UGC Approval No:40934 CASS-ISSN:2581-6403

A study on Online Shopping Behavior of

HEB CASS
Consumers in FMCG Sector
*Swati Bhatnagar & **Aditya Chowdhary

*Assistant Professor, Amity Business School, Amity University, Uttar Pradesh

**MBA Student, Amity Business School, Amity University, Uttar Pradesh

Address for Correspondence: [email protected]

Abstract
The origin of internet provided the consumers with a new experience about collecting information,
comparing the prices of the products and e-commerce is a very important aspect of internet and the most
interesting way to shop online. With the growth of e-commerce, the marketers have started selling
FMCG products online and as the purchasing power of the consumers is increasing the FMCG in India is
also growing online. FMCG is the fourth largest sector in India and it is an important contributor to
India’s gross domestic product. Majority of the consumers go for buying FMCG products online because
it is convenient for them than brick and mortar stores. The study has been conducted to know the online
shopping behavior of consumers towards FMCG products in India. The data has been collected through a
structured questionnaire. The study examines the demographic, behavioral characteristics of the
consumers as well as the main factors and the areas of improvement for the online websites which are
selling FMCG products. The study revealed that convenience is the major factor why consumers buy
FMCG products online and timely delivery of the products, counterfeit/fake products are the major areas
of improvement that the e-commerce websites and companies should take care.

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 UGC Approval No:40934 CASS-ISSN:2581-6403
1. Introduction
1.1 E-commerce
E-commerce or electronic commerce is a term that refers to any type of commercial transaction that
transfers information over the Internet. It covers a range of different types of businesses, from consumer-
based retail websites to auction or music sites, to commercial exchanges that trade goods and services
between companies. It is currently one of the most important aspects of the Internet. Internet was
founded in 1991 and the most attractive way to shop online is e-commerce. 2007 was seen as a
breakthrough year for e-commerce because they contributed very less of total sales. Consumers prefer e-
commerce because it has various advantages over brick and mortar stores. Through e-commerce,
consumers have a variety of products and they can choose the product that best suits them. Consumers
can compare the prices of various commodities and choose to offer them at a reasonable price.
It is expected that the ongoing digital transformation in the country will increase the total number of
Internet users in India from 373 million in 2016 (28% of the population) to 829 million in 2021 (59% of
the total population), and network equipment should reach 2021. The market share will increase from 1.4
billion in 2016 to 2 billion (Indian Express).
India's e-commerce market size
India's e-commerce market is divided into two parts.70% of the shares occupied by travel agencies
and30% captured by fashion, furniture, grocery stores etc.The Internet industry in India may double,
reaching 225 billion U.S. dollars by 2020, accounting for 7.5% of gross domestic product (GDP), mobile
internet users reaching 650 million U.S. dollars, and broadband Internet users reaching 550 million U.S.
dollars. Of the total sales, approximately 70% of car sales are US$40 billion, which is expected to be
digitized by 2020 (Indian brand equity foundation).
1.2 Fast Moving Consumer Goods
Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that are quickly
sold at a lower cost. Although the profitability of FMCG products is relatively small, they are usually
sold in large quantities; therefore, the accumulated profits of these products may be large.India's FMCG
industry is the fourth largest sector in the economy and is expected to have a scale of Rs 1,300 crore. In
the past ten years, the annual growth rate of the industry is about 11% (Ideas make market). The
important components of the market include the sale of unbranded products and unpackaged
products.Key Segments of the FMCG Industry are household Care, personal Care, food and Beverages.
According to Indian FMCG Industry Report; From 2016 to 2020, India's fast-moving consumer goods
market is expected to grow at a Compounded annual growth rate of 21% (Indian brand equity
foundation).It is expected that by 2020, the popularity of modern retail will increase significantly.The
main drivers identified through historical trends are mainly awareness raising and making it easier to
acquire and change lifestyles.Family and personal care accounted for 50% of the market, hair care
accounted for 23%, and food & beverage accounted for 19% (Economic Times).With the increasing
popularity of sales technology and the increase in wastage rates, FMCG distribution systems have
become more transparent, structured, and easily compatible.Rural market consumption patterns have

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shown significant trends in FMCG sector.Brand awareness - Due to high disposable income, consumer is
increasingly aware of and love lifestyles and high- end products.The focus of the construction of FMCG
companies is to innovate existing product portfolios and develop new products.The company is actively
launching lower-priced SKUs to maintain profitability and maintain production to expand the consumer
base. More and more products focus on reducing carbon footprint by creating environmentally friendly
products.
FMCG going online
India's consumer groups are similar to global consumer groups; living in an Internet-based world,
everything can be found on the Internet, including ordering food from restaurants, getting drugs or even
completing salon services at home. Although India's Kirana Store is gaining ground, this will continue to
be the dominant format, but online grocery stores will soon be seen as an important distribution channel.
Online fast-moving consumer goods are growing rapidly. Online shopping for fast moving consumer
goods (FMCG)/consumer packaged goods (CPG) has emerged not only in India but also throughout the
world. Indians buy online is no longer limited to books, electronic products or clothing. Consumers can
now purchase all fast-moving consumer goods such as soaps, shampoos, hair oils, packaged foods, etc.
On the one hand, leading e-commerce portals such as Flipkart and Amazon sell shampoos, hair oils and
other personal care products, but on the other hand e-commerce portals such as Grofers, big baskets
provide groceries, vegetables and packaged food on the doorsteps of consumers. Consumers at work are
busy with their schedules, and these portals provide them with a lot of convenience because they can
shop anywhere, anytime.There are many reasons why online shopping for fast-moving consumer
goods/CPG products has become a difficult task. They are as follows; Logistics costs, Global Retail
Business, Lack of discounts. However, there are few reasons why online shopping for FMCG/CPG
products should be successful. They are as follows:
1. Change the lifestyle of consumers - Usually, today's consumers do not have much time to go
shopping in physical stores. Then, these consumers look for e-commerce sites that offer fast-
moving consumer goods because they save time and can line up at the checkout counter at the
supermarket.
2. The use of mobile phones is increasing at a rapid rate to provide convenient access.

2. Review of Literature
Pandey and Puntambekar (2016) paper states the tendency of consumer behavior towards shampoo
brands. In today’s time both male and female consumers are conscious towards their appearance.
Shampoos have popularized a lot in few decades. TV advertisements have played a major role in the
buying of shampoo. The city of Madhya Pradesh is a small city and almost in all cities modern
products such as shampoo are widely used by residents, regardless of their age and other population
factors. Anandrajan (2016) studied the expectation of consumers towards Fast moving consumer
goods in Villupuram district. The data for this research has been collected by conducting face to face

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interviews with the respondents. The study analyzed the socio-economic background of the
respondents and their level of satisfaction. Consumers buy the products only if it is eye catching.
Sulekha and Kiran (2013) stated that the majority of the Indian population resides in villages and the
fast-moving consumer goods industry is famous for selling products in these areas which states that
the rural part of India seems to be more profitable for the FMCG companies. Barlette test and KMO
test was also applied so that the applicability of factor analysis can be known. The study revealed that
the consumers of rural areas not only think of price but they also think about quality, performance,
reliability etc.
Kansal and Singh (2015) studied the influence of brand on buying FMCG products. The results show
that variables such as educational qualification, gender, occupation, income have a positive
correlation and family size has a negative correlation with the impact on buying FMCG products.
Cash discount and free gifts are the major sales promotion schemes used by the marketers. Uzun and
Poturak (2014) tell that convenience and trust are the most important factors of online shopping
followed by price and quality of the products. According to the results, if the consumers have a good
experience while buying online and they are satisfied with the products and services then there is
lesser risk and they intend to buy again which means they are loyal towards the particular brand or the
product.
Srivastava and Kumar (2013) analyzed that the FMCG sector is an important contributor to India's
GDP. It has been promoting the needs of low- and middle-income groups in India. More than 73% of
FMCG products are sold to middle-class families, of which over 52% are in rural India. Many FMCG
companies are now moving to rural markets and are developing new strategies for rural consumers.
Indian FMCG companies are now busy developing new competitive strategies for the untapped
potential market. This study provides a detailed analysis of the FMCG industry's contribution to
India's rural market growth in order to explore consumer attitudes toward better purchasing decisions
for FMCG in the rural market.
Katiyar (2014) studied the buying behavior of consumers towards FMCG products with special
reference to bathing soap. Bathing soap has seen an increase in the sales in past decades in India and
people are trying new variants of bathing soap. The research tells that both the rural and urban
consumers have the same perception towards bathing soap.Nagaraja (2004) told that the behavior of
the consumers is also influenced by the family members and as well as by the neighbors. Consumers
are mostly influenced by touching and feeling aspect of any kind of promotional activity.Nasrudeen
and R. Mohammed (2014) state the level of consumption of fast moving consumer goods by rural
consumers. There is low level of consumption of FMCG products in rural areas.Muneeswaran and
Vethirajan (2013) discovered that consumer behavior has much importance in the present consumer
oriented marketing system with particular reference to gender attention. The FMCG sector is made up
of four categories of products like household care, personal care, food and beverages which have its
own hosts of products that have a quick turnover and the cost is low.

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Yuvarani (2013) analyzed that the economic liberalization in India had far-reaching consequences
that led to the global brands gaining access to the Indian market. Early companies focused their
marketing efforts on the urban market for educated consumers. However, as the urban market is
saturated, many companies will focus their attention on the fast-growing rural sector.Bhagat (2012)
concluded that companies focus on consumer in the competitive environment. The companies analyze
the qualification of consumers and form the marketing strategies based on them. The consumers are
affected from individual as well as environmental factors like personality, motivation, reference
group, family influence and culture. The aim of this study was to study the factors that affect the
buying behavior of consumers in teenagers because teenage consumers are one of the important
market segments.
Vincent (2006) stated that quality was the most important factor that draws the attention of consumers
towards the product. Consumers consider branded products as good quality products. Consumers do
not regret in paying extra money for the branded products because they get value for their
money.Mahalingam and Kumar (2012) think consumer behavior plays an important role in
marketing. This is affected by various factors. In a constantly changing global scenario, consumers
need and want to buy the product is found. In the study “Consumer Behavior in the City of
Coimbatore, Selected FMCG Research," researchers evaluated the socio-economic status of
consumers, shopping patterns and identified the factors that influence consumers purchasing of
selected FMCG.
The main question arises is “What are the drivers for the increasing online shopping of FMCG
products?” and “What are the improvement areas for e-retails?”

3.Research Methodology
3.1 Research Objectives
The main objectives of the research are:
a) To study the profile of consumers shopping for FMCG in terms of demographics,
psychographic and behavioral characteristics.
b) To study the factors for increasingly shopping for FMCG online.
c) To study the areas of improvement for e retailers for FMCG product range.
3.2 Sources of Data
a) Primary Source- The data will be gathered through a structured questionnaire which will be
distributed to the consumers. The questionnaire contains the questions which tell about the
online shopping behavior of consumers in the FMCG industry. After receiving the responses,
the data will be gathered and analyzed through software called Statistical Package for the
Social Sciences.
b) Secondary Source- The secondary data has been collected from books, websites in order to
have a deep understanding about the online buying behavior of consumers.

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3.3 Research Design
Exploratory cum descriptive research design has been done as the data has been collected from
primary as well as secondary sources.

3.4 Research Sample

 Sampling Plan- It is not possible to study about the whole universe that is why a sample is
taken from the population to study about the characteristics of the population.
 Sampling Technique- The study deals with the analyzing the online shopping behavior of
consumers. The technique used to study the population is convenience sampling technique.
The samples are chosen according to the convenience from the population as it is difficult to
study the whole population.
 Target Population- The target population for the study was the consumers in Delhi/Ncr
region.
 Research Instrument- The instrument through which data is gathered is a well-defined
questionnaire which helps to achieve the objectives of the study.
 Sample Size- The sample size of the study is 300respondents.
3.5 Data Techniques used
Various data techniques have been used with the help of SPSS (Statistical package for Social
Sciences). They are as follows:
 Descriptive analysis
 Inferential analysis- chi-square, factor analysis
 Cross tabulation
3.6 Limitations of the Study
 The time to conduct the study was limited.
 The primary data has been collected through a structured questionnaire and as the sample size
was 300 so it cannot depict the views of the entire population.

3.7 Reliability of the Questionnaire

Reliability testing was also carried out to measure the internal consistency (“reliability”). Cronbach
alpha test was used in order to do the reliability testing. Once the questionnaire was made and initial
responses started to come, with a small sample size of 100, this Cronbach alpha test was done.The
Reliability Statistics table gave the actual value for the Cronbach’s Alpha which is 0.812. That
indicates a high level of internal consistency for our scale as shown below:

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Table 3.7.1

Reliability Statistics
Cronbach's Alpha Cronbach's Alpha N of Items
Based on
Standardized Items

.812 .779 40

4.Data Analysis
4.1 Chi Square Test
4.1.1 Hypothesis Test 1
H0: The satisfaction provided by shopping FMCG products online and the discounts/offers provided
by the online store in a month for FMCG products are not related.
Ha: The satisfaction provided by shopping FMCG products online and the discounts/offers provided
by the online store in a month for FMCG products related.

Are you satisfied by shopping FMCG products online? * How often discounts and offers are
provided by the online store in a month for FMCG products? Cross tabulation
Count
Table 4.1.1.1
How often discounts and offers are provided by the Total
online store in a month for FMCG products?
Less than 2 Between 2- Between 4- More than 6
times 4 times 6 times times
Highly satisfied 30 25 14 9 78
Satisfied 85 44 5 4 138
Are you satisfied by
Neutral 29 30 13 1 73
shopping FMCG
products online? Dissatisfied 4 4 2 0 10
Highly
1 0 0 0 1
Dissatisfied
Total 149 103 34 14 300

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Table 4.1.1.2
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
Pearson Chi-Square 34.602a 12 .001
Likelihood Ratio 35.546 12 .000

Linear-by-Linear Association 2.223 1 .136

N of Valid Cases 300

a. 10 cells (50.0%) have expected count less than 5. The minimum expected
count is .05.
Interpret
ation: The value of chi-square statistics is 34.602. The chi- square statistics has 12 degree of freedom.
Since the p-value (0.001) is less than 0.05, the null hypothesis will be rejected and the alternate
hypothesis will be accepted. Therefore, there is a significant relationship between the satisfaction
provided by shopping FMCG products online and the discounts/offers provided by the online store in
a month for FMCG products.

4.1.2 Hypothesis Test 2

H0: The monthly spending on buying FMCG products online and the choice of FMCG segment the
consumers shop are not related
Ha: The monthly spending on buying FMCG products online and the choice of FMCG segment the
consumers shop related

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How much do you spend monthly on buying FMCG products online? * Which FMCG segment
do you shop online? Cross tabulation
Table 4.1.2.1
Count
Which FMCG segment do you shop Total
online?
Household Personal Food and
care ( Fabric care ( Hair beverages
wash, care, skin (bakery
household care, oral products,
cleaners) care, cereals,
cosmetics, snacks, soft
perfumes, drinks, tea,
toiletries) coffee, dairy
products,
fruits and
vegetables)
Below RS. 1000 22 11 3 36
Between RS. 1000-
34 35 9 78
How much do you 2000
spend monthly on Between RS. 2000-
24 54 19 97
buying FMCG 3000
products online? Between RS. 3000-
19 25 15 59
4000
RS. 4000 and above 14 9 7 30
Total 113 134 53 300

Table 4.1.2.2

Chi-Square Tests
Value Df Asymp. Sig.
(2-sided)
Pearson Chi-Square 23.334a 8 .003
Likelihood Ratio 23.607 8 .003
Linear-by-Linear
7.348 1 .007
Association
N of Valid Cases 300
a. 0 cells (0.0%) have expected count less than 5. The minimum
expected count is 5.30.

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Interpretation – The value of chi square statistics is 23.334. The chi square statistics has 8 degree of
freedom. Since the p value (0.003) is less than 0.05 the null hypothesis will be rejected and alternate
hypothesis will be accepted. Therefore, there is a significant relation between the monthly spending
on buying FMCG products online and the choice of FMCG segment the consumers shop.
4.2 Cross Tabulation: Mode
4.2.1 To find out how often consumers buy FMCG products online in a month.

Table 4.2.1.1
How often do you buy FMCG products online in a month?
Frequency Percent Valid Percent Cumulative
Percent
Less than 2 times 69 23.0 23.0 23.0
Between 2-4 times 154 51.3 51.3 74.3
Valid Between 4-6 times 52 17.3 17.3 91.7
More than 6 times 25 8.3 8.3 100.0
Total 300 100.0 100.0

Interpretation :Majority of the respondents buy FMCG products online between 2-4 times in a
month followed by less than 2 times, between 4-6 times and more than 6 times.
4.2.2 To find out which FMCG segment consumers mostly shop online.

Which FMCG segment do you shop online?

Frequency Percent Valid Percent Cumulative
Percent
Household care ( Fabric
113 37.7 37.7 37.7
wash, household cleaners)
Personal care ( Hair care,
skin care, oral care,
134 44.7 44.7 82.3
cosmetics, perfumes,
toiletries)
Valid
Food and beverages (bakery
products, cereals, snacks,
soft drinks, tea, coffee, 53 17.7 17.7 100.0
dairy products, fruits and
vegetables)
Total 300 100.0 100.0

Table 4.2.2.1

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Interpretation - 44.7% of the respondents buy personal care products like hair care, skin care, oral
care, cosmetics, perfumes, toiletries etc. when they buy FMCG products online
4.3. Factor Analysis

4.3.1 To find the most important factors for increasingly shopping of FMCG online

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .847

Approx. Chi-Square 794.816

Bartlett's Test of Sphericity Df 45
Sig. .000

Table 4.3.1.1

Table 4.3.1.2
Communalities
Initial Extraction
Rank the variables which are important for you while buying FMCG
1.000 .655
products online [Convenience]
Rank the variables which are important for you while buying FMCG
1.000 .590
products online [Better prices]
Rank the variables which are important for you while buying FMCG
1.000 .453
products online [Variety]
Rank the variables which are important for you while buying FMCG
1.000 .493
products online [Easy returns]
Rank the variables which are important for you while buying FMCG
1.000 .474
products online [Delivery options]
Rank the variables which are important for you while buying FMCG
1.000 .590
products online [Discounts]
Rank the variables which are important for you while buying FMCG
1.000 .534
products online [Redeem coupons]
Rank the variables which are important for you while buying FMCG
1.000 .472
products online [Quality]
Rank the variables which are important for you while buying FMCG
1.000 .388
products online [Availability of feedback]
Rank the variables which are important for you while buying FMCG
1.000 .519
products online [Quick price comparisons]
Extraction Method: Principal Component Analysis.

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Table 4.3.1.3
Total Variance Explained
Compon Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared
ent Loadings Loadings
Total % of Cumulati Total % of Cumulati Total % of Cumulati
Variance ve % Variance ve % Variance ve %
1 3.856 38.562 38.562 3.856 38.562 38.562 3.390 33.896 33.896
2 1.311 13.111 51.673 1.311 13.111 51.673 1.778 17.776 51.673
3 .909 9.093 60.766
4 .821 8.210 68.976
5 .615 6.145 75.121
6 .597 5.975 81.096
7 .547 5.466 86.562
8 .497 4.970 91.532
9 .426 4.263 95.795
10 .420 4.205 100.000
Extraction Method: Principal Component Analysis.

Figure 4.3.1.1

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Table 4.3.1.4
Component Matrixa

Component
1 2
Rank the variables which are important for you while
.722 -.261
buying FMCG products online [Discounts]
Rank the variables which are important for you while
.702 .017
buying FMCG products online [Easy returns]
Rank the variables which are important for you while
.685 .064
buying FMCG products online [Delivery options]
Rank the variables which are important for you while
.681 .087
buying FMCG products online [Quality]
Rank the variables which are important for you while
buying FMCG products online [Quick price .679 -.241
comparisons]
Rank the variables which are important for you while
.649 .177
buying FMCG products online [Variety]
Rank the variables which are important for you while
.643 -.348
buying FMCG products online [Redeem coupons]
Rank the variables which are important for you while
buying FMCG products online [Availability of .563 -.267
feedback]
Rank the variables which are important for you while
.277 .760
buying FMCG products online [Convenience]
Rank the variables which are important for you while
.468 .610
buying FMCG products online [Better prices]
Extraction Method: Principal Component Analysis.
a. 2 components extracted.

Interpretation:
1. KMO and Bartlett's Test
a. Kaiser- Meyer- Olkin Measure of Sampling Adequacy- The value of KMO is 0.847. Since the
value is more than 0.7 the sample is adequate for the factor analysis.
b. Bartlet’s Test - 0.00. Since the value is less than 0.05 the responses are the valid and suitable
for factor analysis.
c. Communalities – Ideally the extracted communalities should be greater than 0.5 however the
communalities of few items were found to be greater than 0.5
d. Total Variance explained - Looking at the total variance it was found that 51.673% of
variance in the test to find the most important factors for increasingly shopping of FMCG
online is explained by two extracted factors pricing offers and convenience which is further
supported by scree plot.
e. Scree Plot- It is a graphic representation of the total variance explained table, which shows
that the scree flattens after 2.

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2. Recognition of components
a. Component 1: Pricing offers
Discounts, redeem coupons, better prices and quick price comparisons.
b. Component 2: Convenience
Delivery options, availability of feedback, easy returns, quality, variety, convenience.

5. Discussions, Conclusion and Recommendation

5.1 Discussions
As per study conducted, it was seen that 70.2 % of the consumers are female and 29.8% of the
consumers are male.The consumers who mostly buy FMCG products online are between the age
group of 31-40 and 37.1% are under the age group of 21-30.Majority of the consumers are in service
followed by home maker, self-employed, student, and profession. About 33.4% of the respondents
have income ranging between 20000- 40000.Majority of the consumers i.e. 84.1% of the consumers
prefer shopping FMCG products online and 15.9% of consumers do not want to shop FMCG products
online and about 51.3% of the consumers purchase FMCG products between 2-4 times in a month
followed by less than 2 times, between 4-6 times and only 8.3% of the consumers buy more than 6
times in a month.Majority of the consumers spend between 2000- 3000 rupees on monthly basis for
shopping FMCG products. On the other hand, only 26.2% of the consumers spend between 1000-
2000 rupees for shopping these products.The most preferred online websites for FMCG products are
Amazon, Big Basket, Flipkart followed by grofers, natures basket, reliance fresh, Paytm mall and
others.The most important factor while buying FMCG products online is convenience because the
online store provides the consumers with 24×7 service and the consumer does not have to go
anywhere to shop FMCG products.Timely delivery of products, quality of the products, professional
behavior of the delivery boy, trustworthiness of the website, complex procedure of returning goods
are the major areas of improvement and is followed by freshness of the product and counterfeit/fake
products.It is also seen that 75.5% of the consumers prefer online mode of payment for FMCG
products whereas only 24.5% of the consumers prefer cash on delivery; 48% of the consumers say
that discounts and offers provided by the online store is between 2-4 times in a month ;38.1% of the
consumers get offers and discounts less than 2 times and the rest gets between 4-6 times and more
than 6 times in a month.Majority of the consumers are satisfied by shopping FMCG products online
;12.6% of the consumers are highly satisfied by shopping FMCG products online.There is a
significant relationship between the satisfaction provided by shopping FMCG products online and the
discounts/offers provided by the online store in a month for FMCG products. There is no significant
relation between the number of times FMCG products are purchased in a month and occupation.There
is a significant relation between the monthly spending on buying FMCG products online and the
choice of FMCG segment the consumers shop.The main factors that are for increasingly shopping of
FMCG online are discounts, redeem coupons, better prices, availability of feedback, quality, variety,

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convenience etc.The major areas of improvement for FMCG companies are trustworthiness of the
website, counterfeit/fake products, security issues, freshness of the product etc.
5.2 Conclusion and Recommendations
We are in the golden age of e commerce where the product comes to customers unlike earlier when
consumers go to products. There is an increase in online shopping of FMCG products in India. It has
risen from 3.7% in 2016 to 5.2 % in 2017. The current online shoppers at 69 million are projected to
increase to 215 million in next 4 years (Economic times, March 2018). Offline still commands the
major share of retail market. If the e commerce marketplaces need to survive and challenge the offline
share, they would have to work on significant areas of customer delight. This study has tried to
establish and prove the areas which customers generally look for while doing online shopping in the
FMCG sector .Customers value price, convenience, access and range of products while shopping for
convenience goods. The e commerce marketplaces score high on convenience, variety, discount
redeem coupons, quick price comparisons and convenient delivery options. However they would need
to work on the following areas of improvement like counterfeit/fake products, timely delivery of
products, additional cost on cash on delivery.

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