Internet Retailing or ‘e-tailing’ as is usually referred to as is the selling of Retail goods on the Internet. Short for “Electronic Retailing” and the term seems an inevitable addition to e-mail, e-business and e-commerce.
E-Business presents one of the greatest opportunities and challenges for the retail. The nature of retailing is changing. Online shopping is no longer a fad; it's an acknowledged and important part of the retail experience, with more than a tenth of the world's population having bought products and services over the Internet. According to market research organization ACNielsen, there are more than 627 million online shoppers in the world. The new battleground is electronic retailing. With burgeoning consumer spending, retailers must establish their presence across all channels traditional and new to grab their share of wallet.
There are 38.5 million Indians online today. The Internet offers an audience that will grow to a 100 million users by 2007-08.
The Internet offers unlimited shelf space and isn’t bound by operational timings and geographical boundaries; with an opportunity to cater to country wide city markets (for consumers and suppliers alike) at a comparative miniscule cost. E-commerce activities have spread across the country not only to the Metros but also to the prominent 'tier-II' cities and towns which are witnessing a pick-up in online retailing activity and increased transaction values.
As per Internet and Mobile Association of India forecast of e-commerce transactions will cross the Rs 2000 crore mark (2006-2007) which translates into an increase of over 400% from financial year 2004-05, as shown below.
Year 2002-03 2003-04 2004-05 2005-06 2006-07
B2C - Rs crore Rs 130 crore Rs 255 crore Rs 570 crore Rs 1180 crore Rs 2300 crore
% Growth 0 196% 223% 207% 194%
There are three key drivers for online shopping catching up in India.
1. Internet and PC penetration
2. India’s middle-class is mushrooming, with growing purchasing power and limited personal time.
3. Increasing usage of credit and debit cards coupled with a growing young population who spend significant time online. Convenience of online product research, comparison shopping and competitive pricing are driving consumers to make online purchases.
Yet, On-line shopping has not caught the fancy of majority of consumers in India as it has in developed nations. Issues of security, transaction fulfillment and genuineness are still the major stumbling blocks in the way of the on-line shopping’s popularity. Another reason being touted is that the concept is relatively new and it is going to take time for the industry, which is still in its infancy to build secure payment gateways and logistics of fulfillment. The main consumer concern today is attached with safety & security. There is a big market waiting out there if security concerns are addressed.
Online shopping in India is now dependent on the eagerness of Indian retailers to think out of the box, build on their existing strengths and becoming truly multi-channel retailers. The challenge is to make customers look beyond the informative and functional online activity and direct them towards online shopping for travel, entertainment, lifestyle and food and grocery. The question is how online retailers can fill gaps in the online environment as well as how they can utilize unique elements of the online shopping experience to create a competitive advantage over the physical retailing world.
My thesis is thus an attempt to retrospect the past, introspect the present and prospect for the future of E-Retailing in India. The project will help retailers understand the nature of the Indian consumers’ concerns that form an obstacle to online shopping.
Title: Online retailing in India – How can e-tailers substantially improve sales by addressing transaction security concerns of customers to create a competitive advantage?
(A) Statement of the Problem:
1. Management Problem: How to increase consumer confidence to transact online and boost online sales?
2. Research Problem: To find the relationship between transaction security concerns of Indian consumers and online retail sales.
(B) Objectives of the Study:
1. To understand the exact nature of transaction security concerns of Indian consumers.
2. To search for possible solutions for the transaction security concerns.
3. To explore other reasons that prevents online shopping in India.
4. To find the future potential of online shopping in India.
(C) Scope of the Study: The study seeks to understand online consumer behavior of Internet users in the city of Bangalore.
(D) Hypothesis: Indian consumers will prefer to shop regularly online if they are assured of online transaction security.
(E) Operational definition of concepts:
· Internet Retailing or ‘e-tailing’ is usually referred to as the selling of Retail goods on the Internet. Short for “Electronic Retailing”.
(F) Research Methodology:
1. Type of Study: Exploratory & Descriptive Research.
2. Type of Data:
§ Consumer perceptions of transaction security (primary data).
§ Industry members’ opinions and views of online B2C trade (primary data).
§ Definition of Industry concepts (secondary data).
§ Industry performance data (secondary data).
§ Experts’ opinion on Industry related issues (secondary data).
§ News articles on Industry related issues (secondary data)
3. Source of Data:
§ Secondary data: Magazines, Newspapers, Journals, Published articles, online reports.
§ Primary data: Survey of internet users in Bangalore, discussion with Industry members.
4. Type of Survey: In-home Personal Interview and Internet electronic interviewing. Sample survey.
5. Method of Sampling: Non probability, convenience sampling.
6. Sample Size: 200.
7. Sample Unit: Internet users who are gainfully employed.
8. Tool for Data collection: Structured questionnaire for descriptive research & Checklist for Exploratory research.
9. Techniques of analysis: Microsoft Excel, SPSS package.