PROJECT REPORT

ON
“E-RETAILING IN INDIA”

In Partial Fulfillment of the requirement for award

of Master Of Business Administration(MBA)
SESSION-2019-2021
SUBMITTED TO- SUBMITTED
BY-
Dr. Sofia Khan Sanjay Yadav
(Assistant Professor) MBA(IV Semester)
S.M.S. College Roll No.1901060700105

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DECLARATION

I hereby declare that the information presented in this Project Report is correct to the
best of my knowledge and the analysis is as per the norms and guidelines provided for
the report. I have utilized the requisite concepts and applied the required
methodologies to analyze the data collected to reach the conclusion present in the
report.

I claim the report to be my indigenous work and has not been published anywhere else.

Sanjay Yadav
MBA (IV Semester)
Roll No.1901060700105

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2
ACKNOWLEDGEMENT

A large number of individuals have contributed directly and indirectly in this synopsis.
I am thankful to all of them for their help and encouragement.
My sincere gratitude to Dr. Sofia Khan(Assistant Professor)and all the MBA
faculties for their support and guidance in completion of this Project Report .
I express my sincere thanks to my parents & friends for the inconstant support and
suggestions to accomplish my goals.
Last but not the least I thank God for his love and grace that enabled me to complete
this Project report.

Sanjay
Yadav
MBA (IV Semester)
Roll
No.1901060700105
Contents
Page No.
Executive Summery ……………….. 5
Objective ……………….. 6
About Retail ……………….. 7
Prediction for Retail Sector ……………….. 10
About E-Retailing ……………….. 11
E- Commerce Market ………………… 12
Advantages ………………… 18
Fraud and Security Concern .………………. 21
Problem faced by customer ………………… 25
10.Rcommendation ………………… 30
11.Conclusion ………………..
31

DECLARATION FORM

I hereby declare that the Project work entitled E-

RETAILING (A NEW BUSINESS TOOL TO CAPTURE THE EXISTING MARKET) submitted by
me for the partial fulfillment of the Post Graduate Diploma in Retail Management
Program to Institute for Integrated Learning in Management, Greater Noida is my
own original work and has not been submitted earlier either to IILM GSM or to any
other Institution for the fulfillment of the requirement for any course of study. I also
declare that no chapter of this manuscript in whole or in part is lifted and
incorporated in this report from any earlier / other work done by me or others.

Place :
Date : Signature of Student

Name of Student : Nagendra Pratap Singh

Address : 26-Gayatri Vihar, Thatipur, Gwalior, M.P.

Acknowledgement
Acknowledgement is not only a ritual but also an expression of indebtedness to all
those who have helped in the preparation process of the project. One of the most
pleasant aspect is collecting the necessary information and compiling it is the
opportunity to thank those who actively contributed to it.

I would like to express my sincere appreciation to Prof. Ajeet Sharma his kind help,
guidance, support and encouragement throughout my project . This project will help
me to curve my personality in the best manner, which is needed for professional career.
In fact this project is the mirror of my aspiration.

Signature
Name:- Nagendra Pratap Singh
Course:- PGDM(RM),2008-2010
Executive Summary
This project includes study of modern retailing concept which help customer as well
as shopkeeper or companies to buy or sell products at lowest price, with in time. Now
everyone wants to save there time and to fulfill there wish E-Retailing comes in the
reality. With the help of E-retailing/ E-tailing anyone can buy anything from a pen to
car with in a second. In this project I try to find out that whether this service is helpful
to the customer or will increase problems to the customers. This project is done on
secondary data, I have analysed the secondary data from different sources like
Internet, newspaper magazines etc . In the project in the starting I have given little
intro of RETAILING in INDIA and the formats of RETAIL in India like MALLS, HYPER
MARKET, Convenience store etc.
E-retailing working has been also shown in the project how the e-retailing is beneficial
to the customers and securities concern on E-RETAILING .I have given the
advantages of E-retailing and how this modern world is getting changed or rather say
getting more and more from the usage of internet. Top 10 companies which are based
over e-retailing is also mentioned clearly in this project
Ending of this project contains suggestions and recommendations by me by studying
some projects and some reports available on Internet.

Objectives
The objective behind making the project is to find out :
Whether e-retailing able to change the shopping experience of customer or not.
Whether e-retailing is boom or curse for the customers and Companies
What steps a e-retailing format companies should take to increase the profitability.
Where people are interested in this modern way of shopping or that traditional way.

About Retail
The word retail is derived from the French word retailer, which means –
“to cut off a piece or to break bulk.”A retailer may be defined as a dealer or trader who
repeatedly sells goods in small quantities. The sale of goods or commodities in small
quantities directly to consumers. Of, relating to, or engaged in the sale of goods or
commodities at retail. It also means to sell in small quantities directly to consumers.
According to PHILIP KOTLER, “Retailing includes all the activities involved
in selling goods or services to the final consumers for personal use. A Retailer or Retail
store is any business enterprises whole sales volumes comes primarily from retailing,”

TYPES OF RETAIL SECTOR

Retailing is one of the pillars of the economy in India and accounts for 35%
of GDP. The retail industry is divided into organized and unorganized sectors. Over 12
million outlets operate in the country and only 4% of them being larger than 500 sq ft
(46 m2) in size. • • Organized Retail Unorganized Retail
ORGANIZED RETAIL: Organized retailing refers to trading activities
undertaken by licensed retailers, that is, those who are registered for sales tax, income
tax, etc. These include the corporate backed hypermarkets and retail chains, and also
the privately owned large retail businesses. Organized retail segment has been
growing at a blistering pace, exceeding all previous estimates. According to a study by
Deloitte Haskins and Sells, organized retail has increased its share from 5 per cent of
total retail sales in 2006 to 8 per cent in 2007. The fastest growing segments have been
the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per
cent) and hypermarkets (75-80 per cent). Further, it estimates the organized segment to
account for 25 per cent of the total sales by 2011.

UNORGANIZED RETAIL: Unorganized retailing, on the other hand, refers to the

traditional formats of low-cost retailing, for example, the local kirana shops, owner
manned general stores, paan / beedi shops, convenience stores, hand cart and pavement
vendors, etc. Unorganized retailing” is defined as an outlet run locally by the owner or
caretaker of a shop that lacks technical and accounting standardization. The supply
chain and sourcing are also done locally to meet local needs. Its organized counterpart
may not obtain its supplies from local sources.

RETAILING FORMATS IN INDIA

MALLS: The largest form of organized retailing today. Located mainly in metro
cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and
above. They lend an ideal shopping experience with an amalgamation of product,
service and entertainment; all under a common roof. Examples include Shoppers Stop,
Pyramid, and Pantaloon.
Shopping-centre development has attracted real-estate developers and corporate houses
across cities in India. As a result, from just 3 malls in 2000, India is all set to have over
220 malls by 2005. Today, the expected demand for quality retail space in 2009 is
estimated to be around 40 million square feet. While previously it was the large,
organized retailers –with their modern, up-market outlets, and direct consumer
interface- who had been a key factor driving the growth of organized retail in the
country, now it is the malls which are playing the role.
Segmentation in malls, like up-market malls, mid-market malls, etc., proper
planning, correct identification of needs, quality products at lower prices, the right
store mix, and the right timing, would Ensure the success of the ‘mall revolution’ in
India.

SPECIALTY STORES: Chains such as the Bangalore based Kids Kemp, the
Mumbai books retailer Crossword, RPG's Music World and the Times Group's music
chain Planet M, are focusing on specific market segments and have established
themselves strongly in their sectors.

DISCOUNT STORES: As the name suggests, discount stores or factory outlets,

offer discounts on the MRP through selling in bulk reaching economies of scale or
excess stock left over at the season. The product category can range from a variety of
perishable/ non perishable goods.
DEPARTMENTAL STORES: Departmental Stores are expected to take over the
apparel business from exclusive brand showrooms. Among these, the biggest success is
K Raheja's Shoppers Stop, which started in Mumbai and now has several large stores
(over 30,000 sq. ft) across India and even has its own in store brand for clothes called
Stop!.

HYPER MARTS/SUPERMARKETS: Large self service outlets, catering to

varied shopper needs are termed as Supermarkets. These are located in or near
residential high streets. These stores today contribute to 30% of all food & grocery
organized retail sales. Super Markets can further be classified in to mini supermarkets
typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft
to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

CONVENIENCE STORES: These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of high-turnover convenience
products and are usually open for extended periods during the day, seven days a week.
Prices are slightly higher due to the convenience premium.
MBO’s: Multi Brand outlets, also known as Category Killers, offer several brands
across a single product category. These usually do well in busy market places and
Metros.

CONTRIBUTION OF FDI IN RETAILING

India will look into the industry’s demand for foreign direct investment (FDI)
for multiple products in the retail sector. FDI is already permitted in the retail sector in
some segments. There is a demand to extend FDI in retail sector. At present, India
allows 100 percent FDI in cash- and –carry wholesale trading and export trading
through the automatic route, while 51 percent FDI is permitted in single brand
retailing.
According to a join study by Assoc ham and accounting and consultancy firm KMPG,
the total retail market in India is estimated at $ 353 billion in 2008, and expected to
grow at eight percent annually to touch $ 416 billion by 2010.
The developing countries have the most preferable destination for FDI. India is also
one of the most important. It will help in increasing employment levels as FDI would
result in market growth and expansion which in turn will result in employment
generated at various levels.

ESTIMATES AND PREDICTIONS FOR RETAIL SECTOR:

At present, the industry is estimated to be at more than US$ 400
billion by a study of McKinsey. The Economist Intelligence Unit (EIU) estimates the
retail market in India will increase to US$609.9 billion in 2010 from US$394 billion in
2005. KPMG Report says that the organized retail would grow at a higher rate than the
GDP in the next five years. The retail sector would generate employment for more than
2.5 million people by the year 2010, predicts an analysis by MaFoi Management
Consultants Ltd. Traditional vis a vis Modern Format Retailers The retail boom will
face a strong competition from the 12 million mom-and-pop stores. These are easily
accessible and provide services like free home delivery and goods at credit, which is
not possible with hypermarkets and supermarkets. Buying from Malls, Supermarkets
and Department stores like Big Bazaar, Marks & Spencer’s, etc. provide a different
environment where one can pick and choose from a variety of products. Owing to the
entry of such big players, the small shopkeepers fear losing their business. Reliance
Retail Ltd. has been inviting such people to join in its Dairy business as franchisees.

Growth of Retail Sector in India

E – RETAILING
E-tailing began to work for some major corporations and smaller entrepreneurs as early
as 1997 when Dell Computer reported multimillion dollar orders taken at its Web site.
The success of Amazon.com hastened the arrival of Barnes and Noble's e-tail site.
Concerns about secure order-taking receded. 1997 was also the year in which Auto-by-
Tel reported that they had sold their millionth car over the Web, and
CommerceNet/Nielsen Media reported that 10 million people had made purchases on
the Web.
E-retailing uses internet as a medium for customers to shop for the goods or services. It
can be either pure-plays or bricks-and-clicks. Pure-play uses internet as primary means
of retailing while bricks-and-clicks uses the internet as an addition to the physical
store.
Now a day retailers have started offering almost everything under the sun on internet.
From products like groceries to services like online gaming and jobs, e-retailing covers
all frontiers.
Unfortunately, India has lagged in e-retail growth story due to low density of internet
connections, lower penetration of credit cards and customer anxiety in using new
technologies.
During the dotcom boom – Ecommerce was the sunrise industry, the one that would
change the face of the world. While Ebay and Amazon – the twin pillars of Ecommerce
in US did bring about paradigm shift in USA, the tech pundits in India are still a bit
iffy about Ecommerce in India.
Today the Internet might be viewed as a huge market potentially capable of covering
the population of the whole world. This is why electronic commerce or E-Commerce is
so attractive for many traditional businesses.
E-Commerce consists of the buying and selling of products or services over electronic
systems such as the Internet and other computer networks. The amount of trade
conducted electronically has grown dramatically since the large introduction of the
Internet. A wide variety of commerce is conducted in this way, including things such
as electronic funds transfer, supply chain management, e-marketing, online marketing,
online transaction processing, electronic data interchange, automated inventory
management systems, and automated data collection systems. Modern electronic
commerce typically uses the World Wide Web in at least some point in the
transaction\'s lifecycle.

The E-Commerce Market: Size and Trends

Since mid 1990’s traditional traders followed large Computer Manufacturers into the
new sphere and today you can buy practically anything through the Internet: from a
bunch of flowers to a car. The only exception seems to be a trip to Mars. Today E-
Commerce market is huge and still growing.
The E-commerce market is totally democratic. This is perfect capitalism: if you sell ‘
you win, if you don’t sell ’ you loose. It’s all about marketing and economic rules of
demand and supply. Certain products or services appear more suitable for online sales;
others remain more suitable for traditional sales. Many successful purely virtual
companies deal with digital products, music, movies, education, communication,
software, photography, and financial transactions. Examples of this type of company
include Amazon.com, Google, E-Bay and Paypal. Products less suitable for E-
Commerce include products that have a low value-to-weight ratio, products that have a
smell, taste, or touch component, products that need trial fittings ’ most notably
clothing ’ and products where color integrity appears important. Nonetheless, clothing
sold through the internet is big business in the U.S.
According to eMarketer’s annual report in 2006 the E-Commerce market size in
Europe has grown to 106 billion ($133 billion). Analysts say that it is very likely to go
on increasing and display a very fast rate of annual growth ’ up to 25%. The situation
will be stable for at least five years and the market will reach the point of ’323 billion
($407 billion) by 2011.
Britain, France and Germany prevail in the European E-Commerce market. These
countries have the largest share in the total figures transactions ’ up to 72%. British E-
Commerce market ranks first and analysts believe it will reach $114 billion in 2011,
which is 41% higher than the figures of 2006. Germany holds the second place.
However, it is first in the number of online-customers ’ there are as many as 3 million.
Some researchers also note that in the next five years the European market might
increase significantly due to the E-Commerce growth in the countries like Italy,
Holland and Spain.
A wide range of goods and services can be sold through the Internet. A large piece in
this pie is held by Information Technology. However, the share of other niches (for
instance, traveling and finance) is unexpectedly high. Real estate, computers, hardware
and software, tourism, and financial services comprise the top of the list
The Ecommerce market is expected to touch 323 billion ($407 billion) by 2011, E
Tailing or E RE-tailing market is only about 1150 Crore INR according to a survey
conducted by Internet and Mobile Association of India and Indian Market Research
Bureau (IMRB).
The top E-tailers in India are indiatimes.com, fabmart.com, rediffshopping.com. They
have managed to retain their lead due to innovative business strategies, supply chain
model and changing urban lifestyles

Logistics
Consumers find a product of interest by visiting the website of the retailer directly, or
do a search across many different vendors using a shopping search engine.
Once a particular product has been found on the web site of the seller, most online
retailers use shopping cart software to allow the consumer to accumulate multiple
items and to adjust quantities, by analogy with 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 (though credit card numbers are not
accepted by e-mail, for security reasons).

Top ten e-retailers

1.Amazon.com
2. Planetrx.com
3. Ticketmaster.com
4. Gateway.com
5. Barnesandnoble.com
6. Mothernature.com
7. Iprint.com
8. Hallmark.com
9. Buy.com
10. Bigstar.com
Indian e-tailers: Rediff.com, Jaldi.com, Fabmart.com, Tsnshop.com and
Satyamonline.com.

Payment
Online shoppers commonly use credit card to make payments, however some systems
enable users to create accounts and pay by alternative means, such as:
Debit card
Various types of electronic money
Cash on delivery (C.O.D., offered by very few online stores)
Cheque
Wire transfer/delivery on payment
Postal money order
Reverse SMS billing to mobile phones
Gift cards
Direct debit in some countries
Some sites will not allow international credit cards and billing address and shipping
address have to be in the same country in which site does its business. Other sites allow
customers from anywhere to send gifts anywhere. The financial part of a transaction
might be processed in real time (for example, letting the consumer know their credit
card was declined before they log off), or might be done later as part of the fulfillment
process.

Some online retailing sites in India

E Bay is heading the race of online retailers. In this race it has become very difficult to
determine the online retail store that makes the products available at convenient and
cheap rates. From this very difficulty has cropped up comparison sites. Comparison is
done on the basis of an index which is constructed from the data available from
different shopping sites. The bechna.com and the ultop.com are such sites though many
more sites are entering this zone.
The comparison sites not only help to choose the online sites that would be providing
the best deal but also offline as well. Sites like Rediffproductsearch, Compare
India.com have constructed the data that is taken from the conventional local retailers.
These sites help the customer in finding out the local retail store that will best suit his
purpose.
Design
Why does electronic shopping exist? For customers it is not only because of the high
level of convenience, but also because of the broader selection; competitive pricing and
greater access to information. For organizations it increases their customer value and
the building of sustainable capabilities, next to the increased profits.
Information load
Designers of online shops should consider the effects of information load. Mehrabian
and Russel (1974) introduced the concept of information rate (load) as the complex
spatial and temporal arrangements of stimuli within a setting. The notion of
information load is directly related to concerns about whether consumers can be given
too much information in virtual shopping environments. Compared with conventional
retail shopping, computer shopping enriches the information environment of virtual
shopping by providing additional product information, such as comparative products
and services, as well as various alternatives and attributes of each alternative, etc.
Two major sub-dimensions have been identified for information load: complexity and
novelty. Complexity refers to the number of different elements or features of a site,
which can be the result of increased information diversity. Novelty involves the
unexpected, suppressing, new, or unfamiliar aspects of the site. A research by Huang
(2000) showed that the novelty dimension kept consumers exploring the shopping
sites, whereas the complexity dimension has the potential to induce impulse purchases.
Consumer expectations
The main idea of online shopping is not in having a good looking website that could be
listed in a lot of search engines and it is not about the art behind the site. It also is not
only just about disseminating information, because it is all about building relationships
and making money. Mostly, organizations try to adopt techniques of online shopping
without understanding these techniques and/or without a sound business model. Rather
than supporting the organization’s culture and brand name, the website should satisfy
consumer's expectations. A majority of consumers choose online shopping for faster
and more efficient shopping experience. Many researchers notify that the uniqueness of
the web has dissolved and the need for the design, which will be user centered, is very
important. Companies should always remember that there are certain things, such as
understanding the customer’s wants and needs, living up to promises, never go out of
style, because they give reason to come back. And the reason will stay if consumers
always get what they expect. McDonaldization theory can be used in terms of online
shopping, because online shopping is becoming more and more popular and website
that wants to gain more shoppers will use four major principles of McDonaldization:
efficiency, calculability, predictability and control.
Organizations, which want people to shop more online for them, should consume
extensive amounts of time and money to define, design, develop, test, implement, and
maintain website. Also if company wants their website to be popular among online
shoppers it should leave the user with a positive impression about the organization, so
consumers can get an impression that the company cares about them. The organization
that wants to be acceptable in online shopping needs to remember, that it is easier to
lose a customer then to gain one. Lots of researchers state that even when site was a
“top-rated”, it would go nowhere if the organization failed to live up to common
etiquette, such as returning e-mails in a timely fashion, notifying customers of
problems, being honest, and being good stewards of the customers’ data.
Organizations that want to keep their customers or gain new ones try to get rid of all
mistakes and be more appealing to be more desirable for online shoppers. And this is
why many designers of webshops considered research outcomes concerning consumer
expectations. Research conducted by Elliot and Fowell (2000) revealed satisfactory
and unsatisfactory customer experiences.
User interface
It is important to take the country and customers into account. For example, in Japan
privacy is very important and emotional involvement is more important on a pension’s
site than on a shopping site. Next to that, there is a difference in experience:
experienced users focus more on the variables that directly influence the task, while
novice users are focusing more on understanding the information.
There are several techniques for the inspection of the usability. The ones used in the
research of Chen & Macredie (2005) are Heuristic evaluation, cognitive walk through
and the user testing. Every technique has its own (dis-)advantages and it is therefore
important to check per situation which technique is appropriate.
When the customers went to the online shop, a couple of factors determine whether
they will return to the site. The most important factors are the ease of use and the
presence of user-friendly features
Advantages
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 access as well. A visit to a conventional retail store requires travel and
must take place during business hours.
Searching or browsing an online catalog can be faster than browsing the aisles of a
physical store. One can avoid crowded malls resulting in long lines, and no parking.
Consumers with dial-up Internet connections rather than broadband have much longer
load times for content-rich web sites and have a considerably slower online shopping
experience.
Some consumers prefer interacting with people rather than computers because they
find computers hard to use. Not all online retailers have succeeded in making their sites
easy to use or reliable. On the other hand, a majority of stores have made it easy to find
the style one is looking for, as well as the price range that is acceptable making the
shopping experience quick and efficient. The internet has made shopping an almost
effortless task.
In most cases, merchandise must be shipped to the consumer, introducing a significant
delay and potentially uncertainty about whether or not the item was actually in stock at
the time of purchase. Most successful sites will say whether or not a product is in
supplyBricks and clicks stores offer the ability to buy online but pick up in a nearby
store. Many stores give the consumer the delivery company's tracking number for their
package when shipped, so they can check its status online and know exactly when it
will arrive. For efficiency reasons, online stores generally do not ship products
immediately upon receiving an order. Orders are only filled during warehouse
operating hours, and there may be a delay of anywhere from a few minutes to a few
days to a few weeks before in-stock items are actually packaged and shipped. Many
retailers inform customers how long they can expect to wait before receiving a
package, and whether or not they generally have a fulfillment backlog. A quick
response time is sometimes an important factor in consumers' choice of merchant.
Customers can choose the type of shipping they want from overnight, to a few days.
The quicker the delivery the higher the shipping cost. A weakness of online shopping
is that, even if a purchase can be made 24 hours a day, the customer must often be at
home during normal business hours to accept the delivery. For many professionals this
can be difficult, and absence at the time of delivery can result in delays, or in some
cases, return of the item to the retailer. Automated delivery booths, such as DHL's
Packstation, have tried to address this problem. When shopping in a retail store,
customers can handle and inspect the actual product before they purchase it.
In the event of a problem with the item - it is not what the consumer ordered, or it is
not what they expected - consumers are concerned with the ease with which they can
return an item for the correct one or for a refund. Consumers may need to contact the
retailer, visit the post office and pay return shipping, and then wait for a replacement or
refund. Some online companies have more generous return policies to compensate for
the traditional advantage of physical stores. For example, the online shoe retailer
Zappos.com includes labels for free return shipping, and does not charge a restocking
fee, even for returns which are not the result of merchant error. In the United Kingdom,
Online shops are prohibited from charging a restocking fee if the consumer cancels
their order in accordance with the Consumer Protection (Distance Selling) Act 2000.

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.
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-mail or phone calls to
handle customer questions.

Price and selection

One advantage of shopping online is being able to quickly seek out deals for items or
services with 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.
Fraud and security concerns
Given the lack of ability to inspect merchandise before purchase, consumers are at
higher risk of fraud on the part of the merchant than in a physical store. Merchants also
risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the
online purchase. With a warehouse instead of a retail storefront, merchants face less
risk from physical theft.
Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card
numbers being intercepted in transit between the consumer and the merchant. Identity
theft is still a concern for consumers when hackers break into a merchant's web site and
steal names, addresses and credit card numbers. A number of high-profile break-ins in
the 2000s has prompted some U.S. states to require disclosure to consumers when this
happens. Computer security has thus become a major concern for merchants and e-
commerce service providers, who deploy countermeasures such as firewalls and anti-
virus software to protect their networks.
Phishing is another danger, where consumers are fooled into thinking they are dealing
with a reputable retailer, when they have actually been manipulated into feeding
private information to a system operated by a malicious party. Denial of service attacks
are a minor risk for merchants, as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent
assessment and meets all requirements of the company issuing the seal. The purpose of
these seals is to increase the confidence of the online shoppers; the existence of many
different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent.
A number of resources offer advice on how consumers can protect themselves when
using online retailer services. These include:
Sticking with known stores, or attempting to find independent consumer reviews of
their experiences; also ensuring that there is comprehensive contact information on the
website before using the service, and noting if the retailer has enrolled in industry
oversight programs such as trust mark or trust seal.
Before buying from a new company, evaluate the website by considering issues such
as: the professionalism and user-friendliness of the site; whether or not the company
lists a telephone number and/or street address along with e-contact information;
whether a fair and reasonable refund and return policy is clearly stated; and whether
there are hidden price inflators, such as excessive shipping and handling charges.
Ensuring that the retailer has an acceptable privacy policy posted. For example note if
the retailer does not explicitly state that it will not share private information with others
without consent.
Ensuring that the vendor address is protected with SSL (see above) when entering
credit card information. If it does the address on the credit card information entry
screen will start with "HTTPS".
Using strong passwords, without personal information. Another option is a "pass
phrase," which might be something along the lines: "I shop 4 good a buy!!" These are
difficult to hack, and provides a variety of upper, lower, and special characters and
could be site specific and easy to remember.
Although the benefits of online shopping are considerable, when the process goes
poorly it can create a thorny situation. A few problems that shoppers potentially face
include identity theft, faulty products, and the accumulation of spy ware. Whenever
you purchase a product, you are going to be required to put in your credit card
information and billing/shipping address. If the website is not secure a customers
information can be accessible to anyone who knows how to obtain it. Most large online
corporations are inventing new ways to make fraud more difficult, however, the
criminals are constantly responding to these developments with new ways to
manipulate the system. Even though these efforts are making it easier to protect
yourself online, it is a constant fight to maintain the lead. It is advisable to be aware of
the most current technology and scams out there to fully protect yourself and your
finances. One of the hardest areas to deal with in online shopping is the delivery of the
products. Most companies offer shipping insurance in case the product is lost or
damaged; however, if the buyer opts not to purchase insurance on their products, they
are generally out of luck. Some shipping companies will offer refunds or compensation
for the damage, but it is up to their discretion if this will happen. It is important to
realize that once the product leaves the hands of the seller, they have no responsibility
(provided the product is what the buyer ordered and is in the specified condition).

Lack of full cost disclosure

The lack of full disclosure with regards to the total cost of purchase is one of the
concerns of online shopping. While it may be easy to compare the base price of an item
online, it may not be easy to see the total cost up front as additional fees such as
shipping are often not be visible until the final step in the checkout process. The
problem is especially evident with cross-border purchases, where the cost indicated at
the final checkout screen may not include additional fees that must be paid upon
delivery such as duties and brokerage. Some services such as the Canadian based
Wishabi attempts to include estimates of these additional costs, but nevertheless, the
lack of general full cost disclosure remains a concern.
Privacy
Privacy of personal information is a significant issue for some consumers. Different
legal jurisdictions have different laws concerning consumer privacy, and different
levels of enforcement. Many consumers wish to avoid spam and telemarketing which
could result from supplying contact information to an online merchant. In response,
many merchants promise not to use consumer information for these purposes, or
provide a mechanism to opt-out of such contacts.
Many websites keep track of consumers shopping habits in order to suggest items and
other websites to view. Brick-and-mortar stores also collect consumer information.
Some ask for address and phone number at checkout, though consumers may refuse to
provide it. Many larger stores use the address information encoded on consumers'
credit cards (often without their knowledge) to add them to a catalog mailing list. This
information is obviously not accessible to the merchant when paying in cash.

Product Suitability
Many successful purely virtual companies deal with digital products, (including
information storage, retrieval, and modification), music, movies, office supplies,
education, communication, software, photography, and financial transactions. Other
successful marketers use Drop shipping or affiliate marketing techniques to facilitate
transactions of tangible goods without maintaining real inventory.
Some non-digital products have been more successful than others for online stores.
Profitable items often have a high value-to-weight ratio, they may involve
embarrassing purchases, they may typically go to people in remote locations, and they
may have shut-ins as their typical purchasers.[citation needed] Items which can fit
through a standard letterbox — such as music CDs, DVDs and books — are
particularly suitable for a virtual marketer.
Products such as spare parts, both for consumer items like washing machines and for
industrial equipment like centrifugal pumps, also seem good candidates for selling
online. Retailers often need to order spare parts specially, since they typically do not
stock them at consumer outlets—in such cases, e-commerce solutions in spares do not
compete with retail stores, only with other ordering systems. A factor for success in
this niche can consist of providing customers with exact, reliable information about
which part number their particular version of a product needs, for example by
providing parts lists keyed by serial number.
Products less suitable for e-commerce include products that have a low value-to-weight
ratio, products that have a smell, taste, or touch component, products that need trial
fittings — most notably clothing — and products where colour integrity appears
important. Nonetheless, Tesco.com has had success delivering groceries in the UK,
albeit that many of its goods are of a generic quality, and clothing sold through the
internet is big business in the U.S. Also, the recycling program Cheapcycle sells goods
over the internet, but avoids the low value-to-weight ratio problem by creating
different groups for various regions, so that shipping costs remain low.
Problem faced by customer:
Problems with the Payment System
People in India are not used to the online shopping system and moreover the online
payment system through the credit card is also totally alien to them. Most of them do
not avail of the transaction facilities offered by the credit cards. They are also dubious
regarding the online payment system through the credit cards. Hence different payment
options should be made available to them like the credit card, cash on delivery and net
banking to give them further assurance.
Problems with Shipping
The customers using the online shopping channel should be assured that the products
that they have ordered would reach them in due time. For this the retail companies
have resorted to private guaranteed courier services as compared to postal services.
Offline presence
The customers should be assured that the online retailers are not only available online
but offline as well. This gives them the psychological comfort that these companies can
be relied upon.
Products offered at discounted rates
The online retailers save on the cost of building and employee salaries. Some part of
this benefit should also be enjoyed by the online customers by a reduction in the price
of the product. The customers should be conveyed this message that they are getting
the products at a discounted price.
Language Problem
Most internet retail shops use English as their mode of communication. English may
not be comprehensible to the majority of the Indian population . To increase the
customer base, content in the online retail shops should be provided in local language.

Another reason why the concept of e- retailing or online retailing has not gained
prominence in India is that the Indians prefer to touch the products physically before
buying them. This facility is provided through the multi-brand outlets, not available
online. Studies have revealed the preferences of the customers towards the traditional
shopping methods. Hence the retailer online should first make it a point to spot the
potential customers and accordingly plan out the product. If the customers are more
open to online shopping, then nothing can be more beneficial. They save the time and
effort to visit, departmental stores, shopping malls, etc. products can be delivered by a
click of the mouse.
In a nut shell

Why is Ecommerce so important?

E commerce and ETailing, from a business perspective offer an opportunity to cater to
consumers across geographies, no operational timings, unlimited shelf space – and all
this with miniscule quantity of infrastructure. For a country like India, this business
model is a good way of growing the consumption driven economy.

Growth Drivers
The growth in the E-tailing market is driven by the need to save time by urban India.
Besides with over 2.5 billion internet users, access to internet has also played an
important role in growing the markets. Changing demographics (youthful India),
changing lifestyles and exposure to the developed markets sure give a fillip to this
fledgling industry. The soaring real estate costs in India have certainly inspired many
an online venture. Also E-tailers have developed many innovative promotions to lure
customers and there by growing the market.
Barriers to Growth
But then all is not well in the E-tailer’s paradise. The cost of customer acquisition is
pretty high in India – about 1100 INR/customer which eats into the margins, as most
goods retailed are low value items such as books, CD’s and electronic gadgets. High
margin goods such as apparel are not very popular because of the touch and feel factor.
Most Indian’s are not comfortable using their credit cards for shopping and there is
always a fear of “what you see may not be what you get”. There may be a problem
with complaint resolution, especially after receipt of wrong goods or delayed delivery.

The Real Issues

The Indian Retail industry has always thrived on personalization. The grocer, tailor or
even the mom n shop apparel store owner knows the preferences, remembers
customer’s taste, budget and previous purchases. They sense the customer’s mood too
– which no CRM software can claim to do.
Trying to personalize each customers experience – might be one way to grow.
The Indian consumer is still very need oriented, not very impulse or deal oriented like
the American counterparts. Hence it might make sense to create real consumer centric
promotions constantly that provide real value to the Indian consumer. Slowly but
surely this is happening in India.
There have been horror stories about receipt of bad or wrong goods, delayed deliveries,
no response from the company – which adds up to not trusting the online retailers.
Through this changing – albeit slowly, thanks to automation and technical integration.
Touch points to focus on
* Customer is the King – A good 24/7 customer service through email, chat
and toll free phone is what the E-tailers are providing. Customer complaint resolution –
whether, delayed delivery, product quality, wrong product delivered will certainly
work towards long term customer relationship, retention and acquisition.
* Supply Chain --Most customer complaints and delivery returns can be traced
to the supply chain vendors or merchants. They are in fact the most important internal
customers. It is important to have the supply chain vendors or merchants well
integrated into the system – both technically and strategically.
* New Business Models --E-tailers always search new and innovative
business models. Case in point being US based Power Reviews – where it provides
free review technology to E-tailers and all it asks in return is that the reviews collected
on the retailer’s web site are syndicated, which is then aggregated on the
Buzzillions.com, its sister website. Some Indian sites simply collect orders over a
period of time say a week, order in bulk from the vendor and finally ship it to customer
at a discounted rate. The customer is told beforehand about the delivery date, of course.
* Comparison Shopping and Customer Reviews --All the E-tailers are
present on comparison shopping sites is of paramount importance – especially since
people now visit these sites before they place the order. Being present on well known
sites such as compareindia.com andwize.com is a very good idea. Also they encourage
customer to write the product reviews – nothing authenticates their offering to an
undecided customers like a good product review.

Analysis & Interpretation

Table showing Percentage of Age group

Table No. 1

Age group
No. of Respondents Percentage

Below 30 41 41

31 - 40 32 32

41 - 50 16 16

Above 50 11 11
 Total 100 100

5%
15%
33%

20%

27%

20-Oct 20 - 30 30 -40 40 - 50 More than 50

Interpretation

The above chart shows that 41% of the respondents are below 30 years, 32% of the respondents are
between 31 – 40 years, 16% of the respondents are between 41 – 50 years, 11% of the respondents are
above 50 years. This gives us a feeling that it is youngsters that prefer on line buying and the use of
internet.
Table Showing Respondents Mode to Accessibility of Net
Table No. 2

MODE NO. OF PERCENTAGE

RESPONDENTS
House 23 23
Office 31 31

Cyber 46 46
Café
Total 100 100

4646
50
45
40
35 3131
30
25 2323
NO. OF RESPONDENTS
20 PERCENTAGE
15
10
5
0
House Office Cyber Café

Interpretation
From the above graph it is assumed that 23% of respondents browse in their own house, 31% of
respondents browse in their office, 46% of respondents browse in cyber café, which gives us a feeling
that most of the respondents do not have browsing facility in their house. This makes them depend on
cyber café which is expensive.
Table showing the Number of respondents who have purchased on line
Table No. 3

Have purchased on- No. of respondents Percentage

line

Yes 41 41

NO 59 59

Total 100 100

Graph showing the Percentage of people who have purchased on line

200
180
160
140
120 100
100
80
60 59
Percentage
40 41
20 No. of
0 41 respondents
59 1000
1 2 0 3 4 0 Have purchased
on-

line

Interpretation

The above graph shows that 41% of Respondents have purchased on line and 59% of respondents
have not purchased. This draws light to the fact that there is still a lot to do to make people buy on
line.
Table showing the reason why people are reluctant to buy on line

Table No. 4

No. of
Reason respondents Percentage
Un aware of the
mode of
payment 4 6.78
Absence of
salesmanship 20 33.89
Absence of
personal touch 12 20.33
Fear of doing it
for the 1st time 23 38.98

total 59 100

3%
17%
UN aware of the mode of payment
Absence of salesmanship Absence of
personal touch
51% 10%Fear of doing it for the 1st time
Total
19%

Interpretation

The above chart 4 respondents are unaware of the mode of payment, 20 respondents feel there is
absence of salesmanship in on line buying, and 12 respondents feel that there is absence of personal
touch. This gives us a feeling that respondents vary in their opinion about on line buying. Most of
them are reluctant to take a decision for the first time to buy.
Table showing how respondents found on line buying

Table No. 5

Attribute No. of respondents Percentage

Convenient 12 29.26
time saving 3 7.31
Variety 5 12.2

Availability 17 41.46
Cost saving 4 9.76
total 41 100

Chart showing Attributes of on line buying

45 41.46

40

35
29.26
30

25
No. of respondents
17
20 Percentage
12 12.2
9.76
15
7.31
5
10 3 4

0
Convenient time saving Variety Availability Cost saving

Interpretation

From the above chart it is found that 12 respondents feel that it is convenient to buy on line, 3
respondents feel that it is time saving, 5 respondents feel that it is a variety to buy on line, 17
respondents feel products will be available when ordering on line and 4 respondents feel it is cost
saving. Where in most of the respondents are of the opinion that on line buying is advantageous due
to the availability of the product.
Table showing the number of hours that respondents had to wait to get the product they had
ordered on line

Table No. 6

Time( In hours) No. of respondents Percentage

10 - 30 2 4.9
20 - 30 6 14.63
30 -40 8 19.51
40 - 50 11 26.83

More than 50 14 34.15

Total 41 100

5%
15%
33%
10 - 20
20 - 30
30 -40
40 - 50
20% More than 50

27%

Interpretation

From the above chart it is seen that 5% of respondents waited for 10 – 20 hours for the delivery of the
goods they had ordered on line, 15% of respondents waited for 20 -30 hours, 20% of the respondents
waited for 30 -40 hours, 27% of the respondents waited for 40 – 50 hours, 35% of respondents waited
for more than 50 hours. This gives us a feeling that different products and different sellers give the
products ordered on line at different time lag.
Table showing the influencer of purchase at home

Table No. 7

Influencer No. of respondents Percentage

Father & Mother 06 14.63

Father 09 21.95

Mother 03 07.31

Children 17 41.46

All 06 14.63

Total 41 100

45 41.46
40
35
30
25 21.95
20
15 14.63 14.63
10
7.31
5
Percentage
0
Father & Mother

Father Mother Children All

Interpretation

The above graph shows that 15% of respondents feel that it is the Father and mother who influence
the buying behavior. For 22% of respondents it is the Father who influences the buying behavior. For
7% of respondents it is the Mother who influences the buying behavior. For 41% of respondents it is
the children who influence the buying behavior For15% of respondents it is the all together that
influence the buying behavior.
Table showing the web sites that respondents usually visit in relation to on line shopping
Table No. 8

Sites No. Of Respondents Percentage

Rediff.com 9 21.95

Yahoo.com 6 14.63

Hotmail.com 4 09.75

Fabmart.com 10 24.39

Homedel.com 7 17.07

Ecomart.com 5 12.19

Total 41 100

12%
22%
Rediff.com
17%
Yahoo.com
Hotmail.com
Fabmart.com
15% Homedel.com
Ecomart.com
24% 10%

Interpretation

From the above chart it is assumed that 22% of the respondents visit rediff.com in relation to
shopping, 15% of the respondents visit yahoo.com in relation to shopping, 9% of the respondents visit
hotmail.com in relation to shopping, 24% of the respondents visit fabmart.com in relation to
shopping, 17% of the respondents visit homedel.com in relation to shopping, 12% of the respondents
visit ecomart.com in relation to shopping
Table showing the interest of Respondents to shop on line in future

Table No. 9

Attribute No. of Respondents Percentage

Yes 30 73.17

No 11 26.82

Total 41 100

100
90
26.82
80
70
60
50
40 No
30 Yes
73.17
11
20
10
0 30

No. of Respondents Percentage

Interpretation

The above graph shows that 73% of respondents are interested to shop again through the Net and 27%
of respondents are not interested shop again through the Net.
The Table showing the overall rating of online shopping by the respondents
Table No. 10

Ratings No. of respondents Percentage

Highly satisfactory 17 41.46

Satisfactory 14 34.14

Dissatisfactory 10 24.39

Total 41 100

41.46
45
34.14
40
35
30 24.39
25
20 17 No. of respondents
14
15
10 Percentage
10
5
0
Highly satisfactory Satisfactory Dissatisfactory

Interpretation

From the above graph it is found that 41% of respondents are highly satisfied about on line buying
34% of respondents are satisfied about on line buying 25% of respondents are dissatisfied about on
line buying This gives a feeling that more number of respondents are highly satisfied or at least
satisfied about on line buying. This increases the scope for online selling.
Annexure
Findings
Some of the findings from the study that might stimulate the degree of change from the
conventional strategy are given below.

The volumes in the Indian market lie in the middle and lower middle class. The growth
and impact of e-retailing in India would be directly proportionate to the penetration of
the internet in these categories. Currently access costs are very high. These access costs
are a function for two variables:
The cost of acquisition of computers would be a pre-requisite for internet penetration.
It is typically observed that the probability of customers making a purchase on the net
from a cyber café is very low. Cyber cafes are mainly used for checking mail and other
planned search activities. Thus it is necessary for customers to possess a computer with
an internet connection o improve the scope of e- business.
The cost of connectivity that basically refers to the expenses, incurred in the telephone
bill and internet subscription costs In order for the Internet levels of the internet to
improve, these costs have to reduce thus encouraging more customers to become net
savvy.

Average literacy rates are also an important factor though a large percentage of the
population watches TV and is able to appreciate the nuances and meaning of the
commercials that are aired, Literacy would be an important factor in increasing internet
penetration besides actually increasing the accessibility of the bet as a medium of
business.

The cultural factors and Indian traditions are a key impediment to the development of e
retailing shopping in India is not just a chore, it is an enjoyable experience. In the west
most of the families shop on the week end to shore up glossaries and provisions for the
coming week it is viewed as a task that has to be completed. In such a scenario, the
Internet with its apparent benefits of greater speed, convenience and information
provided those with an attractive option the situation in India however is
completely different. For the traditional Indian house wife purchase of vegetable/
Glossaries by bargaining with the shop keeper is an important event in the day. Add to
this the fact that a large percentage of consumer purchases in India occurs in an around
festivals. This implies a lot of color fund and gaiety that would be missing in the case
of on line shopping.
All the above points have focused on the B2C model of e- business. In the B2B model
in India, the key driving factor is relationship. It would take a significant amount of
time to build the required level of trust in an online relationship. Thus, a large part of
the B2B volumes would be driven by establishing connectivity among existing
business partners.

Only 23% of the respondents are accessing the net in their house it means that in India
Internet in house is not yet become common. But in course of time it will definitely
increase

RECOMMENDATIONS
Now a days customer wants to save there time from any thing so they like to buy
things online but due to security reasons they don’t. So those companies who are in the
field of E-Tailing they should make secure the transactions made by customer to win
their faith.
As we all know that India is a developing country and she is getting better and better
ever moment but still there are some fields where we are not as good as other countries
like USA,Britain,France, Germany etc. but we try to use the same technology or
facility over hear. We need to understand that things which are successfully working
over there will not work with same quality and strength until Infrastructure for that
service will not upto the mark in our country.
Still Indian customers are not aware about this kind of facility is available to them, they
still like to buy things after visiting the shops. Companies which are in that business
need to increase awareness among people by advertisement and customer should also
be informed that how to purchase goods online.
Generally customer complains that most of the companies are failed to provide
products on time, they even not sure that whatever they ordered will surely reached to
them. So Delivery time should be taken into consideration.
If any complain registered by the customer then it should be solved within time and
companies should try to find out quick way of solving the frauds complains. It will
hwlp company to win the faith of customers.
The process of online purchasing should be simple and easier for customer so that they
can easily access or order whatever they want. So many customer do not buy products
from internet although they know that they can buy it online and they have access too
because they do not want to spend their time in finding the right product. They prefer
to go to the market and buy it because they know where they found it.

CONCLUSION
Now a days fashion of e-retailing is increasing day by day, youth are the movers who
want to try this facilities and in metro cities online buying is increasing very rapidly.
Now they use online banking facility, book their movie ticket, railway ticket, recharge
their mobile online. But in two tier cities online facilities are not popular. They still
buy railway ticket, movie ticket with the help of broker or personally standing in a
queue. One reason is that they do not believe on these facilities due to some cases of
leak of personal data and second one is penetration of internet user is very low in two
tier cities.
Consumer’s preferences are changing rapidity and becoming highly diversified. It is
difficult for the retail stores to satisfy all the needs of the customers. The most of the
consumer’s want to get some attractive prices, good schemes and offers on every
purchases and a shopping comfort as well. Those who are able to purchase their needs
and want for a month in a bulk prefers to go to the retail chains. With the help of online
shopping facility retailer can fulfill the need and demand of their customers and able to
provide better services to their customers.
In India online shopping is still not a preferred way of shopping because customers are
facing some problem regarding fraud, privacy, hidden charges, on time delivery etc.
Indians are not so much technosavy that help those who are ready to cheat with the
customers. Companies should need to promote or try to tell their customers about
online shopping facility so that those who are aware about this they will use it at least
once and those who do’not know they will think about using it. Companies need to find
out that what type of problem customer are facing while using online shopping facility
and try to salve there problem so that customer will find it easy in comparison to other
way of shopping.
Slowly-Slowly time will change as the internet uses are increasing. Future of e retailing
is bright in India and now slowly-2 people are changing their perception and accept the
changes comes in the buying process.
Annexure
 Questionnaire

Ag below 30 31-40 1-50 ve 51 yrs

e yrs yrs yrs
4 abo

Family Income per annum (approximately)

Rs. 50000 - 100000 Rs.100000 - 150000

Rs. 150000 - 200000 Rs. 200000 & Above

Marital Singl Married

Status e

1. Do you access the net? Yes No

2. Where do you access the Hous Offic Cyber café

net? e e

3. Have you ever purchased through on- line? Yes No

4. If No why?

UN aware of the mode of payment Absence of personal touch

Absence of salesman ship Fear of doing it for the first time

5. If yes, how did you find it?

Convenie Variety Availability

nt

Time saving Cost saving

6. How long do you have to wait for the delivery of goods ordered?

10 – 20 20 – 30 – 40 hrs
hrs hrs
30

40 – 50 hrs More than 50 hrs

7. Details of the purchasing process from the point of order till delivery.

8. Who influences the purchase of goods at home?

Father & Fath Mother

mother er

Children All

9. Which web site do you visit to do shopping?

rediff.co yahoo.co hotmail.com

m m

Fabmart.co homedel.co ecomart.com

m m

10. Are you interested in shopping again through the net?

Yes No

11. If yes or no why?

12. Your over all rating of on line shopping

13. Details of the purchasing process from the point of order till delivery.

14. Who influences the purchase of goods at home?

Father & mother Fathe Mother

r

Children All

15. Which web site do you visit to do shopping?

rediff.com yahoo.com hotmail.com

Fabmart.com homedel.com ecomart.com

16. Are you interested in shopping again through the net?

Yes No

17. If yes or no why?

18. Your over all rating of on line shopping