A failure story of E-commerce and its causes

Electronic commerce, commonly known as E-commerce, is offering and purchasing or other transactions - via communications and computer technologies of products over the internet. It typically requires a website with a store and a payment mechanism that involves a merchant account and/or a third-party payment facilitator. This greatly reduces costs and improves efficiency and causes many companies interested to move their business into this electronic commerce system. Many companies has successful virtual e-commerce such as dell companies, e-bay or amazon.com but there are also have quite large number of companies unable to maintain their business in e-commerce environment.


An example of e-commerce is boo.com company. Boo.com company is selling branded fashion apparel over the internet .Boo.com is another flop that has been given new life by Fashionmall.com, its original incarnation proved that dot-com flops were not restricted to U.S. shores. Besides that, it is founded in the United Kingdom as an online fashion store. However, Boo.com declared bankruptcy on May 18th, 2002.


Why Boo.com fail as an E-tail on Fashion? This is because Boo.com fails to identify the problems and mismanagement from the beginning went start using this e-commerce. Furthermore, it is also due to bad planning, poor financial control, bad marketing and poor web design. For example, boo.com site is very slow in order to load their page and this has cause majority customer or consumer to wait for minutes to display a product information. The design is also complicated and should display in a fixed size window, this has cause inadequate information is display in other size window page.

Besides, another example of e-commerce failure is eToy.com. EToy.com is also one of the top 10 dot-com flops in a retail website that sells toys via electronic commerce. EToys.com was launched in October 1997, but the company went bankrupt towards the end of the boom on 22 December 2008 and after that it was acquired by Toys “R” Us in February 2009.

Why was eToys.com fail as a retail on selling toys? The reason is the same as boo.com because almost 62 percent of dot-coms is lacked financial skills and 50 percent had litt
le experience with marketing. The other reason is poor customer service , expensive advertising and unable to meet their customer needs. For instance, late in delivery the products to the right location during holiday season. On top,eToy is failure to make any development on the innovation aspect, failure to adjust the compensation plan and failure to budget because this strategies and plan currently constituted in most businesses work against Internet success.

Useful link:


http://www.cnet.com/1990-11136_1-6278387-1.htmlww.cnet.com/1990-11136_1-6278387-1.html http://www.etoys.com/home/index.jspw.etoys.com/home/index.jsp

http://www.boo.com/

http://aglncom.blogspot.com/2008/06/failure-of-etoyscom-in-e-commerce-and_11.html


7 comments:

Amanda said...

Yes, some of the company using E-commerce websites to carrying their business failure is because that do not plan their strategy and others reason is because they business is not suitable for carrying in E-commerce. For example, the business is selling fruit. But most of the E-commerce website failed is minor cause and most of the company is success if that have proper planning before start in this E-commerce.

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