Title of the Project

An Analysis Of Factors Creating Hesitations In

Consumers Mind While Buying Groceries Online

Submitted by
Sanket V. Bhosle

MMM - SemV Roll No. 12

Under the Guidance of

Prof. Ravi Vaidee

In partial Fulfilment of
MMM course
University of Mumbai
(2014-2017)

Prin.L.N.Welingkar Institute of Management

Development & Research
Matunga, Mumbai-400019.

CERTIFICATE FROM GUIDE

This is to certify that the project entitled An Analysis Of Factors Creating Hesitations In
Consumers Mind While Buying Groceries Online.

is successfully done by Mr: Sanket V. Bhosle

During the Third year of his coursein partial fulfillment of the Master Degree in Master Degree in:
Masters in Marketing Management

Management under the University of Mumbai through the Prin.L. N. Welingkar Institute
of Management Development & Research, Matunga, Mumbai-19.
This project represents the work done by Mr./Ms./ ________________________
Under my guidance & the record of Interactive sessions with me during the preparation of the
Project are as under:
Interactive Session No.
(Minimum Three)

Date

1.

19th July, 2016

2.

20th July, 2016

Signature of Guide

3.

Date: 3rd October, 2016

Signature of the Project Guide

Name of the Project Guide:Prof. Ravi Vaidee

Address: ClublifeAhuja Towers, Borivali West, Mumbai 400091
Tel.No./ Mobile No. 9664764768
Email ID: sank.bh.sb@gmail.com

TABLE OF CONTENT:

SR. NO

TOPIC

PAGE NO.

1.

EXECUTIVE SUMMARY

2.

INTRODUCTION

3.

SECONDARY RESEARCH

10

3.1

LITRATURE REVIEW

10

HYPOTHESIS

24

RESEARCH AND RESEARCH METHODOLOGY

25

5.1

RESEARCH OBJECTIVES

25

5.2

SCOPE OF RESEARCH

25

5.3

LIMITATIONS

25

5.4

PARTICIPANTS & APPARATUS

25

5.5

RESEARCH METHODS

26

6.

DATA ANALYSIS & INTERPRETATION

27

7.

OBSERVATION

37

8.

RECOMMENDATION

38

9.

CONCLUSION

39

10.

BIBLOGRAPHY

40

11.

APPENDIX

41

EXECUTIVE SUMMARY
Online grocery shopping is an entirely novel means of buying preferred grocery goods for
household consumption. Such a concept has been launched in a suburban city like Mumbai. India
in the past decade launched few websites like www.localbaniya.com, www.grofers.com,
www.bigbasket.com to name a few. Because of such an exponential improvement in technology
and its widespread availability, business concepts like online grocery shopping are bound to gain a
sustainable market share in the retail food markets, not only in Mumbai but nationwide.
This study is intended to examine the factors that affect the intention of the consumers in Mumbai
to buy groceries online. The most prominent factors of them all include Attitude, Subjective Norms
and Perceived Behavioural Control. The population sample considered for this study consisted of
the consumers who possessed some prior experience of buying goods online over the Internet.
The data collection is done using self administered questionnaire.
The overall findings of the study have highlighted some significant points which should be helpful
to the online grocers for capturing the local city market and encourage repeated orders in the
future. It also helps the online grocers to realize consumers wants and preferences while they
shop online for grocery products. By acknowledging this study, online grocers should be able to
position themselves in the market at par to be accepted by consumers in Mumbai city.
The below study focuses on the growing online grocery industry in India. The world has changed
radically for online grocery start-ups in India in the past few years. Three to four years ago the
buzz was around grocery sites shutting down. Now, the survivors and new entrants are thriving.
This study attempt to answer some of the questions regarding why consumers who prefer to buy
commodities like fashion products, Show tickets, Airline tickets, electronic products etc. online,
but when it comes to grocery products which are require on daily basis, there are many
hesitations in consumer minds. This personality sketching will help to understand the factors like
motivation, attitude, perception etc., which play important role while purchasing any product.
The literature review was done to have the basic understanding through various studies and
reports about the current market and changing trend of the online industry. It also helped to
understand the key factors driving the online market.
Various journals, Reports, Articles, News articles, Research Reports were studied to get the
information on the various figure and growth factors for the online grocery industry. The
secondary data was studied to understand the impact of various factors like Consumer price,
perception, attitude of the consumer while purchasing online. The report includes the data
reviewed from the references mentioned at the end of the report.
This includes designing of the questionnaire, collecting survey and analyzing charts and tables, by
using excel and other computer softwares to understand the buying behaviour of the consumer.
Based on the research conducted and referring the secondary data recommendation and
conclusion have been drawn at the end of the report.

INTRODUCTION
Virtual grocery stores have emerged as an excellent alternative for urban, time-tested citizens who
after a grueling day in office or tending to domestic chores lack time to visit an offline store, wait
in a queue and haggle over prices and lug bags full of groceries back home. Thanks to tech-backed
portals that have come to the rescue of such customers, it is now possible to get all kinds of
essentials delivered at ones doorstop from the comfort of ones office desk or kitchen counter.
While virtual shopping has gained a strong foothold in several foreign countries, the trend is slowly
catching pace in India as well.
The number of Internet subscribers in the country has steadily increased from 238 million in June
last year to 306 million at the end of December 2015. Of the 306 million Internet users, 219 million
users are from urban parts of the country. The user base saw a growth of 71% year by year. On the
other hand, the userbase in the rural area went up by 93% from December 2017 to reach 87
million at the end of December 2016.
Subscribers in urban India using mobile Internet mostly for online communication (80%), social
networking (74 per cent), entertainment (30%), online shopping (13%) and online ticketing (11%).
In rural India, 52% said they used Internet for entertainment, 39% for social network, 37%
communication, one per cent for online shopping and 0.4 per cent for online ticketing.
Currently, Indias online grocery market is estimated to be less than $100 million and is expected
to cross $25 billion by 2020. According to retail consultancy Technopak, the online grocery retail
market is growing at 25 to 30 % in the metros and other large cities in India. What is attracting
more and more customers to shop online is the ease and attractive offers that these portals come
up with.
The world has changed radically for online grocery start-ups in India in the past few years. Three to
four years ago the buzz was around grocery sites shutting down. Now, the survivors and new
entrants are thriving.
The top five online grocery startups in India have risen over $120 million just this year. Four years
ago, a number of startups had come up in this sector but most shut down pretty soon mostly due
to lack of investment and customer base.
This study attempt to answer some of the questions regarding why consumers who prefer to buy
commodities like fashion products, Show tickets, Airline tickets, electronic products etc. online,
but when it comes to grocery products which are require on daily basis, there are many
hesitations in consumer minds. This personality sketching will help to understand the factors like
motivation, attitude, perception etc., which play important role while purchasing any product.

This report shall attempt to answer some of the questions regarding online buying behavior of
consumer, which depends on particular commodities. The market research will be helpful to the
new online grocery stores\ websites in India to find out possible gaps between the customers
expectations and present market offering.

It will mainly a primary research and the information will be gathered from both primary and
secondary research.
The project highlights the factors, which creates hesitations in consumers mind while buying
groceries online.
The factors under consideration would be:
Price
Hygiene and Quality
Delivery Time
Personal Touch

Overview Of Online Grocery Industry

India is among the fastest-growing markets and has been identified as one of the significant
potential markets for the company.
Muralikrishnan B., country manager at eBays India explains that Indian consumers toward buying
high margin products such as clothes and shoes as is the trend among eBay shoppers in the west
rather than electronic gadgets and books, which are the most popular choices now but command
lower profit margin and are less frequent purchases.
He depicted that Indias nascent e-commerce market, which till recently was largely limited to
people buying train, movie, flight tickets, is in the middle of a surge as a younger, tech-savvy
middle class increasingly takes to shopping online in a country seeing rapid growth in internet
usage.
Consulting firm Technopak predicts a $70 billion annual market by 2020, up from $600 million
now, which is just 0.05% of global online shopping.
E-commerce : A boon for the current economic downturn.
First Data Corporation and ICICI Merchant Services, has laid down some facts that e-commerce market in
India had clocked close to Rs. 50,000 cr. by the end of 2011.

Online Grocery Industry in India

Out of about 40 beginners, we are among the very few who survived, says Hari Menon, Cofounder of Bigbasket, which was founded in 2011.
Now BigBasket, along with other survivors ZopNow and Localbanya, and the new kids on the block
like Grofers, PepperTap, and Jugnoo are expanding rapidly, launching in new cities, hiring new
talent and raising fresh funds.
So, what changed
The biggest change is the habit change of consumersto buy grocery online. We are changing
the way people shop for grocery, says Mukesh Singh, Co-founder and CEO of ZopNow. The
startup was founded in 2011 and had an inventory model. ZopNow changed this model earlier this
year and now partners with hypermarkets to source products and is targeting over $80 million in
revenue this fiscal. The increased consumer traction has helped attract investment in this
category which further accelerates the process.
The food and grocery industry in India is now worth $383 billion and is expected to touch $1
trillion by 2020, according to a study by advisory firm Technopak. This is the market these
startups are targeting.
Despite the large market size, experts like Arvind Singhal, Chairman of retail advisory firm
Technopak, say the growth these startups have registered has been surprising. This is because
grocery is a tough segment to crack online even globally. Poor execution had led many an e-grocer
in the USWebvan, HomeGrocer and PublixDirectto bankruptcy in the last decade.

This is a complex, execution-oriented business; understanding the execution and supply chain
makes the real difference, says Hari of Bigbasket, the only major player that still maintains
inventory. The company, the largest in this segment, operates in seven cities and is targeting $ 1
billion revenue by end of FY 2017.
Last-mile logistics and procurement are the two areas that complicate operations in this segment
and each startup is
tackling these challenges differently.
Bengaluru-based BigBasket is expanding its warehouse network and going to smaller towns.
ZopNows new model has seen them partner with hypermarkets like More and HyperCity.
Bengaluru-based ZopNow and its customers have real-time visibility of this inventory. ZopNow
handles the pick-up and delivery.
The new companies have opted for a hyperlocal model. Grofers, which has raised $45 million in
funding just this year, started out as a provider of on-demand delivery services to local stores. Late
last year, the company launched its mobile app through which consumers can place their grocery
orders.

FDI Laws In Online Grocery Industry

In a boost to retailers and grocery startups such as Bigbasket and Grofers, the government allowed
100% FDI in food retail, including through e-commerce, provided such items are produced,
processed or manufactured in the country.
Existing players in the Indian online grocery business are expected to make strategic investments
in supply chain and food processing units following the governments move on Monday to allow
100 per cent foreign direct investment (FDI) in food retail, including through e-commerce,
provided such items are produced, processed or manufactured in the country.
In the past, Indian online grocery players such as Bigbasket, Grofers, and ZopNow have been facing
logistics and supply chain pressures, as a result of which, some like LocalBanya have shut shop and
others like ZopNow has moved from an inventory-led to a marketplace model. The new FDI policy
is expected to ease their burden.
At the same time, US-based e-commerce giant Amazon is likely to pump in more money into its
online groceries unit Amazon Now. Recently, Amazon founder and CEO Jeff Bezos announced an
additional investment of $3 billion in India and with the governments new FDI policy, a significant
portion of this investment may be pumped into its groceries business.
Indian Government has permmitted 100% FDI only in e-commerce market plase model. For
inventroy model it is still 0.
Also FDI of 100% is permmited on for B to B format and it is 0 for B to C.

Difference Between Market Place Model and Inventory Model in E-commerce.

Market Place Model :
According to the FDI policy guideline, Marketplace model of e-commerce means providing of an
information technology platform by an e-commerce entity on a digital and electronic network to
act as a facilitator between buyer and seller.
The main feature of the market place model is that the e-commerce firm like flipkart, snapdeal,
amazon etc. will be providing a platform for customers to interact with a selected number of
sellers. When an individual is purchasing a product from flipkart, he will be actually buying it from
a registered seller in flipkart. The product is not directly sold by flipkart. Here, flipkart is just a
website platform where a consumer meets a seller. Inventory, stock management, logistics etc are
not supposed to be actively done by the ecommerce firm.
Inventory Model :
According to the FDI policy, Inventory model of ecommerce means an ecommerce activity where
inventory of goods and services is owned by e-commerce entity and is sold to the consumers
directly.
The main feature of inventory model is that the customer buys the product from the ecommerce
firm. He manages an inventory (stock of products), interfaces with customers, runs logistics and
involves in every aspects of the business. Alibaba of China is following the inventory model.
What is fulfillment centre and why it is important in online industry?

Fulfillment centers enable ecommerce merchants to outsource warehousing and shipping. This
relieves online business of the necessary physical space to store all products, which is beneficial
for merchants without the capacity to directly manage inventory. Sellers send merchandise to the
fulfillment center, and the outsourced provider ships it to customers for them.
Amazon has its own fulfillment center, they also provide their fulfillment center services to other
small online companies who doesnt have their own fulfillment center and want to outsource the
services.

Literature Review: Online consumer behavior

Consumer behavior has changed greatly over the past decades, but it has been evolutionary and
the seeds of change have been apparent for generations (Kar, 2010). Piyush K. Sinha, Arindam
Banerjee, and Dwarika Prasad Uniyal,( 2002), identified major drivers behind choice of stores for
various shopping needs as exhibited by a typical Indian consumer, by conducting study on 293
participates recruited by e-mail.
Tony Ahn, Seewon Ryu and Ingoo Han,(2004), explored online and offline features of Internet
shopping malls and their relationships with the acceptance behaviors of customers. Web survey
with 932 users was conducted in 6 shopping malls of korea. The study validate technology
acceptance model (TAM) in predicting the acceptance of the Internet shopping malls. Online and
offline features have positive effects on the user acceptance, usefulness, attitude and intention to
use.
Aron M. Levin, Irwin P. Levin and Joshua A. Weller,(2005), For the study two samples of size 199
were used from a large mid-western American university and an online survey panel. The study
found that the preferences for shopping online or offline were shown to vary across products,
consumers, and stages of the shopping experience. When attributes such as large selection and
shopping quickly were predominant, online shopping was preferred. When attributes such as
personal service and ability to see-touch-handle the product were predominant, offline shopping
was preferred.
Junhong Chu et.al. (2010), explored the moderating effects of household (e.g., shopping
frequency) and product (e.g., sensory nature) characteristics on brand loyalty, size loyalty and
price sensitivity across online and offline channels for grocery products. Data was collected from
one of the five leading grocery chains in Spain. The study of found that the households were more
brand loyal and size loyal but less price sensitive in the online channel than in the offline channel.
Rick L.AndrewsOurso and Imran S. Currim,(2004), examined behavioral differences between
consumers attracted to online shopping and traditional supermarket shopping using actual choice
data from an online supermarket and traditional scanner panel data. The study found that as
Compared to traditional supermarket consumers, online consumers prefer larger sizes to smaller
sizes, do more screening on the basis of brand names, do less screening on the basis of sizes, have
stronger choice set effects
Koen Pauwels et.al., (2011), found that the offline revenue impact of the informational website
critically depends on the product category and customer segment. The lower online search costs
were especially beneficial for sensory products and for customers distant from the store. In
contrast, customers in a particular segment reduce their shopping trips, suggesting their online
actions partially substitute for experiential shopping in the physical store.
Dong-Mo Koo, Ji-Hoon Lee (2011), proposed an interrelationship among dominance, energetic and
tense arousal, pleasure and their impact on intention. Results from a survey of 406 consumers
(217 from offline store customers and 189 online store users) demonstrated that dominance had a
significant positive and/or negative effect on both energetic and tense arousal, it has no impact on
pleasure and intention under both offline and online environment; Effect of dominance on tense
arousal was not statistically significant in an online shopping environment; both energetic and
tense arousal had a positive and/or negative impact on pleasure.

Yaobin Lu (2011), focused on factors that influence users' intention to transfer their usage from
the offline to the online channel that offer similar services. The study revealed that innovativeness
in new technology and relative benefit had positive effects on users' intention to transfer usage.
Moreover, the findings of the study also indicated that internet experience moderates the
relationship between relative benefit and consumers' intention to transfer usage from offline to
online services.
Isabel P. Riquelme and Sergio Romn,(2014), examined the role of several consumers' cognitive
and psychographic traits in their perceptions of retailers' deceptive practices (perceived
deception) and the different effects on perceived deception associated with online vis--vis instore shopping.
Online consumer behaviour differs slightly from traditional, offline consumer behaviour. According
to Ba and Pavlou (2002) trust is one of the major concerns for consumers when purchasing items
online. The trust issue in a buyer-selling relationship is based on information asymmetry, which is
explained as a relationship where one party, usually the seller, possess more information than the
buyer about the product or service quality (Ba & Pavlou, 2002). It can also be seen that technology
acceptance and adoption is an important aspect regarding consumer e-commerce behaviour
(Pavlou, 2003). There are several aspects and motives to consumers adoption of e-commerce;
according to Tauber (1972) these motives are primarily personal (self-gratification, physical activity
and sensory stimulation) and social (communication with others, peer group attraction and
status/authority). Personal and social needs are both related to the hedonic aspect of purchasing
items, the shopping enjoyment. The market research conducted by Svensk Digital Mathandel
(2014) presents an increased use of online grocery shopping and that the consumers tend to
continue to purchase their groceries online after trying it.
Theory of Planned Behaviour
The Theory of Planned Behaviour aims at describing the influences and mechanisms behind
actions performed deliberately and are an extension of the Theory of Reasoned Action (TRA) by
Fishbein and Ajzen. The Theory of Planned Behaviour has been described as one of the most
influential and popular frameworks for the study of human action . As mentioned above, two
assumptions provide the foundation of the Theory of Planned Behaviour. The first is the
assumption that individuals are given enough resources to make a rational choice and evaluate
the best behavioural alternative. The second assumption involves the importance of intention.
Intention represents the decision for one chosen alternative and the will to perform just that
special behaviour . According to the theory, the intention to perform certain behaviour is
influenced by three main components . The attitude towards an action, the attitude is defined as
the sum of all accessible beliefs about the action performed . The expectations of other people the social influence on the decision to perform an action, measured as subjective norms it can also
be described as normative beliefs resulting in social pressure .Perceived behavioural control,
which is referred to as the amount of control people believe to have over their actions. It is also
described as the ease or difficulty of performing a certain action or behaviour.

The main components of Theory of Planned Behaviour are attitude, subjective norm, perceived
behavioural control, intention and behaviour.
Consumer Barriers
Previous market research has stated that consumers primary obstacle for using online grocery
shopping is the fact that the ability to feel, touch and evaluate the products the same way is gone
before taking the decision to purchase (Svensk Handel, 2014). This is also stated in the qualitative
research made by Ramus and Nielsen (2005) where they investigated the Theory of Planned
Behaviour regarding online grocery shopping and found that consumers expressed a concern for
the inability to sense and select products by touching and feeling the products of interest. This was
a major concern especially for perishable goods such as fruits, meat and vegetables. The
consumers perceived risk increased concerning giving up the control of the selection of product,
packaging and delivery to the retailer. Since the quality and of the goods and the safety of the
transportation cannot be supervised by the consumer, the risk of getting damaged goods or the
wrong goods delivered were perceived as negative for the service (Ramus & Nielsen, 2005).
Another perceived barrier by the consumers within online grocery shopping is the fact that there
is no ability to interact with store personnel (Agwu, 2013).
Resistance to Change
According to Ram, Jagdish and Sheth (1989) consumers resistance can be the final cause for
market failure for an innovation. Consumer resistance is, according to Cambridge Dictionaries
Online the fact that people are being unwilling to buy a particular service or prod. The resistance
of the consumer is correlated to what kind of adopter he or she is . The tendency to adopt an
innovation is different between individuals, which has been categorized into five types of adopters
are ranging on a scale, referring to the timing of adoption: innovators, early adopters, early
majority, late majority and laggards (Littler, 2015). The consumers resistance of innovation is
affecting the timing of adoption . An innovation is defined as an idea or invention that is being
processed into a good or service and it is new to the market. It must be replicable at an

economical cost and satisfy a specified need Consumers that decides whether or not to purchase
an innovation are depending on different factors in their personal identity and behaviour; their
age, cultural preferences, income level, how easy it is to learn the usage, the innovations
usefulness and the value it brings to the consumer to use the innovation. To encounter the
resistance from customers, one has to consider barriers of functional and psychological nature. In
Agwus (2013) research concerning reluctance and resistance and adoption to a specific ecommerce service in the United Kingdom, the functional and psychological barriers of consumer
resistance were stated to be reasons for low adoption in the case of e-commerce services. The
psychological barriers are barriers of tradition and image, which are often caused by triggering a
questioning of the consumers prior beliefs and values. The more the deviation from what is
considered and has been established as an important tradition, is needed to adopt an innovation,
the greater is the resistance. Considering the image barrier, innovations include a certain identity
and associations. It is clear that the image barrier is perceptually bounded and derives from
stereotyped thinking, which makes it hard for an innovation to break through if the associations
are unfavourable .The functional barriers consist of three different types; product usage, product
value and risks associated. The usage barrier has incentives that require changes in the routine of
the consumers, which depend on relatively longer development to gain consumer acceptance .
Since innovations requires great or technical changes in the consumers routines, is the usage
barrier known to be the primary reason for resistance of innovation and therefore demands a long
process to adjust and accept the usage of it . The value barrier explains that the incentives
favouring the innovation must be stronger than a substitute. By comparing the performance to
price with a similar product or service, the customer will evaluate the value of the innovation . The
risk barrier is important since all innovation represent uncertainty to some extent. As there are
different types of risk to consider, such as physical, economic, functional and social risks, the
customers postpone the adoption of innovations until they know more about the risks. Physical
risks are harm that can be done to persons or property, economic risk are the cost of investing in
the innovation, functional risk relates to the performance of the innovation and social risks are the
resistance customers feel as they may face social exclusion if they adopt to the innovation .

LITERATURE REVIEW
The year 2015 started with a plethora of investments happening in the hyper local space, be it
food delivery, home services or logistics. On the same front, a number of new grocery delivery
firms were also seen sprouting and scaling up. The veterans in this space BigBasket, ZopNow etc.
too garnered attention from VC investors. However, the autumn of this year is proving to be cold
for several start-ups as they struggle with funding challenges, can grocery delivery companies fare
any better?
With increasing penetration of Internet connectivity (rise of smart phone users), growing
popularity of mobile shopping, and dealing in daily consumption commodities, grocery e-stores do
hold a potential in India. The market share is estimated to be less than 100 million, but is expected
to cross $25 billion by 2020, expected to grow at a rate of 25-30% year-on-year in major Indian
cities, as predicted by retail consultancy Technopak
According to Ken Research report, Indian online groceries market is envisaged to grow and reach
Rs 2.7 billion by FY2019. There are roughly 25 odd companies in this space that have received and
announced external funding in 2015. The top 5 start-ups that have risen maximum funding among
these are shown below.
A few acquisitions have been seen in this space this year, such as BigZop getting acqured by
AutonCab, Grofers acquiring Mygreenbox.
The first firms who came up in the online grocery sale segment were formed in 2011, and since
then this has been a growing industry in India. In February 2015, the share of BigBasket was the
largest among the online grocery businesses, followed by Zopnow as reported by Ken Research.
While the space does holds a good opportunity, it still hasnt been easy to crack. Even the funded
startups struggle to scale up. There are challenges in different areas of operations Technology,
vendors, logistics and more.
Different companies in the same space have experimented with different models for order
fulfilment. BigBasket has an inventory-led model with its own logistics and supply chain network,
Grofers and Peppertap have tied up with local stores in cities for enabling hyper local deliveries,
Aaramshop has a hybrid model where consumers can order online and receive from one of its
nearby stores. Additionally, to add further competition for these companies, mainstream retailer
Future Group will launch BigBazzar app for grocery ordering.
Challenges faced by grocery delivery startups are multiple ranging from maintaining quality of
their products to managing the inventory to logistics to customer satisfaction and retention to
even fundraising. These niche businesses also have requirements of the right talent for vendor
acquisition and fulfilment, especially for those who are not keeping their own inventory, tapping
into the right local stores for supply is a critical but a tough task.

While tying up with a merchant as a partner, the poor quality of data and regulated MRPs
limiting our margins are some challenges. The delivery staff at times is technophobic but we are
constantly working towards easing out these challenges. Says Navneet Singh, Co-Founder and
CEO at PepperTap.
For Saurabh Kumar, Founder at Grofers, the biggest challenge was to find the right talent for their
team which would align with the vision of the company and help it grow. His company is backed by
Tiger Global and Sequoia Capital, and is in discussion with other tech VC firms like Softbank and
DST Global to raise more money.
Meanwhile, Rashi Choudhary, Co-Founder and COO at LocalBanya opined that raising an
investment to fuel the growth and expansion of the company was a tough part for her firm.
Further, she feels that this kind of business has many vital parts that must work together well and
it takes a lot of planning and smart thinking to pull it off. LocalBanya had recently shut down its
operations temporarily and laid off a sizeable amount of its workforce.
Vijay Singh, MD and CEO, Aramshop finds staying in tune with the consumer behaviour as the
biggest challenge. We are firm believers that the shopping behaviour of consumers would
continue to be multi-channel, however, the consumers habit of standing in a queue to shop for
groceries stays our biggest competitor. Says Vijay. The growth in mobile has prompted us to look
at mobile app far more seriously than we were doing last year. He added. He had started the
company back in 2011, and has been successfully bootstrapping it since then.
When we raised the same question to a recently launched startup LazyLad, its Co-founder Saurabh
Singla said, There is an issue of adaptability with some retailers. Some are very open to the use of
technology to enhance their business, but few of the retailers are quite skeptical about this.

All the companies appear to be facing issues on different fronts, this is owing to the different
models that these firms operate in. However, Vipul Parekh, Co-Founder at BigBasket sums it well
for us when he says that merchandising, logistics, people management and technology are four
key areas of challenge for a grocery delivery firm. Delivering grocery products with varying shelf
lives in a large geographical area along with managing the inventory is crucial so as to provide hill
fill rate to the customers. Recruiting, training, managing and motivating the blue-collar workforce
of the logistics team is another significant challenge in this line of business.

Hands down, all grocery eCommerce companies agree that the market itself needs to be tamed
first. Even though a number of parameters are in favour of eCommerce in general like increasing
Internet penetration, smartphone users, online shoppers, logistics support and so on, grocery
remains a vertical that requires special treatment due to the perishable nature of the inventory.
Moreover, with India having multiple grocery stores in or near every neighbourhood, a majority of
the population doesnt have to go far for its daily grocery requirements.
Vipul from BigBasket says, At this point in time physical grocery stores would be our biggest

competition and within them the large chains would take preeminence. The large chains
mentioned here, such as BigBazaar, Natures Basket and so on are moving into a hybrid model as
they continue to expand their offline presence. They have more leverage over the pure play
grocery eCommerce/delivery ventures owing to their brand name and profitable parent firms.
Vipul from BigBasket says, At this point in time physical grocery stores would be our biggest
competition and within them the large chains would take preeminence. The large chains
mentioned here, such as BigBazaar, Natures Basket and so on are moving into a hybrid model as
they continue to expand their offline presence. They have more leverage over the pure play
grocery eCommerce/delivery ventures owing to their brand name and profitable parent firms.
In order to create a differentiating factor among themselves, the companies are gunning for a
consumer first approach. These firms are working on the technology backend and optimising the
supply chain to better their competitors. BigBasket takes pride on its inventory of 14,000 SKUs,
Peppertap states its under 2 hour delivery as its USP. As this market picks up steam, there are
various players that are making an entry with different business models. There is room to
experiment and given various factors such as location, capital and technology, we will continue to
see this occur, says Rashi from LocalBanya.

It has to be noted that the existing horizontal marketplaces also see grocery as a viable space.
Amazon has been dealing in gourmet food products for some time now. Flipkart is also rumoured
to have plans for launching grocery delivery this year. Snapdeal tied up with Godrej Nature Basket
at the beginning of 2015 to foray into this vertical. Paytm had launched a dedicated app for
grocery ordering in April 2015, however not much was heard of it thereafter and it was taken
down from the app store in the following June.
When asked if the niche companies should feel threatened about this trend in the market, Vipul
from BigBasket said, This is different market from General Merchandise in terms of supply chain,
logistics and domain knowledge requirements to handle the category well. As a result it is not an
easy decision to launch grocery. I think it will take them time and effort to develop a model which
works and to compete effectively. Having said that, this is a large retail category and with their
growth aspirations I would not be surprised if they chose to enter this domain in some form or the
other. I think their entry into the market will make the domain more competitive but will also
expand the online market for grocery significantly. In the long run this will be significantly
beneficial to leaders in the space like us.
Navneet Singh, CEO and Founder at Peppertap feels that with the entry of these players in this
space, the market will see a lot of momentum. Quoting him, It will be interesting to see if these
giants get into a price war or adopt a different strategy for customer acquisition. Online grocery
soon will become one of the top three most attractive segment for online retailers after
electronics and apparel.

Lazylads Co-Founder Saurabh Singla feels that entry of Amazon, Flipkart and Snapdeal into this
space provides validation to the model. It ensures that the market is hot and the customers buying
tendency is more from mobile. Further he adds, The trend is changing and there is a huge
opportunity out there and a lot of innovation to be done to overcome the problems in the sector
which are very easy for a startup to tackle and difficult for an established player to handle due to
the inherent difference between the two.
The niche players appear to be confident about capturing the market even post the entry of
eCommerce marketplaces in the segment owing to their vertical focus.

Grocery retailing thrives, and has been interwoven into the Indian social fabric since time
immemorial. It served the needy consumers through diverse routes and platforms such as
neighborhood mom and pop stores, village markets and the like. It facilitated the exchange of
goods and services for money and largely remained unorganized and unregulated. India has been
a nation of shopkeepers around 14 million retailers more retail shops than the rest of the world
put together (Juyal S.A., 2012). However the retailing in new millennium stands as an exciting
experience to the consumer on the one side and heralding new vistas of opportunities and
imposing huge challenges to the retailers on the other side. Retailing in India has been growing at
a frenetic pace over the past decade. More importantly it has witnessed rapid changes in terms of
the retail mix- the quality and scale of retailing, the varieties of retail formats and also changes in
consumer preferences and shopping habits (Richa,2011). Concerns were raised that the growth of
modern retailing may have an adverse effect on small retailers.
Available literature provides contrasting perspectives; it supports in some ways and contradicts in
many ways the view that modern and traditional grocers can harmoniously coexist and
supplement each other in meeting the rising consumer demand for quality grocery and food items
at competitive prices(Kalhan, 2007; Vijayakumar, 2008; Mathew, et al 2008; Shaik, 2009).
Fernandes et al (2000) opined that liberalization in India had opened up the countrys markets to
larger retailers and foreign companies, thus increasing the number of choices available to Indian
consumers. The companies are increasingly building their supply chains in India and working to
understand the Indian market. Batt and Cadilhon (2007) reported that the retailing of grocery and
fresh produce in modern format is rapidly evolving in many developing countries such as Kenya
Brazil China and the like and making inroads into India. Vijay (2007) observed that the retail
institutions play a crucial role in attracting and satisfying target customers. The diversity and
changing nature of society has compelled retailers to change their store formats to provide a
complete shopping experience to customers. Kalhan (2007) found a decline in sales of groceries
fruits and vegetables processed foods garments shoes electronic and electrical goods in the small
retail outlets where large retail stores have come up in Mumbai. Vijay Kumar et al (2008) outline
the concerns about the entry of modern retailers in the Indian food sector however it was
concluded that though the concerns are valid there are more winners than losers in the process.

Mathew Joseph et al (2008) found that unorganized retailers in the locality of organized retailers
faced adverse impact however weaken over the time. Shankar & Priya (2009) contend that
corporate food provision will accelerate many key elements of Indias agricultural crisis rather than
being a panacea for Indian agriculture. Shaik (2009) contends that the modernization of the Indian
retail sector is being reflected in the growth of stores and hypermarkets. The author shares the
concerns that existence of local grocery shops, owner-manned general stores, paan/beedi shops,
convenience stores and handcart pavement vendors, small scale and rural vendors would be
threatened. Sadaf & Shyama (2010) opined that the whole concept of shopping has altered with a
movement from the unorganized to the organized sector and dynamic consumer buying 18
behaviour is ushering in a revolution in shopping in India. Mandhachitara & Santimauro (2011)
examined how the traditional form of grocery retailing in Bangkok, Thailand enjoyed its legislative
protection from the modern retail formats, which was eventually withdrawn due to pressure from
the UStrade representatives and the World Trade Organization in 1990.
It was found that half of the traditional outlets were closed down due to massive introduction of
hypermarkets and convenience stores by 2010 while the rest of the stores survived by intrainnovation. Richa (2011) found that Most of the grocery stores turnover had decreased due to the
opening of modern grocery stores in the vicinity of kirana (mom and pop) stores in Kota city and
the impact was more adverse where the distance was shorter. Goswami (2009) reviewed
literature on grocery retailingand found mixed evidence on the impact of modern grocery retailers
over the traditional units. The authors Although traditional retail currently constitutes over 95 per
cent of the total sales in the country smaller kiranas(small mom and pop stores) that are unable to
compete with new age retailers in terms of variety and scale have begun losing volume in several
parts of the country (Vijayraghavan and Ramsurya, 2007). Internationally while some studies
suggest that large scale retailers like Wal-Mart are responsible for widespread closings of mom &
pop stores (Wal-Mart Watch, 2005; Basker, 2005) and question whether cost to communities in
terms of labor displacements and greater convenience (Goetz and Swaminathan, 2006) other
studies suggest that the process of creative destruction unleashed by Wal-Mart has had no statsUnited States (Sobel and Dean, 2006). In India modern trade or organized retailing already account
for 30 to 40 percent of grocery sales in the top 6-7 cities of the country (Kakkar, 2008). As pointed
out by Sanghavi (2007) so far retailers who focused on developing only supply-side efficiency in
terms of reaching retail productivity targets need to think about demand side efficiencies in the
terms of satisfaction of the customers. As it has been over a decade since modern retailing started
to make inroads into the Indian market, the time is ripe for taking up a review at pan India level to
check the ground realities as against the earlier projections or perceptions towards the modern
vies-a-visa traditional Grocery retailing. So the authors thought it pertinent to take stock of the
situation to identify key trends, which in turn would provide critical insights to the academicians,
researchers and policy makers.

Traditional grocers remain a dominant force of retailing in India since 60% to 65% of the Indian
population live in rural areas that have access only to traditional retail channels for their
household shopping needs. Even though modern grocery retail outlets are available in the secondtier and third-tier cities of India, consumers continue to prefer traditional grocery outlets due to
the longstanding relationships. Apart from that, informal credit facility, quicker processing- as
there is no need to stand in long queues for billing, home delivery without too many conditions
attached are some of the factors making buying grocery from traditional retailers more pleasant
for the customers. Traditional grocery retailers remained the largest grocery retailers channel in
India in 2013 (Table 2(A)) in terms of sales comprising 98% of total grocery retailers value sales.
This was primarily due to the dominance of independent small grocers- a channel which comprises
mostly mom and pop stores. Nevertheless, growth in traditional grocery retailers slowed down in
2013 due to the growing popularity of hypermarkets and supermarkets in metropolitan areas of
India.
The year 2015 started with a plethora of investments happening in the hyper local space, be it
food delivery, home services or logistics. On the same front, a number of new grocery delivery
firms were also seen sprouting and scaling up. The veterans in this space BigBasket, ZopNow etc.
too garnered attention from VC investors. However, the autumn of this year is proving to be cold
for several startups as they struggle with funding challenges, can grocery delivery companies fare
any better?
With increasing penetration of Internet connectivity (rise of smartphone users), growing
popularity of mobile shopping, and dealing in daily consumption commodities, grocery e-stores do
hold a potential in India. The market share is estimated to be less than 100 million, but is expected
to cross $25 billion by 2020, expected to grow at a rate of 25-30% year-on-year in major Indian
cities, as predicted by retail consultancy Technopak
According to Ken Research report, Indian online groceries market is envisaged to grow and reach
Rs 2.7 billion by FY2019. There are roughly 25 odd companies in this space that have received and
announced external funding in 2015. The top 5 startups that have raised maximum funding among
these are shown below.
A few acquisitions have been seen in this space this year, such as BigZop getting acqured by
AutonCab, Grofers acquiring Mygreenbox.
The first firms who came up in the online grocery sale segment were formed in 2011, and since
then this has been a growing industry in India. In February 2015, the share of BigBasket was the
largest among the online grocery businesses, followed by Zopnow as reported by Ken Research.

While the space does holds a good opportunity, it still hasnt been easy to crack. Even the funded
startups struggle to scale up. There are challenges in different areas of operations Technology,
vendors, logistics and more.

Different companies in the same space have experimented with different models for order
fulfilment. BigBasket has an inventory-led model with its own logistics and supply chain network,
Grofers and Peppertap have tied up with local stores in cities for enabling hyper local deliveries,
Aaramshop has a hybrid model where consumers can order online and receive from one of its
nearby stores. Additionally, to add further competition for these companies, mainstream retailer
Future Group will launch BigBazzar app for grocery ordering.
Challenges faced by grocery delivery startups are multiple ranging from maintaining quality of
their products to managing the inventory to logistics to customer satisfaction and retention to
even fundraising. These niche businesses also have requirements of the right talent for vendor
acquisition and fulfilment, especially for those who are not keeping their own inventory, tapping
into the right local stores for supply is a critical but a tough task.
While tying up with a merchant as a partner, the poor quality of data and regulated MRPs
limiting our margins are some challenges. The delivery staff at times is technophobic but we are
constantly working towards easing out these challenges. Says Navneet Singh, Co-Founder and
CEO at PepperTap.
For Saurabh Kumar, Founder at Grofers, the biggest challenge was to find the right talent for their
team which would align with the vision of the company and help it grow. His company is backed by
Tiger Global and Sequoia Capital, and is in discussion with other tech VC firms like Softbank and
DST Global to raise more money.
Meanwhile,Rashi Choudhary, Co-Founder and COO at LocalBanya opined that raising an
investment to fuel the growth and expansion of the company was a tough part for her firm.
Further, she feels that this kind of business has many vital parts that must work together well and
it takes a lot of planning and smart thinking to pull it off. Localbanya had recently shut down its
operations temporarily and laid off a sizeable amount of its workforce.
Vijay Singh, MD and CEO, Aramshop finds staying in tune with the consumer behaviour as the
biggest challenge. We are firm believers that the shopping behaviour of consumers would
continue to be multi-channel, however, the consumers habit of standing in a queue to shop for
groceries stays our biggest competitor. Says Vijay. The growth in mobile has prompted us to look
at mobile app far more seriously than we were doing last year. He added. He had started the
company back in 2011, and has been successfully bootstrapping it since then.
When we raised the same question to a recently launched startup LazyLad, its Co-founder Saurabh
Singla said, There is an issue of adaptability with some retailers. Some are very open to the use of
technology to enhance their business, but few of the retailers are quite skeptical about this.
All the companies appear to be facing issues on different fronts, this is owing to the different
models that these firms operate in. However,Vipul Parekh, Co-Founder at BigBasket sums it well
for us when he says that merchandising, logistics, people management and technology are four
key areas of challenge for a grocery delivery firm. Delivering grocery products with varying shelf
lives in a large geographical area along with managing the inventory is crucial so as to provide hill

fill rate to the customers. Recruiting, training, managing and motivating the blue-collar workforce
of the logistics team is another significant challenge in this line of business.
Hands down, all grocery ecommerce companies agree that the market itself needs to be tamed
first. Even though a number of parameters are in favor of eCommerce in general like increasing
Internet penetration, smartphone users, online shoppers, logistics support and so on, grocery
remains a vertical that requires special treatment due to the perishable nature of the inventory.
Moreover, with India having multiple grocery stores in or near every neighborhood, a majority of
the population doesnt have to go far for its daily grocery requirements.
Vipul from BigBasket says, At this point in time physical grocery stores would be our biggest
competition and within them the large chains would take preeminence. The large chains
mentioned here, such as BigBazaar, Natures Basket and so on are moving into a hybrid model as
they continue to expand their offline presence. They have more leverage over the pure play
grocery eCommerce/delivery ventures owing to their brand name and profitable parent firms.
Vipul from BigBasket says, At this point in time physical grocery stores would be our biggest
competition and within them the large chains would take preeminence. The large chains
mentioned here, such as BigBazaar, Natures Basket and so on are moving into a hybrid model as
they continue to expand their offline presence. They have more leverage over the pure play
grocery eCommerce/delivery ventures owing to their brand name and profitable parent firms.
In order to create a differentiating factor among themselves, the companies are gunning for a
consumer first approach. These firms are working on the technology backend and optimising the
supply chain to better their competitors. BigBasket takes pride on its inventory of 14,000 SKUs,
Peppertap states its under 2 hour delivery as its USP. As this market picks up steam, there are
various players that are making an entry with different business models. There is room to
experiment and given various factors such as location, capital and technology, we will continue to
see this occur, says Rashi from LocalBanya.
It has to be noted that the existing horizontal marketplaces also see grocery as a viable space.
Amazon has been dealing in gourmet food products for some time now. Flipkart is also rumoured
to have plans for launching grocery delivery this year. Snapdeal tied up with Godrej Nature Basket
at the beginning of 2015 to foray into this vertical. Paytm had launched a dedicated app for
grocery ordering in April 2015, however not much was heard of it thereafter and it was taken
down from the app store in the following June.
When asked if the niche companies should feel threatened about this trend in the market, Vipul
from BigBasket said, This is different market from General Merchandise in terms of supply chain,
logistics and domain knowledge requirements to handle the category well. As a result it is not an
easy decision to launch grocery. I think it will take them time and effort to develop a model which
works and to compete effectively. Having said that, this is a large retail category and with their
growth aspirations I would not be surprised if they chose to enter this domain in some form or the
other. I think their entry into the market will make the domain more competitive but will also
expand the online market for grocery significantly. In the long run this will be significantly

beneficial to leaders in the space like us.

Navneet Singh, CEO and Founder at Peppertap feel that with the entry of these players in this
space, the market will see a lot of momentum. Quoting him, It will be interesting to see if these
giants get into a price war or adopt a different strategy for customer acquisition. Online grocery
soon will become one of the top three most attractive segments for online retailers after
electronics and apparel.
Lazylads Co-Founder Saurabh Singla feels that entry of Amazon, Flipkart and Snapdeal into this
space provides validation to the model. It ensures that the market is hot and the customers buying
tendency is more from mobile. Further he adds, The trend is changing and there is a huge
opportunity out there and a lot of innovation to be done to overcome the problems in the sector
which are very easy for a startup to tackle and difficult for an established player to handle due to
the inherent difference between the two.
The niche players appear to be confident about capturing the market even post the entry of
eCommerce marketplaces in the segment owing to their vertical focus.

Renaissance of Modern Grocery Retailing in India

As India is getting more integrated with the world economy, transformation of retail sector
especially in urban areas is becoming particularly evident. This was mainly due to the massive
expansion of the modern retailers outlets across the country towards the end of the review
period. However the spread of hypermarkets is particularly noticeable in big cities with consumers
in smaller cities tending to prefer mom and pop stores for quick purchases of small items,
although hypermarkets are slowly penetrating these cities as well. Indias home-grown
supermarkets account for only 2% of food and grocery sales and are struggling to make a profit.
What is bigbasket.com ?
bigbasket.com (Innovative Retail Concepts Private Limited) is Indias largest online food and
grocery store. With over 18,000 products and over a 1000 brands in our catalogue you will find
everything you are looking for. Right from fresh Fruits and Vegetables, Rice and Dals, Spices and
Seasonings to Packaged products, Beverages, Personal care products, Meats .
Choose from a wide range of options in every category, exclusively handpicked to help you find
the best quality available at the lowest prices. Select a time slot for delivery and your order will be
delivered right to your doorstep, anywhere in Bangalore, Hyderabad, Mumbai, Pune, Chennai,
Delhi-Noida, Mysore, Madurai, Coimbatore, Vijayawada-Guntur, Kolkata, AhmedabadGandhinagar, Nashik, Lucknow-Kanpur, Gurgaon, Vadodara, Visakhapatnam, Surat, Nagpur, Patna,
Indore and Chandigarh Tricity You can pay online using your debit / credit card or by cash / sodexo
on delivery.
They guarantee on time delivery, and the best quality!
Why should I use bigbasket.com?
bigbasket.com allows you to walk away from the drudgery of grocery shopping and welcome an
easy relaxed way of browsing and shopping for groceries. Discover new products and shop for all

your food and grocery needs from the comfort of your home or office. No more getting stuck in
traffic jams, paying for parking, standing in long queues and carrying heavy bags get everything
you need, when you need, right at your doorstep. Food shopping online is now easy as every
product on your monthly shopping list, is now available online at bigbasket.com, Indias best
online grocery store.

Where do They operate?

They currently offer services in Bangalore, Hyderabad, Mumbai, Pune, Chennai, DelhiNoida, Mysore, Madurai, Coimbatore, Vijayawada-Guntur, Kolkata, Ahmedabad-Gandhinagar,
Nashik, Lucknow-Kanpur, Gurgaon, Vadodara, Visakhapatnam, Surat, Nagpur, Patna, Indore and
Chandigarh Tricity city limits.

Pricing All the products listed on the Site will be sold at MRP unless otherwise specified. The prices
mentioned at the time of ordering will be the prices charged on the date of the delivery. Although
prices of most of the products do not fluctuate on a daily basis but some of the commodities and
fresh food prices do change on a daily basis. In case the prices are higher or lower on the date of
delivery not additional charges will be collected or refunded as the case may be at the time of the
delivery of the order.
Personal Information
Innovative Retail Concepts Pvt Ltd (IRCPL) is the licensed owner of the brand bigbasket.com and
the website bigbasket.com (The Site) from Supermarket Grocery Supplies Pvt Ltd (SGSPL).
IRCPL respects your privacy. This Privacy Policy provides succinctly the manner your data is
collected and used by IRCPL on the Site.
Eligibility
Services of the Site would be available to only select geographies in India. Persons who are
"incompetent to contract" within the meaning of the Indian Contract Act, 1872 including undischarged insolvents etc. are not eligible to use the Site. If you are a minor i.e. under the age of
18 years but at least 13 years of age you may use the Site only under the supervision of a parent or
legal guardian who agrees to be bound by these Terms of Use. If your age is below 18 years your
parents or legal guardians can transact on behalf of you if they are registered users.
About us
They are a local mobile e-commerce platform that is transforming the shopping experience for
people like us, by connecting them to local stores. Grofers aim to become the one-stop shop for all
consumers daily needs. Users can order through the app and get everything delivered to their
doorstep, quickly.
Grofers offers a wide assortment of groceries, fruits and vegetables, cosmetics, electronics, bakery
items, flowers and much more.
It is hereby clarified that Grofers India Private Limited does not have any relation with the mark
GROFFR, which (we are given to understand) is used by Redstone Consultancy Services Pvt Ltd for
its real estate services business, which is not related to Grofers India Private Limited in any
manner.

4.1 HYPOTHESIS:
The hypothesis framed for the analysis regarding Hesitations In Consumers Mind While Buying
Groceries Online.
Study regarding What Restrict Consumer to buy Groceries Online.
According to Grandn et al. (2011) there is a significant gap in the field of positive attitudes and
their influence on consumer intentions within e-commerce, based on the Theory of Planned
Behaviour. In connection to the promising online grocery market situation in Sweden and the
Theory of Planned Behaviour, the hypotheses for this research have been developed accordingly.
The Theory of Planned Behaviour claim to show a relationship between the models first three
concepts of; attitudes subjective norm, perceived behavioural control and the following step of
concepts in the model; intentions and behaviour. However behaviour according to the Theory of
Planned Behaviour is in the future, as a follow-up for the initial investigation, therefore the
Behaviour is not tested within this research. These hypotheses are testing if each of the first
concepts is influencing positive intentions as shown in the figure.

Hypothesis 1 (H1)
H0 = Physical presence or touch of product does not influence buying intentions of consumer.
H1 = Physical presence or touch of product influence buying intentions of consumer.
Hypothesis 2 (H2)
H0 = Promotional offers does not have effect on online grocery shopping
H1 = Promotional offers have effect on online grocery shopping
Hypothesis 3 (H3)
H0 = High perceived behavioural control does not influence intentions within online grocery to be
positive.
H1 =High perceived behavioural control influence intentions within online grocery shopping to be
positive.

5.1. RESEARCH OBJECTIVE:

To study the attitude of consumer while online shopping of groceries.

To find out preferences of consumer regarding the attributes of online shopping of

groceries.

To identify the factors which cause hesitations in consumer mind while buying groceries
online.

To determine the parameters for choosing the particular Kirana stores or Shopping Market
for purchase of grocery products.

To determine whether online grocery shopping will be beneficial and on what factors.

5.2. SCOPE OF RESEARCH:

To determine which factors restrict the consumer from buying groceries online

To determine which factors can influence consumer to change their traditional method of
grocery shopping and switch to online grocery shopping.

5.3. LIMITATIONS OF RESEARCH :

The first limitation which caused during the market research was to find out the
respondents who shop online and are web savvy.

The second limitation caused during the research was to find out the women respondents
who like to shop other commodities online (i.e. Appeal, Electronics, Show tickets etc.) but
hesitate to buy groceries online.

Sample size is very small.

5.4. PARTICIPANTS:
The survey was taken in Mumbai by sending questionnaire to as many people as possible. Only
those participants who have completed the questionnaire will be accounted as valid survey. There
are 61 participants who have completed the questionnaire.
Computers facilities with internet access, Google Forms and whatsapp were used to conduct the
survey, and Microsoft Office Excel to do statistic and data analysis.

5.5. RESEARCH METHOD:

Primary Source:
The primary source of data collection for this research is a survey research, which collect
information from participants through a questionnaire. The purpose of this research is to analyse
the current and future behaviour of the consumers regarding grocery shopping to help marketing
manager making strategies according to the feedback received from participants. The behaviours
include attitude, believes, perceptions, motivations of participants, and that will be taken on a
series of measurements based on specific research points.
After questionnaires sent out and later collected data from feedback, the quantitative research
method will be use in this research. Google forms and Microsoft Excel programmes help to analyse
the outcome from the samples and generalise the conclusion in whole point of view of consumers
buying behaviour.

Secondary Source :
The secondary source of information here includes library resources, articles in various
newspapers and magazines, research papers, companies brochure and online resources like
company websites, online reports and articles.

DATA ANALYSIS :
PERSONAL DETAILS :
Gender :
Female

Male

Total

37

24

61

Female
Row 2, Male,
24, 39%

Male
Row 2,
Female, 37,
61%

Interpretation:
The above diagram represent that out of the 61 participants 61% of the respondents were female
as the objective of the research was to study the consumer behaviour with respect to grocery, as
grocery is more shop by female respondent.

HOUSEHOLD INCOME PER ANNUM:

Row 2, Above 20
Lakhs, 6, 10%

Row 2

Row 2, 1520, 6, 10%

Row 2, Less
than 5 Lakhs,
16, 26%

Less than 5 Lakhs

5-10
10-15

Row 2, 10-15, 9,
15%

15-20
Row 2, 5-10,
24, 39%

Above 20 Lakhs

Interpretation:
From the above pie chart we can determine that 39% of the respondents have annual income of 5
to 10 lakhs which indicate that majority of the respondent have spending power to purchase
grocery items.

Q.1) Where do you tend to by your groceries from?

2.30%

2.30%

I buy from online

groceries stores.

20.90%

I go to super market
stores.
I shop from my local
Kirana Store.
74.40%

I do not do any grocery

shopping.

Interpretation:

From above pie chart it is clearly seen that maximum percentage of the respondents
(74.4%) shop their groceries from super market.

20.9% respondents prefer their local kiranawala for grocery shopping

According to above analysis very few 2.3% respondents prefer online vendors for grocery
shopping over their traditional ways.

Q.2) How often do you do your groceries shopping in market stores ?

2.30%

23.30%
Weekly
Fortnightly
46.50%

Monthly
Every Few Month
27.90%

Interpretation:

Above pie diagram interpret that 46.5% of the participants do their grocery shopping on a
monthly basis as per their requirement.
Whereas 27.9% participants do their shopping every week and 23.3% every fortnight
respectively.
This indicates the spending power of the respondents.

Q.3) How much do you spent on grocery shopping?

Column1
9.30%
11.60%
46.50%

100-500
550-1000

1100-3000
Above 3000
32.60%

Interpretation:
The above pie diagram shows the spending capacity of the respondents for grocery
shopping.
Maximum participants (46.5%) spend more than Rs. 3000 on their grocery
9.3 % spend very less that is between 100to500 on grocery shopping.
This study indicates the importance of grocery in persons daily routine.

Q.4) Which best describes the type of grocery shopping you do?

Row 2
Bulk Shopp.
5
8%

Special
Occasion/Party
14
23%

Main grocery Shopping

Special Occasion/Party
Main grocery
Shopping
42
69%

Bulk Shopping.

Interpretation:

Above Pie diagram indicates that majority of respondents (69%) do main grocery shopping
which include their daily requirement of grocery products.

Respondents also shop as per the occasions like birthday parties, get together etc. 8% of
the respondents do bulk shopping of groceries to avoid day to day efforts.

Q.5 Which of the following reasons describes your reasons for buying groceries
from Kirana Stores?

Column1
Immediate\ Same day home delivery.

26

Credit Facility

Personal touch

23

Easy Bargaining

Time saving

27

Better pricing than e-shops.

7
0

10

15

20

25

30

Interpretation:

The above graph indicates that 44 of the respondents prfer to shop in the local Kirana
stores because it is too near to their residence.

26 of the participants like the immediate or same day delivery which motivates them to
shop from kirana stores.

Not many of the participants are concern about credit facility, only 5 of the respondents
like credit facility given by their respective Kirana stores.

23 respondents believe that it is good to have a personal touch while buying groceries to
check the quality of the products. Same number of respondents prefer Kirana stores for
grocery shopping as it saves their timing.

Only 6 of the respondents prefer Kirana stores just because they can bargain easily.

Very less respondents prefer local stores over online shopping because of less product
price.

Q.6)Which of the following reasons describes your reasons for buying groceries
from Super market ?

Column1
Comfortable browsing of grocery products

42.9

Free Home delivery

16.7

All products under one roof

88.1

Discounts or promotional schemes

57.1

10

20

30

40

50

60

70

80

90 100

Interpretation:

Majority of the respondents (88.1) prefer grocery shopping from super market because of
All product under one roof facility.

57.1 respondents feel motivated because of the promotional schemes introduced by super
market.

Due to comfortable browsing 42.9 respondents prefer super market over online sites.

Q.7) )Which of the following reasons describes your reasons for not buying
groceries online?

Column1
Quality /Trust Issue

44.2

No personal touch

45.2

Limited coverage area

23.8

Price

38

Return Policy.

28
0

10

15

20

25

30

35

40

45

50

Interpretation:

Above graph table indicates that 45.2% of respondent hesitate to buy groceries online
because they miss the personal touch of the products and due to this they have trust issues
regarding quality of the product.

38.1% of the respondent do not prefer online shopping of groceries due to the companies
limited coverage area, as online grocery stores do not deliver products do many of the
localities in Mumbai.

Price also plays an important role in shopping of any commodities. 23.8% participants
prefer to go to physical stores as they feel prices are higher on online sites than stores.

28% respondents have hesitations in their mind regarding the return policies of the online
stores.

Q.8) Which according to you are the purchase drivers from physical stores vies- avies virtual stores in the category grocery? (Please tick only the one which is
applicable in each row among the columns)
70
60
60
50

45

49
42

26
16

55

36

35

30

10

51

47

40

20

55

25
19

14

10

Physical Store
6

6
1

E-Stores

Observation

From the data collected above it is clearly seems that though number of consumer prefer
to buy commodities like clothes, movie, train and flight tickets etc. online, but when it
comes to grocery shopping, they still restrict themselves to buy groceries online.

Certain parameters which motivate consumer to prefer their Kirana stores or super market
are :

Physical touch of the product

Instant delivery
No extra delivery fee
Easy return policies
Limited coverage area

Physical examination is the important issue in the online shopping which determine the
tangibility of the product.

The data depicts that the supermarkets are the preferred shopping destinations when it
comes to grocery shopping as it offers all the basic aspects of the shopping which are
quality, price, variety, availability, proximity to home, offers and discounts.

From the above data collection we can determine that most of the respondents are ready
to shop groceries online if the e-shops work on all the issues and provide better services.

The data also determine the factors which will be beneficial to the consumers to shop
groceries online which are variety at one stop, saves time and avoiding long queues.

Recommendations:
Business recommendations:
When it comes to operational aspects of business, the firm should consider the following business
operational models:
Instead of going to the traditional e-commerce way of grocery shopping, the firm should
start up by bringing the existing retailers online.
For the purchase of grocery item the consumer can choose their nearby Kirana stores from
the listed stores along with a convenient delivery time.
The local store will be informed about the order and it would be deliver to the address at
the time mentioned with the payment of cash only on delivery.
Following are the important aspects of the proposed business plan:

The firm will have a low operating cost compared to other online grocery websites, as they
dont have to stock any inventory of grocery products.

The firm main cost will include the cost of dealership from the local retailers.

Other cost will include the cost related to website design, Computer database, software
and hardware.

It will allow more user interference, when the customer can order their grocery from the
trusted local retailers, than unknown players in the market.

In order to increase the productivity of the site, the firm should offer special discount with
respect to seasons like Diwali, Ganpati, Holi etc.

The major issue which consumer faces, is they need to order a particular amount of
groceries on online portal, due to that they prefer Kirana stores as there is no minimum
order criteria

CONCLUSION:

From the above data analysis it can be conclude that in todays modern and technology
savvy world, where consumers think online shopping is more convenient than going to
shopping malls and wait in the queue. This thinking depends upon what commodities are
they buying at a particular time.

Consumer who likes to buy commodities like Electronic gadgets, Fashion apparel, movies,
train and flight tickets etc. online. On the other hand when it comes to grocery shopping
same consumer prefers traditional ways for shopping grocery from local kirana stores.

The hypothesis framed for the project Consumer Online Buying Behaviour towards
Grocery shopping was Factors Creating Hesitations In Consumer Mind While Buying
Groceries Online.

From the above data analysis it can be determine that many of the respondents still
prefer traditional ways of shopping for grocery products.

The main issues due to which consumer do not switch to online portals are :
No personal touch of products.
Immediate doorstep delivery by Local Kirana stores.
Better return policy by local kirana stores.

Women who were the prime respondents of this survey has a perception that online
grocery products are unhealthy and buying any food related product without checking can
harm their family members health. According to them personal touch plays important role
in grocery shopping which e-shop misses.

Yet, there are many who may switch to online shopping if they e-shops undertakes factors
like:
Better pricing
Wide coverage area
No minimum order
Easy return policies.

The recommended business operation will not only beneficial for consumer but also to the
firms, as it allows the firm to maintain its lower operating expenses

BIBLIOGRAPHY

http://tech.firstpost.com/news-analysis/indias-e-commerce-market-to-touch-260-bn-by2025-report-209901.html

www.slideshare.net

http://www.forbes.com/sites/thehartmangroup/2015/06/17/whats-the-future-foronlinegrocery-shopping/#211a58437cff

http://www.bigbasket.com/?utm_source=google

http://www.naturesbasket.co.in/HTML/LocateStore.aspx

https://www.zopnow.com

http://www.careerride.com/view.aspx?id=26766

http://www.businesstoday.in/moneytoday/smart-spending/online-groceryshoppingvegetables-new-trend-in-india/story/197141.html

www.escop.com

http://timesofindia.indiatimes.com/business/india-business

https://www.bigcommerce.com

https://www.quora.com

http://www.arkrobot.com

QUESTIONNAIRE ON 'FACTORS CREATING HESITATIONS IN CONSUMER MIND

WHILE BUYING GROCERIES ONLINE' :
Problem Statement : Resistance While Buying Groceries Online.

Background Information.
Name: _____________________________________
Age: _______
Gender:

a) Male

Occupation:

a) Service

b) Female
b) Business

c) Homemaker

Household Income per Annum(In Rs.):

a) Less than 5 lakhs
b) 5-10 lakhs
c) 10-15 lakhs
d) 15-20 lakhs
e) Above 20 lakhs
QUESTIONNAIRE

Q.1) Where do you tend to by your groceries from?

a)
I buy from Online groceries Stores
b)
I go to super market stores
c)
I shop from my local Kirana Store.
d)
I do not do any grocery shopping.

Q.2) How often do you do your groceries shopping in market stores ?

a)
Weekly
b)
Fortnightly
c)
Monthly
d)
Every few months

d) Student

Q.3) How much do you spent on grocery shopping?

a)
100-500
b)
550 to 1000
c)
1100-3000
d)
Above 3000

Q.4) Which best describes the type of grocery shopping you do?
a)
Main grocery Shopping
b)
Special Occasion/Party
c)
Bulk Shopping.

Q.5 Which of the following reasons describes your reasons for buying groceries from Kirana
Stores?
a)
b)
c)
d)
e)
f)
g)
h)

My preferred Super market is too near from my residence.

Immediate\ Same day home delivery.
Credit Facility
Personal touch
Easy Bargaining
Time saving
Better pricing than e-shops.
Other. Please Specify

Q.6)Which of the following reasons describes your reasons for buying groceries from Super
market ?
a) Comfortable browsing of grocery products.
b) Free Home delivery
c) All products under one roof
d) Discounts or promotional schemes.
e) Other. Please specify
Q.7) )Which of the following reasons describes your reasons for not buying groceries online?
a) Quality /Trust Issue
b) No personal touch
c) Limited coverage area
d) Price.
e) Return Policy.
f) Other, please Specify

Q.8) Which according to you are the purchase drivers from physical stores vies- a-vies virtual
stores in the category grocery? (Please tick only the one which is applicable in each row among
the columns)
Physical store (kirana store,
supermarkets)

Virtual store(E-grocery
shopping

Convenience
Immediate home delivery
Time saving
Better prices
Single point shopping
Easy feedback
Easy credit facility
Touch and feel factor
Better Relationship
Return Policy

Q.9) What according to you could be the triggering factors to convert people to purchase
groceries online instead of a physical store? (check all that apply)
a) Free home delivery without any minimum order requirements
b) Secured payment systems
c) When the prices become competitive
d) Wider availability and accessibility of internet service

Q.10)How likely would you be to buy groceries online and have them delivered if
Very likely

Likely

Neither likely
nor unlikely

Costs were
slightly
HIGHER than
regular
grocery store
prices?
Costs were the
same as a
regular
grocery store
prices?
There was a
service
delivery fee
per order?
Instant Return
Policy

Thank You For Your Time!

Unlikely

Very unlikely