Internet shoppingmall LGeshop

1
Internet shoppingmall(LGeshop)
2001 Fall KAIST Techno MBA MGT645 Electronic
Commerce
JAGUAR TEAM Techno-MBA Park minshin, Hwang jungah
MIS-MBA Shim kyungsub
2
Contents

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

3
Characteristics of eShop

• Explosive growing
• Market Size (forecasted in Aug. 2000)

(W billion)
4
Characteristics of eshop
Characteristics of eShop

• 2. Low entry barrier
• Little regulation
• Low capital
• of shopping mall 800 (99) ?2,000 (Jun 01)

(W bilion)
00
01
5
Characteristics of eshop
Characteristics of eShop

• 3. Demographic
• Shopper 2.9mil (1Q01)? 14 of total netizen
• eShop over 500,000 visitors 13 (Mar01)
• Lotte (1.3mil), Interpark (1.1mil), Samsung
  (1.0mil), Lgeshop (0.9mil)
• Shopper analysis

6
Characteristics of eshop
Characteristics of eShop

• 4. Competitors
• HansolCSclub, Samsungmall, eHyundai, Lotte.com
  etc.but there are not much differences each
  other

Korea Institute for Electronic Commerce
7
Characteristics of eshop
Characteristics of eShop

• 4. Competitors
• Samsungmall, HansolCSclub and eHyundai excel in
  delivery
• Lotte.com excels in system

www.samsunmall.co.kr
www.csclub.com
8
Characteristics of eShop
Characteristics of eshop

• 5. Product Category

• Computer peripheral

Electronics
books, stationery
others
food and nuitrition
cars and sports goods
clothes and beauties
ticket, travel
toys
flowers
other services
9
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

10
LG homeshopping

• LG CATV shop
• CATV and Catalog shopping

LGeshop.com Internet shopping mall
11
LG TVshop

• Launched in 1996
• Market leader among the two players (LG CJ39
  6040 in 00))
• Market size
• Bargaining power and higher margin structure
• merchandizing from small and medium companies.
• Well-off Customers with 3040 yrs housewives
• purchase high price products home appliances,
  electronics, clothing..

(W billion)
12
TVshop vs eShop
Market characteristics
13
TVshop vs eShop

• Customers age

• Customers gender

• Purchased product

14
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

(W billion)
15
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)

16
Critical success factor
17
Strategy of eShop
Profit
Customer loyalty
price
logistics
customerservice
Inventory management
Sales marketing
customermanagement
DeliveryManagement
Suppliermanagement
Value chain
SCM
POS
EDI
CRM
18
Customer loyalty

• Customer loyalty directly relates with Sales
• Sales buy rate customer transaction
  (price/buy)

Buy rate buyer/ visitor
19
Walmart vs JC Penny
www.jcpenny.com
www.walmart.com
20
Customer loyalty
Sales buy rate customer transaction
(sales/buyer)
KRNIC (Korea Internet Info Center)
Mar May, 2001(w)
21
Strategy of eShop
Profit
Customer loyalty
price
logistics
customerservice
Inventory management
Sales marketing
customermanagement
DeliveryManagement
Suppliermanagement
Value chain
SCM
POS
EDI
CRM
22
Price
Customers criteria for selecting eshop (KISDI,
2000.12)

Survey from 180 people who ever bought in the
eshop
23
Price
Critical factors of competition among B2C
B2C companies considers the price the most
critical factor in competition.
24
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

25
Strategy of eShop
Profit
Customer loyalty
price
logistics
customerservice
Inventory management
Sales marketing
customermanagement
DeliveryManagement
Suppliermanagement
Value chain
SCM
POS
EDI
CRM
26
Logistics
Web Site Browse Search Item Selection
Buy button
Front Office
Customer Interface
Web Hosting
Payment
Payment Process Ordering
Back Office
Order Tracking
Delivery Notification
Order fulfillment
Delivery, Customer Analysis
Receive Order, Connect Supplier And Deliverer
Delivery Monitoring
Evaluation E-mail Notification
Pick, Pack and Ship
27
Logistics strategy of LGeShop

• SCM with suppliers and transportation company
• Synergy with TV shop in delivering and storing

28
Strategy of eShop
Profit
Customer loyalty
price
logistics
customerservice
Inventory management
Sales marketing
customermanagement
DeliveryManagement
Suppliermanagement
Value chain
SCM
POS
EDI
CRM
29
The CRM System
CRM system overview
30
CRM system overview
Process automation of customer contact point such
as marketing, sales and call center
operationalCRM
Customer data analysis to establish marketing and
sales plan for customer service
AnalyticalCRM
Communication process to increase the harmony
within the organization and between organization
and customer
CollaborativeCRM
31
C/S Strategy of LGeShop

• To establish CRM to increase the customer
  loyalty
• Synergy with TV shop in conducting CRM

32
Conclusion
Profit
Customer loyalty
price
logistics
customerservice
Inventory management
Sales marketing
customermanagement
DeliveryManagement
Suppliermanagement
Value chain
SCM
POS
EDI
CRM
33
Thank you!