ONLINE CONSUMER BUYING BEHAVIOR INSIDE KATHMANDU

VALLEY

By:
Sachin Shakya T.U. Reg. No: 7-2-22-13-2014 Symbol Number: 14489/14

A summer project report submitted to

Faculty of Management, Tribhuvan University
In the partial fulfillment of requirements for the degree of
Bachelors of Business Administration (BBA)

Patan Multiple Campus, Tribhuvan

University

Lalitpur May,
2018
 RECOMMENDATION BY SUPERVISOR

This is to certify that the summer project entitled Online Consumer Buying Behavior
inside Kathmandu Valley is an academic work done by Sachin Shakya (TU Reg. No: 7-
222-13-2014) submitted in the partial fulfillment of the requirements for the degree of
Bachelors of Business Administration (BBA) at Faculty of Management, Tribhuvan
University under my supervision and guidance. To the best of my knowledge, the
information presented by him in the summer project report has not been submitted earlier.

Date: _________________________

Supervisor

VIVA-VOCE SHEET

We have conducted the viva-voce examination of the summer project report presented

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 Submitted By:
Sachin Shakya

Entitled:

Online Consumer Buying Behavior inside Kathmandu Valley

We found the summer project report to be the original work of the student and written
according to the prescribed format. We recommend the summer project report to be
accepted as partial fulfillment for the degree of

Bachelor of Business Administration (BBA).

Viva-Voce Committee

Head, Research Department: ..................................

Member (Supervisor): ...................................

Member (External Expert): ...................................

Date: ……………….

STUDENT’S DECLARATION

I, Sachin Shakya (T.U. Reg. No: 7-2-22-13-2014) hereby declare that I have completed the
summer project and prepared this report entitled Online Consumer Buying Behavior
inside Kathmandu Valley under the supervision and guideline of Mr. Dinesh Man
Malego in partial fulfillment of the requirements for the degree of Bachelors of Business
Administration (BBA) at Faculty of Management, Tribhuvan University. It is my original
work and I have not submitted it earlier elsewhere for any other purposes.

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 _________________

Date: Sachin Shakya

ACKNOWLEDGEMENTS

I would like to thank many people that have contributed in this project. Without them, it
would not have been possible to complete this project.

First of all, I would like to thank my supervisor Dinesh Man Malego for guiding me
through my project. He provided me valuable suggestions and feedbacks. I would also like
to thank the Director of our BBA program Dr. Yuga Raj Bhattarai for providing necessary
ideas and materials required for this summer project report.

Then, I would like to express my gratitude to my fellow students for their valuable
feedbacks during classes.

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Most of all, I would like to thank my family and friends for their unconditional support and
understanding during the project.

Last but not the least I would like to thank all the respondents who participated in the
questionnaire survey.

TABLE OF CONTENTS

Cover page ..............................................................................................................................

i

Recommendation by Supervisor............................................................................................ii

Viva-Voce Sheet....................................................................................................................iii

Student’s Declaration............................................................................................................iv

Acknowledgements.................................................................................................................v

Table of Contents..................................................................................................................vi

List of Tables.......................................................................................................................viii

List of Figures.......................................................................................................................ix

v
Executive Summary...............................................................................................................xi

Chapter – I Introduction.....................................................................................................1

1.1 Background information...............................................................................................1

1.2 Statement of the problem..............................................................................................2

1.3 Purpose of the study.....................................................................................................2

1.4 Significance of the study..............................................................................................3

1.5 Literature Review.........................................................................................................3

1.5.1 Conceptual Framework..........................................................................................3

1.5.2 Review of related studies.......................................................................................4

1.6 Research methodology.................................................................................................6

1.6.1 Research design.....................................................................................................7

1.6.2 Data collection.......................................................................................................7

1.6.3 Population and Sampling.......................................................................................7

1.6.4 Questionnaire design..............................................................................................8

1.6.5 Data analysis..........................................................................................................8

1.7 Limitations of the study................................................................................................8

1.8 Organization of the study.............................................................................................9

CHAPTER – II Data Presentation And Analysis............................................................10

2.1 Respondent Profile.....................................................................................................10

2.2 Data presentation........................................................................................................14

2.3 Data analysis...............................................................................................................35

2.4 Findings and Discussion.............................................................................................38

CHAPTER – III Conclusions and Action Implications..................................................40

3.1 Conclusion..................................................................................................................40

3.2 Action Implications....................................................................................................41

References...........................................................................................................................42

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Appendices..........................................................................................................................44

LIST OF TABLES

Table 2.1 Mean of future expectations with online purchasing ..........................................

17
Table 2.2 Mean of opinions of family affecting purchase decisions ..................................
19
Table 2.3 Mean of opinions of friends affecting purchase decisions ................................. 20
Table 2.4 Mean of opinions of other consumers in online forum affecting purchase
decisions ...............................................................................................................................
21 Table 2.5 Analysis of Online Factors .................................................................................
36
Table 2.6 Comparative Analysis of Online Factors ............................................................
37
Table 2.7 Correlation between Average Age and Average Experience of the respondents
.............................................................................................................................................
38

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 LIST OF FIGURES

Figure 1.1 Conceptual Framework of the study ....................................................................

4
Figure 2.1 Gender of the respondents ..................................................................................
11
Figure 2.2 Age of the respondents .......................................................................................
11
Figure 2.3 Occupation of the respondents ...........................................................................
12
Figure 2.4 Income level of the respondents .........................................................................
13
Figure 2.5 Education Level of the respondents ...................................................................
13
Figure 2.6 Product Group ....................................................................................................
14
Figure 2.7 Past experiences of respondents with online shopping ......................................
15
Figure 2.8 Online Delivery Time .........................................................................................
16
Figure 2.9 Future Expectations with online shopping .........................................................
17
Figure 2.10 Opinions of family affecting purchase decision ...............................................
18
Figure 2.11 Opinions of friends affecting purchase decision ..............................................
19
Figure 2.12 Opinions of other consumers in online forum affecting purchase decision .....
21
Figure 2.13 Frequency of respondents shopping online ......................................................
22
Figure 2.14 I feel that there will be difficulty in settling disputes when I shop online .......
23
Figure 2.15 Delivery fees are high .......................................................................................
24
Figure 2.16 Prices of various products can be compared more easily while shopping online

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 .............................................................................................................................................
24
Figure 2.17 I might not get what I ordered through online shopping .................................
25
Figure 2.18 I might receive malfunctioning products .........................................................
26
Figure 2.19 It is hard to judge the quality of the products over the internet ........................
26
Figure 2.20 I might not receive the product ordered online ................................................
27 Figure 2.21 I do not shop online because of non-availability of reliable and well-
equipped
shipper ..................................................................................................................................
28 Figure 2.22 I feel safe and secure while shopping
online .................................................... 29 Figure 2.23 I feel that my credit/debit card
details may be compromised and misused if I
shop online ...........................................................................................................................
29
Figure 2.24 I feel that my personal information given to a website may be compromised to
a third party ..........................................................................................................................
30 Figure 2.25 Shopping online is risky due to lack of strict cyber laws in place to punish
frauds and hackers ...............................................................................................................
31
Figure 2.26 I buy from online stores if they are visually appealing and have a well-
organized appearance ...........................................................................................................
32 Figure 2.27 I buy from online stores only if the navigation flow is user
friendly ............... 33
Figure 2.28 I buy from online stores only if the site content is easy for me to understand .
34 Figure 2.29 I buy from online stores only if they have an easy and error free ordering
and
transaction procedure ...........................................................................................................
35

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 EXECUTIVE SUMMARY

The online purchasing is gaining massive popularity day by day. There are many benefits
of online purchasing like time saving, access from anywhere, convenience, availability 24
hours a day, variety of products, various options available to compare products and brands.
Besides the benefits of online purchasing, consumers feel certain types of risks such as
perceived risk factors and psychological factors. The perceived risks could be financial
loss, product performance risk, delivery risk and psychological factors like trust & security
and website design. These perceived risk and psychological factors also help to determine
the consumer’s behavior towards online purchasing. Thus, this study focuses on the online
factors affecting consumer’s behavior towards online purchasing. The purpose of this study
is to identify those risk and psychological factors in Kathmandu’s context and also know
who the online consumers are in terms of demography. To achieve the study purpose, a
detailed and most recent literatures were reviewed. The data has been collected from
primary sources through a well-structured questionnaire. For comparable reasons it has
been chosen to use an equivalent amount of respondents, thus around 65 questionnaires
had been distributed through an online platform (Google Form). Since the distribution
chain started from a student’s close friend’s circle, most of the respondents are students.
After literature reviews and analyzing the empirical data, the results of the study revealed
that the website design is the most influential factor when respondents shop online. The
rest of the factors such as product performance risk and financial risk also have significant
effect on consumer’s buying behavior. Delivery risk and trust & security have an average
impact on consumer’s buying behavior.

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 CHAPTER – I INTRODUCTION

1.1 Background information

Studying about the consumer buying behavior is vital in today’s marketing scenario
because no business association can survive without consumers. The study of consumer
behavior focuses on how individuals make decisions to spend their available resources
(time, money, effort) on consumption related items. A number of research articles have
been studied to analyze the online consumer buying behavior in various sectors in this
paper.

The invention of the Internet has created a paradigm shift of the traditional way people
used to shop. A consumer is no longer limited to opening times or specific locations; he/she
can become active at virtually any time and place, allowing him/her to make purchases of
various products or services.

People can search products and their information 24 hours a day over the internet where a
wide selection of different products are available. There has been a move towards online
shopping because of different online factors including convenience, ease of use, low cost,
time saving, various online products and brands, with fast delivery as compared to
shopping physically. The limitation of time and place is minimized, if not completely
broken when consumers make purchases online.

Online consumer buying behavior consists of buying process of products and services
through internet. The process follows various steps similar to physical buying behavior. In
a normal online buying process, there are five steps involved. Initially when the consumer
identifies his or her needs for a product or service, he/she goes online and searches for the
information. After gathering product information, the consumer evaluates the product with
other available options selecting an item according to his/her requirement and criteria
making transaction for selected products and gets post-purchase experience.

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1.2 Statement of the problem

Despite the rapid growth in online shopping and its benefits that are discussed above, not
every consumer’s search at online store does not lead to a complete purchase or transaction
of their actual needs. According to Moshref et al. (2012), before purchasing a product or
service on the internet, consumer predicts different types of perceived risk like financial
risk (loss of money), product risk (quality of product as seen on the website), and non-
delivery risk (if the product remains undelivered). Iconaru et al. (2013) stated, in online
shopping a perceived risk appears from when customers feel uncertainty and fear of
financial loss, poor product quality, non-delivery concerns, the breaching of trust and
misusing of personal information.

Swinyard & Smith (2003) concluded that more than 70% online non-shoppers do not buy
online due to risk of financial losses if they shop from online e-retailers. Forsythe et al.
(2006) argued that perceived risk play an important role to determine consumer’s online
shopping behavior and predict consumer’s intention to shop online in future.

Prior studies identified several online factors that affect consumer’s online shopping
behavior. External factors are also important in the context of online shopping. These
include the perceived risk (financial risk, product performance risk, and delivery risk) and
psychological factors (trust & security and website design). This study will identify the
effects of different external online factors in Kathmandu’s online shopping context.
Although these factors are well researched by previous researchers, the issue is that
different studies explored these external online factors in different online shopping contexts
and did not cover all contexts. Therefore, it is needed to validate the findings of previous
researches in the field of online consumer buying behavior. This study will provide an in
depth understanding of major external online factors in Kathmandu’s online consumer
buying context. The aim of this paper is to answer the following research question.

What external online factors (financial risk, product risk, non-delivery risk, and
psychological factors like website design, trust & security) have more significant influence
on consumer’s online buying behavior?

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1.3 Purpose of the study

The main purpose of this study is to identify the external online factors which influence
consumer’s behavior towards online shopping in Kathmandu Valley’s context. It is
important to know how much effect these factors have on consumer’s online buying
behavior. The findings of this research shall be outlined as implications for online retailers
in order to enhance their consumer knowledge and also increase their online marketing
strategy effectiveness.

Other purposes of this study are:

• To find out the perception of consumers and their experiences on online purchasing
of products.
• To find out if the purchasing decision of the online consumers is affected by family,
friends or opinions discussed by other consumers in online forums.
• To identify the product groups that the consumers purchase the most through an
online platform

1.4 Significance of the study

The findings of this study will not only redound to the benefit of the online marketers in
formulating their marketing strategies but will also increase the knowledge and research in
the field of online shopping. The study will identify five external factors which influences
consumer’s buying behavior and it is important to know how much effect these factors
have on consumer’s online buying behavior. Besides the factors influencing, the study also
helps to analyze who are the online shoppers in terms of demography.

1.5 Literature Review

Literature review or literature survey in a project report is that section which shows the
various analysis and research made in the field of the interest and the result already
published, taking into account various parameters of project and the extent of the project.
Literature review presents the theoretical concepts related to this study.

1.5.1 Conceptual Framework

Online buying behavior is a kind of individual’s overall perception and evaluation for
product or service during online purchasing which could result in satisfaction or

3
dissatisfaction. Previous studies have defined that behavior is a multi-dimensional
construct and has been conceptualized in different ways. Many scholars measure the
consumer’s behavior through different dimensions. According to Gozukara (2014), the first
dimension refers to consumer’s attitude towards a utilitarian motivation (convenience,
variety seeking, and the quality of merchandise, cost benefit, and time effectiveness). The
second dimension states about hedonic motivation (happiness, fantasy, escapism,
awakening, sensuality & enjoyment), and Baber (2014) mentions the third one as perceived
ease of use, and usefulness.

Furthermore, Li & Zhang (2002) mentioned that there are two different types of perceived
risk involved in determining consumer’s behavior during online shopping process. It is
further described as the first category of perceived risk involved in online product and
service i.e. financial risk, time risk, and product risk while the other category of perceived
risk involved in e-transactions including privacy and security.

The following conceptual model is developed on the basis of prior researches presented
into the literature review regarding external online shopping factors. The purpose of
conceptual model is to examine the online consumer buying behavior in the context of
Kathmandu Valley. This model examines the relationship between independent and
dependent online purchasing factors. Based on the presented literature, the independent
factors are perceived risk (financial risk, product performance risk, and delivery risk),
psychological factors (trust & security), and website design factor while dependent factor
is online buying behavior.

Financial Risk

Product Performance
Risk Online Buying
Behavior
Delivery Risk

Trust & Security

Website Design

Figure 1.1 Conceptual Framework of the study

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1.5.2 Review of related studies

Past empirical studies related to the current study have been summarized as follows:

Chawla, Khan and Pandey (2016) have prepared an article on online buying behavior. The
researchers mainly focused on the quantitative analysis of constructing model based on
survey, limiting only to intention and adoption stages. Deductive theory approach has been
utilized to identify main factors influencing different stages of online buying. The study
explored demographics influence on the buying intentions and adoption stages; there was
no systematic interpretation about how the first time buyer was likely to continue with
buying online or would like to intensify or pull more of existent products available offline.

Singhal and Shekhawat (2015) have conducted a review on online and offline consumer
buying behavior. Research papers since 1999 were taken to provide a contemporary view
of the online and offline consumer behavior. Descriptive research was conducted and the
research articles have been extracted from EBSCO Google scholar and DELNET research
database collections. The most motivating factors have been identified which encourage
consumers to shop online. The study also unveiled the various resisting factors, which
acted as barrier and diverted the consumers towards traditional buying mechanism. The
authors found out in conclusion that although consumers were searching online to learn
about products, they were ultimately shifting from online to offline retailing channels when
it came to purchasing.

Shahzad (2015) has conducted a research on online shopping behavior. The empirical data
was collected through a questionnaire survey and it was distributed among 100 respondents
by hand and online. The focus of this study was on the online factors such as financial risk,
product performance risk, delivery risk, trust & security, and website design. The study
found out that the product performance risk, and trust & security had a significant impact
to consumer’s online shopping behavior while financial risk, and delivery risk had no
significant impact on consumer’s online shopping behavior.

Mittal (2013) has conducted a paper on E-commerce, its impact on consumer behavior.
Quantitative data describing the actuality of internet shopping in the case of India has been
obtained in order to explain the development of internet shopping and its impact on
consumer behavior. The paper build on the relevant literature and at the same time

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examined consumer behavior by questionnaires. The paper supported the research
questions including recent trends and various issues in internet shopping, and principle
factors for consumer behavior. The result of the study showed that internet consumer trust
and perceived risk have strong impacts on their purchasing decisions.

Sultan and Uddin (2011) have examined a study on consumer’s attitude towards online
shopping. The population selected for the research is Gotland, and narrowed down to
Gotland University students, university cafeteria and Gotland Public library. The sample
size selected for this research was 100. Convenience sampling technique has been used.
Website Design/Features, Convenience and Time saving are the factors indicated in the
study along with pricing, discount, feedback from previous customers and quality of
product. The study revealed that elderly people were not so keen to shop online, higher
education made online shopping less attractive, and security concerns were very important
while shopping online.

Hadjiphanis and Christou (2006) have investigated the role of e-commerce on consumer
behavior. The paper set out to bring together aspects of consumer behavior that the
researcher considered were pertinent to a retailer striving to meet consumer needs in an
online environment. The paper focused upon the consumer information search process and
consumer value. The ultimate aim of the paper was to establish how retailers were striving
to motivate consumers to buy online.

Constantinides (2004) has conducted a study about influencing the online consumer’s
behavior. The study identified the main constituents of the online experience or Web
experience as being: the functionality of the Web site that includes the elements dealing
with the site’s usability and interactivity, the psychological elements intended for lowering
the customer’s uncertainty by communicating trust and credibility of the online vendor and
Web site and the content elements including the aesthetic aspects of the online presentation
and the marketing mix. The study has revealed similarities as well as differences between
online and the traditional customers.

Swaminathan (2000) has prepared a research framework and analysis on the internet and
consumer buying behavior. The study has both theoretical and managerial implications.
The study examined a model of electronic exchange based on a theoretical framework
proposed by Bagozzi. The factors examined in the study included vendor characteristics,
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security & privacy and customer characteristics. This study revealed that the consumers
who were primarily motivated by convenience were more likely to make purchases online.

1.6 Research methodology

This chapter will provide the detail methodological framework about how the data will be
collected and analyzed in order to solve the research question.

1.6.1 Research design

As this study is based on existing theories of consumer’s behavior, it has chosen to use a
deductive approach which follows a process of reasoning from one or more statements to
reach a logically certain conclusion. This approach is more suitable for this study than an
inductive approach.

The nature of this study is a descriptive type. Quantitative research strategy has been used
in this study since the aim of the study draws a picture of the study’s topic. Considering the
fact that time is very important factor for making any choice of selecting research method,
quantitative approach has been followed as this is also a project conducted for academic
purposes and is limited to time.

1.6.2 Data collection

The data has been collected from primary sources through a well-structured questionnaire.
The reason to choose questionnaire surveys is because similar previous studies used the
same method of data collection and also this method seemed more convenient and effective
for this study. For comparable reasons it has chosen to use an equivalent amount of
respondents, thus around 65 questionnaires had been distributed through an online platform
(Google
Form). Since the distribution chain started from a student’s friends circle, most of the
respondents are students.

1.6.3 Population and Sampling

The target population of this study constitute Nepalese online consumers residing in
Kathmandu Valley. The study is mainly intended to identify the external online factors
which influence consumer’s behavior towards online shopping in Kathmandu Valley’s

7
context and also to know how much effect these factors have on consumer’s online buying
behavior.

Generally, sampling has two techniques which are probability sampling and non-
probability sampling. Probability sampling can further be classified into simple random
sampling, systematic sampling, stratified sampling, cluster sampling and multistage
sampling. Likewise non-probability sampling can further be classified into quota sampling,
snowball sampling, purposive sampling, self-selected, and convenience sampling. Since
the accessibility of convenience sampling is the simple and easily available, this study uses
nonprobability; convenience sampling, even though it has limitations such as not
scientifically representable and generalizes the results of study for the entire population.
Another reason for using this sampling is because many past studies have adopted this as it
represents a convenient substitute for online population. Previous studies indicated that
online consumers are mostly educated and young consumers, convenience sampling is
feasible as most respondents represent students.

1.6.4 Questionnaire design

The design of questionnaire consists of two parts. The first part of the questionnaire is
related to demographic characteristics and experiences of the respondents. The other part of
the questionnaire is related to online factors that influence consumer’s buying behavior
during online purchasing.

1.6.5 Data analysis

The data analysis tool for the online factors of this study is a 1-5 point Likert scale
(1=Strongly Disagree, 2=Disagree, 3=Neutral/ Uncertain, 4=Agree, 5=Strongly Agree).
This data analysis tool is used to evaluate empirical data. The Likert scale is generally used
for questionnaires, and is mainly used in quantitative research. The benefit of using Likert
scale is the convenience as Neuman (2000) suggests the actual strength of Likert scale is its
simplicity and ease of use.

1.7 Limitations of the study

The study area is limited to Kathmandu Valley only. The limitations of the study are as
follows:

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 • Since the questionnaire link through an online form initiated from student’s close
friends circle and a college group, most of the respondents are students.
• Not every respondent was comfortable answering all the required questions such as
Monthly Income.
• Due to sampling used in this study, selecting a truly representative sample of the
whole group was difficult.
• The results of this study cannot be generalized.
1.8 Organization of the study

The study has been divided into three chapters. The first chapter deals on the background
information, statement of the problem, purpose of the study, significance of the study,
literature review, research methodology, and limitations of the study. The second chapter
includes the respondent profile, data presentation and analysis, and findings and discussion.
Finally, the third chapter deals with conclusion and action implications of the study.
References and other appendices are presented at the end of the study report.

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 CHAPTER – II DATA PRESENTATION AND ANALYSIS

The main step of the study is to draw the results of empirical data. In this part, the results of
the study are discussed in detail in terms of demographic factors, past experiences and
online factors.

The results of the data will be divided into two parts. In the first part, the results of
demographic data and past experiences of the respondents will be presented like age,
gender, education, occupation and income, hereby tables and graphs will be used in order
to present the demographic picture of study’s respondents.

Similarly, in the second part, the results of questionnaire survey will be described in
regards to the influence of consumer’s online purchasing behavior. Each statement is
considered as one variable. The results of questionnaire survey are shown as follows:

2.1 Respondent Profile

Gender of the respondents

The Figure 2.1 indicates that, out of the total respondents to whom the questionnaire link
has been distributed, 50.8% are female respondents and 49.2% are male respondents.

Gender

49.2 Male
50.8 Female

Figure 2.1 Gender of the respondents

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Age of the respondents

The Figure 2.2 shows that 14.1% respondents are between the ages of 15-20, 60.9% are
between 21-25 years, 10.9% respondents are between 26-30 years, 10.9% respondents are
31-40 years, and 3.1% of the total respondents are above 40 years of age. From the
following graph, it would be safe to conclude that the respondents between 21 to 25 years
of age are more familiar to shop online.

Age
3.1

10.9 14.1

15-20
10.9 21-25
26-30
31-40
Above 40

60.9

Figure 2.2 Age of the respondents

Occupation of the respondents

The Figure 2.3 shows that 46.2% of the total respondents are students who are currently not
working, 20% of the respondents are students who are involved in part-time working, the
same figure 20% are full-time working respondents, 10.8% respondents are self-employed
and 3.1% of the total respondents are currently unemployed.

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 Occupation
0.0 3.1

10.8
Student/ Not Working
Student/ Part-time Working
46.2 Full-time Working
20.0
Self-Employed
Retired
Unemployed
20.0

Figure 2.3 Occupation of the respondents

Income level of the respondents

The Figure 2.4 shows that 16.1% respondent’s monthly income is between Rs 5000-10000,
while 12.5% respondent’s monthly income is between Rs 10001-15000 and only 3.6%
respondent’s monthly income is between Rs 15001-25000, 8.9% respondent’s monthly
income is between Rs 25001-35000. 12.5% of the respondent’s monthly income is more
than Rs 35000 and lastly 46.4% respondent’s monthly income is less than Rs 5000. Since
most of the respondents are students who are currently not working, these differences
between the income levels of the respondents are acceptable.

Monthly Income

12.5
Below 5000
8.9 5000-10000

3.6 46.4 10001-15000

15001-25000
12.5 25001-35000
Above 35000
16.1

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Figure 2.4 Income level of the respondents

Education Level of the respondents

This demographic factor shows that 10.77% respondents are High school students, 75.38%
are Bachelor program respondents and 13.85% respondents are Masters’ students. As you
can see in the Figure 2.5, around 88% respondents are Master and Bachelor students.

Education Level
0.00

13.85 10.77

Highschool
Bachelors
Masters
PhD

75.38

Figure 2.5 Education Level of the respondents

2.2 Data presentation

The respondents were asked to answer which of the product groups they purchase the most
over the internet. The respondents were allowed to tick on more than one option. 10.8% of
the respondents ticked on Computer games, software, 63% respondents ticked on
accessories, clothing, 15.4% ticked on food, drinks, 12.3% ticked on perfumes, cosmetics,
3.1% ticked on holiday packages, 36.9% ticked on electronic goods, 4.6% ticked on
household goods, furniture, 32.3% ticked on theatre, cinema tickets, 10.8% ticked on travel
tickets, 12.3% ticked on books while 15.4% of the respondents ticked on “Others” section.
The Figure 2.6 indicates that a major portion i.e., 63.1% of the respondents are used to
purchasing clothing, accessories over the internet.

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Figure 2.6 Product Group

Past experiences of respondents with online shopping

The respondents were asked to choose a number from 1 to 5 in regards to their past
experiences with shopping online, 1 being very bad and 5 being very good.

Only 3.1% of the total respondents picked the number 5, while 4.7% of the respondents
picked the number 1. 20.3% of the respondents picked the number2, 39.1% picked the
number 3 and 32.8% of the respondents picked the number 4. From the Figure 2.7, it can
be concluded that the past experiences of most of the respondents with online purchasing
have been average.

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Figure 2.7 Past experiences of respondents with online shopping

Online Delivery Time

The respondents were asked to pick a number from 1 to 5 in regards to their experience
with the ordered goods being delivered on time, 1 being never and 5 being always.

6.3% of the respondents picked the number 1 which implied that they never got their goods
delivered on time, the same figure 6.3% picked the number 2, 33.3% picked the number 3,
39.7% respondents picked the number 4 and 14.3% of the respondents picked the number
5. From the Figure 2.8, we can conclude that most of the respondents get their goods
delivered on time.

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Figure 2.8 Online Delivery Time

Future expectations with online shopping

The respondents were asked to pick a number from 1 to 5 in regards to their future
expectations with online shopping, 1 being very good and 5 being very bad.

Only 3.1% of the respondents picked the number 1 which implied that they had very bad
future expectations with online shopping, 6.3% respondents picked the number2, 23.4%
picked the number 3, 34.4% picked the number 4 and 32.8% picked the number 5.

16
Figure 2.9 Future Expectations with online shopping

The following Table 2.1 indicates that the mean of future expectations with online
shopping is 3.875, which implies that most of the respondents agreed to their future
expectations being above average.

Table 2.1

Mean of Future expectations with online purchasing

x f fx
1 2 2
2 4 8
3 15 45
4 22 88
5 21 105

Mean 3.875
Opinions of family affecting purchase decision

The opinions of family members also influence the purchasing decision of an individual in
many cases. For a student living with his/her parents, purchasing a luxurious product over
the internet without the consent of the family would not be acceptable.

The respondents were asked to pick a number from 1 to 5 in regards to their purchase
decision being affected by the opinions and experiences of their family, 1 being not at all
and 5 being very much.

15.6% of the respondents picked the number 1 which implies that their purchase decision
was not at all affected by the opinions and experiences of their family, 12.5% picked the
number 2, 39.1% were not so sure so picked the number 3, 28.1% picked the number 4 and
only 4.7% of the total respondents picked the number 5.

17
Figure 2.10 Opinions of family affecting purchase decision

The following Table 2.2 indicates that the mean of opinions of family affecting purchase
decision is 2.9375, which implies that the opinions of family doesn’t have a strong impact
on the purchase decision of most of the respondents.

Table 2.2

Mean of opinions of family affecting purchase decisions

x f fx
1 10 10
2 8 16
3 25 75
4 18 72
5 3 15

Mean 2.9375

Opinions of friends affecting purchase decision

The respondents were asked to pick a number from 1 to 5 in regards to their purchase
decision being affected by the opinions and experiences of their friends, 1 being not at all
and 5 being very much.

18
12.3% of the total respondents picked the number 1, 9.2% picked the number 2, 29.2% of
the respondents picked the number 3, 38.5% picked the number 4 and 10.8% of the
respondents picked the number 5.

Figure 2.11 Opinions of friends affecting purchase decision

The following Table 2.3 indicates that the mean of opinions of friends affecting purchase
decisions is 3.2615, which implies that the opinions of friends have an average impact on
the purchase decisions of most of the respondents.

Table 2.3

Mean of opinions of friends affecting purchase decisions

x f fx
1 8 8
2 6 12
3 19 57
4 25 100
5 7 35

Mean 3.261538

19
Opinions of other consumers in online forum affecting purchase decision

While surfing over the online websites, many consumers go through the comments and
review section which provides them insight about the quality and overall attributes of the
product they are going to order online. The opinions of other consumers in online forum
can also heavily influence the purchase decision. If the reviews are extremely bad about a
certain product, then it is very unlikely that any consumer will make the purchase after
going through the reviews of other consumers.

The respondents were asked to pick a number from 1 to 5 in regards to their purchase
decision being affected by the opinions and experiences discussed in online forums, 1
being not at all and 5 being very much.

From the following Figure 2.12, you can see that 9.2% of the respondents were not affected
by the opinions of other consumers in online forum as they chose the number 1, 7.7% of
the respondents picked the number 2, 33.8% of the respondents picked the number 3, 20%
of the respondents picked the number 4 and 29.2% of the total respondent’s purchase
decision was highly affected by the opinions of other consumers in online forum as they
picked the number 5.

Figure 2.12 Opinions of other consumers in online forum affecting purchase decision

20
The following Table 2.4 indicates that the mean of opinions of other consumers in online
forum affecting purchase decision is 3.5230 which implies that the opinions of other
consumers in online forum have an above average impact on the purchase decisions of
most of the respondents.

Table 2.4

Mean of opinions of other consumers in online forum affecting purchase decision

x f fx
1 6 6
2 5 10
3 22 66
4 13 52
5 19 95

Mean 3.523077
Frequency of respondents shopping online

The respondents were asked to pick a number from 1 to 5 in regards to their frequency of
average online purchases, 1 being hardly ever and 5 being atleast once a day.

20% picked the number 1, 41.5% picked the number 2, 29.2% picked the number 3 and
9.2% picked the number 4. Not even a single respondent picked the number 5 which means
that none of the respondents make atleast one online purchase in a day.

21
Figure 2.13 Frequency of respondents shopping online

Online factors results

The questions, concerning the external online factors related to Likert scale are discussed
here. The study will explore how these factors influence the consumer’s online buying
behavior. As mentioned in the conceptual framework, several external factors like
perceived risk (financial risk, product risk, and delivery risk), psychological factors
(website design, trust and security) influence consumer’s intentions during online
purchasing.

The questionnaire survey in this section consists of 16 questions and each question is a
single variable. Every variable is discussed and analyzed separately. Five points Likert
scale is used with score of 1 to strongly disagree and 5 to strongly agree statement. The
first and second online factors, financial risk and product performance risk consist of three
variables, whereas the third factor, delivery risk has only two and the fourth and fifth (trust
and security and website design) contain four variables each.

Financial Risk

Starting with the financial risk, one of the perceived risk factors, questions from 1 to 3
were asked concerning financial risk over the internet purchasing.

“I feel that there will be difficulty in settling disputes when I shop online (e.g. while
exchanging products)” as you look at the Figure 2.14, the results indicate that 6.2%
respondents strongly disagree and 13.8% disagree with this statement. This means that
those respondents do not have any problem settling the disputes over exchanging products
with online merchandiser. 52.3% agree with this statement, 6.2% strongly agree with this
statement. This means that those respondents feel that there will be difficulty in settling
disputes while shopping online. 21.5% of the respondents were uncertain. As mentioned in
Table 2.5, the average score for this variable is 3.38. Higher average score indicates that
high numbers of respondents feel difficulty in settling disputes while shopping online.

22
 I feel that there will be difficulty in settling disputes when I
shop online (e.g. while exchanging products)

6.2 6.2

13.8 Strongly disagree

Disagree
Uncertain
21.5 Agree
52.3
Strongly agree

Figure 2.14 I feel that there will be difficulty in settling disputes when I shop online

“Delivery Fees are high” as result of this question shows that 6.2% of the respondents
strongly agree and 26.2% agree with this statement. These respondents feel that the
delivery fees are high. 23.1% disagree with this statement and feel that the delivery charges
are not high. 44.6% were uncertain about this statement. The average score of this variable
is 3.15 which indicates that most of the respondents are uncertain about this statement.

Delivery fees are high

0.0

6.2
23.1
Strongly disagree
26.2 Disagree
Uncertain
Agree
Strongly agree

44.6

Figure 2.15 Delivery fees are high

“Prices of various products can be compared more easily while shopping online” This
question described how the prices of various products can be compared and consumers can
23
choose the most appropriate one in regards to the financial cost of that product. 68% of the
total respondents agree and 20% strongly agree with this statement. They feel that the
prices of various products can indeed be compared more easily while shopping online.
3.1% disagree with this statement and 9.2% of the respondents were uncertain. The average
score of this variable is 4.05 which indicates that majority of the respondents agree with
this statement.

Prices of various products can be compared more easily

while shopping online
0.0 3.1

9.2
20.0
Strongly disagree
Disagree
Uncertain
Agree
Strongly agree
67.7

Figure 2.16 Prices of various products can be compared more easily while shopping online
Product Performance Risk

“I might not get what I ordered through online shopping” This question described that
consumers have fear of product performance and may not get the right product as what
they ordered through online merchandiser. It leads to disappointment of the consumer in
relation to the product performance expectations. The following Figure 2.17 shows that
46.2% agree and 18.5% strongly agree with this statement. They have a fear of getting the
wrong product if they ordered it through an online retailer. 20% of the respondents were
uncertain about the statement whereas 12% and 3.1% disagree and strongly disagree
respectively with the statement. The average score of this variable is 3.65.

24
 I might not get what I ordered through online shopping
3.1

18.5 12.3
Strongly disagree
Disagree

20.0 Uncertain
Agree
Strongly agree
46.2

Figure 2.17 I might not get what I ordered through online shopping

“I might receive malfunctioning products” This question deals with the credibility and
reliability of online product supplier. The results of the following Figure 2.18 shows that
6.2% disagree and 3.1% strongly disagree with the statement. The respondents do not
doubt on the credibility and reliability of the online product suppliers. Consumers are
confident that they will not receive malfunctioning product from online merchandiser.
While the other figures show that 27.7 % respondents were uncertain and 50.8% of the
respondents agree with the statement and 12.3% strongly agree. They have a fear of not
receiving optimum product performance from the products ordered through an online
retailer. The average score of this variable is 3.63.

25
 I might receive malfunctioning products
3.1

12.3 6.2

Strongly disagree
Disagree
27.7
Uncertain
Agree
Strongly agree
50.8

Figure 2.18 I might receive malfunctioning products

“It is hard to judge the quality of the products over the internet” As you can see in the
following Figure 2.19, it depicts that 50.8% of the respondents agree and 44.6% strongly
agree with the statement. They face difficulties judging the quality of the products over the
internet. 3% of the total respondents were uncertain and 1.5% disagreed with the statement.
The average score of this variable is 4.38 which indicates that most of the respondents feel
that it is indeed hard to judge the quality of the products over the internet.

It is hard to judge the quality of the products over the

internet
1.5
0.0 3.1

Strongly disagree
Disagree
44.6
Uncertain

50.8 Agree
Strongly agree

Figure 2.19 It is hard to judge the quality of the products over the internet

26
Delivery Risk

“I might not receive the product ordered online” This question deals with the delivery
issue of the online buying product, fear of not receiving the product. Mixed responses have
been received in this statement. As you can see in the following Figure 2.20, 38% of the
respondents agree and 4.8% strongly agree with this statement. They have a fear of not
receiving the online product. 31.7% disagree and 4.8% strongly disagree with the
statement. It means that the respondents do not have any delivery issues. 20.6% of the total
respondents were uncertain and the average score for this variable is 3.06.

I might not receive the product ordered online

4.8 4.8

Strongly disagree

31.7 Disagree
38.1 Uncertain
Agree
Strongly agree

20.6

Figure 2.20 I might not receive the product ordered online

“I do not shop online because of non-availability of reliable and well-equipped

shipper” The results summarized in the following Figure 2.21 shows that 21.5% disagree
and 1.5% strongly disagree with this statement. 33.8% of the total respondents agree and
9.2% strongly agree with this statement which implies that they do have a fear that online
merchandise do not have good and proper facility to deliver their products through reliable
shipper and may damage their purchased product during the shipping time. For that reason
they avoid to shop online due to non-availability and non-reliable shipper’s facilities.
33.8% of the respondents were uncertain regarding this statement. The average score for
this variable is 3.28.

27
 I do not shop online because of non-availability of reliable
and well-equipped shipper
1.5

9.2
21.5 Strongly disagree
Disagree
Uncertain
33.8
Agree
Strongly agree
33.8

Figure 2.21 I do not shop online because of non-availability of reliable and well-equipped
shipper

Trust and Security Factor

“I feel safe and secure while shopping online” This question deals with the amount of
trust respondents have over the online retailers. As you can see in the following Figure
2.22, 30.8% disagree and 3.1% strongly disagree with this statement. They do not feel safe
and secure while shopping online. 27.7% of the respondents agree and 1.5% strongly agree
with this statement. They have trust over the online retailers. The remaining 36.9% were
uncertain and the average score for this variable is 2.94.

I feel safe and secure while shopping online

1.5 3.1

27.7 Strongly disagree

30.8
Disagree
Uncertain
Agree
Strongly agree

36.9

28
Figure 2.22 I feel safe and secure while shopping online

“I feel that my credit/debit card details may be compromised and misused if I shop
online” The following Figure 2.23 indicates that 36.9% of the total respondents agree and
6.2% strongly agree with this statement. This means that the respondents feel insecure and
hesitate to trust on online merchandisers. 18.5% of the respondents disagree and 4.6%
strongly disagree with the statement. It means that they have trust and feel secure while
shopping online through any online retailer. The remaining 33.8% were uncertain and the
average score for this variable is 3.22.

I feel that my credit/debit card details may be compromised

and misused if I shop online

6.2 4.6

18.5 Strongly disagree

Disagree
36.9 Uncertain
Agree
Strongly agree
33.8

Figure 2.23 I feel that my credit/debit card details may be compromised and misused if I
shop online

“I feel that my personal information given to a website may be compromised to a

third party” This statement deals with the fear of the consumer’s information being sold
to a third party. As seen in the following Figure 2.24, 53.1% of the total respondents agree
and 9.4% strongly agree with this statement. 12.5% of the respondents disagree with this
statement and feel that their personal and financial information will not be compromised
with a third party when shopping online. The remaining 25% of the respondents were
uncertain and the average score for this variable is 3.59 which implies that most of the
respondents do not completely trust the online merchandisers.

29
 I feel that my personal information given to a website may
be compromised to a third party
0.0

9.4 12.5
Strongly disagree
Disagree
25.0 Uncertain
Agree
53.1 Strongly agree

Figure 2.24 I feel that my personal information given to a website may be compromised to
a third party

“Shopping online is risky due to lack of strict cyber laws in place to punish frauds and
hackers” The results of the following Figure 2.25 shows that 63.1% of the total
respondents agree and 23.1% strongly agree with this statement. The figure 3.1% disagree
and the same figure 3.1% strongly disagree with the statement. The remaining 7.7% of the
respondents were uncertain with the statement. The average score for this variable is 4.00
which implies that on average, the respondents feel that shopping online is risky due to
lack of strict cyber laws in place to punish frauds and hackers.

Shopping online is risky due to lack of strict cyber laws in

place to punish frauds and hackers
3.1 3.1

7.7
23.1 Strongly disagree
Disagree
Uncertain
Agree
Strongly agree
63.1

30
Figure 2.25 Shopping online is risky due to lack of strict cyber laws in place to punish
frauds and hackers

Website Design factor

“I buy from online stores if they are visually appealing and have a well-organized
appearance” The results of this statement are clarified in the following Figure 2.26,
showing that 64.6% of the total respondents agree and 12.3% strongly agree with the
statement. It means that majority of respondents agreed to buy from visually appealing
online stores. 6.2% of the respondents disagree with the statement whereas the remaining
16.9% were uncertain. The average score for this variable is 3.83, which shows a very
strong and positive agreement with the statement therefore it can be concluded that the
online consumers like to buy through well-organized and visually appealing website stores.

I buy from online stores if they are visually appealing and

have a well-organized appearance
0.0

12.3 6.2

Strongly disagree
16.9
Disagree
Uncertain
Agree
Strongly agree
64.6

Figure 2.26 I buy from online stores if they are visually appealing and have a well-
organized appearance

“I buy from online stores only if the navigation flow is user friendly” The results of this
statement can be seen in the following Figure 2.27, showing that 75.4% of the total
respondents agree and 7.7% strongly agree with the statement. It means that majority of the
respondents like to buy from online stores which are easy to navigate and are user friendly.
6.2% of the respondents disagree with the statement whereas the remaining 10.8% were
uncertain. The average score for this variable is 3.85 which is also a quite strong and

31
positive agreement towards the statement. It concluded that online consumers prefer to
shop online through a user friendly website stores which can be easily navigated.

I buy from online stores only if the navigation flow is user

friendly
0.0

7.7 6.2
10.8 Strongly disagree
Disagree
Uncertain
Agree
Strongly agree
75.4

Figure 2.27 I buy from online stores only if the navigation flow is user friendly

“I buy from online stores only if the site content is easy for me to understand and the
information provided is relevant” The results indicate that the online consumers want to
perceive relevant information and easy understandable website contents while making
online purchases. As you can see in the following Figure 2.28, 73.4% of the total
respondents agree and 15.6% strongly agree with the statement. It means the majority of
online consumers avoid purchasing from a website which has irrelevant information and
content of site are hard to understand. 1.6% of the respondents strongly disagree with the
statement and the remaining 9.4% were uncertain. The average score for this variable is
4.02, which indicates a positive and strong agreement therefore it can be stated that online
consumers prefer to buy online products through reliable and proper information providing
website stores.

32
 I buy from online stores only if the site content is easy for
me to understand and the information provided is relevant
1.6 0.0

15.6 9.4
Strongly disagree
Disagree
Uncertain
Agree
Strongly agree
73.4

Figure 2.28 I buy from online stores only if the site content is easy for me to understand

“I buy from online stores only if they have an easy and error free ordering and
transaction procedure” As seen from the following Figure 2.29, 68.8% of the total
respondents agree and 25% strongly agree with the statement. It means that most of the
respondents prefer to buy from an online e-retailer who provides smooth and easy product
ordering and payment transfer methods. None of the respondents disagreed with the
statement whereas the remaining 6.3% were uncertain. The average score for this variable
is 4.19 which is a very strong and positive agreement. It can be concluded that online
consumers like to buy products through an easy and error free ordering website stores.

I buy from online stores only if they have an easy and error
free ordering and transaction procedure
0.0 0.0
6.3

25.0 Strongly disagree

Disagree
Uncertain
Agree
Strongly agree
68.8

33
 Figure 2.29 I buy from online stores only if they have an easy and error free ordering and
transaction procedure

2.3 Data analysis

The questionnaire survey consists of 16 questions and each question is a single variable.
Every variable is discussed and analyzed separately. As it is evident from the following
Table 2.5, five points Likert scale has been used with score of 1 to strongly disagree and 5
to strongly agree. In order to clarify, the score of each variable has been used e.g. “I feel
that there will be difficulty in settling disputes when I shop online” the score 1 to strongly
disagree, 2 to disagree, 3 to uncertain, 4 to agree, and 5 to strongly agree then the score of
65 input data is used as follows: 1*4+2*9+3*14+4*34+5*4=220, divided by 65
respondents and get 3.38 average of this variable. The same procedure is used to calculate
the average of all 16 variables.

On completion of this part, the average of each factor will be calculated by adding the
average of each variable under each online factor and the sum of variables divided into the
total number of variables under each factor. The lower the average score, lower the
respondent’s agreement with the variable and higher the average score, higher the
respondent’s agreement with each variable.

The statements with its respective number of respondents agreeing or disagreeing and its
weighted average mean are shown in the following Table 2.5:

Table 2.5
Analysis of Online Factors
Strongly Strongly Weighted
Statements Disagree Disagree Uncertain Agree Agree Average
(1) (2) (3) (4) (5) Mean
Financial Risk

1. I feel that there will be difficulty in

settling disputes when I shop online 4 9 14 34 4 3.38
(e.g. while exchanging products)
2. Delivery fees are high 0 15 29 17 4 3.15
3. Prices of various products can be
compared more easily while shopping 0 2 6 44 13 4.05
online
Product Risk

4. I might not get what I ordered 2 8 13 30 12 3.65

34
through online shopping
5. I might receive malfunctioning
2 4 18 33 8 3.63
products
6. It is hard to judge the quality of the
0 1 2 33 29 4.38
products over the internet
Delivery Risk

7. I might not receive the product

3 20 13 24 3 3.06
ordered online
8. I do not shop online because of
non-availability of reliable and 1 14 22 22 6 3.28
wellequipped shipper
Trust & Security

9. I feel safe and secure while shopping

2 20 24 18 1 2.94
online
10. I feel that my credit/debit card
details may be compromised and 3 12 22 24 4 3.22
misused if I shop online
11. I feel that my personal
information given to a website may 0 8 16 34 6 3.59
be compromised to a third party
12. Shopping online is risky due to
lack of strict cyber laws in place to 2 2 5 41 15 4.00
punish frauds and hackers
Website Design

13. I buy from online stores if they

are visually appealing and have a 0 4 11 42 8 3.83
well-organized appearance
14. I buy from online stores only if
0 4 7 49 5 3.85
the navigation flow is user friendly
15. I buy from online stores only
if the site content is easy for me to
1 0 6 47 10 4.02
understand and the information
provided is relevant
16. I buy from online stores only if
they have an easy and error free 0 0 4 44 16 4.19
ordering and transaction procedure
From the above Table 2.5, you can see that Website design and Product Risk factors have
higher influence on online consumer’s buying behavior. The following Table 2.6 helps us
to find the comparative average of each factor. 1 st rank is given to Website design as it has
the highest comparative average 3.97; among other factors influencing online consumer’s
buying behavior. This means that most of the respondents strongly agreed with the
statements under the factor Website Design. Consumers buy from online stores if they are
visually appealing and the navigation flow is user friendly with the site content being easy
enough to understand and if the online stores have an easy and error free ordering and
35
transaction procedure. Similarly 2nd rank is given to Product risk factor with its
comparative average being 3.89. This means that online consumer’s buying behavior is
also highly influenced by the Product risk. Consumers have a fear of getting
malfunctioning products and even not getting the products at all if they order it online.
Respondents have high agreement on the statement which states that it is hard to judge the
quality of the products over the internet. Likewise 3 rd rank is given to financial risk and 4th
rank is given to Trust and Security. Delivery Risk is given the 5 th rank as high agreement of
the respondents in regards to the statements under the Delivery risk is not found.

Table 2.6

Comparative Analysis of Online Factors

Financial Product Delivery Trust & Website
security
Variables Risk Risk Risk Design
Variable 1 3.38 3.65 3.06 2.94 3.83
Variable 2 3.15 3.63 3.28 3.22 3.85
Variable 3 4.05 4.38 0.00 3.59 4.02
Variable 4 0.00 0.00 0.00 4.00 4.19

Comparative Average 3.53 3.89 3.17 3.44 3.97

Rank 3 2 5 4 1
Source: Questionnaire Survey

Table 2.7

Correlation between Average Income and Average Experience of the respondents

Income Average Income Average experience
Below 5000 2500 2.96
5000-10000 7501 3
10001-15000 12501 3.71
15001-25000 20001 3.5
25001-35000 30001 3.8
Above 35000 50000 3.43

Correlation 0.494211

36
Source: Questionnaire Survey

Correlation=

Correlation= 0.494211

Identifying the two key factors, average income over the average experience of the
respondents in regards to the online purchasing, the correlation among them were studied.
The correlation calculated among these two factors of 65 respondents was found 0.494211,
which shows positive correlation among average income and average experience of the
respondents. It also indicates that higher income level does increase the interest attitude
towards online shopping behavior.

2.4 Findings and Discussion

The major findings of this study are as follows:

• Out of the 65 respondents, 33 were female and 32 were male.
• 39 respondents belonged to the age group of 21-25, 9 belonged to the age group of
15-20, 7 respondents belonged to the age group of 26-30, the same figure 7
belonged to the age group of 31-40 and 2 of the respondents were above the age 40.
• Out of the 65 respondents, 30 were students; currently not working, 13 were
students who were doing part time jobs, 13 were full time working individuals, 7
respondents were self-employed and 2 of the respondents were unemployed.

• Among the respondents who were comfortable in revealing their income level, 26
of the respondents had the income level below Rs 5000, 9 had the income level
between Rs 5000- Rs 10000, 7 respondents had the income level between Rs
10001- Rs 15000, 2 respondents between the income level of Rs 15001- Rs 25000,
5 had the income level of Rs 25001- Rs 35000 and 7 respondents had the income
level above Rs 35000.
• Out of the 65 respondents, 49 were Bachelors passed or currently studying students,
9 were Masters Students and 7 respondents were Highschool students.
• On asking the respondents about which product group did they purchase the most
over the internet, majority of them (41) ticked on clothing and accessories product
group.

37
 • The past experiences of most of the respondents with online purchasing have been
average and most of them answered that they get their goods delivered on time.
• The mean of future expectations with online shopping was found to be 3.875,
which implies that most of the respondents agreed to their future expectations being
above average.
• The mean of opinions of family affecting purchase decision was found to be
2.9375, which implies that the opinions of family doesn’t have a strong impact on
the purchase decision of most of the respondents.
• The mean of opinions of friends affecting purchase decisions was found to be
3.2615, which implies that the opinions of friends have an average impact on the
purchase decisions of most of the respondents.
• The mean of opinions of other consumers in online forum affecting purchase
decision was found to be 3.5230, which implies that the opinions of other
consumers in online forum have an above average impact on the purchase decisions
of most of the respondents.
• Among the several online factors affecting the consumer buying behavior, Website
design and Product Risk factors were found to have a higher influence on online
consumer’s buying behavior.
• The correlation calculated among the factors Average Income level and Average
experience of 65 respondents in regards to the online purchasing was found to be
0.494211.
CHAPTER – III CONCLUSIONS AND ACTION IMPLICATIONS

3.1 Conclusion

Online purchasing is becoming more and more popular because of easy use, availability of
products and services 24 hours a day and the high variety of products available on the
internet. This study paper has examined the external online factors which influence
consumer’s online purchasing behavior; specifically the influence of five external online
factors namely financial risk, product performance risk, delivery risk, trust & security and

38
website design. This study also focused on the demographic factors which influenced
consumer’s behavior towards online purchasing such as gender, age, income and education.

The demographic findings revealed that the correlation result of the average income level
over the average experience of the respondents in regards to online purchasing is 0.494211,
which indicates that there is a positive correlation among average income and average
experience of the respondents.

The conclusions of the five specific factors influencing buying behavior of online
consumers are given below:

The website design has a significance influence on consumer’s online purchasing behavior;
the comparative weighted average mean of website design is 3.97 which resemble the
highest score among all other online factors. The e-retailers should make their website easy
to understand and use, and provide proper information for the online consumers. The other
influential factor is product performance risk with the second highest comparative
weighted average mean of 3.89, which implies that the online respondents of this study
considered the product performance risk while making purchases online and if they got bad
performance product, it lead to a negative attitude towards online purchasing.

The financial risk factor’s comparative weighted average mean is 3.53, which shows that
the online respondents feel that there will be difficulty in settling disputes over the internet
and prices of various products can be compared more easily while making online
purchases.

Another factor is trust & security, it has comparative weighted average mean of 3.44. it
means that trust and security has an important variable determining online consumer
buying behavior. Therefore, online retailers are advised to ensure trust and security of
online consumers, including the protection of personal information of online consumers.

The fifth and last factor is delivery risk, it has a comparative weighted average mean of
3.17, which shows an average influence over consumer buying behavior and most of the
respondents agreed on getting their goods delivered on time.

The conclusion of this study showed that website design and product performance were the
most significant external online factors of online purchasing context. These online factors
also validate the prior studies and literature reviewed. Financial risk and trust & security
39
had above average influence on online consumer buying behavior. Delivery risk had an
average impact on consumer’s buying behavior.

3.2 Action Implications

Based on the findings of this study, e-retailers should take important measures to eliminate
the psychological factors like trust & security and build trust in the online retail form and
ensure the privacy of online consumers. The e-retailers should also work hard on website
design. The website factor encourages consumers to spend more time on website and
compare prices, and other product information. An attractive and user friendly web page
can influence the consumer’s decision in a more favorable way for marketers.

In addition, based on the study’s results, online respondents are worried about their
products (product performance risk), e-retailers should provide accurate and authentic
information about product’s performance. Through this, e-retailers can get consumer’s
confidence, so that online consumers will buy more from them and they would not have to
worry about their product’s performance.

As this study was limited to only Kathmandu Valley, further research should be carried out
to whole Nepal as well as some other high income countries to see if there is any
differences in the results. This could be remarkable as it can provide retailers with
information for their right marketing strategies.

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 APPENDICES

Questionnaire Online Consumer Buying Behavior in Chitwan Section 1

Demographic Details:
Gender o
Male o
Female
Age o 15-20 o
21-25 o 26-
30 o 31-40 o
Above 40
Which of the following describes your current occupation?
o Student/ Not working o
Student/ Part-time working o
Full-time working o Self-
Employed o Retired o
Unemployed
Monthly Income o
Below 5000 o
5000-10000 o
10001-15000 o
15001-25000 o
25001-35000 o
Above 35000
Education o
HighSchool o
Bachelors o
Masters o PhD
Which product groups do you buy the most over the internet? (You may tick more
than one option) o Computer games, Software o Clothing, Accessories o Food, Drinks o

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Perfumes, Cosmetics o Holiday packages o Electronic Goods o Household Goods,
Furniture o Theatre, Cinema tickets o Travel tickets o Books o Others
Pick the number that represents your choice
My past experiences with shopping online have been on an average
o 1 (Very Bad) o 2 o 3 o 4 o 5 (Very Good)
I get my goods delivered on
time o 1 (Never) o 2 o 3 o 4
o 5 (Always)

My future expectations with shopping online are

o 1 (Very Bad) o 2 o 3 o 4 o 5 (Very Good)
The opinions and experiences of my family affect my purchase decision o
1 (Not at all)
o 2 o 3 o 4 o 5
(Very much)
The opinions and experiences of my friends affect my purchase decision o
1 (Not at all)
o 2 o 3 o 4 o 5
(Very much)
The opinions and experiences discussed in online forums affect my purchase decision
o 1 (Not at all)

o 2o 3o 4o 5
(Very much)
On average, how often do you make online purchases?
o 1 (Hardly
ever) o 2 o 3
o4
o 5 (At least
once a day)

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Section 2
How much do you agree or disagree with the following statements?
Financial Factor
1. I feel that there will be difficulty in settling disputes when I shop online (e.g.
while exchanging products)
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
2. Delivery fees are high
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
3. Prices of various products can be compared more easily while shopping online
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
Product Risk 4. I might not get what I ordered through online shopping
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
5. I might receive malfunctioning products
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
6. It is hard to judge the quality of the products over the internet
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
Non Delivery Risk 7. I might not receive the product ordered online
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
8. I do not shop online because of non-availability of reliable and well-equipped
shipper
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
Trust and Security 9. I feel safe and secure while shopping online
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
10. I feel that my credit/debit card details may be compromised and misused if I
shop online
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree

11. I feel that my personal information given to a website may be compromised to

a third party
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree

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 12. Shopping online is risky due to lack of strict cyber laws in place to punish
frauds and hackers
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
Website Design 13. I buy from online stores if they are visually appealing and have a
well-organized appearance
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
14. I buy from online stores only if the navigation flow is user friendly
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
15. I buy from online stores only if the site content is easy for me to understand
and the information provided is relevant
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree
16. I buy from online stores only if they have an easy and error free ordering and
transaction procedure
☐ Strongly Disagree ☐ Disagree ☐ Uncertain ☐ Agree ☐ Strongly Agree

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