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1 THEORETICAL FRAMEWORK
This section reviews the previous studies done in the area of online shopping following
consumers attitude towards online shopping and highlighting the two main research questions
as i) Factors affecting and influencing consumers to shop online and ii) Who are online
shoppers in terms of demography

Consumers attitudes towards online shopping

The internet has developed into a new distribution channel and online transaction are rapidly
increasing. This has created a need to understand how the consumers perceive online
purchasing.

Price, Trust, Convenience were identified as important factors. Price was considered as to be a
most important factor for a majority of the students. The internet has created a paradigm shift
of the traditional way people shop. A consumers is no longer bound to open a times or specific
location. So he can become activity at virtually any time any place and purchase the products
or services.

The internet is relatively a new medium for communication and the information exchange that
has present in everyday life. The number of internet user is constantly increasing which is also
signifies that online purchasing is increasing. The rapid increasing is explained by the
consumer behaviour. The internet is considered a mass medium that provide the consumers
with purchase characteristics as no other medium. Certain characteristics are making it more
convenient for the consumer compared to the traditional way of shopping, such as the ability
to any time view and purchase products visualize the needs with products and discuss products
with other consumers.

The internet as developed into a new distribution channel and the evaluation of this channel.
E-commerce has now identified using the internet to shop online has become one of the primary
reasons to use the internet combined with searching for products and finding the information
about them. Therefore internet develop the companies also use the internet to convey,
communicate and disseminate information, to sell the product, to take feedback and also to
conduct satisfaction surveys with customers. Costumers use the internet not only to buy the
product online, but also to compare prices, product features and after sales service facilities
they will receive if they purchase the product from a particular store. Many experts are
optimistic about the prospect the online business.

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Due to rapid development of the technologies surrounding the internet, company that is
interested in selling products from its web site will constantly as to search for an edge in the
fierce competition since there are so many potential consumers, it’s of the out most important
to be able to understand what are the consumers wants and needs

Online shopping

Online shopping is a form of electronic commerce which allows consumers to directly buy
goods or services from a seller over the internet using a web browser. Alternative names are:
e-web store, e-shop, e-store, internet shop, web-shop, web-store, online store, online store front
and virtual store. Mobile commerce (or m-commerce) describes purchasing from an online
retailers mobile optimised online site or app.

An online shop evokes physical analogy of buying products or services at a bricks and mortar
retailer or shopping centre; the process is called business –to-consumer (B2C) online shopping.
In the case were a business buys from another business, the process is called business-to-
business (b2b) online shopping. The largest of these online retailing operations are Alibaba,

Online shopping in India

It is a fact that a great online shopping revolution is expected in India in the coming years.
There is a huge purchasing power of a youth population aged 18-40 in the urban area. If we
observe the growth of internet subscribes it is getting doubled year by year. The usage of
internet in India online 4% of the total population. 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, with good competition among the providers. Wi-Fi and Wimax
system as also started in India. This will increase the usage as it goes more on wireless internet.
Indians are proving every time that they can beat the world when it comes to figures of online
shopping. More and more Indians are going to online shopping and the frequency of Indians
online buying is cruising the overall global averages

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Few factors that boost online shopping in India

 Rapid growth of cybercafés across India

 Access to information
 The increase in number of computers users
 Reach to net services through broadband
 Middle-class population with spending power growing

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

Few facts about online shopping

 The figures from Online-Shopping and E-Commerce worldwide: Statistics &

Facts

For private consumers around the globe the most well-known form of e-commerce falls into
the business to consumer (B2C) category, which includes online retail or online shopping. It
refers to online purchases from bricks-and-mortar retailers, such as Walmart, as well as from
web-only online retailing corporations such as Amazon.com or Rakuten. In 2016, an estimated
1.61 billion people worldwide purchase goods online. In 2016, global e-retail sales amounted
to 1.9 trillion U.S. dollars and projections show a growth of up to 4.06 trillion U.S. dollars by
2020. In Asia Pacific, e-retail sales accounted for 12.1 percent of retail sales in 2016 but only
for 1.8 percent of retail sales in the Middle East and Africa.

In recent years, mobile shopping has been on the rise, with customers increasingly using their
mobile devices for various online shopping activities. According to a March 2016 study
regarding mobile shopping penetration worldwide, 46 percent of internet users in the Asia
Pacific region and 28 percent of those in North America had purchased products via a mobile
device, whether smartphone or tablet computer. As of the fourth quarter of 2016, desktop PCs
still accounted for the majority of global e-retail orders but smartphones are the number one
device in terms of retail website visits. During a 2017 survey, 11 percent of online shoppers
stated that they shopped online via smartphone on a weekly basis.

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The average online shopping and purchase intention rates among online shoppers also vary
strongly by product category - a total of 53 percent of online shoppers had purchased books or
music online in the past 12 months but only five percent of shoppers had bought artwork online.
The average number of annual online transactions per capita is also not uniform - Asian
shoppers made an average of 22.1 online transactions whereas shoppers in Latin America
onlinemade9.2e-retailpurchases.
Amazon.com is one of the most popular and well-known example of an online shopping
platform. Founded in 1995, the Seattle-based site started out as an online bookstore, but soon
began expanding its product range towards other retail goods and consumer electronics. As of
2015, Amazon is the worldwide leading e-retailer, as well as the number one web-only retailer
globally.

 E-commerce in India

India has an internet user’s base of about 450 million as of July 2017, 40% of the population.
Despite being the second-largest user base in world, only behind China (650 million, 48% of
population), the penetration of e-commerce is low compared to markets like the United States
(266 million, 84%), or France (54 M, 81%), but is growing at an unprecedented rate, adding
around 6 million new entrants every month. The industry consensus is that growth is at an
inflection point.

In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-
retail activities. Demand for international consumer products (including long-tail items) is
growing much faster than in-country supply from authorised distributors and e-commerce
offerings.

In 2015, the largest e-commerce companies in India were Flipkart, Snapdeal, Amazon India,
and Paytm.

 Market size and growth

India's e-commerce market was worth about $3.9 billion in 2009, it went up to $12.6 billion in
2013. In 2013, the e-retail segment was worth US$2.3 billion. About 70% of India's e-
commerce market is travel related. According to Google India, there were 35 million online

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shoppers in India in 2014 Q1 and was expected to cross 100 million mark by end of year 2016.
CAGR vis-à-vis a global growth rate of 8–10%. Electronics and Apparel are the biggest
categories in terms of sales.

According to a study conducted by the Internet and Mobile Association of India, the e-
commerce sector is estimated to reach Rs. 211,005 crore by December 2016. The study also
stated that online travel accounts for 61% of the e-commerce market.

According to a study done by Indian Institute of ecommerce, by 2020 India is expected to

generate $100 billion online retail revenue out of which $35 billion will be through fashion e-
commerce. Online apparel sales are set to grow four times in coming years.

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by
2016 and $850 billion by 2020, – estimated CAGR of 10%. According to Forrester, the e-
commerce market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR
of over 57% between 2012–16.

As per "India Goes Digital", a report by Avendus Capital, the Indian e-commerce market is
estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable
portion (87%) of this market today. Online travel market in India had a growth rate of 22%
over the next 4 years and reach Rs 54,800 crore ($12.2 billion) in size by 2015. Indian e-tailing
industry is estimated at Rs 3,600 crore (US$800 million) in 2011 and estimated to grow to Rs
53,000 crore ($11.8 billion) in 2015.

Overall e-commerce market had reached Rs 1,07,800 crores (US$24 billion) by the year 2015
with both online travel and e-tailing contributing equally. Another big segment in e-commerce
is mobile/DTH recharge with nearly 1 million transactions daily by operator websites.

A new sector in e-commerce is online medicine, selling complementary and alternative

medicine or prescription medicine online. There are no dedicated online pharmacy laws in
India and it is permissible to sell prescription medicine online with a legitimate license.

Online sales of luxury products like jewellery also increased over the years. Most of the retail
brands have also started entering into the market and they expect at least 20% sales through
online in next 2–3 years.

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  E-commerce and Online Shopping in India - Statistics & Facts

In the upcoming years, e-commerce is expected to boom in the Asian region. The number of
digital buyers in Asia Pacific is projected to pass the one billion mark for the first time in 2018,
which will account for 60 percent of all internet users in the region. In line with the regional
growth, India, a fast-growing emerging Asian market, shows optimistic projections for the e-
commerce industry. Current active e-commerce penetration in India stands only 28 percent,
with lots of room for improvement - India's retail e-commerce CAGR is projected to reach 23
percent from 2016 to 2021.

Close to 329.1 million people are projected to buy goods and services online in India by 2020.
This means that about 70.7 percent of internet users in India will have purchased products
online by then. The majority of digital shoppers in India are male. This growth in volume of
digital buyers has a reflection on revenue as well. Retail e-commerce sales in India are forecast
to grow tremendously, with projections to jump from around 16 billion U.S. dollars in 2016 to
just over 45 billion U.S. dollars in 2021. In 2016, Amazon.in was the leading online store in
India with net e-commerce sales of 437.7 billion U.S. dollars, followed by local competitors
Flipkart and amazon.

Mobile is also a profitable and promising shopping platform for the retail industry in India. In
fact, about 23 percent of Indian internet users stated that they used a mobile phone for making
a purchase in 2016. This places India as one of the leading digital markets for mobile e-
commerce penetration. About 27 percent of digital buyers in the country stated making an
online purchase via their smartphones/mobile on a monthly basis, and 24 percent stated
purchasing online goods and services weekly. About 71 percent of consumers in India also said
mobile wallet is their preferred method of digital payment. In terms of value, sales from mobile
retail e-commerce are projected to generate 63.5 billion U.S. dollars in revenue by 2020.

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Factors influencing consumer to shop online

Though there are several factors that influence consumers to shop online, but as mentioned
above researchers have selected four factors after reading literature in the field on consumer
attitudes towards online shopping and these factors are discussed below in the light of previous
literature.

Convenience
Convenience factor refers that it is easy to browse or search the information through online is
easier than the traditional retail shopping. Through online, consumers can easily search product
catalogue but if the consumer look generally for the same product or item in a traditional store
manually it is difficult to visit physically and time consuming also. Convenience has always
been a prime factor for consumers to shop online. Darian (1987) mention that online shoppers
carry multiple benefits in terms of convenience, such as less time consuming, flexibility, very
less physical effort etc. Bhatnagar and Ghose (2004) claims for convenience as one of the most
important advantage for online shopping. According to the Robinson, Riley, Rettie and
Wilsonz (2007) the major motivation for online purchasing is convince in terms of shop at any
time and having bundles of items delivered at door step.
Rohm and Swaminathan’s (2004) claims in “typology of online shoppers into”: Convenience
shoppers, balanced buyers, variety seekers and store-oriented shoppers, based upon their preset
shopping motivation. Rohm and Swaminathan’s (2004) findings about ’convenience and
variety seeking’ are major motivating factors of online shopping and this study is consistent
with Morganosky and Cude’s (2000) research findings. Webcheck’s (1999) study shows that
convenience factor is one of the biggest advantages of online shopping. Through online
purchase consumers can easily compare the price than the traditional purchase. So price
comparison is also another convenience factor of online shopping.

Time saving
Time savings is one of most influencing factors of online shopping. Browse or search an online
catalogue can save time and patience. People can save time and can reduce effort by shopping
online. According to Rohm and Swaminathan’s (2004), one possible explanation that online
shopping saves time during the purchasing of goods and it can eliminate the traveling time
required to go to the traditional store. On the other side, some respondent think that it is also

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time taken for delivery of goods or services over online shopping.Unexpectedly time saving is
not the motivating factor for the consumers to shop online (Corbett, 2001) because it takes time
receiving goods or delivery. But time saving factor can be seen through different dimensions
i.e. “person living in Florida can shop at Harod’s in London (through the web) in less time than
it takes to visit the local Burdines department store” (Alba et al. 1997, p. 41,emphasis added).
Morganosky and Cude (2000) have
concluded that time saving factor was reported to be primary reason among those consumers
who have already experienced the online grocery buying. So the importance of the time saving
factor cannot be neglected as motivation behind online purchasing. Additionally Goldsmith
and Bridges (2000) emphasize that there is a discrimination between online shopper and non-
online shoppers, online shoppers are more worried about convenience, time saving and
selection whereas non online shoppers are worried about security, privacy and on time delivery.
A study by Kamariah and Salwani (2005) shows higher website quality can highly influence
customers to shop online.

Website design/features
Website design and online shopping activity is one of the vital influencing factors of online
shopping. Website design, website reliability/fulfilment, website customer service and website
security/privacy are the most attractive features which influence the perception of the consumer
of online buying Shergill & Chen (2005). Kamariah and Salwani (2005) claims the higher
website quality, the higher consumer intends to shop from internet. Web design quality has
important impacts on consumer choice of electronic stores, stated by Liang and Lai (2000).
Website design one of the important factor motivating consumers for online shopping. Almost
100,000 on-line shopper’s surveyed by (Reibstein, 2000) shows that web site design was rated
as important factor for online shopping. Another study conducted by Zhang, Dran, Small, and
Barcellos (1999, 2000), and Zhang and Dran (2000) indicated that website design features of
the website are important and influencing factors that leads consumer’s satisfaction and
dissatisfaction with a specific website.
A study conducted by Yasmin and Nik (2010) shows a significant relationship between online
shopping activity and website features. Website design features can be considered as a
motivational factor that can create positive or negative feelings with a website (Zhang, et al
1999). A study by Li and Zhang (2002), if website is designed with quality features it can guide
the customers for successful transactions and attract the customers to revisit the website again.
However, worse quality website features can also hamper online shopping. According to Liang

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and Lai (2000), web design quality or website features has direct impact on user to shop online.s
Moreover researchers such as Belanger, Hiller and Smith (2002) concluded that a large
segment of internet users have serious concerns of security.

Security
Security is another dominant factor which affects consumers to shop online. However many
internet users avoid online shopping because of credit card fraud, privacy factors, non-delivery
risk, post purchase service and so on. But transaction security on the online shopping has
received attention. Safe and secured transaction of money and credit card information increases
trust and decreases transaction risk. In 1995, UK has introduced Fraud free electronic shopping
and later on Europe and Singapore introduced secured electronic transaction (SET). According
to Bhatnagar and Ghose (2004) Security is one of the attributeWhich limits buying on the web
as they claim that there is a large segment of internet shoppers who don’t like to buy online
because of their thinking about the security of their sensitive information.
Cuneyt and Gautam (2004) claims trust in the internet shopping with advanced technology,
and frequent online shopping to the internet being secured as a trustworthy shopping channel.

Online shoppers in terms of demography

Online shoppers in terms of demography are another important aspect. We would like to study
demography in terms of age, gender, income and education as are there any differences while
consumers shop online, differences within the age groups such as does online shopping attracts
elder people or younger people. Studies have shown that online shoppers mainly consist of
people with Higher education and income and working in middle to senior management or
professionals (Kehoe et al., 1998; Hoffman et al., 1996). Locally, a report in the Business Times
and an online survey showed that demographically, a typical Net shopper is mainly male, aged
between 18 and 40, had attended at least secondary school and belongs to a family with average
income of at least $5000. The online survey also showed that cyber-buyers were also mainly
Chinese below 36 years old with diplomas or degrees and drawing a monthly salary of less
than $3500. Another study by Miller (1996) claims cyberspace is the domain of young people
Bhatnagar and Ghose (2004).
Sim and Koi, (2002) states as main discriminating factors appeared to be gender and income.
Customer segmentation is important for electronic commerce success, Berry (1999). Miller
(1996) has focused on demographics to show the profile of Internet users, Bhatnagar and Ghose
(2004).

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Advantages of online shopping

Due to rapid growth of technology, business organizations have switched over from the
traditional method of selling goods to electronic method of selling goods. Business
organizations use internet as a main vehicle to conduct commercial transactions.

Online stores do not have space constraints and a wide variety of products can be displayed on
websites. It helps the analytical buyers to purchase a product after a good search.

1. Convenience of online shopping

Customers can purchase items from the comfort of their own homes or work place. Shopping
is made easier and convenient for the customer through internet. It is also easy to cancel the
transactions.

Top 6 reasons given by shoppers in buying through internet

1. Saves time and efforts.

2. Convenience of shopping at home.
3. Wide variety / range of products are available.
4. Good discounts / lower prices.
5. Get detailed information of the product.
6. We can compare various models / brands.

2. No pressure shopping

Generally, in physical stores, the sales representatives try to influence the buyers to buy the
product. There can be some kind of pressure, whereas the customers are not pressurized in any
way in online stores.

3. Online shopping saves time

Customers do not have to stand in queues in cash counters to pay for the products that have
been purchased by them. They can shop from their home or work place and do not have to
spend time traveling. The customers can also look for the products that are required by them
by entering the key words or using search engines.

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4. Comparisons

Companies display the whole range of products offered by them to attract customers with
different tastes and needs. This enables the buyers to choose from a variety of models after
comparing the finish, features and price of the products on display, Sometimes, price
comparisons are also available online.

5. Availability of online shop

The mall is open on 365 x 24 x 7. So, time does not act as a barrier, wherever the vendor and
buyers are.

6. Online tracking

Online consumers can track the order status and delivery status tracking of shipping is also
available.

7. Online shopping saves money

To attract customers to shop online, e-tailers and marketers offer discounts to the customers.
Due to elimination of maintenance, real-estate cost, the retailers are able to sell the products
with attractive discounts through online. Sometimes, large online shopping sites offer store
comparison.

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Disadvantages of online shopping

Ease of use is the prime reason that drives the success of e-commerce. Though internet provides
a quick and easy way to purchase a product, some people prefer to use this technology only in
a limited way. They regard internet as a means for gathering more information about a product
before buying it in a shop. Some people also fear that they might get addicted to online
shopping.

The major disadvantages of online shopping are as follows.

 Delay in delivery

Long duration and lack of proper inventory management result in delays in shipment. Though
the duration of selecting, buying and paying for an online product may not take more than 15
minutes; the delivery of the product to customer’ s doorstep takes about 1-3 weeks. This
frustrates the customer and prevents them from shopping online.

 Lack of touch and feel of merchandise in online shopping

Lack of touch-feel-try creates concerns over the quality of the product on offer. Online
shopping is not quite suitable for clothes as the customers cannot try them on.

 Lack of interactivity in online shopping

Physical stores allow price negotiations between buyers and the seller. The show room sales
attendant representatives provide personal attention to customers and help them in purchasing
goods. Certain online shopping mart offers service to talk to a sales representative,

 Lack of shopping experience

The traditional shopping exercise provides lot of fun in the form of show-room atmosphere,
smart sales attendants, scent and sounds that cannot be experienced through a website. Indians
generally enjoy shopping. Consumers look forward to it as an opportunity to go out and shop.

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  Lack of close examination in online shopping

A customer has to buy a product without seeing actually how it looks like. Customers may
click and buy some product that is not really required by them. The electronic images of a
product are sometimes misleading. The colour, appearance in real may not match with the
electronic images.

People like to visit physical stores and prefer to have close examination of good, though it
consumes time. The electronic images vary from physical appearance when people buy goods
based on electronic images.

 Frauds in online shopping

Sometimes, there is disappearance of shopping site itself. In addition to above, the online
payments are not much secured. So, it is essential for e-marketers and retailers to pay attention
to this issue to boost the growth of e-commerce. The rate of cyber-crimes has been increasing
and customers’ credit card details and bank details have been misused which raise privacy
issues.Customers have to be careful in revealing their personal information. Some of the e-
tailers are unreliable.

The disadvantages of online shopping will not hinder its growth, Online shopping helped
businesses to recover from the recession.

Merchants should pay attention to the stumbling blocks and ensure secure payment system to
make online shopping effective, the following advice may be followed by the E-merchants and
by the online shoppers.

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