CH 2
CH 2
2.1 Introduction
This chapter focuses on the methodological choices made while approaching towards
this research, to accomplish it as per the carved down objectives. Methodology is the spine of
any research and hence using the appropriate methods make it necessary to pursue the
research systematically. Data of any sort of form just doesn’t appear randomly, which just
needs to be picked up to qualify as data, rather it requires to be given relevant form and shape
using the systematic approach and methods (Ackroyd and Huges, 1992). Any sort of research
starts from its roots i.e. ideas about the research. In this case, the idea of this particular
research was conceived through a senior faculty of the School. According to Berg, 2004 ideas
always promote potential research ventures, as per the author, generation and discussion of
ideas is a starting point of any research initiative. After the ideas get developed it becomes
important to link it with the theory at some appropriate time as per the research design. The
theory with the ideas gives birth to the research problem, questions and framework.
The online grocery selling with respect to India is an upcoming business sector which has
not been much researched within the domain of social sciences (Bozkurt, & Grugulis, 2011). The
present study is taken up further by conducting the primary survey as there is hardly any data
available through the secondary sources. As far as the approach towards the thesis is
concerned, two chapters of the present thesis aims at understanding consumer trust and inter-
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firm networks respectively are based on the primary data collected while one chapter is based
totally on the review of the literature which aims at understanding the historical trajectory of
online retail in India. Another important section (added in the appendix 1) discusses the
Bigbasket has been one of the online grocery sellers which has been able to sustain its
business over the period of time. Since 2012, as many as fifty online sellers have tried their luck
in grocery online retailing but couldn’t succeed due to distinct features of the products which
required unique logistics and management. Till December 2015 very few online grocery sellers
could sustain in the market and Bigbasket is one of them (Sen, 2016). Huge successful ventures
in the field of online business like peppertap, flipkart, ola cabs, local banya etc. have given a try
in the grocery business but soon came out and closed their new initiatives in the field of grocery
e-retailing (Sen, 2016 and Govind & Chakraborty, 2016). This discussion suggests that Bigbasket
has developed something unique as compared to other sellers due to which it has been able to
sustain and grow in the online grocery retail market in India. These unique characteristics of
Bigbasket have proved to be a motivation to undertake Bigbasket as a case study for this
particular research.
The two main chapters of the thesis focus respectively on the demand and supply side of
the grocery online retailing. The chapter focusing on the consumer trust and motivations
towards grocery online retailing is carved out of the demand side of the grocery online retailing
while the other chapter focusing on studying the inter-firm networks and value chains is
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connected towards the supply side. The following section of the study discusses the research
Grocery buying is embedded within the social systems of the individuals and gets
reflected in their buying behaviour. There is a huge difference in the structural operational
mechanism required for dealing with grocery retailing as compared to other goods and services
which becomes the prime motivation to pursue this research with a case study of Bigbasket,
India’s one of the largest online grocery store, considered as one of the successful initiative
which could sustain its operations and business unlike several other organisation in the same
business (Sen, 2016). The online grocery retail market with respect to India has a very small
share in the overall online retail market. It is currently 0.2% of the overall market and is
expected to grow to 1.2% by the year 2023, which accounts to $ 10.5 billion of business (SH,
2019). Similarly, the share of online retail trade of the goods including food and grocery, fashion
and consumer electronics in the overall retail market is expected to increase from current 4% to
8% by the year 2025 (Tandon, 2020). The rapid increase in the share of online grocery retailing
and the growth of overall online retail sector with respect to India proves to be a motivation to
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2.2.1 Demand side of online grocery retailing
Buyers are very particular about the goods they consume (eat and apply on their body)
and it is vested in their nature to touch, feel, smell, physically check and then buy a product
coming under the category of perishable items. For example, while buying apples from a
hawker who is visiting a customer’s neighbourhood and locality regularly, the customer might
feel certain affinity towards the seller but however, while buying the apples from that vendor
also there is a high possibility that customers would choose, pick and then prepare his/her cart
accordingly. Here comes the question of trust, which gets embedded within the consumer’s
buying behavior and actions. The concern here is that if a customer who is buying regularly
from a possibly known hawker or a vendor but still opting to pick, shortlist, check and buy, does
it reflects that there is a lack of trust among the customer specifically about the quality of the
product to be sold? This happens so when there is a physical interface between the consumer
and the buyer, however what happens in the online sector when there is only virtual interface
between the consumer and the seller is still not known. In that scenario online grocery retail
firms face a tough challenge to develop trust among their potential buyers certifying the quality
and freshness of the goods they are selling. A lot of resources including financial investment,
manpower, technological, strategical etc. need to be put in to build and keep it maintained
further among the buyers. This discussion raises the question that despite the consumers
existing buying behaviour and pattern, what has been the reasons that they are shifting
towards online grocery retail. This concern has been taken up in the chapter which deals with
studying the process of development of consumer trust towards grocery online retailing.
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Price perception
There is a general perception that price of the goods being sold online is
comparatively cheaper compared to same set of goods being sold through the conventional
channel. This is also one of the motivations for the customers to go for online shopping.
However, Berkhout, 2016 states that this argument cannot always be the case specifically
with respect to groceries because of delivery charges. For example, if a customer wanted to
buy 250 gms. of tomatoes which are available @Rs. 15/- kg. in local neighbourhood
vegetable store but are available @Rs. 12/- from bigbasket, it would still be cheaper to buy it
locally as the customer would need to pay Rs. 40/- as delivery charges (as applicable for an
order of less than Rs. 1000/-). Hence, the total amount spent by the customer for 250 gms of
tomatoes would be Rs. 43/- which is much higher as compared to prices in the conventional
market. However, does this price perception actually creates a new entry barrier for
customers is still needs to be explored due to the fact that Bigbasket works on the basic
principle (as advertised by them) which guarantees lowest price offered with a * mark
certifying that terms and conditions applied. Similarly, through this backdrop a query is
raised that the concept of price perception among the consumers helps in expanding the
consumer base. The present research banks upon the price perception feature to study the
Routine
It requires lots of inputs to go for a change in the shopping habits and to experience
shift in the consumer behavior. As stated in A.T. Kearney Global Development Retail Index
(GRDI) in IAMR, 2013 report that consumers are happy with the way things are going and
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the channels which they use to buy grocery unless they experience a major event in their
lifecycle which affects their socio-economic status. As explained by Berkhouth, 2016 it could
be a new job, certain incline or decline in income, shifting house, change in the number of
family members etc. These kinds of circumstances affect one’s personal choice and shopping
habits towards the grocery purchase. Specifically within the Indian scenario, grocery
purchase is historically embedded within family values which get carried over to
generations. For example, in many of the families there is a particular grocery store which is
the prime source of providing grocery on monthly basis and the family members have
developed a trust on the services of that particular store and the decision makers would
need a strong reason to discontinue from this ‘old reliable’ store to some online un-verified
seller. The present discourse leads to raise the query as to how major change in the socio-
economic structure of the family leads to entry and exit of the consumers towards grocery
online retailing. This question has been taken up in the upcoming chapter where consumer
Delivery
There is a huge difference between the delivery mechanism adopted in the business
model of firm dealing in grocery and other non-perishable consumer goods like electronics
or apparels. Grocery online retailing units needs to work in such a planned way to get the
goods delivered within a specific timeframe as the shelf life of those perishable goods is
short and customers must receive these goods as good and fresh as compared to be
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purchased from a locally located shop or a hawker. For developing and managing the robust
logistical mechanism to cater to a just in time delivery while keeping proper care of the
goods as required on the way, it requires huge amount of investment, trusted partners and
honest monitoring system. This particular requirement makes the grocery e-retailing distinct
and certainly increases the cost and expenditures of running business. This has been the
primary reason discussed by Sen, 2016, also that more than 50 e-grocers started business in
India but very few could sustain after a short period of time. Moreover, BigBasket has been
seen as one of the upcoming ventures that could sustain its business in the grocery online
industry (Sen, 2016). The present study tries to figure out as to how networks within the
firm perform at work where the delivery mechanism is distinctive in nature. This aspect has
been taken up in the upcoming chapter which tries to focus on the inter-firm networks and
its functioning within the delivery mechanism of the online grocery retailing.
The present study gathers around the central objective to understand the consumer
trust towards grocery online retailing. Secondly, this research also looks up to as to how the
value is added in a buyer driven value chain and how the inter firm-trust and networks
works among the units supplying services to the lead firm. Thirdly, the present research also
focus upon as to how the process of online retailing in grocery is evolved and what is the
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2.3.1 Questions related to demand side of grocery online retailing
1. What are the drivers of building consumer trust in grocery online retailing and how
do they perform?
1. How do the emerging changes affect the governance mechanisms across the value
2. How does the interfirm trust affect the economic and social upgradation of the
3. Where does the question of gender gets located through the value chain?
Two methodological frameworks were developed for the purpose of studying two
sections of this study. One is carved out from the concept of consumer trust and other one
from the concept of value chain analysis and inter-firm networks. Both the frameworks are
2.4.1 Consumer behavior: Exploring the trust building process of consumers towards online
grocery retailing
There is a very high probability that consumer would stick to only one supplier provided
the cost of switching over is not very high and also there are no barriers restricting the decision
making of the buyers. While in the case of grocery retailing any of the factors is not found too
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strong at work. One doesn’t need many valuable and expensive resources to invest while
switching to grocery e-retailing options from conventional means. Moreover, the state policies
like digital India and demonetization are encouraging online transactions. Jarvenpaa et al., 2000
has used the term “trustworthiness of the store” as a synonym with “consumer turst” (p. 47)
based on the fact that due to virtual nature of the e-business sales person representing the
seller organisation is missing hence the sole responsibility comes on the seller organisation to
develop the trust among the consumer. Jarvenpaa et al., 2000 goes further and proposes a
model to study the consumer trust. The variables of the model are perceived size, perceived
reputation, risk perception and attitudes and willingness to buy or re-purchase intentions.
These antecedents of consumer trust are used by the author to collect the data to study the
consumer trust towards an online store. Similarly, Mosavi and Ghaedi (2012) used variables
such as shared value, complaint handling and customer satisfaction to collect the data for a
similar sort of this study. In a similar manner the questionnaire for this particular study was
developed to gather the data related to antecedents of consumer trust. The questionnaire with
description of different variables is presented in the following sections. The outcome of the
study is based on the perception of the respondents for which qualitative data was also
collected.
The response formats were either open, in ranking scale or closed (dichotomous,
multiple choices). More than 30 questions gauged the consumer’s views on choosing the online
shopping, reasons for buying grocery from Bigbasket, products which they buy, their
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experience of those particular products and services, change in the shopping pattern, their
association with conventional grocery vendors etc. (refer to the following Table 2.1). Moreover,
none of the questions were kept mandatory for the respondents to answer. General
information about the consumer characteristics and respondents were also collected which
includes consumer name, age, gender, educational status and means of livelihood etc.
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structure of family which (MCQ)
promoted buying grocery
online?
What has been the prime Multiple Choice
reason to shop from Questions
Bigbasket? (MCQ)
Please describe the list Dichotomous
products which you were not (Yes/No)
using before but have started
buying from Bigbasket.
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Do you think Bigbasket has Dichotomous
sufficient resources, (Yes/No)
knowledge and expertise to
do online grocery business?
Please share any specific Descriptive
experience about Bigbasket’s
products and services used by
you.
Would you like to consider Multiple Choice
repurchasing from Bigbasket Questions
in future? (MCQ)
Risk How would you characterize Multiple Choice To analyse the risk
Perception the decision of whether to buy Questions involved while sopping
a product from Bigbasket? (MCQ) from Bigbasket
Do you think that you would Dichotomous
recommend Bigbasket to (Yes/No)
other people?
The literature on governance and labour within value chain analysis asserts that any
extra cost incurred by the lead firm in order to produce the particular goods and services is
shifted to the participants at the lower level of the hierarchical chain who are at receiving end.
Barrientos, 2001, Kaplinsky, 2000 and Humphrey & Schmitz, 2001 have discussed the
governance mechanism in the value chain analysis and argued that the ‘power to govern’ gives
the ‘lead firm’ enormous opportunities to extract economic rents which could be over and
above the expected profits. Similarly, to pursue further in this direction it is important to study
the interfirm trust developed between the lead firm and the other suppliers down the value
chain. This would explore the perspectives of supplier firms. The approach here is to target and
study value chains where Bigbasket acts as a lead firm in the buyer driven value chain and not
mere as a retailer. The areas of enquiry would be the origins, process and outcomes of the
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contracting relations, the capabilities of the lead firm to build the trust, motivations for the
subordinate firms to get associated with the lead firm, personal relationship developed with the
employees of the lead firm (Nguyen, 2005). Based on the framework so developed and
discussed in further chapter five of this thesis, questionnaire was developed to collect data for
this section of study. The contents of the questionnaire are motivated from this methodological
The questionnaire contained around forty questions most of them were descriptive in
nature. The questionnaire was divided into five sections based on the information sought viz.
structural information, operations and activities, operational cost, modus operandi with lead
firm and breach of trust. The first section covered the structural information about the firm like
about its registration, size of the firm, source of investment and number and nature of labour
involved etc. The second section focuses on the type of activities the firm performed. In the
third sections questions were being framed to gather the various operational costs of the firms.
In the following section, question about the way of operation with the lead form were asked
like the role of the middleman, payment structure from the company, loans etc. The last part of
the questionnaire is based on the questions to find out if there has been any breach of trust of
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Table 2.2: Brief description of the inter firm trust questionnaire
Structural Location of the unit (i) Own dwelling unit To gauge the basic
Information (ii) Rented structural information
(iii)Provided by about the production
Bigbasket units
Legal entity (i) License register
(ii) No legal
registration
(iii) Company register
Evolution of firm (i) 1-2 yrs
(ii) 2-4 yrs
(iii) 4-6 yrs
(iv) Above 6 yrs
Size of the firm According to labour
size
Composition of labour (i) Pure family
(ii) Pure hired
(iii) Mixed
Operations Type of activity (i) Mixed To understand the
& activities (ii) single types and nature of
Engagement in type of (i) value addition activities which the
economic activity (ii) production firms undertake
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How do you finalise the price of Descriptive
services provided? Specify the
prices
Any training provided Descriptive
2.5 Sources of Data and Methodology: For the consumer trust section
The prime requisite of the present research is to prepare theoretical base to understand
the several concepts related to the broad theme of the study. To perform this necessary task,
available literature from authentic sources have been collected and then reviewed. The
literature includes published articles, book chapters, journals, research reports, reports from
government as well as non-government institutions etc. This study is based majorly on the
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Sampling technique: A ‘mixed’ approach
Choosing methods and appropriate approach towards it is the most crucial and essential
step towards pursuing any research. The trajectory of thoughts which build the research ideas
and hence shapes the research problem needs to be extended while exploring the potential
methods and techniques. The backdrop with which the methods and techniques are sought
signifies that the set of targeted population under study is un-traceable in the given
this, the probability sampling techniques couldn’t be applied in the present case due to specific
characteristics of the population as discussed above. As this research has progressed two viable
options of sampling techniques were explored and shortlisted i.e. snow ball and convenience
sampling. The merits and demerits of both were taken into account and after due
brainstorming, convenience sampling was followed while using some of the characteristics of
snowball sampling i.e. ‘referral’. An unorthodox approach with a ‘mixed sampling technique’
was adopted due to the facts such as access, cost effectiveness, time advantage, targeting huge
number of audience to find potential respondents etc. (Zikmund, 1999 in Mosavi & Ghaedi,
2012). On the other hand the disadvantages related to this approach were identified as
sampling bias could be produced as it is non-random and applied to an unknown sampling size
of the population. The data was collected through a structured questionnaire containing 41
questions and posted on internet through Google Forms (online platform for conducting
surveys and recording the data). Initially questionnaire was administered among a smaller
group of respondents to perform a pilot study and after receiving about 10 responses; the
questionnaire was revisited and modified again. The questionnaire was edited to include
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questions related to type of products that consumers buy, what were their experiences with
those products (in order of satisfaction level and also qualitative questions), is there any change
whether they have entirely given up on buying from small stores and local vendors. This was
done as to get both qualitative and quantitative data to support the arguments to be derived
while analysing the data. After that the questionnaire was posted on several internet based
platforms like email groups, social media engines etc. The language of the survey was English
and was conducted between December 2018 and February 2019. The questionnaire was shared
with about 1500 people and total 165 responses were recorded during the period out of which
4 were omitted as they were found invalid. The questionnaire was open and administered to
general public without any pre-condition except the respondent must have been a user or
consumer of Bigbasket goods and services at some point or the other. Moreover, while sharing
the questionnaire with the potential respondents they were also encouraged to share the
questionnaire with the other potential respondents in their social circle. The number of
important step as it multiplied the accessibility, within the specified resources, to the targeted
group.
Data Analysis
Simple statistical tools were used through MS-Excel to analyse the data. The data was
first processed using coding technique in STATA to develop cross tables. Other figures, tables
and charts were prepared using MS-Excel. About twenty seven cross tables were carved out of
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the data using different variables from the questionnaire. The cross tables were as follows; (i)
percentage distribution of individuals buying groceries from other sources by family income (iii)
percentage distribution of family income of individuals by other channels of buying grocery (iv)
percentage distribution of individuals buying groceries from other sources by gender (v)
percentage distribution of individual’s occupation wise buying groceries from other sources (vi)
major change in the socio-economic structure of the family by family income (vii) major change
in the socio-economic structure of the family by profession (viii) customer perception towards
Bigbasket as one of the biggest online grocery seller in India by family income (ix) customer
perception towards Bigbasket as one of the biggest online grocery seller in India by profession
(x) customer perception about Bigbasket has been able to provide solutions to customized
grocery requirements by family income (xi) customer perception about Bigbasket has been able
perception about Bigbasket has been able to build value by keeping its promises and
commitments towards the customers by family Income (xiii) customer perception about
Bigbasket has been able to build value by keeping its promises and commitments towards the
customers by profession (xiv) customer perception about Bigbasket that it keeps best interests
and expectations of customers in mind by family income (xv) customer perception about
Bigbasket that it keeps best interests and expectations of customers in mind by profession (xvi)
percentage distribution of individuals towards the satisfaction level with the complaint
satisfaction level with the complaint resolution mechanism by profession (xviii) customer
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perception towards Bigbasket has been able to establish as a well-known seller in the grocery
online market by family income (xix) customer perception towards Bigbasket has been able to
establish as a well-known seller in the grocery online market by profession (xx) percentage
distribution of customers who believe that Bigbasket has developed sufficient resources,
knowledge and expertise to do online grocery business by family income (xxi) percentage
distribution of customers who believe that Bigbasket has developed sufficient resources,
distribution of consumers who would consider repurchasing from Bigbasket in future by family
income (xxiii) percentage distribution of consumers who would consider repurchasing from
characterize the decision to buy a product from Bigbasket by family income (xxv) percentage
distribution of individuals of how they characterize the decision to buy a product from
Bigbasket to other people by family income (xxvii) percentage distribution of individuals who
would recommend Bigbasket to other people by profession. In addition to this pie charts and
other figures were also prepared for the purpose of data analysis. Pie charts and special figures
were prepared to represent the data which was recorded in combinations, as respondents were
free to choose more than one option in some questions. The figures derived are as follows; (i)
percentage distribution of individuals started to buy groceries from Bigbasket (ii) Percentage
distribution of individuals buying groceries from other sources (iii) Percentage distribution of
choices made by the individuals in combinations to buy grocery from other channels (iv)
percentage distribution of individuals opting for online grocery buying due to major change in
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the socio-economic structure within their family (v) percentage distribution of choices made by
the individuals in combinations to depict the major socio-economic change in the family which
promoted online grocery buying (vi) percentage wise distribution of prime reason to buy from
Bigbasket based on the characteristic features of online grocery retailing (vii) percentage
distribution of customers who perceive Bigbasket as one of the biggest online grocery seller
and who perceive that Bigbasket provides customised solution to their grocery needs (viii)
percentage distribution of customers who perceive Bigbasket tries to build value by keeping its
promises and commitments towards the customer and who perceive that Bigbasket keeps their
best interests and expectations in mind (ix) percentage distribution of the individuals who have
been satisfied with the complaint resolution mechanism of Bigbasket (x) percentage
distribution of individuals who perceive Bigbasket has been able to establish as a well-known
seller in the online grocery market and who perceive that Bigbasket has developed sufficient
resources, knowledge and expertise to do online grocery business (xi) percentage distribution
of consumers who would consider repurchasing from Bigbasket in future (xii) percentage
distribution of individuals of how they characterize the decision to buy a product from
Bigbasket (xiii) percentage distribution of individuals who would recommend Bigbasket to other
people.
2.6 Sources of data and methodology: For inter firm trust and value chain analysis section
The field site is based in a peri-urban setting in Village Bamnoli, Dwarka. Over the period
of time many small units have developed in the vicinity of the main operational set up of
Bigbasket. These smaller operational units are responsible majorly for the outsourced work and
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value addition to the raw materials so that a more finished product is derived for online sale to
the customers. The central objective of this paper lies around the purpose to understand the
process of production networks of the lead firm i.e. Bigbasket and the smaller firms down the
value chain. The fieldwork for this section was done in the month of October and November
2019.
The purposive sampling technique was followed to choose the firms depending upon
their availability, the access and any other constraint. Field setting and potential respondents
were identified in the pilot study where questionnaire was first introduced to a few production
units and after receiving their responses a few questions were added which helped to gather
the missing link in the data. Purposive sampling technique was followed as it allows collecting
specific data points from specific sources of data; however this technique follows non
randomization of sample which has a probability to produce bias. There were about 200
household units working in the field area out of which 22 informal household units which were
Interviews of the owners of the units or the person responsible for running the units
were taken up using a structured questionnaire. In depth interviews of the respondents, which
provided vital information for the purpose of this study, were also developed. The data
collected was descriptive in nature. The similar findings from the respondents were grouped
and clubbed and presented in the descriptive form. Additionally, a few narratives aimed at
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specific points crucial towards the objectives of this research were carved out and presented in
The section is based on the secondary data and was derived through the ‘share valuation
reports’ of the organisation. These reports were accessed online from www.zauba.com. These
reports were prepared and submitted by BM Manjunath & Associates, Chartered Accountant of
the company. The data captured and analysed is related to assets, income, expenses, profit,
2.8 Ethics
University Delhi has given a lot of emphasis on research ethics. The purpose and objective of
the study were made petty clear to the respondents. The data has been recorded and taken up
with the prior consent of the respondents. For both the sections of data collection the
respondents were duly informed about the purpose of the research while introducing the
questionnaire to them and it was also assured that the data provided in the survey will only be
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