The online companies killing off household names
Tom Belger
07 May 2018
Online retailers conquering the world
The internet has revolutionised the way we live, not least when it comes to shopping. Digital companies such as Amazon, Net-A-Porter and Booking.com have shaken up established industries and seen huge growth while many traditional retailers have struggled to adapt. Here are some of the companies that have thrived most in a rapidly changing world.
Amazon
Amazon has come a long way since Jeff Bezos launched the company as an online bookseller in his garage in the mid-1990s. It grew at astronomical pace, selling books in 45 different countries within the first month of its launch and becoming the world’s third largest retailer. By the late 1990s Amazon had already become what its founder called an “everything store”, disrupting a vast range of industries.
Amazon
The likes of the US's Barnes & Noble and the UK's Waterstones are not the only ones feeling the heat. Amazon has also put huge pressure on many other titans of retail, from department stores like Macy’s and Nordstrom to electronics giant Best Buy. It even overtook supermarket giant Walmart in market value in 2015. But Amazon has not been able to resist experimenting offline, buying the organic grocery chain Whole Foods Market, opening bookshops and launching the check-out free convenience store Amazon Go.
eBay
The auction giant, headquartered in San Jose, California, was one of the very first to make a simple idea a reality by creating an online marketplace to link up individual buyers and sellers. The company has enjoyed phenomenal success and is still going strong despite fierce competition from Etsy, Walmart, Amazon and others, with its stock reaching an all-time high in January 2018.
eBay
Devin Wenig, president of eBay Marketplaces, has said the death of stores is “greatly exaggerated”. But he does think stores will end up offering a much more hi-tech experience or becoming distribution hubs too. Some of the biggest challenges eBay has faced have not been in business but in other areas. The company admitted hackers raided its network in one of the biggest data breaches in history in 2014, while governments have come after it over sellers not paying local taxes.
Asos
British fashion upstart Asos overtook the retail juggernaut Marks and Spencer on the London Stock Exchange in November 2017. Analysts called it a “seminal moment” in UK fashion, with Asos conquering the younger market while older rivals have struggled with the shift towards online sales.
Asos
Marks and Spencer, founded in 1884, has announced store closure after store closure, while Zara and H&M have stopped opening as many branches. Meanwhile Asos has hired thousands of staff and says its Yorkshire warehouse is the size of six football pitches. It now sells to almost every country in the world.
Booking.com
Booking.com was created in an attic in 1996, with the tiny Dutch start-up run by its founders a couple of hours away from Amsterdam. Two decades later it is the major force to be reckoned with in the online travel booking market, and boasts more than 15,000 employees in 70 countries. It saw the importance of user-friendly digital design when many hotels were not even online, with its website today strikingly similar to how it looked 10 years ago.
Booking.com
Booking.com says more than 1.5 million nights of stays are now booked on the site every day. It lured many hotels by taking lower commissions and giving them more control over setting rates and collecting payment themselves, according to travel industry site Skift. That gave it the edge on many rival travel agents online and offline, but it now faces a serious new challenge – the rise of homestays on sites like Airbnb.
Net-A-Porter
When Natalie Massenet launched Net-A-Porter in the early 2000s, many brands were baffled. Shoppers buying clothes without trying them on was still a radical idea, and designer labels were wary about selling through a retailer with no shops. But the founder was onto a winner and the company now calls itself the world’s leading online luxury fashion retailer, with sales in more than 170 countries.
Net-A-Porter
The founder, pictured, and her small team used to run the designer fashion site from an apartment in west London, with the company’s distinctive black boxes stacked up in a bath tub. Net-A-Porter was inspired by Natalie Massenet’s background as a Tatler journalist, with the stylish website more like a magazine than a simple list of products. Now many brands would do anything to be stocked by Net-A-Porter, which has thrived as online sales keep growing at the expense of bricks and mortar stores.
Boohoo
Fast fashion retailer Boohoo has seen its sales almost double in the past year, while its pre-tax profits soared 40%. The company set its sights on shoppers in their late teens and early 20s, getting an edge on competitors through a strong focus on social media, mobile-friendly design and competitive prices. The British company is also constantly trying out new products, ordering them in much smaller batches than many high street rivals can afford to do.
Boohoo
Boohoo has gone global since its launch just 12 years ago by fashion entrepreneurs Carol Kane and Mahmud Kamani. They have their eyes on continued expansion across the world, buying the Nasty Girl and PrettyLittleThing fashion sites in recent years. Much of Boohoo’s operations are run from an enormous warehouse in Burnley, just outside Manchester, where it is now the town’s biggest employer.
QVC
“There have been a whole series of biases against TV shopping, as there are in the early days of any medium. The challenge is to grow in spite of, or out of, those biases.” Those were the words of media mogul Barry Diller before he became chair of QVC in the 1990s. Launched in Pennsylvania, the retailer has become a colossal global player since its launch in the mid-1980s.
QVC
QVC’s broadcast networks reach more than 360 million homes worldwide. But even though it launched long before the internet had even taken off, it has embraced e-retail. It now boasts 2.8 million Facebook fans, and has even finally got a foot in the French market with the launch of QVC France in 2015.
Feelunique
Aaron Chatterley, co-founder of one of Europe’s biggest online beauty retailers Feelunique, says the best advice he ever had came from his grandmother. He nearly turned down a job in the Caribbean as a young man, but she told him the only things she regretted in life were the things she never did. So he decided to take the job at the Caribsurf internet service provider on the British Virgin Islands. It gave him an insight into the internet’s power long before most people had any idea of its potential.
Feelunique
Chatterley told Figaro Digital that “all the luxury brands” turned down offers to sell on Feelunique when it launched in 2005. But within a decade the website was listing hundreds of brands including major names like Dior, Benefit and Yves Saint Laurent. It ships to more than 120 countries across the globe, with more than 30,000 products on sale.
JD.com
Many shoppers in the USA and Europe will have never heard of JD.com, but that may be about to change very soon. One of China’s biggest online retailers, its ambitious founder Richard Liu now has his sights set on global growth and taking on the likes of Amazon. The company has already gone into partnership with Walmart, selling the American giant’s China-made products to Chinese shoppers.
JD.com
JD.com is unusual among online retailers in running its own delivery network, giving it greater control over the whole operation.
It is also unusual in having started as a short-lived physical store before going online. The first shop in Beijing measured just four square metres, but the founder shut it down in 2004 to concentrate on digital growth. After initially focusing on electronics, it became a general retailer in 2008, selling everything from clothes to fresh food.
Craigslist
Craigslist started out as an email list among friends, founded by a former IBM programmer called Craig Newmark in 1995. The classifieds website has expanded rapidly from its San Francisco base to cover many more areas over the past two decades, outliving plenty of other tech companies of the 1990s. Forbes reported last year that it had 59 million unique visitors a month.
Craigslist
Craigslist has been described as an “anomaly” among major tech companies, as several analysts have said it does not make as much money as it could. Some in the business world are baffled it does not try to profit more from charging users, as the vast majority of ads are free to post. It also reportedly has only a few dozen employees. But it does generate significant income from fees for job, property and other adverts, and Forbes currently estimates its value at more than $3 billion (£2.2bn).
Ocado
UK company Ocado has a deal to sell Waitrose products, but not everyone realises it's a separate online grocery retailer in its own right. Founded in 2000 by three former bankers, its annual sales had topped £1.37 billion (£1bn) just 15 years later.
Ocado
While Ocado has been free to focus on online growth, rivals from Walmart to Tesco, pictured, have faced the huge headache of what to do with struggling physical stores. Ocado’s smooth ordering and distribution have seen it regularly voted the best supermarket website in consumer surveys. It also started delivering for Morrisons in 2014, and has branched out with new shopping sites including pet store Fetch, dining store Fizzle and beauty retailer Fabled. Crucially, its technology is also being licensed by retailers around the world.
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