Consumers, all over the world, are increasingly shifting from

the crowded stores to the one-click online shopping format.

However, in spite of the convenience offered, online
shopping is far from being the most preferred form of
shopping in India. A survey among 150 internet users,
including both users and non-users of online shopping, was
carried out to understand why some purchase online while
others do not. The results suggest that convenience and
saving of time drive Indian consumers to shop online; while
security and privacy concerns dissuade them from doing so.
The Internet is no longer a niche technology - it is mass
media and an utterly integral part of modern life. As our
lives become more fractured and cluttered, it isn't surprising
that consumers turn to the unrivalled convenience of the
Internet when it comes to researching and buying products.
-- Jonathan Carson
President - International,
Nielsen Online
The above statement best illustrates how Internet has
changed the way consumers do nearly everything. A recent
study by market research firm ACNielsen suggests an
upward trend in online shopping across the world. A
significant observation of this study is that India beats the
global counterparts in number of purchases per month, with
5.2 purchases against the global average of 4.9. Online
shopping is described as the process by which consumers
purchase products or services over the Internet.
In today's fast-paced environment, with our lives becoming
busy and chaotic, online shopping has become a culture and

an inevitable part of one's life. The best thing about

shopping online is that it provides consumers freedom and
control, and choice of a wide range of products, with the
favorite items being only a few `mouse' clicks away. Some
say that it is technology and others say it is a business
model; but there is no gainsaying that online shopping has
revolutionized the way companies sell products and services,
and also the way people shop.
Online shopping provides several advantages over the
traditional brick-and-motor shopping. Exhibit 1 presents a
comparison between the features of traditional and online
shopping. In the traditional model, retailers are the people
who play a crucial role as they are responsible for selling
products or services to the end users. This model leads to
high distribution, inventory, logistics and other costs which
in the current volatile and dynamic market situation render
it uncompetitive in many situations. Online shopping helps
companies cut costs and enables them to compete
effectively and efficiently in today's, as well as, tomorrow's
market. In addition, online shopping provides seamless
interactions with the customers and enables the firm in
better understanding the consumers' value propositions. The
benefits and disadvantages of internet shopping for
customers have been discussed extensively in literature;
some of which are presented in Exhibit 2. Two kinds of
benefits - intrinsic and extrinsic - are identified. The former
refers to the benefits gained from purchasing online and
include pleasure, novelty and altruism, while the latter
pertains to benefits obtained from the outcome of
performing the activities such as monetary savings, time
savings, self-enhancement and social adjustment.

Online shopping, in India, is still in its nascent stage. Even

though India occupies eighth position in terms of number of
internet users, the percentage penetration is low at 3%.
With the growing popularity of cybercafs, low cost of
broadband, and government initiatives, the internet usage is
expected to grow at 150% in the next few years. Some of
the common activities undertaken by internet users in India
are e-mail and chatting (98%), job search (73%), banking
(34%), shopping (28%), bill payment (19%), matrimonial
search (17%), and stock trading (14%). Though online
shopping has witnessed incredible growth in the past few
years in India, it is not as pervasive like in the west. In
India, the most commonly purchased items in online
shopping include books, electronic gadgets, apparel

accessories, railways and airline tickets, computer and

peripherals, music and movies and hotel bookings. Exhibit 3
presents the various products bought by percentage of
internet users during the year 2006-07.

Online Shopping in India

With the year 2007 being declared as the broadband year in
India, various initiatives were undertaken by the Indian
government to increase PC and Internet penetration.
Currently, there are approximately 42 million active Internet
users and over 4.7 million broadband Internet connections in
India. Nearly 77% of all the Internet users belong to the age
group of 18 to 35, with majority being in socioeconomic
classes A, B and C. English is the most preferred language of
Internet users (Users of vernacular websites have increased
to 34%, up from 12% in the previous year). The average
internet usage has been 25 days a month with each visit
averaging 28 minutes. Of the internet users in India,
approximately 10.8 million or 25% shopped online during
the year 2006-07, an increase of 76% over the previous
year. During 2007-08, major metropolitan cities namely

Mumbai (24%), Delhi (20%), Chennai (9%) and Bengaluru

(6%) contributed to the bulk of online commerce; and 88%
of the shoppers were male.

According to a survey by MasterCard, India and China would

become the largest online shopping markets in the AsiaPacific region by 2010, surpassing Japan and South Korea.
Robust economic growth, large scale urbanization and rising
spending by the middle class have been identified as the
growth drivers for online shopping in India. In another study
by IMRB and Internet and Mobile Association of India
(IAMAI), online shopping in India was expected to reach Rs.
9210 cr during the year 2007-08, 30% more than during the
previous year. The various reasons identified in this study for
consumers to adopt online shopping are: saves time and
effort; convenience of shopping from home; availability of a
wide variety/range of products, detailed information about
the product; and easy comparison between alternative
products/brands. The growing number of internet users and

favorable
environmental
factors
provide
excellent
opportunity for firms to offer their products online. Many
traditional retail firms are seriously looking at e-tailing as a
future revenue generator. While the above assessment
paints a rosy picture for online shopping, not all view it as
the next big thing in India. Some are skeptical about its
growth prospects. Various factors like limited choice,
security or perceived risk, and inefficient services have been
ascribed to be depriving consumers from getting value from
shopping online.

Why Some Purchase and Others Just Browse?

Despite growing popularity of online shopping, only 25% of
internet users patronize the virtual format. Concerns of
privacy, security, concerns about after sales service, and
missing out point-of-purchase promotions have been
described as some of the factors that deter consumers from
shopping online. To further understand why some just
browse while others purchase online, a survey was carried
out among students of a leading management school in

India. The objective of the study was to investigate the

behavior of online consumers and to identify the factors that
differentiate online shoppers from those who just shop
offline. A convenient sample of 149 subjects (internet users
with debt/credit card) was recruited for the study. The
majority of the subjects were between the age of 20 and 27
years (94%). Sixty-one percent of the respondents were
male. On average, about 73% of the subjects had been
using the internet for more than five years. Based on items
generated from a focus group of 10 students (five online
shoppers and five offline shoppers), a survey instrument was
constructed. Sixty percent or 90 respondents had purchased
online during the previous three months (users), while the
remaining 59 had purchased offline during the same period
and had never purchased online (non-users). Apparel,
books, electronic goods and computer peripherals were the
most popular categories bought by the respondents in both
offline and online shopping contexts during the previous
three months. The independent sample t-test was used to
compare the mean differences between users and non-users
of online shopping using SPSS statistical software. Exhibit 4
depicts the results of the independent sample t-test.
Discussion
In the survey, we systematically investigated the factors that
influence consumers to shop online as against the traditional
format. Independent sample t-test was carried out to
compare the mean scores of users and non-users on 18items generated through a focus group discussion. The
results show that privacy concerns, online security and
perceived risk deter internet users from shopping online.

Perceived risk in purchasing the product represents an

inherent risk involved in online shopping. The inherent risk
arises as a result of the asymmetry between the online
retailers and the consumers. Consumers do now know
whether the retailers would deliver the products they have
ordered or deceive them by supplying counterfeit products.
While consumers perceive risk in most purchase decisions, it
has a distinct dimension in the new shopping format, i.e.,
shopping online. Apart from product and channel risk,
security and privacy risk are also significantly higher in case
of non-users of online shopping. Enhancing the security and
privacy features of e-commerce websites by the use of
secure socket layers to transmit personal information can
reduce the risks associated with such purchases.
Shopping is an important personal and social activity for
many consumers. The results show that users perceive
online shopping format as more stimulating, exciting and fun
experience. Some of the factors that could have a negative
influence on the online shopping experience include loss of
sensory shopping and social interaction. Lack of social
interaction dissuades many consumers from shopping online.
Further, consumers who value experiential shopping are less
likely to shop online. The perceived time saving and
convenience offered by e-retailers has a significant influence
on users to shop online. The high responses received on
factors like availability of much product information and
product details by non-users further shows that non-users
have to work hard and put in more effort in collecting
information when purchasing offline. To conclude, the study
proposes that risks pertaining to product, security and
privacy, lack of sensory and social interaction are the most

important factors that dissuade internet users from shopping

online in the Indian context. Improving these could persuade
the current non-users to purchase online in future.
________________________________________________
__________________________
Online shopping
Meaning
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, Intern
Online shopping or e-shopping is a form of electronic
commerceet shop, web-shop, web-store, online store, online
storefront and virtual store. Mobile commerce (or mcommerce) describes purchasing from an online retailer's
mobile optimized online site or app.
An online shop evokes the physical analogy of buying
products or services at a bricks-and-mortar retailer or
shopping center; the process is called business-to-consumer
(B2C) online shopping. In the case where a business buys
from another business, the process is called business-tobusiness (B2B) online shopping. The largest of these online
retailing corporations are Alibaba,Amazon.com, and eBay.
Definition
The act of purchasing products or services
over the
Internet. Online shopping has grown in popularity over the
years, mainly because people find it convenient and easy to
bargain shop from the comfort of their home or office. One

of the most enticing factor about online shopping,

particularly during a holiday season, is it alleviates the need
to wait in long lines or search from store to store for a
particular item.

Advantages of online shopping

1. Easy to Find: Finding a product online is much more
easier than looking for it in the local store. You can search
any product easily by using the search engine feature of an
online shopping website. But in store you have to look for it
until you find it. Sometime it becomes very annoying when
you can't find the product even after looking in the couple of
shops. But in online usually we don't have to face this
problem. If you don't find a product than you can switch to a
new shopping website without wasting your time. For
example if you don't find the suitable product in E-bay, you
can look for it in the Amazon without wasting your time. On
the other hand if you do not find any product in the store
you have to go to other store which is more laborious and
time consuming.
2. Products can be cheaper: Sometime a product can be
much cheaper in another country than your country. In this
case it would be wise to shop online to save some money.
Here is my story, I had a big problem with the air flow
sensor of my car. I went to the dealer , and they asked 700$

for a new air flow sensor. Since my car is old, I am never

going to spend that much money for that sensor. I did not
have time and patience to look for a spare part from the
junk yard. Then an idea popped into my head! I took out the
part number and searched it on e-bay, and found plenty of
used parts with a very cheap price. I bought the part and so
far my car is running great. I am very thankful to god for
creating such an easier way of shopping.
3. Save time and energy: You don't have to waste your time
in going to store and standing in front of the crowd. Who
likes to search a product in the every corners of a shop and
stand in the long line for paying the bill? Shopping from the
local store become more time consuming and expensive if
you do not have your own car. You can solve all the above
problems just by shopping online.
4. Freedom of choice: Freedom of choice is very high in
online than shopping from a nearby store. In online you can
choose the product you are looking, from a vast range of
products.
5) Freedom of price flexibility: You will enjoy the freedom of
price flexibility. If you don't like the price of a product from
an online shop, you can switch to other online to store to
look for cheaper price. You can also follow this procedure in
normal shop, but it would take more time and energy to do
so.
6. High satisfaction percentage: Now a days shopping online
is very reliable. The percentage of satisfaction is very high.
This is why you would see most of the seller has 99%+
positive feedback.

7. Buyer protection: Dependable websites like Ebay provides

buyer protection to motivate people to buy from their site.
This highly trusted websites will give your money back if any
seller do not deliver the item or deliver an item which does
not match with the description.
8. Rare product: Shopping online is very useful in buying
rare products. For example, Few days ago I have bought a
rare car part through through Ebay. The price of the part
was very affordable too.
9. Privacy: There are some products which you don't want to
buy publicly. You can buy any kind of product from online
web store anonymously to maintain your desired privacy.
10. E-business : The progress of online business is actually
helping million of people. Now people can buy and sell from
their home. People who can not afford to buy or rent a shop,
can easily open an online store and sell items from their
home. This is playing a very important role in reducing the
unemployment rate.
Disadvantages of online shopping
1. Delay: The main disadvantage of online shopping is, you
can not receive the product immediately. you have to wait
until the the product arrives. Sometime it is better to have
an item instantly than keep waiting for it for many days. I
would prefer to buy an item instantly if the delivery time is
too long.
2. Inferior product: You don't know about the actual quality
of the product. Sometimes the description of the product

might be different than the actual product. As a result you

might end up with inferior quality product.
3. Shipping Charge: Shipping charge and shipping delays
are one of the main disadvantage of shopping online. Items
are generally cheaper in online web store. But sometime the
addition of shipping charge makes the price similar or more
expensive than your nearby local store.
4. Delivery Problem: Sometime you may face Delivery risk.
Delivery risk occurs when the seller fails to deliver the
original product or delivers a damaged (inferior/duplicate)
product due to shipping problems.
5. Shopaholic : Since it's very easy to search & purchase
different items very easily and quickly from online, many
people ends up being a online shopaholic. That means they
buy too many things they actually don't need. Sad to say, I
think I am one of them! Online Shopaholic people thinks
they are saving money because the cost is very low when
you shop from online, but sometime it's actually a waste
because you don't need them. So, buy smart!
6.Scam: As online shopping is becoming very common the
number of online scam and fraud is also increasing. This is
why a buyer should always buy from trusted websites only
because trusted websites would take care of any fraud to
maintain their reputation.
7. Some items are better to buy from the real Store: You
wouldn't like to buy any clothing products because you won't
be able to know whether they are going to look good on you
or not.

8. Return problem: Returning an item is difficult in case of

online shopping. Although seller accepts sells return, they
usually wants the item within a short period of time and you
also have to pay for the shipping charges.
9. Warranty issues: Many electronic items are sold without
international warranty. So make sure you contact with the
seller to verify whether the item has international warranty
or not.

1.0 Introduction
1.1 History of online shopping:
History of Online Shopping starts not so long ago. Tim Berners-Lee
created "The World Wide Web Browser" in 1990. In1994 few other
developments took place. Online bank, the first of its kind opened this year.
Another development was opening of online pizza shop by pizza hut.
In the same year Netscape introduced SSL encryption to enable encryption
over the data transferred online. This later became the necessity of online
shopping. In 1995, Amazon started operation, one of the largest online
shopping mall now. Then in 1996 ebay started its online shopping portal.
1998 witnessed use of electronic postage stamps, where people can
download and print postal stamps after paying nominal fee. In 1999 the first
online shop in UK launched.
1.2 Overview:
Online shopping is a form of electronic commerce whereby consumers
directly buy goods or services from a seller over the Internet without an
intermediary service. An online shop, e-shop, e-store, Internet shop, web
shop, web store, online store, or virtual store evokes the 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.
(www.flipkart.com) When a business buys from another business it is called
business-to-business (B2B) online shopping. When a consumer buys from
another consumer it is called as consumer to consumer(C2C).online
shopping.(www.OLX.com)
Our generation stands on very cusps of greatest technology revolution that
mankind ever faced. Traditionally consumer buys and sells their product and

services on various shops and stores. But in todays world Internet is

changing the way consumers shop and buy good services, and rapidly
evolved into a global phenomenon. Many companies have started using the
internet with the aim of cutting marketing costs, thereby reducing the price
of their products and services in order to stay ahead in highly competitive
market. Companies also use the Internet to convey communication and
disseminate information, to sell the product, to take feedback and also to
conduct satisfaction surveys with customer.
The growing use of Internet in India provides a developing prospect for
online shopping. If E-marketers know the factors affecting online Indian
behavior, and the relationships between these factors and the type of online
buyers, then they can further develop their marketing strategies to convert
potential customers into active ones, while retaining existing online
customers.
The ecommerce industry in India is all set to touch Rs. 9210 crore by the end
of FY08. (30% jump from Rs 7,080 crore in 07).
1.3 Current status:
In November 2011, 27.2 million online users in India age 15 and older
accessed the Retail category from a home or work computer, an increase of
18 percent from the previous year, as consumers continue to turn to the web
to shop for and purchase items and retailers continue to increase their online
visibility through active marketing campaigns. Analysis of some of the
largest Retail subcategories revealed that Coupons was the largest with 7.6
million visitors, an increase of 629 percent from the previous year as
consumers rapidly adopt daily deal sites. Consumer Electronics ranked next
with 7.1 million visitors growing 12 percent from the previous year, while
5.8 million online users visited Comparison Shopping sites, an increase of
25 percent from the previous year.
Amazon Sites led as the top retail destination in India reaching 6.8 million
visitors, representing 14.7 percent of the online population. Apple.com
Worldwide Sites saw its audience reach 3.4 million visitors, followed by
Samsung Group with nearly 2.8 million visitors. Other top retail destinations
included Flipkart.com (2.7 million visitors), HomeShop18.com (2.3 million
visitors) and Naaptol.com (2.1 million visitors).
Top
10
Retail
Sites
by
Unique
Visitors
(000)
November
2011
Total India Visitors Age 15+ Home/Work Locations

Total Internet : Total Audience

Retail
Amazon Sites
Apple.com Worldwide Sites
Samsung Group
Flipkart.com
Homeshop18.com
Naaptol.com
Bookmyshow.com
Myntra.com
Priceindia.in
Alibaba.com Corporation

Total Unique
Visitors (000)
46,390
27,171
6,805
3,426
2,759
2,675
2,286
2,145
2,125
2,110
2,047
1,973

% Reach
100.0%
58.6%
14.7%
7.4%
5.9%
5.8%
4.9%
4.6%
4.6%
4.5%
4.4%
4.3%

1.4 Major Player in online shopping in India

1) Ebay.in
Ebay is the leader when it comes to online shopping in India. With just about
every thing under the sun, ebay is the best portal for shopping in India. Ebay
provides a large number of options for buyers in every category. May it be
laptops, music CDs or fitness equipment they have it all.

2) FutureBazaar.com
FutureBazaar.com from the Future group which is very successful with its
brands like Big Bazaar and Pantaloons is the online shopping site from the
group. It is place to find great electronic and fashion deals.

3) HomeShop18.com
HomeShop18 comes from the Network18 group and is fast becoming one of
the best place to shop online in India. Some products can also bought via the
cash on delivery option. It provides free shipping and also has an EMI
facility for ICICI Bank card holders with no additional cost.

4) Indiatimes
Indiatimes shopping has the widest range of consumer electronic items at
lowest prices. The portal is supported by the Times of India group and offers
support mostly in the north western part of India.
5)Naaptol
Launched in January 2008, Naaptol has grown to become India's leading
comparison based social shopping portal, the one-stop destination for all
shoppers, merchants and market enthusiasts.

6) Flipkart.com
Originally started as books only site it now has a good
collection of games and movies among other items. Cash on
delivery option can also be availed besides other online
payment options.
Flipkart.com has now emerged as a major player in the
online shopping arena in India. They offer cash on delivery
on products of all sizes and amount. Moreover they have
now started giving 30 day replacement guarantee which is of
utmost use. Specifically when we buy electronic items and
other gadget there is always a chance that it might get some
problems.
Also, as Flipkart themselves acquires products in bulk
directly from suppliers and ships items by its own self
delivery personnel, for this reason there is a marked

difference in the product price at Flipkart.com. Whereas sites

such as ebay.in has different small-time sellers that sell their
items.
Majorly shopping at Flipkart is a great experience and value
for money.

2.0 Advantages of online Buying:

The major advantage of online shopping is the convenience it offers.
By sitting back at home you can now shop anything from candles to
vehicles by several clicks of mouse buttons.
The worry you may have on travelling, traffic blocks and parking
constraints in real world shopping can be avoided while shopping
online. With online shopping, you need not have to worry about
weather conditions as well.
Another big advantage of online shopping is the flexibility of
shopping. Unlike offline shops, online shops have no holidays, closing
times or any other problems. You can shop 24hrs a day, 7 days a week
and 365 days a year. Is n't that amazing to have a shop open always?
One of the advantages of online shopping is the facilities available for
product, price comparisons. Since so many companies have come up
with the facilities of online shopping, the price comparison and
quality comparison of the products and services are possible. Some
online malls also provide customer reviews about each product, thus
you can easily find out what other customers think about the product
or services before buying it.
You can efficiently use these facilities to decide whether a product or
service is worth the price quoted. If you are lucky you will be also
getting amazing offers from different online stores that will effectively
reduce the price than buying offline.
In short , online shopping offers more convenience and save time in
comparison with real - world shopping.

3.0 Future Opportunity:

As rules of the advertising game change rapidly, online or digital marketing
market size in India is estimated to touch close to Rs 2,000 crore in the next
two years from a Rs 1,400 crore now, say management experts. It is
expected that by 2016 modern retail industry in India will be worth US$
175- 200 billion. India retail industry is one of the fastest growing industries
with revenue expected in 2007 to amount US$ 320 billion and is increasing
at a rate of 5% yearly. A further increase of 7-8% is expected in the industry
of retail in India by growth in consumerism in urban areas, rising incomes,
and a steep rise in rural consumption. It has further been predicted that the
retailing industry in India will amount to US$ 21.5 billion by 2010 from the
current size of US$ 7.5 billion.