LGeshop

Internet shoppingmall(LGeshop): 

Internet shoppingmall (LGeshop) JAGUAR TEAM Techno-MBA Park minshin, Hwang jungah MIS-MBA Shim kyungsub 2001 Fall KAIST Techno MBA MGT645 Electronic Commerce

Contents: 

Characteristics of eShop LG CATV Homeshopping LGeShop Growth Starategies of LGeShop Contents

Slide3: 

Explosive growing Market Size (forecasted in Aug. 2000) (W billion) Characteristics of eShop

Characteristics of eshop: 

Characteristics of eshop 2. Low entry barrier Little regulation Low capital # of shopping mall: 800 (’99) 2,000 (Jun ’01) Characteristics of eShop (W bilion) ‘00 ‘01

Characteristics of eshop: 

3. Demographic Shopper: 2.9mil (1Q’01) 14% of total netizen #eShop over 500,000 visitors: 13 (Mar’01) Lotte (1.3mil), Interpark (1.1mil), Samsung (1.0mil), Lgeshop (0.9mil) Shopper analysis Characteristics of eshop Characteristics of eShop

Characteristics of eshop: 

Characteristics of eshop 4. Competitors HansolCSclub, Samsungmall, eHyundai, Lotte.com etc. but there are not much differences each other Characteristics of eShop Korea Institute for Electronic Commerce

Characteristics of eshop: 

Characteristics of eshop 4. Competitors Samsungmall, HansolCSclub and eHyundai excel in delivery Lotte.com excels in system Characteristics of eShop www.samsunmall.co.kr www.csclub.com

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5. Product Category Characteristics of eshop Characteristics of eShop Computer & peripheral Electronics books, stationery others food and nuitrition cars and sports goods clothes and beauties ticket, travel toys flowers other services

Classification of eshop: 

Classification of eshop Portal-based mall Yahoo shopping, Daum, Lycos, Naver Brokerage: Lower cost, higher efficiency Disadvantage in one-stop customer service Pure on-line eShop - Samsungmall, interpark, buynjoy(KT), happy2buy(Sktel) - Based on strong IT infrastructure - Strong influence of parent company Off-line based eShop - Lotte.com, e-hyundai, hansol CS club, LGeshop: - Established based on off-line shopping mall - Advantage of merchandising, delivery system

LG homeshopping: 

LG homeshopping LG CATV shop CATV and Catalog shopping LGeshop.com Internet shopping mall

LG TVshop: 

LG TVshop Launched in 1996 Market leader among the two players (LG: CJ39 = 60:40 in ’00)) Market size Bargaining power and higher margin structure merchandizing from small and medium companies. Well-off Customers with 30~40 yrs housewives purchase high price products: home appliances, electronics, clothing.. (W billion)

TVshop vs eShop: 

TVshop vs eShop Market characteristics

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Customers’ age TVshop vs eShop Customers’ gender Purchased product

LGeShop: 

Opened in 1998 as a supportive function for TVshop Reformed and took its own way from may, 2000 Dramatic increase in sales & # visitors LGeShop revenue trend LGeShop (W billion)

Critical Success Factor: 

Critical Success Factor Synergy with TVShop Merchandising, delivery, after-sale service Co-promotion :VOD system Differentiated customer service Refund service(within 30 days) Pre-refund service Recall service Delivery on the appointed day service Call center(24hours a day) Critical success factor

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Critical success factor

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Strategy of eShop SCM POS EDI CRM Value chain Supplier management Inventory management Sales & marketing customer management Delivery Management price logistics customer service Customer loyalty Profit

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Customer loyalty directly relates with Sales Sales = buy rate * customer transaction (price/buy) Buy rate = buyer/ visitor Customer loyalty

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Walmart vs JC Penny www.walmart.com www.jcpenny.com

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Sales = buy rate * customer transaction (sales/buyer) KRNIC (Korea Internet Info Center) Mar ~ May, 2001(w) Customer loyalty

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Strategy of eShop SCM POS EDI CRM Value chain Supplier management Inventory management Sales & marketing customer management Delivery Management price logistics customer service Customer loyalty Profit

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Customer’s criteria for selecting eshop (KISDI, 2000.12) % Survey from 180 people who ever bought in the eshop Price

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Critical factors of competition among B2C B2C companies considers the price the most critical factor in competition. Price

Price Strategy of LGeShop: 

Price Strategy of LGeShop To establish SCM with suppliers For the tight control for the inventory  reduce cost Synergy with TVshop for bargaining power with TV homeshopping, it can achieve the economies of scale in purchasing

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Strategy of eShop price logistics customer service Customer loyalty Profit SCM POS EDI CRM Value chain Supplier management Inventory management Sales & marketing customer management Delivery Management

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Evaluation E-mail Notification Pick, Pack and Ship Front Office Back Office Customer Interface Payment Process Ordering Web Hosting Payment Order Tracking Delivery, Customer Analysis Delivery Monitoring Receive Order, Connect Supplier And Deliverer Delivery Notification Order fulfillment Web Site Browse Search Item Selection Buy button Logistics

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SCM with suppliers and transportation company Synergy with TV shop in delivering and storing Logistics strategy of LGeShop

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Strategy of eShop price logistics customer service Customer loyalty Profit SCM POS EDI CRM Value chain Supplier management Inventory management Sales & marketing customer management Delivery Management

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The CRM System CRM system overview

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CRM system overview operational CRM Analytical CRM Collaborative CRM Process automation of customer contact point such as marketing, sales and call center Customer data analysis to establish marketing and sales plan for customer service Communication process to increase the harmony within the organization and between organization and customer

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C/S Strategy of LGeShop To establish CRM to increase the customer loyalty Synergy with TV shop in conducting CRM

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SCM POS EDI CRM Value chain Supplier management Inventory management Sales & marketing customer management Delivery Management price logistics customer service Customer loyalty Profit Conclusion

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Thank you!