Consumers, all over the world, are increasingly shifting from the crowded stores to the one-click online shopping format. However, in spite of the convenience offered, online shopping is far from being the most preferred form of shopping in India. A survey among 150 internet users, including both users and non-users of online shopping, was carried out to understand why some purchase online while others do not. The results suggest that convenience and saving of time drive Indian consumers to shop online; while security and privacy concerns dissuade them from doing so.

The Internet is no longer a niche technology - it is mass media and an utterly integral part of modern life. As our lives become more fractured and cluttered, it isn't surprising that consumers turn to the unrivalled convenience of the Internet when it comes to researching and buying products.

-- Jonathan Carson President - International,

Nielsen Online

The above statement best illustrates how Internet has changed the way consumers do nearly everything. A recent study by market research firm ACNielsen suggests an upward trend in online shopping across the world. A significant observation of this study is that India beats the global counterparts in number of purchases per month, with 5.2 purchases against the global average of 4.9. Online shopping is described as the process by which consumers purchase products or services over the Internet.

In today's fast-paced environment, with our lives becoming busy and chaotic, online shopping has become a culture and an inevitable part of one's life. The best thing about

shopping online is that it provides consumers freedom and control, and choice of a wide range of products, with the favorite items being only a few `mouse' clicks away. Some say that it is technology and others say it is a business model; but there is no gainsaying that online shopping has revolutionized the way companies sell products and services, and also the way people shop.

Online shopping provides several advantages over the traditional brick-and-motor shopping. Exhibit 1 presents a comparison between the features of traditional and online shopping. In the traditional model, retailers are the people who play a crucial role as they are responsible for selling products or services to the end users. This model leads to high distribution, inventory, logistics and other costs which in the current volatile and dynamic market situation render it uncompetitive in many situations. Online shopping helps companies cut costs and enables them to compete effectively and efficiently in today's, as well as, tomorrow's market. In addition, online shopping provides seamless interactions with the customers and enables the firm in better understanding the consumers' value propositions. The benefits and disadvantages of internet shopping for customers have been discussed extensively in literature; some of which are presented in Exhibit 2. Two kinds of benefits - intrinsic and extrinsic - are identified. The former refers to the benefits gained from purchasing online and include pleasure, novelty and altruism, while the latter pertains to benefits obtained from the outcome of performing the activities such as monetary savings, time savings, self-enhancement and social adjustment.

Online shopping, in India, is still in its nascent stage. Even though India occupies eighth position in terms of number of internet users, the percentage penetration is low at 3%. With the growing popularity of cybercafés, low cost of broadband, and government initiatives, the internet usage is expected to grow at 150% in the next few years. Some of the common activities undertaken by internet users in India are e-mail and chatting (98%), job search (73%), banking (34%), shopping (28%), bill payment (19%), matrimonial search (17%), and stock trading (14%). Though online shopping has witnessed incredible growth in the past few years in India, it is not as pervasive like in the west. In India, the most commonly purchased items in online shopping include books, electronic gadgets, apparel accessories, railways and airline tickets, computer and peripherals, music and movies

and hotel bookings. Exhibit 3 presents the various products bought by percentage of internet users during the year 2006-07.

Online Shopping in India

With the year 2007 being declared as the broadband year in India, various initiatives were undertaken by the Indian government to increase PC and Internet penetration. Currently, there are approximately 42 million active Internet users and over 4.7 million broadband Internet connections in India. Nearly 77% of all the Internet users belong to the age group of 18 to 35, with majority being in socioeconomic classes A, B and C. English is the most preferred language of Internet users (Users of vernacular websites have increased to 34%, up from 12% in the previous year). The average internet usage has been 25 days a month with each visit averaging 28 minutes. Of the internet users in India, approximately 10.8 million or 25% shopped online during the year 2006-07, an increase of 76% over the previous year. During 2007-08, major metropolitan cities namely Mumbai (24%), Delhi (20%), Chennai (9%) and Bengaluru (6%)

contributed to the bulk of online commerce; and 88% of the shoppers were male.

According to a survey by MasterCard, India and China would become the largest online shopping markets in the Asia-Pacific region by 2010, surpassing Japan and South Korea. Robust economic growth, large scale urbanization and rising spending by the middle class have been identified as the growth drivers for online shopping in India. In another study by IMRB and Internet and Mobile Association of India (IAMAI), online shopping in India was expected to reach Rs. 9210 cr during the year 2007-08, 30% more than during the previous year. The various reasons identified in this study for consumers to adopt online shopping are: saves time and effort; convenience of shopping from home; availability of a wide variety/range of products, detailed information about the product; and easy comparison between alternative products/brands. The growing number of internet users and favorable environmental factors provide excellent opportunity for firms to offer their products online. Many

traditional retail firms are seriously looking at e-tailing as a future revenue generator. While the above assessment paints a rosy picture for online shopping, not all view it as the next big thing in India. Some are skeptical about its growth prospects. Various factors like limited choice, security or perceived risk, and inefficient services have been ascribed to be depriving consumers from getting value from shopping online.

Why Some Purchase and Others Just Browse?

Despite growing popularity of online shopping, only 25% of internet users patronize the virtual format. Concerns of privacy, security, concerns about after sales service, and missing out point-of-purchase promotions have been described as some of the factors that deter consumers from shopping online. To further understand why some just browse while others purchase online, a survey was carried out among students of a leading management school in India. The objective of the study was to investigate the behavior of online consumers and to identify the factors that differentiate online shoppers from those who just shop

offline. A convenient sample of 149 subjects (internet users with debt/credit card) was recruited for the study. The majority of the subjects were between the age of 20 and 27 years (94%). Sixty-one percent of the respondents were male. On average, about 73% of the subjects had been using the internet for more than five years. Based on items generated from a focus group of 10 students (five online shoppers and five offline shoppers), a survey instrument was constructed. Sixty percent or 90 respondents had purchased online during the previous three months (users), while the remaining 59 had purchased offline during the same period and had never purchased online (non-users). Apparel, books, electronic goods and computer peripherals were the most popular categories bought by the respondents in both offline and online shopping contexts during the previous three months. The independent sample t-test was used to compare the mean differences between users and non-users of online shopping using SPSS statistical software. Exhibit 4 depicts the results of the independent sample t-test.

Discussion

In the survey, we systematically investigated the factors that influence consumers to shop online as against the traditional format. Independent sample t-test was carried out to compare the mean scores of users and non-users on 18-items generated through a focus group discussion. The results show that privacy concerns, online security and perceived risk deter internet users from shopping online. Perceived risk in purchasing the product represents an inherent risk involved in online shopping. The inherent risk arises as a result of the asymmetry between the online retailers and the consumers. Consumers do now know

whether the retailers would deliver the products they have ordered or deceive them by supplying counterfeit products. While consumers perceive risk in most purchase decisions, it has a distinct dimension in the new shopping format, i.e., shopping online. Apart from product and channel risk, security and privacy risk are also significantly higher in case of non-users of online shopping. Enhancing the security and privacy features of e-commerce websites by the use of secure socket layers to transmit personal information can reduce the risks associated with such purchases.

Shopping is an important personal and social activity for many consumers. The results show that users perceive online shopping format as more stimulating, exciting and fun experience. Some of the factors that could have a negative influence on the online shopping experience include loss of sensory shopping and social interaction. Lack of social interaction dissuades many consumers from shopping online. Further, consumers who value experiential shopping are less likely to shop online. The perceived time saving and convenience offered by e-retailers has a significant influence on users to shop online. The high responses received on factors like availability of much product information and product details by non-users further shows that non-users have to work hard and put in more effort in collecting information when purchasing offline. To conclude, the study proposes that risks pertaining to product, security and privacy, lack of sensory and social interaction are the most important factors that dissuade internet users from shopping online in the Indian context. Improving these could persuade the current non-users to purchase online in future.

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Online shopping

Meaning

which allows consumers to directly buy goods or services from a seller over the Internet using a web browser. Alternative names are: e-web-store, e-shop, e-store, Intern Online shopping or e-shopping is a form of electronic commerceet shop, web-shop, web-store, online store, online storefront and virtual store. Mobile commerce (or m-commerce) describes purchasing from an online retailer's mobile optimized online site or app.

An online shop evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping center; 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 Alibaba,Amazon.com, and eBay.

Definition

The act of purchasing products or services over the Internet. Online shopping has grown in popularity over the years, mainly because people find it convenient and easy to bargain shop from the comfort of their home or office. One of the most enticing factor about online shopping, particularly during a holiday season, is it alleviates the need to wait in long lines or search from store to store for a particular item.

Advantages of online shopping

1. Easy to Find: Finding a product online is much more easier than looking for it in the local store. You can search any product easily by using the search engine feature of an online shopping website. But in store you have to look for it until you find it. Sometime it becomes very annoying when you can't find the product even after looking in the couple of shops. But in online usually we don't have to face this problem. If you don't find a product than you can switch to a new shopping website without wasting your time. For example if you don't find the suitable product in E-bay, you can look for it in the Amazon without wasting your time. On the other hand if you do not find any product in the store you have to go to other store which is more laborious and time consuming.

2. Products can be cheaper: Sometime a product can be much cheaper in another country than your country. In this case it would be wise to shop online to save some money. Here is my story, I had a big problem with the air flow sensor of my car. I went to the dealer , and they asked 700$ for a new air flow sensor. Since my car is old, I am never going to spend that much money for that sensor. I did not have time and patience to look for a spare part from the junk yard. Then an idea popped into my head! I took out the part number and searched it on e-bay, and found plenty of used parts with a very cheap price. I bought the part and so far my car is running great. I am very thankful to god for creating such an easier way of shopping.

3. Save time and energy: You don't have to waste your time in going to store and standing in front of the crowd. Who likes to search a product in the every corners of a shop and stand in the long line for paying the bill? Shopping from the local store become more time consuming and expensive if you do not have your own car. You can solve all the above problems just by shopping online.

4. Freedom of choice: Freedom of choice is very high in online than shopping from a nearby store. In online you can choose the product you are looking, from a vast range of products.

5) Freedom of price flexibility: You will enjoy the freedom of price flexibility. If you don't like the price of a product from an online shop, you can switch to other online to store to look for cheaper price. You can also follow this procedure in normal shop, but it would take more time and energy to do so.

6. High satisfaction percentage: Now a days shopping online is very reliable. The percentage of satisfaction is very high. This is why you would see most of the seller has 99%+ positive feedback.

7. Buyer protection: Dependable websites like Ebay provides buyer protection to motivate people to buy from their site. This highly trusted websites will give your money back if any seller do not deliver the item or deliver an item which does not match with the description.

8. Rare product: Shopping online is very useful in buying rare products. For example, Few days ago I have bought a rare

car part through through Ebay. The price of the part was very affordable too.

9. Privacy: There are some products which you don't want to buy publicly. You can buy any kind of product from online web store anonymously to maintain your desired privacy.

10. E-business : The progress of online business is actually helping million of people. Now people can buy and sell from their home. People who can not afford to buy or rent a shop, can easily open an online store and sell items from their home. This is playing a very important role in reducing the unemployment rate.

Disadvantages of online shopping

1. Delay: The main disadvantage of online shopping is, you can not receive the product immediately. you have to wait until the the product arrives. Sometime it is better to have an item instantly than keep waiting for it for many days. I would prefer to buy an item instantly if the delivery time is too long.

2. Inferior product: You don't know about the actual quality of the product. Sometimes the description of the product might be different than the actual product. As a result you might end up with inferior quality product.

3. Shipping Charge: Shipping charge and shipping delays are one of the main disadvantage of shopping online. Items are generally cheaper in online web store. But sometime the addition of shipping charge makes the price similar or more expensive than your nearby local store.

4. Delivery Problem: Sometime you may face Delivery risk. Delivery risk occurs when the seller fails to deliver the original product or delivers a damaged (inferior/duplicate) product due to shipping problems.

5. Shopaholic : Since it's very easy to search & purchase different items very easily and quickly from online, many people ends up being a online shopaholic. That means they buy too many things they actually don't need. Sad to say, I think I am one of them! Online Shopaholic people thinks they are saving money because the cost is very low when you shop from online, but sometime it's actually a waste because you don't need them. So, buy smart!

6.Scam: As online shopping is becoming very common the number of online scam and fraud is also increasing. This is why a buyer should always buy from trusted websites only because trusted websites would take care of any fraud to maintain their reputation.

7. Some items are better to buy from the real Store: You wouldn't like to buy any clothing products because you won't be able to know whether they are going to look good on you or not.

8. Return problem: Returning an item is difficult in case of online shopping. Although seller accepts sells return, they usually wants the item within a short period of time and you also have to pay for the shipping charges.

9. Warranty issues: Many electronic items are sold without international warranty. So make sure you contact with the seller to verify whether the item has international warranty or not.

1.0 Introduction 1.1 History of online shopping:History of Online Shopping starts not so long ago. Tim Berners-Lee created "The World Wide Web Browser" in 1990. In1994 few other developments took place. Online bank, the first of its kind opened this year. Another development was opening of online pizza shop by pizza hut.In the same year Netscape introduced SSL encryption to enable encryption over the data transferred online. This later became the necessity of online shopping. In 1995, Amazon started operation, one of the largest online shopping mall now. Then in 1996 ebay started its online shopping portal.1998 witnessed use of electronic postage stamps, where people can download and print postal stamps after paying nominal fee. In 1999 the first online shop in UK launched.1.2 Overview:Online shopping is a form of electronic commerce whereby consumers directly buy goods or services from a seller over the Internet without an intermediary service. An online shop, e-shop, e-store, Internet shop, web shop, web store, online store, or virtual store 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.(www.flipkart.com) When a business buys from another business it is called business-to-business (B2B) online shopping. When a consumer buys from another consumer it is called as consumer to consumer(C2C).online shopping.(www.OLX.com)Our generation stands on very cusps of greatest technology revolution that mankind ever faced. Traditionally consumer buys and sells their product and services on various shops and stores. But in today’s world Internet is changing the way consumers shop and buy good services, and rapidly evolved into a global phenomenon. Many companies have started using the internet with the aim of cutting marketing costs, thereby reducing the price of their products and services in order to stay ahead in highly competitive market. Companies also use the Internet to convey communication and disseminate information, to sell the product, to take feedback and also to conduct satisfaction surveys with customer. The growing use of Internet in India provides a developing prospect for online shopping. If E-marketers know the factors affecting online Indian behavior, and the relationships between these factors and the type of online buyers, then they can further develop their marketing strategies to convert

potential customers into active ones, while retaining existing online customers.The ecommerce industry in India is all set to touch Rs. 9210 crore by the end of FY08. (30% jump from Rs 7,080 crore in ’07).

1.3 Current status:In November 2011, 27.2 million online users in India age 15 and older accessed the Retail category from a home or work computer, an increase of 18 percent from the previous year, as consumers continue to turn to the web to shop for and purchase items and retailers continue to increase their online visibility through active marketing campaigns. Analysis of some of the largest Retail subcategories revealed that Coupons was the largest with 7.6 million visitors, an increase of 629 percent from the previous year as consumers rapidly adopt daily deal sites. Consumer Electronics ranked next with 7.1 million visitors growing 12 percent from the previous year, while 5.8 million online users visited Comparison Shopping sites, an increase of 25 percent from the previous year.Amazon Sites led as the top retail destination in India reaching 6.8 million visitors, representing 14.7 percent of the online population. Apple.com Worldwide Sites saw its audience reach 3.4 million visitors, followed by Samsung Group with nearly 2.8 million visitors. Other top retail destinations included Flipkart.com (2.7 million visitors), HomeShop18.com (2.3 million visitors) and Naaptol.com (2.1 million visitors).

Top 10 Retail Sites by Unique Visitors (000)November 2011Total India – Visitors Age 15+ Home/Work Locations

Total Unique Visitors (000)

% Reach

Total Internet : Total Audience 46,390 100.0%Retail 27,171 58.6%Amazon Sites 6,805 14.7%Apple.com Worldwide Sites 3,426 7.4%Samsung Group 2,759 5.9%Flipkart.com 2,675 5.8%Homeshop18.com 2,286 4.9%Naaptol.com 2,145 4.6%Bookmyshow.com 2,125 4.6%Myntra.com 2,110 4.5%Priceindia.in 2,047 4.4%Alibaba.com Corporation 1,973 4.3%

1.4 Major Player in online shopping in India

1) Ebay.in Ebay is the leader when it comes to online shopping in India. With just about every thing under the sun, ebay is the best portal for shopping in India. Ebay provides a large number of options for buyers in every category. May it be laptops, music CDs or fitness equipment they have it all.

2) FutureBazaar.com FutureBazaar.com from the Future group which is very successful with its brands like Big Bazaar and Pantaloons is the online shopping site from the group. It is place to find great electronic and fashion deals.

3) HomeShop18.com HomeShop18 comes from the Network18 group and is fast becoming one of the best place to shop online in India. Some products can also bought via the cash on delivery option. It provides free shipping and also has an EMI facility for ICICI Bank card holders with no additional cost.

4) Indiatimes Indiatimes shopping has the widest range of consumer electronic items at lowest prices. The portal is supported by the Times of India group and offers support mostly in the north western part of India.

5)Naaptol Launched in January 2008, Naaptol has grown to become India's leading comparison based social shopping portal, the one-stop destination for all shoppers, merchants and market enthusiasts.

6) Flipkart.com

Originally started as books only site it now has a good collection of games and movies among other items. Cash on delivery option can also be availed besides other online payment options.

Flipkart.com has now emerged as a major player in the online shopping arena in India. They offer cash on delivery on products of all sizes and amount. Moreover they have now started giving 30 day replacement guarantee which is of utmost use. Specifically when we buy electronic items and other gadget there is always a chance that it might get some problems.

Also, as Flipkart themselves acquires products in bulk directly from suppliers and ships items by its own self delivery personnel, for this reason there is a marked difference in the product price at Flipkart.com. Whereas sites such as ebay.in has different small-time sellers that sell their items.

Majorly shopping at Flipkart is a great experience and value for money.

2.0 Advantages of online Buying:

The major advantage of online shopping is the convenience it offers. By sitting back at home you can now shop anything from candles to vehicles by several clicks of mouse buttons.

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

Another big advantage of online shopping is the flexibility of shopping. Unlike offline shops, online shops have no holidays, closing times or any other problems. You can shop 24hrs a day, 7 days a week and 365 days a year. Is n't that amazing to have a shop open always?

One of the advantages of online shopping is the facilities available for product, price comparisons. Since so many companies have come up with the facilities of online shopping, the price comparison and quality comparison of the products and services are possible. Some online malls also provide customer reviews about each product, thus you can easily find out what other customers think about the product or services before buying it.

You can efficiently use these facilities to decide whether a product or service is worth the price quoted. If you are lucky you will be also getting amazing offers from different online stores that will effectively reduce the price than buying offline.

In short , online shopping offers more convenience and save time in comparison with real - world shopping.

3.0 Future Opportunity:As rules of the advertising game change rapidly, online or digital marketing market size in India is estimated to touch close to Rs 2,000 crore in the next two years from a Rs 1,400 crore now, say management experts. It is expected that by 2016 modern retail industry in India will be worth US$ 175- 200 billion. India retail industry is one of the fastest growing industries with revenue expected in 2007 to amount US$ 320 billion and is increasing at a rate of 5% yearly. A further increase of 7-8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption. It has further been predicted that the retailing industry in India will amount to US$ 21.5 billion by 2010 from the current size of US$ 7.5 billion.