Title of the Project

An Analysis Of Factors Creating Hesitations In

Consumers Mind While Buying Groceries Online

Submitted by
Sanket V. Bhosle

MMM - SemV Roll No. 12

Under the Guidance of

Prof. Ravi Vaidee

In partial Fulfilment of
MMM course
University of Mumbai
(2014-2017)

Prin.L.N.Welingkar Institute of Management

Development & Research
Matunga, Mumbai-400019.

CERTIFICATE FROM GUIDE

This is to certify that the project entitled An Analysis Of Factors Creating Hesitations In
Consumers Mind While Buying Groceries Online.a

is successfully done by Mr: Sanket V. Bhosle

During the Third year of his coursein partial fulfillment of the Master Degree in Master Degree in:
Masters in Marketing Management

Management under the University of Mumbai through the Prin.L. N. Welingkar

Institute of Management Development & Research, Matunga, Mumbai-19.
This project represents the work done by Mr./Ms./ ________________________
Under my guidance & the record of Interactive sessions with me during the preparation of the
Project are as under:
Interactive Session No.
(Minimum Three)

Date

1.

19th July, 2016

2.

20th July, 2016

Signature of Guide

3.

Date: 3rd October, 2016

Signature of the Project Guide

Name of the Project Guide:Prof. Ravi Vaidee

Address: ClublifeAhuja Towers, Borivali West, Mumbai 400091
Tel.No./ Mobile No. 9664764768
Email ID: sank.bh.sb@gmail.com

SR. No

TOPIC

PAGE NO

1.

INTRODUCTION

2.

LITERATURE REVIEW

3.

HYPOTHESIS

11

4.

RESEARCH & RESEARCH METHODOLOGY

13

4.1

RESEARCH OBJECTIVE

4.2

SCOPE OF RESEARCH

4.3

LIMITATIONS

4.4

PARTICIPANTS & APPARATUS

4.5

RESEARCH METHODS

4.6

SELCECTION OF METHOD

4.7

QUESTIONNAIRE DESIGN

5.

DATA ANALYSIS & INTERPRETATION

5.1

HYPOTHESIS

6.

OBSERVATION, RECOMMENDATION AND CONCLUSION

29

7.

BIBLIOGRAPHY

34

8.

ACKNOWLEDGEMENT

35

20

CHAPTER 1

INTRODUCTION

INTRODUCTION
Virtual grocery stores have emerged as an excellent alternative for urban, time-tested citizens who
after a grueling day in office or tending to domestic chores lack time to visit an offline store, wait
in a queue and haggle over prices and lug bags full of groceries back home. Thanks to tech-backed
portals that have come to the rescue of such customers, it is now possible to get all kinds of
essentials delivered at ones doorstop from the comfort of ones office desk or kitchen counter.
While virtual shopping has gained a strong foothold in several foreign countries, the trend is slowly
catching pace in India as well.
Currently, Indias online grocery market is estimated to be less than $100 million and is expected
to cross $25 billion by 2020. According to retail consultancy Technopak, the online grocery retail
market is growing at 25 to 30 % in the metros and other large cities in India. What is attracting
more and more customers to shop online is the ease and attractive offers that these portals come
up with.
The world has changed radically for online grocery start-ups in India in the past few years. Three to
four years ago the buzz was around grocery sites shutting down. Now, the survivors and new
entrants are thriving.
The top five online grocery startups in India have risen over $120 million just this year. Four years
ago, a number of startups had come up in this sector but most shut down pretty soon mostly due
to lack of investment and customer base.
This study attempt to answer some of the questions regarding why consumers who prefer to buy
commodities like fashion products, Show tickets, Airline tickets, electronic products etc. online,
but when it comes to grocery products which are require on daily basis, there are many
hesitations in consumer minds. This personality sketching will help to understand the factors like
motivation, attitude, perception etc., which play important role while purchasing any product.
This report shall attempt to answer some of the questions regarding online buying behavior of
consumer, which depends on particular commodities. The market research will be helpful to the
new online grocery stores\ websites in India to find out possible gaps between the customers
expectations and present market offering.
It will mainly a primary research and the information will be gathered from both primary and
secondary research.
The project highlights the factors, which creates hesitations in consumers mind while buying
groceries online.

The factors under consideration would be:

Price
Hygiene and Quality
Delivery Time
Personal Touch

For the purpose of the project has undergone through

Surveying the relevant consumer base through exhaustive questionnaire.

Deducing an analytical overview through different methods.

Literature Overview Of Online Grocery Industry

India is among the fastest-growing markets and has been identified as one of the significant
potential markets for the company.
Muralikrishnan B., country manager at eBays India explains that Indian consumers toward buying
high margin products such as clothes and shoes as is the trend among eBay shoppers in the west
rather than electronic gadgets and books, which are the most popular choices now but command
lower profit margin and are less frequent purchases.
He depicted that Indias nascent e-commerce market, which till recently was largely limited to
people buying train, movie, flight tickets, is in the middle of a surge as a younger, tech-savvy
middle class increasingly takes to shopping online in a country seeing rapid growth in internet
usage.
Consulting firm Technopak predicts a $70 billion annual market by 2020, up from $600 million
now, which is just 0.05% of global online shopping.

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 Rs. 50,000 cr. by the end of 2011.
With entery and operational costs being comparatively low tha n the other countries like USA, the
second of the current year has been good for the new e-commernce sites spanning across a
varitey of business- womens fashion, mens fashion, groceries, sports, toys, books, home
furnishing, jewellery, automotive, electronic gadgets 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 associate labour costs drives up
the profit margin.
It is far easier and quicker to compare prices of goods online, equipping the customer with ith
information to decide right price or items for themselves. With services like COD, customers can
trust the process of going online and purchasing.
E-commerce facilitates shopping anytime, anywhere and for almost anything desired. Busy
consumers prfer this to the restrictions of when a mall 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.

Connecting the local Kirana stores with the buyers while storing inventories on the
cloud.
Vijay Sing, CEO & MD of Aramshop says that in order to reduce the cost to their business
operation they applied the concept of cloud computing, where it connects the local kirana shops
with the buyers. It enables the business to reduce the invetory cost as all the inventories are
handled by the local vendor.

Online Grocery Industry in India

Out of about 40 beginners, we are among the very few who survived, says Hari Menon, Cofounder of Bigbasket, which was founded in 2011.
Now BigBasket, along with other survivors ZopNow and Localbanya, and the new kids on the block
like Grofers, PepperTap, and Jugnoo are expanding rapidly, launching in new cities, hiring new
talent and raising fresh funds.
So, what changed
The biggest change is the habit change of consumersto buy grocery online. We are changing
the way people shop for grocery, says Mukesh Singh, Co-founder and CEO of ZopNow. The
startup was founded in 2011 and had an inventory model. ZopNow changed this model earlier this
year and now partners with hypermarkets to source products and is targeting over $80 million in
revenue this fiscal. The increased consumer traction has helped attract investment in this
category which further accelerates the process.
The food and grocery industry in India is now worth $383 billion and is expected to touch $1
trillion by 2020, according to a study by advisory firm Technopak. This is the market these
startups are targeting.
Despite the large market size, experts like Arvind Singhal, Chairman of retail advisory firm
Technopak, say the growth these startups have registered has been surprising. This is because
grocery is a tough segment to crack online even globally. Poor execution had led many an e-grocer
in the USWebvan, HomeGrocer and PublixDirectto bankruptcy in the last decade.
This is a complex, execution-oriented business; understanding the execution and supply chain
makes the real difference, says Hari of Bigbasket, the only major player that still maintains
inventory. The company, the largest in this segment, operates in seven cities and is targeting $ 1
billion revenue by end of FY 2017.
Last-mile logistics and procurement are the two areas that complicate operations in this segment
and each startup is
tackling these challenges differently.
Bengaluru-based BigBasket is expanding its warehouse network and going to smaller towns.
ZopNows new model has seen them partner with hypermarkets like More and HyperCity.
Bengaluru-based ZopNow and its customers have real-time visibility of this inventory. ZopNow
handles the pick-up and delivery.
The new companies have opted for a hyperlocal model. Grofers, which has raised $45 million in
funding just this year, started out as a provider of on-demand delivery services to local stores. Late
last year, the company launched its mobile app through which consumers can place their grocery
orders.

CHAPTER

HYPOTHESIS & LIMITATIONS OF STUDY

10

3.1 HYPOTHESIS:
The hypothesis framed for the analysis regarding Hesitations In Consumers Mind While Buying
Groceries Online.
Study regarding 'What Restrict Consumer to buy Groceries Online.'

11

CHAPTER 4
RESEARCH AND RESEARCH METHODOLOGY

12

4.1. RESEARCH OBJECTIVE:

To study the attitude of consumer while online shopping of groceries.

To find out preferences of consumer regarding the attributes of online shopping of

groceries.

To identify the factors which cause hesitations in consumer mind while buying groceries
online.

To determine the parameters for choosing the particular Kirana stores or Shopping Market
for purchase of grocery products.

To determine whether online grocery shopping will be beneficial and on what factors.

4.2. SCOPE OF RESEARCH:

To determine which factors restrict the consumer from buying groceries online

To determine which factors can influence consumer to change their traditional method of
grocery shopping and switch to online grocery shopping.

4.3. LIMITATIONS OF RESEARCH :

The first limitation which caused during the market research was to find out the
respondents who shop online and are web savvy.

The second limitation caused during the research was to find out the women respondents
who like to shop other commodities online (i.e. Appeal, Electronics, Show tickets etc.) but
hesitate to buy groceries online.

Sample size is very small.

13

4.4. PARTICIPANTS :
The survey was taken in Mumbai by sending questionnaire to as many people as possible. Only
those participants who have completed the questionnaire will be accounted as valid survey. There
are 61 participants who have completed the questionnaire.

Computers facilities with internet access, Google Forms and whatsapp were used to conduct the
survey, and Microsoft Office Excel to do statistic and data analysis.

4.5. RESEARCH METHOD:

Primary Source:
The primary source of data collection for this research is a survey research, which collect
information from participants through a questionnaire. The purpose of this research is to analyse
the current and future behaviour of the consumers regarding grocery shopping to help marketing
manager making strategies according to the feedback received from participants. The behaviours
include attitude, believes, perceptions, motivations of participants, and that will be taken on a
series of measurements based on specific research points.
After questionnaires sent out and later collected data from feedback, the quantitative research
method will be use in this research. Google forms and Microsoft Excel programmes help to analyse
the outcome from the samples and generalise the conclusion in whole point of view of consumers
buying behaviour.

Secandory Source :
The secondary source of information here includes library resources, articles in various
newspapers and magazines, research papers, companies brochure and online resources like
company websites, online reports and articles.

14

4.7. QUESTIONNAIRE ON 'FACTORS CREATING HESITATIONS IN CONSUMER MIND

WHILE BUYING GROCERIES ONLINE' :
Problem Statement : Resistance While Buying Groceries Online.

Background Information.
Name: _____________________________________
Age: _______
Gender:

a) Maleb) Female

Occupation:

a) Service

b) Business

c) Homemaker

Household Income per Annum: a) Less than 5 lakhs

(In Rs.)
b) 5-10 lakhs
c) 10-15 lakhs
d) 15-20 lakhs
e) Above 20 lakhs

15

d) Student

QUESTIONNAIRE

Q.1) Where do you tend to by your groceries from?

a)
I buy from Online groceries Stores
b)
I go to super market stores
c)
I shop from my local Kirana Store.
d)
I do not do any grocery shopping.

Q.2) How often do you do your groceries shopping in market stores ?

a)
Weekly
b)
Fortnightly
c)
Monthly
d)
Every few months

Q.3) How much do you spent on grocery shopping?

a)
100-500
b)
550 to 1000
c)
1100-3000
d)
Above 3000

Q.4) Which best describes the type of grocery shopping you do?
a)
Main grocery Shopping
b)
Special Occasion/Party
c)
Bulk Shopping.

Q.5 Which of the following reasons describes your reasons for buying groceries from Kirana
Stores?
a)
b)
c)
d)
e)
f)
g)
h)

My preferred Super market is too near from my residence.

Immediate\ Same day home delivery.
Credit Facility
Personal touch
Easy Bargaining
Time saving
Better pricing than e-shops.
Other. Please Specify

16

Q.6)Which of the following reasons describes your reasons for buying groceries from Super
market ?
a) Comfortable browsing of grocery products.
b) Free Home delivery
c) All products under one roof
d) Discounts or promotional schemes.
e) Other. Please specify
Q.7) )Which of the following reasons describes your reasons for not buying groceries online?
a) Quality /Trust Issue
b) No personal touch
c) Limited coverage area
d) Price.
e) Return Policy.
f) Other, please Specify

Q.8) Which according to you are the purchase drivers from physical stores vies- a-vies virtual
stores in the category grocery? (Please tick only the one which is applicable in each row among
the columns)
Physical store (kirana store,
supermarkets)

Virtual store(E-grocery
shopping

Convenience
Immediate home delivery
Time saving
Better prices
Single point shopping
Easy feedback
Easy credit facility
Touch and feel factor
Better Relationship
Return Policy

Q.9)What according to you could be the triggering factors to convert people to purchase
groceries online instead of a physical store? (check all that apply)
a) Free home delivery without any minimum order requirements
b) Secured payment systems
c) When the prices become competitive
d) Wider availability and accessibility of internet service

17

Q.10)How likely would you be to buy groceries online and have them delivered if
Very likely

Likely

Neither likely
nor unlikely

Costs were
slightly
HIGHER than
regular
grocery store
prices?
Costs were the
same as a
regular
grocery store
prices?
There was a
service
delivery fee
per order?
Instant Return
Policy

Thank You For Your Time!

18

Unlikely

Very unlikely

CHAPTER 5
DATA ANALYSIS

19

DATA ANALYSIS:
PERSONAL DETAILS :
Gender :
Female

Male

Total

37

24

61

Female
Row 2, Male,
24, 39%

Male
Row 2,
Female, 37,
61%

Illustration :
The above diagram represent that out of the 61 participants 61% of the respondents were female
as the objective of the research was to study the consumer behaviour with respect to grocery, as
grocery is more shop by female respondent.

20

HOUSEHOLD INCOME PER ANNUM:

Row 2, Above 20
Lakhs, 6, 10%

Row 2
Row 2, Less than
Less
than 516,
Lakhs
5 Lakhs,
26%

Row 2, 15-20, 6,
10%

5-10
10-15
15-20

Row 2, 10-15, 9,
15%

Above 20 Lakhs
Row 2, 5-10, 24,
39%

Illustration :
From the above pie chart we can determine that 39% of the respondents have annual income of 5
to 10 lakhs which indicate that majority of the respondent have spending power to purchase
grocery items.

21

Q.3) Which best describes the type of grocery shopping you do?

Row 2
Bulk Shopp.
5
8%

Special
Occasion/Party
14
23%

Main grocery Shopping

Special Occasion/Party
Main grocery
Shopping
42
69%

Bulk Shopping.

Illustration :

Above Pie diagram indicates that majority of respondents (69%) do main grocery shopping
which include their daily requirement of grocery products.

Respondents also shop as per the occasions like birthday parties, get together etc. 8% of
the respondents do bulk shopping of groceries to avoid day to day efforts.

22

Q.4 Which of the following reasons describes your reasons for buying groceries
from Kirana Stores ?
Chart Title
Better pricing than e-shops.

Time saving

27

Easy Bargaining

Personal touch

23

Credit Facility

Immediate\ Same day home delivery.

26

My preferred Super market is too near from my residence.

43
0

10

15

20

25

30

35

40

45

50

Illustration :

The above graph indicates that 44 of the respondents prfer to shop in the local Kirana
stores because it is too near to their residence.

26 of the participants like the immediate or same day delivery which motivates them to
shop from kirana stores.

Not many of the participants are concern about credit facility, only 5 of the respondents
like credit facility given by their respective Kirana stores.

23 respondents believe that it is good to have a personal touch while buying groceries to
check the quality of the products. Same number of respondents prefer Kirana stores for
grocery shopping as it saves their timing.

Only 6 of the respondents prefer Kirana stores just because they can bargain easily.

Very less respondents prefer local stores over online shopping because of less product

23

price.

Q.5)Which of the following reasons describes your reasons for buying groceries
from Super market ?

Chart Title
Discounts or promotional schemes.

57.10%

All products under one roof

Free Home delivery

Comfortable browsing of grocery products

88.10%

16.70%

42.90%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

Illustration :

'All

Majority of the respondents (54) prefer grocery shopping from super market because of
product under one roof' facility.

34 respondents feel motivated because of the promotional schemes introduced by super

market.

Due to comfortable browsing 25 respondents prefer super market over online sites.

24

Q.6) )Which of the following reasons describes your reasons for not buying
groceries online?
Chart Title
Return Policy.

28%

Price

38%

Limited coverage area

23.80%

No personal touch

45.20%

Quality /Trust Issue

0.00%

44.20%
10.00%

20.00%

30.00%

40.00%

50.00%

Illustration :

Above graph table indicates that 45.2% of respondent hesitate to buy groceries online
because they miss the personal touch of the products and due to this they have trust issues
regarding quality of the product.

38.1% of the respondent do not prefer online shopping of groceries due to the companies
limited coverage area, as online grocery stores do not deliver products do many of the
localities in Mumbai.

Price also plays an important role in shopping of any commodities. 23.8% participants
prefer to go to physical stores as they feel prices are higher on online sites than stores.

28% respondents have hesitations in their mind regarding the return policies of the online
stores.

25

Q.7) Which according to you are the purchase drivers from physical stores vies- avies virtual stores in the category grocery? (Please tick only the one which is
applicable in each row among the columns)
Chart Title
60
60

55

55

51
50

42

40

36

35
26

30
20

49

47

45

16

25
19

14

12

10
6

10

6
1

Physical store (kirana store, supermarkets

Physical store (kirana store, supermarkets

26

Chapter 6
Observation, Recommendation And Conclusion

27

Observation

From the data collected above it is clearly seems that though number of consumer prefer
to buy commodities like clothes, movie, train and flight tickets etc. online, but when it
comes to grocery shopping, they still restrict themselves to buy groceries online.

Certain parameters which motivate consumer to prefer their Kirana stores or super market
are :
Physical touch of the product
Instant delivery
No extra delivery fee
Easy return policies
Limited coverage area

Physical examination is the important issue in the online shopping which determine the
tangibility of the product.

The data depicts that the supermarkets are the preferred shopping destinations when it
comes to grocery shopping as it offers all the basic aspects of the shopping which are
quality, price, variety, availability, proximity to home, offers and discounts.

From the above data collection we can determine that most of the respondents are ready
to shop groceries online if the e-shops work on all the issues and provide better services.

The data also determine the factors which will be beneficial to the consumers to shop
groceries online which are variety at one stop, saves time and avoiding long queues.

28

Recommendations:
Business recommendations:
When it comes to operational aspects of business, the firm should consider the following business
operational models:
Instead of going to the traditional e-commerce way of grocery shopping, the firm should
start up by bringing the existing retailers online.
For the purchase of grocery item the consumer can choose their nearby Kirana stores from
the listed stores along with a convenient delivery time.
The local store will be informed about the order and it would be deliver to the address at
the time mentioned with the payment of cash only on delivery.
Following are the important aspects of the proposed business plan:

The firm will have a low operating cpst compared to other online grocery websites, as they
dont have to stock any inventory of grocery products.
The firm main cost will include the cost of dealership from the local retailers.
Other cost will include the cost realted to website design, Computer database, software
and hardware.
It will allow more user interference, when the customer can order their grocery from the
trusted local retailers, than unknown players in the market.
In order to increase the productivity of the site, the firm should offer special discount with
respect to seasons like Diwali, Ganpati, Holi etc.
The major issue which consumer faces, is they need to order a particular amount of
groceries on online portal, due to that they prfer Kirana stores as there is no minimum
order criteria.

29

CONCLUSION

From the above data analysis it can be conclude that in todays modern and technology
savvy world, where consumers think online shopping is more convenient than going to
shoppong malls and wait in the queue. This thinking depends upon what commodities are
they buying at a particular time.
Consumer who likes to buy commodities like Electornic gadgets, Fasion apperal, movies,
train and flight tickets etc. online. On the other hand when it comes to grocery shoppin
same consumer prefers traditional ways for shopping grocery from local kirana stores.
The hypothesis framed for the project Consumer Online Buying Behavior Towards Grocery
shopping was Factors Creating Hesitations In Consumer Mind While Buying Groceries
Online
From the above data analysis it can be determine that many of the resepondent still prefer
traditional ways of shopping for grocery products.
The main issues due to which consumer do not switch to online portals are :
No personal touch of products
Immediate doorstep delivery by Local Kirana stores
Better return policy by local kirana stores

Women who were the prime respondents of this survey has a perception that online
grocery products are unhealthy and buying any food related product without checking can
harm their family members health. According to them personal touch plays important role
in grocery shopping which e-shop misses.

Yet, there are many who may switch to online shopping if they e-shops ubndertakes
factores like:
Better pricing,
Wide coverage area
No minimum order
Easy return policies.

The recommended business operation will not only benifitial for consumer but also to the
firms, as it allows the firm to maintain its lower operating expences.

30

CHAPTER 8
BIBLIOGRAPHY

www.slideshare.net
http://tech.firstpost.com/news-analysis/indias-e-commerce-market-to-touch-260-bn-by2025-report-209901.html
http://www.forbes.com/sites/thehartmangroup/2015/06/17/whats-the-future-for-onlinegrocery-shopping/#211a58437cff
http://www.bigbasket.com/?utm_source=google
http://www.naturesbasket.co.in/HTML/LocateStore.aspx
https://www.zopnow.com
http://www.careerride.com/view.aspx?id=26766
http://www.businesstoday.in/moneytoday/smart-spending/online-grocery-shoppingvegetables-new-trend-in-india/story/197141.html

31

ACKNOWLEDGMENT:
I take this opportunity of submitting this report to express my profound gratitude to the
management of Prin.L.N.Welingkar Institute of Management Development & Research for giving
me the opportunity to accomplish this project work.
I am also grateful to our Head of Department and my Project Guide Prof. Ravi Vaidee, for being
resourceful, helpful & also for their constant support, encouragement and able Guidance,
without which the successful completion of this research would have been impossible. Their
positive attitude, forceful personality and unwavering faith in me assured that I come out of the
woods whenever I encountered difficulties.
It is my earnest endeavour to express my sincere thanks to the faculty for their kind co-operation,
help and never ending support.
Last but not the least entire Marketing Department who directly or indirectly helped me in the
completion of this research and to my friends, colleagues and family without their blessings,
support, motivation and encouragement this would not have been possible.

32