Exploit Ecommerce Trends

TABLE OF CONTENTS

TABLE OF CONTENTS 1

1. EXECUTIVE SUMMARY 2

2. INTRODUCTION 3

2.1 Ecommerce 3

2.1.1 Internet Users

2.1.2 Demographic Browsing Behaviour (Microsoft, 2007)

2.2 Organic Foods 5

2.2.1 Recognition

2.2.2 Past and Current Trends

2.2.3 Future of Organic Foods

3. ECOMMERCE OPPORTUNITY 7

3.1 Current Practice

4. POSSIBLE E-COMMERCE SERVICE 8

4. 1 Product Offering

4.2 Traffic Generation

4.3 Payment Options

4.4 Delivery Service

4.5 Repeat Customers

5. CONCLUSION 10

REFERENCES 11

Websites

Reports

APPENDIXES 12

Appendix A: Web Experience

Appendix B: Retail Ecommerce Climbs 23% in Qtr 2 Vs A Year Ago

Appendix C: Concern about Microsoft research in China

Appendix D: Food & Farming Report 2004 - Summary

Appendix E: Organic Farming Compliance Handbook - Market Summary

1. Executive Summary

Today, an ever-increasing number of households have access to the internet. As more people use the internet, more consumers will also move online. This increasing trend has been demonstrated by the increase in sheer volume of sales generated through online spending. Spurring such purchases is the adoption of secure and trusted payments options through globally-recognized service providers.

In addition, the penetration of the internet into the basic ways of how people live their lives is not helping to curb the increase in demand. The population of the world becomes educated in the ways they can meet their needs by turning to the online world.

With the ease of access to information, people more informed choices. This is reflected in the change of their habits and even something as basic as eating habits. Slowly but surely, people are becoming more aware of how the current foods they are eating are detrimental to their health.

With more governments facing difficulties in subsidizing the medical costs associated with the wrong eating habits, re-education of its populace is the most effective way. And as citizens become believers in healthy foods, there will be a higher demand for such foods.

This increase in demands is clearly reflected by the average growth of almost 20% for organic foods compared to 2-3% market growth for non-organic foods in the last decade.

Consumers are truly becoming more discerning when they have access to information that they need to make the right decisions.

2. Introduction

2.1 Ecommerce

2.1.1 Internet Users

In 2005, there was an estimated 1, 081, 000, 000 internet users in the world. United States of America accounted for 18.3% (197.8 million users), China had 119.5 million users (11.1% share) while Japan came out 3rd place with 8% share (86 million users).

(Infoplease, 2007).

What used to be unavailable in one country can now be easily obtained through the website. Even if the website business is based in a small town in Turkey, consumers from as far as USA and China can still purchase from it. In fact, with the advent of Internet, the globe has become 'borderless'. No longer is there a need to contend oneself with just what is available in one's own market.

There are many types of businesses that has gone online. From flower delivery services to viewing of properties in 3-dimensional to booking a holiday itinerary with the destination country's local tour agency.

Internet users have also become savvier. They are able to do their own auctions online via popular sites like Yahoo! Auctions, add money-making features to their blogs and even request for payments through the use of email by utilizing Paypal's services.

2.1.2 Demographic Browsing Behaviour (Microsoft, 2007)

A Microsoft laboratory based in China is carrying out research that can analyse the behaviour of Internet users with precision and draw up a profile of them (their age, sex, geographic origin and so on). The US software corporation's aim is get to know its users better in order to deliver targeted advertising.

The research was based on 189,480 users and 223,786 pages in sum. It was found that female users prefer to visiting pages about movies, baby, kids, food, and family which are related to their personal life, while male users prefer to visiting webpage about money, chat, girls, adult and cars.

An extract of the distribution for some categories profiled by the research.

2.1.3 Online Spending

In addition, the online ecommerce spending for the 1st half of the year in USA grew by 20% from US$46.1 billion (2006, Q1 and Q2) to US$55.1 billion. Total retail sales for year 2007 is expected to breach the US$200 billion mark - a conservative estimate.

(Comscore, 2007)

The rising trend is further reflected by the growth of China's C2C ecommerce industry. The further development of internet in China and its people becoming more eshopping-savvy, the annual per capita consumption rose from RMB 160 Yuan in 2001, to a high of RMB 611 Yuan in 2005.

(iResearch, 2006)

In general, the ecommerce industry will continue to grow as more people gain access to the internet and more people starts to spend online. The security