Boo.com – E-commerce failure and its causes

Boo.com was launched 3rd November 1999, with approximately $125million of funding from Europe largest luxury goods group. It was actually a high profile e-tailer website, but due to several serious problems in managing the site, Boo.com had failed in this competing industry.

Boo.com spent a lot for consultancy fees after the launched had been delay for 6 months. The online virtual shopping assistant “Miss Boo” did not successfully helping visitors with purchasing experience. The site was reported slow browsing, poor navigation and irritating technology which caused bad reputation for Boo.com. Moreover, Boo.com can’t fulfill the “three click rules” in web design, which means customer should be able to access to their product information not more than three clicks. Boo.com makes the process over complicated. Besides, computer text appeared instead of graphics causes customers unable to view and purchase the products. Customers’ complaint on the poor online shopping experience that advised customer to limit their transaction discourages customers to drop on the site again. This is because there is no site-testing before it is launched, and they ignore the users of their site.

Boo.com has a nice graphic and 3-D view on the products, but they ignore the price of those products. The bad marketing completely shows where Boo did not fulfill 3 important criteria which are “ease/convenience”, “better prices” and “speed of process”. Furthermore, there is bad planning in expanding their business plan. The management tries to dominate in the market immediately instead of expanding step by step.

Boo.com had lack of sound financial management, due to huge cost spend on technological and employee benefits. Besides, Boo.com did not have a manager to oversee its spending. Instead of cut down the cost, Boo.com employs excessive employees which show a bad human resource management in the company.

The last and the main reason Boo.com fail is where investors refuse to continually inject money into business after it has spent $380 million. This force Boo.com into liquidation and finally it was bought by a US fashion portal, Fashionmall.com.

Revenue model for Google, Amazon.com & e-Bay

E-commerce consists of buying and selling products through computer process and it is quite popular nowadays. Some company focusing on using e-commerce to conduct their business. Some people may be confused that without physical transfer of money, how are these companies going to survive? How are they going to earn money? The answer is through revenue model.

A Revenue Model lays-out the process by which a company actually makes money by specifying how it is going to charge for the services provided. What is the revenue model for Google, Amazon.com and eBay?

Google is a useful and popular search engine; it has many revenue models such as Google AdWords and Google AdSense. Google Adwords is a pay per click advertising program designed to allow the advertiser to present their advertisement to the user. Pay-Per-Click (PPC) is an online advertising payment model in which payment is based on qualifying click-through. An advertiser has to pay every time his advertisement receives a click. When a user search for something, there are some related advertisement will be shown on the right side of the screen. You can see a clear picture as below:

If you are interested to advertise in Google you can log on to www.adwords.google.com for more information.

Google AdSense is an advertisement serving program. Website owners can enroll in this program to enable text, image and, video advertisements on their sites. Revenue is generated on a per-click or per-thousand-ads-displayed basis and the advertisement are administered by Google. AdSense program includes AdSense for search and AdSense for content. Advertisers are required to pay Google a fee each time a user clicks on one of their ads displayed on Google Network members’ web sites. Here is the picture for Google AdSense:

Amazon.com is an American-based multinational e-commerce company. It sell product online such as electronic device, books and games. Amazon is the most successful online-shopping website.

Amazon Marketplace is an online marketplace that allows sellers to sell their product. Buyers can buy new or used items which are sold directly by a third party through Amazon Marketplace; this has created profit for Amazon. Besides that, Amazon will charge a commission rate based on the sale price of an item. When each transaction is being done, Amazon will also charge transaction fee to the seller. In addition, Amazon also allows some user to advertise their advertisement on their website.

eBay is an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. It also establishes localize website in many countries including Malaysia. EBay generates revenue from a number of fees such as insertion fees, promotional fees, and final value fees.

Insertion fees: When an item is listed on eBay, a non-refundable fee is charged.
Final value fees: Fees that charged to the seller at the end of each auction.

Here is an example of the auction:

Every e-commerce business is continuously creating new revenue model in order to bring more profit to the organization. We hope to see a lot of revenue model in the future.

History and evolution of e-commerce

E-commerce has tremendously developed over the past few years. It can be defined as the transaction of selling, buying, transferring or exchanging goods, information and services using the Internet. In the past, people need to go to a physical shop to shop for clothing, groceries, food and many more. However, since e-commerce wan introduced, shopping and travelling time can be cut down. Today, the most successful firm with e-commerce based would be Airasia. Most firm nowadays use E-commerce as a way to cut cost (permit cost, material cost) while trying to improve e their services and goods to be able to compete with other organization in offering their customer a better quality of goods and wider range of products.

History of e-commerce is dated back to when the term “buying and selling”, internet, computer and electricity was invented and introduced. It all started in 1991 when Internet was opened for commercial use. With the help of Electronic Funds Transfer and Electronic Data Interchange which appeared in late 1970s, users are able to exchange business information and carry out electronic transaction. Organizations and companies are able to send commercial documentation electronically to its supplier, customers, as well as creditors.

In 1984, the Electronic Data Interchange was standardized through ASCX12, enabling the transfer of large amount of transaction become more reliable and stable. Next development occurred in 1992 when Mosaic web-browser was made available and adapted into Nescape. It enables easier and convenient access to electronic commerce. This is when online retail products are offered and purchases are made online by the customer The Digital Subscriber Line (DSL) was introduced which allows faster access and more stable connection to the internet.

The development and success of E-commerce can be seen in 1995 with two biggest E-commerce based companies which are Amazzon.com and eBay.com. In 1999, retail spending over the Internet reaches $20 billion according to business.com and is still expending again day after day.

E-commerce success and its causes- eBay

In today business world, e-commerce is become more and more important for business activity which conducted over the internet. As we can see, there is more business engaged and sell the products and services online.

eBay, is one of the most successful example of e-commerce business. It is the world’s largest online marketplace, where anyone can trade online anytime and anywhere. There are million items available for fixed-price and also auction-style trading which is conducted online in their day to day e- commerce business.

Questions arose as how eBay did and the reason of the success and sustainability to be the leading in the online trading platform?
The key successful factor is the trust and safety. eBay has developed a Trust and safety team which is responsible to maintain a safe trading marketplace for people from all around the world to trade with each other. For example, there is a set of rules and regulation to guide the clients whenever they trade in eBay. The rules and regulation is strictly enforceable to prevent any fraud and unethical transactions occurred.

Moreover, eBay’s transaction processing to make online payment is supported by the PayPal, which is the leader in the online payment solution. It enables an individual and business to securely and easily make or receives their payment by online. On the other hand, PayPal fraud prevention would keep buyers’ financial information private and highly confidential from the sellers and other to others unauthorised access. Other than using PayPal to make the payment, buyers also can make their payment by credit card, debit card, Paymate, Propay and other payment methods.

The next success contributor to eBay is a convenient platform to search and bargain for the item. A buyer can find the items that they wish to purchase by either searching or browsing through the catalogue. For the buyer who is looking for a specific item, they can just enter the descriptive or key word of the item into the search column. There are also some specific options which allow the buyer to narrow their search.

Also, eBay provides a feedback option which enables the buyers or sellers to leave their feedback and comments on particulars products, services, and even comment on the members. This option played a significance role because it is a useful option which ensures the buyers with the reputation of members before they trade with each others. This can increase the trustworthy of a buyer to other members who they wish to trade with.

To be sustainable and continue to be the leading in e-commerce, eBay is striving for continuous improvement in all aspect.

Teris

Hello, my name is Wong Shin Wen, you can call me Teris. I am 21 years old. Currently, I am studying in Universiti Tunku Abdul Rahman for undergraduate program- major in accounting. I was born in Johor Bahru- the city that located in the south of Malaysia. When I first started my life in KL, it is quite though. I need to stay far away from my family, taking care myself and doing all the house-hold by myself. Throughout these 2 years experience, I already adapted to this kind of environment. But I still miss my family very much.

When I am free, I will definitely stick myself with computer, watching drama & playing computer games. Computer is my main entertainment in KL. Besides that, I like to travel around in KL, eating local dishes and shopping. In my opinion, KL is a shopping paradise as compare to my hometown.

I visit Facebook almost everyday. There got a lot of games to play and is quite interesting. Besides that, all my friends are using facebook, so I can get the latest news from there, and I won’t lose contact with my friend. I have set up a personal blog in the internet (http://wretch.cc/blog/prteris). I have written all things that happen around me and me recent status. My friends have given me a lot of comment about my blog, thanks. Usually I will check my e-mail everyday. I can get may interest news through e-mail from my friend. In addition, I will log in to UTAR intranet everyday. If there are any changes about my subject, then I can get connected with it and I won’t be the last one who knows about the changes. I like to go to Google website. I can get many things from there. It is a very useful searching engine for everyone and I would recommend it to my friend.

Surfing through internet will help increase my knowledge. I can get something that is not available in the classroom. Usually, I will chat with my friend through internet, by using Skype or MSN. It is very convenient to contact with my friend. Besides that, I will buy thing through internet, such as movie ticket, clothes and bag. Watching video through Youtube is usally my activities in internet, the video they posted is very funny and interesting and I like it very much. Besides that, I will watch some article news, so I can get the latest news that happen around the world.

Winnie

Bong Siat Nyuk, Winnie, Mirian,born and grown up in Miri, Sarawak. I’m currently pursuing my degree in Utar, a year 3 semester 1 student, undergraduate of Bachelor in Commerce of Accounting.

Outgoing, love travelling, foods, surf net, love holidays, and capturing some special moments. Last but not least, I love shopping the most. I spend most of my weekend doing shopping at my favourite mall- Pavilion, Mid Valley, Sunway Pyramid, etc.

The websites that I visited the most is www.facebook.com, www.friendster.com. Both of this website keep us connected to our friends and explored us to people all around the world. I uploaded my pictures as well as my personal information in this website to share with all my friends and family. www.utar.edu.my, Utar’s official website. I log in daily to update myself with any news or latest information about my university. www.mydressroom.com.my, is a local online boutique which is located at Bangsar. Customers can just browse through the catalogue in this website and purchase their garments online. They offer great variety of garments, from casual to office wear, which is the ideal dressing room for every girl, every occasion. www.miricommunity.net , a forum where people post all the forum and information about Miri. I visited this website frequently to update myself with the news about my hometown.

I did sign up for msn messenger account which I log in daily. I chat and communicate with my friends there. Sometime, I also use the video call to communicate with my friends over Msn Messenger. It was a fun and convenient way to keep in touch with my friends and family. Also, I check and send email daily through my hotmail account. Besides, I download music and video from internet. I did E commerce by using internet too. For instance, I purchase the airline ticket online. By doing this online, I can get my ticket at a cheaper price and it is fast and convenient.

Jiun

My name is Chow Lih Jiun. I’m now 20 years old, half more year to 21. I come from Kuala Lumpur, studying in UTAR Sungai Long now. Due to near distance, I have to drive to university everyday. It makes me so tired to wake up early in the morning for 8am class. I am a year 3 semester 1 student, undergraduate of Bachelor of Commerce Accounting.

My hobbies are listening to music, watch movie, shopping, and sleeping. I like blogging too! I have my own blog ( www.wretch.cc/blog/jiunjiun1128 ), and I start blogging since 3 years ago. I share my experience, some pictures and videos in blog, and my friends will leave comments for me after visit my blog.

The top five websites that I visited always are:
1) yahoo.com – I check my mail everyday in yahoo.
2) Facebook.com – I keep connected to friends and share photos in facebook.
3) Youtube.com – I like to watch video that is funny or some drama in youtube.
4) Google.com – I use google to search for the information I needed, especially when doing assignment or thesis.
5) Jbtalks.cc – I like to visit to this forum because there is a lot of interesting picture and news which sometimes can’t see in newspaper. I will purchase some products from the seller because it is cheaper.

I usually switch on my pc once I reach home. I will chat with my friends in live messenger when I’m free, or video call my friends. I check my mailbox everyday, and sometimes, I watch movie or drama in ppstream. I will updated my blog twice a month and check my friends’ activities in facebook and freindster everyday. Sometimes, I will play online games when I feel bored.

That is all for my introduction. Our group will post some information about e-commerce later. Feel free to leave comments on it. Wish all of you have a nice day!

Sarah Tan

Hello all. My name is Sarah Tan and I’m a student in Universiti Tunku Abdul Rahman. I’m a year three sem one student majoring in commerce accounting. I’m an East Malaysian. Travelling to a big city was a life time experience for me as I met a lot of new friends and learnt their different culture. Not only that, I also learnt to be independent. It was really difficult for me for the first few months as I started missing my family, home cooked food, and caring from my family members. Travelling to KL really make me grow spiritually and mentally. However, what I enjoyed the most was the freedom I get in return.

My hobby would be every girl’s best friend which is SHOPPING. Who doesn’t like shopping right? Even male friends of mine love shopping. I love to shop for particularly furniture. Aren’t that weird? I spend also half of my day in my room so it is important to have a cozy room. It is also a good time to hang out with friends. It’s like killing two birds with one stone.

Basically, I visit my Facebook almost everyday. Thanks to Mark Zuckerberg for creating this social networking website, I am able to stay connected with friends from my primary and secondary school as well as new friends from my varsity life. Facebook kept me updated with the latest news and gossip from my friends from all around the globe. Secondly, I visit Lowyat forum frequently mostly to do my online shopping. It’s really a great bargain if you are lucky. Moreover there is a wider selection of imported goods that you cannot find in the market. Fans of international goods such as clothing from Forever 21, Louis Vuiton, and Coach can buy what they want at a cheaper price compared to the market price. Thestar.com is also a useful website. Go green concept of keeping myself updated with the current happenings in the world. Most importantly, it is free f charge. Blogspot.com is also in my favorites list. Lastly would be an important search engine which is Google.com. I think most student also graduated with the help of Google. Google is an important engine for me to search for information for my assignment, acts as a translator for me as I could not read Chinese (http://translate.google.com/# -> good website for banana like me) and many more.

Internet is important in my daily life as a communication tools. Moreover, I use internet to do my e commerce activities, whereby I purchase my airline ticket, do online shopping as well as paying bills. Internet is also important as news feed, keeping me updated with what is happening in the world surrounding us. Entertainment is an essential activity to do using internet. Playing online games and watching videos in Youtube or Crunchyroll can actually help students like us to release stress as we do not have a black box. Lastly, the use of Internet is for education purposes. I’m sure majority of varsity student will be using the internet to search for information and knowledge other than the traditional method which is going to the library.