A STUDY OF PERCEIVED RISK AND TRUST IN ONLINE SHOPPING

Abstract

The purpose of conducting is study was to explore whether and how trust affects perceived risk in the online shopping context and vice versa, to determine the different perceived risks involved in online shopping in Indian context, to understand elements of each perceived risk in online shopping and to find out reasons for reluctance to online shopping. The study examines the demographic profile of the online shoppers and tries to establish the link between the attitude of the buyers and their shopping behavior. In the study there were predominant male respondents comprising about 65% of the total. While, most of these about 80% were in the age bracket of 15-29 years of age. Both these are in accordance with the India Broadband forum Report which confirms that most shoppers and online visitors are males and in the age bracket of 18-30 years. As the survey responses were collected online and through an MNC firm, most of the respondents were either undergraduates or postgraduates with a healthy monthly income. It is found that a person is more prone to online shopping with a higher income. This also is in accordance with the latest articles stating that the youth of India have the highest spend on online shopping. Since education is often correlated with the level of Internet literacy, better-educated Internet users are still the principal composition of online purchasers. In the study it was also found that a staggering number of respondents had never shopped online. However, they did respond to the questions posed to them related to the trust of the online vendors. Thus, proving that there were still some barriers when it comes to online shopping. The online shopping of consumers ranged from frequent (once in a week) to rarely (once a year) with most of the respondents saying that they shopped at least once a month or once in 2-5 months.