TERMIII_MM2_Grocery Retail in India

7/29/2019 TERMIII_MM2_Grocery Retail in India

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Marketing

Research Project

ONLINEGROCERY

RETAIL

GROUP 9

Tarun Chadha (121)Hersh Kenkare (091)Ekta Poddar (087)Arnab Guha Mallik (074)Atul Sharma (075)

Saurav Mishra (112)Surbhi Bhatia (119)


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The graphs show the prowess of Asia in termsof its internet user base as well as in terms of growing internet penetration

The internet retailing sector in India grew at32% in the year 2010 and is estimated at Rs.34.7 billion. Expected to grow at a CAGR of 21%in the next 5 years.

Internet users in India is 140 million & isexpected to have the third highest number of internet users in the world by 2013.

Online grocery retail provides an elegantsolution to various consumer groups such asDouble Income No Kids (DINKs) families,bachelors working long hours etc.

Growth of the online grocery retail sector willprovide benefits like convenience, time-saving,any time shopping etc.

Market Potential Of The Online Grocery Industry


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Online groceryshopping site

Traditionalsupermarkets

Advantages Convenience Notraffic, no queues

Time Saving andeasy shopping

24*7 shopping Better prices as

next shop is a clickaway

Better comparisonof products andprices

Price

Variety

Ability to attract newcustomers

Products can beverified

Personal service

Disadvantages Products are difficultto find Prices are higher thanin a conventional store Product qualitycannot be verified Narrower assortmentthan in a conventionalstore Minor personalservice or no service atall

Crowding

Queuing

Time wasted

Online Grocery Retailing in India

Failure of Sangamdirect.com (started byHUL, then handed over to WadhwanGroup)

Competition with local Kirana Stores aswell as with Modern Supermarkets &Hypermarkets

A few websites (mostly in South India)

but not professional

Supply chain and logistics the majorconcern

The market for online grocery retail in Indiais small and fragmented with very fewretailers like Groceryshop.in and Storrz.inhaving a reliable retailing infrastructure.

E-Grocers vs Supermarkets


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Method of Study


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Management Decision Problem

Feasibility study of launching an online retail store in India

Research on consumer perception about online groceryretail

Selection of products that consumers would purchaseonline

Identification of design features like website design andsupply chain design


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Research Questions

Is online grocery retail an attractive option?

Do working individuals opt for online groceryretail frequently?

What are the factors influencing the consumer infavor of online grocery purchase?

How does desired waiting time depend on typeof grocery items ordered?


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Hypothesis

Hypothesis 1: Customers negative sentiments regarding the risks of Online grocery retailing can be compensated by offering LOWER prices

Hypothesis 2: Customers want lesser waiting time for perishable andfrequent use grocery items

Hypothesis 3: Customers are willing to pay HIGHER prices in exchange forthe time and transportation costs saved in ordering groceries online


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1. Consumers are increasingly looking for ways to savetime. There is a general desire for more convenience

2. Household size and the presence of children are foundto be variables for patterns of use of hypermarkets

3. The distance to travel to the shop is also decisive: the proximity of stores determines the frequency of

visits the level of loyalty to a grocery store

4. In-home shoppers tended to live more than a tenminute drive away from the nearest grocery store.

5. Food-related lifestyle of a customer are also believed to

influence adoption of Internet shopping

6. Internet shoppers are older and make more money thannon-internet shoppers.

(Seth and Randall 2005)

(Bawa and Ghosh 1999).

(Fox, Montgomery, and Lodish 2004;

Bawa and Ghosh 1999)

Berkowitz, Walton, and Walker (1979)

(Grunert and Ramus 2005).

Donthu and Garcia (1999)

Findings from Literature Review


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Goal of the FGD

Explore qualitative factorsabout the research problem

Identification of areas to betaken up for detailed

descriptive research

Number & Type of Respondents

8 people per FGD First FGD had people who shop

online frequently

Second FGD had people whohave shopped onlineoccasionally or not shoppedonline at all

Methodology

Familiarizing respondents withtopic to be discussed andmotivation behind study

Discussion of one question at a

time Mainly open ended questions

with more emphasis onpersonal opinions

No need to achieve consensusof any sort

Ensuring nearly equalparticipation

Focus Group Discussion


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How often do access the internet? How often have/ do you shop online? Which sites do usually make purchases from? Any reason for

preferring these? What are the factors driving you to shop online? What are your primary concerns with shopping online? Have you ever purchased groceries online? Would you consider it if

it were started? What are the reasons behind your response? How is shopping for groceries different from shopping for other

items?

What grocery items do you think it makes sense to purchaseonline? What mode of payment would you prefer?

Focus Group Questions


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Factors positively impacting the decision to shop online includeconvenience, easy to compare prices, time and transportation costsaving, lower prices, special deals

None of the participants had shopped for groceries online but wereopen to the idea given their busy schedules

General concerns about online shopping included securityconcerns, lack of personalized service, returning defective items,non existent reviews

Groceries being time sensitive products presents special concernslike inability to inspect items, timely delivery

Preference for buying non-perishable like grains, rice, biscuits,coffee and tea, spices over milk, fruits and vegetables

Preference for cash on delivery Online grocery shopping to be used mainly for replacement

purchases rather than experimenting with new products

Focus Group Analysis


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Profile Age: 29 years Profession: Runs an institute training people for GD/PI Internet Usage: Moderate to Heavy Online Shopping: Frequent Products purchased: Books, music CDs

Preferred Sites: Flipkart.com, Infibeam.com Has shopped online for groceries on a couple of

occasions

Depth Interview: Ms. Pooja Bhatia


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Gauging internet usage & grocery consumption: place of access, frequency, grocery bill range

Factors impacting purchase: both positive and negativefactors identified in FGD rated on Likert Scale, prioritizingamong them, impact of price change on purchasedecision

Questionnaire Design


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Selection of items: Respondents asked to rate most likelyitems of purchase (broad categories) on Likert Scale,Identification of importance attached to certain features of website to help with design

Logistics and payment preferences: capturing perception onoptimum method and amount of premium, desired deliverytime, mode of returning faulty items

Questionnaire Design


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1- least likely 5 - most likely

Data Analysis


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1- most likely 5 - least likely


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1- least likely 5 - most likely


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Response to various parameters determining theswitch to online grocery purchase


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Response to the various elements of the web portal


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H th i 1 C t g ti ti t g di g


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Hypothesis 1 : Customers negative sentiments regardingthe risks of Online grocery retailing can be compensatedby offering LOWER prices

A significant relation occurs between payment

security and customers likelihood to use online

grocery retailing With increasing concerns about security, the

likelihood to use online retailing increases with

LOWER offered prices Customers security apprehensions can be

compensated by offering lower prices

A significant relation occurs between lack of credit facilities and customers likelihood to use

online grocery retailing With increasing concerns about lack of creditfacilities, the likelihood to use online retailingincreases with LOWER offered prices Customers negative sentiments regarding lackof credit can be compensated by offering lower

prices


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Hypothesis 2: Customers want lesser waiting timefor perishable and frequent use grocery items

Frequent use items like Rice, Oil and Milk and perishable items like

Vegetables have a significant relation with the Waiting Time variable With increasing likelihood of ordering frequent and perishable items, the

waiting time for delivery expected by customers decreases Hence, customers expect that perishable and frequent use items have a

low delivery time of less than 12 hours

0

1

2

3

4

5

Mean value of responses

Hypothesis 3 : Customers are willing to pay HIGHER prices


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Hypothesis 3 : Customers are willing to pay HIGHER pricesin exchange for the time and transportation costs saved inordering groceries online

Perceived positive advantages of using online grocery retail, mainly saved time and

transportation costs are significantly related to greater likelihood of ordering online by paying a

PREMIUM charge Customers who value the Time and Transportation Costs saved by online grocery shopping are

willing to pay higher price for the goods


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Factor Analysis


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Logistics Issues

Resistance tochange


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THANK YOU

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