California-based Newegg Inc., the world’s second largest e-retailer –second only to Amazon, is crossing the border with their newly launched Web site Newegg.ca.
The privately held Newegg sells an extensive array of high-tech computer components and accessories, gaming products and consumer electronics. Founded in 2001, and with similar sites in Taiwan and China, the American company has 10 million registered users and has done $1.9 billion in sales.
With more than one million reviews and a customer rating and ranking system, Newegg focuses heavily on customer service and user experience.
From internal computer components to point-and-click digital cameras, Newegg carries a wide variety of products all promoting the “digital lifestyle,” said Bernard Luthi, vice president of merchandising at Newegg.
Newegg.ca will focus on the company’s strategies: fast shipping, depth of product, customer service and low prices, Luthi said.
“We know there are companies there already, but we believe we can scale up to really prove to Canadian consumers that we’re a viable alternative. If you price match our products, we are on par or lower with our competitors, and we have a strong relationship with UPS to keep our shipping costs low.”
The company will begin operations in Canada without distributions partners, shipping products from their warehouses in the United States, but Luthi said they will look into having Canadian distribution partners in the future as the company grows.
Expanding into Canada is the company’s next attempt at expanding globally. Proximity to the United States, exchange rates and similar markets make it the most logical place to start, Luthi said.
“It’s a real trial-ground to not only expand but also test our model to determine what works and what could work internationally.”
Newegg also hopes to change Canadians buying habits and increase online shopping, said Luthi. Initial market research has shown that Canadians do a lot of homework online but do not necessarily make as many purchases online.
“The Canadian market is catching up quickly in converting researcher to buyer. It will only be a matter of time before Canadians see that online prices are better and it will save a trip to the store.” Newegg.ca will offer a smaller selection of products than their American counterpart, but will increase their product-list incrementally throughout the next year and rapidly over the next few years.
“We’re here for the long-term,” Luthi said. “We know we won’t walk into the Canadian marketplace and dominate but in ten years, we will become a major force in the Canadian market”.