UNDERSTANDING THE ATTITUDE OF INDIAN CUSTOMER TOWARDS ADOPTION OF THE VEHICLE BUYING PROCESS ONLINE

Abstract

E-commerce needs no introduction in today’s competitive environment. E-commerce is latest generation of commerce. It is the one that can be done anywhere and anytime on the internet. The e-commerce industry is one of the fastest growing sectors in India today. The growing no. of first generation entrepreneurs, small medium and micro scale industries and growth in infrastructure impact e-commerce industry in India. In recent years there is a great transformation in the way India shops and trades. Earlier people used to go to markets to shop for things like clothes, groceries, shoes etc., then they switched to malls but now they don’t need to go anywhere. They can now shop sitting at anyplace and without wasting their time. According to Capgemini; the Internet makes shopping into an anytime and anywhere thing. It has been seen that mostly vehicle buyers use Internet while buying a vehicle, not for the entire purchase but to research vehicle features and ratings.

India is one of the largest markets in the world for the automotives. It ranks sixth in manufacturing of passenger car and commercial vehicle in the world and third in Asia with an annual production of more than 39 lacs units. It has 3 major automobile manufacturing hubs each in west, south and north India.

This research was done with the objective to explore the problems faced by customers while buying a new vehicle (both 2 wheelers and 4 wheelers) in the existing system and to identify the proper channel to make the entire process of buying a new vehicle easier. This study enables us to answer the following questions: 1. What problems are faced by consumer while buying a new vehicle ? 2. What sources are preferred by customer for researching a new vehicle ? 3. Do customer prefer to buy things online ? 4. How satisfied are the customers from the different sources of information for buying a new vehicle ? 5. How many dealerships customer do visit before buying a new vehicle ? 6. How social media Influence the decision of buying a new vehicle ? 7. How much level of interaction customer expects from a manufacturer/ dealer on online platform/ social media ? vi

8. What are the reasons of visiting a dealership when every information is available online ? 9. Do customer wants to complete the entire process of buying a new vehicle/ spare parts/ accessories online or they prefer to pay extra to physical outlets ? 10. What facilities customer want to have on the manufacturer/dealer/3rd party website ?

Why is there a need for this kind of study ? 1. As E-commerce in India is growing exponentially in every field so there is a huge opportunity of entering in E-commerce with a new concept. 2. To know, will customers prefer to buy a vehicle from E-commerce leaving traditional method behind. 3. To check the potential of online buyers. 4. To suggest the manufacturer to enter in a new channel to sell vehicle because it is a new market to enter in.

There was not adequate literature available on this topic as no research was done so far. A questionnaire was prepared framing the inquiry as part of this market probe, the questionnaire focused on answering the following questions:  What are the major issues car-buyers face when buying cars today?  How may online buying address these issues?  What gender and age groups are likely to consider buying online?  What concerns do buyers have for online car buying?  What may address these online buying concerns? The data in the study was analyzed primarily by depicting it using various Pie Charts and Bar charts and basic Microsoft excel functionality. Telephonic, email, and internet surveys were conducted which consisted of mostly closed ended questions. As per the analysis on the data of 107 respondents collected via various online mediums (Facebook, E-mails, Watsapp and telephonic interviews), It was seen that 70.69% respondents of the age group 18-25 were more active online and prefer to shop online. So for the future perspective companies should shift their traditional channel to the modern channel i.e. online channel because younger generation wants to do things in easier way to save their time and efforts. 85% of the respondents use vii

internet for vehicle research. So if they get an option to buy vehicle online then they will definitely give it a try. 73.26% females preferred to shop online but they were not bothered about the vehicle research. They just wanted to complete their shopping comfortably. The biggest problems customers faced were availability of too much options in the market and difficulty in comparing them. This feature was provided by some 3rd party websites but their data were not much authentic and only 40.60% respondents were not satisfied with this. So OEM should develop a comparison feature on their website so that customer can compare the competitors’ models with their product. For e.g. Maruti Suzuki website gives an option to compare their model Swift Dzire with Hyundai’s i20, Honda’s Amaze, Toyota’s Etios and others. Many respondents face problem of location of dealerships because different brand dealers are located in different location of the city. To solve that problem companies can create an auto mall concept in which different brand dealers are operating under one roof. Some respondents also faced a problem of availability of desired colour and model variant with the dealer. This can be solved by managing the real time inventory with dealers on manufacturer website so that customer can check the availability and contact the dealer instead of waiting for it. This will also reduce the no. of dealers customer visit/contact before buying a vehicle because maximum no. of customers visit/contact dealerships just for checking the availability and offers. Some respondents faced problem of different prices and offers with different dealers. This can be solved either by restricting dealers to offer different prices or it can be done by showing offers of different dealers on their website. Many respondents said that the sales staffs in dealerships do not having sufficient knowledge about their product or about competitor’s product in the same segment. This can be solved by giving the proper training to the sales staff. Price negotiation is again a big problem. This problem can give a good business opportunity to start. A 3rd party website can provide negotiation services. They can negotiate from dealers for the customer. People are now becoming more active on the social media. 55.70% respondents said that they hadn’t posted any auto related experience on social media but in future they’ll surely post their experiences. So companies should make their presence felt on social media to monitor customers’ experiences and comments. 73.58% customers said that they’ll prefer to buy vehicle from manufacturer website if some add on benefits will be given. This is just because customers trust manufacturers the most. So it’s a great opportunity for the manufacturer to launch an online buy option viii

on their website. It’ll increase their sales and margins.Around 60% respondents believe that buying vehicle online save great time and effort. The most wanted features on the website are full range of product information, detailed comparison of vehicles, customer reviews, live feedbacks & customer service.

This concept of buy online will eliminate middle man and hence increase profit margins of the company. It also enables customer to save time and effort in buying the vehicle. Initially companies may face problem related to payments but it can be solved by providing COD, DD/ Banker’s cheque pickup before delivery or by giving an option of pay online through trusted payment gateway (Visa Verified etc.) on payment page. Another problem might be related to warehousing because after implementing this, the manufacturer has to maintain inventory on their own and lease warehouses. But it is not a big problem in comparison to the profit margins they get by implementing this concept.

Though the project was done to achieve accurate results but there might be some errors due to a few limitations like the results are based on survey conducted on 107 respondents only because of time and cost limitations and the study of this kind is highly specific to the automobile buyers. Some of the respondents were not much interested in answering questions, so there might be some unwillingness errors. To remove these errors it can be conducted at larger scale including other mediums of data collection and by giving respondents some rewards to increase their willingness to answer. This concept is a win-win situation for all. Manufacturer will earn higher profit margins, customer can save their time, money and efforts and dealerships can focus more on service centers and create a good ROI because service centers have good margins of about 70% than the sales team which has about 5% margins.