An example of an E-Commerce failure and its causes

EBay, Amazon, and Dell are the example of successfully operating business through e-commerce. However, there still have many companies that are not able to perform well through e-commerce and lead to winding up. For example the Boo.com.

Boo.com was a European company founded in 1998 and operating out of a London head office, which was founded by three Swedish entrepreneurs, Ernst Malmsten, Kajsa Leander and Patrik Hedelin. This British company dealing business through Internet by selling the clothes and comes tic. However, the vision of Boo.com was became the worlds first online global sports retail site. Unfortunately, Boo.com has been liquidated on May 18th 2000, the investors funds could not be raised to meet the spiraling marketing, technology and wage bills.The failure of Boo.com as an e-retailer:

Bad planning
The founder of the Boo.com was too ambitious in their business plan. Instead of starting small and then expanding slowly, they wanted to dominate the market immediately.

Lack of sound financial management
The grandiose and sizable vision of Boo.com’s founders and investors came with huge costs which spiraled out of control due to lack of sound financial management. In addition to the initial outlay website, there were high maintenance expenses.

Cash burn

Over the course of two years, the company managed to burn through $130m of investors' money, as well a substantial amount of the founders' savings. It indicates that the endless rounds of raising finance, glamorous parties, staff clashes and bitter sparring with the press.

Poor design, browsing and navigation
The website was heavily relied on Java Script an Flash technology to display 3D views of wares. Besides that the Boo.com website has the poor design for its targeted audience, going against many usability conventions. Not only that, the website also very time consuming to load and this make the vast majority of users have to spend their time when using the website. This is due to the poor broadband technology at that time. The complicated design also required the site to be displayed in a fixed size window. It makes the users hard to see all the products one time because the space available has been limited.

Poor marketing

Nevertheless, Boo.com marketed itself as a premium sports, urban street wear and fashion retailer, stocking quality products for the fashion conscious young individual. However, with premium products came expensive charges but the customer wish to buy cheaper products through Internet. Besides that, the clothing concern by customers is to see, feel and try before buying.