UK turning into nation of internet shopkeepers?

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iol scitech dec 6 shopping online pic www.sxc.hu UBS predicts internet users in ASEAN will rise to 294 million in the next three years, from the current estimate of 199 million.

London - What do the following five retailers have in common: Woolworth, Comet, HMV, Clinton Cards and Game?

Perhaps putting Woolworth and Comet into the list has given the game away. Yes, these are UK shopkeepers that have become victims of internet retailing, or in their cases, the lack of a coherent internet strategy has exposed their retailing weakness.

One obvious problem for these retailers was not having the exclusive rights to the products they were selling. Consumers could exploit their convenient location to examine the products and then buy them cheaper online, a technique known in the trade as scan-and-scram.

Supermarkets such as Sainsbury's have risen to the challenge of the internet by offering customers a variety of ways to shop. Its site is very user friendly while rival Tesco lets customers shop on-the-go on smartphones through its app.

Mid-market retailer Next has a three-legged retailing platform that lets customers choose to shop at its stores, through its catalogues or on the web.

Some retailers do not have a high street presence. N Brown Group, whose banners include SimplyBe and Jacamo, specialises in home-shopping catalogues. It recently revealed a 16 percent jump in e-commerce sales to £377m, which accounts for over half of total revenues. Asos has become the UK's largest online-only fashion retailer in 12 years. Over the past four years sales have more than trebled, which equates to a growth rate of around 36 percent a year. Profits have followed suit but the shares have raced ahead on hopes that the company can continue to deliver sparkling growth.

They are now valued at over 40 times profit, which is very high indeed

The growth in internet retailing could mean property companies will need to moderate their expectations for rental income. Parcel-delivery companies such as UPS could see an increase in demand. This may augur well for Royal Mail, which has been mooted to float on the stock market next year. - The Independent on Sunday

* David Kuo is a director of financial advice site fool.co.uk

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