CHAPTER II

REVIEW OF RELATED LITERATURE

This chapter represents online shopping indicating electronic commerce to buy products or
services directly from the seller through the internet. Internet based or click and order business
model has replaced the traditional Brick and Mortar business model. More people than before
are using the web to shop for a wide variety of items, from house to shoes to airplane tickets.
Now people have multiple options to choose their products and services while they are
shopping through an online platform.

An online shop evokes the physical analogy of using products or services at a regular
shopping center, the process is called business to business online shopping. A typical online
stores enable the customers to browse the firm’s range of products and services, view photos
or images of the products along with information about the product specifications, features and
prices.

Online shopping has unique characteristics: Huseynov and Yildrim (2014) emphasized that
the lack of physical interaction tends to be the critical impediment in online retail sales followed
by the privacy of individual information and security of financial transactions over the internet.
Demangeot and Broderick (2010) also revealed that perceived ease of use does not affect the
behavioral pattern in this case rather influenced by security and privacy issues. No relationship
is built between the customer and the online shop in the presence of perceived online risk even
if a customer spent hours on the internet (Zuroni & Goh,2012).

Jaurenpaa, Todd, Jarvenpaa, (1997) proposed a model of attitude, behavior and shopping
intention towards internet shopping in general. The design includes several indicators classified
into four broad categories like product, value, quality services offered through the website, the
shopping experience, and the risk perception of the online shopping. Chang, Cheung, and Lai
(2005) studied categories of variables, which drive online shopping activity. In their study, they
divided the features into three broad categories. Perceived characteristics of the web sale
channel are the first one which includes risk, online shopping experiences, advantage, service
quality and trust. The second category is a website and product features which are risk
reduction measures, site features and product characteristics: and the last group is consumer
characteristics. Various types of features, demographic variables, consumer shopping
orientations, consumer innovativeness and psychological variables, computer internet
knowledge, and usages drives consumer characteristics.
 Also demographic variables such as age, gender and level of income play a facilitating role
because they influence consumer perception and consumer behavior that drives them towards
online shopping. ( Kim, Zhao & Yang,2008; Laforet & Li,2005: Sabbir Rahman,2012). In China,
online shopping intention depends on consumers age, income, and education as well as marital
status most importantly their perceived usefulness ( Gong, Stump, & Maddox,2013).

The Internet has dramatically changed consumers’ shopping behaviour. During the
preInternet growth time period (1993 and the years prior) (Canzer 2006, Friedman 2006,
Laudon and Traver 2008), consumers mainly focused on shopping through traditional
marketplace, while with the great development of Internet, during the post- Internet growth
time period (1994 and the following years), consumers have changed some shopping habits by
switching from conventional market channels to online channels.

Research on consumer behaviour of online shopping is gaining in intensity (Croome et al.2010).

Consumer behaviour is the study of the processes involved when an individual selects,
purchases, uses or disposes of products, services, ideas, or experiences to satisfy needs and
desires (Solomon 1998). To a very large extent, online consumer behaviour can be studied using
frameworks from ‘offline’ or traditional consumer behaviour. Synthesizing research in this area
from 1994 to 2013, previous studies provided a critical and comprehensive review of the
theories and empirical results of online consumer behaviour (Cheung et al. 2005).

Synthesis

Previous research have shown that convenience and time saving are the main reasons that
motivate consumers to shop online (Chen, Hsu, & Lin, 2010). Convenience means shopping
practices using the internet that can reduce time and effort of the consumers in the buying
process. Online shopping has enabled finding merchants easier by cutting down on effort and
time (Schaupp & Belanger, 2005). Research also demonstrated that online shopping is better
than conventional shopping due to convenience and ease of use (Nazir et al., 2012). In a
previous study done on adoption and usage of online shopping, it was established that attitude
towards online shopping depends upon the view of the consumers regarding the activities
carried out on the internet as opposed to conventional shopping environments (Soopramanien
& Robertson, 2007). Thus, a consumer who perceives online shopping as beneficial is more
inclined to make online purchases. According to prior studies, time savings and convenience are
the primary motivators for encourage people to make online purchases. Shopping is
convenience. Internet usage strategies that can cut down on consumers' time and effort spent
shopping process. By reducing the amount of work and time required, online buying has made
it easier to find businesses. Additionally, research has shown that online buying is superior. Due
to convenience and ease of use, than traditional shopping . In a previous In a study on the
uptake and use of internet purchasing, it was determined that attitudes Online buying is
dependent on how people feel about the transactions made on the internet as compared to
traditional retail settings.

Conceptual Framework

INPUT PROCESS OUTPUT

Trust Assessment through Market acceptability
online survey output

Time Search and purchase

online/offline

Convenience Interviews

Product Variety Observation

Hypothesis of the study

Null Hypothesis:Online shopping is more appealing to students since it saves them time and
gives them a better feeling than traditional shopping, where you have to put out more time and
effort to buy any kind of product.

Definition of Terms:

Trust- is a fiduciary relationship in which one party, known as a trustor, gives another party, the
trustee, the right to hold the title to property or assets for the benefit of the third party. In
finance a trust can also be a type of closed-end fund built as a public limited company.

Time- is the continued sequence of existence and events that occurs in an opportunity
irreversible succession from the past, through the present into the future.
Convenience- a procedures, products and services are those intended to increase ease in
accessibility, save resources and decrease frustation. A modern convenience is a labor- saving
device, service or substance which make a task easier or more efficient than a traditional
method.

Product Variety- is a class of business models that seek a competitive advantage by offering
more variety than the competition.

Behavior- is the range of actions and mannerisms made by individuals, organisms, systems, or
artificial entities in conjunction with themselves of their environment, which includes the other
systems or organisms around as well as the physical environment.

Traditional shopping-This is a shopping process, wherein consumers purchase their desired

products and brands by visiting a store. It can be any local stores nearby, or a big departmental
store, like Big Bazaar, Spencer, and others.

Model of attitude-Every attitude has three components that are represented in what is called
the ABC model of attitudes: A for affective, B for behavioral, and C for cognitive. The affective
component refers to the emotional reaction one has toward an attitude object.

Market Acceptability-It is a measure by which it is seen whether the product or service is

satisfying a large customer base so as to continue or increase its current production. Market
acceptance is most important for a company to determine at the time of product launch to
determine whether it is a failure or a success.