Traditional retailers Superquinn, Heiton Holdings and Eircom have together taken a 41 per cent stake, valued at €4.8 million, in a new Internet shopping venture, Buy4Now.ie. Eircom is understood to be the largest investor, having paid €3 million for a 22 per cent stake.
The site, which is due to begin trading in October with selected retailers, plans to offer more than 25,000 products from established "brick-based" businesses including Atlantic Homecare, Arnotts, Easons, Eircom stores, Ereba Insurance, Louis Copeland, and Molly Blooms. Superquinn has begun piloting the system for home grocery delivery in the Dublin area, and expects the service to be operational by November.
Unipower, a European Internet middleware provider, has also taken a 6.7 per cent stake in the new venture through the provision of software and a technology partnership arrangement. The investments have placed an early valuation on Buy4Now of around €13 million.
Mr Leo Martin, chief executive of Heiton Holdings, Mr Frank Murphy, finance director of Superquinn, and Mr Noel Herrity, managing director of Eircom Multimedia, have been appointed to the board of Buy4Now as non-executive directors. Buy4Now's founder and chief executive is Mr Ali Murdoch, former sales manager for ICL Ireland.
Mr Murdoch envisages the traditional retailing experiences of Superquinn and Heiton, combined with Eircom's plans for multimedia driven e-business, will contribute significantly to Buy4Now's success. Internet service provider, Eircom.net, has agreed to carry Buy4Now as the core shopping channel on its home page.
All of the companies that sign up to Buy4Now agree to sell their products online exclusively through Buy4Now. Where prospective shoppers go directly to the retailer's own website, they will be automatically redirected to Buy4Now to conduct online shopping.
Mr Murdoch says Buy4Now differs from other pure dot.com companies because its revenues will not be solely based on commissions garnered from online transactions. It also acts as an ASP (Application Service Provider) by hosting all of its members' business-to-consumer software centrally, and customising it for their individual needs. Mr Murdoch says Buy4Now is already generating hosting revenues of around €630,000, and the model will bolster the business with fixed, recurring revenues. He forecasts the company will be profitable and generating sales of €15 million by October 2002.
Buy4Now will also look after the entire logistic requirements of online shopping, from routing online orders to relevant branch stores to delivering goods to people's doorsteps. Mr Murdoch says the biggest challenge is likely to be the delivery of fresh food orders generated through the Superquinn store, and this service will be closely based on the experiences of Tesco Direct in the UK.
Buy4Now plans to expand its range of offerings to include electrical goods and toys, and a major audio-visual equipment announcement is expected next month. Mr Murdoch envisages that, by Christmas, it will have over a million products available online.
The company says it is now looking to replicate the Buy4Now concept in other European markets.
