Established in 1999 by Mr. Jimmy Lai Chee- ying, a Hong Kong based businessman. A direct marketing company that sold groceries through the Internet and phone-in orders. On-line shopping and free home delivery service.
Venture by a well established businessman. First to enter into cyber shopping in Hong Kong. Low infrastructure cost. Huge Distribution channel and free home delivery service. Free promotion on “Apple Daily”, one of the best selling newspaper dailies in Hong Kong. Products offered could also be quickly changed based on market demand and competition.
Distribution system was complex and costly to administer. No fixed agreement with the local wholesalers. Goods from unreliable sources leading to quality concerns. Limited variety of goods < 9000 SKUs.
Incompetence in meeting customer order. Highly inefficient use of labor. Shortage of labor at peak hours leading to unsatisfied customer. Lack of coherent public relation campaign. No fulfillment of promise of money-refund.
Favorable market segment > 2m internet user. Increasing demand for internet sales. Newly available virtual credit card facility. HKs were too busy to shop. Lack of good transport facility for the customer.
High entry barrier – Duopoly in retail market. Not much technology – other bigger player can follow the same easily. Cut throat price war – had to sell product below cost price. Retail price restriction by suppliers and wholesalers. Public’s fear for online fraud.
Try to target a smaller segment first and gradually build the business. Requirement of proper market research. Co-operation with the suppliers and wholesalers. Optimized distribution and delivery system. “Walk the talk” policy – Customer relationships management. Efficient use of labor resources. Should have a concrete contingency plan.
Targeting - Started the business by targeting the appropriate segment. Customer Value - Brought value to the customer through better customer service, better pricing and adequate information. Supplier Relationship - Forged alliance with large number of high profile retailers. Product Range - Offered wide library of products at very competitive price. Customer Willingness - Western countries were more comfortable with online shopping. Review System – Customer views were given importance and corresponding improvements implemented.