Saturday, November 10, 2012

Tesco Homeplus opens world’s first virtual store

Tesco is one of the world's largest retailers with operations in 14 countries, employing over 500,000 people and serving millions of customers every week. One of the visions of Tesco is to be most highly valued by the customers they serve and to achieve this Tesco adopted the strategy of having virtual stores in South Korea. Tesco entered the South Korean market in 1999 in a joint venture with Samsung named Homeplus.
In August 2011, Homeplus opened world’s first virtual store in South Korea. This virtual store was displayed on the walls of Seonreung subway station in downtown Seoul with over 500 popular products with barcodes. The consumers could scan the products they wanted to purchase using Homeplus app on their smart phones and even get their order delivered at their door steps. This whole concept of having virtual stores was to make online shopping more visually appealing and use the waiting time of commuters at train stations to shop. This is a part of the strategy of Homeplus to become the number one supermarket in South Korea. They came up with this innovative idea that if consumers couldn't come to the stores, the stores could go to where there are consumers. This idea also worked in South Korea because more than two thirds of its population owns a smart phone.
The Homeplus app which allows consumers to scan and order the products has been downloaded by 90,000 people since its launch. This whole strategy of Tesco was developed to cater to the unique market of South Korea. Most of the global corporations failed to capture the market in South Korea. Whereas, Tesco has been improving and innovating to compete with the number one retail store, E-mart. Main hindrance in the success of Homeplus was the less number of stores compared to E-mart. Homeplus very innovatively increased its presence in the market by having virtual stores and providing door delivery service.  One of the main goals of Tesco has been to make the customer’s shopping experience easier and   convenient and to achieve this Home plus changed its strategy based on the demand and competition in the South Korean market.

This strategy proved to be successful and the online sales for Homeplus went up by 130 percent and the number of registered users increased by 76 percent. Continuing with their strategy, Home plus is now expanding by opening similar virtual stores in more than 20 bus stops in South Korea.  These stores give the commuters to shop groceries on the go. Virtual stores are more popular among young consumers and with increasing number of smart phone users, Homeplus is planning to expand into newer locations like Universities  to increase its market share in South Korea.


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