Research : Play.com case study: The rapid rise of the internet retailer

“Play.com Case Study: The Rapid Rise of the Internet Retailer”

Play.com, a Jersey-based, privately owned online retailer, has recorded rapid growth since its establishment in 1988. Starting with a focus on selling CDs and DVDs mainly to young, tech-savvy men, the company quickly evolved into one of Europe’s most successful e-commerce retailers.

Following its acquisition in the second half of 2011, Play.com is now a part of Rakuten Group. Also check…

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Highlights

• The UK is Europe’s leading e-retail economy, estimated to reach a value of GBP40 billion (approximately $61.7 billion) in 2015. The e-retail market is continuing to grow at a much faster pace than the overall retail market and still accounts for only a small percentage of total retail sales, presenting opportunities for new players.
• Internet business is thriving in the Channel Islands due to a legal tax loophole: goods on Channel Islands-based sites sold for less than £15 can legitimately be shipped to customers in the mainland UK without incurring any sales tax. Play.com was one of the first online retailers to take advantage of the legal tax loophole.
• In 2011, Play.com was sold to Rakuten for a seemingly low price of $25 million. Considering the controversies around LVCR tax exemption and the suspiciously low price of Play.com’s recent acquisition, boosted by the lack of transparency of company profits, Play.com may not be as profitable as expected and in need of a change in strategy.

Your key questions answered

– What are the factors facilitating Play.com’s rapid growth?

– What are the business advantages of offshore fulfillment?

– What is the size of the selected online retail markets in Europe?

– Why is Play.com’s success questioned?

– Is the company in need of strategic change?

Key Topics Covered:

CHAPTER 1 ONLINE RETAIL MARKET IN THE UK

• Europe’ leading e-retail economy
• Double digit revenue growth as new shoppers enter online spending
• Better revenue possibilities in e-retail
• Electricals are most in demand but books and music & video are advancing at a faster pace

CHAPTER 2 GROWTH OPPORTUNITIES

• Slowdown on the horizon
• Growth opportunities in customer satisfaction and enhanced shopping experience
• Internet business thriving in the Channel Islands
• Business advantages of offshore fulfillment
• Revenue boost through instant tax benefit
• £130 million loss on tax revenues
• Breach of the Principal VAT Directive
• Crackdown on internet VAT avoidance effect on future UK e-commerce revenues
• Amazon is the most popular e-retailer despite increasing competition from bricks and mortar retailers

CHAPTER 3 SUCCESS STRATEGY

• Play.com
• Survivor of dotcom boom
• One of Europe’s biggest e-retail businesses

CHAPTER 4 FACTORS OF RAPID EXPANSION

• Online shopping driven by lower prices and customer satisfaction
• Competitive prices
• One of the top 10 most popular retailers in the UK
• Wide product range and ease of navigation
• Simple payment process and reward scheme
• Free delivery service
• Integration with social media and enhanced shopping experience
• Online focus and big labels for affordable prices
• PlayTrade competes head-on with Amazon and eBay

CHAPTER 5 PLAY.COM’S PROFITABILITY IS IN QUESTION AFTER A CONTROVERSIAL TAKEOVER

• £400 million business
• Legal tax exemption facilitating Play.com rapid expansion?
• Play.com acquisition – another step in Rakuten’s global expansion
• Brand’s success questioned after £25 million takeover

For more information visit http://www.researchandmarkets.com/research/xlr4sr/play_com_case_stud