The rapid growth in online purchases and product return pose challenges to the supply chain. The demography influences purchases. After an extensive literature review, the authors examine if the product return in online purchases depends on demographic factors and product categories. This online survey-based research analyzed the 619 responses and identifies that age, gender, profession, search intensity have a significant relationship with the return frequency. After using statistical analysis, findings suggest that the family income, payment method, purchase frequency, monthly spending do not have a significant influence on return frequency. Similarly, analysis indicated age, gender, profession, and search intensity to be significant. Textile and household goods showed a significant relationship with return frequency from the different categories. This research emphasizes the role of demography factors; however, online purchase and return is a complex process involving the role of product, retailer, website, and delivery.
Top1. Introduction
By 2025, 900 million are expected to become internet users in India; the gross merchandise value is expected to be 20 billion USD (Indian E-commerce Industry Analysis, 2021). Another report quoted by Forbes estimates the value to be 120 USD by the same year (Rozario, 2021). The Indian e-commerce industry growth is estimated to be at a 23% compounded annual growth rate (CAGR) (Retail Industry in India, 2021). The retail e-commerce sector gives 8 percent of the total employment and contributes 10 percent to the total gross domestic product of India. According to Invest India report, a government agency to promote investment, almost 50 percent of the smartphones, and 20 percent of all apparel sales in India are through e-commerce. One hundred percent of pin codes in India have registered e-commerce transactions. The average selling price (ASP) in tier-2 and smaller towns is marginally less compared to tier-1 or metro cities. Electronics and apparel constitute nearly 70 percent of the total e-commerce transaction market value. Ed-tech, hyperlocal, and food-tech are newer categories within e-commerce showing significant growth (Retail Industry in India, 2021).
Government of India programs like Digital India, make in India, startup India, skill India, and the national retail policy are going to increase internet usage further (E-commerce in India: Industry Overview, Market Size & Growth, 2021). Foreign direct investment and investment by private players have increased substantially to further the cause of e-commerce growth in India. Retail companies have also put in efforts to increase sales. The online reviews available on the website (Ullal et al., 2021), and ‘deal of the day’ (Nigam et al., 2020) have influenced sales.
Customer demography plays an important role in retail e-commerce. Thirty-four (maximum) percent of internet users in India are in the age range of 20 to 29 years and twenty percent are in the age range of 30 to 39 years (Keelery, 2021). Usually, online buyers are more affluent compared to offline buyers (Rajaretnam & N. Sheth, 2017). Age and education along with service quality dimensions have been found to influence the use of e-government services (Sharma, 2015). Even the internet addition is associated with gender (Nitin Anand et al., 2018). The period of pandemic introduced some growth opportunities in e-Pharmacies, grocery, social commerce, vernacular version of the e-commerce, hyperlocal and fast delivery, and festive sales (Kakaria, 2021).
The retail e-commerce sector has its challenges. Many Indian customers are first-time buyers and demonstrate higher consumer remorse and return products (Khurana, 2013). Cash on delivery, payment gateway failure rate, internet penetration, non-standardized postal address, and smartphone usage are some of the challenges (Khurana, 2013).In an emerging market like India, the major focus remains on extending the market and ensuring growth. Therefore, product return in the e-commerce scenario gets scant attention. A significant observation is that compared to the other seventeen countries where it operates, the product returns for Amazon are more in India, at around 30 percent of the total sales thus, indicating a product as well as country-specific context (Variyar, 2018).