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In recent years, technological innovations have had a profound impact on business transactions. Schwatz (1997) has argued that the web-world has, in particular, revolutionized the way transactions are carried out. Over the past few decades, internet penetration has been steadily growing and the number of people using it for performing business transactions and digital/electronic commerce has turned into a major phenomenon across the globe (Joines et al., 2003; Jayawardhena, 2004).
Several studies have been undertaken to highlight the benefits of e-commerce/ online shopping to consumers as well as marketers. The benefits for retailers are many and include, their ability to reach and target a large number of people at the same time across the world (Strauss, 1999), targeting people with different demographic profiles and improving the efficiency and effectiveness of the business (La & Kandampully, 2002). Easy access to a wide range of products, services and information are the core benefits that online shopping provides to consumers. As one of the most convenient methods of shopping, online shopping provides functional as well as practical benefits (Donthu & Garcia, 1999; Chen & Chang, 2003). Consumers perceive that buying through the internet provides them with the possibility of availability of products and services at a lesser price as compared to the offline stores. The online stores incur less costs as compared to traditional brick and mortar stores supports this perception (Lawrence et al., 1998). Instantly fulfilling their emotional and hedonistic requirements are other significant benefits that consumers are able to draw upon through online shopping. There are people who shop online only for fun, pleasure and gratification (Menon & Kahn, 2002; Parsons, 2002).
Online shopping is catching up fast in India because of a vibrant youth populace and growing middle class.1 India offers an attractive business opportunity for retailers from across the world. Coupled with increasing penetration and accessibility of the internet, availability of advanced security features and provision of different payment options by retailers, propensity to try out new retail formats has grown manifold among Indian consumers.2 They are confident in searching for and purchasing products online. Growth in the number of mobile subscribers, especially smartphone users is further driving the growth of online shopping. The number of people using the internet on mobile is expected to reach 155 million by the end of March 2014, and 185 million by June 2014.3
Indian internet retailing touched US $10.672 billion in 2013, compared to US $1.38 billion in December 2007. While regular shopping grew at 65%, buying online rose at a much higher rate of 85% in 2013, over the previous year.4 The exponential growth of e-commerce in India will continue for the next few years and it is expected to reach US $76 billion by the year 2020. The steadily increasing share of online retailing has turned India into an attractive market for both local and multinational online retailers. If the Indian government eliminates current restrictions imposed against multinational corporations (MNCs), global e-commerce players will be allowed to sell products directly to Indian consumers. Firms like Amazon and e-bay have already started developing India-centric strategies.5 The competition for capturing a share in the world’s largest and most price-sensitive market is expected to heat up further. Currently, the Indian online retail space has two dominant stores - Flipkart and Snapdeal, along with numerous small niche entities like Jabong, Quikr, etc.