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HP launches Web subsidiary for e-commerce

HP launches Web subsidiary for e-commerce

Hewlett-Packard is spinning off its Shopping Village as a wholly owned subsidiary called HP Direct and is boosting e-commerce with limited direct sales, company officials said this week.

HP will launch an e-commerce pilot program in the United Kingdom next month, followed by a Swedish program in the third quarter. Both campaigns will feature more than 70 products.

"The UK is the most active Internet market in Europe, whereas Sweden has the highest percentage of Internet users," says Pradeep Jotwani, senior vice president and director of consumer sales and marketing for HP's Ink jet Imaging Solutions.

Online sales in Europe are expected to reach $US30 billion by 2001, according to research by International Data Corporation. Forrester Research places the figure at $US69 billion. Currently, Europeans spend $US2.8 billion annually on Internet commerce.

"Europe is ready," Jotwani says. HP will target other European countries next year and price its products at parity with European retailers.

Domestically, HP will turn its online Shopping Village into HP Direct, a subsidiary positioned to compete with Web-based build-to-order PC vendors. HP's main Web site draws more monthly page views than Dell, Gateway, or Compaq, according to a recent Media Metrix survey.

But despite the Media Metrix findings, HP lags behind its nimble Web-bred competitors, according to analysts, who say HP's loyalty to its resellers has shackled its e-commerce initiatives.

"HP has a strong history with the channel and they've been cautious not to tread on their resellers," says Van Baker, a senior analyst with the market research firm Dataquest.

Company officials hope that HP Direct will even the playing field. "HP Direct will operate like any other Internet start-up company," says Shen Li, general manager of HP Direct.

Observes Baker, "It sounds like HP Direct wants to divorce itself from the interests of any other HP product division."

HP Direct will offer online auctions of refurbished hardware in the next few months, and configured-to-order Pavilion PCs later in the year.

In a separate announcement, HP unveiled its My Printing Supplies Store, the first of several upcoming e-commerce personalisation features. HP will offer product recommendations based on individual printing needs.

Repeat customers can access printing supplies that match their HP printer. The My Printing Supplies Store will sell more than 100 printing products. It will also offer printing ideas and projects suited to individual customer needs.


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