Factors Influencing Online Purchase Behaviour of Customers in Tier III Cities of India-A Factor Analysis Approach

Today, Internet has developed to a highly competitive market. The size of e-commerce market in India is worth around Rs 9,500 crore, out of which the pure play online shopping market is worth Rs 1,300 crore. While online shopping globally is growing at around 8-10%, in India the growth rate is upwards of 30%. With the growing importance of the online retail industry in India, it becomes imperative for web retailers and Internet marketers to understand the determinants of online purchase behaviour of customers to understand what is important to the Indian online customer. The main purpose of the research is to understand various factors affecting the behaviour of customer while purchasing in India. This research uses primary data collected through survey of 220 online shoppers. The findings of the study indicate that customer online purchase behaviour is significantly related to eight factors. As per the results of the study, it is found that convenience, perceived usefulness of medium, Internet expertise, product risk, security risk, convenience risk, non-delivery risk, and return/ shipment policy are the eight dominant factors which influenced the decision of customers while purchasing online. The framework of the research enhances understanding of the factors affecting customer online shopping behaviour, helps in profiling typical Indian online shoppers and may help e-marketers developing more specific marketing strategies to increase e-commerce sales.