CatalogCity Bucks Consolidation Trend With Expansion Abroad
"There just aren't as many merchants online as a year ago," said John Pincott, CatalogCity's vice president for Europe. "We believe in the shopping mall concept, in banding together to present a consolidated front against people like Amazon."
Pincott conceded that a bumpy global economy has "made this a tough market in which you have to be profitable, and today everything is geared toward profitability. In Europe we expect to reach a 'black zero' [breakeven] by the end of 2002."
CatalogCity, Monterey, CA, has made its biggest strides in the United Kingdom, "where we now have 100 merchant partners and can offer visitors to our site 40,000 products, and that number is growing," Pincott said. "We have a partnership with Lycos and are on trial with the Ask Jeeves search engine.
"We're still building in France, where our site is up and we have 40 merchants but as yet no channel partners," he said. "We're talking to La Poste about the online side of their business. They have money and potential with a great domestic business and a real willingness to go international and venture into new areas."
Pincott admitted, however, that La Poste had never gotten off the ground globally in the past.
"We hope something will come of it this time because they have a lot of domestic merchant partners and we think we can help them develop their online business in Europe."
CatalogCity has a site up and running in Germany with a dozen German merchants offering products, mostly glassware and grills. The bulk of the German offering, however, comes from UK catalogers.
The strength of the U.S. domestic market -- where CatalogCity has 20 major portal partners, including Yahoo, Excite and quixtar.com, Amway's portal -- has helped fuel the European expansion.
That backing, Pincott said, "allows us to show our ability even though we are still a fledgling company in Europe. Clearly we have substance behind us, and our potential partners know it."
While he is focused on slow, organic growth, Pincott also is looking for partners with deep pockets who "will allow us to take a big leap forward rather than proceed with baby steps.
"I know there is an opportunity out there that no one is filling yet but may soon," he said. "So we have to move fast. We need a resource-rich partner who says, 'Let's go big.' "
In the fall Pincott plans to launch a new service in the UK called "Best of the U.S." A demonstration site is already up.
"We're bringing together about 600 U.S. merchants and taking those items best suited to selling abroad," he said. "We've done the content, and our current challenge is logistics -- making it easy for European customers to buy from U.S. merchants featured in 'Best of the U.S.' We calculate duties and value-added tax in the price we charge."
European customers get a U.S. post office box address, and participating merchants ship products to that address. CatalogCity then ships the product to the European customer.
This also makes it easier for U.S. merchants, Pincott said, because they do not have to change their systems. CatalogCity handles multiple currency transactions and allows merchants to test international markets "without spending a penny."
The company also has Web sites up in Argentina, Brazil and Mexico, with the Latin American business handled out of a hub in Miami.
In Japan, CatalogCity has partnered with Yamato.
"They're the biggest private transport and shipping company in the country and about the same size as Japan Post. They'll handle the logistics end," Pincott said.