indian consumers who are not only better equipped but also more confident of the online transactions.

LITERATURE REVIEW

The consumers’ attitude towards online shopping is known as one of the main factors that affects e-shopping potential (Michieal, 1998). Though attitudinal issues are thought to play a significant role in e-commerce adoption, however social-demographic variables such as the gender, income, age, and nation also affect customers in purchasing. In a study of customer satisfaction and repurchase behavior, Mittal, Kamakura & Wagner (2001) divided consumer characteristics into six social-demographic variables. They were gender, age, educational background, marital status, children, and living area.

A review of empirical studies in this area shows several things. Many studies have found that typical online buyers have used the Web for several years, and because of their familiarity, they searched online for product information and purchase options (Bellmanet al., 1999). There was also evidence that the Internet shopper was convenience-oriented (Donthu & Garcia, 1999; Korgaonkar & Wolin, 1999), innovative and variety-seeking (Donthu & Garcia, 1999). He or she did not appear to be brand-or price-sensitive (Donthu & Garcia, 1999). From a consumer’s viewpoint, Yao (1998) who researched the purchase behavior of online shopping in demographic variables and behavior variables angle, found that different age groups affected customer’s product choice in price. Sheth (1983) considered that consumers’ purchase preference would affect their intention.

Considering that Internet shopping, is still not at the mature stage of development, not too much is known about consumers’ attitudes towards adopting this new shopping channel and factors that influence their attitude toward (Haque et al., 2006). That means that, through motivation and perception, attitudes are formed and consumers make decisions. Thus, attitudes directly influence decision making (Haque et al.,2006). Attitudes serve as the bridge between consumers’ background characteristics and the consumption that satisfies their needs (Armstrong and Kotler, 2000; Shwu-Ing, 2003). Because attitudes are difficult to change, to understand consumers’ attitudes toward online shopping, can help marketing managers predict the online shopping intention and evaluate the future growth of online commerce.

OBJECTIVE:

The purpose of this research study is to investigate online Indian consumer behaviour, which in turn will provide E-marketers with a constructional framework for fine-tuning their online strategies. The objectives of this research are:

  • To study the attitudes and behaviour of Indian consumer regarding online shopping.
  • To evaluate the contribution of online shopping in India.
  • To understand the issues and challenges of online shopping in India.
  • To analyze if the Indian online buying behavior is affected by demographics, cultural and social characteristics.
  • To identify factors which determine online shopping.
  • To examine the satisfaction level of online purchases of Indian consumers.
  • To investigate the future and growth of Online Shopping in India.

HYPOTHESIS:

Keeping in mind the above objectives and in order to address the problem in the most effective manner the following hypotheses have been formulated:

  • There is no significant difference between the frequency of online buying among male & females Indian consumers.
  • There is no significant difference between the Indian consumers educational background and their online purchase intention.
  • There is no significant difference between the income of regular online shopper and occasional online buyer.
  • There is no significant difference between the convenience orientation of consumers who make frequent online purchases or those who purchase occasionally.
  • There is no significant difference in the dominance of usage of shopping online between the Generation Y shoppers (those born after 1977) and other online buyers, that is, people over 45 years of age.

RESEARCH METHODOLGY:

The general purpose of the study is to conduct a descriptive research on the customer attitudes and behaviors for online shopping in Indian setting.

To this end exploratory or qualitative research tool would be used, which can help better understand and gain data that, shows how consumers make online shopping. Sampling designs chosen for use in this research is non-probability judgment sampling. A non-probability sample group would be used and the surveys would be mailed and distributed among the Internet users chosen. As discuss by Cavana et al.(2001), when time or other factors become critical, non-probability sampling is generally used. By using this sampling design, no probabilities are attached to the elements in the population under research. However this research may able to collect preliminary information in a quick and inexpensive way. In judgment sampling, the researcher uses his/her judgment in selecting information rich units from the population for study based on the population’s parameters to answer the research question. Five hundred surveys would be conducted because it is considered to be a large sample size to serve the purpose of the research.

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A combination of primary and secondary research techniques would be used to collect the data to meet the objectives. The primary research would be conducted across Delhi through structured consumer survey questionnaires administered among all the people who use Internet through judgmental sampling. Any person who meets the criteria would be a potential sample unit for the survey. According to Sekaran (2003), surveys type is a useful and powerful method in finding answers to consumer behavior’s research. To carry out the research, the questionnaire consists of a combination of several types of questions.

Also the researcher will seek to review related literatures of consumer behavior on online shopping. After data collection the Statistical Package for the Social Sciences (SPSS) would be used for data analysis. Various tests would also be conducted like T Test, Z Test, Factor Analysis. These methods would help to reach an answer and come up with results to prove the findings.

SCOPE:

Today Internet is not only a networking media, but also as a means of transaction for consumers at global market. Internet usage has grown rapidly over the past years and it has become common means for delivering and trading information, services and goods (Albarq, 2006). Since online shopping is growing tremendously in the current business scenario it is imperative to study how consumers’ make purchase decisions on the Internet. With the advent of Internet shopping, consumers are faced with an overwhelming amount of product offerings, and consequently have a greater degree of freedom to choose among many different alternatives. Internet shopping carries a number of different characteristics than traditional shopping methods.

In India the Internet has taken root and grown along many fronts in the past decade. The research assumes significance since marketers have endeavored to cater to this growing segment of consumers. Research undertaken within India on the profile of Internet shoppers is piecemeal and incomplete. This empirical research intends to explore into this issue, this study among the Internet users will help marketers to plan highly focused online campaigns in the future.

PROPOSED CHAPTERIZATION:

Keeping in mind the objective of the research, In this research proposal, the background, context and theme of the study would be presented first; then the objectives of the study and the research statements would be formulated. Here, vital concepts, questions and assumptions shall be stated. Finally, the scope and limitation of the study, methodology to be used and the significance of the research will be discussed in detail.  

So, proposed table of contents for the research are as follows –

  • Acknowledgement
  • Executive Summary
  • Table Of Contents
  • List Of Tables
  • List Of Figures

Chapter 1 – Introduction

In this chapter the background to the research area is presented. This presentation leads to a discussion of the issues within the research area which further leads to the formulation of a research question. This research question will be answered later in this thesis. The purpose of this thesis is also presented.

Chapter 2 – Literature Review

This chapter includes a review of relevant and supporting theories for this research. They begin with broader theories of segmentation and online buying behaviour before two models relevant to the empirical study is presented.

Chapter 3 – Research Methodology

The means that were used to conduct this research will be presented in this chapter. This includes the methodological approach, the research strategy, method of data collection, the sample and quality standards. The methodology is chosen to fulfil the purpose and aim of this thesis.

Chapter 4 – Analysis & Findings

The results of the empirical study will be presented in this chapter. The empirical findings will assist in the analysis of results presented in chapter five.

The extent by which data analysis done would depend on the amount and quality of data collected through primary and secondary research. Principle objective in such a process of data analysis would be the use of statistical tools wherever required which could include the use of worksheets in excel. This would involve extensive discussion with industry representatives to get an accurate and valuable opinion. Based on the analysis suitable analysis and recommendations would be fixed.

Chapter 5 – Conclusion

The conclusion answers the research question and presents implications for marketers. It answers whether the purpose of the research has been achieved.

Chapter 6 – Recommendations And Limitations

In this chapter the limitations of this research is presented as well as recommendations for future research in online communities

References

This research has referenced the following reputable sources – Literature, Journals, Articles, and Websites

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