An example of an e-commerce failure and its causes

The example of an e-commerce is is a retail website that sells toys through the internet. EToys was founded in 1997 and at that time it was the first online toy retailer. By 1998, became the third largest e-commerce site in the country. was founded by Toby Lenk. The funding is from Sequoia Capital, Highland Capital Partners and Idealab. The company went bankrupt near the end of the dotcom boom. Dot-com boom is the period marked by the founding of a group of new internet-based companies. The company that owned the eToys site filed for bankruptcy toward the end of the Internet bubble on March 7, 2001. was then reopened by eToys Direct Inc. changes a number of ownership and at the end it was acquired by Toys "R" Us in February 2009.

In 1999, the company was involved in a dispute with Swiss art site etoy. EToys filed a suit against Swiss art site for trademark infringements. The domain of Swiss art site was similar to its own domain. The suit was dropped and in turn filed a lawsuit against The suit against Swiss art site was a huge mistake. EToys had a highly successful Initial Public Offering in 1999. Shares issued at $20 rose to $76 on the first day of trading, but in February 2001, its stock went from $84 per share to 9 cents per share. EToys spent millions on advertising, marketing, and technology to compete with its competitors. All the spending incurred exceeds the company's income and investors quickly turn to other company, this leads to the failure of does not have a solid infrastructure before its expansion. They had a rapid expasion and this causes them to failed. Another cause is because eToys did not deliver their product on time. Sales were low and many customers did not receive their products and this quickly spread to everyone. The customer satisfactions were low and they go to other competitors.



Tan Cheng Ling said...

Need study management seriously

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