Tenth AIMS International Conference on Management

January 6-9, 2013

Online Retail Shopping Behavior in India-A Boon or a Curse?

Sanketh Yadav S sanketh.yadav91@gmail.com M.P Birla Institute of Management, Bangalore 1. Introduction
It was only one year ago where retail industry was big hope for Indian Economy. Stores were open all over, sprawling malls were been opened. Retailers bought each and every space of Indias largest cities. It was grabbed in such a way that even the small towns caught mall-mania. An increasingly competitive market means that retail selling is growing in importance for all retailers. Retailing is a service, and retail selling is an essential function as customer service. Retail selling therefore requires a good knowledge of the products being sold, an understanding of the profile of the target customers and further, comprehension of customers needs both in terms of merchandise being sold and the shopping experience. As India started facing the global recession, the consumers cut down their spending level and retailers are facing a major problem. The United States of America market is dominated by retailers such as Wal-Mart, Kmart, Home Depot, Toys R Us, McDonalds, Starbucks and a few other leading to a complete saturation of the market. Strong Gross Domestic Product growth in Asian counties coupled with and absence of major competition has lured global retailers to look towards Asia India, China are seen by retailers as growing economies and lucrative retail destinations. Foreign Direct Investment is making a good impact on the Retail Industry. It is made clear that, in India there is 51 percent Foreign Direct Investment in multi-brand. Foreign Direct Investment will bring cutting edge technology, higher quality standard and global best practices to the country. All said and done that the consumption figure for India are still miniscule compared to those in the West or even China. The growth of modern retail in the country with the help of Foreign Direct Investment will help increase in consumption, and thus growth, in the long run. India's organized retail market may attract up to $16 billion Foreign Direct Investment in the next three years.

2. Retail Present Scenario in India

At present the retail Industry in India is accelerating. It is not widely accepted as the way it is accepted in Asian counterparts. India is geared to become a major player in the retail market. Since India is a developing nation, it is still not prepared for it. And they are leaving no stone unturned to become the best in retail Industry. Also India with a highly diverse demography, it allows different companies bringing in different products targeting different consumers. According to the Global Retail Development Index 2012, India ranks fifth among the top 30 emerging markets for retail. There are many factors contributing to the boom in this sector. Some of them are increased consumerism with the ability to afford luxury items. Even there is increase in the spending power of Indians. Indians are travelling abroad and they are exposed to different cultures, their way of living, their style and thereby more brands. Worldwide retailers eye the Indian market because in our culture there is lots of give-and-take for marriages, festivals and other important events. Hence its imperative for people to spend on gifts as a part and parcel of life irrespective of caste and creed and economic status. As there is no limitation to the spending power, Cities like Chandigarh, Coimbatore, Pune, Kolkata, Ahmadabad, Nagpur, Cochin, Hyderabad etc has good market for almost every product or service. And provide a good platform for a brand to enter Indian market.

3. Retail Started and Transformation

Man is a social animal. Individuals need to grow on the need to survive and the need to belong. As purported by Darwin it is this survival instinct that has brought about the evolution of civilizations. Man was just not satisfied with his basic needs I.e. food, clothing, and shelter. They have found many ways to continuously upgrade in the standard of living. Thus was laid the foundation for Retailing. Retail is not which is started some years back. It is there in existence from ages. It all began with the bartering and exchange of goods-be it for kind or currency. Haats, Mandis and Melas have always been a part of the Indian landscape. They still continue to be present in most parts of the country and form an essential part of life and trade invarious areas. In fact it was the Greeks and the Romans who were the first to indulge in this form of trade. Following the Romans many other civilization started holding informal markets in fairs which patronized people from all over. Tracing the evolution of Indian retail would be incomplete without a mention of the canteen Stores Department and the Post Offices in India. The Khadi & Village Industries (KVIC) was also set up post 2645

Tenth AIMS International Conference on Management

January 6-9, 2013

independence. Today, there are more than 7,050 KVIC stores across the country. While independent retail stores like Akbarallys, Viveks and Nallis have existed in India for a long time, the first attempts at organized retailing were noticed in the textiles sector. One of the pioneers in this field was Raymonds, which set up stores to retail fabric. It also developed dealer network to retail its fabric. These dealers sold a mix of fabrics of various textile companies. Over the years these temporary markets became more or less permanent markets. Thus this can be called as a precursor for the shops and retailing- in a broader perspective. Retailing in this stage in India was completely unorganized. There was lack of international exposure and only few Indian companies explored the Retail platform on a large scale. Only companies like Levis, Pepe, Marks and Spencer etc had entered. But these companies were targeting only on Niche market. These companies never targeted the lower and the middle class category. Since majority of them were low and middle class people, the market was not completely captured. Then later this was realized by brands like Big Bazaar and Pantaloons and they came up with such products which could be affordable by low and middle class people. This was not such a big success but when compared to earlier brands these companies were a way ahead. A great shift that was seen in the Indian Retail Revolution was when there was emerge of Malls in all regional markets. Shopping Malls didnt just happen. They are not the result of wise planners deciding that suburban people, having no social life and stimulation, needed a place to go. The mall was originally conceived of as a community center where people would converge for shopping, cultural activity, and social interaction. It is better to say that malls have achieved and gone beyond those early expectations. In todays consumer culture The Mall is the centre of the Universe. Malls were started all over, it is achieved such great success because of the migration of the population out from the cities. Malls are now the retail. The mall bought the organized format of Retailing in India which was absent earlier. Though malls were also initially set up for only high class people, looking that they not getting that positive response they carter to the larger population. By doing this there was a good development seen and as well as got a positive response. However there is still great scope for enhancing Indian mall culture as other than ambience and branding many other aspects of Retail Service remains to be developed on international standards. To our surprise there was not even one mall in India a decade ago and there were only handful of malls years ago. Today there are more than 50 malls across different cities.

4. Online Retail
The phenomena that world is fast shrinking into a Global Village because of Internet and other communication mediums is not completely reflective in the Indian context. While developed and fast developing countries have understood the power of Internet, India still unaware and trying to cop up with the technological developments.. The retail industry canvass has been repainted by Internet and the rules of the game in retailing are fast changing. The western culture has affected each and every aspect of our Indian Society. The life is becoming fast not only in metros but also in the normal cities. The number of nuclear families is increasing and both husband and wife are working, as they have less time to go to the market for purchasing every now and then. Some other reasons like these, say shortage of time, traffic jams, late working hours, versatility of plastic money and above all the approach of internet at the door step of whosoever desires it. Online retailers have improved their service and consumers have found it convenient. There is been transformation in payment mode as well. From advance payment it is moved to cash on delivery (COD). Even in case of delivery pattern is changed. From fixed delivery timings it is moved on to convenient delivery timings at the choice of the customer. India has opened the doors for foreign direct investment in retail. Indian market is dominated by unorganized players but there is potential in the area of retail players as well. Entry of bigger players such as Big Bazaar, More etc to even in the rural areas is paved the way of growth in its sector. There is been rise in the increase of Indian middle class people due to rapid economic growth. Though the population of using Internet in India is low in terms of the overall percentage of total population but, in absolute numbers it is very high. This gives great opportunities for various ecommerce sites to reach this segment. The population accessing in India is the age group from 18-45. In spite of all this online retailing forms a meager 0.08% of the total Indian retail markets. Market players have to be more proactive and innovative in their approach and offering to make serious inroads. In the current market, bulk of online sales is in books, gifts, small electronic items. This market in India needs to jump to the next level. Online Retail-A Global Perspective The world is becoming a borderless global marketplace. Mature retail and gateway cities of North America and Europe serve as the foundation while emerging markets including China, India and Brazil are the primary drivers of growth. Examining economic conditions, shopping trends, investment opportunities and leasing strategies on a global basis provides us with a critical understanding of how the mature and emerging markets are affecting the retail revival currently underway. 2646

Tenth AIMS International Conference on Management

January 6-9, 2013

Global markets are bifurcated into two categories I,e mature markets like Europe and North America and emerging markets like China, India and Brazil. Year-over-year GDP growth has slowed in all markets, but less so in the emerging ones. Private consumption in mature markets as a share of GdP is on average about 65%, much higher than in emerging markets like China (22%) and India (41%). these markets represent trillions of dollars of untapped private spending; presenting a tremendous opportunity for growth. In the face of slow economic recovery and increased competition from online shopping, retailers are evolving their physical store formats to survive. Some see the role of physical space shifting from a transaction model to an experiential one. In many cases, retailers are shrinking real estate footprints to improve operating efficiencies, and also using the smaller formats to enter urban markets. Going forward, retailers will be challenged to stay current with new technology, incorporating it into their own formats, and creating new and interesting shopping experiences for customers. Wal-Mart Almost 50 years ago, Sam Walton started Wal-Mart with a single store in Rogers, Ark., dedicated to providing customers with a broad assortment of merchandise at great prices. Sam told Wal-Mart associates: "Customers are the reason why we're in business. And when we exceed their expectations, we're at our best." From the day the doors opened in Rogers, on July 2, 1962, Wal-Marts culture has been built on a common purpose: saving people money so they can live better. That one store changed the way that retail works, and that change continues to this day. Today Wal-Mart operates more than 10,000 retail units under 69 different banners in 27 countries. We have more than 2 million hardworking associates who serve 200 million customers and members every week. We appreciate all that our associates do in delivering on our mission and in growing our business. Last year, Wal-Mart delivered a strong financial performance. Net sales increased by 5.9 percent .to $443.9 billion, and consolidated operating income grew by 4 percent to $26.6 billion. Our diluted earnings per share from continuing operations attributable to Wal-Mart were $4.54 per share, up from $4.18 the previous year. We leveraged operating expenses for two consecutive years. Our strong financial position is best illustrated by our ability to grow. We added 52.2 million square feet through 1,160 additional units, including acquisitions in the U.K. and South Africa. Our Wal-Mart U.S. strategy is working. Assortments are back. WalMart International is delivering strong sales and remains our company's primary growth engine. With $125 billion in sales, it is remarkable that our international business alone would now be among the three largest retailers in the world. Our top priority is improving returns through increased profitability, especially in Brazil and China. There is no doubt Wal-Mart is the bestpositioned global retailer. We believe that we have all the pieces in place to build on our success and deliver value for our customers and shareholders again this year. We continue to strengthen our next generation Wal-Mart efforts, investing in people, technology, innovation and infrastructure. It is rooted in our culture to stay out in front of change. The world moves more quickly each day, and we aim to be at the forefront of bringing about change in retail, both in our stores and through ecommerce.

5. Looking ahead
Looking ahead, there is a clear understanding of what is needed to be done at Wal-Mart to drive longterm shareholder value and deliver on the mission. Fifty years ago, there was a single Wal-Mart discount store. Today, there are thousands of stores, millions of associates and hundreds of millions of customers shopping every week. One quote of Sam's that is really appreciated is: "I had no vision of the scope of what I would start ... but I always had confidence that as long as we did our work well. -Michael T.Druke, President and Chief Executive Officer,Wal-Mart Stores, Inc Annual Sales Growth:

2647

Tenth AIMS International Conference on Management

January 6-9, 2013

6. Online Retail: Indian Perspective

Key players in the Indian retail market are as follows Pantaloon Retail Ltd (Future Group venture) Shoppers Stop (K Raheja Group venture) Lifestyle Retail (Landmark Group venture) Spencers Retail (part of RP-SG Group) Reliance Retail Aditya Birla More Tata Trent Bharti Retail Over 2 million sq ft of retail space spread over 35 cities with 65 stores and 21 factory outlets Over 3.21 million sq ft of retail space spread over 23 cities with 51 stores Approximately 15 lifestyle and eight Home Centre stores Retail footage of close to 1 million sq ft across 45 cities with 200 stores 700 stores with a revenue of 7,600 crore INR 575 stores with approximate revenue of 2,000 crore INR. Recently, purchased stake in Pantaloon Retail 59 Westside stores, 13 Starbazaar hypermarkets and 26 Landmark bookstores 74 Easyday stores with plans to invest about 2.5 billion USD over the next five years to add about 10 million sq ft of retail space in the country

Now it is the time to find the right alternative for the retail industry to bring down the expenses and to move up in the market. With the lacks of online searches, happening daily for the different products, online market is now creating enormous opportunities in retail business. To reach the online shoppers, online Retailing is the best alternative solution for the retail industry, through which online branding can be achieved. Online branding and online marketing are the ongoing retail business trends. The two popular models that exist in the e-Tailing marketplace are Online Retailers and Online Auctions. The Website of an Online Retailer is used as a storefront to sell physical goods that are then delivered by a third party. The Online Auctions, on the other hand, serves as a platform where a seller can offer to sell its products to interested buyers and provides the enabling infrastructure for electronic transactions. Products such as consumer electronics, consumer appliances and media products, which are perceived to be less risky amongst Indian consumers, are projected to lead the growth of internet retailing in India in the forecast period. These products are considered to be less risky because consumer electronics and appliances have a product warranty with the manufacturer, such as Dell, Samsung or LG, which is no different from buying them in a store-based channel. Thus, with these internet retailers predicted to expand to new cities, purchases of such products via internet retailers will increase and help to fuel growth. Dell India was still leading the internet retailer in 2010, holding a value share of 22%. Dell Indias ability to offer convenience, as well as develop a secure environment for payment, helped the company to retain its lead in internet retailing.

7. Research Methodology
Methods of data collection A combination of Interview method and Questionnaire method is used to collect data from the respondents. Sample Design Under sample design the method of Random Sampling is been used to collect data from the respondents. Sample Size Sizes of 25 respondents are taken for the collection of the data. Data Analysis and Interpretation In data analysis and interpretation method of Averages is used to analyze the data.

2648

Tenth AIMS International Conference on Management

January 6-9, 2013

8. Analysis & Interpretation

From the above Figure it is analyzed that 52% of them are aged between 18-25 & 48% of them are between 25-45.So it is interpreted that majority of them are Youngsters.

From the above Figure it is analyzed that 52% of them are male and 48% of them are Female. So it is interpreted that majority of them are Male.

From the above Figure it is analyzed that most of them are Students I,e (None).

From the above Graph it can be analyzed that 4% are business people, 44% students and 52% employed. So it can be employed that majority of them are employed.

From the above Graph it is analyzed that 16% of them prefer More 12% Star Bazaar, 26% Other. It is clearly interpreted that most of them prefer Big Bazaar (44%).

From the above Figure it can be analyzed that only few consumers prefer Value for Money, Convenience. But many consumers prefer for Time Saving (56%).

2649

Tenth AIMS International Conference on Management

January 6-9, 2013

From the above Figure it can be analyzed that only 8% of the consumer prefer Other, 12% for Shopping experience , 36% for Check Quality. So it is interpreted that 44% of them prefer Touch & Feel.

From the above Figure it can be analyzed that majority of consumers prefer Flip kart (52%) when compared to other Online Websites.

From the above Figure it can be analyzed that there is equal importance given to Visualization & Security (40%).

From the above Figure it is analyzed that consumers use net for more than 4Hrs (44%). So it is interpreted that consumers use Net more.

From the above Figure it is analyzed that consumers use net Often for purchasing goods online

2650

Tenth AIMS International Conference on Management

January 6-9, 2013

From the above graph it can be observed that consumers use Rarely (40%) Internet for shopping. Very few consumers use Often (20%), Sometimes(28%), Never (12%). Purchases

From the above graph it can be observed that people are willing to spend only 5001000(44%) on online shopping. None to shop for more than 5000(0%), 200-500(20%), 1000-5000(36%).

From the above Figure it is analyzed that most of the consumers prefer Groceries (92%), Fast Food (96%), and Jewelry (92%) to purchase In Retail and Cinema tickets (96%) and Airplane tickets (100%) to purchase Over the Net. How often do you use the following World Wide Web activities?

From the Graph it is analyzed that consumers prefer Internet for Chatting (80%), Research/Education (84%), Communication via e-mail (92%), and Surfing (72%) Frequently and Gaming (36%), Products/Service Information (48%), and Shopping (44%) Occasionally. 2651

Tenth AIMS International Conference on Management

January 6-9, 2013

Select level of agreement for the following question. Online Shopping

From the above Figure it indicates that most of them DisagreeinDifficult (44%) and Security (56%) aspects. And some Agree for Saves Time (72%), 24x7 (56%), and the rest go with Strongly Disagree, Indifferent, and Strongly Agree. How important are the following factors in your decision to purchase goods from Internet?

From the above graph it indicates that Delivery Time (52%), Guarantees (72%), and Prices (72%) as Very Important. And the rest go with Important, Neither Important nor Unimportant, and Unimportant.

9. Recommendations and Suggestions

From Customers point of View People should develop trust on Online Shopping like other countries. Service Tax to be reduced. More number of products based on different sizes to be displayed and Should be available. Giving the accurate and prompt information regard the Product/service. Thus it improves in getting customers attention which in turn helps to build Quality and the Quantity. Finds it very convenient. There is no problem in doing Online Shopping. More specification has to be given for the products like clothes, cosmetics and many more. They must concentrate more on Security and their Issues. Safety Payment should be the top priority. From Researchers point of view Customer is the King A good 24/7 customer service through email, chat and vtoll free phone is what the Etailers are providing. 2652

Tenth AIMS International Conference on Management

January 6-9, 2013

Supply Chain: Most customer complaints and delivery returns can be traced to vthe supply chain vendors or merchants. It is important to have the supply chain vendors or merchants well integrated into the system both technically and strategically. New Business Models: 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. Also they encourage customer to write the product reviews nothing authenticates their offering to an undecided customers like a good product review. Bind with Social Media: Social media has really empowered consumers. The ramifications for retailers can be negative or positive. Information travels fast among the ever-connected consumers, and negative experiences disseminate quickly around large communities. Retailers who fail to monitor how their brand is being discussed on social media sites are potentially missing opportunities to respond to and rectify sustained criticism. Social media can be an important marketing tool however. Retailers can reach large numbers of consumers quickly through their own social media channels, and the provision of a consumer forum through Facebook allows consumer complaints to be managed efficiently and conveniently for them. The ever-connected consumer also acts as a brand advocate, advertising products and retailers to friends simply by liking them. Provide a medium: The best way to reach out to people is to create blogs and discussion forums for them so that they have the freedom to rate the quality of service delivery and leave behind suggestions. Also managers can control the degree of freshness of Web site content by making design choices, such as use of dynamic pages and the more frequent updating of content, depending on business needs and consumer expectations

10. Conclusion
Compared to countries like United Kingdom, United States, Australia, Canada and others, India is still in its nascent stage of e-shopping. But the real growth that online retailers are betting on in India is an increase in buying in smaller towns and cities that have no access to modern retail. There are divergent views on the future of e-retailing in India. Some experts are of the opinion that the giant, big brand retailers would dominate the small ones due to their wider investment capacities. It would be next to impossible for the small retailers and the kiranas to prove their existence in the battlefield of online retailing. Another viewpoint is that there would be an exponential growth in the online retailing business in India. Though much is yet to be achieved, remember E-tailing is a new industry in India. With broadband internet access still accessible to entire population, this industry may see an explosive growth. Most growth drivers are in Indias favor demographics, economy, changing lifestyle, exposure to new ideas. It is just a question of creating a sustainable eco system for E-tailing, which is at an inflection point.

11. References
1. 2. http://www.livemint.com/Industry/jejcIGVMt1DbB8vKdhvglI/Foreign-retailers-express-concernsover-retail.html (First Published: Wed, Nov 07 2012.) (07/11/12) http://web.ebscohost.com/ehost/detail?sid=5e44aa2e-12f5-434f-a87deea1428a53a4%40sessionmgr114&vid=7&hid=118&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#d b=bsh&AN=37167014 (22/11/2012) http://www.hindu.com/rp/2008/05/02/stories/2008050250130300.htm http://articles.timesofindia.indiatimes.com/2012-06-25/news/32408603_1_retail-sector-retail-industryglobal-retail-development-index (11/11/2012) http://www.business-standard.com/india/news/india-needs-to-developoffer-more-quality-retail-spacesat-commercially-viable-costs-john-strachan/472231 /(18/11/2012) http://www.equestindia.com/eq/article_3.asp/(18/11/2012) http://www.walmartstores.com/sites/annual-report/2012/CEOletter.aspx (19/11/2012) http://www.corpwatch.org/article.php?id=13796(19/11/2012) http://www.zenithresearch.org.in/images/stories/pdf/2012/May/ZIJMR/22_ZIJMR_Vol2_Issue5_May %202012.pdf (20/11/2012) http://www.pwc.com/en_IN/in/assets/pdfs/industries/retail-and-consumer/retail-report-300812.pdf (20/11/2012) http://ijmtpublication.com/files/IJMT_volume%2019_2_1.pdf(20/11/2012) 2653

3. 4. 5. 6. 7. 8. 9. 10. 11.