RESEARCH METHODOLOGY PROJECT:

CONSUMER BUYING BEHAVIOUR ON BIGBASKET

GROUP NO:1

1
 GROUP MEMBERS:
1.RUTIKA GAHERWAR-13
2.KARNIKA BHONSALE-07
3.ABHISHEK PATTNAIK-30
4.KETAN JOSHI-20
5.SURABHI PATIL-29
6.CHINMAY KADOO-21
7.OJAS GAWLI-16
8.VIBIN K.S-53
9.APURVA JAIN-17
10.HARDIK BHANUSHALI-06

2
 INDEX
1. INTRODUCTION

2. LITERATURE REVIEW AND RESEARCH GAP

3. PROBLEM STATEMENT

4. RESEARCH METHODOLOGY

5. PROBLEM STATEMENT

6. DATA CODING

7. OBSERVATION

8. HYPOTHESIS AND DATA ANALYSIS

9. CONCLUSION

10.REFERENCES

3
 1. INTRODUCTION

In 1999, the founders of Big Basket - Hari Menon, Abhinay Choudhari, V S Sudhakar, Vipul Parekh
and V S Ramesh - started Fabmart. It was one of the first online businesses in India but it did not
succeed because of the low Internet penetration in India and the lack of secure digital payment
gateways which discouraged people from making online payments. After trying other ventures,
they regrouped in 2011 to try the online grocery market again and started Big Basket.
Bigbasket.com (Innovative Retail Concepts Private Limited) is India’s largest online food and
grocery store. With over 18,000 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.
Busy work life in cities and paucity of time have led to creation of web and application-based
platforms like Big Basket that provides basic necessities from Groceries to Confectionaries right
at doorstep.
Food shopping online is now easy as every product on your monthly shopping list, is now
available online at bigbasket.com, India’s best online grocery store. People no longer need to get
stuck in traffic jams, pay for parking, stand in long queues, and carry heavy bags. Since people
don’t want any of these chaos platforms like Big Basket are gaining popularity with surge in
orders.
Timely delivery and good service is what customers expect so, the objective of our research was
to find bottlenecks in the logistics and the delivery system of Big Basket.
With a comprehensive questionnaire, we tried to figure out the exact pain points where
customers are facing issues.
So based on various hypothesis we had and the data we collected, we tried to analyse the
hypothesis.

4
 2.LITERATURE REVIEW AND RESEARCH GAP:

1) Online Delivery is time consuming

In the research article named “I’ll have the ice cream soon and the vegetables later”: A study of
online grocery purchases and order lead time”(Milkman, Katherine L.Rogers, Todd, Bazerman,
Max ),it was seen that an increase in the delay between order completion and order delivery
results in online customers prioritising and ordering more of the basic need items such as
vegetables and ordering less items belonging to lesser groups of importance by need (Ice creams
among others). In a more detailed explanation, it was seen in the research that people spend
more liberally on the items of “want” over the items of “need” in settings where there is a shorter
delay time. It was noted that there was a single day increase in delay caused approximately a 2%
decrease in the size of the grocery order.
In the research paper titled “Online Grocery Shopping: The effect of Time Availability on
Malaysian Consumer Preferences”, it was seen that customers with little time on their hands
preferred online grocery shopping as compared to brick and wall retail shopping. Moreover, a
general trend in the behaviour of online shoppers was noted in the research paper titled
“consumer behaviour and attitude towards internet shopping” (S Freeman and M Gabbot 1999)
where it was seen that delays or increases in waiting time resulted in the customer abandoning
the cart midway. Similarly, A Neilsen report titled “Response times; the three important limits”
(1996) led to a broad-based conclusion that there is a loss in consumer interest if online shopping
websites have a delay of more than 10 seconds.
A research paper titled “Consumer Responses to Online Food Retailing” (by Michelle A.
Morganosky and Brenda J. Cude) carries out two surveys where 76.6% in the first survey and
53.3% of the total respondents cite convenience/time as the most important reason to shop
online. Interestingly, however 47.5% in the first survey and 19% in the second survey perceive
that the time taken to shop online is equal to or greater than the time taken to buy the same in
a brick and wall shop. The study noted that there was a marginally significant relation between
the buying of grocery items and the perception of the time taken in buying activities among the
online users.
In the research paper titled “Exploratory Studies on Online Grocery Shopping” (by Ali M. Noor,
Zetty M.M. Zaini, Mohd Raziff Jamaluddin and Mohd Salehuddin Mohd Zahari),it was seen that
consumers overall tended to give less value to time when asked about searching items,however
time became an important factor while purchasing the product of their choice. The study notes
that consumers will give second thoughts to online grocery shopping if high delays in search and
purchase of grocery items were to be prevalent on the websites.

5
2)Dynamics of health-conscious consumer behaviour while purchase eatables from e-
commerce
1)(Lau & Lee, 1988) discovered from other developed Asian regions that consumers prefer to
shop daily for fresh food at open markets, given the convenient access to modern supermarkets.
While there have not yet been survey-based analyses of the direct relation between shopping at
supermarkets and nutritional and diet composition effects, there has been some indirect
evidence. Asfaw (2007) finds for Guatemala that consumers that do some of their shopping at
supermarkets also tend to consume more processed food (but not necessarily from
supermarkets). Neven et al. (2006), in the early stage modern retail situation of urban Kenya,
show that consumers tend mainly to buy processed foods and staples from supermarkets, but
mainly depend on traditional retailers for fresh produce. Hawkes (2008) examined recent survey
evidence from Tunisia of shopping at supermarkets ‘correlation with consumers ‘food
consumption variety and quantity and finds some correlation. (Xiaoyong Zhang,2002) examined
the dynamics of Chinese consumers consumption, perceptions, and uses with regard to food
products and found that as far as market outlets are concerned, the supermarket is the dominant
market outlet for dairy products; other products are mainly purchased in open markets. If
supermarkets have to compete with open markets, great effort should be put into improving
their fresh-food image which consumer ‘s value most among product attributes. Veeck and
Veeck (2000) observe, "Meats and produce are purchased from supermarkets when time is
limited, but making such purchasing at an outdoor or a 'wet' market. remains the ideal”. They
note that these outlets are perceived as providing fresher products compared with supermarkets
by Chinese consumers, and Bean (2006) explains that Chinese consumers are highly sensitive to
the freshness of food products. Brian Halweil (2002) states that the long-distance transport of
food has become such a defining characteristic of the modern food system that most people
accept it as the only way to remain well-fed. For those who can afford it, the wonder of eating
exotic produce grown halfway around the globe is one of the clearest benefits of a long-distance
food system. However, consumers may seek out local food because of the superior taste of
products harvested at the peak of ripeness and flavour, and because of the high level of control
it gives over the food that they eat. Marijke D‘Haese (2005) researched the growing trend of
supermarkets in South Africa. The study covered two villages in the Transkei area of South Africa
and concluded that in these poor rural communities, the majority of households now buy their
main food items from supermarkets rather than from local shops and farmers. The supermarkets
provide many food items at lower prices. With an increase in income, the households look for
variety and exotism in their food products, and will most likely find this in the supermarkets,
rather than the local stores.

6
3)A study on Consumer Preference and Attitude Regarding Online Food Products
In Hanoi, Vietnam, states-Approximately 46% of respondents selected food products based on
their self-assessment in food hygiene, and the percentage of consumers who referred to food
hygiene and safety certification was the smallest, accounted for only 30.4%. Nevertheless, only
one-third of participants believed in the food safety information provided online (37.7%). The
ingredients were the most important requisite criteria in ordering ready-to-eat food (52.2%).
Regarding food labels, participants were most concerned about expiration date and brand (51%
and 22.2%).In context of Vietnam, consumers suppose that food hygiene is a requisite factor
which they use to restrict the number of services to look at, while price and convenience are two
factors among the most decisive factors which influence behaviour of choosing food products
on the Internet A study by Nguyen also reveals that a high percentage of customers used calories
and nutrition labelling for ordering food [38]. In addition, the percentage of consumers trusting
in food hygiene information of online food products was 37%, lower than a study conducted
among Australian consumers. The literature suggested that the number of people who
distrusted online food information had increased because they might encounter potentially
inaccurate and misleading information. These concerns from consumers are valid due to the fact
that distributors can easily advertise their food items, and most of these websites do not
undergo the traditional mechanism of accuracy verification. For traditional food establishments,
consumers can subjectively assess food safety through food processing and aesthetic value. By
contrast, for online food services, clients can only decide based on advertising footage as well as
reviews from other customers, which is hard to verify because of its virtual nature.

4) Price affecting consumer behaviour while purchasing product online

1)In the research paper named “A Study on Consumers’ Attitude Towards Online Shopping”
(N.Jemila Dani Jul. - Sept. 2017) study has been done on measuring the psychographic dynamics
of the consumers to identify the psychological factors which are influencing the consumers to
shop for food and groceries online. Modern retail outlets spend a lot of money and resources in
identifying customer preferences. On the other hand, mom & pop stores have a handful
employees involved only in selling the products, including the owner himself. People prefer local
market because the customer can have a look and feel of the products unlike the Mom & Pop
stores where they have to name an item in order to receive it. Moreover, the minimal order size
of Rs 1000 to delivery it without shipping charges is high as many don’t prefer to order the
vegetables, fish, meat etc. in bulk and refrigerate it for the week’s use.
A research paper titled “Comparison of physical store versus online grocery shopping habits
based on consumers’ environmental characteristics” (Gulten Bozkurt 2010), in this comparative
study of people buying from local markets and online shopping is done. Indians are price-
sensitive consumers, a kirana store can never compete with the kind of discounts and deals a
supermarket offers to consumers. They can only provide discount for a few rupees and, that too
for consumers who are frequent buyers. On the other hand most of the supermarkets have some
or the other offer running. Bulk purchase always comes with discounts and deals. Another
strategy used by online shopping is ‘The loyalty card’ concept, it is a way to share the margin

7
with loyal customers. The intention is to retain the customers and then start giving them a share
of the profit made from loyal customers. But the gain in the long run is often overlooked by the
discount-sensitive Indian buyer. This is because the customer moves around to the store giving
him a better discount at the point-of-sale, instead of a loyalty card which will give fruit only when
the loyalty card points swell.
In the research paper titled “TRUST AND TAM IN ONLINE SHOPPING: AN INTEGRATED MODEL”
(David Gefen, Elena Karahanna, Detmar W. Straub Mar, 2003), where it was seen that how trust
is important in keeping the customers intact and by using TAM (Television Audience
Measurement) how it will help us to identify which audience and market to tap. The model
shows that consumer trust is as important to online commerce as the widely accepted TAM use-
antecedents, perceived usefulness and perceived ease of use. Together these variable sets
explain a considerable proportion of variance in intended behaviour. The study also provides
evidence that online trust is built through a belief that the vendor has nothing to gain by
cheating, a belief that there are safety mechanisms built into the Web site, and one that it is
easy to use. Grocery e-tailing is challenging, but it also has the advantage of high percentage of
repeat orders. All you need to do is impress a customer with the first order. Once a customer is
satisfied, you can have one more regular in your clientele.

5) Home delivery Services

The increasing amount of small-sized shipments and their frequency variations, due to the
growth of e- commerce, pose a great challenge to logistics service providers but at the same
time, new technologies and innovations are being developed with the aim of increasing the
efficiency of the logistics service provider.
A growing trend of online grocery shopping has been seen. A number of reasons can be
attributed to this. From high pressure jobs, to convenience of Grocery Delivery Application, to
distances, long queues at the mall, maintaining work life balance etc you can have any
innumerable reasons why people prefer online grocery shopping to buying grocery from brick
and mortar stores. But people need to stay at home to get delivered the ordered items, also,
sometimes ordered goods are not always delivered. On the other side, a high rate of failed
deliveries due to the customer’s absence causes significant loss of logistics efficiency, especially
for perishable food.

6) Site/consumer cancellation of online orders

Research related to online grocery shopping has paid much attention to consumer response
(Morganosky and Cude 2001; Morganosky and Cude 2002; Wang and Tsai 2014), consumer
behaviour (Ramus and Nielsen 2005; Kempiak and Fox 2006; Hand et al. 2009; Gong, Stump, and
Maddox 2013; Zhu and Semeijn 2015), as well as consumer expectations (Wilson‐Jeanselme and
Reynolds 2006; Scott and Scott 2008; Xia, Huang, and Zhu 2010). These works particularly
concern with the acquisition of customers in online grocery retail market, and show that people
are likely to buy groceries online in terms of convenience, product range and price. The

8
disadvantages of online grocery shopping mentioned in these works could be concluded as
mental barriers, e.g., the risk of receiving inferior quality groceries and the loss of the
recreational aspect of grocery shopping. In the study conducted by Ramus and Nielsen 2005, it
is reported that two groups of interviews not experienced with online grocery shopping
perceived underlying risks due to the inherent time lag between ordering and delivery, which
might cause losses in situations of urgency. It is an inevitable issue under present increasing
online grocery market, and order cancellation option with refund has been adopted as a major
approach to alleviate this kind of risk from e-grocer consumers.
However, the order cancellation option creates more operations difficulties on the business side.
In this paper, we explore the profitability of refund policy for consumer order cancellations in an
online grocery business. The stream of literature most relevant to our study is perishable
inventory management with order cancellations, pricing strategy, and refund policy. From an
inventory management point of view, order cancellations are considered as disruptions to the
supply process. You and Wu (2007) develops a continuous time inventory model with order
cancellations in advance sales period, and investigates the optimal ordering and pricing policy of
two-period sales to achieve the maximum total profit. Jiang-Taoet al. (Jiang-Tao et al. 2008)
establishes a production-sale model for deteriorating items with advance sales and spot sales,
assuming the order cancellation rate is constant. Similarly, Son 2008, Thangam and Uthayakumar
2009, Zhang and Fu-Wen 2011, Zhao and Pang 2011, Fan 2012, Dye and Hsieh 2013, and You
2017 study order cancellation issues by deriving the optimal pricing and ordering policy, which
aims to maximize the total profit. The difference of our study from the ones mentioned above
lies in the different timeline. All of these papers listed above have one advance period with order
cancellations plus one spot period without order cancellations. In our paper, the selling period
and the order cancellation period overlaps with each other, at the same time, customer orders
are prepared by two shifts with different amount of information. This difference implies a higher
level of order cancellation disruption in our study by shifting the influence of the order
cancellation from the early stage of the planning horizon towards the end of the planning
horizon. The order cancellation issue has also been studied in revenue management literatures.
The techniques of revenue management are widely used in practices, e.g., airlines, hotels and
fashion industry, which are characterized by limited capacity and high perishability. Gallego and
Çahin 2010; Mcgill and Ryzin 1999; Watanabe and Moon 2011; Rusdiansyah et al. 2013 consider
the online retailing problem with order cancellation and refund in this category. They focus on
optimizing capacity allocation according to the forecasting of no-shows and partially refund for
order cancellations. Although the problems in these papers have the similar perishability, the
preparation costs have different features for online grocery retail business. The paper of Xie and
Gerstner 2007 show that offering refunds for customer cancellations on a service request could
be profitable without increasing the selling price. Namely the service provider could gain an extra
revenue by allowing customers to cancel the services before delivery. While this paper,
published in Marketing Science, only studies the impact of order cancellation on the demand
side, we extend the study of order cancellation to the supply process of a e-grocer and prove
that a lower price could benefit the e-grocer even no extra revenue is collected from order
cancellation. It is worth noting that the refund policy for product returns cannot be applied
directly to the order cancellation situation in this study. Product returns are often caused by low

9
quality or poor fit. Refunds for returns provide insurance against dissatisfaction, and allowing
firms to charge higher prices and earn higher profits (Fruchter and Gerstner 1999). Previous
researches (Mann and Wissink 1989; Moorthy and Srinivasan 1995; Chu, Gerstner, and Hess
1998; Shieh 2010) have shown that offering refunds for product returns can be profitable.
However, order cancellations for e-grocers typically occur before the ordered items are
delivered or shipped. E-grocers offer refunds only on cancellations made well before the delivery
moment.
We consider a pre-order online fresh grocery retail business with order cancellation options and
two supply preparation shifts. Due to the perishable nature of the fresh products, the problem
is single-period with planning horizon starting from determining the selling price and accepting
consumer orders, and ending when all orders are shipped. Any cost occurs between order
shipment and order delivery is considered as a sunk cost. During the planning horizon, the
following four events occur: online consumer order collection, consumer order cancellation, first
shift of supply preparation, and second shift of supply preparation.
Therefore, there are factors which brings about changes in the consumer behaviour in using the
online platform for the purchase of vegetables and fruits. Those factors spotted by us are being
summarized below:
 Delivery Time: Big Basket delivers the groceries the next day. Many retailers have
started the facility of home delivery to nearby societies and customers in just few
minutes to hours. So customers prefer this instead of waiting for 24 hours.
 Minimum order quantity/price compulsion: Big Basket does not offer home-delivery
below a certain set order price limit. This means that customers would be forced to
add a product or two just to avail the service. This makes them lose a customer.
 Be at home: Customers have to be at home when Big Basket is about to deliver. This
means the customers have to plan according to the delivery time. If by some means
the order gets delayed customer gets angry and unhappy by the service. On top of
this they have to pay a little add on price for the home delivery.
 Order Cancellations: They depend on they won’t be able to deliver them. This
sometimes tend in cancellation of orders. Out of stock issues tend to make the
customers unhappy and repetitive of such issues makes the customers reluctant to
reuse the service. Stores that they have tied-up with to provide them the items. If
they do not have the items available.

10
3.PROBLEM STATEMENT:
To study factors affecting the buying behaviour of Big Basket consumers.

4. RESEARCH METHODOLOGY:
1.SAMPLING TECHNIQUE: SIMPLE RANDOM SAMPLING WITHOUT REPETITION

2.AREA OF STUDY-MUMBAI

3.TYPE OF RESEARCH: EXPLORATORY

4.SAMPLE SIZE- 325

Sample size calculation:
SS=Z2 *p(1-p)/(M.E)2
Z=Level of Significance (5%)=1.96
P=Population of Mumbai=1.84Cr

5.DATA TYPE-NOMINAL

6.DATA COLLECTION-1.PRIMARY (Survey, Focussed group)

2.SECONDARY(Research papers, census)

5.DATA CODING
 We use questionnaire to collect required data. Responses have been coded as
suggested by faculty. All the options in the questionnaire have been coded as 1, 2, 3,
so that it can be processed easily in SPSS.
 Multiple optioned responses have been coded and merged into required cells so as to
avoid confusion and get the proper factors in SPSS.
 The blank spaces have been marked as zero.

11
7.OBSERVATION

Reliability Statistics

Cronbach's Alpha N of Items

.741 7

Cronbach’s Alpha- It indicates the reliability of data. For checking reliability of data
following question were considered:
1. Annual income of your family?
2. Do you buy from big basket?
3. What is the average monthly expense on Big basket?
4. What is the preference of products that you buy?
5. Have you experienced delays in receiving orders, if yes what is the delay time?
6. What are the other issues that you have encountered while receiving delivery?

12
8.Hypothesis & Data Analysis:

1. Annual income is independent of spending expenses on Big Basket.

Cross tabulation

What is the average monthly expense on Big

basket?

0 1 2 3 4 Total

Annual income of your 1 11 26 13 6 4 60

family
2 0 17 12 5 3 37

3 7 29 15 25 4 80

4 4 4 25 37 10 80

5 4 6 9 26 22 67

Total 26 82 74 99 43 324

Description-The person with income range in 10 lakh -14 lakh spends maximum amount
that is 3000-5000rs per month.

13
2) Does these problems force you to cancel orders? * How would you rate the experience
right from ordering to delivery?
Cross tabulation

How would you rate the experience right from ordering to

delivery? Total

0 1 2 3 4 5

Does these problems 0 37 0 0 1 0 2 40

force you to cancel
1 2 4 13 45 50 28 173
orders?
2 0 3 3 30 81 25 111

Total 39 7 16 76 131 55 324

Description-81 people have given good rating and they don’t cancel the orders.

14
3) To study the effect of cancellation of order on consumer’s purchase:

How would you rate the

Does these problems force you experience right from ordering to
to cancel orders? delivery?

Pearson 1 .56
Correlation 9**

Sig. (2-tailed) .00

0

N 324 324

Pearson .569** 1
Correlation

Sig. (2-tailed) .000

N 324 324

Description-The bivariate correlation between the delay time of an order delivery and
cancellation shows a correlation of 0.494. This symbolifies a weak positive correlation exists
between the two. Its evident that delay time is not a strong factor in the cancellation of the
orders. It means that a unit increase in delay time causes a 0.494 increase in cancellations.

15
4)To study the awareness of quality of product affecting the consumer behaviour:
How would you rate What are the other
the experience right issues that you have
from ordering to encountered while
delivery? receiving delivery?
How would you rate Correlation 1.000 0.86
the experience right
from ordering to
delivery?
Significance (2-tailed) 435

Df 0 83

What are the other Correlation 086 1.000

issues that you have
encountered while
receiving delivery?

Significance (2-tailed) 435

Df 83 0

Description-Does these problems force you to cancel” is weak but positive (0.120). This
means that even though people tend to face issues and therefore cancel orders, they still
prefer to buy from bigbasket

16
Description-A bivariate test done to examine the correlation between issues faced during
delivery and ratings given to bigbasket by the respondents revealed a 0.243 correlation which
signifies a weak positive correlation.

Description-Bivariate correlation test done for finding out the correlation between customer
delivery for basket and cancellation of order revealed a correlation of 0.569 which is a
moderate positive correlation.

17
5)Gender is independent of having a preference for specific category of products on big
basket

Sum of Mean
Squares df Square F Sig.

Between 2.137 1 2.137 .054 .816

Groups

Within Groups 12743.332 322 39.576

Total 12745.469 323

With gender = factor.

Description-As it is highly significant we can conclude that purchase on big basket is

independent of gender.

18
6) Respondents with bad experience of delivery hesitate to order again or tend to cancel
the order.

Description-The bivariate correlation between the delay time of an order delivery and
cancellation shows a correlation of 0.494. This symbolifies a weak positive correlation exists
between the two.Its evident that delay time is not a strong factor in the cancellation of the
orders. It means that a unit increase in delay time causes a 0.494 increase in cancellations.

19
9.CONCLUSION

In this study, we investigated the buying patterns, choices and perceptions of Big Basket
customers.
For analysis of our hypothesizes, we used bivariate correlation. Our first hypothesis, “People
with higher income spend relatively more” was supported by limited evidence as we saw that
that average monthly expense is only somewhat dependent on the annual income of the
family. We also saw that delay time in order delivery to customers was not a strong factor in
the cancellation of the orders by the respondents. We could also see that delivery issues other
than delays in delivery were not a strong factor in cancellation of orders either. It was also
seen that delay timings had only a moderate effect on the ratings score of Big Basket. Lastly,
we saw that an increased spending on basket led to higher satisfaction levels by those
customers as reflected in the ratings given by them.

20
10.REFERENCES

1. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=983129-”: A study of online

grocery purchases and order lead time” (Milkman, Katherine
L.Rogers,Todd,Bazerman,Max )

2. http://shodhganga.inflibnet.ac.in/jspui/bitstream/10603/198085/9/09_chapter%
201.pdf.This article sites about consumers behaviour for local market purchase over
supermarkets/online stores globally-

3. Consumer Preference and Attitude Regarding Online Food Products in Hanoi,

Vietnam- nt. J. Environ. Res. Public Health 2018, 15(5),
981; https://doi.org/10.3390/ijerph15050981

4. Research paper named “A Study on Consumers’ Attitude Towards Online Shopping”

(N.Jemila Dani Jul. - Sept. 2017)

5. A research paper titled “Comparison of physical store versus online grocery

shopping habits based on consumers’ environmental characteristics” (Gulten
Bozkurt 2010)

6. Research paper titled “TRUST AND TAM IN ONLINE SHOPPING: AN INTEGRATED

MODEL” (David Gefen, Elena Karahanna, Detmar W. Straub Mar, 2003)

21