The Failure of E-Commerce

4The failure of E-commerce was starting in 1999. There was a large number of E-Commerce companies began to fail. Well-known B2C (Business-to-Consumer) failures include Webvan.com (1999-2001), Pets.com (1998-2000), eToys.com (1997-2001), Boo.com (1998-2000) and so on. Well-known B2B include Chemdex.com (1997-2001) http://en.wikipedia.org/wiki/Chemdex, Ventro.com, Verticalnet.com.
Those companies usually fail and not able to face the challenges in market via Internet are normally because of their unimpressive and non-persuaded marketing capacity as well as other weaknesses they either became bankrupt or failed to achieve success.

In June 2008, CNET hailed Webvan as one of the greatest dotcom disasters in history.^[1]

Webvan was an online "credit and delivery" grocery business that went bankrupt in 2001. It was headquartered in Foster City, California, USA, near Silicon Valley. It delivered products to customers' homes within a 30-minute window of their choosing. At its peak, it offered service in ten U.S. markets: San Francisco Bay Area, Dallas, San Diego, Los Angeles, Chicago, Seattle, Portland, Atlanta, Sacramento, and Orange County. The company had originally hoped to expand to 26 cities.

After their acquisition of HomeGrocer a year ago.

Lots of their consumer can see the differences in the way the two companies did business. The HomeGrocer certainly had an uphill battle to survive, Webvan seemed set on driving the company out of business. There are several causes of Webvan Went Wrong, particularly in comparison with HomeGrocer, the Seattle-based service that got us turned on to Internet grocery shopping in the first place.

1. Too Much Money to Burn -- Significant investment is normally a good thing, but in this case the vast sums acted to Webvan's detriment, not to mention the detriment of the entire industry. Webvan used its money in two basic ways: to build up an expensive infrastructure and to expand rapidly across the country.

Webvan spent huge sums on high-tech warehouses that were designed to revolutionize distribution, but they turned out to be mostly a waste of money and a lot of unnecessary expense. Webvan would spend something like $35 million on a warehouse, whereas HomeGrocer spent only about $15 million for a much less automated warehouse.

2.Infinite Expansion Creates Infinite Dilution -- The grandiose expansion plans Webvan executed even in the face of the dot-com bubble bursting were problematic at best.

Most significantly, they put pressure on competing Internet grocers in those markets. In an established, profitable business, pressuring competitors in key markets makes sense, but in a situation where everyone is losing massive sums of money in attempts to gain market share, forcing head-to-head competition just makes it all the more likely that everyone will fail.

The Webvan's expansion plans also made it difficult for management to concentrate on the basic business of serving the customer. Therefore, there will having a lot complaints with Webvan. However, there had essentially no complaints with HomeGrocer, particularly in terms of customer service, where they always answered their email promptly and were great about providing refunds for the occasional mistake or damaged food. As Webvan took over, our exchanges with customer service gradually became

Merge and Die -- Acquiring HomeGrocer was also a mistake. Though it made sense on the surface, Webvan botched the acquisition almost entirely, failing to merge the organizations in some ways and overriding HomeGrocer's leaner approach in others.

In the early days of HomeGrocer, the drivers were excited by what they were doing, and that excitement encouraged customers to have faith in the then-unusual notion of buying groceries online. The difference in attitude after the acquisition was particularly shocking.

As the Conclusiuon: The failure of webvan.com was due to the inability to make high volume, low priced purchases. Webvan.com failed to meet customer requirements. It made bad management decisions like to raise $850 million and spend it on ads and campaigns. The last thing to kill webvan.com was to merge with Homegrocer.com.