TABLE OF CONTENTS

PAGE NO.

Executive Summary3
Chapter 1: Introduction to the study..4

1.1 Objective of the project..5

1.2 Hypothesis...5

1.3 Research Methodology.....5

1.4 Sampling...6

Chapter 2: A Study On Online Shopping With Reference To Groceries

2.1.1 Online Shopping (E-commerce)7

2.1.2 Models of E-commerce...9

2.1.3 Advantages of E-Commerce.12

2.1.4 Disadvantages of E-Commerce15

2.2.1 Online Shopping In India18

2.2.2 Factors with respect to Women in Online Shopping.23

2.3.1 Online Grocery Shopping..25

2.3.2 Functioning of Online Grocery Shopping27

2.3.3 Reasons for Online grocery shopping not being popular.29

2.4.1 Consumer Behaviour...31

2.4.2 Types of Consumers35

2.5 Indian Players in Online Grocery Shopping38

Chapter 3: Literature Review..46

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Chapter 4: Analysis of the Project

Data analysis....51

Observations & Findings....71

Limitations.72

Chapter 5: Conclusions & Suggestions

5.1 Conclusion..73

5.2 Recommendations.74

Appendix

Appendix I - Questionnaire..77

Appendix II - Names of the respondents80

Bibliography..84

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EXECUTIVE SUMMARY

The project focused on finding out the Consumer Behaviour Pattern on Online
Buying of Groceries. The stated objective of the study was further broken down
to secondary objectives which aimed at finding information regarding the
Groceries purchased by people in Mumbai, which involved frequency of
purchases, average spending, their awareness about the online retailers, factors
affecting online buying decision process, etc.
The exploratory research was carried out with an online questionnaire being filled
by the people who do grocery shopping regularly with a set of 15 closed ended
questions and 3 open ended questions.
The survey was limited only to the people residing in Mumbai. The exploratory
findings helped us in determining the key factors which needed to be further
explored for research.
The project first studies the attitude of customers towards online shopping, also
determining the factors which influence the consumer to purchase goods and
service.
The second half of the project depicts the attributes of online shopping
influencing the purchase decision by the respondent. It also determines the
issues regarding online shopping.
The last part of the project determines the purchase decision with respect to
grocery. It determines the place preference of grocery shopping with respect to
price, quality, variety, proximity and offers/ discounts.
The project also recommends the business operational plan which works with
contracting dealership with the local kirana stores.

Chapter 1
Page 3

Introduction to the study

India has the worlds 3 rd largest Internet user base, which crossed the 200 million
mark recently. Better connectivity, booming economy and higher spending power
helped the Indian e-commerce market revenues to cross $500 million with a
CAGR of 103% over last 4 years. This may not be a significant number,
averaging to only around $5 per user per year.
With the above background in mind, this research has been conducted to gain an
insight into the online buying behaviour of consumers. The objective is to explore
the factors which influence online purchase, the psychographic profile of the
consumer groups and understanding the buying decision process.
Our findings should help an Internet Marketer to determine the product/service
categories to be introduced or to be used for marketing for a specific segment of
consumers. This would also allow them to add or remove services/features which
are important in the buying decision process. This study however does not aim to
identify newer areas to introduce new services, nor should it be used to predict
the success or failure of internet ventures.

1.1 Objectives:

To study attitude of customers towards online shopping

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To find out the preferences of the consumer regarding the attributes of

online shopping website

To identify the issues faced by the user while online shopping

To determine the parameters for choosing the particular shopping centre

for purchase of grocery items.

To determine whether online grocery shopping will be beneficial and on

what factors.

1.2 Hypothesis
The hypothesis framed for the project Consumer Perception Towards Online
Grocery Shopping is:
Online grocery shopping is beneficial for the consumer.
Online grocery shopping has a great scope in future

1.3 Methodology
When choosing the research approach, a selection between deductive approach
and inductive approach can be made. The chosen method is a deductive
approach.
Method of Data Collection
Both secondary and primary data were used in the dissertation. Secondary data
came from the literature and primary data appeared from our research.
1. Primary data
Primary data consists of original information gathered from sample size of 100
respondents residing in Mumbai, India. A questionnaire was distributed to them to
collect the primary data.
2. Secondary data

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Secondary data consists of information that already exists and that was collected
in the past for some other purposes

1.4 Sampling
Sample Size: The survey was conducted on 100 respondents; sample was
based on affordability criteria especially on time constraints. Email invitations
were sent to invite respondents on the Internet, and students were contacted for
responses. Messaging applications on the smartphones came in handy to share
the link of the questionnaire
Population: The population was targeted at the respondents who have done
online grocery shopping and who will be doing it in future.
Email invitations were sent to invite respondents on the Internet, and students
were contacted for responses. Messaging applications on the smartphones came
in handy to share the link of the questionnaire

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Chapter 2

2.1 ONLINE SHOPPING (E-Commerce)

Internet is changing the way consumers shop and buy goods and services, and
has rapidly evolved into a global phenomenon. Many companies have started
using the Internet with the aim of cutting marketing costs, thereby reducing the
price of their products and services in order to stay ahead in highly competitive
markets.
Companies also use the Internet to convey communicates and disseminate
information, to sell the product, to take feedback and also to conduct satisfaction
surveys with customers.
Customers use the Internet not only to buy the product online, but also to
compare prices, product features and after sale service facilities the will receive if
they purchase the product from a particular store. Many experts are optimistic
about the prospect of online business.

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In addition to the tremendous potential of the E-commerce market, the Internet

provides a unique opportunity for companies to more efficiently reach existing
and potential customers.
Although most of the revenue of online transactions comes from business-tobusiness commerce, the practitioners of business-to-consumer commerce should
not lose confidence. It has been more than a decade since business-toconsumer E-commerce first evolved. Scholars and practitioners of electronic
commerce constantly strive to gain an improved insight into consumer behaviour
in cyberspace.
Along with the development of E-retailing, researchers continue to explain Econsumers behaviour from different perspectives. Many of their studies have
posited new emergent factors or assumptions which are based on the traditional
models of consumer behaviour, and then examine their validity in the Internet
context.

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2.1.2 Models of E-commerce

Business-to-Business (B2B):
B2B e-commerce is simply defined as e-commerce between companies. This is
the type of e-commerce that deals with relationships between and among
businesses. About 80% of ecommerce is of this type, and most experts predict
that B2B ecommerce will continue to grow faster than the B2C segment.
Eg: indiamart.com, eindiabusiness.com, tradeindia.com, etc.
Business-to-consumer (B2C):
Business-to-consumer e-commerce, or commerce between companies and
consumers, involves customers gathering information; purchasing physical goods
(i.e., tangibles such as books or consumer products) or information goods (or
goods of electronic material or digitized content, such as software, or e-books);
and, for information goods, receiving products over an electronic network.
It is the second largest and the earliest form of e-commerce. Its origins can be
traced to online retailing (or e-tailing). Thus, the more common B2C business
models are the online retailing companies such as flipkart.com Amazon.com,
snapdeal.com etc
Business-to-Government (B2G):
Business-to-government e-commerce or B2G is generally defined as commerce
between companies and the public sector. It refers to the use of the Internet for
public procurement, licensing procedures, and other government-related
operations. This kind of e-commerce has two features: first, the public sector
assumes a pilot/leading role in establishing e-commerce; and second, it is
assumed that the public sector has the greatest need for making its procurement
system more effective.
Web-based purchasing policies increase the transparency of the procurement
process (and reduce the risk of irregularities). To date, however, the size of the

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B2G ecommerce market as a component of total e-commerce is insignificant, as

government e-procurement systems remain undeveloped.
Consumer-to-Consumer (C2C):
Consumer-to-consumer e-commerce or C2C is simply commerce between
private individuals or consumers. This type of e-commerce is characterized by
the growth of electronic marketplaces and online auctions, particularly in vertical
industries where firms/businesses can bid for what they want from among
multiple suppliers. It perhaps has the greatest potential for developing new
markets. Online auction site eBay, Yahoo! Auctions are a couple of examples of
C2C websites.

M-commerce
M-commerce (mobile commerce) is the buying and selling of goods and services
through wireless technology-i.e., handheld devices such as cellular telephones
and personal digital assistants (PDAs).
Mobile Commerce is any transaction, involving the transfer of ownership or rights
to use goods and services, which is initiated and/or completed by using mobile
access to computer mediated networks with the help of an electronic device.
Mobile Commerce in India
Mobile is growing in India with more than 800 million subscribers across the
country. The advancement in terms of adoption of smart phones with 3G enabled
services is happening at a rapid pace. This of course has opened up the gates to
mobile advertising, mobile application development and mobile commerce in
India. According to BuzzCity's latest report, India is top performing mobile
advertising region in the whole of Asia. The growth in mobile advertising globally
is tremendous with ads served on a year-on-year growth of 139%. With respect

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to some number crunching, more than 126 billion ads were served in 2011,
compared with 52 billion in 2010.
In India, Mobile Commerce is still in the development phase as the use of mobile
phones for carrying out transactions is very limited. However, the development is
taking place at a nice speed and in the coming years, Mobile Commerce is most
likely to make its presence feel as companies and businesses have started
understanding the benefits of Mobile Commerce.
Some of the companies have even incorporated this technology. Airtel, ICICI,
Reliance are some of the companies/businesses that are using this technology
as their users are allowed to make limited purchases from their phones. For now,
the users are mainly allowed to pay phone bills, utility bills, book movie tickets,
book travel tickets with their cell phones.
However, more services will be introduced in coming years. Security is one of the
main concerns of Mobile Commerce as its very important to offer secure
transactions and this is the reason why Mobile Commerce is still in the
development phase in India.
For now, users are mainly allowed to do Mobile Banking i.e. to access the bank
account with a cell phone in order to pay the utility bills. With the current rate of
development, users will be soon allowed to purchase products, advertise, to take
part in auctions and pay bills with the help of a cell phone, while they are on the
move.

2.1.3 Advantages of E-Commerce

When you read the following list of advantages of ecommerce for businesses
and customers, you will get the sense that ecommerce is the holy grail of retail.

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1. Overcome Geographical Limitations

If you have a physical store, you are limited by the geographical area that you
can service. With an ecommerce website, the whole world is your playground.
Additionally, the advent of m-commerce, i.e., ecommerce on mobile devices, has
dissolved every remaining limitation of geography.
2. Gain New Customers with Search Engine Visibility
Physical retail is driven by branding and relationships. In addition to these two
drivers, online retail is also driven by traffic from search engines. It is not unusual
for customers to follow a link in search engine results, and land up on an
ecommerce website that they have never heard of. This additional source of
traffic can be the tipping point for some ecommerce businesses.
3. Lower Costs
One of the most tangible positives of ecommerce is the lowered cost. A part of
these lowered costs could be passed on to customers in the form of discounted
prices. Here are some of the ways that costs can be reduced with ecommerce:

Advertising and Marketing

Organic search engine traffic, pay-per-click, and social media traffic are
some of the advertising channels that can be cost-effective.

Personnel
The automation of checkout, billing, payments, inventory management,
and other operational processes, lowers the number of employees
required to run an ecommerce setup.

Real Estate
This one is a no-brainer. An ecommerce merchant does not need a
prominent physical location.

4. Locate the Product Quicker

It is no longer about pushing a shopping cart to the correct aisle, or scouting for
the desired product. On an ecommerce website, customers can click through
intuitive navigation or use a search box to immediately narrow down their product

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search. Some websites remember customer preferences and shopping lists to

facilitate repeat purchase.
5. Eliminate Travel Time and Cost
It is not unusual for customers to travel long distances to reach their preferred
physical store. Ecommerce allows them to visit the same store virtually, with a
few mouse clicks.
6. Provide Comparison Shopping
Ecommerce facilitates comparison shopping. There are several online services
that allow customers to browse multiple ecommerce merchants and find the best
prices.
7. Enable Deals, Bargains, Coupons, and Group Buying
Though there are physical equivalents to deals, bargains, coupons, and group
buying, online shopping makes it much more convenient. For instance if a
customer has a deep discount coupon for turkey at one physical store and toilet
paper at another, she may find it infeasible to avail of both discounts. But the
customer could do that online with a few mouse-clicks.
8. Provide Abundant Information
There are limitations to the amount of information that can be displayed in a
physical store. It is difficult to equip employees to respond to customers who
require information across product lines. Ecommerce websites can make
additional information easily available to customers. Most of this information is
provided by vendors, and does not cost anything to create or maintain.
9. Create Targeted Communication
Using the information that a customer provides in the registration form, and by
placing cookies on the customer's computer, an ecommerce merchant can
access a lot of information about its customers. This, in turn, can be used to
communicate relevant messages. An example: If you are searching for a certain

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product on Amazon.com, you will automatically be shown listings of other similar

products. In addition, Amazon.com may also email you about related products.
10. Remain Open All the Time
Store timings are now 24/7/365. Ecommerce websites can run all the time. From
the merchant's point of view, this increases the number of orders they receive.
From the customer's point of view, an "always open" store is more convenient.
11. Create Markets for Niche Products
Buyers and sellers of niche products can find it difficult to locate each other in the
physical world. Online, it is only a matter of the customer searching for the
product in a search engine. One example could be purchase of obsolete parts.
Instead of trashing older equipment for lack of spares, today we can locate parts
online with great ease.

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2.1.4 Disadvantages of E-Commerce

To make a fair evaluation of ecommerce, we cannot stop at discussing the
advantages of ecommerce. Let us also look at the other side of the coin too.
Ecommerce Lacks That Personal Touch
Not that all physical retailers have a personal approach, but I do know of several
retailers who value human relationship. As a result, shopping at those retail
outlets is reassuring and refreshing. Clicking on "Buy Now," and piling up
products

in

virtual

shopping

carts,

is

just

not

the

same

for

me.

Different people sing to different tunes. For me, the demise of the personal touch
in online transactions is the biggest disadvantage of ecommerce.
Ecommerce Delays Goods
Unless you are using a website to merely order a pizza online, ecommerce
websites deliver take a lot longer to get the goods into your hands. Even with
express

shipping,

the

earliest

you

get

goods

is

"tomorrow."

But if you want to buy a pen because you need to write something right now, you
cannot buy it off an ecommerce website. Likewise with candy that you want to
eat now, a book that you want to read tonight, a birthday gift that you need this
evening... You get the idea.
An exception to this rule is in the case of digital goods, e.g. an ebook or a music
file. In this case, ecommerce might actually be faster than purchasing goods from
a physical store.

Many Goods Cannot Be Purchased Online

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Despite its many conveniences, there are goods that you cannot buy online.
Most of these would be in the categories of "perishable" or "odd-sized." Think
about it, you cannot order a Popsicle (also referred to as an ice pop or ice lolly)
or a dining table set.
Well, you could order both of them online, but consider the inconvenience. The
Popsicle would have to be transported in refrigerated trucks. Unless the seller
was willing to make a huge loss, the cost of shipping that popsicle would far
exceed the cost of the popsicle.
Likewise, a dining table set can certainly be purchased online. In some cases,
the cost of logistics is bearable. But if you have to return the furniture, you will get
well-acquainted with the inconvenience of ecommerce.
Ecommerce Does Not Allow You to Experience the Product Before
Purchase
You cannot touch the fabric of the garment you want to buy. You cannot check
how the shoe feels on your feet. You cannot "test" the perfume that you want to
buy. You get the idea.
In many cases, customers want to experience the product before purchase.
Ecommerce does not allow that. If you buy a music system, you cannot play it
online to check if it sounds right? If you are purchasing a home-theatre system,
you would much rather sit in the "experience center" that several retail stores set
up.
Anyone Can Set Up an Ecommerce Website
We live in an era where online storefront providers bring you the ability to set up
an ecommerce store within minutes. I have tried it, and it is possible to set up a
basic store in under 10 minutes.
But if anybody can set up a store, how do I know that the store I am purchasing
from is genuine? The lowered barriers to entry might be a great attraction to the

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aspiring ecommerce entrepreneur. But for the buyer, reliability can be an issue.
This could lead customers to restrict their online purchases to famous
ecommerce websites.
Security
When making an online purchase, you have to provide at least your credit card
information and mailing address. In many cases, ecommerce websites are able
to harvest other information about your online behavior and preferences. This
could lead to credit card fraud, or worse, identity theft.
Conclusion
While we might be gung-ho about ecommerce, we must acknowledge that there
are disadvantages too. Only when we accept our shortcomings will we work
towards overcoming them.

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2.2.1 Online Shopping In India

India has the worlds 3 rd largest Internet user base, which crossed the 200 million
mark recently. Better connectivity, booming economy and higher spending power
helped the Indian e-commerce market revenues to cross $500 million with a
CAGR of 103% over last 4 years. This may not be a significant number,
averaging to only around $5 per user per year.
With the above background in mind, this research has been conducted to gain an
insight into the online buying behaviour of consumers. The objective is to explore
the factors which influence online purchase, the psychographic profile of the
consumer groups and understanding the buying decision process.
Our findings should help an Internet Marketer to determine the product/service
categories to be introduced or to be used for marketing for a specific segment of
consumers. This would also allow them to add or remove services/features which
are important in the buying decision process. This study however does not aim to
identify newer areas to introduce new services, nor should it be used to predict
the success or failure of internet ventures.
The Indian economy is slated to grow by upward of 6 % annually in the next few
years which is among the highest rates of any big emerging economy. And quite
a lot of this growth would be on the back of domestic consumption of goods and
services.
E-commerce is emerging as a great level given that organized retail is still not
ubiquitous across the length and breadth of the country with large retail chains
making up less than 10%
of the market.
E-commerce is helping people in smaller towns in India access quality products
and services similar to what people in the larger cities have access to. Its being

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forecast that close to 60% of online shoppers would come from beyond the top
eight large cities by end of this year.
Increasing internet penetration has helped to expand the potential customer pool.
Internet penetration is only about 10% (or about 121 million users) as against
about 81% in the US and 36% in China. However this number continues to rise
at a consistent pace because of falling prices for broadband connections.
Indians are also increasingly taking to mobile devices for not only search but
shopping as well. The number of smartphone users is rapidly increasing in India
and with 4G services about to take off its expected to get even more people
going online. There are currently about 900 million mobile subscribers and this
number is expected to touch 1.2 billion by 2015. Of these about 27 million are
estimated to be active mobile internet users. More importantly, 20% users
indicated intent to buy products through their mobile phones as against the
current 4% and this number is expected to only increase in the next two to three
years.
Innovation is helping e-commerce companies break the inertia for online
shopping by offering benefits to customers not traditionally available in a brick
and mortar store.
Business models include no question asked return policies ranging from 7 days
to 30 days, free product deliveries and the industry dynamics changing cash on
delivery model. The last innovation has really help unlock the potential as people
can now order products and pay when they get physical delivery of the product.
This has been a tremendous success because Indians are still reluctant to give
their credit/debit card details online and want to have the psychological comfort
that they would actually get the product once payment has been made. These
innovations have led to further innovations downstream as ancillary businesses
are developing to support these initiatives.
Some companies have begun to develop support mechanisms for the entire cash
on delivery model and are trying to reach the far flung corners of India, including

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in the interiors where traditional logistics companies are still not completely
present. The logistics companies are also shoring up their act and have started
to build specific verticals and expertise to address the requirements of ecommerce companies.
Divyan Gupta is the Founder and CEO of Keshiha Services Pvt. Ltd, a company
with interests in the internet, telecom, healthcare, education and advanced
technology businesses has stated that, acceptance of online shopping as a
secure shopping mode is has also helped to increase e-commerce uptake.
Currently only about 10 million people do online transactions out of an
approximate population of 200 million credit and debit card holders. However the
latest industry report by First Data Corporation and ICICI Merchant Services
indicate that there are about 150 million users that are ready for e-commerce.
More importantly the report indicates that urban Indian consumers are now
confident enough to make online purchases of up to US$500 as against US$40100 in the recent past.
So not only are the numbers of online shoppers projected to increase but there
has been a real increase in the total value being spent online.
So what happens next for an industry which is retailing everything online- from
flowers to baby products to books, coupons, apparels, music and electronic items
to even houses, car and jewelry? While this e-commerce play is not like the
earlier dot com bubble, there are clear signs that order might be coming in amidst
all the noise that is out there.
First a slow but sure consolidation is starting to take place in the industry. Experts
say that over the next 12-18 months there would be a couple of multi-product
generalists who would be successful along with a leader in single product
category
Second, Venture Capitalists are starting to be choosy about which business to
invest in, basing their decisions on performance as opposed to

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future predictions. Valuations which went through the roof are now
returning to normal levels. According to an Avendus report, about
US$829 million was pumped in the sector in the first 10 months in
2011. However this came down to US$16 million in December 2011
and went up only marginally to. US$24 million in January of this
year.

Despite all of this, its been a very impressive story so far. The poster child of the
Indian ecommerce industry is Flipkart.com, a 4 year old venture which modeled
itself afterAmazon.com and is already commanding a valuation of US$ 500
million and is targeting revenues of US$1 billion in the next two to three years. All
of this has caught the attention of Amazon.com which entered the market in
February this year. It came in through Junglee.com, a price comparison site and
is already amongst the top 10 sites in the country.
Everyone is therefore trying to capitalize before the 800 pound gorilla comes in
fully on its own which is expected to be sometime around Q3/Q4 this year.
There is huge demand for top-notch professional grade web 2.0 consultancy and
development. Very few companies have a long term vision around customer
acquisition, retention and constant conversations. A lot more can be done in
understanding the linkages between design and functionality based on user
experience and social integration. However to succeed in a tough market like
India your company needs to be open to long term strategic partnerships rather
than an upfront pay for services model. The upside would be worth its wait.
India has more than 3,311 running e-commerce centres, according to research
conducted by eBay India for its 2011 census. Indian web is clouded with ecommerce (B2B, B2C, B2G, and C2C type business models) start ups and
increasing like mushrooms on lawn.
India- an upcoming super power has more than100 million internet users which is
keep on growing by introduction of 2G and 3G. They want to be online always by
any internet enabled gadgets. People are moving from street bargaining to online

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web bargaining. The common Indian Mentality of seeing and believing or how
it will look is changing by introducing some creative business models like cash
on delivery by major e-commerce sites.

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2.2.2 Factors with respect to Women in Online Shopping

Shopping has been an obsession of women across the globe. A new shop in the
neighborhood, a new shopping mall in the area, a new brand launched women
are first to know and first to go. When it comes to shopping, women are more
organized (45% of women come to retail stores with shopping-lists as compared
27% of men), regularized and they show some definite trends in their buying
behaviors. A woman is more likely to spend time in a retail store (29%) as
compared to her male counterpart (23%). When a woman visits a retail store or
any physical retail store she will consider a few important factors such as:
How conveniently the store is located
Behaviour of the staff
Cleanliness (most of women are obsessed with it)
Products put at an easy reach so that she can check the label, feel it (if
required) and physically compare it with a similar product from a different
manufacturer
Overall aesthetic decoration of the store
And most importantly freebies and discounts available with the products
Naturally, the same woman when she would visit an online retail store will look
for these factors in her sub-conscious mind. She would love to get the same
feeling as she derives from the environment of her favorite retail store. She will
unknowingly demand these from your online shopping store. She would choose
to stay and buy from youronline webstore if you can meet the following:
Save time: You should give her the navigational freedom and easy roam
around options in your store; give her instantly whatever she wants.
Get a better selection: Your product should be the best in the designated price
bracket
Complete product details: Do not describe your products in single words; give
as much detail as possible.
Better value/offer: Your freebies should be 'useful' enough and the discount
should be noticeable

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 Logistics: You must deliver the product right at her doorsteps and nowhere
else!
Flexible return policy: Many times a woman takes a second opinion and you
should respect this nature. Be flexible if she asks you to replace what she has
bought.

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2.3.1 Online Grocery Shopping

Proving that no sector of the retail market is safe from the online shopping
revolution, it is now possible for the humble hometown grocery store to become
digitized and available on your smartphone, tablet, or computer. Just think: no
more long checkout lines, counting the number of items to see if you qualify for
the Express Lane, forgetting your grocery list at home, or carrying heavy bags up
your front steps. Online grocery shopping is dramatically changing the
consumer's relationship with the food market and making a service that may
have once felt luxurious into an everyday convenience.
Ordering Food Online
An online grocery store is a website that allows users to purchase food over the
Internet to be delivered to the person at a later time. Ordering food on the
Internet is similar to ordering any other product--the desired food items can be
searched for specifically, or one can browse through listings of products or
sections, similar to sections one might walk through at an actual grocery store.
The products offered by an online grocery store are identical to a normal grocery
store. When one has finished shopping, checkout is made with a credit card, and
the buyer must specify certain hours that he will be available to receive the food
for delivery. Since Internet groceries must deliver the food to the customers, they
typically pay a fee for delivery based on the amount of food they buy.
Benefits of Online Grocery Shopping

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The primary benefit of online grocery shopping is convenience. By ordering

online, one can quickly search for the products she needs and order them
without having to physically walk through expansive aisles. It also saves travel
expenses and time going to the grocery store.
Considering the wide availability of the Internet, it also means grocery shopping
can be done from remote locations or in the middle of doing other tasks. For
instance, using an online grocery store can allow a person to do all her grocery
shopping during her lunch break at work. It is also very useful for those without a
car or who may be physically unable to move around easily, since the food is
delivered right to their doors. The use of online-based grocery stores is
increasing in popularity as more and more people become comfortable with using
the Internet to make purchases.
Disadvantages of Online Grocery Shopping
Perhaps the largest disadvantages of shopping online are that it costs extra
money, since food must be delivered, and that the food ordered is not obtained
immediately. If someone were making a certain recipe and discovered he needed
an additional ingredient, he would probably not be able to order it online and get
it quickly enough to finish his dish. In the same way, it forces a person to plan his
food buying in advance of when he will need itif delivery will take a day or two,
a person needs to plan to have an extra day or two of essential foods available
before he runs out. Another disadvantage is that online shopping forces the
customer to be home during a certain period to collect the food when it is
delivered. Also, online grocery stores will often only cover specific delivery areas.

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2.3.2 Functioning of Online Grocery Shopping

Following are the basic parameter that determines the working of online grocery
shopping.
Creating the Website
The most important part of online grocery shopping is the website itself. The
website should have a complete list of groceries that are able to be delivered as
well as the prices for each item.
This website should then have a "shopping cart" where a user can add items to a
list of things to be ordered, as well as view and edit items that she is planning to
purchase. Finally, this website should have the ability for the user to enter her
address and pay for the order.
Filling the Order and Shipping
The next step is to take the submitted order and use it to collect and deliver the
items on the
list. In general, fulfillment of the grocery order needs to be done manually by a
stockboy or other employee.
This process can be made easier by having a well-organized room where the
products can be easily and efficiently located. The stock person should also
check to make sure that the items placed in the order match the list that the user
created.
Then, once the order has been compiled, the collection of food needs to be
placed in a vehicle and delivered to the customer.
Restocking and Processing Payments

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Clearly, it is critical to ensure that all the items listed on the website are in stock
and able to be shipped. As a result, the stock room needs to be carefully checked
to ensure inventory levels are sufficient.
Also, it is important to have the ability to obtain and process payments made by
credit card.
Also, in order to encourage repeat customers, it can be helpful to require
customers to have a user name, which would allow information to be stored. This
can also help create "suggested" carts of food items they commonly purchase.

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2.3.3 Reasons for Online grocery shopping not being

popular

There are four basic reasons why online grocery shopping will never become
popular by consumers. Home-shopping of groceries is no fun, it adds complexity
to your lifestyle and it is more expensive than buying at the supermarket. On top
of those disadvantages: traditional supermarkets are fighting for consumer loyalty
by improving their marketing mix and increasing their efficiency.

1. Online grocery shopping is boring. In my view online shopping for dry

groceries and perishables is boring. It does not even come close to the fun of
buying books at Amazon.com the joy of buying clothes and shoes at
Zappos.com, or the excitement of ordering exotic products in China by
Alibaba.com. There is absolutely no advantage here over the weekly trip to the
supermarket. I dare you to try online grocery shopping a couple of times and see
for yourself. Only when an online business focuses on special products and on
rich information content, online shoppers will become interested and stay
interested.

2. Online grocery shopping is complex. Online shopping is less time

consuming than traditional shopping, but it adds complexity to your lifestyle. Let
us assume in an optimistic mood that every household manager will master the
skill of shopping online. After ordering online you first have to be at home and
make sure that the goods are properly received. Second you often have to go to
the store anyway for miscellaneous articles. Third you have to check proper
billing and payment. Fourth you have to follow up on order-picking mistakes and
delivery errors.

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3. Online grocery shopping is expensive. The distribution costs of homeshopping are twice as high as the costs of traditional food retailing, and most
consumers are not willing to pay the extra 15 %. Internet startups will first try to
gain market share with low prices and low service fees, but when the
shareholders cash is consumed they will have to ask higher than normal prices
to cover the costs and survive. Of course their is a small niche market for
expensive home-shopping services: affluent PC-minded and service oriented
consumers and consumers with no easy access to a nearby store.

4. Online grocery shopping is not competitive. In recent years Efficient

Consumer Response and Category Management had a significant and positive
impact on quality and efficiency of traditional supermarkets. Food retailing has
always been a very competitive business, and in recent years super-marketing
has become a professional science that is constantly improving the value to the
consumer. In the USA, Europe and now also in India, China and South America
very competitive stores with Every Day Low Prices and high service levels are
gaining market share and are making the food business a war zone for new
entrants.
Conclusion: the average consumer with access to a good supermarket
does not have a good reason to go grocery shopping online.

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2.4.1 Consumer Behaviour

The study of consumers helps firms and organizations improve their marketing
strategies by understanding issues such as how

The psychology of how consumers think, feel, reason, and select between
different alternatives (e.g., brands, products, and retailers);

The psychology of how the consumer is influenced by his or her

environment (e.g., culture, family, signs, media);

The behavior of consumers while shopping or making other marketing

decisions;

Limitations in consumer knowledge or information processing abilities

influence decisions and marketing outcome;

How consumer motivation and decision strategies differ between products

that differ in their level of importance or interest that they entail for the
consumer; and

How marketers can adapt and improve their marketing campaigns and
marketing strategies to more effectively reach the consumer.

One "official" definition of consumer behavior is "The study of individuals, groups,

or organizations and the processes they use to select, secure, use, and dispose
of products, services, experiences, or ideas to satisfy needs and the impacts that
these processes have on the consumer and society." Although it is not necessary
to memorize this definition, it brings up some useful points:

Behavior occurs either for the individual, or in the context of a group (e.g.,
friends influence what kinds of clothes a person wears) or an organization
(people on the job make decisions as to which products the firm should
use).

Consumer behavior involves the use and disposal of products as well as

the study of how they are purchased. Product use is often of great interest
to the marketer, because this may influence how a product is best
positioned or how we can encourage increased consumption. Since many

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environmental problems result from product disposal (e.g., motor oil being
sent into sewage systems to save the recycling fee, or garbage piling up
at landfills) this is also an area of interest.

Consumer behavior involves services and ideas as well as tangible

products.

The impact of consumer behavior on society is also of relevance. For

example, aggressive marketing of high fat foods, or aggressive marketing
of easy credit, may have serious repercussions for the national health and
economy.

There are four main applications of consumer behavior:

The most obvious is for marketing strategyi.e., for making better

marketing campaigns. For example, by understanding that consumers are
more receptive to food advertising when they are hungry, we learn to
schedule snack advertisements late in the afternoon. By understanding
that new products are usually initially adopted by a few consumers and
only spread later, and then only gradually, to the rest of the population, we
learn that (1) companies that introduce new products must be well
financed so that they can stay afloat until their products become a
commercial success and (2) it is important to please initial customers,
since they will in turn influence many subsequent customers brand
choices.

A second application is public policy. In the 1980s, Accutane, a near

miracle cure for acne, was introduced. Unfortunately, Accutane resulted in
severe birth defects if taken by pregnant women. Although physicians
were instructed to warn their female patients of this, a number still became
pregnant while taking the drug. To get consumers attention, the Federal
Drug Administration (FDA) took the step of requiring that very graphic
pictures of deformed babies be shown on the medicine containers.

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Social marketing involves getting ideas across to consumers rather than

selling something. Marty Fishbein, a marketing professor, went on
sabbatical to work for the Centers for Disease Control trying to reduce the
incidence of transmission of diseases through illegal drug use. The best
solution, obviously, would be if we could get illegal drug users to stop.
This, however, was deemed to be infeasible. It was also determined that
the practice of sharing needles was too ingrained in the drug culture to be
stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein
created a campaign that encouraged the cleaning of needles in bleach
before sharing them, a goal that was believed to be more realistic.

As a final benefit, studying consumer behavior should make us better

consumers. Common sense suggests, for example, that if you buy a 64
liquid ounce bottle of laundry detergent, you should pay less per ounce
than if you bought two 32 ounce bottles. In practice, however, you often
pay a size premium by buying the larger quantity. In other words, in this
case, knowing this fact will sensitize you to the need to check the unit cost
labels to determine if you are really getting a bargain.

There are several units in the market that can be analyzed. Our main thrust in
this course is the consumer. However, we will also need to analyze our own
firms strengths and weaknesses and those of competing firms. Suppose, for
example, that we make a product aimed at older consumers, a growing segment.
A competing firm that targets babies, a shrinking market, is likely to consider
repositioning toward our market. To assess a competing firms potential threat,
we need to examine its assets (e.g., technology, patents, market knowledge,
awareness of its brands) against pressures it faces from the market. Finally, we
need to assess conditions (the marketing environment). For example, although
we may have developed a product that offers great appeal for consumers, a
recession may cut demand dramatically.
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Page 34

2.4.2 Types of Consumers

In business terms there are different types of consumers of goods and services
that are offered for sale by companies and manufacturers. A product
manufacturing company has to determine, know or understand the type of
consumers its targeting with its goods to make sure that there exists a market for
the products they intend to introduce into the market. Knowing the types of
consumers for goods is also important in that it enables the company to avail the
right and desired product to the consumer hence increasing sales and
profitability.
There are different types, classes or categories of consumers of goods and
services and in this article each of them will be discussed in detail.

Seasonal Consumers
These are types of consumers who purchase and consume products on
seasonal basis. You would most of the times not find these types of consumers
buying the goods or service in question but rather at certain times when the need
for them arises. They buy products that are season based or demanded at
certain times and not all the times.
Examples

Purchasing umbrellas during the rainy season

Purchasing cold drinks during the hot seasons

Going out for holyday during the Christmas season

Personal Consumers
These types of consumers are individual consumers who purchase goods for the
sole purpose of personal, family or household use.

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Examples

Going to the supermarket and shopping for goods which are to be used in
the house

Purchasing a car that you intend to use personally

Purchasing clothes for personal use from a clothing mall

Purchasing a mobile phone to communicate with people

Organizational Consumer
Organizational consumers are consumers of goods and services whose main
intention is not for immediate use but rather to use it for things like production,
using them to carry out the organizations activities or for resale purposes aimed
at getting profits as a result. E.g. an organization may buy raw materials that are
aimed at producing other goods which will later be offered for sale to other
consumers.

Impulse Consumers
Impulse consumers or buyers are those who make unplanned buying decisions.
Impulse buyers make swift buying decisions in that they encounter products
which they immediately purchase after they fall in love with the product and its
features. The products they purchase were not initially in their plans but as a sort
of something that comes up all over sudden from somewhere and that calls for
the consumer to make an unplanned purchase.

Need Based Consumers

Need based consumers are those types of consumers who buy goods and
services when they need them and not any other time. A need for a certain
product will necessitate buying it as the consumer would find it tempting to buy
the product because it is needed immediately for a certain purpose.
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Discount Driven Consumers

Discount driven consumers are types of consumers who are purchase goods and
services primarily for the discounts on offer. They may not engage in any buying
activity for most of the times only to act when they hear or see large discounts
being offered on products they like. They are price sensitive and they would
rather wait and purchase products when they come with discounts as opposed to
when they have no discount.

Habitual Consumer
Habitual consumers are those who find it a must or compelling to use certain
type of goods whenever they are presented with the opportunity. It is just like a
habit that they cant do without engaging in it. E.g. the cigarette smoker falls
under this category of consumers. The person would smoke at any given time
when he/she has a cigarette. He may also not be able to do without smoking
because it is a habit that he has become addicted to.

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2.5 Indian Players in Online Grocery Shopping

2.5.1 LocalBanya

LocalBanya.com is Mumbai's first online supermarket. We are an online

convenience store dedicated to YOU! Our aim is to give you access to high
quality products without wasting any time or energy.
LocalBanya.com went live in May 2012 with the objective of making groceries
conveniently available to your doorsteps. Today we offer you all categories
ranging from fruits, vegetables, exotic vegetables, groceries, personal care,
household detergents, kitchen ware, OTC, breakfast, snacks and still counting.
You will also find niche product items like bagels, shor sharaba, etc. We stock
only the highest quality products and do not compromise when it comes to
customer satisfaction.
At LocalBanya.com you can expect the best prices in Mumbai on your favourite
grocery items because when we sell online, we can sell stuff cheaper. Save on
each purchase, with up to 40% savings on some items and with free home
delivery - anywhere in Mumbai, you don't need to worry about the drive, traffic,
pollution or missing your favourite TV show anymore!
All you have to do is browse through our 8000+ products on offer, pick what you
want, where and when it should be delivered, and voil - you're done! We even
let you pay cash /card on delivery or give you online credit/ debit / net banking
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payment options! Essentially, we are your Local-Banya, except we're online. So

don't waste your money on phone calls, just log in and shop away!

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2.5.2 BigBasket

BigBasket.com (Innovative Retail Concepts Private Limited) is Indias largest

online food and grocery store. With over 10,000 products and over a 1000
brands in our catalogue you will find everything you are looking for. Right from
fresh Fruits and Vegetables, Rice and Dals, Spices and Seasonings to Packaged
products, Beverages, Personal care products, Meats we have it all.
Choose from a wide range of options in every category, exclusively handpicked
to help you find the best quality available at the lowest prices. Select a time slot
for delivery and your order will be delivered right to your doorstep, anywhere in
Bangalore, Mumbai & Hyderabad. You can pay online using your debit / credit
card or by cash / sodexo on delivery.
We guarantee on time delivery, and the best quality!

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2.5.3 Natures Basket

Godrej Natures Basket is the retail venture of Godrej Group and is today Indias
foremost retail destination for fine foods from across the world. Started in 2005
as a single fresh food store, we have today morphed into a 32-store chain of
premium gourmet stores strategically located at high street locations in Mumbai,
Delhi/NCR, Pune, Hyderabad and Bangalore.
With the growing palate preference of the Indian consumers, we are ready to
embrace sophisticated and exotic tastes from around the world. Were travelling
more than ever before, and as we take a bigger place on the world stage, we
want to explore everything it has to offer.
So we bring you the very best in service, quality and of course, international
cuisine selection- a huge variety of delicious cheeses of all kinds from France
and Italy, fresh and spicy ingredients from Thailand, amazing handcrafted ham
and salami from Europe, oils and vinegars from the Mediterranean, most exotic
and fresh organic produce and a cellar that boasts of the worlds best collection of
wine & beer. In addition, we are powered by a team of noted food experts who
search for the best and newest food products from around the globe. To make
your journey through this gourmet destination even more mouthwatering, our
uniquely knowledgeable and passionate staff will answer any questions you

Page 41

have, and can help you put together a gift hamper or an expertly selected cheese
or meat platter for your special occasion.

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2.5.4 Aaram Shop

AaramShop is a hybrid retail platform that is completely focused on ensuring that

you can shop for your daily essentials & grocery brands from the comfort of your
homes or offices and have your orders delivered to you in a matter of hours, not
days.
The ease of shopping (or aaram) comes along with the ability to get the products
at competitive costs. Shopping on AaramShop makes shopping for essentials
more engaging, entertaining, effortless, fun and stress-free.
AaramShops are your trusted neighborhood retailers, who have serviced you for
years. Now you can access the same retailers via their customized web-fronts of
their stores.
AaramShop is especially designed keeping in view the modern consumers and
shoppers busy lifestyle; who are always short on time and high on stress.
Shopping on AaramShop is non-intrusive yet social, effortless yet comprehensive
and something that can be done at their convenience.
AaramShop encourages consumers to share their opinions and experiences
about the various products and brands listed on AaramShop with their friends
and the larger shopper community on AaramShop. At every step of the way, you
will have choices not only of the products and brands, but also of the AaramShop
that you wish to engage with thereby ensuring a more in-control experience.

2.5.5 Zopnow
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Zopnow.com, an online retail store exclusively aims to catergrocery and FMCG

need of people launched its service in Bangalore. Zopnow with punch line Be
Lazy, Buy Easy plans to deliver grocery items at consumers doorstep in less
than 3 hours or at a predefined time specified by the customer.
However, currently zopnows is offering 1501 products to some selected areas of
south Bangalore. Zop now is founded by serial entrepreneur B.K Birlaand
Mukesh Singh, erstwhile CTO, Makemytrip.
According to company website, it wants to build a customer centric online store
that will leverage the hybrid model of online, call center, mobile application and
physical touch. Zopnow claims to deliver great customer experience by providing
customers, a convenient way to shop and in the process cut down the time at the
checkout counter, traffic and parking.
At present Zopnow offers cash on delivery (COD) option and are in the process
of adding card, debit card, Sodexho and Ticket Restaurant vouchers, however
Sodexho and Ticket Restaurant vouchers would be applicable only for food
items. It offers free shipment for minimum order value of INR 500 and above,
however shipping cost of INR 30 is added to all shipment below INR 500.

2.5.6 Veggi Bazaar

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Veggibazaar is Indias first online vegetable & fruits store, launched in the year
2009, founded by R Venkatesan. It is the perfect environment for purchase of
fruits, vegetables. Its procurement begins at farms and we adhere to stringent
policies that enable us to maintain the freshness on all our products.
Veggibazaar.com takes orders online and delivers the very next day. This not
only ensures freshness of the productsan essential feature of the company
but also means that he does not have to worry about bulk storage space and
associated facilities, which is a huge saving.
Vegetables reach the company's Alwarpet office in Chennai by 6.30 a.m. the
following day and, after a quality check, they are sorted, cleaned, chopped,
packed and delivered between 3 p.m. and 9 p.m. Venkatesan has 25 employees
to do these jobs. Clients can pay online through debit/credit cards or pay cash on
delivery.
Venkatesan has also started providing additional facilities, such as nutritional
specific packages and loyalty points which customers can redeem against future
purchases.

Chapter 3

Page 45

3.1 Literature Review

"India is among the fastest-growing markets and has been identified as one
of the significant potential markets for the company,"
Muralikrishnan B., country manager at eBay's India explains that Indian
consumers toward buying high margin products such as clothes and shoes as is
the trend among eBay shoppers in the West rather than electronic gadgets and
books, which are the most popular choices now but command lower profit
margins and are less frequent purchases.
He depicted that India's nascent e-commerce market, which till recently was
largely limited to people buying train, flight and movie tickets, is in the middle of a
surge as a younger, tech-savvy middle class increasingly takes to shopping
online in a country seeing rapid growth in Internet usage.
Consulting firm Technopak predicts a $70-billion annual market by 2020, up from
$600 million now, which is just 0.05% of global online shopping. EBay itself
estimates India's online shopping market in 2012 will grow close to 100%.
E-commerce: A boon for the current economic downturn
First Data Corporation and ICICI Merchant Services, has laid down some
facts that e-commerce market in India had clocked close to Rs 50,000 cores by
the end of 2011.
Even though there are less than 10 million internet users who are actually
engaging in e-commerce activities, there are about 150 million internet users in
India or around 75 million households that are ready for e-commerce.
With entry and operational costs being comparatively low than the other
countries like US, the second half of 2011 and the beginning of the current
calendar have seen the launch of a good number of new e-commerce sites
spanning across a variety of businesses womens fashion, mens fashion,
shoes, followed by accessories, groceries, sports, toys, home furnishings,
jewellery, automotive, bicycles, electronics and electrical equipment etc.
Key drivers for success for e-commerce

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Reduction in operational cost as the entire business can be moved online, the
need for physical stores has become obsolete. Less infrastructural investment
and associated labour costs drives up the profit margin.
It is far easier and quicker to compare prices of goods online, equipping the
customer with the information to decide the right price or terms for themselves.
With services like COD, customers can trust the process of going online and
purchasing.
Market penetration also becomes far more achievable with e-commerce; it is
possible for a merchant in Mumbai to extend his reach to north-eastern cities or
even rural villages that are now connected by the online network.
E-commerce facilitates shopping anytime, anywhere and for almost anything
desired. Busy consumers prefer this to the restrictions of when a mall/shop is
open and the need to physically travel to a shop. Online business takes shopping
a step further by taking itself to the customer creating conveniences of shopping
anywhere and at anytime.
In India, with the increasing propensity of social media, businesses have now
begun to engage their customers on social networking portals such as Facebook.
These are likely to be rapidly developing marketing channels for the future.
These businesses are difficult to turn into profitable ventures due to the
low margins and the logistics costs involved.
Gaurav Saraf, director of Epiphany Ventures says that, the concept of online
grocery shopping faces the problem of turning their business into profitable
ventures as the concept is new in the market which leads to low margin along
with low margin high cost is involved when it comes to logistics. In addition to
these problems the perishable items such as fruits & vegetables have a short
shelf life, if these items are not delivered before the expiry of their shelf life it
would could cause wastage and also add up the cost. From the above comment
a conclusion is arrived that these business ventures have a very thin margin
when it comes to business operations.
Connecting the local kirana stores with the buyers while storing

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inventories on the Cloud

Vijay Singh, CEO & MD of Aaramshop.com says that in order to reduce the cost
to their business operation they applied the concept of cloud computing, where it
connects the local kirana shops with the buyers. It enables the business to
reduce the inventory cost as all the inventories are handled by the local vendor.
Create a work-life balance
Vijay Singh, CEO & MD of Aaramshop.com states that the concept of online
grocery shopping creates the work-life balance in urban areas where the urban
couples are busy in their work culture and cannot give time towards their daily life
needs.
It is a difficult venture and these challenges make investors more cautious
while evaluating such initiatives
Singhal of SAIF Partners explains that the it is difficult for the investor to invest in
these type of business where the market is extremely fragmented.
Such a venture can only survive on repeat purchases and thats what one needs
to target. If a company knows what it needs to stock, how much it needs to stock
and where it needs to deliver, the business will become simpler to manage and
run. The firm needs to find a strong value proposition and target market to
survive the cut-throat competition
The solution to the above problem stated can be that in order to survive in the
market the business should target the satisfied consumer to create repeat
purchases. Also inventory management should be applied to these organizations
it will enable them to what it need to stock, how much it needs to stock and
where it needs to deliver, this will allow to operates its business operation
smoothly.

Study of Market Leader in the Industry : Tesco

Tesco PLC is a British-based international grocery and general merchandising
retail chain. It is the largest British retailer by both global sales and domestic

Page 48

market share with profits exceeding 2 billion. In 2008, Tesco became the world's
fourth largest retailer, the first movement among the top five since 2003.
Originally specializing in food and drink, it has diversified into areas such as
clothing, consumer electronics, financial services, telecoms, home, health and
car insurance and software.
Tesco is now the world's biggest Internet grocer. However, Internet sales still
represent a tiny, although growing, percentage of the overall UK grocery market.
Most people use the Internet as a way of gathering information on products and
making price comparisons before visiting their local store.
While the wider grocery market is incredibly closely tracked in terms of market
share, there is no comparably precise data available on share breakdown in the
online sector. However, based on various estimates and some figures declared
by the major players, it is fair to assume that Tescos share is somewhere around
55%.

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Various initiatives taken by TESCO:

The One In front initiative was designed to ensure that queues of customers did
not exceed two at any checkout (for its physical stores). Although it cost the
company many millions of pounds to implement, the plan worked since
customers appreciated the quick and efficient service provided.
Tesco was also a first mover in providing loyalty cards in the U.K. Launched in
1995, the loyalty cards rewarded the customers for shopping with them.
However one of the most risky and adventurous initiatives adopted by Tesco was
online grocery retailing.
Green initiatives include the introduction in May 2007 of its first fleet of fully
electric, zero-emission home delivery vans. Each of the zero-emission vans,
which are based at the newly opened green supermarket in Shrewsbury and
throughout London, will reduce CO 2 emissions by 100 tonnes per year, Tesco
claims.
The company also offers customers a bag less delivery service, which was
launched in response to consumer concerns about the number of bags used for
home shopping. The initiative is one of a raft of projects aimed at saving 1bn
bags per year.

Page 50

Chapter 4
4.1 DATA ANALYSIS
Personal Information
Gender:
Male

72

Female

28

28%

Interpretation:

The above diagram depicts that out of the total 100 respondent 72% of the
respondents were Male and 28% of the respondents were Female.

It shows that majority of the respondents were Male. It can also be

perceived as--there are more active males on the internet.

Age Bracket
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Below 20

18

18%

20-25

30

30%

25-30

32

32%

30-35

12

12%

35-40

6%

40 and above

2%

Interpretation:

The highest numbers of respondents were in the age bracket of 25-30 as

these respondents are well educated and web savvy.

Second highest were ranging in the 20-25 age bracket which is yet
another age group of young and tech savvy group and the age group of
Below 20 is a very young group which is more technically advanced but
less interested in buying groceries.

The older age groups were 30-35, 35-40, Above 40 which are less tech
savvy and more into traditional method of buying.

Do you do grocery shopping regularly?

Page 52

Interpretation:

From the above diagram, it can be seen that most of the respondents
actually do grocery shopping regularly.

It implies that majority of them are well versed about grocery shopping.

How often do you go for grocery shopping?

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Daily

8%

Weekly

40%

Monthly

38%

Never

14%

Interpretation:

Majority of the respondents do grocery shopping weekly and monthly,

which has the maximum number of votes.

Very few people choose to buy daily

It shows that majority of the people buy groceries weekly and monthly.

Are you aware that there are websites that provide online shopping
for groceries?

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Yes

74%

No

26%

Interpretation:

From the above diagram, it can be observed that 74% of the respondents
are aware that there are websites that provide online shopping for
groceries.

It is a very good number to carry out a research. It is helpful to collect the

right data for the research.

Which of the following websites are you aware of?

Page 55

Local Banya
Big basket
Natures Basket

56
42
12

56%
42%
12%

Homeshop18

56

56%

Aaram Shop
Zopnow

30
8

30%
8%

Other

6%

Interpretation:

These are some of the websites that the respondents are aware of.
Majority of them are aware of the popular websites like LocalBanya and
Homeshop18.

These websites are growing very popular everyday. The percentages

might add up because the respondents were given the check box options
where they can select more than one option.

Do you think that ordering groceries online is cost effective?

Yes
No
Cant say

Page 56

26%
10%
64%

Interpretation:

From the above diagram, it is observed that majority of the people are not
sure that the buying online would be cost effective or not. Some
respondents agree that it will be cost effective. While few of them dont
think that it would be that cost effective.

Majority of the people are not sure about the cost effectiveness. But most
of them agree that it would save some money for them.

Do you feel secured to shop online?

Page 57

Yes

62%

No

38%

Interpretation:

From the above diagram, we can see that majority of the respondents feel
safe to shop online. While some of them still dont feel secured to buy
online.

It is the risk factor that keeps most of the people from buying online. 38%
of the people are still thinking before making payment online.

Do you think that online purchasing of grocery products would

save time for your other productive activities?

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Yes
No
Cant say

64%
10%
26%

Interpretation:

From the above diagram, we can assume that majority of the people think
that buying online would save some time for their productive activities.

Majority of the people agree with it, hardly few of them do not agree, while
some are not sure about it.

Would 'Online shopping' remove the physical aspect of the

product, which is an obstacle for its quality check?

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Yes
No
Cant

74%
20%
6%

say

Interpretation:

Majority of the respondents think that online shopping would remove the
physical aspect of the product i.e. touch, feel, smell, etc. While some do
not agree with this and few of them are not sure.

Do you think that going online for shopping grocery products

would create employment opportunities for the people?

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To

some 60%

extent
Yes
No
Cant Say

16%
18%
6%

Interpretation:

Few of the respondents think that online shopping would create

employment opportunity and approximately same no. of respondents do
not agree

60% say to some extent it might create.18% says it will not create
employment opportunity and 6% are not sure.

According to you which type of shopping is more tedious/

tiresome?

Physical shopping (Local shops)

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84

84%

Online shopping

16

16%

Interpretation:

The above diagram shows that majority of the people think that physical
shopping is more tedious and tiresome.

People would try avoiding going to local markets or kirana shops if they
are tired. They would prefer online shopping.

Do you think that going online would reduce rush in the

shops/markets?

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Yes

68

68%

No

16

16%

Can't say

16

16%

Interpretation:

The most important point that comes to your mind when you think about
grocery shopping, that is rush in the shops. The above diagram explains it
well.

Majority of the people think that online shopping would reduce the rush in
the markets and local shops.

Very less people think the other way and few people are not sure about it.

Is the delivery time of the products reasonable?

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Yes

48

48%

No

6%

Never tried

46

46%

Interpretation:

Almost half of the respondents have not tried it so dont have a clue about
the delivery time.

Out of those who have tried it, almost all of them agree that the delivery
time is reasonable

There are hardly few people who think that it is not reasonable

Are the websites for online shopping user-friendly?

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Yes

54

54%

No

6%

Never tried

40

40%

Interpretation:

According to the above diagram, majority of the people find the websites
of the online retailers user-friendly.

There are very less people who find it very hard to use

Do you find the 'Goods-return policies' of the websites complex

and not satisfactory?

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Yes

12

24%

No

8%

Never faced such problem

34

68%

Interpretation:

From the above diagram, we can depict that majority of the people have
not faced this problem

Out of those who have faced it, majority of them find it complex and not
satisfactory.

There are very few people who dont find it complex

What mode of payment do you prefer for online shopping?

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Cash (Cash on delivery)

32

64%

Debit card/Credit card

18

36%

Other

8%

INTERPRETATION:

The above graph clearly shows that people prefer to make payment using
cash after the delivery is received

However, there are few buyers who prefer using credit or debit cards for
making payment

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*Open-Ended Questions*
Have you tried online grocery shopping? If yes, what was your
experience?

Suraj Kerawat Yes, really that was nice experience because it reduced man
power and to is way to use
Gaurav It was a very hectic experience for carrying those heavy bags... and getting the
things according to the list

Ajinkya Rasal My experience was good as I could manage to get fresh groceries at less
price.

Onkar Tendulkar They are good.. quick.. hassle free and offer discounts
Prasad Tari Yes, it was good..you will get everything on one click..
Namrata shinde Not Bad. But still prefer shopping groceries by going to the market.

INTERPRETATION:

From the above responses we can figure out that most of the respondents
who have tried had a good experience of shopping groceries online

It can be seen that people think that it is hassle free and less time
consuming while there are few people who would still stick to their
decision of going to the markets or local shops for buying groceries

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Do you prefer going to local shops/markets or buying online?

Why?
Responses
Saoumya Varma I prefer going to market, local store or super market.
It's fun shopping physically and we should not rely on technology soo much that
we fade away the essence of store shopping or going to market and bargaining.
We can't bargain only! Can we?
Prasad Tari I ll prefer local shops/ market than buying things online..because
I don't believe on quality of online products. Even though they are offering good
offers. For me quality matters.

Sanket Sawant Online, less time consumption

Salim Fancywala

I would prefer to go to local shops as you can feel the quality

of the products served

Onkar Tendulkar Prefer buying perishable items from market ...

INTERPRETATION:

From the above responses, it is clearly seen that majority of the

respondents prefer going to the local markets for buying groceries as they
want to check the quality before buying it

Few people like to bargain and that is not possible online

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What are the obstacles that you face while shopping online?

Responses:
Soumya Shetty The product delivered,is sometimes different than how it was
actually showcased online.

Sneha Chopra Quality check is the biggest problem...

Nick Cant touch and feel the product

Prasad Tari Particular product which are rarely available ...
Ashish Bavaria Purchase of Daily basis product cannot be used for its time
factor , quality

INTERPRETATION:
From the above responses, we can highlight few obstacles that are commonly
faced by the consumer. They are

Quality check

No assurance of getting the same product as showcased

Product availability

Not useful for purchasing groceries on a daily basis because of the

delivery time factor

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4.2 OBSERVATIONS & FINDINGS:

From the data collected above we can observe that there is an increase in
the number of respondent in online shopping as there is awareness about
this concept in the market.
Certain parameters which motivate the user to shop online are:

Discounts and offers, offered by the website. (Cost Effective)

Secured feeling while buying

Saves time which could be used for various other productive activities

Reduction of rush in the markets and the local shops

Going to markets and local shops is tedious and tiresome

User friendliness of the website.

Cash on delivery form an important gateway in online transaction.

Free shipping is the most important factor which motivates the user to
shop online.
Certain parameters which demotivates the user to shop online

Physical examination is the important issues in the online shopping which

determines the tangibility of the product.

Goods-Return Policies are complex and not satisfactory

The data depicts that supermarket are the preferred shopping destination
as it offers all the basic aspect of the online shopping which are price,
quality variety, proximity to home, offers & discounts.

According to the data, most of the respondents prefer to go to local shops

as they could check them and buy it at the same time.

The data also determines the factors which will be beneficial for the
consumer to shop grocery online which are variety at one shop, saves
times and avoid long queues.

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4.3 Limitations:

The first limitation caused during the market research was to find out the
respondent who shop online and are web savvy.

The second limitation caused during the research was searching the
women respondents who shop grocery products along with the experience
of online shopping.

Other limitation caused in the market research was that the research will
only study the consumer perception towards online grocery shopping and
not the dealers, wholesalers or retailers perception towards online
shopping which acts as an agent to the online retail industry to support its
business operations.

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Chapter 5
5.1 CONCLUSION:

From the above data analysis it can be concluded that consumer buys goods
from the online shopping website on the basis of factors like offers and discounts,
variety of product available, free home delivery, website user friendliness and
cash of delivery payment option.
The hypothesis framed for the project Consumer Perception towards Online
Grocery Shopping was Online grocery shopping stores are beneficial for the
consumer and Online grocery shopping has a great scope in future.
From the above data analysis it can be determined that most of the respondent
would agree that buying groceries online is more beneficial as compared to buy
in the traditional method. As there are a lot of consumers who are getting
attracted towards e-commerce, there will be a great scope for online grocery
shopping in future.
Out of the agreed respondent to buy online grocery, most of the respondent
would think that it would be beneficial to shop grocery online on the basis of
factors like easy to order, variety, discounts/ offers, saves time and avoid long
queues.
With above analysis we can thus prove the hypothesis to be positive.

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5.2 RECOMMENDATIONS:

5.2 Business Operational

When it comes to operational aspects of the business, the firm should consider
the following business operation model:

Instead of going the regular eCommerce way of Grocery shopping, the

firm should start up by bringing existing retailers online.

For the purchase of the grocery item user can choose their nearby Kirana
Store from the listed stores along with a convenient time of the delivery.

The local store would be informed about the order and it would be
delivered to the address at the time mentioned with the payment of cash
only on delivery.

Following are the important aspects of the proposed business plan:

The firm will have a low operating cost compared to other online grocery
website, as they dont have to stock any inventory of grocery products.

The firm main cost will include cost of dealership from the local retailers.

Other cost will include the cost related to website designing, HR personal,
computer database hardware & software, building cost etc.

It will allow the firm to eliminate the cost of brand loyalty of the branded
grocery item which reduces the operating cost to a great extent.

It will develop a better relationship between their neighbourhood retailer

and the consumers.

It will allow more user interference, when the consumer can order their
grocery from the trusted local retailer, than unknown player in the market.

Also it will protect the local retailer from diminishing from the market due
the presence of supermarket and foreign players in the market.

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In order to increase the productivity of the site, the firm should offer
special discounts with respect to seasons like Diwali, Ganpati, Holi etc,
also special packages should be created as monthly ration.

The recommended business operation will not only be beneficial for the
consumer but also to the firm, as it allows the firm to maintain its low operating
expenses and for the consumer

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APPENDIX I
The Questionnaire used for the survey:
Name:
Gender:o Male
o Female
Age:o Below 20
o 20-25
o 25-30
o 30 -35
o 40 and above
Email ID (Optional)
Do you go for grocery shopping regularly?
o Yes
o No
How often do you do grocery shopping?
Daily
Weekly
Monthly
Never
Are you aware that there are websites that provide online shopping for
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groceries? *
Yes
No

Have you tried online grocery shopping? If yes, what was your
experience? *

Do you prefer going to local shops/markets or buying online? Why? *

Which of the following websites are you aware of?

Websites for online grocery shopping
LocalBanya
Big Basket
Natures Basket
Homeshop18
Aaram Shop
Zopnow
Other
Do you think that ordering groceries online is cost effective? *
o Yes
o No
o Cant Say

Do you feel secured to shop online? *

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o Yes
o No
Do you think that online purchasing of grocery products would save time
for your other productive activities? *
o Yes
o No
o Cant Say
Would 'Online shopping' remove the physical aspect of the product, which
is an obstacle for its quality check? *
(Touch, smell, feel, etc)
o Yes
o No
o Cant Say
Do you think that going online for shopping grocery products would create
employment opportunities for the people? *
o Yes
o To some extent
o No
o Cant Say
According to you which type of shopping is more tedious/tiresome? *
o Physical shopping (Local shops)
o Online shopping

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Do you think that going online would reduce rush in the shops/markets? *
o Yes
o No
o Can't say
Is the delivery time of the products reasonable? *
o Yes
o No
o Never tried
Are the websites for online shopping user-friendly? *
o Yes
o No
o Never tried
Do you find the 'Goods-return policies' of the websites complex and not
satisfactory?
o Yes
o No
o Never faced such problem
What mode of payment do you prefer for online shopping?
Cash (Cash on delivery)
Debit card/Credit card
Other:
What are the obstacles that you face while shopping online?

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APPENDIX- II
NAMES OF THE RESPONDENTS
Name
1. amol
2. Salim Fancywala
3. Suraj Kewat
4. Mrunmai Bhomkar
5. soumya shetty
6. Gaurav
7. Sneha Chopra
8. siddesh pai
9. sanket sawant
10. Nikita Salunkhe
11. Ajinkya Rasal
12. shruti suhas talashilkar
13. kaustubh
14. Sneha Pangam
15. Yogesh
16. Shawn J Rebello
17. sachin pawar
18. aakash
19. Saoumya Varma
20. Fahim siddiqui
21. Supriya Shailesh Shetty
22. altino
23. Gauri Zagde
24. onkar tendulkar
25. Nick
26. Mehul Shah

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27. Prasad Tari

28. Yogesh Sawant
29. Ashish Bavaria
30. Ashish Bavaria
31. Sachin Kadam
32. Yogesh Raut
33. Namrata Shinde
34. Andrew Lourenco
35. Smita Divekar
36. Mahesh Shinde
37. Royden Ambrose
38. Taranpreet Singh
39. harish devadiga
40. Sneha's friend
41. shilpa r.parab
42. rakesh labdhe
43. Kunal Limaye
44. Amey
45. Vinayak Dhuri
46. kshitij thakur
47. mitali
48. harsh
49. prachi dhoke
50. Mihir mehta
51. Amit
52. Salman ansari
53. Sumit
54. Mrunali
55. Samiksha sheth
56. Gauresh
57. Shreya cheda
58. Siddharth Jain

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59. Santosh chopra

60. Nikita Almeida
61. Abhijit rahane
62. Shweta talawdekar
63. Kalpit
64. sneha
65. Yogendra
66. Shaam rawate
67. Saurabh pawar
68. Akshay
69. Soudamini
70. Farhan ahmed
71. Sukriti
72. Ashley
73. Gauri harkulkar
74. Omkar pawar
75. Nikhil zagde
76. Mridul shah
77. Prashant tare
78. Yuvraj Pawar
79. Ankit tiwari
80. Abhijit sawant
81. Suchit kapse
82. Yugandhar kakde
83. Nirmiti sawant
84. Anuj mhatre
85. Samidha salvi
86. Mahindra Bhoir
87. Roy Mendonca
88. Sahil Tiwari
89. Harsh waghela
90. Soumitra

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91. Sheetal dhedia

92. Rishikesh pawar
93. Karan bundhela
94. Anup pawar
95. Vikas sawant
96. Kavish
97. Manali Rasal
98. Hardik
99. Priya Dalvi
100.Mitesh

Page 83

Bibliography

Books:

David Whiteley, E-Commerce: Strategy, Technologies And Applications,

Published by McGraw Hill Education

Majumdar Ramanuj, Consumer Behaviour : Insights From Indian Market

(English), Publisher: Phi Learning

Webliography
http://www.firstpost.com
http://www.businessworld.in
http://internetlivestats.com
http://www.consumerpsychologist.com
http://www.marketingteacher.com
http://kenyaentrepreneur.hubpages.com
http://trak.in
http://www.boston.com
http://online.wsj.com
http://www.imediaconnection.in
http://informationmadness.com
http://www.sooperarticles.com
html http://blog.dreamstarts.in
http://www.vccircle.com

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