Present Scenario of Consumer s Online Shopping Market

Transcription

1 Present Scenario of Consumer s Online Shopping Market Dr. P. Na. Kanchana, Assistant Professor, Department of Management Studies, Srimad Andavan Arts & Science College (Autonomous), Thiruvanikovil, Trichy Mobile: id: pnakanch@yahoo.co.in Abstract: India will witness changing shopping trends in the next few years. India is set to become the third largest nation of Internet users in the next two years itself. The online retail market in India is expected to grow immensely, given the rising middle class in India, with growing disposable income on hand and lesser availability of time to spend the same. Extensive use of advertisements and presence on social media websites also helped these online shopping websites to gain brand recognition. Today, the services have improved so much that online marketers offer products at huge discounts, with delivery in 48 hours, along with a no question asked return policy. All these factors along with increasing penetration of Internet, improved rate of literacy, introduction of safe & secure technology, etc. have been able to drive the online retail market in India. The current study is descriptive in nature and it has made an attempt to understand the behavior of Indian consumers towards online shopping. Key Words: online shopping, E-commerce 51

2 1 Introduction Electronic commerce has become one of the essential characteristics in the internet era. According to UCLA Center for Communication Policy (2001), online shopping has become the third most popular internet activity, immediately following usage / instant messaging and web browsing. It is even more popular than seeking out entertainment information and news two commonly thought activities when considering what internet users do when online. Internet users, 48.9 percent made online purchases in 2001, with three-quarters of purchasers indicating that they make 1-10 purchases per year. In the typical online shopping process, when potential consumers recognize the need for some merchandise or service, they go to the Internet and search for need-related information. However, rather than searching actively, at times potential consumers are attracted by information about products or services associated with the felt need. They then evaluate alternatives and choose the one that best fits their criteria. Finally, a transaction is conducted and post-sales services provided. Online shopping attitude refers to consumers psychological state in terms of making purchases on the internet. Considering the latest updates from IBN 7, the number of online shopping have crossed 600 in the year 2013 which was only 100 in The popularity of local e-commerce sites is also noteworthy in addition to global leaders like ebay and Amazon. 2 Purpose of the Study This study helps to understand the need for online shopping, different views presented by various authors about online shopping, know the reasons of why online shopping beats traditional shopping and the current scenario of online shopping market. 3 Need for Online Shopping Few developments have altered India s lifestyle more quickly and more completely than the Internet. Online access has enabled people from all walks of life to bring entire libraries, entertainment venues, post offices and financial centers to a workplace, to a desktop or to a shirt pocket. The Internet s largest and most meaningful impact depends on the way consumers shop everything, from gifts, gadgets and groceries to clothing, cars, and cruises. The ease and 52

3 selection that the internet provides to shoppers has changed the face of retailing. Moreover, consumers visit a store s website to make their choices before traveling to the store itself; and in a rapidly swelling tide, many shoppers are bypassing the store altogether and ordering online directly from the web sites of their favorite brands and outlets. Online stores are open 24 hours a day, seven days a week, and their inventories are often more complete than those of their brickand-mortar counterparts. The internet makes it easy for shoppers to compare products within or between stores, to read product reviews from other customers, to access vendor return policies and to find warranty information. 4 Review of Literature Maignan and Lukas s research (1997) and Rowley (2000) found that the financial risks had been cited as a main reason to stop internet shopping and security had become a major concern in online transaction relationships. Solomon (1998) studied the consumer behavior and said that it is the study of the processes involved when an individual selects, purchases, uses or disposes of products, services, ideas, or experiences to satisfy needs and desires. In view for the internet to spread out as a retail channel, it is imperative to realize the consumer s mind-set, intention and conduct in light of the online buying practice. Bellman, Lohse and Johnson (1999) examine the relationship among demographics, personal characteristics, and attitudes towards online shopping. These authors find that people who have a more wired lifestyle and who is more time constrained tends to buy online more frequently, i.e., those who use the internet as a routine tool and/or those who are more time starved prefer shopping on the internet. Donthu and Garcia (1999) proposed that risk aversion, innovativeness, brand consciousness, price consciousness, importance of convenience, variety-seeking propensity, impulsiveness, attitude toward advertising, attitude toward shopping, and attitude toward direct marketing would influence online shopping behavior and found that among them age, income, importance of convenience, innovativeness, risk aversion, impulsiveness, variety-seeking propensity, attitude toward direct marketing, and attitude toward advertising were factors influencing online shopping behavior. 53

4 Bhatnagar, Misra and Rao (2000) measure how demographics, vender / service / product characteristics, and website quality influence the consumers, their attitude towards online shopping and consequently their online buying behavior. They report that the convenience the internet affords and the risk perceived by the consumers are related to the two dependent variables (attitude and behavior) positively and negatively, respectively. According to Miyazaki and Fernandez (2001), perceived risk affects consumer online purchasing behavior negatively. They also found that internet experience is negatively related to the existence of concerns regarding the privacy and security of online purchase and the perceived risks of conducting online purchases. Schiffman, Scherman, & Long (2003) in their study researched that yet individual attitudes do not, by themselves, influence one s intention and/or behavior. Instead that intention or behavior is a result of a variety of attitudes that the consumer has about a variety of issues relevant to the situation at hand, in this case online buying. Shergill and Chen (2005) conducted a study on Web-Based Shopping: Consumer s Attitudes towards Online Shopping in New Zealand. The model included several indicators belonging to four major categories; the value of the product, the shopping experience, the quality of service offered by the website and the risk perceptions of Internet retail shopping. The study concluded that regular web buyers were much more satisfied with all website variables than trial web buyers. Sorce et al. (2005) found that younger consumers searched for more products online and they were more likely to agree that online shopping was more convenient. This study was conducted on behavior of youth in Malaysia. Wang, Liu and Cheng (2008) conducted a study on the influencing factors of online shopping and documented that consumers think it to be risky to make online payments. The consumers were also expecting a higher level of privacy in online shopping. This study was conducted in China and the Chinese consumer s experience with the internet and computer skill was also found to be a factor influencing the consumer behavior. Norazah Suki and Norbayah Suki (2009) conducted a study on Cellular Phone Users Willingness to Shop Online. The study suggested that marketers should propose more on attractive promotions such as advertisements or discounts through the web. 54

5 Chowdhury and Ahmad (2011) conducted a study on factors affecting consumer participation in online shopping in Malaysia. The major focus of the study was to describe the relationship between independent variables and dependent variable using Pearson s correlation method. The limitation of this study was that it only used four variables (ability, benevolence, integrity and trust) in explaining the consumer participation but did not take other important variables into account, e.g., cost in switching vendors and the presence of third party. The study provides buying intention. Karim (2013) conducted a study on online shopping behavior of customers and documented that online vendors can assure transaction security for their consumers and avoid long delays in completing online orders and the hassle of returning goods for better online shopping experience. 5 Top Reasons Why Online Shopping Beats Traditional Shopping Online shopping is all the rage at the moment. Now, there are two types of people, those that love online shopping and those that don t see the point. Some reasons for why online shopping is amazing and how it beats physically going into a store has been explored. Unlimited Time: Online shopping allows the consumers to look at clothing and take as much time as they want before committing to buying anything. They can put outfits together, compare dresses and won t have sales assistants tailing them throughout the store. They can also visit several sites at once to see which store is offering the best price, and the best thing about this is that they don t lose the item. Many customers have left an item behind, thinking that they will find something better, only to come back and find that it has been sold. This would not happen with online shopping. No Queues: Waiting in queues can be stressful. Shopping is supposed to be fun, not exhausting. With online shopping, an item can be added to your basket and paid instantly. Commitment Free: With online shopping, things can be added into the basket as we shop, and then view the total. This allows us to remove items that we may have added on an impulse. Online shopping allows us to review what we are planning to buy before handing over the cash. If the total cost is way over the budget, items can be simply removed from the basket without any embarrassment. Changing Room Free Zone: People often wonder how they can go from loving something, to absolutely hating it. Changing rooms in stores often have fluorescent lighting. Colours are 55

6 distorted and mirrors are placed strategically to deceive the customer. Things can look entirely different at home. Changing rooms are also tiny, hot and stuffy. It feels like being trapped inside a cell, having said that, even prison cells are bigger than changing rooms! Also sales assistants waiting outside pressurize the customers to try things on very quickly. Online shopping allows us to purchase items, and then try them on at home. If you don t like something, you can easily send it back which eliminates the dreaded changing room problem. Bargains: Websites always have deals running which you often can t find in store. For example, they may be offering 10% off new items, or free next day delivery. This can be advantageous when we need something, because we know that they will always have some kind of deal going on. If you like an item, you can add it to your bookmarks and come back in a few days and find that it is on offer. We may think that things like free delivery do not matter, and that you can just travel to the store to buy items instead. However, we must think about how much it costs to actually get to the shop. The cost of petrol, bus fare, or even the effort of walking is saved. This contributes to the cost of the item; therefore, free delivery is a godsend! The Excitement: The ultimate advantage to shopping online is the fact that items are brought right to the customer. Life doesn t get any better than that does it? We can browse and order from the comfort of our own home, and then have the clothes sent to us. 6 Present scenario of online shopping market The average annual spending of Indians on online purchases is expected to rise 67 percent to Rs 10,000 next year, according to a study. Currently, online shoppers spend around Rs 6,000 a year on an average, said the Assocham-PwC study. About 40 million consumers purchased something online this year and the number is expected to grow to 65 million by 2015 with better infrastructure in terms of logistics, broadband and internet-ready devices. The overall e- commerce industry, valued at $17 billion, has been growing at a compounded annual growth rate of about 35 percent each year, the study said, adding that it is expected to cross the $100 billion mark in five years. In 2014, the sector attracted the attention of investors, including top global firms and leading Indian industry leaders like Azim Premji and Ratan Tata. Brands like Flipkart and Snapdeal are enjoying edge over global players like Amazon in the country. Online apparel sales continue to capture a greater share of India retail ecommerce as a category along with the 56

7 computer and consumer electronics sector, fuelling the overall market growth. The smartphone and tablet shoppers will be strong growth drivers. Mobile phones already account for 11 percent of ecommerce sales, and their share will jump to 25 percent by 2017, Assocham Secretary General D S Rawat said. Computer and consumer electronics, along with apparel and accessories, account for the bulk of India s retail ecommerce sales. These will contribute 42 percent of the total retail ecommerce sales in 2015 from the current level of 39 percent, said the study. India s travel and tourism are second fastest growing travel and tourism industry in the world. Nearly 75 percent of total travel related business has migrated to e-commerce. With nearly one-third of internet users already making purchases online, the ecommerce growth will rely more on increased spending from existing buyers than first-time online buyers, it said. Other factors contributing to the growth of e-commerce include aggressive merchandising and discounting from flash sales and daily deals, more online loyalty programmes and increasing popularity of smartphones and tablet computers among consumers, the study added. The industry is expected to spend an additional $500 million to $1 billion on logistics functions, leading to a cumulative spend of $950 million to $1.9 billion till , it said. Currently, over 25,000 people are employed in e-retailing warehousing and logistics. It is estimated that there will be an additional employment of close to 1,00,000 people in these two functions alone by , the study said. 7 Conclusion The current study is descriptive in nature and it has made an attempt to understand the behavior of Indian consumers towards online shopping. There is a huge scope of web-stores in various areas and in almost all the segments. The young population is the biggest attraction of this industry and they may contribute substantially to the growth of online shopping in India. The majority of internet users are youngsters, the majority of goods and services demanded are related to only this segment. References 57

8 1. Bellman, Lohse and Johnson (1999), E.J., Predictors of online buying behavior, Association for Computing Machinery, Communications of the ACM, 42(12), pp , Bhatnagar, Misra and Rao (2000), Online risk, convenience, and Internet shopping behavior, Communications of the ACM (43:11), pp , Chowdhury and Ahmad (2011) Factors Affecting Consumer Participation in Online Shopping in Malaysia: The Case of University Students. European Journal of Business and Economics, 5(0). 4. Donthu and Garcia (1999)., The Internet shopper, Journal of Advertising Research, Vol. 39, No. 3, pp , Maignan, I.; Lukas, B., The nature and social uses of the Internet: a qualitative investigation, Journal of Consumer Affairs, Vol. 31, No. 2, pp , Miyazaki and Fernandez (2001), Miyazaki, A.D.; Fernandez, A., Consumer perceptions of privacy and security risks for online shopping, The Journal of Consumer Affairs, Vol. 35, No. 1, pp , Norazah Suki and Norbayah Suki (2009) Norazah Mohd Suki, Norbayah Mohd Suki, Cellular Phone Users Willingness to Shop Online, World Academy of Science, Engineering and Technology International Journal of Social, Human Science and Engineering Vol. 3, No. 6, pp.70-74, Rashed Al Karim(2013), Customer Satisfaction in Online Shopping: a study into the reasons for motivations and inhibitions, Journal of Business and Management (IOSR- JBM) e-issn: X, p-issn: Volume 11, Issue 6 (Jul. - Aug. 2013), PP Rowley (2000)., Product searching with shopping bots, Internet Research: Electronic Networking Applications and Policy, Vol. 10, No. 3, pp , Schiffman, Scherman, & Long (2003).,"Toward a better understanding of the interplay of personal values and the Internet", Psychology & Marketing, 20(2), pp , Shergill and Chen (2005), Web Based Shopping: Consumers Attitude towards Online Shopping in New Zealand, Journal of Electronic Research, Vol. 6, No. 2, pp [Online] Available ://commerce.massey.ac.nz/research_outputs/2003/ pdf. 58

9 12. Sorce et al. (2005), Attitude and age differences in online buying, International Journal of Retail & Distribution Management, Vol. 33, No. 2/3, pp , Solomon (1998), M. R., Consumer behavior, New York, NY: Prentice Hall, Wang, Liu and Cheng (2008), Study on the Influencing Factors of Online Shopping, Proceedings of the 11th Joint Conference on Information Sciences, Published by Atlantis Press,