1. Boo hoo – learning
from the largest
European dot com
failure
ROMAN MAN SHRESTHA
ASSIGNMENT 2
HIMLAYAN COLLEGE OF MANAGEMENT
INTERNET MARKETING
2. INTRODUCTION
- Boo.com was an online retail company founded in 1998 by Ernst Malmsten,
Kajsa Leander and Patrik Hedelin.
- The vision of the company was that it would be the first online global sports
retailer selling brands such as Polo, Ralph Lauren, Tommy Hilfiger, Nike, Fila,
Lacoste and Adidas.
- Its aim was to compete with industry rivals such as Amazon and Barnes + Noble
in the online retail market.
3. REASON FOR FAILURE
1) Lack of investment due to unclear forecast sales figures which led to lack of
confidence for investors resulting in a shortage of capital to continue operations
2) Channel distribution issues affecting the flow of goods due to manufacturers own
established networks along with disagreements to discount products due to them being
seen as a luxury product and status symbol
3)Ambitious marketing plan
4. FUDAMENTAL PROBLEM OF BOO.COM
-Following an extremely aggressive growth plan
-Launching into too many markets at one time
-Obsession with brand identity
-Poor functionality
-Allowing marketing team to overrule business decisions
-Using technology that most internet users at the time did not have
-Slow and unpleasant website experience for customers
-Too ahead of their time with technology required by users
5. CHANNEL DISTRIBUTION ISSUES
Issues around distribution and channel conflict were found to exist for Boo.com
- Boo possessed classic channel conflicts. Initially, it was difficult getting fashion and
sports brands to offer their products through boo.com. Manufacturers already had a
well-established distribution network through large high street sports and fashion
retailers and many smaller retailers.
- Retailers also disliked Boo.com for selling goods at lower prices as it affected there
own brand image
- Well established companies such as Nike, Ralph Lauren and others did not think that
discounting there products benefited there brand equity and image as they are viewed
by consumers to be expensive luxury status products
6. LESSON LEARNED FROM BOO.COM
-Make informed decisions when choosing who to hire
-Understand the importance of timing when entering a market
-Use a cost effective marketing strategies
-Test all areas of the website before launching
-Don't use overly optimistic figures when predicting future profitability and customer base
-Don't spread too thin
-Don't try to expand into too many markets and locations at once
-Build local brand awareness then move to global.
