Abstract
This research contributes to the understanding of the shopping preferences of Indian Millennials with respect to Brick-and-Mortar vs. E-commerce. In particular, this study aims to understand the reasons that are stopping the largest Millennial population of the world from shopping online. The shopping categories that are considered a part of this study are apparels, footwear & accessories and electronics. There are several aspects that are considered important by consumers around the world before indulging in shopping. In a densely populated and diverse country like India, the majority prefers Brick-and-Mortar even after the availability and convenience of online shopping. To understand the reasons, this research has used surveys to collect data from the sample population.
The research suggests there is one particularly major reason that is stopping the Indian Millennials from shopping online. Their preferences are based on the shopping categories. Indian millennials are more likely to shop standardized products such as electronic gadgets at an e-commerce store but the majority of the respondents are not in favor of shopping apparels or footwear at e-commerce stores even if it available at a lower price and better convenience. They associate an experience with shopping products under the apparels and footwear category that goes missing in the case of buying it online. On the other hand, Brick-and-Mortar is the essence of this experience which makes it the preferred choice by the Indian Millennials.
Introduction
Background: Indian retail sector
The retail sector of India, the second most populated country of
the world is expanding exponentially. In terms of value, it is expected to
nearly double to US$ 1 trillion by 2020 from US$ 600 billion in 2015 (Ibef.org,
2017).
A.T. Kearney’s annual look at emerging retail
markets puts India at the top of the list, ahead of China, which has been
a longtime index leader (Thomas, 2017). The report considers the best
opportunities for retail investments globally and ranks the top 30 developing
countries based on the firm’s findings for market attractiveness. GDP per
capita, population, national retail sales and country risk are a few factors
taken into consideration. India’s expanding economy, coupled with booming
consumption rates, urbanizing population and growing middle class, are what
moved the country to the top spot, A.T. Kearney explained.
The Indian retail industry can be broadly
classified into two categories namely:
- Organized retail sector – It includes traders/retailers, who are licensed for trading activities and registered to pay taxes to the government. It includes online shopping. The organized retail sector which is estimated to reach approx. 18-20% of the total sector, by 2020, is growing at a high rate of 20%-25% per annum (The Economic Times, 2017).
- Unorganized retail sector – It consists of unauthorized small shops – conventional Kirana shops, general stores, corner shops among various other small retail outlets. It remains as the radiating force of Indian retail industry but the scenario is changing gradually.
The country has witnessed a change in the consumption patterns
which has been driven by increased urbanization, expansion of the middle class
& increased exposure to global lifestyle due to technological advancements
(Cbre.co.in, 2017). India’s retail market is robust and this growth has
not only been witnessed in the major metropolitan cities, but is also spreading
across numerous tier 2 and tier 3 locations, providing enhanced business
opportunities for retailers.
E-commerce in India
India, the second most populated country in the world is also the
country with the second largest number of internet users. With over 340 million
internet users, only 34.4% of the country’s population has access to the
internet as compared to 87.9% in the US (Internetlivestats.com, 2017). It is
interesting to note that until 2007, only 4% of India’s population had access
to the internet. Within a decade, the number of internet users has grown by 900
% (Internetlivestats.com, 2017). The number of
internet users in India is expected to double by 2020 (The Economic Times,
2016).
With the increase in internet users, India has witnessed a growth
in the e-commerce sector since 2007 and is on an upward trend since then (Nagrale, 2014). By 2034, the Indian e-commerce market
is expected to overtake the US by amounting to around $2,039 billion, second
only to China (Worldpay.com, 2017). The country has seen an unparalleled growth
in every e-commerce sector with a strong focus on apparel and consumer
electronics (The Indian Express, 2016). Other sectors that are in their nascent
stage of growth are furniture, food and grocery delivery sector.
The role of external funding
In addition to Internet penetration, discounts played a major role
in the exponential growth of Indian e-commerce. Discounts as much as 70-90% were
offered by the e-retailers to lure the Indian citizens (Mishra, 2015). High
discounts were made possible through enormous cash inflow by investors and
venture capitalists in a hope to gain a share of one of the world’s fastest
growing economy. $9 billion dollars in 2015 and $4 billion dollars in 2016 were
invested by hedge-fund companies and investors to pump up the Indian e-commerce
market (YourStory.com, 2016).
Major e-commerce players
The Indian e-commerce market differs from that of a country like
China because the market concentration in China is largely on account of
Alibaba-owned Taobao and Tmall, whereas, in India the market share is divided
amongst several ecommerce companies, each coming up with its own business model
(eCommerce in India Accelerating growth, 2017). As a result, Indian customers
have a wide range of products and services to choose from. Thousands of e-commerce
stores are active in India but the market is dominated by three major players
that managed to secure heavy funding from external sources (Techinasia.com,
2015). The Indian e-commerce giants are: Flipkart, PayTM and Amazon.
Founded in 2007, Flipkart
is the 6th biggest start-up in the world, valued at $15 billion.
With 83 million registered users and 30 million products, it has managed to
capture 45% share of the Indian e-commerce market. Flipkart owns several Indian
e-commerce players including Myntra and Jabong which are the most popular
e-marketplace for apparels in India.
PayTM is
funded by Alibaba which owns 62% stake in the company. Other investors include
Japanese conglomerate Softbank and Taiwanese semiconductor maker Meditek. It
was launched in 2010 and since then, it has managed to secure funding of
billions of dollars with a current valuation of over $7 billion (ETtech.com,
2017).
Amazon.in was
launched in India in 2013 and has since then attracted millions of customers. The
company’s strong knowledge under the e-commerce domain and best practices from their international
experience give them an additional edge. Furthermore, Amazon have been a part
of markets where it has seen the e-commerce market evolve and are aware of the
challenges and strategies to address issues thereof.
The issue
Despite all the growth and investments
during the last decade, the issue that is currently faced by the Indian
e-commerce industry is that the marketplace is discount-driven (Retail.franchiseindia.com,
2016). More specifically, if the products are available
online at the MRP (maximum retail price) then the customer would choose to buy
it from a physical store (Punit, 2016). It is an
intriguing scenario because even if the
products are not at a discount, unlike Brick-and-mortar, the e-commerce stores
offer various advantages and convenience such as cash on delivery, 24-hours
service, 30 days returns, safe payments gateways, trusted reviews and other
aspects such as social media to interact and solve the issues of consumers.
Indian Millennials
Millennial is an identity given to the generation of people born
between the early 1980s and the early 2000s (Live Science, 2013). American
global management consulting firm, A.T. Kearney’s report on global millennials
states that about 58% of global Millennials live in Asia. With 385+ million
millennials, India has the largest domestic millennial population in the world that
accounts for 19 percent of the global generational cohort (Southeast-asia.atkearney.com,
2016). These Indian citizens have disposable income and a strong reliant intent
connection. The sheer number of India’s 18- to 35-year-olds doubtlessly will
hold significant sway over the country’s immediate economic future. Leading
global financial services firm, Morgan Stanley reported that millennials in
India are growing and are expected to become more than a third of India’s
population at 42% by 2025 (Morgan Stanley, 2017).
Another reason for selecting Indian Millennials for this research
is that Millennial online shoppers look just beyond bargains (Morgan Stanley,
2017). They look for added advantages such as product reviews, recommendations
and convenience. This is in synchronization with one the current issues faced
by the Indian e-commerce industry which is driven by discounts.
An analysis of the demographic profile of internet users by multinational professional services firm, PWC further testifies that e-commerce will rise rapidly in India in coming years. Around 75% of Indian internet users are in the age group of 15 to 34 years (eCommerce in India Accelerating growth, 2017). This category shops more than the remaining population. Peer pressure, rising aspirations with career growth, fashion and trends encourage this segment to shop more than any other category and India, therefore, clearly enjoys a demographic dividend that favours the growth of e-commerce.
Research Question and Contributions
E-commerce has been heavily explored by academics and
practitioners since the birth of the internet. Brashear et al. (2009) extended their investigation
outside the United States by examining the profiles of Internet shoppers of
five countries namely Brazil, Bulgaria, New Zealand, England and China.
However, Brashear et al. (2009) only looked into one Asian country— China,
which is inadequate to generalize the findings to represent the Asian region. In
2015, a research by Lim and Cham extended the previous studies by examining the
profiles of Internet shoppers and non-Internet shoppers in three countries– Malaysia, Singapore and Taiwan. Since Asia is formed
from a multicultural society, further investigation on the Internet shopper’s
profile among other Asian countries is very much needed. Even though the retail
market of India is much bigger than any other Asian country (except China), no
studies yet have explicitly analyzed the E-commerce market of India and particularly
the shopping preferences of Indian millennials in relation to online vs.
offline shopping. I think this is an important piece of research because it helps to
nuance possibly the single largest question facing the investors and consumers’
today –
“What is stopping the Indian consumers from shopping online?”
What should be the expectations of e-commerce industry based on consumer
preferences? Currently, the major Indian e-commerce players are in losses of
over millions of dollars because of luring customers through discounts
(CatchNews.com, 2015). As the external funding dries up, it will become
extremely difficult for the e-commerce companies to figure out how they will
run their business sustainably.
The e-commerce market in India is still very nascent and the potential
to grow is immense, currently stopped only by the low internet penetration in
the country. 65% of the Indian population does not have access to the internet
but this would not be an everlasting situation. India’s internet user growth rate is 4x of global rate (ETtech.com, 2016,
Mary Meeker’s 2016 internet trends report). Analysts suggest that e-commerce accounts for less than 1 per
cent of the country’s $500 billion retail market, which is still mostly
cash-driven (The Irish Times, 2014).
Thesis Outline
The structure of this thesis will reflect figure XX found below.
The first section sought to give an overview of the Indian retail market and
the share of e-commerce within it. The second section deals with the literature
review to understand the work done by practitioners and analysts. Lastly, the
opening section highlighted the need and importance of the research question.
The third section details the research methodology in significant depth. The
fourth and perhaps most significant section deals with the analysis and
findings of the study. The fifth section will be comprised of three different
elements; the limitations of the research; further research and improvements
and the conclusion of the research. Section six and seven offer appendices and
bibliography respectively.
Theoretical Background
Introduction
The literature related to this paper
mainly comes from the e-commerce stream of research. The basic principles of
e-commerce are uniform across the globe despite of the differences in
ethnicity, culture and demographics. Therefore, it is realistic to assume that
the existing literature on e-commerce is suitable for the Indian e-commerce
market as well to a certain extent. This section extends on from the vital
context provided in section one.
This section
will outline the factors that are commonly cited as impactful in the e-commerce
industry. This section will focus on the impact of the following aspects on
e-commerce:
- Discount
- Website quality
- Hedonic and
utilitarian shopping value - Choice
- Trust
- Delivery
The impact of discount
Existing literature (Alford &
Biswas, 2002; Lichtenstein, Ridgway, & Netemeyer, 1993) defines price
consciousness as the degree to which the consumer focuses exclusively on paying
a low price. The availability of abundant price information in the Internet
shopping context makes online shoppers more sensitive to price. Recent studies
suggest that the price promotions offered in an emerging market should be
shallower than those offered in a developed market. Additionally, relatively
deep price promotions should occur less frequently in an emerging market,
compared to a developed market (Mathur and Sinitsyn, 2013). However, the
current scenario in India, an emerging market is completely opposite. Because
the e-commerce stores are offering heavy discounts to lure the customers.
Another study shows that the main
determinant of success or failure in e-commerce is not just the price, but also
the process for delivering products and the quality of the website. If these
factors are good, customers accept paying more for the product or service
(Rababah, Al-Shboul and Al-Sayyed, 2011).
The impact of website quality
The quality of the website is particularly
important because, for e-retailers, it represents the central, or even the only
interface with the marketplace (Palmer & Griffith, 1998). Sinioukov (1999)
suggested that enabling consumers to search for information easily and making
the information readily accessible and visible is the key to creating a successful
e-retailing business. Cameron (1999) pointed out
that a number of factors render a website
inconvenient from a user’s perspective. In some cases, information may not be
accessible because it is not in a logical place, or is buried too deeply within
the website. In other cases, information may not be presented in a meaningful
format. Finally, needed or desired information may be entirely absent. If
customers are stymied and frustrated in their efforts to seek information or
consummate transactions, they are less likely to come back (Cameron, 1999).
According to Schaffer (2000), 30% of the
consumers who leave a website without purchasing anything do so because they
are unable to find their way through the site. Schaffer (2000) argued that a
convenient website provides a short response time, facilitates fast completion
of a transaction, and minimizes customer effort. Because of the nature of the
medium itself, online customers have come to expect fast and efficient
processing of their transactions. A website that is logical and convenient to
use will also minimize the likelihood that customers make mistakes and will
make their shopping experience more satisfying. These outcomes will likely
enhance customer e-loyalty.
The impact of Hedonic and utilitarian shopping value Comfort in Brick and Mortar
Research supports the notion that shopping can provide both hedonic and utilitarian value (e.g., Babin et al., 1994; Babin and Darden, 1995). Hedonic shopping value reflects the value received from the multisensory, fantasy and emotive aspects of the shopping experience, while utilitarian shopping value reflects the acquisition of products and/or information in an efficient manner and can be viewed as reflecting a more task oriented, cognitive, and non-emotional outcome of shopping (Babin et al., 1994; Holbrook and Hirschman, 1982). Shoppers are not only motivated by the potential purchase of product, but also by the satisfaction that can be gained from the shopping experience (Tauber, 1972). In fact, marketers today tend to consider shopping to be a multisensory ‘experience’ rather than a simple acquisition task (Foster and McLelland, 2015). As such consumers are expected to derive certain value (or benefits) from both the utility- and experiential-based aspects of the shopping trip (Babin et al., 1994). Not surprisingly, the consideration of utilitarian and hedonic shopping value has been a common approach in the retailing literature (Babin et al., 1994; Ballantine, 2010). In line with this common convention, both utilitarian and hedonic value are examined herein and discussed separately below. Utilitarian shopping value is task-oriented and non-emotional in nature (Babin et al., 1994; Hirschman and Holbrook, 1982; Jones et al., 2006). It pertains to task-related benefits obtained through shopping, and can be derived from particular design cues (Baker et al., 2002), positive perceptions of service quality (Bitner, 1990), and certain physical cues (Bitner, 1992; Borghini et al., 2009) that support the accomplishment of shopping task. However, not all shopping behavior is “directed toward satisfying some functional, physical, or economic need” (Babin et al., 1994, 653). In recognition of this, hedonic value reflects the affective benefits gained from positive feelings experienced through the shopping trip. It can be derived during planned shopping behavior as well as impulsive shopping behaviors (Arnold and Reynolds, 2003), where shopping can serve as psychological therapy (Babin et al., 1994). In a sense, it represents the emotional value gained through the
shopping experience itself. Although both types of shopping value are
important, the consideration of hedonic value is especially relevant for modern
retailing, as retailers seek to create unique shopping experiences by adding
elements of entertainment and interactivity to their store environments (Foster
and McLelland, 2015). Therefore, this study will consider the impact of consumer
comfort on both utilitarian and hedonic shopping value.
The impact of Choice
Compared with a brick-and-mortar retailer,
an e-retailer generally is able to offer a wider range of product categories and
a greater variety of products within any given category. An offline store in a
mall is constrained by the cost and availability of floor space, whereas an
online store does not have such limitations. Nowadays, it is common for e-retailers
to form alliances with other virtual suppliers to provide customers with
greater choice. The highlight is that even though the e-retailer may not have
the product in his possession, the experience of the consumer will not be
affected by the involvement of the third party who possess the product. The
customer will have access to the entire range on one website. Many consumers do
not want to deal with multiple vendors when shopping. Bergen, Dutta, &
Shugan (1996) noted that consumer search costs associated with shopping across
retailers increase with the number of competing alternatives. In contrast, an
increase in the number of available alternatives at a single e-retailer can
greatly reduce the opportunity costs of time and the real costs of
inconvenience and search expended in virtual store hopping. The e-retailer that
offers greater choice can emerge as the dominant, top-of-mind destination for
one-stop shopping, thereby engendering e-loyalty.
The impact of Trust
Trust is an important factor in developing
long-term online B2C relationships (Eastlick et al., 2006). Furthermore, Yoon
(2002) claimed that trust influences online purchase intention. Turban et al.
(2006) argued that a secure IT infrastructure is important in decreasing
perceived risk and increasing consumer trust in the context of e-commerce.
Belanger et al. (2002) suggested that the ability to handle online transactions
and conduct ecommerce professionally may enhance consumer belief in e-vendor ability.
This research argues that advances in information technology have enabled
online shopping websites to provide instantaneous explanations and online
assistance, which can improve consumer trust. Further, McKnight et al. (2002)
argued that “structural assurance” can help develop consumer trust. Structure
assurance refers to proactive legal or technological structures that ensure the
safety and security of online transactions.
The impact of Delivery
Delivery refers to the total time spent in
shipping and handling the product to the customer. Schaupp and Belanger (2005)
pointed out that reliable and timely product delivery is essential to consumer
satisfaction. They further argued that online shopping websites should not only
minimize delivery time but also provide parcel tracking mechanisms to reduce consumer
anxiety.
Research Methodology
Research Philosophy
Saunders et all relates Research philosophy to the development of
knowledge in a particular field. The development of new knowledge is further
explained as a relatively modest ambition of
answering a specific problem in a particular organisation, if not a ground-breaking
knowledge.
This research aims to the development of
knowledge in the field of retail shopping preferences of millennials in an
emerging market. The specific problem that has been focussed in this study is
the reluctance of Indian millennials to shop online.
Research Strategy
Saunders et al emphasise that
no research strategy is inherently superior or inferior to any other.
Consequently, what is most important is not the label that is attached to a
particular strategy, but whether it will enable to answer a particular research
question(s) and meet the objectives.
For this research, I have used surveys as
the strategy to collect data and understand the preferences of Indian
Millennials shoppers. Survey research involves the collection
of data from a sample of respondents drawn from a well-defined population. This
strategy was used for this research because of multiple reasons. First, the
anonymity of the surveys allows the respondents to answer with candid and
honest answers. Secondly, in addition to
easy comparison because of standardised data, using surveys allowed the
collection of a large amount of data from a sizeable population in a highly
economical manner. Lastly, surveys allow easy replication of the research and
provides the flexibility to collect the data. The flexibility allows the
researcher to collect the data from any part of the world. The data collected
for this research will be analysed using descriptive and inferential
statistics.
Defining and Selecting
Shopping categories
For this research, the shopping categories
were narrowed down to the three shopping categories: Apparels, Footwear and
Accessories and Electronics. The rationale was that comparing Brick-and-mortar
with online made more sense if the most popular categories on e-commerce stores
are compared with the offline stores.
Time Horizon
According to Saunders, Lewis &
Thornhill (2012) one of the pressing issues a researcher must address is over
what time horizon the research will be conducted. In this regard, there is two
predominant categorisations i.e. cross sectional and longitudinal. Cross
sectional is described as a ‘snapshot’ taken at a particular time. Conversely,
longitudinal research is likened to a series of snapshots (Saunders, Lewis
& Thornhill, 2012). Many cross-sectional studies utilize the survey
strategy, as is the case with this research. In reality, due to the time
constrained nature of the research longitudinal research was rendered
impossible, this will be discussed further in the limitations and further
research sections.
Data Collection – procedure
This research uses snowball sampling technique to collect data
from Indian millennials aged 18-40. The survey was shared on Facebook and the
participants accessed it through online research platform, Qualtrics. The
respondents are Indian millennials who are mature enough to shop for themselves
and have some sort of purchasing power. Moreover, millennials have a good grasp
over both, online and offline shopping. These are the people who have witnessed
and experienced the growth of online shopping in India since 2007 onwards.
For e-commerce to grow and sustain in India, it is imperative to
understand the preferences of the millennials as to what is stopping them from
shopping online. Although they are accustomed to shopping offline since their
birth, it is not impossible to change their behavior. As per studies,
millennials are flexible and are open to new technological innovations as
opposed to older citizens.
Participants
The sample of respondents has a total of 117 Indian citizens. Out
of 117, 100 respondents have completed the entire questionnaire. The remaining
17 filled the survey partially. Considering the 100 respondents who filled the
questionnaire completely, 54% are males and 46% are females. The average age of
the sample is aa with a minimum of bb years and the maximum of cc
years. Hence, all the respondents can be categorized as Indian millennials. 55%
of the respondents mentioned that they are working, 29% identified themselves
as students and 9% stated that they are looking for a job. Additionally, 83% of
respondents stated that they possess a debit/credit card in their name which
signifies that they have some sort of purchasing power.
Survey Design
The questionnaire was designed in a conversational approach to
understand the shopping preferences of Indian millennials. It was divided into ee sections to get a detailed
understanding of the shoppers. On the first screen of the survey, the
respondents were informed that the survey does not includes grocery and daily
needs purchases as shopping.
The first section asked the respondents to classify themselves
under a category of shopper based on the time they spent and the category that
excites them the most. It also asked them about their preferences about their
company when they like to go shopping.
The second section asked the respondents to give a score to the
different aspects of online and offline shopping on a scale of 0-100. This was
done to get a close look at the different aspects that may have an impact on
the shopping preferences of Indian consumers.
The third section was narrowed down to one of the biggest
challenges faced by the Indian e-commerce industry: discounts. In this section,
the respondents were asked whether they would shop online if they are not
offered a discount. They were also asked the % of discount that they expect at
online stores. The same questions were asked for the offline category to see if
there is any change in the pattern and the extent to which it differs from the
online category.
The fourth section provided the respondents with a case that
involved shopping a pair of jeans. They were asked to choose between an offline
and online store to buy the pair of jeans and the reasons for choosing the
option. The details of the question were in synchronization with the current
scenario of the Indian e-commerce industry and the research question.
Finally, the last section asked the respondents to give some details
about their current situation and demographics.
The survey ended with a question that asked to respondents to
point out the single most reason that would makes/make them switch from offline
to online shopping.
Types of questions
Surveys
give the freedom to ask different types of questions. This research used both
open and closed questions to collect data. For the most part, the survey
involved closed questions such as multiple choice, ranking and rating scale. Closed questions represent a convenient way of
collecting the data and are comparatively easier to analyse (Wolcott, 1994).
The open questions that were asked to the respondents of this research were
mostly related to the closed questions they answered.
Data Analysis
Introduction
The central focus of this study is to
understand the shopping preferences of Indian millennials to identify the
reasons that are stopping them from shopping online. In the first two sections,
the background of Indian retail and the impact of various aspects on online
shopping were outlined. The third section detailed the methodological choices
used to collect primary data. This section will provide comprehensive
description, analysis and discussion of the data set. The first component will detail
the demographic characteristics and shopping elements of the respondents. The
second component will explain in detail about the preferences of Indian
millennials in terms of their shopping behaviour.
Sample
Description
This segment will profile the participants based on their demographic factors such as age, gender, and employment status. Secondly, this section will segment the participants based on the type of shopper they are with respect to time and spending. Additionally, & Lastly, the customer perceptions of these requirements will be discussed.
Gender
Distribution
The 100 participants were broken down under
gender distribution as follows: 46 were females and the remaining 54 were
males. This translates to 46% representation of females and 54% representation
of males in the sample population. The gender distribution is summarised in
Table XX. Although, studying the impact of gender is not the intention of this
research, it was done to get an equal mix of both the genders to get a better
understanding of the Indian millennials.
The sample that originally consisted of
141 participants had to be reduced to 100 for the gender distribution section.
The 41 participants who were ineligible did not complete the entire form
possibly due to some technical glitch or length of the survey.
TABLE no.
Age Profile of
the Sample
The questionnaire was targeted to Indian
millennials. This category includes any Indian citizen between the age of
18-40. The average age of the sample overall was quite low at XX years of age.
The female cohort had an average age of XX years, while the males had a XX
years average age. There was a standard deviation of XX years within the
sample. The vast majority of the sample 70.2% was between the ages of 20-30.
The second highest representation was between 30-40 with 17.4%. The 40-50 and
50+ age bucket accounted for 12.4% cumulatively. Table 4.2.2 gives a summary of
the age profile of the sample. The age profile of the respondents will be
discussed in further detail in the limitations section of the paper.
Types of shoppers
The first section of the survey was designed to understand the
types of shoppers who are answering the survey. To classify them under a
category, questions related to their shopping behavior in general were asked.
Shopping frequency
A majority of the respondents stated that they go shopping only
when it is necessary. The breakdown for the sample population is: out of 117
respondents, 63% stated that they purchase something only when it is necessary,
21% agreed to buying something every month and 12% agreed to buying something
every week. Only 4% stated they end up buying something every day.
Millennials are often bombarded with advertisements offline and
online every day, especially online because they are always connected through
many applications and networks. The statistics mentioned in table no XX
signifies that Indian shoppers does not indulge in impulse buying behavior and
buy things only when they need something.
TABLE
NO
Time spent while shopping
A similar relationship was seen when the respondents were asked
about the time they spend when they go shopping. 50% of the respondents stated that
they spend only a moderate amount of time. Another 16% mentioned that spend a
little amount of time while shopping. On the contrary, 18% of the respondents
stated they spend a lot of time and8% stated they spend a great deal of time
while shopping. 10% of the respondents stated that they do not remember the
time spent while shopping.
TABLE
NO
Shopping category
Another question was asked to understand the shopping category
that excites the Indians millennials the most. The options that were given are
Apparels, Shoes & Accessories, Electronics and All the categories equally.
The answers do not give a clear understanding of the most popular category
because of approximately equal weightage to All the categories and Apparels.
Singularly, Apparels was stated as the most exciting category followed by
Electronics and Shoes & Accessories respectively.
TABLE
Shopping preference based on company
Shopping in India is considered a social affair amongst the
millennials. 52% of the respondents stated they prefer to go shopping with
friends and family. 18% stated that they prefer shopping alone while 27% stated
that they don’t mind going either.
It was interesting to witness that 75% of the respondents stated
they go shopping on the weekends. To a certain extent, it can be deduced that
Indian millennials consider shopping as something that should be done only on
the weekends. This goes against the concept of online shopping which can be
done at any time of the week without having a plan for shopping.
Online vs. Offline
51% of the respondents stated that they prefer offline shopping
over online shopping while 20% of the respondents stated that they prefer
online shopping over offline. 33% stated that they prefer both equally.
Findings
Case – buying a pair of jeans
In the fourth section of the survey, the respondents were asked to
select an answer based on a case of buying a pair of jeans. The case was
designed keeping in mind the current scenario of the Indian e-commerce industry
and its competition, brick-and-mortar. The question was:
“A pair of jeans is available for 1050 Indian rupees on an Indian e-commerce website. Its Maximum retail price is 1200 Indian rupees.
It will be delivered within 3-5 days and the delivery is free.
The same pair of jeans is available for 1100 Indian rupees in a store in your city.
Which option would you prefer to buy the pair of jeans?”
The impact of discount
The respondents were asked to choose
between an offline and online store to buy a pair of jeans. The offline store
was providing the jeans at a 10% discount whereas the online store was
providing the same pair of jeans at a 15% discount and a free delivery. Despite
of the fact that the deal was better at the online store in terms of price, 68%
of the respondents stated that they would prefer to buy it at an offline store.
This case was particularly interesting
because the Indian millennials are not just looking for a lower price but they
are expecting a lot more from online stores to choose it over offline stores.
However, several respondents also mentioned that the price difference is not
much to buy it online. This depicts the current situation of the Indian
e-commerce industry where the consumers are asking for a higher discount in the
case of an online store.
On the other hand, the respondents were
asked in the previous sections about their willingness to shop online or
offline if there are no discounts. Only 37% of the respondents agreed to
shopping online without a discount whereas 69% of the respondents agreed to
shopping offline if no discounts are offered. This clearly signifies the
mindset of Indian millennials who crave for discounts at online stores.
Instant gratification: the impact of time and delivery
Respondents declined to prefer buying the
pair of jeans at an online store by stating that the delivery takes a period of
time and their purchase could be ‘need based’. Other respondents stated that
the delivery takes time and they do not want to wait for an ‘unexpected’ period
of time to get the product at the benefit of a ‘small’ price difference. This
highlights a serious limitation of the Indian e-commerce stores. The consumers
will not even consider buying something online in the case of a need based purchase.
Moreover, the unexpected time of delivery also plays a role in not choosing
online over offline stores.
The perfect fit
Many respondents in favour of offline
store to by the pair of jeans highlighted the importance of the ‘perfect fit’
which will be absent in the case of buying it from an online store. They also
highlighted a unique aspect on the offline retail stores: free alteration. The
Indian brick-and-mortar provides consumers with free alteration so that they
can get the fit as per their requirements, this is what the respondents claimed
as the perfect fit. The responses sheds light on the unnoticed limitations of
the e-commerce stores in India. The shopping decisions made by the Indian
consumers are not limited to the best price of quicker delivery, they also
expect to get the perfect fit at no extra costs.
The advocates of the online store
The reasons by the remaining 32% of the respondents in favor of
buying the pair of jeans at an online store were not surprising in general.
They highlighted the benefit of saving time and money by choosing an online
store.
The points that were particularly interesting were regarding
saving the overhead expenses of travelling to the offline store and the ease of
return the products. Even though there was no information about returning the
product in the question, respondents in the favor of online shopping assumed
that they can return the product easily at an online store. Indian e-commerce
stores give an option to return the products within 30 days from the date of
delivery/purchase which lures the customers to ignore the fact that the product
might not fit very well.
Moreover, not only in terms of higher discount, respondents also
thought of the overhead expenses they might have to bear to visit the offline
store that can be saved in the case of buying from an online store. Like
returning the product, there was no information provided about the overhead
expenses in the question.
Limitations, Further Research & Conclusion
Limitations
The research is subject to some limitations. In a diverse country
like India, the preferences of Indian millennials might differ based on their
language and the region they live in. Media reports indicates that less than
30% of the country’s population falls under the category of English speakers
(Forbes.com, 2014). This poses a major challenge on the Indian e-commerce
industry because currently, all the e-commerce websites in India are in
English. This could be the reason that is stopping the Indian millennials from
shopping online. It could be noted as the main limitation of this research
because the data collected for this study was done through a survey written in
English. It might not be appropriate to generalize the preferences of Indian
millennials on the basis of a single
language.
Further Research
The aim of this research was to understand the factors that is
stopping the Indian millennials from shopping online. The research further can
be focused on specific categories of shopping in India to get a closer look.
This will assist in understanding the category that shows the maximum potential
to grow in the near future and also the one that can take a step back because
of the lack of association with the consumers.
Additionally, the next research can be focused on Indian non-millennials
to understand if there are any chances of creating a desire among the
non-millennial generation of India. If such a market exists, it could prove be
a great opportunity to tap into the pockets of the people who are earning well
and are willing to pay more to get convenience at their doorsteps.
The scenario of e-commerce in India is evolving gradually and will
take a new form in the next few years especially with the penetration of
internet at a fast pace. Therefore, a new research can be conducted to witness
a change in the shopping preferences of consumers in the next few years.
An interesting next step of this research would be to do a
research that involves augmented reality clubbed with online shopping in India.
This is because the majority of the sample highlighted the need to try the
product before they can make a decision to purchase it. With the advancements
in augmented reality, it could be the something that the Indian millennials
might prefer over offline shopping.
To conquer the major limitation of this research, the next step
could be to study the impact of language as a barrier in the expansion of
online shopping in India.
Conclusion
The research shows that Indian millennials expects more than what
e-commerce in India is offering at the current phase. The data portrays a sense
of dissatisfaction associated with online shopping with the majority of the
sample.
The Indian millennials are not impulsive shoppers and are even
cautious when it comes to e-commerce because of the associated risks that are
absent in case of brick-and-mortar. Additionally, they look for added benefits
or a complete package when they buy something. By a complete package, they are
not referring to an online store that gives them choice. They are referring to
a complete package of the product they intend to purchase. For example, in the
case of buying of buying a pair of jeans
the respondents were not just looking for the best price and free delivery but
also the alteration to get the perfect fit.
It was interesting to find that the Indian millennials have
segmented their shopping categories into offline and online stores. For
example, they do not hesitate while buying an electronic gadget an online
store, however, the same does not apply to apparels and footwear because they want
to experience the product’s quality and material. In the case of shopping for
apparels which is one of the biggest shopping segment in India, alteration
might sound like a small part but it plays an important role in the preferences
of Indian millennials to choose a shopping medium so that they can get the
perfect fit. In the case of electronic
gadgets, the research shows that Indian millennials are inclined to purchase it
at an online store because there are negligible chances of uncertainty
associated with a branded electronic gadget.
Another finding shows that the Indian millennials use the online
stores as a research medium for shopping.
One of the major issues faced by the Indian e-commerce players is
the consumer’s desire to get more discounts at online stores. The research
clearly shows that the consumers do expect more discount at online stores. Not
only more discount as compared to the offline store, they also want a much
higher % of discount at an online store. However, that is not the only factor
that makes them take a decision. If their purchase is need based, then they
might not consider buying it online even if it is available at a lower price.
There was no finding in relation to the website quality of the
e-commerce stores in India. It signifies that the Indian millennials do not
have any major issues with the user experience at the website portal and it
does not makes an impact on their shopping behavior.
Appendices
Survey
Design
Q1 Are you an Indian citizen?
- Yes (1)
- No (2)
Condition:
No Is Selected. Skip To: End of Survey.
Q2 Which option best describes you when
it comes to shopping?
- I end up buying something every day (1)
- I end up buying something every week (2)
- I end up buying something every month
(3) - I shop only when it is necessary (4)
Q3 Which shopping category excites you
the most?
- Apparels (1)
- Shoes and accessories (2)
- Electronics (3)
- All of the above (4)
Q4 Where do you prefer to go shopping?
Please rank the options as per your shopping preferences by rearranging them
______
Single brand stores. Example – Levi’s, Nike and Samsung outlets (1)
______
Multi brand outlets. Example – Lifestyle, Westside and Croma outlets (2)
______
E-commerce websites. Example – Myntra, Flipkart and Amazon (3)
______
Unbranded outlets / Street shopping. Example – fashion street in your city (4)
Q5 How much time do you spend when you
go shopping?
- A great deal (1)
- A lot (2)
- A moderate amount (3)
- A little (4)
- I don’t remember (5)
Q6 Which option describes you in a
better way?
- I prefer shopping alone (1)
- I prefer shopping with friends &
family (2) - I don’t mind going either (3)
- Other (4) ____________________
Q7 When are you most likely to go
shopping?
- Weekdays (1)
- Weekends (2)
Q8 Which option do you find more
appealing based on your shopping experience?
- Online shopping (1)
- Offline shopping (2)
- Both equally (3)
- None of them (4)
Q9 Based on the option you selected, why
do you find it more appealing?
Q10 When it comes to shopping online,
how would you rate the following aspects based on your experience?
______
Price (1)
______
Customer service (2)
______
Convenience (3)
______
Variety (4)
______
Discounts (5)
______
User experience (6)
______
Delivery time (7)
______
Ease of returning the products (8)
______
Security (9)
Q11 When it comes to shopping offline,
how would you rate the following aspects based on your experience?
______
Price (1)
______
Customer service (2)
______
Ambience (3)
______
Convenience (4)
______
Variety (5)
______
Discounts (6)
______
Ease of returning the products (7)
Q12 Do you expect a discount at online
stores?
______
Discount at online stores (1)
Q13 On online stores, what
percentage of discount on the Maximum retail price makes you happy?
- 50% and above (1)
- 30-50% (2)
- 15-30% (3)
- At least 10% (4)
- I don’t care about getting a discount on
online stores (5)
Q14 Are you willing to shop online if
there are no discounts?
- Yes (1)
- Yes, if (2) ____________________
- No (3)
Q15 Do you expect a discount at offline
stores?
______
Discount at offline stores (1)
Q16 On offine stores, what percentage of
discount on the Maximum retail price makes you happy?
- 50% and above (1)
- 30-5-% (2)
- 15-30% (3)
- At least 10% (4)
- I don’t care about getting a discount on
offline stores (5)
Q17 Are you willing to
shop offline if there are no discounts?
- Yes (1)
- Yes, if (2) ____________________
- No (3)
Q18 A pair of jeans is
available for 1050 Indian rupees on an Indian e-commerce website. Its
Maximum retail price is 1200 Indian rupees. It will be delivered within
3-5 days and the delivery is free.The same pair of jeans is available for 1100
Indian rupees in a store in your city. Which option would you prefer to
buy the pair of jeans?
- Online store – 1050 Indian rupees (1)
- Offline store – 1100 Indian rupees (2)
Q19 Why did you choose to buy it
offline/online?
You are close to the end of this survey.
Q20 Age
- Years (1) ____________________
Q21 Gender
- Male (1)
- Female (2)
Q22 Relationship Status
- Single (1)
- Married (2)
- In a relationship (3)
- prefer not to answer (4)
Q23 Employment Status
- Looking for a job (1)
- Student (2)
- Working (3)
- Retired (4)
- Not working (5)
- prefer not to answer (6)
Q24 Income
- Monthly (1) ____________________
- Prefer not to answer (2)
Q25 Do you have a Debit/Credit card in
your name?
- Yes (1)
- No (2)
Q26 This is the last question of this
survey.What is the single most factor that makes/will make you switch from
offline to online shopping? You can answer it in your own words. Do not worry
about typographical errors.
You have answered all the questions.
Please click on Next to submit your responses.Once again, thanks for your
time.
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