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EXECUTIVE SUMMARY

   Internet and Information technology have made tremendous contributions for business transformation witnessed nowadays all over the world. This has given birth to E commerce which encompasses several pre purchase and post purchase activities leading to exchange of products or service or information over electronic systems such as the internet and the other Telecommunication networks. Analyzing the competitive advantage of E-Commerce it is observed that E-Commerce enables simpler, faster and efficient business transactions. For developing country like India, E-Commerce offer considerable opportunity for growth. E-commerce leads to a boon for the current economic downturn. As India's e-commerce market is worth about Rs.80,000 crores in 2015. About 80 %of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.).Online retailing comprises about 15%. India has close to 10 million online shoppers and is growing at an estimated 40-45% per annum. The rapid growth of e-commerce in India is being driven by greater customer choice and improved convenience.

   This project  'A study on understanding the consumer's perception towards online grocery shopping will first study the attitude of customers towards online shopping of grocery items, also determining the factors which influence the consumer to purchase grocery and food items online or from the traditional brick and Mortar stores.

The project will also depict the attributes of online shopping influencing the purchase decision by the respondent. It will also determine the issues regarding the online shopping.

    A primary as well as a secondary research was followed to meet the objectives of the project and accordingly related findings, conclusion and recommendations were drawn from the project.

Consulting firm Technopark predicts a $70-billion annual market by 2020, up from $600million now, which is just 0.05% of global online shopping. EBay itself estimates India's online shopping market in 2014 will grow close to 100%. 'E-commerce: A boon for the current economic downturn' First Data Corporation and ICICI Merchant Services, has laid down some facts that e-commerce market in India had clocked close to $1.2 billion by the end of 2015.Even though there are less than 10 million internet users who are actually engaging in e-commerce activities, there are about 150 million internet users in India or around 75 million households that are ready for e-commerce. With entry and operational costs being comparatively low than the other countries like US, the second half of 2011 and the beginning of the current calendar have seen the launch of a good number of new e-commerce sites spanning across a variety of businesses ' women's fashion, men's fashion, shoes, followed by accessories, groceries, sports, toys, home furnishings, jewellery, automotive, bicycles, electronics and electrical equipment etc.

Key drivers for success for e-commerce

Reduction in operational cost as the entire business can be moved online, the need for physical stores has become obsolete. Less infrastructural investment and associated labour costs drives up the profit margin. It is far easier and quicker to compare prices of goods online, equipping the customer with the information to decide the right price or terms for themselves. With services like COD, customers can trust the process of going online and purchasing. Market penetration also becomes far more achievable with e-commerce; it is possible for a merchant in Mumbai to extend his reach to north-eastern cities or even rural villages that are now connected by the online network.

E-commerce facilitates shopping anytime, anywhere and for almost anything desired. Busy consumers prefer this to the restrictions of when a mall/shop is open and the need to physically travel to a shop. Online business takes shopping a step further by taking itself to the customer creating conveniences of shopping anywhere and at anytime. In India, with the increasing propensity of social media, businesses have now begun to engage their customers on social networking portals such as Facebook. These are likely to be rapidly developing marketing channels for the future. 'These businesses are difficult to turn into profitable ventures due to the low margins and the logistics costs involved.'Gaurav Saraf, director of Epiphany Ventures says that, the concept of online grocery shopping faces the problem of turning their business into profitable ventures as the concept is new in the market which leads to low margin along with low margin high cost is involved when it comes to logistics. In addition to these problems the perishable items such as fruits& vegetables have a short shelf life, if these items are not delivered before the expiry of their shelf life it would could cause wastage and also add up the cost. From the above comment a conclusion is arrived that these business ventures have a very thin margin when it comes to business operations

   Industry Introduction

Internet is changing the way consumers shop and buy goods and services, and has rapidly evolved into a global phenomenon. Many companies have started using the Internet with the aim of cutting marketing costs, thereby reducing the price of their products and services in order to stay ahead in highly competitive markets. Companies also use the Internet to convey communicates and disseminate information, to sell the product, to take feedback and also to conduct satisfaction surveys with customers. Customers use the Internet not only to buy the product online, but also to compare prices, product features and after sale service facilities the will receive if they purchase the product from a particular store. Many experts are optimistic about the prospect of online business. In addition to the tremendous potential of the E-commerce market, the Internet provides a unique opportunity for companies to more efficiently reach existing and potential customers. Although most of the revenue of online transactions

comes from business-to-business commerce, the practitioners of business-to-consumer commerce should not lose confidence. It has been more than a decade since business-to-consumer E-commerce first evolved. Scholars and practitioners of electronic commerce constantly strive to gain an improved insight into consumer behaviour in cyberspace. Along with the development of E-retailing; researchers continue to explain E-consumers behaviour from different perspectives. Many of their studies have posited new emergent factors or assumptions which are based on the traditional models of consumer behaviour, and then examine their validity in the Internet context.

    Online Grocery Shopping

Proving that no sector of the retail market is safe from the online shopping revolution, it is now possible for the humble hometown grocery store to become digitized and available on your Smartphone, tablet, or computer. Just think: no longer checkout lines, counting the number of items to see if you qualify for the Express Lane, forgetting your grocery list at home, or carrying heavy bags up your front steps. Online grocery shopping is dramatically changing the consumer's relationship with the food market and making a service that may have once felt luxurious into an everyday convenience. An online grocery store is a website that allows users to purchase food over the Internet to be delivered to the person at a later time.

Ordering food on the Internet is similar to ordering any other product--the desired food items can be searched for specifically, or one can browse through listings of products or sections, similar to sections one might walk through at an actual grocery store.

The products offered by an online grocery store are identical to a normal grocery store. When one has finished shopping, checkout is made with a credit card, and the buyer must specify certain hours that he will be available to receive the food for delivery. Since Internet groceries must deliver the food to the customers, they typically pay a fee for delivery based on the amount of food they buy.

Benefits of Online Grocery Shopping

The primary benefit of online grocery shopping is convenience. By ordering online, one can quickly search for the products she needs and order them without having to physically walkthrough expansive aisles. It also saves travel expenses and time going to the grocery store. Considering the wide availability of the Internet, it also means grocery shopping can be done from remote locations or in the middle of doing other tasks. For instance, using an online grocery store can allow a person to do all her grocery shopping during her lunch break at work. It is also very useful for those without a car or who may be physically unable to move around easily, since the food is delivered right to their doors. The use of online-based grocery stores is increasing in popularity as more and more people become comfortable with using the Internet to make purchases.

Disadvantages of Online Grocery

Shopping Perhaps the largest disadvantages of shopping online are that it costs extra money, since food must be delivered, and that the food ordered is not obtained immediately. If someone were making a certain recipe and discovered he needed an additional ingredient, he would probably not be able to order it online and get it quickly enough to finish his dish. In the same way, it forces a person to plan his food buying in advance of when he will need it'if delivery will take a day or two, a person needs to plan to have an extra day or two of essential foods available before he runs out. Another disadvantage is that online shopping forces the customer to be home during a certain period to collect the food when it is delivered. Also, online grocery stores will often only cover specific delivery areas.

How Does Online Grocery Shopping Work?

Following are the basic parameter that determines the working of online grocery shopping:

Creating the Website

The most important part of online grocery shopping is the website itself. The website should have a complete list of groceries that are able to be delivered as well as the prices for each item. This website should then have a "shopping cart" where a user can add items to a list of things to be ordered, as well as view and edit items that she is planning to purchase. Finally, this website should have the ability for the user to enter her address and pay for the order.

Filling the Order and Shipping

The next step is to take the submitted order and use it to collect and deliver the items on the list. In general, fulfilment of the grocery order needs to be done manually by a stock by or other employee. This process can be made easier by having a well-organized room where the products can be easily and efficiently located. The stock person should also check to make sure that the items placed in the order match the list that the user created. Then, once the order has been compiled, the collection of food needs to be placed in a vehicle and delivered to the customer.

Restocking and Processing Payments

Clearly, it is critical to ensure that all the items listed on the website are in stock and able to be shipped. As a result, the stock room needs to be carefully checked to ensure inventory levels are sufficient. Also, it is important to have the ability to obtain and process payments made by credit card. Also, in order to encourage repeat customers, it can be helpful to require customers to have a user name, which would allow information to be stored. This can also help create "suggested" carts of food items they commonly purchase.

OBJECTIVES OF THE PROJECT

' To study the components of online grocery industry in Mumbai

' To determine the parameters for choosing the particular retail store/ E-Grocer for purchase of grocery items

' To understand consumers perception towards online grocery shopping

' To identify the issues faced by the consumerwhile online grocery shopping

' To determine whether online grocery shopping will be beneficial for the growth of online grocery industry

Introduction to TOP Players

    Major Players of Online Grocery Shopping in Mumbai

   LocalBanya

Localbanya was amongst the first to launch in Mumbai. LocalBanya offers a wide choice and includes exhaustive categories of products. From daily staples, dairy products, bakery items, household supplies, beverages to even health care, personal care products, they have it all. In fact they also offer fruits, vegetables, frozen foods, desserts, confectioneries, magazines and sweets. The site sports a clutter free layout and the products are neatly categorised, which makes it easy to find the products you are looking for.

Currently they deliver in Mumbai and have a mandate of minimum order of Rs500. LocalBanya offers discounts on almost all products, apart from which it runs promotions like Moustache Mondays where they have offers on specific products. They also have a concept of reward points, which can be redeemed on your next purchase. If you create an account, then you can save time by using the 'My Usual' feature, which lets you repeat one of your past orders. You can opt for online payment or cash on delivery. It also lets you choose the time and date of delivery as per your convenience.

BigBasket

BigBasket is present in three cities.Bangalore-based BigBasket is one of the pioneers in this space and amongst the only two such services that have managed to cater to multiple cities. BigBasket has established its presence in Bangalore, Mumbai and Hyderabad. On the homepage you will find the current offers, on the top you will find the various categories like Fruits & Vegetables, Grocery & Staples, Dairy & Eggs, Beverages, Branded Foods, Personal Care, Household and Confectionery. What sets BigBasket apart is the fact that it also sells meat. They provide free shipping on all orders over Rs.1000 and do not have a minimum order policy, but they will charge a small fee of Rs.20 (Rs.25 for Mumbai) on other orders.

BigBasket also accepts food coupons like Sodexo as a mode of payment. Additionally, it also has an iPhone and Android app, which makes it easy for customers to place their orders. BigBasket offers same d ay delivery that is limited only to Bangalore, if you place the order before 12 noon then your order will be delivered to you on the same day at your chosen time slot. For the citizens of Bangalore, they also have something called what you see is what you get, where they promise to deliver every item on the list and if they fail to do so, then they will credit your account with 50% of the value of the undelivered product.

EkStop

They have a superfast delivery service called EkSpress Delivery. Another option for Mumbaiites is EkStop. You can shop online for groceries, household supplies, personal care products, health care products and even stationery. They have a superfast delivery service called EkSpress Delivery where they promise to deliver within four hours of placing the order. They have a minimum order caveat of Rs.400, but they do not have a delivery charge. Shopping on the portal is also easy; you can sign-in and create a list and search for all the items at once.

This will save you time in finding individual products. You can save this list for future reference. Based on your shopping history, it will also bring you insights on what products you spend your money on and will provide you with tips to save money when you order in future. In terms of payment options, EkStop accepts all forms of online payments, cash on delivery and it also accepts food vouchers. They also have aEkStop Loyalty Program under which you can earn reward points, which can be redeemed as cash discount on your subsequent orders.  

AaramShop

AaramShop is like a marketplace for local shops.AaramShop has successfully established a name for itself and they are present in over 30 cities like Delhi, Bangalore, Pune, Mumbai and Ahmadabad. They differ from the other services due to their business model. AaramShop doesn't stock products in warehouses, instead it has tied up with local kirana shops. You will have to register on AaramShop, then look around for shops in your area that have tied-up with them, select the one you prefer after going through the terms and conditions that the store may have.

For instance, some shops may accept food coupons. All your orders will be forwarded to this particular shop that you have set as your preferred AaramShop. Payment is cash on delivery after you have received your order. You can place order for groceries, staples, household essentials, etc. You can create and save your lists online, which can be repeated when placing orders in the future. It also has a reminder facility.

Comparison between online grocery shopping portals

Particulars BigBasket.com EkStop.com LocalBanya.com AaramShop.com

Operations in Mumbai, Bangalore, Hyderabad Mumbai Mumbai 35 cities in India

Order placement Website Website Online Online

Free Delivery For options above Rs.1000 Yes Yes Depends on retailer

Delivery Time 4 slots - from 7am to 10pm Same day possible Same day at extra cost Depends on retailer

Payment mode Cash, credit card, coupons Cash, debit/credit card, net banking Cash, debit/credit card, net banking Depends on retailer

Minimum order - - Rs.500 -

Offers/

Discounts None Daily deals, loyalty programs Reward points Depends on retailer

RESEARCH METHODOLOGY

Research Type: Exploratory & Descriptive

Research Techniques: Primary Analysis & Secondary Data Research

' Structured Questionnaire

' Research Area- Mumbai

' Sample Size -50

' Sample population

Qualifying criteria ' 1. Online shoppers

    2. Age Group ' 25 & above

    3. Grocery Purchasers

' Sampling Technique ' Stratified Random Sampling

' Sources of Secondary data:

' Internet

' E-Commerce Journals

' Consumer behaviour Research Papers

DATA ANALYSIS

Total Respondents- 50 (Online Shoppers)

Area-Mumbai

DEMOGRAPHICS

' AGE

' 85 % of the respondents surveyed belonged in the age group of 25-40 years of agewhile remaining 20% surveyed belonged in the age group of 41 and above

' OCCUPATION

' 58% of the respondents surveyed are working, 26 % respondents are engaged in on businesses, 14 % of the respondents include housewives and non working class of people

' ANNUAL INCOME

' 52% of the respondents surveyed have an income of 5-10 lpa, followed by

32 % having an annual income of 1-5 lpa

   Q1) How often do you buy products online?

INTERPRETATIONS:

' 61 % of the respondents surveyed shopped regularly online once in a month

' 16% of the respondents surveyed did online shopping once in 2 weeks

' 18 % of the respondents surveyed did online shopping rarely

' 4 % of the respondents are frequent online shoppers at frequency of once a week

Q2) Which item you shop online?

INTERPRETATIONS:-

' 56% of the respondents did online shopping to buy apparels

' 22 % used online shopping portals to buy books

' 10% of the respondents did online shopping to purchase electronic items

' 8 % of the total respondents did online grocery shopping

  Q.3) Where do you shop for grocery items?

INTERPRETATIONS:-

' 38% of the total respondents surveyed did their grocery shopping from Supermarkets

' 32 % respondents purchased their grocery from local markets/SabziMandis

' 22 % of the respondents purchased their monthly grocery items from the neighbourhoodkirana store

' Only 8% of the respondents purchased grocery online

 Q.4) Rate the parameters which influence you to purchase grocery from a

    particular store.

8. Rate the parameters which influence you to purchase grocery from a particular store.

  Highly Important Important Neutral Less Important Not Important Response Total

Price 28.6%

(15) 67.3%

(33) 2.0%

(1) 2.0%

(1) 0.0%

(0) 50

Product Quality 79.6%

(40) 20.4%

(10) 0.0%

(0) 0.0%

(0) 0.0%

(0) 50

Variety 30.6%

(15) 63.3%

(32) 6.1%

(3) 0.0%

(0) 0.0%

(0) 50

Delivery 26.5%

(14) 44.9%

(22) 24.5%

(12) 4.1%

(2) 0.0%

(0) 50

Discounts/Offers 30.6%

(16) 44.9%

(22) 20.4%

(10) 2.0%

(1) 2.0%

(1) 50

8.1. Price Response Percent Response Total

1 Highly Important

28.6% 15

2 Important

67.3% 33

3 Neutral

2.0% 1

4 Less Important

2.0% 1

5 Not Important   0.0% 0

INTERPRETATIONS

' 33% of the respondents consider price as an important parameter for choosing a particular grocery store

8.2. Product Quality Response Percent Response Total

1 Highly Important

79.6% 40

2 Important

20.4% 10

3 Neutral   0.0% 0

4 Less Important   0.0% 0

5 Not Important   0.0% 0

INTERPRETATIONS

' 39% of the respondents feel product quality is an essential factor for purchasing grocery from a particular grocery store.

8.3. Variety Response Percent Response Total

1 Highly Important

30.6% 15

2 Important

63.3% 32

3 Neutral

6.1% 3

4 Less Important   0.0% 0

5 Not Important   0.0% 0

INTERPRETATIONS

' 31 % of the respondents feel product variety is the main reason for them choosing a particular store for their grocery shopping

8.4. Delivery Response Percent Response Total

1 Highly Important

26.5% 14

2 Important

44.9% 22

3 Neutral

24.5% 12

4 Less Important

4.1% 2

5 Not Important   0.0% 0

INTERPRETATIONS

' 22 % of the respondents feel delivery of the product to their homes makes them purchase grocery from a particular grocery shop

8.5. Discounts/Offers Response Percent Response Total

1 Highly Important

30.6% 16

2 Important

44.9% 22

3 Neutral

20.4% 10

4 Less Important

2.0% 1

5 Not Important

2.0% 1

INTERPRETATIONS

' 22 % respondents visit a particular store for grocery shopping due to the discounts and offers available at a particular store

Q5. Which online grocery shopping sites are you aware of?

INTERPRETATIONS:-

' 60% of the consumers are aware about localbanya.com and remaining 24% out of the total respondents are aware about Bigbasket.com.

' 6% out of the total respondents are aware about AaramShop.com while remaining 10% are aware about Ekstop.com

Q.6) If you had an option to buy grocery online will you consider it?

INTERPRETATIONS:-

' 43 % of the total respondents think they might want to try doing online grocery shopping

' 35% of the respondents have agreed to go online for grocery shopping if they were given an option

' 22 % of the respondents have flatly denied the option of doing online grocery shopping

Q.7)  What are your issues/ Concerns regarding online grocery shopping?

INTERPRETATIONS:-

' 60 % of the respondents showed concerned over the product quality and freshness issue which held them from purchasing groceries online

' 20 % & 16 % of the respondents felt improper return policy and lack of proper delivery system as a major concern for restraining online grocery shopping

Q.8) Do you think buying grocery online is beneficial?

INTERPRETATIONS:-

' 62 % of the total respondents surprisingly think that buying grocery online is beneficial

' 38 % of the surveyed respondents feel online grocery shopping is not going to benefit

Q.9) If yes, why do you think is beneficial?

INTERPRETATIONS:-

' Of the 62 % respondents who  felt online shopping of grocery is beneficial, 30 % of them feel its easy to place an order online for the products

' 27% of them feel it's a time saving option

' 24 % of them feel it's a better alternative to shopping by avoiding long ques

' 12 % feel online grocery shopping is beneficial in terms of discounts and offers provided

Q.10)  Do you feel that online grocery will take over Kirana shops, Local Markets?

INTERPRETATIONS:-

' 96% of the respondents disagreed that online grocery sites will take over Kirana Shops, Local Markets

MAJOR FINDINGS

From the primary survey conducted with the 50 respondents following findings were noted:

' We can observe that there is an increase in the number of consumers shopping online and which shows there is awareness about online shopping concept in the market

' The data depicts that supermarket are the preferred grocery shopping destination for consumers because of the following parameters,which includes price, quality, Variety, Delivery, Discounts/Offers

' From the data collected we can find out that consumers are interested to do online grocery shopping, but are hesitant to make online grocery purchases due to the following reasons:

1. Quality and freshness of the product delivered to them is a major concern for consumers to witheld  themselves for doing online grocery shopping

2. Lack of proper return policy is another issue

3. Improper delivery system and delivery charges

' Majority of the consumers think online grocery shopping is beneficial because of the following reasons:

1. Easy to order

2. Avoid  wait in the long ques

' Overall it can be found out that consumers perceive online grocery shopping as a beneficial tool and would try doing online grocery shopping but are still hesitant and concerned about making online grocery purchases mainly because of the quality and the freshness issues.

LIMITATIONS

' The research area was restricted to Mumbai

' The sample size was restricted to 50 respondents due to time constraint

' Respondents were chosen based on their internet and online shopping knowledge only

' The questionnaire as not a full-fledged one and as made with an intention of getting the basic consumer perception towards online grocery shopping

    RECOMMENDATIONS

' Online grocery shopping organizations need to be more creative, fusing virtual platforms with real platforms, and thinking outside the box in terms of helping consumers feel at ease about shopping for their groceries online.

' On-time delivery of products purchased through online shopping will prove to be quite beneficial in a long run to attract customers and retain existing customers

' Easy and hassle free return policy for goods which are not matching the quality standard of the consumers should be properly implemented

' Promotional schemes should be launched to promote e-grocery business. Companies should focus on offering informative advertisements which would contain product information along with additional products & services offering which best suits needs of people. Such advertisements frequency should be high so as to position the products & brands in consumer mind-set.

' E-Grocery selling organizations should target the satisfied consumer to create repeat purchases.Also inventory management should be applied to these organizations it will enable them to what it need to stock, how much it needs to stock and where it needs to deliver, this will allow to operates its business operation smoothly.

' E-grocery organizations should try to gain trust from consumers who are reluctant to make online grocery purchase due to quality issues by making the consumers aware and should make sure that products are delivered fresh along with proper  information regarding date of manufacturing, Expiry date, Maximum number of days within which the food items should be consumed etc

FUTURE SCOPE

' This study can be used  as a base to carry out research regarding consumer perception on online grocery shopping  in other Metro cities of India

' The study done to understand the consumer perception regarding online grocery shopping can help organizations involved in online grocery industry to improve on the issues which  are bothersome for consumers to do online grocery shopping and attract more consumers

References

http://www.indiastudychannel.com/resources/165956-List-of-online-grocery-shopping-websites-in-Mumbai.aspx

http://yourstory.com/2012/10/shop-groceries-online-ecommerce/

http://www.moneycontrol.com/news/others/have-you-tried-buying-grocery-online-_1105474.html

tech.firstpost.com/news-analysis/go-online-to-go-grocery-shopping-104577.html

http://www.organicgarden.co.in/

http://sibresearch.org/uploads/2/7/9/9/2799227/riber_b14-173_378-397.pdf

http://firstmonday.org/ojs/index.php/fm/article/view/987/908

ANNEXURE

  Questionnaire

Name: __________________________________

Gender:-

' Male

' Female

Age:-

' 25-30

' 31-35

' 36-40

' 41 and above

Occupation:-

' Student

' Service

' Business

' Others

 Annual Income Level:-

' 1 lakh ' 5 lakhs

' 5 lakhs ' 10 lakhs

' 10 lakhs and above

Q1.How often do you buy products online?

' Once a week ' Once in two week' Once a month' Others

Q.2.Which item you shop online?

' Apparels

' Books

' Electronics

' Food/Grocery

' Games

' Any other (Please specify)________________

Q3. Where do you shop for grocery items?

' Local Kirana

' Local Markets

' Supermarkets

' Online grocery

   Q4. Rate the parameters which influences you to purchase grocery from a particular store.

Parameter Highly Important Important Neutral Less Important Not Important

Price

Product Quality

Variety

Delivery

Discounts/Offers

    Q5. Which online grocery shopping sites are you aware of?

   'Localbanya.com

   'Ekstop.com

 'Aaramshop.com

   'Bigbasket.com

Q6. If you had an option to buy grocery online will you consider it?

' Yes

' No

' May be

Q7. What are your issues/ Concerns regarding online grocery shopping?

' Quality & Freshness of the product

' Price

' Lack ofproper delivery systems

' Payment issues

' Security issue

' Lack of proper return policy

' Any other(Please specify)

    Q8. Do you think buying grocery online is beneficial?

    ' Yes

    ' No

Q9. If yes, why do you think is beneficial?

' Easy to order

' Variety at one shop

' Discounts & offers

' Saves time

' Avoid long queues

' Any other (Please specify)

Q10. Do you feel that online grocery will take over Kirana shops, Local Markets?

' Strongly agree ' Agree ' Neutral ' Disagree ' Strongly Disagree

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