CHAPTER -3

ONLINE SHOPPING: AN OVERVIEW

3.1 INTRODUCTION

This chapter will provide us with a good understanding of online retail industry and steps involved in conducting online shopping. Further we try to trace back the origin of online shopping and its evolution through different periods. The factors affecting online shopping, its merits and demerits etc. are also taken up for discussion. The chapter will also analyse its popularity in Indian market as well as among students.

3.2 ONLINE SHOPPING AT A GLANCE

Online shopping or online retailing is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the internet using a web browser. Alternative names are: e-shop, e-store, internet shop, web-shop, web-store, online store, and virtual store. An online shop evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping centre; the process is called business-to-consumer (B2C) online shopping. In the case where a business buys from another business, the process is called business-to-business (B2B) online shopping. The largest of these online retailing corporations are eBay and Amazon.com, both based in the United States.

The first World Wide Web server and browser, created by Tim Berners-Lee in 1990, opened for commercial use in 1991.Thereafter, subsequent technological innovations emerged in 1994: online banking, the opening of an online pizza shop by Pizza Hut, Netscape’s SSL v2 encryption standard for secure data transfer, and Intershop's first online shopping system. Immediately after, Amazon.com launched its online shopping site in 1995 and eBay was introduced in 1996.

Online customers must have access to the internet and a valid method of payment in order to complete a transaction. Generally, higher levels of education, and personal income, correspond to more favourable perceptions of shopping online. Increased exposure to technology also increases the probability of developing favourable attitudes towards new shopping channels

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Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine. Once a particular product has been found on the website of the seller, most online retailers use shopping cart software to allow the consumer to accumulate multiple items and to adjust quantities, like filling a physical shopping cart or basket in a conventional store. A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information is collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this information only needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete. Less sophisticated stores may rely on consumers to phone or e-mail their orders (although full credit card numbers, expiry date, and Card Security Code, or bank account and routing number should not be accepted by e-mail, for reasons of security).

Online shoppers commonly use a credit card or a PayPal account in order to make payments. However, some systems enable users to create accounts and pay by alternative means, such as: Billing to mobile phones and landlines, Cash on delivery (C.O.D., offered by very few online stores), Cheque/ Check, Debit card, Direct debit in some countries, Electronic money of various types, Gift cards, Postal money order, Wire transfer/delivery on payment, Invoice, especially popular in some markets/countries, such as Switzerland .Some online shops will not accept international credit cards. Some require both the purchaser's billing and shipping address to be in the same country as the online shop's base of operation. Other online shops allow customers from any country to send gifts anywhere. The financial part of a transaction may be processed in real time (e.g. letting the consumer know their credit card was declined before they log off), or may be done later as part of the fulfillment process.

Once a payment has been accepted, the goods or services can be delivered in the following ways:

Downloading: The method often used for digital media products such as software, music, movies, or images.

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Drop shipping: The order is passed to the manufacturer or third-party distributor, who then ships the item directly to the consumer, bypassing the retailer's physical location to save time, money, and space.

In-store pick-up: The customer selects a local store using a locator software and picks up the delivered product at the selected location. This is the method often used in the bricks and clicks business model.

Printing out, provision of a code for, or e-mailing of such items as admission tickets and scrip (e.g., gift certificates and coupons). The tickets, codes, or coupons may be redeemed at the appropriate physical or online premises and their content reviewed to verify their eligibility (e.g., assurances that the right of admission or use is redeemed at the correct time and place, for the correct dollar amount, and for the correct number of uses).

Shipping: The product is shipped to a customer-designated address.

Will call, lCOBO (in Care Of Box Office), or "at the door" pickup: The patron picks up pre-purchased tickets for an event, such as a play, sporting event, or concert, either just before the event or in advance. With the onset of the Internet and e-commerce sites, which allow customers to buy tickets online, the popularity of this service has increased.

3.3 ONLINE SHOPPING IN INDIA

The very concept of purchasing something online, a necessity or luxury took time to settle down well with the Indians, since this entire concept was very western. In addition to that, there were other hindrances such as low computer penetration and low computer literacy. Gradually, people became more cyber savvy, which dissolved their inhibitions about online trade. As technology became more advanced, the percentage of merchants and traders increased with their goods and services. Everybody wants to expand nationally as well as internationally in terms of business. Online trade makes it possible and connects you to numerous dealers within very less time.

The advent of smart phones has played magnificent role in increasing this shopping habit. It has become very convenient for the people to shop via their smart phone anywhere and at any time, provided with good internet connectivity.

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This trend is most popular among youngsters, as they are glued to their mobile phones and it’s like a miracle for them or for any shopaholic to research among various alternative products or best deals available, then comparing the prices with competitors, making suitable and affordable choice, with their own ‘Mall on Mobile’. The Concept of Mall on Mobile refers to shopping through mobile phone, a step ahead in online shopping.

Since last decade online shopping has brought a great revolution in the retailing world. This trend was followed in India also, but as compared USA and other European countries, the pace of online shopping in India was slower, due to low internet penetration, lack of awareness and less exposure of upgraded technologies& gadgets. As described earlier, online shopping was in nascent stage in many developing countries including India; however, recently many online shopping stores opened in India are encouraging online shopping habits among Indians especially younger generations, and in turn empowering them to leverage its benefits like products options & choices, saving time, 24 X 7 availability, fast service, price & selection, cost effectiveness, comparison and easy mode of payment.

More and more players are entering in this domain and are carving their respective niche by providing best deals and discounts, due to which Indian online shopping market is gearing up and grabbing a better share. In near future online retail in India is estimated to grow exponentially. Despite of many early challenges online shopping in India is expected grow manifold as e-shopping awareness is increasing among the Indian consumers. Furthermore, with the steady pace of technological advancements and increasing pool of internet users, no doubt India will become a major player of this domain.

According to Google there has been a growth of 128% in online shopping interests among Indian internet users from the year 2012-2013.This number is expected to grow further in 2013, expanding to many domains and businesses. The growth is attributed to many factors and the number of E–Commerce websites and portals is on the rise every day. They offer exciting options for online shopping which is associated with comfortable shopping experience. With people having an option to buy right from electronics and apparel to inner wear. Online shopping is becoming the popular destination. 50% of Indian

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population fall under the 18-25 categories and major chunk of this group is both internet savvy and fashion conscious. This is the prime reason to make many experts believe online shopping to be a game changer in India.

3.4 ONLINE SHOPPING AMONG COLLEGE STUDENTS

Online shopping includes shopping for books, clothing, electronic gadgets and many other goods that have entered the e-market. The advent of shopping for these types of good on the internet has given rise to a number of consumers mostly between the age of 18-24 which are the youngsters or youth and more specifically the college goers.

Recent statistics show that Indian online shoppers are third highest in the world after Turkey and Ireland (source: Hub pages). Online shopping in India also accounts for 4.5% of all digital camera sales in the country and largest seller of Reebok merchandises (source: Trak.in).

College students are most tech and internet savvy and researches have noticed that there are plenty of students shopping online for buying shoes, bags, shirts and t-shirts, jeans and other accessories as well as books and other stationery and gadgets like phones, cameras etc. The innumerable choices and the new return policy for those who don't like it after it is bought which some have adopted and lastly receiving it by courier directly at their doorstep within seven days is seemingly to have been liked by many youngsters today.

The cause of this can be attributed to the influx of plastic money in the form of credit cards among college students because of the increase in the standard of living, they thus prefer buying online than going searching for what they need, except if they talk about streets famous for shopping and things they might not anywhere else.

While online shopping is the new craze, there are still some who prefer to go out and shop and stores. College students are definitely seen catching up with the ever growing Technology Age, so much as to take shopping which was done on streets directly online.

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3.5 FACTORS AFFECTING ONLINE SHOPPING BEHAVIOUR

In online shopping condition, culture, social, personal, psychological etc. factors still had influencing role. However, online shopping features made the relevant factors show the characteristics different from the past.

First, since the opening of the network, online transactions between consumers and retailers faced various risks. The more risk consumers should face, the less conduct of online shopping they would attend. At present, immature medium of payment and credit means of online shopping are the major influencing factors of online shopping.

Second, preserving privacy of online shopping was other important factors. Online transmission of consumer individual information was easily intercepted and illegally utilized. Out of personal privacy considerations, a great portion of the consumers had a wait and see attitude towards online shopping.

Third, consumer cognition was another important factor. As deep-rooted traditional shopping habits like seeing are believing, after personally see, hear, touch, taste, try, and other sensory judgment and choice of goods, consumer made purchasing decisions, Online shopping could only provide visual effects which influenced consumer online shopping.

Last, consumer computer and the internet experience have also influenced online shopping. As the shopping website had licensing, landing, operating and ordering procedures generally, consumers who took apart in online shopping should have basic knowledge of computer and internet.

3.6 ADVANTAGES OF ONLINE SHOPPING

3.6.1 Convenience

Online stores are usually available 24 hours a day, and many consumers have internet access both at work and at home. Other establishments such as internet cafes and schools provide internet access as well. In contrast, visiting a conventional retail store requires travel and must take place during business hours. The major advantage of online shopping is the convenience it offers. By sitting back at home we can now shop anything from candles to vehicles by several clicks

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of mouse buttons. The worry we may have on travelling, traffic blocks and parking constraints in real world shopping can be avoided while shopping online. With online shopping, we need not have to worry about weather conditions as well.

3.6.2 Information and Reviews

Online stores must describe products for sale with text, photos, and multimedia files, whereas in a physical retail store, the actual product and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other experimentation).Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which product to buy. Some stores even allow customers to comment or rate their items. There are also dedicated review sites that host user reviews for different products. Reviews and even some blogs give customers the option of shopping for cheaper purchases from all over the world without having to depend on local retailers. In a conventional retail store, clerks are generally available to answer questions. Some online stores have real-time chat features, but most rely on e-mails or phone calls to handle customer questions.

3.6.3 Price and Selection

One advantage of shopping online is being able to quickly seek out deals for items or services provided by many different vendors (though some local search engines do exist to help consumers locate products for sale in nearby stores). Search engines, online price comparison services and discovery shopping engines can be used to look up sellers of a particular product or service. Shipping costs (if applicable) reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax may compensate for this. Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments bricks-and-mortar retailers order. Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently large orders. Another major advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users' shopping experience. Apart from this, the Online Store is only required to

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collect sales tax if they have a physical location in our state even if we buy from a store across the world.

3.6.4 Variety

The choices that people get for products are amazing. One can get several brands and products from different sellers at one place. One can get in on the latest international trends without spending money on airfare. When we shop online, you can shop from retailers in other parts of the country or even the world without being limited by geographic area. These stores offer a far greater selection of colors and sizes than we will find locally. Some online shops have a provision to accept orders without stock and ship it across to you when the stock becomes available. We also have the option of taking our business to another online store where the product is available.

3.6.5 Send Gifts

Online Shopping makes sending gifts to relatives and friends easy, no matter where ever they stay. Now there is no need of making distance an excuse for not sending a gift on occasions like Birthday, Wedding Anniversary, Marriage, Valentine’s Day, Mother’s Day etc.

3.6.6 Fewer Expenses

Many times when we opt for conventional shopping we tend to spend a lot more than the required shopping expenses on things like eating out, traveling, impulsive shopping etc. Online shopping saves such wastage of time and money.

3.6.7 Comparison of Prices

Online shops make comparison and research of products and prices possible. Online stores also give us the ability to share information and reviews with other shoppers who have firsthand experience with a product or retailer.

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3.6.8 No Problem of Crowds

Crowds force us to do a hurried shopping most of the time. Crowds also create a problem when it comes to finding a parking place nearby where we want to shop and going back to our vehicle later loaded with shopping bags.

3.6.9 Avoids Compulsive Shopping

Many times when we go out on Shopping we end up buying things which we do not require because of the shop keepers up selling skills. Sometimes we even compromise on our choices because of the lack of choices in those shops.

3.6.10 Buying Old or Unused Stuff at Low Prices

Online Shops make it possible for us to buy old or unused stuff at rock bottom prices. If we want to buy antiques there is no better options than online stores

3.7 DISADVANTAGES OF ONLINE SHOPPING

3.7.1 Do not Physically See the Items

Normally when we shop from a regular store, we can see the item and at least visually inspect that it looks fine. You can select a colour, size and can even speak to a sales person to clarify doubts regarding an item. The biggest disadvantage of online shopping is we do not physically see the item till it arrives. May be you have seen it in the nearby mall but there is a possibility that the particular piece you have ordered may be defective. Misinterpretation or misunderstanding of items bought online is a common problem. Usually the photos of items you see online are much better than once you have the item in front of you.

3.7.2 Waiting for the Items to Arrive

Once you place you order the waiting game starts. You have to wait for a few days for the item to arrive which can be quite frustrating. Most experts believe that we are most excited about your "buy" in the first few days, so by the time your item arrives you will most likely be less excited then getting the item on same day you made the payment.

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3.7.3 Chances of Mishandling while Shipping / Delivery Risks

What if the item you are expecting never arrives, you will be lost in a series of phone calls to the seller and the courier company. What if you are not at home during the time of delivery and the courier company leaves the package on your door and a passerby decides to steal it? What if the shipping company broke your stuff and you realize it after opening it when the courier man has already gone away. The seller might claim that you broke it.

3.7.4 Shipping Charges

Only a few sites offer free shipping, some others will ship for free only if your total purchase price exceeds a certain amount. Shipping fee is often a big discouragement for online shoppers.

3.7.5 Returning Merchandise

Even if the seller agrees to take back the defective merchandise, you often have to pay the cost of shipping it back. Additionally you have to call and convince the people regarding the reason of your return. Some good sites do have excellent return policy, but not everyone.

3.7.6 Online Security:

Making payments online is usually safe but not always. There may be sites which are not secure or do not encrypt your personal credit card data, so if a hacker breaks in their system, your personal data can be compromised.

3.7.7 Risk of Online Fraud:

Some people pretend selling items at a very cheap price and often send you a low quality, opened or refurbished item, in other cases the site may shut down unexpectedly, leaving lot of customers who might have already paid for the item but did not receive anything. Shopping online can also take you to phishing sites which want to defraud you.

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3.7.8 Time Zone Difference:

In countries like USA there are various time zones and the customer service hours of the online shopping site may be different from your time zone, making it difficult for you to get in touch with a human when you need help.

3.7.9 Sales Tax:

Although an online shopping site may not charge you a sales tax during the purchase, you are legally obliged to pay taxes when you file annual taxes (assuming you live in a taxable state). Most people are able to get by, but in case of a scrutiny not paying sales tax on online purchases may become an issue.

3.7.10 Cannot Buy Items that We Need 'Right Now':

Disadvantage of online shopping includes inability of getting items in your possession quickly.

Most of the good internet sites have taken adequate measures to overcome most of these disadvantages. An intelligent online shopper knows a lot more than a novice. Both regular stores and online shopping have advantages and disadvantages of their own.

3.8 MAJOR ONLINE SHOPPING SITES IN INDIA

3.7.1 Flipkart.com

Here you can buy almost everything ranging from books, bags, toys, baby care, belts, watches, television, cell phones to refrigerators, hard drives, motorcycles, air conditioners, and a lot of various items. Here you can get easy discounts, coupons and many other deals which will keep you buying from Flip kart.

3.8.2 EBay.in

The world leader in online shopping store has stamped its mark in India also. EBay is a shopping store in which a wide variety of goods, services and products are bought and sold. eBay sells fresh new products along with used products. It sometimes holds up auction for some products also. eBay and Flip kart are on a neck to neck competition for becoming the best online shopping site in India.

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3.8.3 Tradus.in

Tradus is a European based online shopping store which provides variety of online products and commodities. Shipping is done for free but only to a few parts of the country. Discounted prices of products are available in this website.

3.8.4 Futurebazaar.com

FutureBazaar.com is an online shopping site which is owned by highly recognized and reliable Future Bazaar Private Limited. It offers you variation of products along with the variation in their prices.

3.8.5 Buytheprice.com

An interesting feature about this website is that the prices of the products go on decreasing if more and more people buy them. The price of the book goes down from 400 to 300 if instead of 1, 10 people buy it. The customers can take profitable advantage of this option.

3.8.6 Infibeam.com

Infibeam is India’s own e-commerce company placing its headquarters in Ahmadabad. Buy cell phones, jewelry, apparel, Mp 3 and a lot more here.

3.8.7 Homeshop18.com

This website contains a range of kitchen appliances, household products, laptops, shoes, gifts etc. Homeshop18. Owned by Network18, a television and a media marketing company. Homeshop18 is the first company to launch its 24 x 7 open Home shopping TV channel. This website has been awarded the “Best Shopping Site” by PC World Magazine in 2008. Because of its advertisement, the popularity has been rising to new peaks. It is also becoming one of the strongest contenders for best online shopping sites in India.

3.8.8 Yebhi.com

Yebhi is also referred as the Online Apparel Store of India. This website provides a wide collection of apparel, bags, jewelry. Yebhi is the undisputed king of Online Apparel in India. Lucrative prices along with discounts makes the customers buy in this shopping store.

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3.8.9 Snapdeal.com

Snapdeal is India’s largest e-commerce website with respect to the number of transactions in a single day. Products such as watches, hard drives, laptops, and computers can be bought at a very cheap price. It provides some heavy discounts on its items. Operating in only a few numbers of cities but the transaction rate is very high. It ranks amongst the top players in best online shopping sites in India.

3.8.10 Indiaplaza.in

Shop over more than 8 million items in indiaplaza.in. Offers varied products with number of options available for each product.

3.8.11 Myntra.com

Myntra aiming to redefine the fashion mantra of Indians offers fashion products such as T-shirts, jeans, watches, shoes, belts and other fashion accessories.

3.8.12 ShopClues.com

ShopClues is an amazing online shopping store to buy products. ShopClues, famous for its Jaw Dropping Deals, provides commodities at an extremely cheap price. Offers wide variety of goods such as cameras, cosmetics, and pen drives etc.

3.8.13 Pepperfry.com

India’s leading lifestyle store offering home decor products along with wardrobe, and other fashion accessories.

3.8.14 Jabong.com

This site is gaining popularity day by day because of its efficient work process and availability of number of branches in most parts of the country. Soon it will be in race amongst the present best online shopping sites in India

3.8.15 Sulekha.com

Offers a limited number of products but at a very lucrative price. Kitchen appliances and electronic items can be profitably purchased.

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