Nowadays, E-Commerce has been bringing us some success in our life such as improving our lifestyle after it implemented. Although that, it still got other some failure of E-Commerce. The Pets.com is one of an example of E-Commerce companies which plummeted in the Dot.com crash. Pets.com attempted to sell pets accessories and supplies directly to the customer over the web.
Pets.com was started by Greg Mclemore in November 1998. It was then purchased in early 1999 by a venture capitalist firm.Amazon.com-backed Pets.com raised $82.5 million in an IPO in February 2000 before collapsing nine months later.
Pets.com was never able to give pet owners a compelling reason to buy supplies online. After they ordered kitty litter, a customer had to wait a few days to actually get it. And let's face it, when you need kitty litter, you need kitty litter. Moreover, because the company had to undercharge for shipping costs to attract customers, it actually lost money on most of the items it sold.
The demand and needs of the consumers is important to identify as well as understand the market and the consumer's needs and wants. The Pets.com begins their e-commerce business without a survey in the market. The inability to define clearly the market demand and understand customer demand and buying behavior also cause the e-commerce failure.
Besides that, lack of experience in management and poorly constituted business plan led to the downfall of Pets.com. Company had raised more than $100 million in supporting only for the advertisement. The CEO and the managing body had little or no experience in running the company.
Furthermore, the idea of Pets.com was inadequate. The company was choosing a business that is not profitable. The customers just can view the picture of the pets but cannot touch the pets by themselves via the website. This makes the customers loss confident and reduces their trust on the quality of the pets and also the pets’ health condition. However if customers really want to order for the pets, they also have to wait for several days before the pets delivered to them. Purchasing online offered no real benefit whether it is regards to price or convenience.
Although Pets.com had shows the failure of e-commerce, but there are still have many success example of e-commerce. There are such as Amazon.com, Ebay.com and etc. Thus, many strategies are needed to develop before conduct the e-commerce business.
References :
- http://www.cnet.com/4520-11136_1-6278387-1.html?tag=feat.2
- http://www.witiger.com/ecommerce/dotcomfailures.htm
- http://www.itworld.com/nl/ecom_in_ent/11132001/pf_index.html
- http://ieeexplore.ieee.org/Xplore/login.jsp?url=/iel5/10826/34122/01625913.pdf?temp=x
Prepared By: Lee Boon Keat
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