Net Sweetens Business for Candy Sales

BOSTON (05/08/2000) - When eCandy.com Inc. went online last November, its goal was to do more than merely satisfy the occasional sweet tooth.

The Los Angeles-based company also sought to bring new ways of doing business to the $23.5 billion U.S. retail confectionery industry, said co-founder Rani Aliahmad.

"I wouldn't use the word revolutionizing," he said. "ECandy is really evolutionizing the industry."

Aliahmad and eCandy.com co-founders John Hadl and David Kim didn't have any prior experience in the confectionary business when they founded the company early last year. But they decided to bring their technology and business backgrounds to an industry they felt was "a little dysfunctional."

"You can have a great candy out there, but there's no way people are going to know about you" because of industry domination by a few large manufacturers, Aliahmad said. And, he added, the industry has been unwilling to adjust to shoppers' evolving tastes.

"It's a push economy rather than a pull economy - not consumer-driven," he said. "You change that by bringing the manufacturers closer to the consumers."

ECandy.com claims to do that by focusing strictly on online distribution and paying attention to the customer, Aliahmad said.

One simple way eCandy.com taps into its customer base is by reading e-mail from customers suggesting new products, said Aliahmad. The company then passes those suggestions on to manufacturers.

But Stephen Traino, president of San Diego-based Candy Direct, an online candy distributor founded in 1997, said such strategies are nothing new. ECandy, he said, is just one of many sellers in a large market.

Industry analysts say the future of the online candy business has yet to be proved.

Food analyst Mitchell Pinheiro at Janney Montgomery Scott LLC in Philadelphia said businesses like eCandy.com will likely find their greatest success in gift candy sales, since the Internet can't instantly satisfy sweets-craving shoppers.

Susan Fussell, communications director at the National Confectioners Association in McLean, Virginia, agreed.

According to the association, up to $2 billion of U.S. candy sales in 1998 were earned through mail order or online sales.

"The Internet is so far only a small part of the mail-order market," she said.

"There is definitely room for growth. ECandy knows that, and that's why they've looked for these niches."

Weiss is a freelance writer in Lancaster, Pennsylvania.

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