The failure of Boo.com & its causes

There are extremely successful virtual e-commerce companies such as eBay, Google, or Yahoo! in recent years. However, there are large number of e-commerce companies that are not able to maintain their profit through e-commerce. Some well-known business-to-consumers (B2C) failures include eToys, Xpeditor, Chemdex.com and Webvan.com.

Boo.com was a United Kingdom company founded by Ernst Malmsten, Kajsa Leander and Patrik Hedelin, which later flopped after having to liquidate and was placed into receivership in 18 May 2000. Boo.com’s intention is to sell branded fashion apparel over the Internet.

Boo.com is beset with problems and mismanagement from the start. The site was heavily relied on JavaScript and Flash technology, but as that time it was very slow to load at a time when dial-up Internet usage was a norm. Hence, it took vast majority users to wait minutes for the page to load. The complicated design required to be displayed in a fixed size windows, which limited space available to display product information to customer.

Boo.com’s founders spent £125 million in just six months, to market itself as a global company but then had to deal with different languages, pricing and tax structures in countries it served. Their sales wasn’t up to their expectation, especially when there were a high numbers of returned products by their customers (the company mysteriously decided to pay postage on returns).

To avoid failures, e-commerce companies could take up certain necessary actions such as:

  1. Relying on long-term relationships — Getting comfortable and assuming that a business relationship, because it has existed for years, will continue to exist. Long-term business relationships are a thing of the past in the electronic world, and the ability to see everyone’s wares at once makes us fickle.
  2. Do not focus too much on “e” in “e-commerce” – Customers still need personal attentionl; this is why successful e-businesses have multiple channels of communication, not just the Web. The whole concept of e-commerce is so electronic, there is a natural tendency to overlook the actual human customer at the other end of the transaction.
  3. Ease of use – A successful e-commerce website must be fast, easy to use, convenient and perhaps fun.

However at current, Boo.com, re-launches as the “ultimate online destination for travel” under owner Web Reservations International (WRI), which claims to be one of the world’s most successful e-businesses. Read the article Boo.com in New Travel Guise and The Greatest Defunct Websites & dotcom Disasters.

Also, view the archieve of Boo.com site here.

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~ by JL on June 13, 2008.

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