Today’s day and age see the concept of Online Shopping rise rapidly since its inception and transform into a powerful source of interaction between the buyers and sellers. However, it is immensely important to understand the meaning of online shopping and get a clear picture as to what has made it successful and where there is a scope for development. This article explains all these aspects and also discusses the need for Consumer Protection in online shopping.
What is Online Shopping?
Online shopping is the process in which a consumer purchases goods and services from a manufacturer or seller, using the world wide web, or simply, the internet. The goods are bought without any intermediary service. Here, the intermediate services mean salesmen, retailers, brokers and agents. Online shopping consists of different categories of products like household items, clothes, books, toys, medicines and so on.
The sellers online consist of all those manufacturers who want to sell their products. The internet is an extremely easy and cheap way of promoting and marketing products. Online platform eliminates the need for a producer to have branches or offices with sales teams and retail outlets in all the parts of the world where he intends to sell products. Hence, the internet expands the reach of the sellers across a large number of consumers.
Remote locations are hence no more a hindrance to sales as sellers can now reach the hubs of demand to sell their product. All that is required to be done is send the product on the address of the consumer who places the order.
Consumers, through online shopping, can avail huge discounts and offers on products of good quality and brand image.Many people choose online shopping because of the convenience, speed, and ease of purchase. This avoids them the effort of physically going and picking out what they want from shops and shopping malls. They can receive the same outcome with a click of a button.
Online shopping has helped the globalization of businesses throughout the world as companies can easily market their product all over the world.
Factors Influencing Online Shopping Behavior of Consumers
- Financial risk is the main factor influencing individuals who are shopping online. Financial risk is the peril of losing a certain amount of money while purchasing a product online or making setting it up to make it function well. The older generations tend to fret more about their security and privacy of their bank account information.
The personal financial information being disclosed from a transaction online is another worrying factor for consumers. There is a risk of this personal information given to or stolen by a third party to send emails and spam to customers. Many customers need assurance that their data will be protected, hence influencing behavior. Individuals with a higher inclination towards risk-taking opt for online shopping.
- Product risk is the next significant influencer of consumer behavior. Not receiving the products or receiving damaged goods after payment is made online is a common fear in consumers. Consumers may anticipate the loss of the purchased products, delay in delivery, thus fluctuating in online shopping behavior.
- Limited information and the inability to see a three-dimensional version of the product is another factor that might influence consumers. Consumers know all the details of what they are purchasing from a physical store. They get the real feel of the product here, unlike those available online only in the form of pictures.This often causes cautious consumers to avoid online shopping in order to eliminate a gap in the expectations and the reality.
- The policies of the seller become an important influence in the behavior of consumers while shopping online. For example, if the return and refund policy of the seller is quick and efficient, it may increase the consumer’s trust in the seller and create loyalty. On the other hand, if the policy is weak or not flawed, buyers may avoid purchasing from that seller and search for alternatives instead.
- Another aspect of online shopping that influences consumer behavior is ease and comfort. Consumers need not waste time in stepping out of their homes and searching for the desired product.They can purchase anything they need or want via online shopping.
- Consumer behavior is also influenced by various choices and preferences based on likes and dislikes. Each consumer has his/her own tastes in fashion, food and drink, furniture and so on. Even though sellers aim to divert these interests to their own products through ways like marketing, consumers do not lose their individuality entirely. They may try and test new products. Hence, these inherent inclinations and aversions and the fluctuations affect online shopping behavior.
- Apart from advertisements, society may also influence the individual. This society can include one’s social circle, state, country or global society. Groups affect the decisions made by a consumer. This can consist of the consumer’s friends, family, classmates, colleagues, celebrities and so on. The biggest example is the demonstration effect where an individual copies certain consumption patterns of other individuals.
- Finally, there is also a prevailing influence on the purchasing power of the consumers. They can only purchase those products that they can afford at that moment in time. Hence, even the best quality products having all the aforementioned positive prerequisites will go unsold if the consumer cannot pay for it. Consumers often have a budget which they make according to their savings and earnings. They tend to purchase goods in accordance with this budget, hence resulting in changes in online shopping behaviour.
These are the factors that influence of online shopping behaviour of consumers.
Need for Consumer Protection in Online Shopping
Even though online shopping is at its peak, with a majority of the urban population purchasing commodities online, it has certain shortcomings which adversely affect consumers, resulting in the need for consumer protection.
Physical stores like retail shops allow price negotiations between buyers and the seller. Hence, the buyers can get the sellers to settle for lower prices through bargaining. The marketing and promotion team of the seller provide personal attention to customers and aid them in purchasing goods. However, there is an absence of this personal interaction between the consumer and the seller when goods are purchased online.
Electronically, a customer has to buy a product without seeing actually how it looks like. The electronic images of a product are often misleading. The appearance, in reality, may not match the limited images available on a virtual platform. Visiting physical stores to have a close examination of the good, though time-consuming, gives consumers a real feel for the product. The electronic images of goods may vary from the physical appearance when people buy the goods based on electronic images.
Online shopping allows the seller to conceal information about the product, like its quality, or not displaying the reality of the product. Some sellers offering items at a cheap price often send low quality, opened or refurbished products. Consumers can hence be cheated and their Right to be informed will be violated if the products received are adulterated, spurious or duplicate.Sometimes, there is a disappearance of the shopping site itself. Hence, after the collection of all the online payments made to a fraudulent seller, the products are never actually provided to the customers.
In addition to the above, the online payments are not perceived by cautious consumers to be safe and secured. There may be websites which do not encrypt personal credit and debit card data, thus creating a risk for the customers’ personal data if a hacker breaks into their system. This is a cyber-crime when bank details get misused,thus disrupting an individual’s privacy.
Online shopping has turned disastrous to the consumer in cases like Anil Kumar v. M/s Naaptol Online Shopping Pvt. Ltd. and M/s Gati Limited, Vinodkumar, Ernakulam Vs. Shoed Merchant, Mumbai &Ebay India and the Chitra Vittal cases. These instances show the need for consumer protection in online shopping.
These are the indicators of why consumer protection is required in online shopping. The article hence also indicates the areas of improvement in online shopping.
However, consumer rights in online shopping are upheld just as rights in offline shopping. Complaints filed against online sellers are being dealt with in utmost seriousness and compensation is being granted to the aggrieved. The six rights of the consumer are continuously being stressed on, even in online shopping. These rights are:
- Right to Safety
- Right to Information
- Right to Choice
- Right to be Heard or Right to Representation
- Right to Seek Redressal
- Right to Consumer Education.
Complaints Involving Major Online Shopping Websites
The course of time has seen several complaints against the most renowned online shopping websites, namely Snapdeal, Flipkart, Amazon and so on.
In a case, a student was refused the delivery an iPhone sold by Snapdeal for the offer price of $1, that is, Rs.68 as of 2016. The consumer court, by laying down the rules of consumer protection, ensured the delivery of the product at the specified price, along with extra charges as compensation to the student.
Major cases have also arisen at the Billion Day Sale of Flipkart, Amazon and Snapdeal which have highlighted the need for consumer protection. Many consumers pointed out that there indeed was not much change in the discounted price of the items as compared to their original prices. These websites, especially Flipkart has had many technical glitches in this scheme. In the past, Snapdeal has also faced complaints of erroneous pricing of products.
Flipkart, in 2014, had a major problem with an Enforcement Directorate probe over alleged violation of the Foreign Exchange Management Act, along with allegations of price undercutting and adversely affecting competition.
These were some major complaints involving these online shopping websites.
Recent Trends in Online Shopping
Cash on Delivery is an immensely attractive trend developed by the online shopping companies. This has recently attracted a lot of consumers who have ensured the safety of their financial information. This is because the consumers do not need to enter any credit or debit card details on the website. The risk of stealing or handing over of financial information to the third party is eliminated.
Also, cash on delivery ensures that a product is not paid for till it reaches the consumer. Any damage or discrepancy of the product will not cause an economic loss to the consumer since the consumer has not paid for the product. Hence, product risk is curbed as well.
There has been a rapid increase in the users of the internet, surpassing 300 million since 2016 according to reports on e-commerce in India. With an increase in the number of internet users, there has also been an increase in transactions and other activities online, primarily online shopping. This is a fast-developing trend focused on buying necessities online too, like medicines and groceries.
Virtual experience is the key to online shopping. Recently, websites of the sellers have focused on attractive layouts and desirable segmentation. Products can be visible to the consumer in different arrangements according to his preference, be it brand, price, colour and so on. Coveted products can be added to a wish list of items whose preview would be saved for the consumer to access. This is a recent trend in attracting consumers.
Tracking an order is also possible in today’s online shopping. Notifications are sent to the consumer as to when the good has been dispatched, shipped and its location. This removes the concern in the minds of the consumers who are now secure about their goods.
These recent developments have to boost online shopping in India. Online shopping seems to rapidly grow in the country, which is rapidly noticing a shift from real to the virtual world.
Frequently Asked Questions:
Is a person who buys a product online is consumer?
Yes, the person is a consumer since he is purchasing a product for a considerable amount for consumption.
Why do people prefer online shopping?
Online shopping is convenient and saves time. A click of a button provides one with the same products that physical movement to obtain it does.
Why do cautious consumers avoid shopping online?
Consumers have various worries regarding online shopping. Their main concerns are that the purchased product may not be up to the mark and that their financial data may be misused.
Can consumers file complaints against sellers online?
Yes, consumers can file a complaint against an online seller. He will be redressed in the same manner as a consumer having a complaint against an offline seller.