INTRODUCTION India, a country with the second largest population in the world and with more than fifty per cent of the population between the age

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1 INTRODUCTION India, a country with the second largest population in the world and with more than fifty per cent of the population between the age group of years. Today s consumers are changing rapidly from being informed of the latest happenings, to experimenting different things in life. On the other hand, agriculture is changing, though plagued with a lot of constraints like drought; farmer suicides etc, on the bright side a lot of individuals are taking interest to pursue agriculture. Agriculture is the largest employment generator to the nations and is getting more modernized through various means, today s consumers are also getting health conscious and are very concerned of the environment they live inn. Consumers are getting experimental with innovate foods like exotic foods, organic foods and bizarre foods. The rise of e-commerce and online shopping has given an impetus to the rising middle class and made available the unavailable. Increasing disposable income, the high penetration of smart phones, 24x7 connectivity is making the middle class shop more for less. E-commerce has become a changed the way shopping is done. India is at the brink of an e commerce revolution. E commerce is giving an all new experience to the consumers; the Indian consumers have never been so pampered as they are today. Technological advancement is helping the e commerce sector become more efficient and is increasing connectivity to a larger audience. The Indian e- commerce players like flipkart.com, jabong.com, myntra.com have been on a high growth trajectory and have garnered some huge investments. The entrance of major global players like Alibaba.com and Amazon.com has taken competition to another level. To stay ahead of competition the e-commerce players are differentiating themselves by offering services such as One day delivery, 30 day replacement policy, cashback offers, mobile wallets etc. The e-commerce industry is growing rapidly, as per KPMG & CII report of November 2015; the e-commerce market in India was estimated at USD17.6 billion in 2014, and is expected to grow at a CAGR of 40 per cent to touch USD136 billion by The report also states that the e-commerce retail market is among India s exciting and fastest growing markets. It is poised to be worth USD36.7 billion by 2020, from USD3 billion in 2014, growing at a CAGR of approximately 52 per cent. Currently over 80 per cent of the market share in the overall Indian e- commerce market is controlled by the top three to four players as per the report.

2 Though e-commerce sector looks very interesting, this sector had a different start in India. The history of e-commerce so called online shopping in India dates back to June 1999, where K Vaitheeswaran and five other friends launched an online shopping site fabmall.com, which started selling music CD s for sale and after acquiring the US based online shopping site, changed the name to Indiaplaza.com. The same year saw the start of one more online shopping site called rediffshopping.com, however the site rediffmail.com started in 1996, by Ajit Balakrishnan. However, the biggest boom for the e-commerce market online came in 2007, with the launch of Flipkart.com, a site started by two ex-employees of amazon.com, Sachin and Binny Bansal. They too started off by selling books and today they are India s leading online players. This boom in e-commerce has led companies to enter into various sectors and since the rise of this sector many other sectors are getting developed. The one sector that can be developed through e-commerce and technology is agriculture, which is one of the major sectors that have taken a back seat is agriculture. Agriculture has been the backbone of any economy in the world; it has been the main source of livelihood for centuries now and is the oldest form of employment across the globe. Agriculture plays a vital role in India s economy. Over 58 per cent of the rural households depend on agriculture as their principal means of livelihood. As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) was 16.1 per cent of the Gross Value Added (GVA) during at prices. During Q1 FY2016, agriculture and allied sectors grew 1.9 per cent year-on-year and contributed 14.2 per cent of GVA. India is the largest producer, consumer and exporter of spices and spice products. It ranks third in farm and agriculture outputs. According to CIA Fackbook the contribution to Indian GDP composition in 2014 is 18% India accounts for 7.68 percent of total global agricultural output. India world rank is 11 and GDP is $ billion. Contribution of Agriculture sector in Indian economy is much higher than world's average of 6.1%. The agricultural sector though contributes to India in a big way it is plagued by many issues, the lack of proper finances and too much dependency on rainfall, lack of infrastructure and supply chain coupled with middle men who are paying farmers a miniscule amount is leading to farmer suicides in many parts of the country. Over use of fertilizers and pesticides is rendering soil useless for further growth. Most of the farmers have a very small land holding and hence do not have sufficient output of the produce,

3 leading to low quality produce, lack of mechanization has lead to huge labour work and low produce of labour employed leading to huge amount of loses. India of late has started importing most of the produce, like pulses, wheat etc, which at one point of time India was self sufficient and used to export these commodities. The Government over the years tried many methods to bring back agriculture on track, through Green Revolution, Blue Revolution, Yellow Revolution, they had a good beginning but lacked continuity. Today, however we have seen the entrance of various private players which will change the face of Indian agriculture, with companies like Relaince, Mahindra s, Tata s entering agriculture the way agriculture is functioning will change in the years to come. Corporate farming is the new buzz word. ITC had a decade ago started e-choupal an online site to sell the produce based on the current days prevailing rate of the commodity. These organizations have also hugely invested in the retail sector giving rise to new models in supply chain is proving beneficial. Consumer are benefiting with the rise of private sector in agriculture as the retail sector is closing the gap from the farm to the table. Consumers today are getting very health conscious and are becoming more and more concerned with the environment they live in. This has bought in a major change in agriculture thought the use of organic methods in farming. This is a new breed of entrepreneurs specially the younger generation, who is coming forward and taking organic farming to the next level. As per organicworld.net a year book on organic agriculture, Organic farming is practiced in 172 countries, and 43.7 million hectares of agricultural land are managed organically by approximately 2.3 million farmers. The global sales of organic food and drink reached 80 billion US dollars in The World of Organic Agriculture, FiBL & IFOAM Organics International (2016): The World of Organic Agriculture India as a country is not far behind in organic foods. Organic Food provides one of the best options for the Indian consumers concerned of the ill effects of the high use of chemicals injected into farm foods which effects not only health but also the environment. Organic food, in India is still a very nascent and niche concept. Currently the consumption for domestic organic food is estimated to be around $200 million annually and growing at a compounded rate of 30 percent to 40 percent each year. The certified land in India for organic farming is around 4.2 million hectares. The demand for Organic Foods in increasing mainly in metropolitan cities such as Mumbai, Chennai, Delhi, Gurgoan, Bengaluru and Pune. The increasing awareness of

4 organic foods is also creating a new set of jobs in the market place. According to a recently published report by TechSci Research India Organic Food Market Forecast and Opportunities, 2017, the organic food market in India is expected to grow at the CAGR of around 19% during The increased growth in the Indian organic food market is also driven due to the entry of many large retail giants and also by e-commerce retail players. Organic food has been also distributed through the online channels. In India, there are more than 25 e commerce players selling a variety of organic foods online. 1.1 Changing trends in the Indian Buying Behaviour 1. Huge Disposable Income : The major driver for the increase in spending capacity is the huge disposable income by the consumers, specially by the middle class consumers who would love to indulge themselves in something that gives them more value. The upper class has always been the spend thrifts. As Indians are moving around the world and the increasing knowledge of things around them the consumers are not worrying on spending in products that give them either a snob value or are matter of indulgence, be it grocery, apparel etc. 2. Lack Of Time : With the concept of Double Income No Kids (DINKS) and Double Income Single Kids (DISK) today s Indian husband and wife s are working which is not providing for enough time for shopping and hence online is the major preference. Apart from online shopping eating out is become a norm for most of the couples who stay away from their home town. This is has also given rise to nuclear families creating a huge time constraint. 3. Hectic Schedules And Stress : In today s world and specially in India, the work life balance is no longer prevalent. Late night working, only weekend offs and sometime even working on weekends have let consumers with little or no time for themselves. More over the pace of life has increased to a much larger extent. Online gives them a good platform to have everything on their finger tips. 4. Digital Customers : Customers today have become available 24 X 7 and companies are trying to cope with this phenomenon each time there is an option. The advent of smartphones and 24X7 connectivity to the outside world has led to different lifestyles and how customers function. In Mumbai, for example the Government is planning on having Malls and shopping centers open until 12 am and may also keep the stores open 24 hours.

5 5. Experimenting With New Foods: With the advent of media, and customers travelling to different parts of the global, Indians are become experimental with the food. Today s Indians do not mind to experiment with Italian, Chinese, Continental etc. the customer today is also watching programs like Masterchef, and channels like Fox life and travel and living which are giving them a whole new perspective in life. 6. Non Availability Of Products In Some Markets : Due to lack of availability in major part of the country, online purchases of grocery and other items have picked up drastically. The tie up of Amazon with India Post has given a huge reach to the company and also provided the customer with what is not available with them nearby. Today s rural customers are also moving neck to neck with the urban counterpart and are also demanding the same products and services which gives e- commerce companies a huge benefit. The changing trends in customers buying behaviour mentioned above is leading a new wave in online grocery retailing. Grocery is 60 per cent out of the total Indian retail market. The reason is simple food is the basic necessity be it the rich or the poor. The purchase of grocery online refers to the purchase of grocery over the internet. This was started in the West; it slowly is catching up in India. The initial firms were founded in the year This sector has developed rapidly and has invited huge investments by angles investors and venture capitalist. The players that lead this market today are Big Basket, Aaramshop, Zopnow etc. The companies that were operational for about 3 years have grabbed a massive marketplace proportion of their respective towns of operations also known as Hyperlocals. The market additionally flourishes because it has been capable to offer steep discounts and lure customers away from the brick and mortar stores to online grocery purchasing. However, the online grocery market is also grappling with players like localbanya.com and peppertap.com, have had to temporarily suspend operations, due to various issues that are affecting the sector. Since this is a new sector, it is increasingly getting difficult for players to understand the game as distribution, supply chain; discounts etc have to be done to an extent of sustainability and scaling up. I feel this study is of importance considering the changing consumer behaviour and the way the online grocery and organic sector is operating. This study will not be useful for academicians but also the industry at large and budding entrepreneurs who want to enter the sector or organic products online.

6 In my thesis, I will be doing an abstract review of approximately peer reviewed research papers published in major National and International Journals from across the world. The literature review thus will give an in-depth insight into my research as to how people will embrace consuming Organic Food by purchasing online. Problem Statement Organic Grocery is Not Selling Online The thesis will evaluate various factors that are influencing the purchase of organic foods, since organic grocery precuts are not being purchased despite a lot of health benefits in organic grocery products. This thesis will help entrepreneurs and other agencies to understand the reasons for non acceptance of grocery products online.