A Study of E-Commerce and Online Shopping: Pages 91-96

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April 2016 Vol. XI No. 1 IMPACT FACTOR 3.

860 ISSN (P) : 0973-4503 ISSN (E) : 2454-1702 RNI : UPENG 2006/17831

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A Study of E-Commerce and


Online Shopping
Rashmi Vashishtha
Reserarch Scholar, Mewar University, Gangrar, Chittorgarh, Rajasthan.

Dr. Sudhir Kumar


Associate Professor, Faculty of Commerce and Business Administration, D.N. College, Meerut

Abstract
E-commerce and online shopping in India is getting a noticeable growth as more usage of internet facilities, high educational
standards, changing life style and economical growth of the country reasons in the demand of ecommerce techniques and
tools. Versatile shopping experience and rapid development of transaction facilities is further boosting opportunities for
the remaining market segments. The biggest advantage of e-commerce is the ability to provide secure shopping transactions
via the internet and coupled with almost instant verification and validation of credit card transactions. One of the most
important issues to be addressed in electronic commerce is the area of services. The primary purpose of this study is to
examine and uncover the impact of e-commerce and also identify the issues and areas important to the implementation of
e-commerce that may help in enhancing the productivity in the economic growth of the country.
Key words : E-commerce, online shopping, internet facilities.

1. INTRODUCTION precursor to the social networking on the Internet 25


English entrepreneur Michael Aldrich invented years later.
online shopping in 1979. His system connected a In March 1980, he went on to launch
modified domestic TV to a real-time transaction Redifon’s Office Revolution, which allowed consumers,
processing computer via a domestic telephone line. customers, agents, distributors, suppliers and service
He believed that videotext, the modified domestic TV companies to be connected on-line to the corporate
technology with a simple menu-driven human– systems and allow business transactions to be
computer interface, was a ‘new, universally applicable, completed electronically in real-time. During the 1980,
participative communication medium — the first since manufactured, sold, installed, maintained and supported
the invention of the telephone.’ This enabled ‘closed’ many online shopping systems, using videotext
corporate information systems to be opened to technology. These systems which also provided voice
‘outside’ correspondents not just for transaction response and handprint processing pre-date the
processing but also for e-messaging and information Internet and the World Wide Web, the IBM PC, and
retrieval and dissemination, later known as e-business. Microsoft MS-DOS, and were installed mainly in the
His definition of the new mass communications medium UK by large corporations. The first World Wide Web
as ‘participative’ [interactive, many-to-many] was server and browser, created by Tim Berners-Lee in
fundamentally different from the traditional definitions 1990, opened for commercial use in 1991. Thereafter,
of mass communication and mass media and a subsequent technological innovations emerged in 1994:
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online banking, the opening of an online pizza shop by services), these are far less labour-intensive than
Pizza Hut, Netscape’s SSL v2 encryption standard traditional channels (Wyckoff, 1997).
for secure data transfer, and Internship’s first online Electronic retailing over the Internet or online
shopping system. Immediately after, Amazon.com shopping first started in 1994 (Hsin, 2000). It is
launched its online shopping site in 1995 and eBay considered as one form of direct consumer marketing
was also introduced in 1995. of non-store retailing using online channels. This new
2. REVIEW OF LITERATURE concept of retailing has captured the interest of many
retailers and merchants because of the general
The emergence of e-commerce is not
recognition that online shopping will establish itself as
revolutionarily new as it has existed for quite some
an alternative channel alongside traditional offline retail
time (OECD, 1997). Since in the 1970’s and 1980’s,
channels such as physical retail stores (Rowley, 2000).
businesses have been deploying e-commerce via
Electronic retailing predominantly started in the form
electronic data interchange (EDI) for computer to
of online storefronts whereby products from a single
computer exchange of standardized electronic
merchant are offered to consumers through an online
transaction documents within an organization or inter-
catalogue. Merchants tend to choose to establish online
organizations using proprietary private valued-added
storefronts as an online retailing method when the
networks (VANs) as a communication medium.
product brand names and reputations are well
However, this form of traditional e-commerce using
established and widely known among consumers. A
private value-added networks as communication
good example is The Dell Online Store that sells
medium is costly to install and maintain, and has put e-
personal computers (The Economist, 1997) to
commerce out of reach in many small and medium sized
consumers everywhere.
businesses (Margherio, 1998). The arrival of the
commercial use of the Internet and its World Wide Chowdhury and Ahmad (2011) conducted a
Web (WWW) has been defining the new e-commerce study on ‘factors affecting consumer participation in
since 1993 (Zwass, 1996). With the emergence of the online shopping in Malaysia’. The major focus of the
Internet and World Wide Web (WWW) as a medium study was to describe the relationship between
for commercial transactions, it has thrust e-commerce independent variables and dependent variable using
into the spotlight, becoming the main focus of the Pearson’s correlation method. The limitation of this
international community. The Internet and WWW have study was that it only used four variables (ability,
made it easier, simpler, cheaper and easily accessible benevolence, integrity, and trust) in explaining the
for businesses of all sizes and consumers to interact consumer participation but did not take other important
and conduct commercial transactions electronically as variables into account (e.g., cost switching vendors
compared with the traditional approach of using private and the presence of third party. The study provides a
value-added networks (Margherio, 1998). By virtue useful insight on the significant role of trust in students
of the Internet’s network architecture, e-commerce is for online shopping. Yulihasri, Islam and Daud (2011)
born global, where geographical boundaries and conducted a study on ‘Factors that Influence
political boundaries mean little in this networked Customer’s Buying Intention on Shopping Online’. The
environment (OECD, 1997). As a result, ecommerce variables that were tested included usefulness of internet
through the Internet dramatically shrinks the distance shopping, ease of use, compatibility, privacy, security,
between producers and consumers, who can make normative beliefs, self-efficacy, attitude and student’s
their purchases directly without involving traditional buying intention. Pearson correlation analysis provided
‘middlemen’ such as retailers, wholesalers and statistical information about the relationship of each
distributors. Although new intermediaries are required independent variable with dependent variables. It was
(for example network access providers, electronic studied that web advertising favourably influences the
payment system, and authentication and certification purchasing of a company’s products.

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April 2016 Vol. XI No. 1 IMPACT FACTOR 3.860 ISSN (P) : 0973-4503 ISSN (E) : 2454-1702 RNI : UPENG 2006/17831

Karim (2013) conducted a study on online experiences offered by the e-commerce websites
shopping behaviour of customers and documented that among Indians have increased rapidly. As a result the
online vendors can assure their consumers for numbers of internet users is expected to reach the figure
transaction security and avoid long delays in completing of 700 million by 2019.
online orders and the hassle of returning goods for The key drivers in Indian e-commerce growth
better online shopping experience. Morris (2013) are:
conducted a study on ‘More Consumers Prefer Online
(a) Increased Usage of Internet : According
Shopping’ Shoppers increasingly want what’s called a
to the Internet and Mobile Association of India
“seamless omnichannel experience,” meaning one in
(IAMAI), the Internet user base in the country stood
which retailers allow them to combine online and brick
at 190 million at the end of June, 2013. With more
and mortar browsing, shopping, ordering and returning
and more people accessing the web through mobile
in whatever combo they would like.
phones, the Internet user base in the country is
With the increasing size, more demand by projected to touch 243 million by June, 2014, a year-
youth and change in the behaviour of youth towards on-year growth of 28 per cent. The growth of Internet
shopping has clearly indicated a huge market is users has also led to a substantial growth of other digital
available to the incumbents and existing performers. industries such as e-commerce and digital advertising.
And at this stage it is important to understand the buying
behaviour of Indian customers towards online shopping (b) Rising Educational Level in Computer:
which is mandatory for a great marketing strategy by The Government of India has put new horizontal efforts
the players in this industry. The size and growth rate of in the education of tools and techniques of computer
this industry was never like this before. And considering studies. The students of urban areas, rural areas and
all this, the present study has made an attempt to business persons are attracted towards the advance
understand the online shopping behaviour of Indian computer technologies. The development of
customers. educational standards has enabled a great demand in
the market.
3. PROSPERITY OF E-COMMERCE IN
(c) Busy Lifestyle : The powerful influence
INDIA
of various social media tools such as Pinterest or
According to the survey by industry body Facebook allows consumers to organize their favorite
Assocham (The Associated Chambers of Commerce items and segment it into themed collections to share it
and Industry of India), India’s e-commerce market, with others. This fuels personal expression in shopping
which stood at $2.5 billion in 2009, reached $8.5 and makes others reflect on their purchase decision.
billion in 2012 and rose 88% to touch $16 billion in
(d) Rising middle class with disposable
2013. The survey also estimated that the country’s e-
income : With the rise of small and medium enterprises,
commerce market will soon reach $56 billion by 2023
foreign direct investment, and India’s own powerful
with the rise of online retail. India is gradually becoming
multinational corporations creating millions of new jobs,
the country with highest number of internet literate
a new generation of globally-minded Indian consumers
population in the world and the internet penetration is
has been created. With growing job opportunities the
largely driven by mobile phones, with some of the
income sources have also increased. Because of high
cheapest and most basic hand-sets currently offering
spending power, customers are willingly able to pay
access to the internet.
for the products online.
As per data released by Telecom Regulatory
(e) Awareness of Products : People are
Authority of India (TRAI), India’s total internet
aware of the availability of various products in the
subscribers stood at 238.71 million as of December
markets through the help of television, newspaper,
31, 2013. Due to high internet penetration in India,
website etc. Hence, features can be known easily.
the adaptability of online shopping and better shopping
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(f) Easy to Find the Review of Products : is attracting the attention of players around the globe.
It is quite easy to find the review of products by the India, the second most populous country in the world,
help of online shopping. E–commerce has made it is home to 1.2 billion people. India is a large and
simpler to get information regarding the product and rapidly growing region with a rising middle class,
the customers can purchase the products after getting accelerating internet access and a staggering
reviews and feedback of the product. penetration of mobile phones. India is becoming
increasingly attractive to businesses, especially to
4. GROWTH OF E-COMMERCE IN ecommerce firms that thrive on global and scalable
INDIA business models.
v Online retailers would have to leverage There are five key challenges that e-commerce
technology to the fullest, and by developing firms are encountering in emerging Indian markets :
strategies through analytics produced using big (a) Indian customers return much of the
data will help in making customers feel special merchandise they purchase online : E-commerce
and increase brand loyalty. in India has many first time buyers. This means that
v Cash on Delivery (CoD) accounts for up to they have not yet made up their mind about what to
60 per cent of transactions, according to expect from ecommerce websites. As a result, buyers
Internet and Mobile Association of India. sometimes fall prey to hard sell. But by the time the
v The increasing adoption and use of product is delivered, they demonstrate remorse and
Smartphone’s enable businesses to collect return the goods. Though consumer remorse is a global
large amount of data on consumers for problem, it is all the more prevalent in a country like
utilization to do target-based marketing and India, where much of the growth comes from new
advertising. buyers. Returns are expensive for e-commerce players,
as reverse logistics presents unique challenges. This
v Product and service feedback via social media
becomes all the more complex in cross-border
channels have an impressionable effect on the
e-commerce.
minds of the larger customer base.
(b) Cash on delivery is the preferred
v It is necessary to create high quality and SEO-
payment mode : Low credit card penetration and
friendly ecommerce site for building long
low trust in online transactions has led to cash on
relationship with customers with exclusive
delivery being the preferred payment option in India.
content helps increase the profit volume ratio.
Unlike electronic payments, manual cash collection is
v The service of providing 24 hours chat laborious, risky, and expensive.
assistance to give instance response and
(c) Payment gateways have a high failure
guidance to customers has raised the quality
rate: As if the preference for cash on delivery was not
of online shopping experience. bad enough, Indian payment gateways have an
v Mobile advertising route has the potential to unusually high failure rate by global standards.
increase online shoppers as they are more E-commerce companies using Indian payment
comfortable with using mobile devices for gateways are losing out on business, as several
browsing and shopping, they are now more customers do not reattempt payment after a transaction
open to getting messages from brands via their fails.
mobiles. (d) Postal addresses are not standardized:
5. CHALLENGES AND OPPORTUNITIES If you place an online order in India, you will quite
OF E-COMMERCE IN INDIA likely get a call from the logistics company to ask you
The growth of e-commerce volumes in India about your exact location. Clearly your address is not

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enough. This is because there is little standardization and then, using marketing articles or social media to
in the way postal addresses are written. Last mile establish an online presence is minimal when compared
issues add to e-commerce logistics problems. to the costs of traditional forms of advertising.
(e) Logistics is a problem in thousands of (d) Choose a reliable hosting provider :
Indian towns : The logistics challenge in India is not Do analyze and opt for the most reliable and cost
just about the lack of standardization in postal effective choice of servers for your business. The most
addresses. Given the large size of the country, there important things to measure while selecting are
are thousands of towns that are not easily accessible. choosing a hosting provider that is tried and tested,
Metropolitan cities and other major urban centres have guaranteed uptime, response times of the servers,
a fairly robust logistics infrastructure. The problem with security and the level of support and customer care
logistics is compounded by the fact that cash on delivery provided.
is the preferred payment option in India. International (e) Prompt Delivery and Quick Quality
logistics providers, private Indian companies, and the Services : The processing of delivery and quick quality
government-owned postal services are making a valiant services of the product is an important feature to make
effort to solve the logistics problem. If someone could the online shopping websites better than others. It must
convert the sheer size of the problem into an be quick in regards of home delivery services and
opportunity, we might soon hear of a great success payment etc.
story coming out of the Indian logistics industry.
(f) Improve business credibility through
6. KEY POINTS FOR EFFECTIVE online branding : Internet marketing campaign will
ONLINE SHOPPING help your business increase product awareness and
(a) It must be Secure : Every customer brand loyalty. Maintaining an online presence via
wishes for safe and secure transactions during internet marketing is a great way to keep up with the
purchasing goods online. If the website is secure, time and provide consumers with all of the opportunities
customers will tend to purchase more from it. Secure they need 24 hours a day. As consumers browse the
Sockets Layer (SSL) is a standard security technology web, they may come across your business name or
for establishing an encrypted link between the web logo and become interested in what your business has
server and a browser. E–commerce websites with the to offer.
SSL certificate are able to prevent and protect the 7. CONCLUSIONS
users’ information when customers access their
Indian e-commerce and online shopping
websites.
together plays a significant instrument in making
(b) There must be Easy and comprehensive growth and will definitely witness
Understandable Content : The website for online greater changes in the coming years. It is contributing
shopping should be in understandable language. The to the economy in a significant manner and has gained
language should be kept simple while making the its popularity due to the fast development in the area
website, and if possible the translation of the content of information technology. Owing to the increasing
must be given on the website in simple languages. internet population, it has become easier and simpler
(c) Effectiveness and cost-efficiency in dealing with the competitive market for better deals
should be of concern : Internet marketing is one of on product. However, along with development and
the most effective and cost-efficient methods of changes in e-commerce, there are also security and
advertisement. It is effective because it create a better privacy concerns among the customers. Hence,
chance to see the impact of internet marketing on your researchers in this field will need to study more on the
online business almost immediately. It is cost-efficient security and critical issues relate to e-commerce.
because the costs associated with starting a website, m
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