By Gary Symons
TLL Editor in Chief
The British supermarket giant Tesco is taking on Amazon, opening an online marketplace to sell a wide variety of products.
While Tesco is primarily a grocer, the online shop will be selling things you wouldn’t normally see in the grocery aisles, from furniture to toys, appliances to clothing. The Tesco shop has already put up roughly 9,000 new products on the company’s website, as the company works to turn itself into a “one-stop shop for everything customers need.”
It’s an important development for companies looking for buyers for their products in the UK, as the Tesco shop is primarily aimed at selling third-party products in a major experiment in retail licensing.
For Tesco, the company’s marketplace director Peter Filcek says the move is a major expansion that will greatly expand the types of products it can offer.
“We’re constantly looking at ways to improve the shopping experience for our customers, and our new marketplace offers them the same great quality and value they have come to expect from Tesco across an even bigger range of products, from our specially selected partners,” Filcek said.
The new range of products will appear alongside Tesco groceries on the website but orders will be fulfilled by third-party suppliers.
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This is an area in which Amazon dominates the global market, but over the past decade the online shopping giant has faced increased competition from a wide range of powerful retailers, including Walmart in the United States, Temu and Alibaba from Asia, and in the UK from Sainsbury’s new fashion hub, and the online shop from M&S that focuses on selling a number of other ‘high street’ brands.
Tesco is among the players that can literally give Amazon a run for its money, as it is a major grocer chain with a strong and loyal customer base throughout Great Britain. Tesco is said to be targeting an additional £1 billion in revenue from its sales of third party goods over the next few years.
Executives are understood to be targeting as much as £1bn in revenues from third-party lines in the coming years.
This is, however, Tesco’s second attempt at online shopping for non-grocery consumer goods. The company formerly launched the Tesco Direct website in 2012, which lasted six years before being discontinued. This latest move is believed to be based on the lessons learned from that program, with Tesco now having greater resources in delivery and in third party retail licensing.
As well, some analysts in the UK have suggested that Tesco is responding to Amazon’s expansion in the UK, luring shoppers from Tesco and other supermarket chains.
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