A Study on Consumer Perception towards

Online Grocery Store

By

Submitted
In fulfillment of the requirement for the degree

Masters in International Management

To

Institu d' Administration des Enterprises Greater Noida Campus, India

University of Poitiers, France

April, 2013
DECLARATION

I hereby declare that the project report titled “A Study on Consumer Perception
Towards Online Grocery Store”, under the guidance of Prof: Debjani Bhattacharyais my
work submitted in partial fulfillment of the requirement for the Degree of MASTERS IN
INTERNATIONAL MANAGEMENT from INSTITU ADMINISTRATION DES
ENTERPRISES, Poitiers and not submitted for the award of any degree, diploma, fellowship or
any similar titles or prizes

Date: 11/03/2013

Signature:
CERTIFICATE OF COMPLETION OF DISSERTATION

This is to certify that Dissertation Report on

A Study on Consumer Perception Towards Online Grocery Store, prepared by the
Himansu S Mishra is his genuine effort under my guidance and supervision.

Signature:

Prof: Debjani Bhattacharya

Faculty Guide
NIILM-CMS
Date:
ACKNOWLEDGEMENT

This project proved as an excellent opportunity for me to apply the concepts learnt in the
course of my program at the institute.

I would like to express my sincere gratitude and thanks to my supervisor and mentor, Prof. for
guiding and providing complete knowledge about the subject briefing about market and risk
calculations

Finally, I would like to thank all those who were directly or indirectly related to this project.

Signature

Date

Executive Summary
Internet and Information technology have made tremendous contributions for business transformation
witnessed nowadays all over the world. This has given birth to E commerce which encompasses several
pre purchase and post purchase activities leading to exchange of products or service or information over
electronic systems such as the internet and the other Telecommunication networks.

Analysing the competitive advantage of E-Commerce it is observed that E-Commerce enables simpler,
faster and efficient business transactions. For developing country like India, E-Commerce offer
considerable opportunity for growth.
E-commerce leads to a boon for the current economic downturn. As India‟s e-commerce market is worth
about Rs 50,000 crores in 2011. About 80% of this is travel related (airline tickets, railway tickets, hotel
bookings, online mobile recharge etc.).

Online retailing comprises about 15%. India has close to 10 million online shoppers and is growing at an
estimated 40-45% per annum.The rapid growth of e-commerce in India is being driven by greater
customer choice and improved convenience.

The project was undertaken under the supervision of Nirala Imex Inc who currently has their business
operation in Taiwanese market in selling of Indian grocery items to the local retailers & wholesaler in the
Taiwanese market.

The company has proposed a plan to launch an online grocery store in the Indian market for which the
project was undertaken was to determine whether online grocery shopping will be beneficial to the user
with respect to questionnaire which will be analysed in three parts.
The project will first study the attitude of customers towards online shopping, also determining the factors
which influence the consumer to purchase goods and service.

The second half of the project will depict the attributes of online shopping influencing the purchase
decision by the respondent. It will also determine the issues regarding the online shopping.
The third part of the project determines the purchase decision with respect to grocery. It will determine the
place preference of grocery shopping with respect to price, quality, variety, proximity and offers/
discounts. The project will also recommend the business operational plan which works with contracting
dealership with the local kirana stores.
Contents

Executive Summary ................................................................................................ Error! Bookmark not defined.

List of Abbreviations.............................................................................................................................................. 9
Introduction ........................................................................................................................................................ 10
1.1 What is e-commerce? ................................................................................................................................... 10
1.2 Purpose of Study ........................................................................................................................................... 10
1.3 Existing Issues .................................................................................................................................................. 2
1.4 Outline of the Study ........................................................................................................................................ 2
1.5 Organization of report..................................................................................................................................... 3
Literature Review .................................................................................................................................................. 4
2.1 Understanding use of e-commerce ................................................................................................................. 4
2.2 Models of E-commerce ................................................................................................................................... 5
2.3 Overview Business-to-consumer (B2C) ......................................................................................................... 10
2.3.1 A Consumer Perspective of E-Service Quality .................................................................................... 11
2.3.2 B2C E-Commerce Web Site Quality ..................................................................................................... 11
2.3.3 Customer Expectations and Service Quality Dimensions Consistency ............................................ 12
2.4 Online Shopping In India ............................................................................................................................... 12
2.5 Online Grocery Shopping .............................................................................................................................. 14
2.5 Indian Players in Online Grocery Shopping ................................................................................................... 16
Research Plan ...................................................................................................................................................... 19
3.1. Research Objectives ..................................................................................................................................... 19
3.2 Research Scope ............................................................................................................................................. 19
3.3 Research Design and Methodology............................................................................................................... 19
3.4 Sampling ........................................................................................................................................................ 20
3.5 Questionnaire Design .................................................................................................................................... 21
Analysis and Findings .......................................................................................................................................... 22
4.1 Demographic observations ........................................................................................................................... 22
4.2 Questionnaire Analysis .................................................................................................................................. 26
Chapter 5 ............................................................................................................................................................. 37
CONCLUSION ....................................................................................................................................................... 39
5.1 Summary ....................................................................................................................................................... 39
5.2 Limitations ..................................................................................................................................................... 39
5.3 Revisiting objectives ...................................................................................................................................... 39
5.4 Major Findings ............................................................................................................................................... 40
5.5 Future Scope ................................................................................................................................................. 40
5.6 Recommendation ............................................................................................. Error! Bookmark not defined.
5.7 Conclusion ........................................................................................................ Error! Bookmark not defined.
Bibliography: ....................................................................................................................................................... 46
Reference Links: .................................................................................................................................................. 46
Web Links ............................................................................................................................................................ 46
List of Figures
Figure 1: Gender Distribution.............................................................................................................................. 22
Figure 2: Age distribution of sample ................................................................................................................... 23
Figure 3: Occupation of sample .......................................................................................................................... 24
Figure 4: Average Annual Income of sample ...................................................................................................... 25
Figure 5 : Popularity of online items ................................................................................................................... 26
Figure 6: amount of money spent on online shopping ....................................................................................... 27
Figure 7: Need of shopping online ..................................................................................................................... 28
Figure 8: Features of websites attracting users .................................................................................................. 29
Figure 9: Features effecting the most satisfaction.............................................................................................. 31
Figure 10: Issues considered while shopping online .......................................................................................... 32
Figure 11: Shops preferred for grocery items ..................................................................................................... 33
Figure 12: Preference to buy grocery online...................................................................................................... 34
Figure13: Opinion on buyng grocery online ........................................................................................................ 35
Figure 14 : Parameters beneficial for shopping online ....................................................................................... 36

List of Tables
Table 1: Gender Distribution ............................................................................................................................... 22
Table 2: Age Distribution for sample................................................................................................................... 23
Table 3: Occupation of sample ............................................................................................................................ 24
Table 4 : Average Annual Income of sample ...................................................................................................... 25
Table 5: Popular Items online ............................................................................................................................ 26
Table 6: amount of money spent on online shopping ....................................................................................... 27
Table 7 :Need of shopping online ....................................................................................................................... 28
Table 8: Features of websites attracting users ................................................................................................... 29
Table 9: Features effecting the satisfaction most .............................................................................................. 31
Table 10: Issues considered while shopping online ........................................................................................... 32
Table 11: Shops preferred for grocery items ...................................................................................................... 33
Table 12: Preference to buy grocery online ....................................................................................................... 34
Table 13: Opinion on buyng grocery online ........................................................................................................ 35
Table 14: Parameters beneficial for shopping online ........................................................................................ 36
Table 15: Correlation of factors with attitude of online users............................................................................ 37
Table 16 : Regression table ................................................................................................................................. 38
List of Abbreviations

Abbreviation Description
Chapter 1
Introduction

1.1 What is e-commerce?

Information communication technology and the Internet have made contributions in changing the concept of
business. There is a paradigm shift of business model witnessed today all over the world. The proliferation of
internet has given birth to E-business and subsequently e-commerce. While e-commerce is confined to a
transaction, e-business encompasses several pre purchase and post purchase activities leading to the exchange of
products or service or information over electronic systems such as the internet and the other electronic mode
including telecommunication networks.

Analyzing the competitive advantage of e-commerce it is observed that e-commerce enables simpler, faster and
efficient business transactions. It helps in developing low-cost leadership in existing markets and introduces
product differentiation and mass customization. For a developing country like India, e-commerce offer
considerable opportunity for growth.

E-commerce has entered every section of business and influenced the retail sector in a big way. The proliferation
of internet in remote corners of developed as well as developing countries have proved to be conducive for a
steady growth of online market and commerce. The unserved and underserved sections of the society have been
privileged to get access to a broader choice of commodities and service.

1.2 Purpose of Study

According to a Nelson report, 2012 UK and US are forecast to remain at the center of the growing global market
for online grocery retailing, new research has shown, as new technology continues to change the way consumers
shop. A report published by just-food.com shows the UK will remain Europe's largest market by some distance. By
2014, market value is forecast to reach GBP20.1bn (US$30. 9bn), having more than tripled on the levels seen in
2009. During this time, the online sector's share of the retail food and drinks market is expected to increase to 4%
in 2010, reaching 9.5% by 2013 and then exceeding 12% by 2014.
The US market, by comparison, is expected to reach a value of US$13. 55bn, which represents an increase of
almost 75% compared with levels in 2009, the report said. Although the market is forecast to continue to
experience double-digit growth rates in the region of 11-12% per year, its share of the US retail grocery market is
unlikely to rise above 2% during this time, the report claimed. Much of the projected growth within the US market
is expected to come from the anticipated spread of broadband access across the country. The online market may
also benefit from the increasing tendency of shoppers to research products prior to purchase.

India„s e-commerce market is worth about Rs 50,000 crores in 2012 about 80% of this is travel related (airline
tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online retailing comprises about 15%. India
has close to 10 million online shoppers and is growing at an estimated 40-45% per annum. The rapid growth of e-
commerce in India is being driven by greater customer choice and improved convenience.

1.3 Existing Issues

With increasing popularity of e-commerce in all sectors of business world, huge investments are made by business
houses enhancing B2C and B2B transactions. Besides there are several other models which have developed e.g.
C2C, G2C, and many more. Though e-commerce has seen the boom, there have been many stories of failure. One
of the basic reasons of failure is the gap between server perception and customer perception of quality of online
service. There have been many scholarly articles (Sasser, Olsen and Wyckoff, 1978; Grönroos 1982; Lehtinen and
Lehtinen 1982; Lewis and Booms 1983; Parasuraman, Zeithaml and Berry 1985; Ennew, Reed and Binks 1993)
suggested that service quality is a gap score of what a customer expects from a company and what is offered to
them in reality. They reiterated that it is important to understand how customers assess service quality because it is
the key factor which differentiates service products and give a competitive edge to business. Parasuraman et.al.
(1988, 1991) conceptualized service quality into a measuring scale, SERVQUAL which gained good recognition in
many other published studies. It was considered important to study the customer perception of online shopping.

1.4 Outline of the Study

The project was undertaken in supervision of Nirala Imex Inc. which conducts its business in Taiwan. The
operation include selling of Indian grocery items to the local retailers & wholesaler.

The company has proposed a plan to launch an online grocery store in the Indian market for which the project was
undertaken to determine whether online grocery shopping will be beneficial to the user with respect to a
questionnaire which will be analyzed in three parts. The project had the following objectives:
 (1) To study the attitude of customers towards online shopping,
(2) To identify factors influencing consumers‟ online purchase decision of goods and services.
(3) To identify issues related to online shopping from the customer‟s point of view.
(4) To study the place preference of grocery shopping with respect to price, quality, variety, proximity and
offers/discounts.

The project will also recommend the business operational plan which works with contracting dealership with the
local Kirana stores.

1.5 Organization of Report

The report is organized in 5 chapters as follows

Chapter 1 introduces the subject of research. The issues have been mentioned in the chapter and objectives
identified accordingly for the study.

Chapter 2 gives a brief of theoretical background and related works done by different scholars , so that the study
can be built on them.

Chapter 3 explains the research plan. The type of research study , sampling method adopted and questionnaire
design have been explained elaborately in this chapter.

Chapter 4 shows Data tabulation and analysis of data. Descriptive analysis has been followed by questionnaire
analysis. Correlation and regression has been used to understand the study.

Chapter 5 summarises the project, discusses limitations, future scope and recommendation from the study.
Chapter 2
Literature Review

2.1 Related Studies

Impact of promotions and value consciousness in online shopping behaviour in India.

Journal of Database Marketing & Customer Strategy Management; Dec2012, Vol. 19 Issue 4, p311-320, 10p

Online shopping continues to attract investment from retailers. Online shopping websites offer discounts and
promotions to attract online shoppers. Online retailing is in the nascent stages of growth in India. The research
examines the influence of deal proneness on Indian consumers' online shopping behavior. The results indicate that
Indian consumers are not influenced by deals, offers or other promotional tools being used by online retailers.
Promotions may not be necessary viewed by consumers as an important attribute while purchasing products or
services online. The instrumental aspects of online shopping websites need to be strengthened to motivate
consumers to shop online.

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 cores by the end of 2011.
Even though there are less than 10 million internet users who are actually engaging in e-commerce activities, there
are about 150 million internet users in India or around 75 million households that are ready for e-commerce.
With entry and operational costs being comparatively low than the other countries like US, the second half of 2011
and the beginning of the current calendar have seen the launch of a good number of new e-commerce sites
spanning across a variety of businesses – women‟s fashion, men‟s fashion, shoes, followed by accessories,
groceries, sports, toys, home furnishings, jewellery, automotive, bicycles, electronics and electrical equipment etc.

Key drivers for success for e-commerce

Reduction in operational cost as the entire business can be moved online, the need for physical stores has become
obsolete. Less infrastructural investment and associated labour costs drives up the profit margin.
It is far easier and quicker to compare prices of goods online, equipping the customer with the information to
decide the right price or terms for themselves. With services like COD, customers can trust the process of going
online and purchasing.
Market penetration also becomes far more achievable with e-commerce; it is possible for a merchant in Mumbai to
extend his reach to north-eastern cities or even rural villages that are now connected by the online network.
E-commerce facilitates shopping anytime, anywhere and for almost anything desired. Busy consumers prefer this
to the restrictions of when a mall/shop is open and the need to physically travel to a shop. Online business takes
shopping a step further by taking itself to the customer creating conveniences of shopping anywhere and at
anytime.
In India, with the increasing propensity of social media, businesses have now begun to engage their customers on
social networking portals such as Facebook. These are likely to be rapidly developing marketing channels for the
future.

Factors Influencing Online Shopping: An Empirical Study in Ahmedaba.

IUP Journal of Marketing Management; Nov2012, Vol. 11 Issue 4, p51-65, 15p, 9 Charts, 1 Graph
According to an India online landscape study (Juxt, 2010), the number of active Internet users in India stands at 65
million, of which 17 million are online shoppers, indicating a growth of 70% from the previous year. The statistics
alone are enough to denote the potential of e-commerce in India. However, as the online market becomes crowded
with players, businesses need to have an edge in terms of customer satisfaction to gain a larger market share. With
the above-mentioned objective in mind, a primary survey of online shoppers was conducted in Ahmedabad and
consumer perceptions were analyzed using factor analysis and Analysis of Variance (ANOVA) test. The paper has
found that ease/attractiveness of website, service quality of website and website security are the three dominant
factors which influence consumer perceptions regarding their online purchasing experiences. Hence, businesses
which focus on these three factors can attract more clicks. Also, the paper has proved that these factors are related
to the various types of consumers classified as trial, occasional, frequent and regular (based on their frequency of
purchase). The authors have found that regular buyers are most influenced by ease/attractiveness of website and
service quality of website, while occasional buyers value website security more than other categories of
consumers.
Convenience, Price, Product: Motivators for Online Specialty Food Consumers.
(Journal of Food Products Marketing; 2001, Vol. 7 Issue 1/2, p53, 13p)
This study by White, Gregory K.1Manning, Barbara J. Examines the factors motivating consumers' purchases of
specialty food and beverage products via the Internet. While convenience is often cited as a motivating factor,
price and product selection have also been identified. This study considered convenience in terms of time, space,
and effort. It also identifies several specific sub-categories for price and products. Among respondents who had
made a recent online purchase, convenience-related issues were most frequently cited as being relevant to the
purchase decision. Product-related factors were important for nearly one-third of the respondents. Price was of
relatively little importance.

Consumers' Knowledge:: The Missing Element in Online Purchasing Expenditures.

(Journal of Information & Knowledge Management; Jun2011, Vol. 10 Issue 2, p159-168, 10p, 2 Diagrams, 2 Charts )
This study introduces two knowledge-related constructs (i.e., consumer competency and product knowledge)
into online purchasing expenditures and then analyses variables (i.e., convenience, trust, and privacy) that have
been discussed in existing literature in order to investigate how knowledge plays out in the online purchasing
context. The findings, derived from the responses of 124 survey participants, show that consumer competency is
the focal element of online expenditures. While convenient service is still one of the most important factors, trust
and privacy do not directly impact online expenditures. It is interpreted that competent consumers, who are already
determined to purchase something online, are able to locate trustworthy sites and make purchases from those sites;
consequently, these issues that are traditionally considered important do not necessarily dissuade
consumers' online expenditures, but may affect individual web sites. This study shows that consumers' knowledge
about technology and the Web are the main determining factors for online purchasing expenditures.

Get Inside the Lives of Your Customers.

Harvard Business Review; May2001, Vol. 79 Issue 5, p80-89, 10p, 1 Diagram, 1 Chart, 1 Cartoon or Caricature
An Article by Seybold, Patricia B. :Many companies have become adept at the art of customer relationship
management. They've collected mountains of data on preferences and behavior, divided buyers into ever-finer
segments, and refined their products, services, and marketing pitches. But all too often those efforts are too
narrow--they concentrate only on the points where the customer comes into contact with the company. Few
businesses have bothered to look at what the author calls the customer scenario--the broad context in which
customers select, buy, and use products and services. As a result, consultant Patricia Seybold maintains, they've
routinely missed chances to deepen loyalty and expand sales. In this article, the author shows how effective three
very different companies have been at using customer scenarios as the centerpiece of their marketing plans. Chip
maker National Semiconductor looked beyond the purchasing agents that buy in bulk to find ways to make it
easier for engineers to design National's components into their specifications for mobile telephones. Each time they
do so, it translates into millions of dollars in orders. By developing a customer scenario that describes how people
actually shop for groceries,Tesco learned the importance of decentralizing its Web shopping site and how the extra
costs of decentralization could be outweighed by the higher profit margins online customers generate. And
Buzzsaw.com used customer scenarios as the basis for its entire business. It has used the Web to create a better
way for the dozens of participants in a construction project to share their drawings and manage their projects.
Seybold lays out the steps managers can take to develop their own customer scenarios. By thinking broadly about
the challenges your customers face, she suggests, you can almost always find ways to make their lives easier--and
thus earn their loyalty.

Marketing to mum.
B&T Magazine; 6/10/2011, Vol. 61 Issue 2743, p22-26, 5p, 12 Color Photographs
The article discusses how to influence a grocery-buying mother's preference for a brand when she goes to the
supermarket. It notes that mothers consume a wide range of media with the mainstream media such as television,
magazines and catalogues as the best option. The grocery-buyer mother also goes online to research products either
through investigation and social or word of mouth. It indicates the stages in influencinggrocery-buyer mother's
decision to buy including the awareness stage, the research stage where she turns to the Internet and packaging.

Warfare in the aisles.

Economist; 4/2/2005, Vol. 375 Issue 8420, Special Section p6-8, 3p, 1 Color Photograph, 1 Graph
The article focuses on competition in the local supermarket. Female supermarket shoppers' interests range from
health, family matters and the environment to politics and social issues, such as the welfare of overseas workers
making some of the products they buy. They also share and discuss the information they acquire, which is how
they become attached to certain brands and products. Consumer-goods companies invest in brands to convince
supermarkets to stock their products and to get shoppers to buy them. To keep in touch with customers, consumer-
goods companies are shifting their spending away from traditional media to other types of promotion. To make
things more complicated, marketeers detect a growing trend towards "cross-shopping": the same people buying
very expensive and very cheap things at the same time. Some people avoid supermarkets
and buy groceries online. The internet has also enabled suppliers to go direct to the consumer. To boost sales and
negotiating power with supermarkets, consumer-goods companies are concentrating on their most powerful
"Superbrands". Some companies are trying a combination of old and new marketing techniques.
These businesses are difficult to turn into profitable ventures due to the low margins and the logistics costs
involved.
Gaurav Saraf, director of Epiphany Ventures says that, the concept of online grocery shopping faces the problem
of turning their business into profitable ventures as the concept is new in the market which leads to low margin
along with low margin high cost is involved when it comes to logistics. In addition to these problems the
perishable items such as fruits & vegetables have a short shelf life, if these items are not delivered before the
expiry of their shelf life it would could cause wastage and also add up the cost. From the above comment a
conclusion is arrived that these business ventures have a very thin margin when it comes to business operations.

Quality factorsHow to improve the online shopping experience.

Strategic Direction; 2013, Vol. 29 Issue 1, p27-29, 3p
Purpose – This paper aims to review the latest management developments across the globe and pinpoint practical
implications from cutting-edge research and case studies.Design/methodology/approach – This briefing is prepared
by an independent writer who adds their own impartial comments and places the articles in context.Findings – The
advent of internet shopping in recent decades has radically transformed the retail landscape. Astute businesses have
grasped the opportunities generated by this phenomenon. Some focus exclusively on web-based activities, whereas
others prefer a strategy blending new and conventional channels. Online markets are advancing towards maturity
though. The Less growth potential now exists as a result. Another likely consequence is heightened competition.
And what does all this mean? That company will find it even tougher to secure custom from the diverse range of
shoppers who make purchases online. Satisfying the needs of customers should always be a priority. Within an
increasingly challenging business environment, it becomes even more critical.Practical implications – The paper
provides strategic insights and practical thinking that has influenced some of the world's leading
organizations.Originality/value – The briefing saves busy executives and researcher hours of reading time by
selecting only the very best, most pertinent information and presenting it in a condensed and easy-to digest format.
2.2 Models of E-commerce

Business-to-Business (B2B):
B2B e-commerce is simply defined as e-commerce between companies. This is the type of e- commerce that deals
with the relationships between and among businesses. About 80% of e-commerce is of this type, and most experts
predict that B2B eCommerce will continue to grow faster than the B2C segment. Eg: indiamart.com,
eindiabusiness.com, tradeindia.com etc.

Business-to-consumer (B2C):
Business-to-consumer e-commerce, or commerce between companies and consumers, involves customers
gathering information; purchasing physical goods (i.e., tangibles such as books or consumer products) or
information goods (or goods of electronic material or digitized content, such as software, or e-books); and, for
information goods, receiving products over an electronic network.

It is the second largest and the earliest form of e-commerce. Its origins can be traced to online retailing (or e-
tailing). Thus, the more common B2C business models are the online retailing companies such as flipkart.com
Amazon.com, snapdeal.com etc.

Business-to-Government (B2G):
Business-to-government e-commerce or B2G is generally defined as commerce between companies and the public
sector. It refers to the use of the Internet for public procurement, licensing procedures, and other government-
related operations. This kind of e-commerce has two features: First, the public sector assumes a pilot/leading role
in establishing e-commerce; and second, it is assumed that the public sector has the greatest need for making its
procurement system more effective.

Web-based purchasing policies increase the transparency of the procurement process (and reduce the risk of
irregularities). To date, however, the size of the B2G commerce market as a component of total commerce is
insignificant, as government e-procurement systems remain undeveloped.

Consumer-to-Consumer (C2C):
Consumer-to-consumer e-commerce or C2C is simply commerce between private individuals or consumers. This
type of e-commerce is characterized by the growth of electronic marketplaces and online auctions, particularly in
vertical industries where firms/businesses can bid for what they want from among multiple suppliers. It perhaps
has the greatest potential for developing new markets.

Online auction site eBay, Yahoo! Auctions are a couple of examples of C2C websites.
Mobile Commerce in India
Mobile is growing in India with more than 800 million subscribers across the country. The advancement in terms
of adoption of smart phones with 3G enabled services is happening at a rapid pace. This of course opens up the
gates to mobile advertising, mobile application development and mobile commerce in India. According to Buzz
City's latest report, India is a top performing mobile advertising region in the whole of Asia. The growth in mobile
advertising globally is tremendous with the ads served on a year-on-year growth of 139%. With respect to some
number crunching, more than 126 billion ads were served in 2011, compared with 52 billion in 2010.

In India, Mobile Commerce is still in the development phase as the use of mobile phones for carrying out
transactions is very limited. However, the development is taking place at a nice speed and in the coming years,
Mobile Commerce is most likely to make its presence feel as companies and businesses have started understanding
the benefits of Mobile Commerce. Some of the companies have even incorporated this technology. Airtel, ICICI,
Reliance are some of the companies/businesses that are using this technology as their users are allowed to make
limited purchases from their phones. For now, the users are mainly allowed to pay phone bills, utility bills, book
movie tickets, book travel tickets with their cell phones.

However, more services will be introduced in the coming years. Security is one of the main concerns of Mobile
Commerce as it„s very important to offer secure transactions and this is the reason why Mobile Commerce is still
in the development phase in India.

2.3 Overview Business-to-consumer (B2C)

Business or transactions conducted directly between a company and consumers who are the end-users of its
products or services. Business to consumer as a business model differs significantly from the business to business
model, which refers to commerce between two or more businesses (Source: investopedia).
The significant paradigm shift over the recent years from a brick-and-mortar to an e-commerce shopping
preference is clearly evident. As consumers continue to realize the many advantages of online shopping e-
commerce will continue to grow exponentially. The bottom line is, if you‟re in the business of selling directly to
consumers and want to compete with the retail giants you must have the ability to respond quickly to the growth
and demands the e-commerce shift presents. Just as important as having an e-commerce presence is choosing the
right company for your e-commerce solution. You want a proven leader who has the experience to help you avoid
mistakes.

Whitestone TEC™ is the industry leader in providing powerful turn-key e-commerce solutions for the retail market
that are far superior to the standard “box” applications and cost a fraction of a custom solution. Our expertise in the
retail market is unparalleled; our vast experience and sole focus in this market gives us the experience and
capabilities to deliver solutions that are tailored to meet the unique needs of retailers. For Distributors and Buying
Groups, our e-commerce solutions enable you to provide your retailers with powerful turn-key Business-to-
Consumer (B2C) solutions as an integrated extension of an existing Business-to-Business (B2B) or a new site.
Amplify your e-commerce initiatives and boost your sales volume dramatically by increasing your product
exposure to thousands of consumers who shop online and create a more loyal retailer base by providing your
retailers with the critical tools they need to succeed.

2.3.1 A Consumer Perspective of E-Service Quality

Zhang and Prybutok(2005) concluded e-service is an emerging and rapidly evolving area as demonstrated by
new technological innovations introduced to improve e-service. Motivated by the growing interest in online
commerce, we focus our research questions on examining the factors that contribute to e-service, the relationships
among these factors and the consumers‟ attitude toward -service. To explore answers to our research questions, we
developed an e-service model. Specifically, our proposed model consists of such constructs as individual
differences, e-service convenience, Web site service quality, risk, e-satisfaction, and intention. We develop an e-
service quality survey instrument and use empirical data to validate the instrument. The results of our empirical
study validate our eight hypotheses. We confirm seven of the eight hypotheses. One hypothesis that tested
individual differences and service convenience was not confirmed. However, we found that service convenience,
Web site service quality, and risk are significant factors affecting consumers‟ satisfaction level, which in turn
affects intention. The findings suggest that managers need to understand e-convenience from the consumers‟
perspective. In order to provide better services for users, companies need to invest in Web site service quality
design and evaluation, and at the same time, control the perceived risk associated with using it.

2.3.2 B2C E-Commerce Web Site Quality

Cao, Zhang and Seydel examined and integrated four sets of factors that capture e-commerce web site quality
using an IS success model: system quality, information quality, service quality, and attractiveness. A questionnaire
survey was conducted to verify the measures of web site quality. Based on TAM, a framework is also developed
relating web site quality to customers‟ beliefs (perceived usefulness and ease of use), attitudes (preferences for the
site), and intentions (to revisit the site).
Findings – A set of instruments of web site quality has been developed and empirically validated by
factor analysis.Research limitations/implications – The research is based on a sample of students browsing
several book web sites and they may not sense the web site quality across different B2C commercial web sites such
as music, computer, travel, clothes and flowers. Data in these domains should be collected in any future research to
examine further the measures developed here. Practical implications – Guidelines for web interface design are
proposed.

2.3.3 Customer Expectations and Service Quality Dimensions Consistency

Sachdev and Verma-Service marketers bemoan what they perceive as an unprecedented increase of customer
expectations in many service industries. Customer expectations are on the rise with each competitive advance.
While at most everybody has an intuitive sense of what expectations are, service marketers need a far more
thorough and clear understanding of expectations in order to comprehend the concept of service quality and to
measure and manage it. A literature review suggests that the measurement of service quality is full of controversy
associated with many issues, of which an important few are : the type of expectations customers hold in the
evaluation, important manageable service quality dimensions /attributes that define it in its full framework and
dimensional consistency across the service categories.

2.4 Online Shopping In India

The Indian economy is slated to grow by upward of 6 % annually in the next few years which is among the highest
rates of any big emerging economy. And quite a lot of this growth would be on the back of domestic consumption
of goods and services. E-commerce is emerging as a great level given that organized retail is still not ubiquitous
across the length and breadth of the country with large retail chains making up less than 10% of the market.
E-commerce is helping people in smaller towns in India access quality products and services similar to what
people in the larger cities have access to. It„s been forecast that close to 60% of online shoppers would come from
beyond the top eight large cities by the end of this year.

Increasing internet penetration has helped to expand the potential customer pool. Internet penetration is only about
10% (or about 121 million users) as against about 81% in the US and 36% in China. However this number
continues to rise at a consistent pace because of falling prices for broadband connections.

Indians are also increasingly taking to mobile devices for not only search but shopping as well. The number of
Smartphone users is rapidly increasing in India and with 4G services about to take off it„s expected to get even
more people going online. There are currently about 900 million mobile subscribers and this number is expected to
touch 1.2 billion by 2015. Of these about 27 million are estimated to be active mobile internet users. More
importantly, 20% users indicated intent to buy products through their mobile phones as against the current 4% and
this number is expected to only increase in the next two to three years.

Innovation is helping e-commerce companies break the inertia for online shopping by offering benefits to
customers not traditionally available in a brick and mortar store. Business models include no question asked return
policies ranging from 7 days to 30 days, free product deliveries and the industry dynamics changing ―cash on
delivery model. The last innovation has really helped unlock the potential as people can now order products and
pay when they get physical delivery of the product.

This has been a tremendous success because Indians are still reluctant to give their credit/debit card details online
and want to have the psychological comfort that they would actually get the product once payment has been made.
These innovations have led to further innovations downstream as ancillary businesses are developing to support
these initiatives. Some companies have begun to develop support mechanisms for the entire cash on delivery
model and are trying to reach the far flung corners of India, including in the interiors where traditional logistics
companies are still not completely present. The logistics companies are also shoring up their act and have started to
build specific verticals and expertise to address the requirements of e-
Commerce companies.

Divyan Gupta is the Founder and CEO of Keshiha Services Pvt. Ltd, a company with interests in the internet,
telecom, healthcare, education and advanced technology businesses has stated that, acceptance of online shopping
as a secure shopping mode is has also helped to increase e-commerce uptake.
Currently only about 10 million people do online transactions out of an approximate population of 200 million
credit and debit card holders. However the latest industry report by First Data Corporation and ICICI Merchant
Services indicate that there are about 150 million users that are ready for e-commerce.

More importantly the report indicates that urban Indian consumers are now confident enough to make online
purchases of up to US$500 as against US$40-100 in the recent past. So not only are the numbers of online
shoppers projected to increase but there has been a real increase in the total value being spent online.

2.5 Online Grocery Shopping

Proving that no sector of the retail market is safe from the online shopping revolution, it is now possible for the
humble hometown grocery store to become digitized and available on your Smartphone, tablet, or computer. Just
think: no longer checkout lines, counting the number of items to see if you qualify for the Express Lane, forgetting
your grocery list at home, or carrying heavy bags up your front steps. Online grocery shopping is dramatically
changing the consumer's relationship with the food market and making a service that may have once felt luxurious
into an everyday convenience.

Ordering Food Online

An online grocery store is a website that allows users to purchase food over the Internet to be delivered to the
person at a later time. Ordering food on the Internet is similar to ordering any other product--the desired food items
can be searched for specific, or one can browse through listings of products or sections, similar to sections one
might walk through at an actual grocery store. The products offered by an online grocery store are identical to a
normal grocery store. When one has finished shopping, checkout is made with a credit card, and the buyer must
specify certain hours that he will be available to receive the food for delivery. Since Internet groceries must deliver
the food to the customers, they typically pay a fee for delivery based on the amount of food they buy.

Benefits of Online Grocery Shopping

The primary benefit of online grocery shopping is convenient. By ordering online, one can quickly search for the
products she needs and order them without having to physically walk through expansive aisles. It also saves travel
expenses and time going to the grocery store. Considering the wide availability of the Internet, it also means
grocery shopping can be done from remote locations or in the middle of doing other tasks. For instance, using an
online grocery store can allow a person to do all her grocery shopping during her lunch break at work.
It is also very useful for those without a car or who may be physically unable to move around easily, since the food
is delivered right to their doors. The use of online-based grocery stores are increasing in popularity as more and
more people become comfortable with using the Internet to make purchases.

Disadvantages of Online Grocery Shopping

Perhaps the largest disadvantages of shopping online are that it costs extra money, since food must be delivered,
and that the food ordered is not obtained immediately. If someone were making a certain recipe and discovered he
needed an additional ingredient, he would probably not be able to order it online and get it quickly enough to finish
his dish. In the same way, it forces a person to plan his food buying in advance of when he will need it--if delivery
will take a day or two, a person needs to plan to have an extra day or two of essential foods available before he
runs out. Another disadvantage is that online shopping forces the customer to be home during a certain period to
collect the food when it is delivered. Also, online grocery stores will often only cover specific delivery areas.

How Does Online Grocery Shopping Work?

Following is the basic parameter that determines the working of online grocery shopping.

 Creating the Website

The most important part of online grocery shopping is the website itself. The website should have a complete list
of groceries that are able to be delivered as well as the prices for each item. This website should then have a
"shopping cart" where a user can add items to a list of things to be ordered, as well as view and edit items that she
is planning to purchase. Finally, this website should have the ability for the user to enter her address and pay for
the order.

 Filling the Order and Shipping

The next step is to take the submitted order and use it to collect and deliver the items on the list. In general,
fulfillment of the grocery order needs to be done manually by a stock boy or other employee.
This process can be made easier by having a well-organized room where the products can be easily and efficiently
located. The stock person should also check to make sure that the items placed in the order match the list that the
user created.

Then, once the order has been compiled, the collection of food needs to be placed in a vehicle and delivered to the
customer.

 Restocking and Processing Payments Clearly

It is critical to ensure that all the items listed on the website are in stock and able to be shipped. As a result, the
stock room needs to be carefully checked to ensure inventory levels are sufficient.

Also, it is important to have the ability to obtain and process payments made by credit card. Also, in order to
encourage repeat customers, it can be helpful to require customers to have a user name, which would allow
information to be stored. This can also help create "suggested" carts of food items they commonly purchase.

2.5 Indian Players in Online Grocery Shopping

Fresh n daily

Fresh N Daily is Mumbai„s first online fruits and vegetable store. Our endeavor is to service you at the comfort of
your home with the best quality products and at the best possible prices.

They procure goods directly from the farmers/ brand owners and ensure there are no intermediaries.
Moreover, unlike a physical store – supermarket neighborhood Kirana store sabziwala - we are an online store.
This means that the cost structure is very lean: low rental costs, low manpower costs, low overheads etc. The prices
are therefore the most competitive.

Thirty-year-old VikasChauhan, who quit an IT company, has a delivery van that procures vegetables from local
Mandi, brands them with FreshnDaily packets and delivers to areas it has identified as key zones. It has just two
delivery boys who supply in key zones. For the rest, it has tied up with small nook and corner shops. At Ghatkopar,
for example the helper of the corner mobile recharge shop collects the vegetables from the delivery van and
delivers door to door. Friendly pays the errand boy a monthly salary and the mobile shop gets the boy„s services
for free. The shop even gets an incentive when deliveries cross Rs 5,000 a day.

Farm2Kitchen.com

Farm2Kitchen Team is led by SeemaDholi (Founder & CEO), a woman entrepreneur who is committed to the
betterment of the lives of Indian families. She started Farm2Kitchen with only one mission - To enhance the
quality of life for Indian families and provide the best customer service possible.

Farm2kitchen.com, which deals only in organic groceries and textiles, and caters to Gurgaon and surrounding
areas. Founder SeemaDholi, who hails from Pearl Academy of Fashion and has several other ventures in her
basket, such as Divavee and Fashion Per Inch India, wants to educate local consumers about the benefits of organic
groceries and then spread the message to the rest of the country. Set up in 2011, Farm2kitchen is now looking for
funds, but even before that, Seema wants to expand operations and go pan-India.

They support organic farming & agriculture as organic farming is a holistic approach to food production, making
use of crop rotation, environmental management and good animal Husbandry to control pests and diseases.

Some of the cities which will be covered under Farm2Kitchen's umbrella for organic food are -Organic food
stores/shops in New Delhi, Mumbai, Chennai, Kolkata, Bangalore, Gurgaon, Hyderabad, Pune, Aurangabad,
Ahmedabad, Kolkata, Nasik, Vadodara, Gandhinagar (Gujarat), Visakhapatnam, Chandigarh, Bhopal, Jaipur,
Lucknow, Dehradun, Thiruvananthapuram.

BigBasket.com

BigBasket.com (Innovative Retail Concepts Private Limited) is India‟s largest online food and grocery store. With
over 10,000 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 Deals, Spices and Seasonings to Packaged products, Beverages,
Personal care products, Meats – we have it all.
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, Mumbai & Hyderabad. You can pay online using your debit / credit card or by cash /
Sodexo on delivery. We guarantee on time delivery, and the best quality! Happy Shopping!
My Grahak

It‟s an online grocery store from Rei Six Ten Retail Ltd., a retail chain network of about 350 stores in the NCR,
Punjab, Baddi and Nagpur. This is one of the first attempts from a retail grocery giant to enter the online space and
leverage their existing network of offline stores. Mr. AmbujJhunjhunwala is the founder & CEO of MyGrahak.com

MyGrahak covers the basic FMCG categories of food, non-food and grocery. The delivery is currently offered in
Delhi-NCR only. The site comes with the regular frills of an online store, viz. Discount on all products (min. 4%),
48hrs delivery, CoD, customer support etc.

The portal boasts of 7000+ products.

Key figures of MyGrahak

5000 transactions per month growing at over 30% month on month

 Loyalty rate - repeat purchases have increased to 50% from 30% in last 2 months
 8,500 registered families
 10,000 SKUs (Stock Keeping Units) - target of 35,000 SKUs
 Delivery vehicles fitted with GPS
Chapter 3

Research Plan
3.1. Research Objectives
 To study the attitude of customers towards online shopping.
 To identify the issues faced by the user while Sopping online
 Identify the parameters for which influences purchase behavior of the Online Grocery Store.

3.2 Research Scope

 To determine which factor influences the consumer to go for online shopping.
 To find out which feature of the website attracts the user to purchase the product from the online shopping
 website.
 To find out the whether grocery online shopping is beneficial for the user.
 To analyze which factors influence the user to buy online grocery.

3.3 Research Design and Methodology

The sources of data used in this project report are both primary and secondary data.

1. Primary data

Primary data consist of original information gathered from a sample size of 200 respondents residing in Delhi,
India.

2. Secondary data

Secondary data consists of information that already exists and that was collected in the past for some other
purposes.
3.4 Sampling

Sample Design:

 Size of Sample: The sample size selected for the research is 200 in the area of South Delhi.
 Parameters of Interests: The major parameter of interest is the subgroup of people
Who are working professionally and web savvy having an experience in online
Shopping. The two other subsidiary parameters of interest are:
 The respondent should also have an experience grocery shopping.
 And the female respondent who has an online shopping experience.

Sample unit:

1. Working People (Including Men & Women)

2. House Wife‟s
3. College Students
4. Senior Citizens

Sample size: 200

1. Working People: 32%

2. House Wife‟s: 29%
3. College Students 23%
4. Senior Citizens: 16%

Sampling Technique:

Quota Sampling:

Quota sampling is a method for selecting survey participants. In quota sampling, a population is first segmented
into mutually exclusive sub-groups, just as in stratified sampling. Then judgment is used to select the subjects or
units from each segment based on a specified proportion
3.5 Questionnaire Design

The questionnaire was administered by focus group consisting of two faculty members, two from online industry
and two users. Questions in the questionnaire have been kept simple so that they are understandable to all
respondents. This was made to keep the survey simple and user friendly. Also technical jargons are avoided to
ensure that there is no confusion for respondents.
Chapter 4
Analysis and Findings

4.1 Demographic observations

1. Gender

Male Female Total

116 84 200

Table 1: Gender Distribution

GENDER

42%

58%

Male Female

Figure 1: Gender Distribution

Graphical Presentation

The above diagram depicts that out of the total 200 respondent 42% of the respondent were female as the objective
was to study the consumer behavior with respect to online grocery, as grocery is more shopped by female
respondent.
2. Age Brackets

Age Respondents
18-24 92
25-30 76
30& above 32

Table 2: Age Distribution for sample

100

90

80

70

60

50 Series1

40

30

20

10

0
18-24 25-30 30& above

Figure 2: Age distribution of sample

Interpretation

 The 38 % of the respondent were among 30 & above age bracket as these respondents are well
educated and web savvy.

 Another 46% of the respondent were ranging from 18-24 age bracket and the remaining 16 % were respondent
were ranging from 25-30 age bracket, as these respondents are ready to adapt changes.
4. Occupation

Occupation Respondents

Services 124

Business 76

Total 200

Table 3: Occupation of sample

OCCUPATION

Business
38%

Services
62%

Figure 3: Occupation of sample

Interpretation
For the research to be successful most of the respondents are working officials who are educated and web savvy.
 5. Annual Income

Annual Income Respondents

1-5 lakhs 76
5-10 Lakhs 82
10 & above 42

Table 4 : Average Annual Income of sample

ANNUAL INCOME
10 & bove
21%

1-5 lakhs
38%

5-10 Lakhs
41%

Figure 4: Average Annual Income of sample

Interpretation
From the above pie chart we can determine that 48 % of the respondent have around 5-10 lakhs of annual income
which indicates the majority of the respondent have the spending power to purchase grocery items.
4.2 Questionnaire Analysis

Q1. Which item you shop online?

Items No. of Respondents

Apparels 48

Books 28
Electronic 56
Food 16
Games 32
Music 12
Other 8

Table 5: Popular Items online

60

50

40

30
No. of Respondents
20

10

0
Apparels Books Electronic Food Games Music Other

Figure 5 : Popularity of online items

Interpretation
 The above diagram depicts that book has the highest number transaction in online shopping.

 Music is the second most item sold in the online shopping, along with electronics appliances like hair dryer,
mobile appliances, computer peripherals etc.

 The other items that are sold in the online shopping are the apparels which are more preferred by the female
respondent.
 Games are the items that are preferred with the respondent ranging the age bracket between

Q.2. The amount spent in the online shop

Amount(Rs) Number of respondent

100-500 48
500-1000 68
1000-5000 36
5000 & above 48
Table 6: amount of money spent on online shopping

Money spent onnline shoping

80

70

60

50

40
Number of respondent
30

20

10

0
100-500 500-1000 1000-5000 5000 & above

Figure 6: Amount of money spent on online shopping

Interpretation
The money spend in online shopping is ranging from INR 1000-5000, which indicates the users are willing to pay
more price when there is premium quality products such as electronics, branded apparels, original music etc.
 Q.3 .When do you feel the need to shop online?

No. of respondents
When I need home delivery 68
When I want something unique and special 48
When I need to compare prices 24
When I don’t have time to find things in different market 40
Others 20
Table 7 :Need of shopping online

Need to shop Online

80
70
60
50
40
30
20
10
0
When I need home When I want When I need to When I don’t have time Others
delivery somenthing unique and compare prices to find things in
special different market

No. of respondents

Figure 7: Need of shopping online

Interpretation

 From the above we can depict the factor which motivates the respondent to shop online is when they need home
delivery.

 The other factor which motivates to shop online when they compare prices of different products at a same place.

 The above graph also determines that people shop online when they don„t have the time to find things in the market for
the product to be purchased.

 Also respondent shop online when they want some unique & special product which they cannot find in the offline market
Q.4. What features on the online shopping website attracts you?

Very Somewhat Not

Important Important Important
Website user Friendly 110 60 30
cash on delivery 75 105 20
credit / debit card payment 82 82 36
offers and discounts 93 71 36
Free shipping 144 29 9

Table 8: Features of websites attracting users

160
140
120
100
Very Important
80
Some what Important
60
Not Important
40
20
0
Website user Friendly
cash on delivery
credit / debit card payment
offers and discountsFree shipping

Figure 8: Features of websites attracting users

Interpretation

 The above diagram depicts that website user friendliness forms an important factor when it comes to online
shopping, more the website user friendliness will determine the number of visits to a website which will in
turn results an increase in the sale transactions for the particular shopping site.

 Cash on delivery forms an important aspect of the online shopping website in the Indian online shopping
market, the above graph depicts that it does forms an most important part on the online shopping.

 The other mode of payment gateway through net banking and credit/debit banking also forms an important
part of the online shopping website.
 When it comes to tracking the items service in online shopping most of the respondents think that it is an
important service which allows the user to track their items in transit.

 When it comes to the security aspect of the website Id & password forms an important aspect of the online
transaction. The other aspect order confirmation is the like the shopping cart where the user gets the list of
items he/she is going to purchase which avoids unnecessary purchase of the product , also forms an important
part of the online shopping website.

 The above graph depicts that along offers & discounts, free shipping also forms as the most important factor
for the online shopping website, which forms a motivating factor for the user to shop
Q.5. While shopping what affects your satisfaction the most?

Features No. of respondents

Design of website 52
Discount offers 48
Advertisements 64
Range of Products 24
Value of money 12

Table 9: Features effecting the satisfaction most

Website Features
No. of respondents

Value of money 12

variety 24

Advertisments 64

Discount offers 48

Design of website 52

Figure 9: Features effecting the most satisfaction

Interpretation
 From the above diagram we can determine that people prefer online shopping when
discounts offered are offered to them.
 Also the variety of product offering to the customer also forms an important factor which motivates the
respondent to shop online.
 The other factor that motivates the user to shop online is when the product they purchase is of value of
money.
 Also the design of website along with the different advertisement promotion motivates
the user to shop online.
 Q.6. What are your issues regarding online shopping?

Issues No. of respondent

No guarantee 48
Possibility of forgery 52
Highly priced prodcut 44
Too much clutter 28
Security issue 20
Physical Examination 8
Table 10: Issues considered while shopping online

Issue shoping online

No guarantee Possibility of forgery Highly priced prodcut

To much clutter Security issue Physical Examination

4%
10%
24%

14%

26%
22%

Figure 10: Issues considered while shopping online

Interpretation
The other factor which demotivates the user to shop online is the security issue, which consists of issues like
phishing, hacking of accounts etc.
Q7. Where do you shop for grocery items?

Shops No of respondents
Local Kirana 80

Ration Shop 21

SabziMandi 49

Super Markets 50

Table 11: Shops preferred for grocery items

90 80
80
70
60 49 50
50
40
30 21
20
10
0
Local Kirana Ration Shop Sabzi Mandi Super Markets

No of respondents
Figure 11: Shops preferred for grocery items

Interpretation

The above graph depicts that most of the respondents shop from supermarket for grocery items. The
reason for shopping from the particular shopping centre can be depicted below.
Q.8. If given an option to buy grocery online will you buy online?

Yes 68

No 88

May be 44

Table 12: Preference to buy grocery online

May be
22%

Yes
34%

No
44%
Figure 12: Preference to buy grocery online

Interpretation

 The remaining percentage of the respondent may or may not buy grocery online due the factors like physical
examination and security issues.

 The above graph depicts that around 34% of respondent are willing to buy grocery online if the option is
given.
Q.9.Do you think buying grocery online is beneficial?

Yes 136

No 64

Table 13: Opinion on buyng grocery online

No
32%

Yes
68%

Figure13: Opinion on buyng grocery online

Graphical Presentation

 The above diagram depicts that most of the respondent think that buying grocery is beneficial which can be
determined from the next question.

 The remaining respondent thinks that online grocery shopping will be not beneficial due the factors like
forgery products, highly priced products and no guarantee ofthe product.
Q10. If yes why do think is beneficial?

Parameters No. of repondents

Easy to order 68
Variety 48
Discount & offers 52
Saves time 20
Avoide long queues 12

Table 14: Parameters beneficial for shopping online

Parameters
6%

10%

34%
Easy to order

Variety

Discount & offers

26%
Saves time

Avoide long queues

24%

Figure 14 : Parameters beneficial for shopping online

Graphical Presentation

 The above graph depicts that user respondent think that online shopping will be beneficial as it will save their
time to shop for grocery items.

 The next relating aspect why consumer will shop grocery online as it will allow the user to avoid long queues
resulting in reduction in time spent in shopping.

 The other factors why online grocery shopping will be beneficial as it will allow the user to shop all the
grocery at a particular place with discounts and offers.
 buying grocery options to buy
online beneficial online
Home Delivery -.114 .215**
Something unique and special -.033 .128
To compare prices -.091 -.054
Time constraint .196** .520**
others .123 .504**
User friendly website .646** .379**
Cash on Delivery -.089 -.108
Online payment options .472** .344**
offers .341** .260**
Free shipping .230** .260**
Design of website .315** .731**
Discount .248** .596**
Advertisements .287** .844**
Range of Products .141* .489**
Value of Money .106 .413**
No guarantee .248** .596**
Security issue .154* .482**
High priced Product .222** .576**
To much clutter .095 .488**
Physical Examination .130 .464**

Table 15: Correlation of factors with attitude of online users

From the correlation table it was seen that all the factors influence the decision of an online user to shop online and
the satisfaction. It was however seen that factors like facility of home delivery, provision of comparing prices and
cash on delivery did not correlate with online buyer attitude. This can be explained as the hich anyhow is also
available in offline stores.

How significantly the factors contribute is given in the next table.

 Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
(Constant) 1.197 .321 3.726 .000
Home Delivery -.168 .078 -.161 -2.148 .034
Something unique and .061 .080 .060 .766 .445
special
To compare prices -.046 .057 -.056 -.813 .417
Time constraints .050 .118 .055 .419 .676
Others -.132 .200 -.128 -.658 .512
User friendly website .568 .102 .672 5.587 .000
Cash on Delivery -.068 .098 -.048 -.699 .486
Online payment options .007 .104 .008 .065 .948
offers .003 .105 .004 .029 .977
Free shipping -.020 .093 -.028 -.217 .828
Design of website .201 .153 .232 1.311 .192
Advertisements -.116 .100 -.140 -1.152 .251
Range of Products -.060 .336 -.061 -.179 .858
Value of Money -.066 .127 -.061 -.521 .603
No guarantee -.037 .206 -.042 -.177 .860
Security issue .378 .345 .403 1.095 .276
High priced Product -.077 .205 -.087 -.373 .709
To much clutter -.136 .117 -.153 -1.160 .248
Physical Examination -.157 .199 -.136 -.789 .431

Table 16 : Regression table

The t-test values were not found to be significant primarily because in India online grocery is a budding concept
and has not been familiarized with users. It holds promise of expansion.
Chapter 5

CONCLUSION

5.1 Summary

From the above data analysis it can be conclude that consumer buys goods from the online shopping website on the
basis of factors like offers and discounts, variety of product available, free home delivery, website user friendliness
and

The hypothesis framed for the project Consumer Perception towards Online Grocery Shopping was Online grocery
shopping stores are beneficial for the consumer‖.

From the above data analysis it can be determined that most of the respondent would agree to buy grocery online
rather than shopping of grocery with the traditional method.

Out of the agreed respondent to buy online grocery, most of the respondent would think that it would be beneficial
to shop grocery online on the basis of factors like easy to order, variety, discounts/ offers, saves time and avoid
long queues. With above analysis we can thus prove the hypothesis to be positive.

5.2 Limitations

 The first limitation caused during the market research was to find out the respondent who shop online and are
web savvy.
 The second limitation caused during the research was searching the women respondents who shop grocery
products along with the experience of online shopping.
 Other limitation caused in the market research was that the research will only study the consumer perception
towards online grocery shopping and not the dealers, wholesalers or retailers‟ perception towards online
shopping which acts as an agent to the online retail industry to support its business operations.
5.4 Major Findings

 From the data collected above we can observe that there is an increase in the number of respondent in
online shopping as there is awareness about this concept in the market.
 Certain parameters which motivates the user to shop online are:
 User friendliness of the website.
 Discounts and offers, offered by the website.
 Cash on delivery form an important gateway in online transaction.
 Free shipping is the most important factor which motivates the user to shop online.
 Physical examination is the important issues in the online shopping which determines the tangibility of the
product.
 The data depicts that supermarket are the preferred shopping destination as it offers all the basic aspect of
the online shopping which are price, quality variety, proximity to home, offers & discounts.
 From the above data collection we can determine most of respondent agree to buy grocery online if the
option is give.
 The data also determines the factors which will be beneficial for the consumer to shop grocery online
which are variety at one shop, saves times and avoid long Queues.

5.5 Future Scope

Experts predict a promising and glorious future of ecommerce in the 21st century. In the foreseeable future
ecommerce will further confirm itself a major tool of sale. Successful ecommerce will become a notion absolutely
inseparable from the web, because e-shopping is becoming more and more popular and natural. At the same time
severe rivalry in the sphere of ecommerce services will intensify their development. Thus prevailing future trends
of ecommerce will be the growth of Internet sales and evolution.

Each year number of ecommerce deals grows enormously. Sales volumes of on-line stores are more than
comparable with those of “brick-and-mortar” ones. And the tendency will continue, because a lot of people are
“imprisoned” by work and household duties, while Internet saves a lot of time and gives opportunity to choose
goods at the best prices. Present-day Internet sales boom is the foundation for magnificent ecommerce future.

The “quantity to quality” tendency of ecommerce is also becoming more and more obvious, as the Internet has
excluded geographical factor from the sale. So it doesn‟t matter any more whether your store is situated in New
York or London or in a small town. To survive, merchants will have to adapt rapidly to the new conditions. To
attract more customers e-store-owners will have not only to increase the number of available services, but to pay
more attention to such elements like attractive design, user-friendliness, appealing goods presentation, they will
have to opportunely employ modern technologies for their businesses to become parts of ecommerce future.

Of course, those, who acquire e-stores earlier, get better chance for future success and prosperity, though an
ecommerce site itself doesn‟t guarantee you anything. Only an appropriate ecommerce solution in combination
with thorough emarketing and advertising can buy you business insurance
APPENDICES

Questionnaire on Online Grocery Store

Name:

Gender:-

□Male
□ Female

Age:-

□18-24
□ 25-30
□ 30 and above

Occupation:-

□ Student
□ Service
□ Business

Income Level:-

□ 1 lakh - 5 lakhs
□ 5 lakhs - 10 lakhs
□ 10 lakhs and above

Q1. Which item you shop online?

□Apparels

□Books

□Electronics

□Food
□Games

□Music

□Any other(Please specify)

Q2. How much money do you spent in online shopping? (Rupees)

□100 - 500

□500 - 1000

□1000 - 5000

□5000 & above

Q3. When do you feel the need to shop online?

Agree Neutral Disagree

When I want something unique and special

Value for money

When I need to compare prices

When I don„t have the time to find things by

different market

Others

Q4. What features in online shopping website attracts you?

Agree Neutral Disagree

The design of a website

Discounts offered
Advertisement

Variety

Value for money

If others specify …………………………………………………………………………..

Q5. While shopping what affects your satisfaction the most?

Disagree Neutral Agree

Website user Friendly

Cash on delivery

Credit / debit card payment

Offers and discounts

Free shipping

Q6. What are your issues regarding online shopping?

Disagree Neutral Agree

No guarantee

Possibility of forgery

Product highly priced

Too much clutter

Security issue
 Physical examination

Any other (Please specify)

Q7. Where do you shop for grocery items?

Local Kirana

Ration Shop

Sabzi Mandi

Supermarkets

Q9. If given an option to buy grocery online will you buy online?

 Yes
 No
 May be

Q10.Do you think buying grocery online is beneficial?

□Yes
□No

Q11.If yes, why do you think is beneficial?

□Easy to order

□Variety at one shop

□Discounts & offers

□Saves time

□Avoid long queues

□Any other (Please specify)

Bibliography:
Reference Books:

 Marketing Management: Philip Kotler

 Basic of Marketing: Dr. P. C. Pardeshi

Reference Links:
Sasser, W. Earl, Jr., Olsen, R. P. and Wyckoff, D. D. (1978), Management of Service Operations: Text and Cases.
Boston: Allyn & Bacon.

Lehtinen, U. and Lehtinen, J. R. (1982), “Service Quality: A Study of Quality Dimensions,” unpublished working
paper, Service Management Institute, Helsinki, Finland.

Lewis, R. C. and Booms, B. H. (1983), “The Marketing Aspects of Service Quality,” in Emerging Perspectives on
Services Marketing, Leonard L. Berry, G. Lynn Shostack, and Gregory Upah, eds. Chicago: American Marketing
Association, 99-107.

Parasuraman, A.. Berry, L. L .and Zeithaml, V.A. (1988), “SERVQUAL: A Multiple-Item Scale for Measuring Service
Quality,” Journal of Retailing, 64 (1), 12-40.

Parasuraman, Zeithaml & Berry (1985). A conceptual model of Service quality and its implication for future
research. Journal of Marketing, 49(4), 41-50.

Parasuraman, A.. Berry, L. L .and Zeithaml, Valarie A. (1991), “Refinement and Reassessment of the SERVQUAL
Scale,” Journal of Retailing, 67(4), 420-50.

Ennew, C.T., Reed, G. V; and Binks, M.R (1993). "Importance-Performance Analysis and the Measurement of
Service Quality", European Journal of Marketing, Vol. 27 (2) pp.59 – 70.

Web Links
http://www.firstpost.com/tech/indias-e-commerce-market-to-touch-260-bn-by-2025-
report-255350.html.

http://online.wsj.com/article/SB10001424052702303816504577308652286295634.
Html

http://www.businessworld.in/businessworld/businessworld/content/Services- Economy-
Moves-Online.html?storyInSinglePage=true

http://trak.in/tags/business/2011/08/23/india-online-internet-users-survey-report-
2011/