Electronic commerce, commonly written as e-commerce or eCommerce, is the trading or facilitation of trading in products or services using computer networks, such as the Internet or online social networks. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction’s life cycle although it may also use other technologies such as e-mail.
The history of eCommerce dates back to the invention of the very old notion of “sell and buy”, electricity, cables, computers, modems, and the Internet. Ecommerce became possible in 1991 when the Internet was opened to commercial use. Since that date, thousands of businesses have taken up residence at web sites.
At first, the term e-commerce meant the process of execution of commercial transactions electronically with the help of the leading technologies such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange business information and do electronic transactions. The ability to use these technologies appeared in the late 1970s and allowed business companies and organizations to send commercial documentation electronically.
Although the Internet began to advance in popularity among the general public in 1994, it took approximately four years to develop the security protocols (for example, HTTP) and DSL which allowed rapid access and a persistent connection to the Internet. In the year 2000, a great number of business companies in the United States and Western Europe represented their services in the World Wide Web. At this time the meaning of the word e-commerce was changed. People began to define the term eCommerce as the process of purchasing of available goods and services over the Internet using secure connections and electronic payment services. Although the dot-com collapse in 2000 led to unfortunate results and many eCommerce companies disappeared, the “brick and mortar” retailers recognized the advantages of electronic commerce and began to add such capabilities to their web sites. By the end of 2001, the largest form of eCommerce, Business-to-Business (B2B) model, had around $700 billion in transactions.
According to all available data, eCommerce sales continued to grow in the next few years and, by the end of 2007, eCommerce sales accounted for 3.4 percent of total sales.
Ecommerce has a great deal of advantages over “brick and mortar” stores and mail-order catalogs. Consumers can easily search through a large database of products and services. They can see actual prices, build an order over several days and email it as a “wish list” hoping that someone will pay for their selected goods. Customers can compare prices with a click of the mouse and buy the selected product at the best prices.
Online vendors, in their turn, also get distinct advantages. The web and its search engines provide a way to be found by customers without an expensive advertising campaign. Even small online shops can reach global markets. Web technology also allows to track customer preferences and to deliver individually-tailored marketing.
History of eCommerce is unthinkable without Amazon and eBay which were among the first Internet companies to allow electronic transactions. Amazon.com, Inc. is one of the most famous eCommerce companies and is located in Seattle, Washington (USA). It was founded in 1994 by Jeff Bezo’s and was one of the first American eCommerce companies to sell products over the Internet. After the dot-com collapse, Amazon lost its position as a successful business model, however, in 2003 the company made its first annual profit which was the first step to further development.
At the outset, Amazon.com was considered as an online bookstore, but in time it extended a variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s, apparel, footwear, health products, etc. The original name of the company was Cadabra.com, but shortly after it became popular on the Internet Bezo’s decided to rename his business “Amazon” after the world’s most voluminous river. Amazon is one of the first eCommerce businesses to establish an affiliate marketing program, and nowadays the company gets about 40% of its sales from affiliates and third-party sellers who list and sell goods on the web site. According to the research conducted in 2008, the domain Amazon.com attracted about 615 million customers every year and attracts over 130 million customers to its US website per month by the start of 2016. The most popular feature of the web site is the review system, i.e. the ability for visitors to submit their reviews and rate any product on a rating scale from one to five stars.
India’s internet users expected to register double-digit growth to reach 627 million in 2019, driven by rapid internet growth in rural areas, market research agency Kantar IMRB. Internet usage in the country has exceeded half a billion people for the first time, pegged at 566 million, driven by rural internet growth and usage. It is growing at an unprecedented rate, adding million’s new entrants every month. The industry consensus is that growth is at an infection point. By 2020, India is expected to generate $100 billion in online retail revenue.
I would like to talk about the nutrition healthcare industry here in particular. The online nutrition market is booming with the growth of e-Commerce and nutraceutical industries. Few segments within nutraceuticals such as sports nutrition, where the target customer is younger, is growing faster than other segments because the younger population has higher online penetration rates. Given that nutraceuticals require a tremendous amount of customer education, content and mobile will play a large role in growing this category online. Growing health awareness in the country and increasing per capita incomes will all lead to growth in the industry.
Today, the fitness industry accounts for over a $24 billion franchise industry which is waiting to be expanded and exploited to achieve the complete potential.
In the last decade or so, the Indian fitness industry has come a long way from being a non-existent upper middle class dominated industry that only reached a certain category of people. In recent years, the middle class with its highly disposable income and newfound consciousness about health is now working hard to keep predominant health conditions at bay.
Diabetes, cardiac problems, osteoporosis, arthritis are common among Indians who are rushing to occupy the world’s number one slot in many health conditions that invariably become a part of their existence by the time they enter the post-40 lifespan.
The fitness industry isn’t banking on this newly dawned realization alone. It is also working on ensuring Indians realize the importance of ‘looking good, eating right and feeling good’. Earlier, it was only sports persons who endorsed directly or indirectly, the importance of fitness. Today that isn’t the case. Fitness has as many champions today in various fields. Fitness is considered to be the lone solution for so many psychological and physiological problems that medical intervention can be minimized by just hitting the gym alone. The middle class has now latched on to it.
With a growing population that looks to get fitter a there seems to be an unprecedented growth in the demand for sports nutrition supplements to help these people achieve their goals. Online marketplaces like healthkart.com have over 500,000 customers who have transacted with them and they continue to grow at 2–3 times year on year. The customers are spread across the country with 30% of sales coming from tier 4 towns. Having said this I believe that technology will be the major influencing factor in the growth of the nutritional healthcare sector in India. The growth in the number of mobile users and increased availability of internet and data services have paved the way for tech startups to tap into the mobile apps market as a means to offer convenient and easy access to healthcare services and nutritional supplements.
Recently, Mr.Mukesh Ambani’s Reliance Jio’s entry into the Indian telecom market has changed the way the Indian audience will connect with the internet, by offering the lowest 4G data plans in the world and is hoping that this will realize India’s digital dream and make it into a “data abundant” country. And with this, the future looks only brighter with more accessibility to the Internet.
There has been a huge change in the way people buy their nutritional supplements in the past few years. The shift from buying from ‘brick and mortar’ to buying ‘online’ has been huge and the Indian audience has seemed to accept this change wholeheartedly. Many sports nutrition companies have shifted to selling online and health nutrition e-commerce marketplaces have come up realizing this untapped area and they look at this as a huge untapped market. These websites offer great deals and offers, which most of the ‘brick and mortar’ places shy away from thus lure potential customers and existing customers to buy from them. Some of these nutritional e-commerce websites and marketplaces also offer a return policy in case a customer feels something is wrong with their product. A few companies have gone a step ahead and collaborated with top nutritional experts to help potential and existing customers to understand their nutritional needs and help them pick the right products in line with their goals. These factors have helped the Indian audience place their trust in buying online rather than from retail.
A large number of the Indian population out there, especially an abundance from tier 2 and tier 3 cities have understood the importance of maintaining oneself through a well-balanced diet coupled with quality supplementation and exercise. Many of them desire to achieve the physique of their most-liked Bollywood actor/actress and try and ape their fitness regimes.
This being said, I believe that the online nutritional market is only destined for further growth and many health nutrition e-commerce companies are betting big on this untapped market which is expected to grow to $ 4 billion by 2020, if not more.
Jay Sitlani, Crash Boom Bang