Over 77 percent believe shopping online as safe as offline: CIRC Report

India’s e-commerce sector is expanding at an unprecedented pace. This growth reflects in the way people are increasingly adopting online modes of shopping. According to India Brand Equity Foundation (IBEF), the e-commerce market in India is expected to reach US$ 200 billion by 2026. However, this growth cannot be sustained without building and enhancing consumer trust in online products.

CUTS Institute for Regulation & Competition (CIRC), a not-for-profit research and capacity-building organization, conducted a consumer survey on product trust to release a report titled, ’Evaluation of product trust in the age of e-commerce. According to the report, 77.8 per cent of respondents believe that online shopping is as safe as offline shopping, with 80.2 per cent believing that online products will meet their expectations. Apparel, electronics, and personal care products make up the top three categories of products purchased online. However, receiving fake/counterfeit products, damaged products, and expired products are the top three reasons for products not meeting their expectations. 

Dr. Arvind Mayaram, former Finance Secretary of India and Chairman of CIRC said, “To keep up with the rapid digitization and spur the transition of consumers from offline to online, it is important for sellers to build and enhance product trust so that they can build consumer loyalty and grow their business. Government policies also impact how consumers are served. Therefore, policymakers must work towards building a conducive policy framework that doesn’t overburden the growth of the ecosystem with regulations and also strengthens consumer protection.”

The report also aims to understand the factors that contribute to building trust in online shopping and the ways through which sellers can enhance this trust in consumers. The top five factors that help enhance trust in online shopping include:

Pricing – India is a highly competitive as well as price-sensitive market. A product’s pricing is the first indicator in the mind of a customer. This has led to sellers on e-commerce platforms finding ways to present attractive deals and discounts for consumers, made possible due to their reduced operating costs. In an earlier study by CIRC, over 83 per cent of the respondents reported that they get more deals and discounts online as compared to offline retail stores.

Product Quality – Since the touch-and-feel aspect is absent in online shopping, consumers trust those platforms the most that provide detailed product descriptions and specifications. The more information provided about the product on the website, the easier it is for the consumer to evaluate the quality and trust the product. For example, Amazon’s efforts to educate sellers on product trust in order to drive revenue are reflected in its product listing.

Customer Service – Approachable and prompt customer care helps build trust and gives a sense of reliability and security. E-commerce platforms have leveraged the use of technology to better connect with customers and improve their online shopping experience, minimizing risk and increasing assurance to address any unpleasant online shopping experience. 

Customer Reviews –  Customer reviews and feedback on online platforms can influence a consumer’s purchasing decision as they compensate for the absence of touch and feel. Learning about the experience of other consumers helps potential buyers and evokes product trust. It also helps sellers on the e-commerce platforms to understand what is working for a consumer and what is not.

Delivery/Shipping Service – Timely and reliable delivery, consumer-friendly refund and replacement policies, strong safety and compliance, and grievance redressal mechanisms play a key role in building product trust. Lenient return policies have been found to encourage the intention of consumers to purchase online.

It is important to understand the consumers’ changing needs and expectations, build innovative features, and reduce information asymmetry to improve consumer trust. There is also a need for greater collaboration between all stakeholders to arrive at a stable and predictable policy framework that proves mutually beneficial to all.