Dissertation: Personal Traits, Trust & Online Buying Behaviour India

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Thesis and Dissertation
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This dissertation investigates the relationship between personal characteristics, trust, and online buying behaviour in India. It highlights the shift in consumer preferences from physical stores to online platforms due to factors like convenience, accessibility, and competitive pricing. The research acknowledges the rapid growth of e-commerce in India, driven by increased smartphone usage and internet penetration. It also addresses the challenges associated with online shopping, such as product quality concerns, payment security risks, and delivery issues, which impact consumer trust. The study further analyzes the impact of trust and risk factors on the online purchasing decisions of Indian consumers. The dissertation uses both online shopping sites and mobile apps and proposes a research methodology including research philosophy, logic, method, data collection, sample, data analysis and ethical considerations.
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Running Head: DISSERTATION
Link between Personal Characteristics, Trust and Online Buying
Behaviour in India
Name of the Student
Name of the University
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1DISSERTATION
Acknowledgement
Conducting this research has been one of the most enriching experiences of my life. The
contribution of this research to enhance my knowledge base and analytical skill has been
paramount. It gave me the opportunity to face challenges in the process and overcome them. This
would not have been possible without the valuable guidance of my professors, peers and all the
people who have contributed to this enriching experience. I would like to take this opportunity to
thank my supervisor _________________________ for the constant guidance and support
provided to me during the process of this research. It would not be justified if I did not thank my
academic guides for their important and valuable assistance and encouragement throughout the
research process. I would also like to thank my friends who had provided me with help and
encouragement for collecting primary data and valuable resources. Finally, I would like to thank
the customers of online shopping industry who have participated in the research survey and
provided with valuable inputs into the subject. The support of all these people has been inspiring
and enlightening throughout the process of research in the subject.
Heartfelt thanks and warmest wishes,
Yours Sincerely,
PLEASE FILL NAME
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2DISSERTATION
Abstract
India is a country of diversity and thus the personal characteristics vary from person to person.
However, in spite of the diversity, the people of the country show considerable similarity in
certain traits like personal approach towards online shopping. The personal characteristic can
either have positive or negative impact on the online purchasing behaviour of an average Indian
customer. The relationship between personal characteristics and online purchasing behaviour of
an Indian customer is established by several factors of which, the two most important are
usefulness and ease of use. With the emergence of online shopping around 1994, several
companies like Amazon, EBay and others entered the market but at that time, internet was not
easily accessible to the people. Hence at that time, online shopping was not very popular and the
physical stores boomed with sales throughout the year. In the 21st century, with the significant
development of network technology, internet reached nooks and corners of the world and even to
the top of the palms of the people through the electronic handheld devices like smartphones, tabs
and others. Through these devices, people could easily access the online shopping websites
through which they could buy literally everything – from a simple needle to a large car. Another
advantage of online shopping is that the customers did not have to visit any store and the
purchased items are delivered directly to the footsteps of the customer. Due to these, online
shopping became very popular within a very small space of time and the sales in the physical
stores started to decline. However, there are also several disadvantages of online shopping –
faulty or wrong products can be delivered to the customer, the delivery personnel can misplace
packages, fraud and others. Online shopping is a global phenomena in terms of the retail industry
but in this research, the focus is only on the online shopping industry in India.
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3DISSERTATION
Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.1 Introduction............................................................................................................................5
1.2 Research Aim.......................................................................................................................11
1.2.1 Research Objectives......................................................................................................11
1.2.2 Research Questions.......................................................................................................12
Chapter 2: Literature Review.........................................................................................................13
2.1 Introduction..........................................................................................................................13
2.2 Online Shopping..................................................................................................................13
2.3 Personal Characteristics and Online Buying Behaviour......................................................19
2.4 Trust and Online Buying and Behaviour.............................................................................21
2.5 Conceptual Model................................................................................................................24
Chapter 3: Methodology................................................................................................................30
3.1 Research Philosophy............................................................................................................30
3.2 Research Logic....................................................................................................................32
3.3 Research Method.................................................................................................................32
3.4 Data Collection....................................................................................................................33
3.5 Sample.................................................................................................................................35
3.6 Data Analysis.......................................................................................................................35
3.7 Ethical Considerations.........................................................................................................36
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Chapter 4: Research Findings........................................................................................................37
Chapter 5: Discussion....................................................................................................................76
Chapter 6: Conclusion...................................................................................................................85
Chapter 7: Limitations and Future Research.................................................................................90
7.1 Research Limitations...........................................................................................................90
7.2 Future Research...................................................................................................................90
References......................................................................................................................................92
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5DISSERTATION
Chapter 1: Introduction
1.1 Introduction
Online shopping is defined as the process through which an individual purchases some
products through the internet without having to visit the store physically. In order to access the
products in the online shops, the customers require access to an electronic medium through
which they can open the website of the online shop and purchase the items they require. In India,
lifestyle has changed considerably in the last few decades and along with it, the personal
characteristics and behavior of the people have also changed significantly. Even a few years
back, online shopping was not at all popular in the country as the preferences of people were
always the retail stores. However, in the time span of the last 6-8 years, this scene has completely
changed as e-commerce giants like Amazon and Flipkart have taken over the Indian market by a
very significant margin. There has been an introduction of wide range of products such as
smartphones, tablets, laptops, computers, clothing, furniture, accessories, food, books and many
others through the online shopping sites (Cho & Sagynov, 2015). Currently, an average Indian
customer having access to the internet can purchase literally any product he needs from the
online shops without having to visit any retail store. In addition to the availability of the
products, the products are also delivered to the customer without no or minimal costs.
Furthermore, with the increasing number of smartphone uses in the country, more and more
people now have access to the online shopping websites and can order products anytime. Most of
the Indian customers tend to search a particular product (especially if it is expensive) from
different websites as well as retail and compare the prices before making decision of purchase. In
most of the cases, it is found that the products sold online are much cheaper than those in the
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retail stores. This is one of the reasons behind the increasing popularity of online shopping in
India.With the emergence of online shopping throughout the world, it has been seen that the
sales in the physical stores have decreased considerably as most of the people now prefer to
purchase products online (Pappas, 2016). This has further been accelerated by the access to
various electronic media like smartphones and computers for a large volume of the global
population. However, there is still a significant majority of people who do not trust online
shopping, either due to previous poor experiences or due to belief of checking products
physically before purchasing.
Most of the online shopping sites in India have their own online shopping portal that can
be accessed through the internet browser. Furthermore, the companies also provide mobile apps
that can be downloaded in smartphones. These applications are much popular due to their
simplistic design and ease of use. It has been found that most of the Indian customers place
orders in the online sites through mobile apps. Thus it is clear that the personal characteristic of
the Indian customers is to purchase the products from a site that is reliable and cheap and the
ordering process is very easy to conduct.
With the emergence of online shopping around 1994, several companies like Amazon,
EBay and others entered the market but at that time, internet was not easily accessible to the
people. Hence at that time, online shopping was not very popular and the physical stores boomed
with sales throughout the year. In the 21st century, with the significant development of network
technology, internet reached nooks and corners of the world and even to the top of the palms of
the people through the electronic handheld devices like smartphones, tabs and others. Through
these devices, people could easily access the online shopping websites through which they could
buy literally everything – from a simple needle to a large car. Another advantage of online
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7DISSERTATION
shopping is that the customers did not have to visit any store and the purchased items are
delivered directly to the footsteps of the customer (Mansour, Kooli & Utama, 2014). Due to
these, online shopping became very popular within a very small space of time and the sales in the
physical stores started to decline. However, there are also several disadvantages of online
shopping – faulty or wrong products can be delivered to the customer, the delivery personnel can
misplace packages, fraud and others. Thousands of customers around the world have reported
these issues regarding online shopping and have stated that they will not use online shopping any
further. Thus, it is quite evident that there are a large number of factors on which the consumer
behaviour regarding online shopping depends.
In general, the online shopping sites conduct their business activities keeping in mind two
main objectives – supplying popular products at low prices and provide accessibility of the
online portal to all the customers who are interested in online shopping process. The online
shopping sites deliver the products directly from the warehouse through various retails and thus
the overall costs are very much reduced. In other words, the online sites operate through reduced
supply chain with some of the components cut down to reduce overall processing and handling
cost (Al-Debei, Akroush & Ashouri, 2015). For ensuring access to customers, as discussed
above, the companies operate through internet websites as well as mobile apps that can be
accessed by smartphone user. In addition to the services, the companies need to provide the
assurance or the guarantee and warranty policies, legal policies, product return policies and all
other customer support policies.
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8DISSERTATION
Figure 1: Trends of online shopping in India
(Source: Cho & Sagynov, 2015)
This timeline shows the online retail e-commerce sales figures in India from 2009 to
2015 and a forecast regarding 2016, in billion U.S. dollars. Online shopping sales in India totaled
23 billion US dollars in 2015 and are expected to surpass 38 billion U.S. dollars by 2016. The
study suggested that in 2016, about 69 million consumers purchased online which is expected to
cross 100 million by 2017 with the rise of digital natives, better infrastructure in terms of
logistics, broadband and Internet-ready devices to fuel the demand in e-commerce.
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The report added that by the end of 2018, Indian e-retail is expected to touch $17.52
billion. "The total retail sales are growing at an impressive rate of 15%, registering a double digit
growth figure year after year.
Another variable under consideration in this particular research is trust i.e. how the
people of the target area trust the online shopping sites for making purchases. First, it has been
found that the most popular companies are easily trusted by the customers while the lesser
known and startup companies are not really trusted by people. The trust on the online shops
mainly depends on a number of risk factors that are explained below. While purchasing product
from any store, the customer may be worried about the performance or quality of the product. If
it is a physical store, the customer can try and test the product before purchasing but in online
stores, there is no such option for try and test. Thus the customer may choose not to purchase the
product from the online shopping sites. Most of the online shopping sites accept payments
through online payment gateways (Chen et al., 2015). While it is a very convenient process as it
does not require transfer and handling of cash, it does have various risks including hacking,
breach of personal information of the customer and others. Thus some customers may not agree
to pay the amount online and will not purchase products if there are no alternative methods of
payment like cash on delivery. There are many reported cases of misplacement of products i.e.
order of one person was delivered to another. Again, during the delivery of the products, the
products may get tampered or damaged. All these issues discourage the customers to purchase
products online and get them from the retail stores instead.
When a customer purchases a product, he always expects service excellence. This is also
true for online shopping and the service excellence include error free placement of order,
processing of the payment, timely delivery of non-tampered and the best quality product and
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prompt customer care service that is available 24 hours. While purchasing any product, a
customer always looks for sufficient return on investment made. This is also true for online
shopping as the customer only purchases products online when he is absolutely sure about the
return he gets from the purchase after paying its price. There are many customers who are not
sure about the return of investment from online shopping and thus refrain from purchasing
products online. Some of the customers, especially the younger generation, use the computer /
online media with playfulness and during the process, they may also access the online shopping
sites (Wang & Chou, 2014). While browsing through the shopping sites, they may find some
products very interesting and buy them. For the extensive use of online shopping, experience of
the customers also matter. There are many customers who are not regular online shoppers but use
the sites once or twice casually to check out the types and qualities of products they provide.
However, if they have very positive experience with the online shopping sites, they may become
regular customers of online shopping. Some internet users get absorbed while browsing through
the online shopping sites. While they mainly get enjoyment from the browsing, they also become
more eager to purchase the products that they find useful from the online shopping sites. On the
other hand, computer anxiety is the condition that makes the customer fear that purchasing
products from the online stores through computer will not be suitable and necessary. Thus
computer anxiety prevents a user to use online shopping websites. Some customers feel content
and happy while purchasing different types of products like clothes, books, electronic devices
and others. These customers are casual shoppers but buy products regularly from the stores.
Some customers do not use the online shopping sites on a regular basis but feel aroused when
there are huge discounts and limited time sales going on in the sites. During these times, they
purchase various products at discounted costs and in large quantities. Psychological risk comes
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11DISSERTATION
from the fear of selecting the wrong product from the site (Hoffmann, Lutz & Meckel, 2014). In
an online shopping site, there are similar products sold by different brands and some of them
might not be of the best quality. However, if the customer is new to online shopping, he might
not have clear idea about the nature of the products and the brands. The customer may fear the
reactions of his friends and families when he makes purchase of a product. This can discourage
the customer to use the online shopping websites for purchasing products. While purchasing
products, the customer may feel the prices of the products shown in the online shopping portal
are not appropriate and there will not be sufficient return on investment.
1.2 Research Aim
The aim of this research is to conduct a detailed study on the trends of online shopping in
India and how the personal characteristics and trust of an individual is linked with the online
buying behaviour.
1.2.1 Research Objectives
The objective of this research is to identify how the personal characteristics and trust of
the customers can affect the online sales of various products. While online shopping is a broad
and vast area of study, this research will be particularly focussed on the online shopping
behaviours of the customers in India only. Following are the research objectives:
To identify the current trend of online shopping in India
To identify the behavioural patterns of Indian customers regarding online
shopping
To analyse the trust factors of Indian Customers over online stores for shopping
purposes
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