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The Indian nutraceuticals and supplements marketplace is fast shifting from shops to laptops, tabs and cellphones, opening up a large market opportunity online. Online retailing today represents one of the fastest and most dynamically growing segments. Health and wellness sector appears to be no exception as many health and wellness products too are sold online. This includes nutraceuticals, nutrition and supplements also. But this online market of nutra and supplements products is used by limited number of enlightened customers keeping a vast potential open to growth.
According to S Chandrashekhar, industry expert, e-commerce and digital marketing is rapidly evolving. “From a simple TV shopping to internet-based and digital marketing is now expected to be largely driven by mobile phones. With estimated 950 million cell phone users and 300 million internet users the segment is all set to gallop,” said Chandrashekhar.
As it is nutraceutical, dietary supplements and food supplements market is growing in India due to varied reasons like increasing health and fitness awareness, growing number of middle class with surplus income to spend on health products, growing awareness about preventive healthcare and alarmingly increasing number of patients with lifestyle diseases. In this market growth, a large portion now comes from increasing online shopping.
One of the reasons for growth of online sales of nutraceutical products is the growing number of internet users and growing interest of many in online shopping, even health products due to convenience. India is world’s second largest growing online population in the world after Brazil and in next few years 70% of the online population is expected to shop online (all sorts of products). How many of them choose online shopping option for even nutraceuticals and similar products is worth watching. Experts believe that healthcare will be the next big thing in the online retail space. “The Indian e-commerce valued at $22 billion in 2015, is likely to explode in the next 5 years and online neutraceutical is expected to follow the same trend,” Chandrashekhar pointed out.
But Manjiri Chunekar, Managing Director, Grass Root Nutrition, still has apprehensions over the likely growth of online sales of nutra
products. She opined e-marketing of nutra products still has a long way to go in India. “The customer here is neither greatly educated in this area nor much aware or confident about purchasing products through e-marketing facilities,” she added.
Countering this with figures, Parth Patel, Head, E-Commerce, West-Coast Pharmaceutical Works, Ahmedabad, said growth of both online and offline market in India of nutraceutical, nutrition and supplements is very good. “Number of products available online is increasing, number of companies manufacturing and selling products online is growing day-by-day. “In 2012 there were only 100 companies selling their products online. That number has increased to 500 now and by the year end, I expect this number to grow further to about 1,000 big and small companies,” said Patel. He added currently the online market is worth over Rs 500 crore and the growth is 20% to 30% month-onmonth.
Chandrashekhar pointed out that compared to other countries, in India the online nutraceutical sale is in its infancy and 80% of online nutraceuticals transaction in India are related to sports medicine products. Quoting the Euromonitor International research he said the global vitamin and supplement market is worth $68 billion with internet sales contributing a major share in the growth of supplement demand. Another study by Consumerlab.com reports that 44% of consumers purchased nutraceuticals online globally.
Though India is in infancy stage in online market of nutra products, slowly but steadily there has been a remarkable transformation in shopping habits and places of Indian consumers as e-commerce has taken the world of retail by storm. This fascination of Indian consumers to shop online is expected to reflect in nutra products too. To take advantage of customers’ new trend of online purchasing, companies need to initiate digital marketing campaigns to promote products and to establish a rapport with tech savvy consumers.
Sharing his thoughts, Avik Sanyal – Country Manager India and SAARC for Glanbia Performance Nutrition, said, “The health and nutrition industry is in its promising phase and growing rapidly at double digit rates year-onyear. This growth can be attributed to increasing awareness about healthy living and a desire to look and feel fit among people, regardless of age or gender.”
He further said, “We want to offer world class products to satiate the needs of our consumers and are committed to high standards of quality in every serving. The category has a huge untapped market and we are confident that e-commerce is a way to reach out to the remotest location and provide a well-informed shopper experience at your fingertips. Our constant endeavour is to grow the category through education”.
Commenting on the growth of nutrition market and need for online marketing, Sameer Maheshwari, Co-Founder and Managing Director, HealthKart.com, said, “Sports nutrition market in India is plagued with counterfeit products – almost 50% of the products sold in this category is suspect. To guarantee 100% authenticity of products to customers, we actively partner with global brands to ensure strict quality control during sourcing. Such partnership will benefit Indian customers looking for authentic and high quality sports and nutrition products”.
Considering the potential growth of online market space many Indian companies are turning to digital marketing and sales. RWL Healthworld (formerly known as Religare Wellness), which operates a chain of over 100 retail stores across India, has launched its e-commerce portal Religare Wellness in November 2014. Before that, in 2012 Parry Nutraceuticals, a division of E.I.D. Parry, awarded digital duties to the leading full service digital agency, Euro RSCG 4D Matrix, which was responsible for creating a strong data digital presence for their nutritional food supplements through their SEO, PPC and social media services.
Chandrashekhar opined it is good that companies are adopting digital channels, optimising social media promotions, integrating email marketing, and mobile-based promotions as vehicles to communicate value of goods and services. Facebook, Instagram, Pinterest, have become handy to reach consumers who used to seek word-of-mouth experiences from friends and family. ‘Diabetes living online’ is a good example in this context. He said, conscious promotions through such channels would help customers accept niche/premium priced products faster, yet with deep conviction.
One of the factors that restricts more consumers to shop nutraceuticals online as well as offline is the customer’s dependence on doctor’s prescription for anything related to the health, said Chunekar. Doctors themselves are not too well-versed with nutra products. They prescribe multi vitamins, but not beyond that. Maybe that is the limitation of the companies that they have not been able to reach the doctors or unable to get their attention, said Chunekar.
Chandrashekhar suggested an effective use of digital channels to overcome this problem. “With low awareness on health prevention, Indian nutraceutical segment need to educate its primary and secondary users – that is doctors and consumers, for which digital channel is the most efficient. It is not only cost effective, but also highly customisable,” he said quoting the examples of promotion by ‘Heinz nutrition’ foundation forum in India and ‘Lutein for every age’, a public awareness programme carried out in US.
This shows that digital marketing is not merely online sale or e-commerce. It includes digital campaigns, ads, awareness programmes for different group and types of customers using digital channels. Digital marketing consists of digital channels such as email, social networks and mobile devices as vehicles to communicate the value of goods and services to a specific audience.
Going a step ahead, Patel suggested brands to conduct awareness and knowledge building programmes for customers to identity the counterfeit or the fake supplements in the market. “There are thousands of supplement brands available in India. So, there should be proper consumer education programmes to be conducted by the brands,” said Patel. He suggested that brands should also start publishing their product details more about how to identify the original product and the fake products because if sale increases this (fake products) is bound to happen. Brands should conduct such consumer education programmes because they are the best people who know about their products, so they can make the customer understand more through such knowledge enhancement programmes.
Secondly, websites selling the products should get more and more approvals, more and more certificates of analysis (COA) of products from manufacturer to identify the efficiency of the product and also to certify which product is good and which is bad for the customer. There is no law for the supplements, so no one can be penalised if there is any mistake by the manufacturer or pre-mix supplier, added Patel.
Ganesh Kamat, Director, Vital Nutraceuticals, feels that digital marketing is a powerful tool for the nutraceutical industry as it enables brands to communicate the benefits of their products to consumers, empowering them to make the right decisions. The biggest advantage, however, is that digital marketing provides customers in every corner of the country with access to the best products available. The main benefit for consumers is interaction between them and manufacturer/marketer directly, added Kamat.
Anil Joshi, CEO, GCV Life, said robust marketing is required for influencing consumers’ mindset in the digital world. The company needs to provide trustworthy information to the consumers, review sites and offer an easy access to information which will establish that the company is honest about giving customers the best options.
Like in the nutraceuticals segment, lack of proper regulations for their online sales is one of the issues. “In the absence of a specific law for nutraceutical products, their digital marketing and online sale will be governed by the existing laws like consumer protection law, Advertising Standards Council of India (ASCI) Code of Conduct advertisements for digital marketing,” said Gowree Gokhale of a legal and tax counselling firm Nishith Desai and Associates.
She pointed out that currently most of the consumers buying health products online are vigilant consumers and they take precautions to get the information, expiry date etc. “But there is no law for online sale as to what precautions should be taken by the selling company, what information must be provided online etc.,” said Gokhale. In actual across the counter sale, the consumer is able to view the actual product, see and read the information on the label carefully. But that facility may not be available in online sale. It is important how much product information is available online, she added.
Quoting example of his online health products sales website drugneed. com, Patel explained the precautions they are taking to keep the customer informed. He said, “We have three channels. In the first two channels we get the product review from the market and from the other channels on which the brand is sold. We ask from the manufacturers more and more details about the product and the approval of the product for the third channel. Once we get a green signal from all these channels then only we list the new product. We take proper precaution because we are directly dealing with the health of the people.”
Recently, Maharashtra FDA raided Snapdeal warehouses for selling prescription drugs online. Patel fears more such types of raids on websites because there is no clear framework and the companies have already started selling products online.
“These kind of issues will come up till the framework is in place. For the industry framework is needed at the earliest possible because the industry size is growing fast,” he said.
Echoing the sentiments, Gokhale said, “A comprehensive law on nutraceuticals would sort out the issues related to online sales of nutraceuticals automatically.” She pointed out that currently there was no law on nutraceuticals, which was even creating confusion over whether nutra products are governed by food regulations or drug regulations. There is no need for a separate law for each category of products being sold online, she said and added a comprehensive nutraceutical law would take care of even online sale.
However, some experts feel online sale is a vast field covering different commodities and online legal requirements of each of these commodities would be different. Hence, one type of rules may not be applicable to all commodities sold online.
Lack of law and regulation create another problem. As there is no law, the formal e-commerce dispute resolution regulatory mechanism is also lacking in India. Online sales related disputes are not easy to manage. The problem becomes more serious as Indian courts are already overburdened with cases. In US, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Health Information Technology for Economic and Clinical Health Act (HITECH Act), etc are some of the laws that take care of medico legal and techno legal issues of e-health and telemedicine.
As Patel mentioned the regulation framework will help industry a lot in all respect, including digital marketing and online sale. But, if regulations are there or not the companies have already started selling products online and the online market is growing fast. Customers are exploring non-traditional channels to gain information and obtain goods. “Those who invest and stay prepared are the ones going to reap the benefits,” advices Chandrashekhar. He has suggested 5-important steps to be aware on digital marketing to remain relevant.
He said, “First, don’t expect miracle in digital marketing/online marketing as like other channels, it will take time. A simple key word optimisation alone can take month’s together to see its benefits. Second, it is important to remain updated; the general feeling is digital marketing is about having a website. But, when did you last update, what did you do with your website, is it mobile enabled, are some of the key things to ask. Recently ‘Google’ altered its search engine algorithm by connecting search engine ranking with mobile compatibility. Thirdly, care for content make it relevant, factual and acceptable. One cannot make hyperbolic and baseless claims in digital medium. It will spoil the brand and company image. Fourth, make sure that digital strategy is an integral part of your campaigns. Last, but not the least allocate a resource, right in the beginning of the year – be men or material and keep reviewing every quarter, so that one can track the ROI.”