1

(PROJECT WORK)

PUNJAB ENGINEERING COLLEGE, CHANDIGARH

ECONOMICS FOR ENGINEERS (MHN2001)

THE ECONOMICS OF E-COMMERCE: WHAT DRIVES CONSUMER CHOICES?

SUBMITTED BY :-

1) AYUSH ANAND (SID – 23107018)

2) RAVI TIWARI (SID – 23107039)

3) ROHIT TIWARI (SID – 23107033)

4) ARYAN SHARMA (SID – 23107035)

5) AYUSHMAN (SID -23107047)

SUBMITTED TO :-

Dr. ANJU SINGLA

(HEAD OF CENTRE OF MANAGEMENT AND HUMANITIES)

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DATE OF SUBMISSION: 25 MARCH 2025

BATCH: 2023-2027

DECLARATION

We hereby declare that the project work titled " The Economics of E-Commerce: What
Drives Consumer Choices?" submitted to Punjab Engineering College, Chandigarh, in
partial fulfilment of the requirements for the course Economics for Engineers (MHN2001)
is our original work.

This work has not been submitted elsewhere in any form for the award of any other degree or
diploma. The data and information presented in this report are collected and analysed solely
for academic purposes, and due acknowledgment has been made wherever necessary.

We further declare that this project complies with the ethical standards and guidelines set by
the institution and that the plagiarism percentage of this work is within the permissible limit
as per Turnitin software analysis.

Submitted by:

1. Ayush Anand (SID – 23107018)

2. Ravi Tiwari (SID – 23107039)

3. Rohit Tiwari (SID – 23107033)

4. Aryan Sharma (SID – 23107035)

5. Ayushman (SID -23107047)

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ACKNOWLEDGEMENT

We would like to express our sincere gratitude to Dr. Anju Singla, Head of the Centre of
Management and Humanities, for her invaluable guidance and support throughout this
project. Her insights and encouragement have played a crucial role in shaping our
understanding of the subject.

We are also grateful to Punjab Engineering College, Chandigarh, for providing us with the
resources and academic environment necessary for conducting this research.

Lastly, we would like to extend our appreciation to our peers, family, and friends for their
continuous support and motivation during the completion of this project.

Submitted by:

1. Ayush Anand (SID – 23107018)

2. Ravi Tiwari (SID – 23107039)

3. Rohit Tiwari (SID – 23107033)

4. Aryan Sharma (SID – 23107035)

5. Ayushman (SID -23107047)

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S. No Content Pages

1 Introduction 7-9

2 Review of Literature 10-32

3 Research Methodology 33-42

4 Data Analysis and Interpretation 43-52

5 Conclusion 53-57

6 Bibliography/References 58-62
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ABSTRACT

The rapid expansion of e-commerce has fundamentally transformed consumer shopping

behaviour, making online platforms a dominant force in the retail sector. This study examines
the economic principles underlying e-commerce and explores the key drivers influencing
consumer choices in digital marketplaces. Factors such as price competitiveness, festive
discounts, convenience, accessibility, and product variety contribute to the growing
preference for online shopping over traditional retail.

A critical aspect of this research is understanding the psychological and behavioural factors
that shape consumer decision-making. Using a structured questionnaire-based empirical
approach, this study investigates the role of cognitive and emotional responses in
influencing first-time purchases, repeat buying behaviour, and impulse shopping tendencies.
Findings indicate that consumers who find an online platform engaging, user-friendly, and
efficient are more likely to return for future purchases. However, the predictability of impulse
buying remains inconclusive, highlighting the complexity of digital purchasing behaviour.

Additionally, this research explores the impact of individual and platform-related factors,
including product involvement, digital literacy, purchasing barriers, and the
effectiveness of personalized search tools. These elements significantly shape how
consumers navigate e-commerce platforms, influencing their willingness to engage with and
trust online businesses.

By integrating behavioural insights with economic analysis, this study offers a

comprehensive perspective on digital consumerism, bridging gaps between academic
research and industry application. The findings provide valuable implications for businesses,
policymakers, and digital marketers, helping them optimize e-commerce strategies and
enhance consumer engagement in an increasingly competitive online marketplace.
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Chapter 1
Introduction
of
the Topic
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1.1 Rationale of the study

In today’s fast-paced world, online shopping has emerged as a convenient solution for
modern consumers. Over the past decade, shopping habits have undergone a significant
transformation. While many consumers still prefer visiting physical stores, an increasing
number find online shopping more convenient. The ability to shop anytime and from
anywhere has made e-commerce a preferred choice, particularly for those with busy
schedules. As trade and commerce continue to evolve, the rise of multichannel retailing has
contributed to the exponential growth of online shopping worldwide.

E-commerce has seen remarkable expansion, with the global market valued at approximately
$2.29 trillion (John, 2018) and projected to reach $4 trillion by 2020 (eMarketer, 2016). The
rapid growth in online sales, with a 15% increase in revenue and a 13% rise in orders
(eMarketer, 2018), has driven the popularity of various e-commerce models, including
business-to-business (B2B) and business-to-consumer (B2C) transactions (Zuroni & Goh,
2012).

Among global regions, the Asia-Pacific market has emerged as a dominant force in online
shopping, outpacing traditional markets such as the US, UK, Japan, and European countries.
China, in particular, has played a crucial role in this growth, generating approximately $899
billion in online sales out of the region’s total $1 trillion in 2016 (eMarketer, 2016). As
internet accessibility increases and consumers become more aware of the benefits of online
shopping, e-commerce is gaining traction among those who seek better value in terms of
convenience, pricing, product variety, and information availability. Similar to other Asian
nations, Bangladesh is also witnessing a surge in e-commerce adoption, particularly among
younger consumers experimenting with new shopping methods.

Unlike traditional retail stores, online marketplaces provide detailed product descriptions
through text, images, and multimedia, often supplemented with additional resources for
buyers seeking more information. Online shoppers vary widely in their behaviours—some are
adventurous and enjoy exploring new products, while others prioritize convenience and
efficiency. There are also consumers who dislike waiting for product deliveries. Given this
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diverse range of behaviours, online consumer actions—including product searches,

purchasing decisions, and usage patterns—have become a key focus of contemporary
research.

The primary objective of any business is to deliver products and services that meet consumer
expectations. Companies that successfully fulfil customer needs and ensure satisfaction are
more likely to build long-term relationships and drive repeat purchases. In Bangladesh, the e-
commerce industry is expanding rapidly and has the potential for significant growth as
internet penetration extends to rural areas. While traditional shopping habits still hold strong
in the country, modernization and fast-paced lifestyles are gradually increasing the reliance
on online retail. This study aims to explore consumer behaviour toward online shopping,
analysing their preferences, concerns, and overall satisfaction levels.

1.2 Introduction to the Online Shopping Industry

Online shopping, a key aspect of e-commerce, enables consumers to purchase goods or

services directly from sellers via the Internet using web browsers or mobile applications.
Shoppers can either visit a retailer’s website directly or use online search engines to compare
products, prices, and availability across multiple vendors. With advancements in technology,
consumers today can make purchases seamlessly across a variety of digital devices, including
desktops, laptops, tablets, and smartphones.

1.3 Justification for the Topic

The rapid expansion of the internet and its widespread accessibility have significantly
contributed to the increasing prominence of online shopping. Traditional brick-and-mortar
retail is gradually being complemented—and in some cases replaced—by e-commerce,
offering enhanced convenience and greater choices for both buyers and sellers. One of the
major advantages of online shopping is the ability to save items in a personal cart for future
purchases, allowing consumers to shop at their convenience. The process is simple and
accessible to anyone with a valid payment method, such as a credit card, debit card, or online
banking facility.
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Chapter 2
Review of
Literature
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AYUSH ANAND (23107018)

Review of Literature: The Economics of E-Commerce in

India
2.1 International Perspectives on Online Shopping

Garcia (1998) highlights a significant increase in the number of online shoppers across six
major European markets, with the figure rising from 27.7% to 31.4% within a year, indicating
that nearly 59 million Europeans were regularly shopping online. Alongside this growth in
the number of shoppers, the overall volume of purchases also saw a substantial rise.

Karayanni (2008) explored the psychological aspect of online shopping, emphasizing that
consumers often find the activity enjoyable beyond just fulfilling their purchasing needs. The
sense of fun and engagement associated with online shopping plays a crucial role in shaping
consumer attitudes, making "enjoyment" a key predictor of positive sentiment toward e-
commerce.

Menon (2010) further supported this idea, asserting that when consumers have an enjoyable
shopping experience, they develop a more favourable perception of online shopping and are
more likely to adopt it as a preferred method. The study categorized enjoyment into three
primary dimensions: escapism, which refers to shopping as a means of temporary relief from
daily stress; pleasure, which measures how satisfied and happy a consumer feels during the
experience; and arousal, which reflects the excitement and engagement levels of shoppers.

Sharma (2015) emphasized the importance of identifying factors that influence online
purchase intentions, as a deeper understanding of these variables can help businesses tailor
strategies to encourage more consumers to shop online. For example, if high perceived risk
deters customers in certain product categories, retailers can implement strategies to reduce
this risk and foster trust.

Earlier research in developed countries, where internet usage is widespread and consumers
are highly accustomed to online shopping, has identified risk perception as a primary factor
distinguishing those who shop online from those who do not. Other significant determinants
include the level of control over the shopping process, convenience, affordability, customer
service quality, and ease of website navigation. Booz & Company (2011) noted that a
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consumer's overall attitude toward online shopping directly influences their purchasing
behaviour.

However, limited research has been conducted in regions like India, where internet
penetration remains relatively low, and consumer behaviour in the online shopping space is
still evolving. This study aims to explore how these factors apply to the Indian market and
determine their influence on consumer shopping preferences.

The five-stage consumer buying model—problem recognition, information search,

evaluation, purchase, and post-purchase evaluation—remains a widely accepted framework
in consumer behaviour studies. Consumers today, particularly in urban India, engage in
information-driven shopping, where they compare multiple sources (e.g., product reviews,
specifications) before purchasing. This aligns with Sheth’s Consumption Values Theory,
which highlights the role of functional, social, and emotional drivers in decision-making.

Similarly, the Keeney four-stage model—which includes structuring decisions, assessing

impacts, determining preferences, and evaluating alternatives—acknowledges the complexity
of modern consumer choices. In India, while businesses increasingly leverage consumer data
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for marketing, many fail to fully utilize data analytics, creating gaps between available
insights and strategic implementation.

2.2 National Perspectives on Online Shopping

According to Assocham, India's e-commerce industry was projected to reach a valuation of

$38 billion by 2016, marking a 67% increase from its $23 billion revenue in 2015. The sector
has experienced exponential growth, expanding from just $3.8 billion in 2009 to $17 billion
in 2014, before further surging in subsequent years. A report by Forrester indicated that
India's e-commerce sector had the fastest growth rate in the Asia-Pacific region, with a
compound annual growth rate (CAGR) exceeding 57% from 2012 to 2016, and was
anticipated to reach $56 billion by 2023, accounting for 6.5% of the total retail market
(eMarketer).

In 2013 alone, India's online shopping market grew by 88%, driven largely by increasing
consumer adoption of digital retail. The online travel sector dominates e-commerce, making
up around 90% of total online transactions, and is expected to grow at an annual rate of 22%,
reaching a valuation of ₹54,800 crores ($12.2 billion) by 2016. Other major contributors to e-
commerce sales include electronics (5%), followed by apparel, accessories, clothing, and
jewellery, each comprising around 3% of the market.

A study by ComScore (2013) identified India as the third-largest internet user base globally,
with 73.8 million individuals accessing the web from home or workplace computers.
Research by Kim and Park (2005) in the U.S. indicated that consumers who actively seek
pre-purchase information online tend to develop stronger online shopping habits. However,
for individuals who are not technologically proficient, traditional retail stores remain a
preferred option due to their ease of access and familiar shopping environment (Monsuwe,
2004).

Hsieh et al. (2013) examined the shift from physical to digital interactions in various aspects
of daily life, highlighting how online shopping has transformed purchasing behaviour. Jush
and Ling (2012) described online shopping as the entire process of purchasing goods and
services over the internet, while Goldsmith and Flynn (2004) compared it to traditional
catalogue shopping, where customers can browse a variety of products and place orders via
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phone or mail. However, a major drawback of both online and catalogue shopping is the
inability to physically inspect products before purchase.

Christian & France (2005) found that customer satisfaction in e-commerce is primarily driven
by privacy (technology factors), merchandising (product factors), and convenience (shopping
factors). Other essential considerations include trust, delivery reliability, usability, product
customization, and security. Interestingly, security was ranked lowest among customer
concerns, possibly because modern e-commerce platforms have made it a standard feature,
shifting consumer focus toward other shopping attributes.

Rubinstein (2002) analysed the factors that attract and retain online shoppers, emphasizing
the crucial role of pricing. While competitive pricing can draw customers, long-term retention
depends on exceptional customer service and timely delivery. Agwan (2016) observed that e-
commerce platforms relying solely on low prices often attract price-sensitive customers with
lower brand loyalty, making it essential for retailers to focus on service quality and customer
experience to maintain a competitive edge.

Evolving Trends in the Digital Era

Information Search and Digital Influence

The rise of digital platforms has reshaped how consumers gather information. Indian
consumers rely significantly on personal recommendations (81%) and social media
reviews (61%), surpassing global averages. The increasing penetration of mobile commerce
has further accelerated this shift, with a majority using smartphones for shopping.

Evaluation and Purchase Behaviour

During the evaluation stage, Indian consumers prioritize price, product quality, and brand
reputation. Online shopping for categories like apparel, electronics, and cosmetics has
grown significantly, with digital platforms becoming the first point of research before making
final purchase decisions.

Post-Purchase Engagement

Post-purchase behaviour has become crucial in retaining customers, especially with seamless
return policies and personalized engagement strategies. The growing demand from rural
consumers necessitates stronger reverse logistics and customer service improvements to
support continued e-commerce expansion.
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India’s Digital Consumer Landscape

India’s e-commerce sector is growing rapidly, driven by increasing internet penetration,

affordability of smartphones, and the dominance of digital payment systems like UPI.
While tier-2 and tier-3 cities contribute significantly to the market, brand trust and
localized marketing strategies play a vital role in influencing buying decisions.

Technological and Behavioural Shifts

With the advent of AI and machine learning, decision-making has become more data-
driven. Consumers now rely on search engines, chatbots, and augmented reality (AR)
trials to minimize pre-purchase uncertainty. However, challenges such as data privacy
concerns and product authenticity issues continue to impact consumer trust.

Challenges and Future Directions

Despite advancements, data privacy concerns and trust issues in online shopping,
particularly in rural areas, pose barriers to adoption. Future consumer behaviour models
should integrate real-time analytics and personalized experiences to enhance engagement
and build long-term loyalty.
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Rohit Tiwari (23107033)

Review of Literature: The Economics of E-Commerce in India

Introduction

E-commerce has significantly transformed the economic landscape of India, presenting both
opportunities and challenges. The rapid adoption of digital technology, increased internet
penetration, and the rise of mobile commerce have contributed to the growth of e-commerce
in the country. This review of literature explores the economic dimensions of e-commerce in
India, covering growth drivers, business models, regulatory challenges, and future prospects.

Growth of E-Commerce in India

The Indian e-commerce sector has seen an unprecedented surge since 2014, driven by
advancements in digital infrastructure, increasing smartphone penetration, and improved
internet connectivity. The emergence of global players like Amazon and Alibaba, alongside
domestic firms such as Flipkart and Snapdeal, has intensified market competition (Singha,
2018). The Indian government’s Digital India initiative has further accelerated this growth by
facilitating digital transactions and enhancing internet accessibility in rural areas.
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Economic Impact and Business Models

E-commerce operates through various models, including Business-to-Business (B2B),

Business-to-Consumer (B2C), Consumer-to-Consumer (C2C), and Government-to-Citizen
(G2C). The B2C segment has shown significant growth, with consumers increasingly
shopping for travel services, electronics, apparel, and groceries online (Singha, 2018).
Additionally, the B2B sector has also expanded, allowing businesses to streamline supply
chains, reduce costs, and enhance operational efficiency.

Employment and Investment Trends

The e-commerce industry has generated substantial employment opportunities in logistics,

warehousing, customer service, and digital marketing. Investment in Indian e-commerce has
grown significantly, with venture capital and private equity funding driving the expansion of
online marketplaces. According to a study (2015), the influx investments from international
players has led to infrastructure improvement

Challenges in the E-Commerce Economy

Despite rapid growth, the e-commerce industry in India faces several challenges. Payment
security, regulatory uncertainty, and logistics inefficiencies remain key concerns. The
majority of Indian consumers still rely on cash-on-delivery (COD) transactions, adding
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operational costs for businesses (Khosla, 2017). Moreover, tax regulations and compliance
frameworks continue to evolve, creating complexities for e-commerce firms.

Role of Government and Policy Interventions

The Indian government has played a crucial role in shaping the e-commerce landscape. The
implementation of the Goods and Services Tax (GST) has streamlined tax structures,
reducing logistical bottlenecks and improving ease of business operations (Ka Math, 2017).
Additionally, initiatives such as Digital India and Make in India have facilitated digital
transactions, financial inclusion, and rural connectivity, contributing to the overall economic
development of the sector.

Consumer Behaviour and Market Expansion

Indian consumers are increasingly shifting towards online shopping due to the convenience,
competitive pricing, and variety offered by e-commerce platforms. Studies indicate that Tier
2 and Tier 3 cities are experiencing significant growth in online transactions, with an
increasing number of consumers purchasing products for festivals, weddings, and daily
necessities (Singha, 2018). The rise of digital payment solutions, such as UPI and mobile
wallets, has further accelerated this shift.

Future Prospects of E-Commerce in India

The future of e-commerce in India is promising, with expected innovations in artificial

intelligence, blockchain, and data analytics enhancing customer experience and supply chain
efficiency. With an increasing number of consumers embracing digital payments and the
continued support of policy reforms, the industry is poised for sustained growth. However,
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businesses must address issues related to cybersecurity, infrastructure, and customer trust to
maintain long-term success (Rina, 2016).

Conclusion

The economic impact of e-commerce in India has been profound, offering new business
opportunities, employment generation, and increased investment. However, challenges
related to taxation, payment security, and logistics must be addressed to ensure sustainable
growth. With continued government support and technological advancements, the Indian e-
commerce industry is set to play a pivotal role in shaping the country’s digital economy.

References

1. Singha, R.K. (2018). E-Commerce in India: Opportunities and Challenges. SSRN.

2. Mishra, S. & Lotkar, M. (2015). A Study on Current Status of E-Commerce in India.

3. Khosla, R. (2017). Why E-commerce Boom in India.

4. Ka Math, A. (2017). GST to Benefit E-Commerce the Most.

5. Rina, S. (2016). The Utility of E-Commerce Beyond Sale

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Ravi Tiwari(23107039)
Review of Literature: The Economics of E-Commerce in India

INTRODUCTION
India's e-commerce market has seen remarkable growth, driven by increased internet
penetration and smartphone adoption. As of September 2023, India had over 918 million
internet subscribers, including 375.66 million in rural areas, highlighting the democratization
of online access. Additionally, nearly 80% of Indian pin codes have adopted e-commerce,
with Tier-2 to Tier-4 cities accounting for the largest volume of online orders. This shift is
attributed to improved supply chain infrastructure and the convenience of online shopping1.

The Indian e-commerce market was valued at USD 88.6 billion in 2022 and is projected to
grow at a compound annual growth rate (CAGR) of 19.6% from 2023 to 2030. Factors such
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as affordable smartphones, low-cost data plans, and government initiatives like "Digital
India" and "Startup India" have significantly contributed to this growth. By 2030, India is
expected to become the third-largest consumer market globally, with its digital economy
projected to reach $800 billion36.

Indian consumers are increasingly tech-savvy, with 52% using search engines and 51%
relying on social media for product reviews before purchasing—well above global averages
of 38% and 37%, respectively. Furthermore, 65% of Indian consumers plan to increase their
online shopping in the next six months, driven by efficient delivery services and competitive
pricing2.

The most popular categories for online purchases include apparel (71%), consumer
electronics (53%), and makeup/fragrances (44%). Mobile devices dominate as the preferred
shopping medium, with 81% of consumers using smartphones for purchases. Younger
demographics, particularly those aged 25–34, are key drivers of this trend411.

By 2026, rural online shoppers are expected to grow at a CAGR of 22%, reaching 88 million,
while urban shoppers will grow at a CAGR of 15%, reaching 263 million. This growth is
supported by UPI's dominance in digital payments, which accounted for $1.5 trillion in
transactions in 2022610.
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These trends underscore India's transformation into a global e-commerce powerhouse, driven
by technological advancements, consumer preferences for convenience, and robust digital
infrastructure.

Citations: on the last page

Literature Review: Consumer Buying Process Model

The consumer buying process model has evolved as a foundational framework in marketing
literature, reflecting shifts in technology, socio-economic factors, and cultural dynamics. This
review synthesizes traditional models, emerging trends, and statistical insights to analyze the
decision-making journey of modern consumers, with a focus on India’s rapidly transforming
e-commerce landscape.

Traditional Models of Consumer Decision-Making

The five-stage model (problem recognition, information search, evaluation, purchase, post-
purchase evaluation) remains a cornerstone of consumer behavior studies. For instance,
85% of urban Indian shoppers now engage in information-centered shopping, checking at
least two data points (e.g., reviews, manufacturing dates) before purchasing even basic
goods like yogurt3. This aligns with Sheth’s consumption values theory, which emphasizes
functional, social, and emotional drivers7. Globally, 53% of consumers reduce spending after
a single poor experience, highlighting the critical role of post-purchase evaluation in loyalty4.

The Keeney four-stage model (structuring decisions, assessing impacts, determining

preferences, evaluating alternatives) underscores the complexity of modern choices. In
India, 50% of marketers leverage consumer data for campaigns, yet only half explore its full
potential, indicating gaps in aligning data with decision-making frameworks5.

Evolving Trends in the Digital Era

Research and Information Gathering

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Digitalization has redefined information search behaviors. In India, 81% of consumers rely on
personal recommendations, while 61% trust social media reviews, surpassing global
averages (37%)8. Mobile commerce dominates, with 81% of Indians using smartphones for
purchases, driven by UPI’s $1.5 trillion transaction volume in 202235. Globally, 65% of
shoppers plan to increase online spending, prioritizing platforms with efficient delivery and
competitive pricing4.

Evaluation and Purchase

During evaluation, Indian consumers prioritize functional value (price, quality) and epistemic
value (product comparisons). For example, 71% buy apparel online, followed by electronics
(53%) and cosmetics (44%)3. The shift to “destination shopping” is evident, with 64% of
global consumers finalizing choices digitally before in-store purchases8.

Post-Purchase Behavior

Post-purchase engagement now hinges on seamless returns and personalized

communication. In India, rural shoppers are projected to grow at a 22% CAGR (reaching 88
million by 2026), demanding robust reverse logistics3. Globally, improving a customer’s
experience from one-star to three-star increases repurchase likelihood by 68%4.

Regional Insights: India’s Digital Consumer

India’s e-commerce market, valued at $88.6 billion in 2022, is poised to reach $300 billion by
2030, fueled by 918 million internet users (40% penetration)35. Tier-2/3 cities drive 62% of
orders, with platforms like Meesho capturing price-sensitive demographics3. However, 54%
of marketers struggle to convert data into actionable strategies, reflecting systemic
challenges in attribution modeling5.

UPI’s dominance (75% of digital payments) and vernacular content have democratized
access, yet 48% of urban Indians still prioritize trusted brands like Flipkart38.

Technological and Behavioral Shifts

AI and machine learning are reshaping decision-making. For instance, 52% of Indians use
search engines (vs. 38% globally) to validate purchases, while 51% rely on social media
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reviews3. The Smith & Rupp model highlights how digital touchpoints (e.g., chatbots, AR
trials) reduce pre-purchase uncertainty, critical in categories like electronics7.

Challenges and Future Directions

Persistent concerns about data privacy (raised by 60% of global consumers) and product
authenticity hinder adoption4. In India, only 15% of rural shoppers trust online reviews,
emphasizing the need for hyper-localized strategies3. Future models must integrate real-
time analytics, with 97% of loyalty shifts tied to experiential improvements4.

Conclusion

The consumer buying process is increasingly nonlinear, shaped by digital touchpoints,

cultural nuances, and data-driven personalization. India’s market exemplifies this evolution,
blending traditional value-consciousness with tech-enabled convenience. However, bridging
the gap between data collection and actionable insights remains pivotal for sustaining
growth.

Note: Citations correspond to the numbered sources provided in the search results.

Need for the Study

The study of consumer behavior in India's online shopping sector is crucial due to several
converging factors:

1. Rapid Digital Adoption and Market Expansion: As highlighted in the source, India is
one of the fastest-growing digital markets, with internet subscribers reaching nearly
half a billion. The e-commerce market was valued at $38.5 billion in 2017 and is
projected to reach $200 billion by 2026. Understanding the drivers and dynamics of
this growth is vital for stakeholders.

2. Changing Consumer Preferences and Behavior: The shift towards online shopping is
influenced by factors like convenience, broader product options, and value, as noted
in the source. Analyzing consumer preferences and behavioral patterns is essential
for businesses to align their strategies effectively.
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3. Impact of Technology and Digitalization: The increasing availability of information,

enhanced interaction capabilities, and easier accessibility to technology via the
internet are transforming business models. Understanding how these technological
advancements affect consumer decisions and shopping experiences is critical.

4. Research Gaps

1. Detailed Analysis of Consumer Challenges: The study acknowledges challenges

faced by retailers and consumers, but further in-depth research is needed to identify
specific issues, their impact, and potential solutions for both retailers and consumers.

2. Evolving Consumer Decision-Making Processes: While the research touches upon

factors influencing purchase decisions, a more granular analysis of how consumers
utilize product reviews, social media platforms, and other sources to make online
purchasing decisions is needed.

3. Impact of Regional and Linguistic Diversity: India has significant regional and
linguistic diversity that impacts online shopping behavior. Research is needed to
understand how language preferences, regional trends, and cultural factors influence
online shopping adoption and satisfaction.

4. Trust and Security Concerns: Despite the growth of e-commerce, trust and security
concerns remain significant barriers for many consumers. Research is needed to
explore how e-commerce platforms can enhance trust and ensure secure online
transactions.

5. Sustainability and Ethical Consumption: As consumers become more

environmentally conscious, research is needed to understand the demand for
sustainable and ethical online shopping options and how businesses can effectively
integrate these practices.
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AYUSHMAN (23107047)

LITERATURE REVIEW: ECONOMIC AND SOCIAL IMPACT OF E-COMMERCE

(OECD, 1999)

1. Introduction

The rapid expansion of e-commerce in the late 1990s introduced significant shifts in global
economies and social structures. This OECD report (1999) explores these changes, analyzing
how digital commerce influences productivity, market competition, and consumer behavior. It
also examines regulatory challenges, such as taxation, security, and employment shifts,
marking an early attempt to understand the transformative potential of the internet on
traditional business and trade.

2. Economic Impact

The report identifies several key economic transformations brought about by e-commerce:

• Productivity Gains: Digital transactions and automation streamline operations,

reduce costs, and improve efficiency across industries.

• Market Restructuring: Traditional brick-and-mortar businesses face disruption,

leading to new competitive dynamics and innovative business models.

• Global Trade Expansion: E-commerce reduces geographic barriers, enabling

small businesses to access international markets more easily.

3. Social Impact
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E-commerce also generates significant social implications:

• Consumer Behaviour: Online shopping alters purchasing habits, giving

consumers greater access to information and price comparisons.

• Employment Shifts: While e-commerce creates new job opportunities in tech

and logistics, it also threatens traditional retail employment.

• Regulatory and Ethical Concerns: Issues like taxation, data privacy, and
cybersecurity become increasingly relevant as online transactions grow.

4. Policy and Regulatory Challenges

The OECD highlights the need for new policies to address emerging challenges, including:

• Developing fair taxation frameworks for online businesses.

• Strengthening cybersecurity and consumer protection measures.

• Ensuring labor policies adapt to the changing job market.

5. CONCLUSION

This early analysis of e-commerce’s impact underscores its role in reshaping economies and
societies. The report remains relevant today, as many of its predictions about digital markets,
regulatory challenges, and social effects continue to evolve.
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ARYAN SHARMA (23107035)

LITERATURE REVIEW ON THE ECONOMICS OF E-COMMERCE:

E-commerce has emerged as a transformative force in the global economy, revolutionizing

traditional business models and creating new paradigms for economic activity. This literature
review synthesizes current research on the economics of e-commerce, examining its impact
on economic growth, market efficiency, and social development. The growing significance of
digital commerce platforms has attracted substantial academic attention, particularly as the
sector continues to evolve in response to technological innovations and changing consumer
behaviours.

CONCEPTUAL FRAMEWORK OF E-COMMERCE ECONOMICS

The economics of e-commerce can be conceptualized as an interconnected system with

multiple influencing factors. As researchers have identified six key components that form the
foundation of e-commerce economics: digital innovation, market efficiency, logistics
efficiency, economic growth, government regulation, and social impact.

Conceptual Model OF The Economics of E-Commerce

The network model demonstrates the complex interrelationships between these factors.
Digital innovation serves as a primary driver that directly influences market efficiency and
economic growth. Government regulation shapes the development of digital innovation,
logistics efficiency, and social impacts, creating a regulatory framework that can either
facilitate or restrict e-commerce growth. This conceptual model provides a systematic
approach to understanding how various elements of the e-commerce ecosystem interact to
generate economic outcomes.

E-COMMERCE GROWTH AND ECONOMIC DEVELOPMENT

 29

Recent research indicates that e-commerce has become a pivotal force in economic
development across various regions. In India, studies project that the e-commerce sector will
grow from $17 billion in 2014 to over $100 billion within five years, potentially contributing
more than 4% to the country's GDP. This remarkable expansion represents a compound
annual growth rate (CAGR) of 52%, positioning e-commerce as one of the fastest-evolving
markets in the Indian economy.

The economic impact extends beyond direct monetary contributions. Research demonstrates
that e-commerce stimulates consumer demand, enhances market efficiency, and catalyzes
entrepreneurial innovation across multiple sectors. E-commerce provides particularly
valuable resources for the growth of Micro, Small, and Medium Enterprises (MSMEs) and
rural communities, creating new economic opportunities in previously underserved areas.

DIGITAL INFRASTRUCTURE AND E-COMMERCE DEVELOPMENT

The relationship between digital infrastructure and e-commerce development has emerged as
a critical area of study. Provincial panel data analysis from 2013 to 2020 reveals that digital
economy plays a significant role in promoting e-commerce development, with stronger
effects observed in eastern regions compared to central and western areas. Research identifies
three key dimensions of digital economy that influence e-commerce development: digital
infrastructure, application level, and innovation capacity.
 30

Industrial structure upgrading and rationalization serve as indirect mechanisms through which
digital economy affects e-commerce development. This finding suggests that policy
interventions should prioritize infrastructure development in rural and remote areas to create
conditions conducive to e-commerce growth. Additionally, researchers recommend that e-
commerce development policies should be formulated according to local conditions,
recognizing the heterogeneous nature of digital infrastructure and socioeconomic contexts.

LOGISTICS EFFICIENCY AND MARKET OPERATIONS

Logistics efficiency has emerged as a fundamental component of successful e-commerce

operations. Systematic literature reviews have highlighted the critical role of logistics in the
sustainability and profitability of e-commerce businesses. The digitization of information has
enabled new logistics models that support global data flows, enhancing the capacity for cross-
border e-commerce transactions.

Research indicates that packages now have 'digital wrappers' – strains of digital information
paired with physical products that include details about the product, exporter, importer, and
other information required for global tracking. This integration of digital and physical
logistics systems represents a significant advancement in e-commerce operations, reducing
friction in international trade and improving supply chain visibility.
 31

However, the ability to benefit from e-commerce growth varies significantly due to gaps in
access to the internet, digital skills, and developed postal infrastructure. These discrepancies
create uneven economic benefits from e-commerce expansion, highlighting the need for
targeted investments in e-commerce enablers to ensure broadly distributed economic gains.

ECONOMIC EFFICIENCY AND COST IMPACTS

E-commerce has demonstrable impacts on business costs and productivity across multiple
economic sectors. Research suggests that e-commerce can significantly improve economic
efficiency, enhance competitiveness, improve resource allocation, and increase long-term
growth. The potential for "frictionless" economies with near-zero transaction costs has been a
subject of particular interest, as digital platforms reduce the barriers that traditionally.

Studies indicate that this "boundary crossing" increases competition and innovation, likely
boosting overall economic efficiency. The widespread adoption of e-commerce, facilitated by
 32

its relatively simple applications, has led to significant cost reductions in routine business
activities, such as ordering supplies, processing payments, and demand forecasting. These

This literature review underscores the multifaceted nature of e-commerce economics and its
profound impact on global economic development. Research consistently highlights that e-
commerce enhances efficiency, broadens market access, and drives innovation in business models,
contributing significantly to economic value. However, critical gaps remain in understanding its
effects across different regions, the sustainability of its growth patterns, and the broader
interdisciplinary implications of digital commerce.

Future research should address these gaps by conducting detailed regional analyses to inform
targeted policy interventions, longitudinal studies to assess long-term economic sustainability, and
interdisciplinary investigations that integrate technological, social, and economic perspectives. As
digital advancements continue and consumer behaviors evolve, e-commerce will remain a key area
of academic inquiry and policy discourse, shaping both economic and social transformations world.

operational efficiencies, while less visible than consumer-facing innovations, may represent
the most pervasive economic impacts of e-commerce

CURRENT CHALLENGES AND FUTURE DIRECTIONS

Despite its growth trajectory, e-commerce faces significant challenges in an uncertain

economic environment. Research from 2025 indicates that e-commerce leaders face a dual
mandate: driving growth in an expanding digital market while tightly controlling costs in an
unpredictable economy. Economic uncertainty ranks among the primary concerns for e-
 33

commerce experts, with inflation remaining elevated in many regions and consumer
behaviour shifting toward greater value-consciousness.

The post-COVID landscape has accelerated e-commerce adoption by approximately five

years, with some platforms reporting 50-100% growth during the pandemic. However, this
acceleration has also revealed significant disparities in e-commerce readiness across different
regions and socioeconomic groups, presenting both challenges and opportunities for future
economic development.

CONCLUSION

This literature review underscores the multifaceted nature of e-commerce economics and its
profound impact on global economic development. Research consistently highlights that e-
commerce enhances efficiency, broadens market access, and drives innovation in business
models, contributing significantly to economic value. However, critical gaps remain in
understanding its effects across different regions, the sustainability of its growth patterns, and
the broader interdisciplinary implications of digital commerce.

Future research should address these gaps by conducting detailed regional analyses to inform
targeted policy interventions, longitudinal studies to assess long-term economic sustainability,
and interdisciplinary investigations that integrate technological, social, and economic
perspectives. As digital advancements continue and consumer behaviours evolve, e-
commerce will remain a key area of academic inquiry and policy discourse, shaping both
economic and social transformations worldwide.
 34

Chapter 3
Research
Methodology
 35

This chapter focuses on research methodology that was used in the study. It provides a
detailed description of the research approach adopted in the study. Research Design, target
population, research instruments, data collection & analysis method used were presented in
the subsequent section.

3.1 Research Design

This study uses descriptive research. Descriptive research involves gathering data that
describe events & then organizes, tabulates, depicts, and describes the data collection. It often
uses visual aids such as graphs and charts to help the reader in better understanding of the
data distribution and therefore offer a better clarification on consumer behaviour towards
online shopping.

3.2 Data Collection

The research made use of primary data & secondary data, which was collected using
structured questionnaire distributed to the 100 respondents. This research study was
conducted in April, 2021. A sample of 100 respondents was taken, out of which 10 were in
government or semi-government services, while 10 were taken from private sector
employees, 20 were taken from my colleague and the rest 60 were students of our college.
The administered questionnaire was collected after completion by the respondents on the
same day & then responses used for analysis. The questionnaire had both open-ended
questions to enable guide the respondent through filling of the questionnaire as well as probe
them for more information. The secondary data was collected from articles.

3.3 Objective of the Study

1. To study the factors influencing the consumer to buy products from online shopping

2. To study the perception of consumers towards online stores

3. To predict its future and its acceptance by Indian citizen.

3.4 Research Hypothesis

• H1 There is significance relationship exists between likeliness of consumer towards online

shopping and services offered by online shopping platforms
 36

• H0 There is no significant relationship between likeliness of consumer towards online

shopping and services offered by online shopping platform.

Core Concept of Online Shopping

Online shopping is a digital form of commerce that enables consumers to purchase goods and
services directly from sellers via the Internet using either a web browser or a mobile
application. Shoppers can explore desired products by visiting a retailer’s website or by
utilizing shopping search engines that compare prices and availability across multiple online
vendors. Most e-commerce platforms provide search functionalities, allowing users to locate
specific brands, models, or items efficiently. To complete a transaction, customers need an
active internet connection and a valid payment method, such as a credit card, an internet-
enabled debit card, or digital payment services like PayPal. For tangible goods, such as
clothing or books, the retailer arranges shipment to the buyer, whereas digital products,
including software or audio files, are delivered electronically. Some of the most prominent
players in the online retail sector include Amazon, eBay, and Alibaba.
 37

Types of E-Commerce

1. Business-to-Consumer (B2C)

The B2C model involves businesses selling products or services directly to end-users. It is the
most common type of e-commerce, covering a wide range of industries. Online purchases
such as clothing, household items, and entertainment subscriptions fall under this category.
Compared to business-to-business (B2B) transactions, B2C purchases typically involve
shorter decision-making processes, especially for lower-cost items. For example, selecting a
new pair of sneakers is far simpler than a company evaluating a new email service provider.

Due to the shorter sales cycle, B2C businesses generally invest less in marketing per
transaction but tend to have a lower order value and fewer recurring purchases than B2B
companies. The B2C model extends beyond physical products to include digital services.
Modern B2C companies leverage technology such as mobile applications, targeted
advertising, and remarketing strategies to enhance customer experience and drive sales.

2. Business-to-Business (B2B)

In B2B e-commerce, businesses sell products or services to other businesses. The buyer may
use the products directly or resell them to consumers. Compared to B2C, B2B transactions
typically have a longer sales cycle, higher order values, and more frequent purchases.

Many B2B companies have transitioned from traditional catalogues and manual order
processing to e-commerce platforms, allowing for improved targeting and streamlined
transactions. The B2B space is evolving rapidly, especially as younger generations, such as
millennials, become key decision-makers. By 2020, nearly half of B2B buyers belonged to
the millennial generation, significantly increasing online B2B transactions.

3. Consumer-to-Business (C2B)

The C2B model allows individuals to offer goods and services to businesses. In this setup,
consumers can set their prices or invite businesses to bid for their services. Freelance
platforms exemplify this approach by connecting professionals with companies looking for
specific skills.

One of the pioneering platforms in this space was Elance (now Upwork), which facilitated
hiring freelancers for various business needs. Additionally, the C2B model has been
 38

leveraged to connect brands with social media influencers, enabling companies to promote
their products through influencer marketing.

4. Consumer-to-Consumer (C2C)

C2C e-commerce, also known as an online marketplace model, facilitates transactions

between individuals. Platforms in this space generate revenue through listing or transaction
fees. Early adopters of this model, such as eBay and Craigslist, revolutionized the way
consumers buy and sell goods.

A key advantage of C2C businesses is that they grow organically, driven by active buyers and
sellers. However, challenges such as quality control and maintaining a seamless technological
experience remain significant considerations for such platforms.

Impact of COVID-19 on Consumer Buying Behaviour

The COVID-19 pandemic significantly altered consumer purchasing patterns, leading to

notable shifts in shopping preferences. Reports indicate that empty store shelves during the
pandemic created substantial challenges for consumers (Lufkin, 2020). As a result, many
shoppers were compelled to change their usual purchasing habits, with a growing preference
for online shopping over traditional retail (Reddy, 2020).

Beyond the increase in online shoppers, a noticeable transformation occurred in the types of
products being purchased. Consumers prioritized essential items such as personal care
products and medical supplies over non-essential goods like fashion apparel. A survey
conducted by the National Retail Federation (NRF) highlighted key changes in consumer
shopping behaviour during the pandemic:

1. Widespread Adaptation: Nearly 90% of consumers modified their shopping habits

in response to COVID-19.

2. Growth in Online Shopping: More than half of the surveyed consumers transitioned
from in-store shopping to online purchases.
 39

3. Safety Concerns: Approximately 60% of respondents reported avoiding physical

stores due to the fear of infection, choosing instead to purchase necessities through
online platforms.

While some of these behavioural changes may be temporary, certain trends—especially the
digital shift—are expected to persist beyond the pandemic. As societies move beyond the
immediate crisis, digital commerce is likely to remain an integral part of shopping behavior
(Shashidhar, 2020).

Consumer psychology also played a crucial role in shaping purchasing patterns during this
period. According to Paul Marsden, a consumer psychologist at the University of the Arts
London, panic buying can be linked to three core psychological needs: autonomy (the desire
to maintain control over one’s actions), relatedness (ensuring the well-being of family
members), and competence (making informed purchasing decisions). This explains why
"retail therapy" is often a common response during crises, though in a pandemic, additional
concerns further influence consumer behaviour.

Moreover, consumer responses to COVID-19 varied across different demographics. While

women expressed greater concerns about the pandemic’s impact, men were found to be more
affected in terms of spending habits. Surveys revealed that 33% of men, compared to 25% of
women, altered their expenditure on products due to the pandemic. Similarly, 36% of men, in
contrast to 28% of women, adjusted their spending on experiences such as travel, dining, and
entertainment.

These insights illustrate how the pandemic not only accelerated the digitalization of shopping
but also introduced new dynamics in consumer decision-making and spending behaviour.

Changes in Revenue Across E-commerce

With the adoption of social distancing measures during the COVID-19 pandemic, physical
retail stores experienced a decline in foot traffic. Consequently, many consumers turned to e-
commerce as an alternative for their shopping needs. However, while online shopping has
increased in some sectors, the overall surge in e-commerce has not been uniform across all
industries. Certain categories, particularly essential goods like groceries and household
supplies, witnessed a substantial rise in sales.
 40

For instance, JD.com, China's largest online retailer, reported a fourfold increase in sales of
household essentials compared to the same period in the previous year. Additionally, a survey
conducted by Engine revealed that consumers, on average, increased their online spending by
10-30%.

Growth in Online Grocery Shopping

A significant shift was observed in the grocery sector, where e-commerce sales saw a
dramatic increase. In the second week of March, as shoppers encountered shortages at
physical stores, they turned to online platforms to meet their grocery needs. Data from
Rakuten Intelligence illustrates a sharp spike in online grocery purchases, while other e-
commerce sectors showed moderate fluctuations without extreme highs or lows.

This shift highlights the evolving consumer behaviour during the pandemic, emphasizing the
growing reliance on digital platforms for essential shopping needs.

Performance of Other E-commerce Categories

 41

Beyond groceries, e-commerce encompasses a vast range of products across multiple

industries. The impact of the COVID-19 pandemic on online shopping behaviour varied
across these different categories. Data insights provided by Common Thread Collective
indicate that while overall e-commerce trends may not show a consistent increase or decline,
analysing individual sectors reveals a more detailed picture.

Certain industries, such as health and wellness, home fitness equipment, and personal care
products, experienced notable growth as consumers adapted to new lifestyles. Conversely,
categories related to luxury goods, travel accessories, and formal wear saw a downturn due to
reduced social interactions and travel restrictions.

By examining shopping trends across specific verticals, businesses can better understand
shifting consumer preferences and adjust their strategies to meet evolving demands in the
digital marketplace.
 42

Growth in Subscription Services

Although e-commerce sales have not universally surged as initially anticipated, certain
sectors have witnessed substantial growth. Among them, subscription-based and convenience
services have experienced a notable increase in both revenue and customer conversions.

Performance branding firm WITHIN has been analysing the impact of COVID-19 on e-
commerce by tracking year-over-year data across multiple industries. Their findings indicate
that consumers are increasingly gravitating toward subscription models that offer
convenience, predictability, and minimal contact with physical stores.

This trend is particularly evident in industries such as meal-kit deliveries, online streaming
platforms, personal care subscriptions, and fitness programs. As more individuals sought
solutions to accommodate remote work and home-based lifestyles, subscription services
gained traction, solidifying their role in the evolving digital marketplace.

Limitations of the Study

While this research provides valuable insights into consumer behaviour changes due to
COVID-19, certain limitations must be acknowledged:

 The sample size is relatively small and is based on familiar behaviour rather than a
randomly selected group, which may impact the generalizability of findings.
 43

 Since the sample size does not perfectly represent the broader population, the
results may not be entirely reflective of wider consumer trends.

 The study relies solely on an online questionnaire, limiting responses to individuals

with internet access and potentially excluding certain demographics.

 The findings are dependent on the accuracy of responses provided by

participants, which may introduce response bias.

 The absence of trained interviewers to clarify questions and probe deeper into
responses may result in less reliable data and missed insights.

These constraints highlight the need for further research with a larger, more diverse sample
and mixed-method approaches for a comprehensive understanding of consumer behaviour
shifts.
 44

Chapter 4
Data Analysis
and
Interpretation
 45

4.1 Data Interpretation and Analysis

This chapter presents the analysis and findings of the study based on the research
methodology. The results highlight consumer behaviour patterns concerning online shopping.
The study was guided by the following objectives:

 To examine the factors influencing consumers to purchase products through online

platforms.

 To assess consumer perception towards online stores.

 To analyse the future potential and acceptance of online shopping among Indian
consumers.

The study targeted 100 respondents, all of whom successfully completed and submitted the
questionnaire, resulting in a 100% response rate. This high response rate was achieved
through consistent follow-ups, including courtesy reminders to encourage participation.

This chapter provides an overview of demographic information, followed by a detailed

analysis of the findings based on the study’s objectives. The results are illustrated through
graphs and pie charts, accompanied by explanatory discussions to provide deeper insights
into the observed trends.

Primary Data Analysis:

 46

The above pie chart illustrates the age distribution of the respondents. The majority, 73%,
belong to the 18-30 age group, indicating that young adults form the largest segment of
online shoppers. Additionally, 16% of the respondents fall within the 30-50 age group, while
the remaining 11% are aged 18 or below. This distribution suggests that online shopping is
predominantly favoured by younger individuals, though it also holds relevance for older
demographics.

The pie chart represents the respondents' interest in online shopping. A significant 93.9% of
the participants expressed a preference for online shopping, highlighting its widespread
acceptance. Meanwhile, 5.1% of the respondents were uncertain about their stance on online
shopping. Notably, only 1% of the respondents stated that they did not like online shopping.
These findings indicate a strong inclination towards digital shopping platforms among the
surveyed individuals.
 47

The survey results indicate that 73% of respondents believe that online shopping is time-
efficient, making it a preferred choice for many. Additionally, 18% of the participants
remained neutral, neither agreeing nor disagreeing with this statement. A smaller segment,
7% of respondents, strongly supported the idea that online shopping saves time. However,
only 2% of the respondents disagreed, suggesting that a vast majority perceive online
shopping as a convenient and time-saving alternative to traditional shopping methods.
 48

The above pie chart illustrates respondents' perceptions regarding safety and privacy in
online shopping. A significant 96% of participants feel secure while making purchases
online, indicating a high level of trust in digital transactions. However, 4% of respondents
expressed concerns about safety and privacy, highlighting that while online shopping is
generally perceived as secure, some consumers still have reservations regarding data
protection and fraudulent activities.

The above pie chart illustrates respondents' views on the ease of choosing and comparing
products while shopping online. A majority (79%) agreed that online shopping provides
convenience in comparing products, enabling better decision-making. Additionally, 8% of
respondents remained neutral, indicating that they neither found it significantly easier nor
difficult. On the other hand, 1% of respondents disagreed, while another 1% strongly
disagreed, suggesting that a small portion of shoppers still face challenges in product
comparison despite the available online tools.
 49

The above pie chart illustrates respondents' opinions on the availability of detailed
information while shopping online. A significant 56% strongly agreed that online
shopping provides comprehensive product details, while 37% agreed, reinforcing the belief
that online platforms offer sufficient information for informed purchasing decisions.
Additionally, 6% of respondents remained neutral, suggesting they did not have a strong
preference. Only 1% disagreed, indicating that very few respondents found online product
descriptions inadequate.
 50

The data indicates that 93% of respondents believe online shopping is a time-efficient way
to make purchases, highlighting its convenience and ease of access. In contrast, 7% of
respondents disagreed, suggesting that they may find the process time-consuming due to
factors such as browsing, decision-making, or delivery times.

The above pie chart illustrates consumer preferences for online shopping platforms.
Amazon and Flipkart emerged as the top choices, each receiving 37% of the votes,
indicating their dominance in the Indian e-commerce market. Myntra followed with 24%,
likely due to its strong presence in the fashion segment, while Ajio received 2%, suggesting
a relatively lower preference among respondents.
 51

The above pie chart illustrates the primary reasons why consumers prefer online shopping
over offline shopping. A majority (38%) selected "All of the above," indicating that
factors like great offers, attractive prices, home delivery, cashback, and discounts
collectively influence their decision.

Among individual factors, home delivery stood out as the most significant reason,
securing 33% of the votes. This highlights the convenience factor as a major driver of online
shopping. Attractive prices (12%), cashback & discounts (9%), and great offers (8%)
followed, showing that financial incentives also play a crucial role in consumer preferences.

4.2 Hypothesis Testing

To assess the relationship between consumers' inclination towards online shopping and the
services provided by online shopping platforms, the following hypotheses were formulated:

 H₁ (Alternative Hypothesis): There exists a significant relationship between

consumer preference for online shopping and the range of services offered by e-
commerce platforms.

 H₀ (Null Hypothesis): No significant relationship exists between consumer

preference for online shopping and the services provided by e-commerce platforms.
 52

The hypothesis was tested using the Chi-Square Test, which helps determine whether the
association between these variables is statistically significant. The test results, generated
using IBM SPSS Statistics software, provide insight into whether consumer preferences are
influenced by the services available on online shopping platforms.
 53

Chi-Square Test Output Analysis

The results of the Chi-Square Test are presented in three key tables:

1. Sample Size and Missing Values:

The first table provides details regarding the sample size and any missing values. The
sample size for this study is 101 (N = 101), and there are no missing cases, as
indicated by N = 0 in the missing values column.

2. Cross-Tabulation Table:
The second table represents a contingency table, which displays the relationship
between two nominal variables. Each row corresponds to factors influencing
consumers to choose online shopping over offline shopping, rated on a scale of 1 to 5.
Similarly, the columns represent the likeliness of consumers towards online
shopping, measured on a scale of 1 to 3. This table helps in understanding how
different factors contribute to consumer preferences.

3. Chi-Square Statistics Table:

The final table presents the Chi-Square test results, where the Pearson Chi-Square
value is 117.508, with an associated p-value of 0.001. Since this p-value is less than
0.05, the null hypothesis (H₀) is rejected.

Conclusion:

The null hypothesis states that there is no significant relationship between consumer
preference for online shopping and the services provided by e-commerce platforms.
However, based on the Chi-Square test results, we reject the null hypothesis and conclude
that a significant relationship does exist between consumer preference for online shopping
and the services offered by online shopping platforms.
 54

Chapter 5
Conclusion
 55

5.1 Major Findings

For the analysis of consumer behaviour towards online shopping, basic statistical methods
such as frequency and percentage distribution were utilized. These methods aided in
systematically evaluating, organizing, tabulating, and interpreting the collected data, leading
to meaningful conclusions.

 Consumer Preference for Online Shopping: Over 80% of respondents expressed a

preference for online shopping and acknowledged that it is a time-saving mode of
purchasing.

 Ease of Comparison and Evaluation: Around 70% of respondents agreed that

comparing and evaluating products is more convenient when shopping online.

 Availability of Product Information: More than 50% of respondents believed that

online platforms provide detailed product descriptions, enhancing their shopping
experience.

 Preferred Online Shopping Platforms: Among the various platforms, Amazon and
Flipkart emerged as the most preferred choices, each securing 37% of the votes.
Myntra followed with 24%, while Ajio accounted for 2% of the responses.

 Key Factors Influencing Online Shopping Preference:

o 33% of respondents cited home delivery as the primary reason for choosing
online shopping.

o 12% favoured attractive pricing, while 9% valued cashback and discounts, and
8% were drawn to great offers.

o The majority (38%) selected "All of the above," indicating that a combination
of great offers, attractive prices, home delivery, cashback, and discounts
collectively influenced their preference for online shopping.

These findings highlight the growing inclination towards online shopping, driven by
convenience, time efficiency, competitive pricing, and additional benefits offered by e-
commerce platforms.
 56

5.2 Conclusions and Suggestions

The study indicates a notable shift in consumer buying behaviour, with a growing
preference for online shopping. The COVID-19 pandemic has further accelerated this
trend, leading to a significant surge in the e-commerce industry. Consumers increasingly
favour the convenience of home delivery, preferring to shop from an extensive range of
products, compare options, and make purchasing decisions based on competitive pricing
offered by various sellers.

However, the scenario is quite different from the seller's perspective. The Indian e-
commerce sector is expanding as more retailers enter the market. While this growth is
beneficial in the long run, many entrepreneurs lack the financial resources to sustain their
businesses for extended periods before becoming profitable. The future of e-commerce in
India is promising but also presents challenges that demand strategic efforts from both
businesses and investors. Given India's unique socio-cultural market dynamics,
companies must adopt a hybrid approach that blends globally tested strategies with
localized elements to ensure long-term success.

Despite rapid internet penetration, online shopping adoption still lags behind network
development. Many internet users remain browsers rather than active online consumers,
largely due to an imperfect legal framework and inadequate support systems for online
transactions in India.

Future Outlook

The study suggests that online shopping has a bright future in India, with consumer
perception becoming increasingly positive. With the advancement of internet accessibility
and digital payment systems, shopping has become more secure, convenient, and
accessible anytime, anywhere.

Two major factors influence consumer decision-making in online shopping:

1. Risk Aversion – This reflects how much certainty a consumer needs before making a
purchase. Highly risk-averse consumers require detailed product descriptions,
reviews, and guarantees, while less risk-averse consumers are more comfortable with
uncertainty.
 57

2. Innovativeness – This refers to the willingness of consumers to explore and

experiment with new shopping methods. Consumers with high innovativeness are
more likely to adopt new e-commerce trends, whereas traditional shoppers may take
longer to transition to online platforms.

Recommendations for Growth

To enhance trust and adoption of online shopping in India, the following steps are
essential:

 Strengthening consumer protection laws to provide a secure shopping environment.

 Enhancing customer service and return policies to build confidence.

 Promoting digital literacy to encourage hesitant consumers to adopt online shopping.

 Implementing a balanced business strategy that caters to both local and global
market needs.

With these improvements, India's e-commerce sector has the potential to flourish and
become a dominant force in the global online retail industry.
 58

Chapter 6
Bibliography
/ References
 59

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Citation for review literature paper(Ravi Tiwari)

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trends-and-prospects

2. https://www.pwc.in/industries/retail-and-consumer/global-consumer-insights-pulse-
survey-india-perspective.html

3. https://www.grandviewresearch.com/industry-analysis/india-e-commerce-market-
report

4. https://newrelic.com/resources/report/state-of-ecommerce-india
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5. https://www.pwc.in/assets/pdfs/how-india-shops-online--new.pdf

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