Online marketplace Newegg is a tech titan in North America, but it’s on a mission to grow on a global scale. Retail Connections asks can it join Amazon and eBay in the industry’s top tier, and what are its unique selling points?
“Global e-commerce is not the future it’s an immediate opportunity.”
That was an opening line from Sophia Tsao, vice president and global marketplace head at Newegg, during her company’s annual Seller Summit in Europe on 14 June. It’s not a new line of thinking, of course, but it set the scene neatly for a day of insights into how online retail represents the fastest growth market merchants of all sizes looking to boost their sales.
Retail Connections was in attendance as a media partner for the event, where delegates heard that online marketplace Newegg experienced 35% annual sales growth last year and generated more than $2 billion in revenue in the process.
Newegg Marketplace, which is based in the US but is expanding rapidly around the world, now shipping to 52 countries and building a presence in all the key eCommerce markets, was born out of Newegg.com – historically a PC components and electronics retailer founded in 2001.
Tech-focused online marketplace
As an online marketplace, Newegg specialises in selling third-party technology products such as virtual reality headsets, smart home devices, and gaming systems and accessories – and it is slowly branching out into other verticals too. It is a technology company, run on a sophisticated e-commerce platform, with accompanying logistics, payments, consumer/product analytics and straightforward third-party integration capability, that puts itself at the heart of the consumer technology community.
In addition to providing a platform for companies, such as Dyson, to sell their products globally, it focuses on “extending beyond commerce” via blogs, events and special launch promotions aimed at attracting a tech-hungry consumer, according to Jonathan Yin, director of international business development at Newegg.
Millions of followers
Last year, registered user numbers at Newegg increased from 32 million to 36 million, and the marketplace now boasts 14 million email subscribers. It has a social media following of 2.9 million and hosts 3.9 million reviews on its site, showcasing its community credentials for those interested in technology and gadgets.
“Most of our customers are early adopters, builders and influencers in their own right,” explained Yin, adding that app-enabled products “has been a huge category” for the business.
Companies such as HTC and Facebook – via its Oculus Rift division – have worked with Newegg during the launch of product ranges because, according to Yin, the marketplace is a recognised destination for the audience these organisations are targeting.
Red Bull gaming
Earlier this year, Newegg announced it was an official partner of the Red Bull Gaming Sphere, a new space in London’s Shoreditch for gamers to meet fellow video game enthusiasts.
The public-access studio is marketed as a hub for the UK’s gaming and e-sports communities, offering the latest relevant technology and a packed schedule of events.
Red Bull Gaming Sphere will host weekly and monthly gatherings, including tournaments, PC-building workshops, meet-and-greets with influencers and other gaming-related events. Gaming tournaments will also be a regular feature of the hub.
Mitesh Patel, vice president for global marketing at Newegg, told Retail Connections the company will be working with other marketplace sellers to run events and help build awareness of the brand and its products.
“We’re going to be doing events with other brands and manufacturers in the gaming sphere and we’re going to broadcast them and stream them,” he revealed.
Customers might want to sponsor a competition, for example a “Friday Night, Fight Night” gaming tournament, he said. “That type of co-branding co-promotion is really going to be our vehicle.”
So, why the interest in Newegg? It is growing its business year on year, but it wants to expand further and add more sellers – be they large or small merchants – from Europe and territories outside North America, and it is likely to make more noises in the UK soon.
Tsao explained that Newegg is looking to innovate using voice-enabled technology, and is working out how to integrate Amazon Alexa or Google Home into its marketplace, in another example of practicing what it preaches: a tech retailer that immerses itself in technology.
Retail Connections conducted a wide-ranging Q&A with Tsao at the end of 2017, which details more background about the business, but the imminent future is targeted on raising awareness outside its home country.
In online marketplace land it is apparent that Amazon and eBay sit on a pedestal and hold a significant market share, and then hundreds of others – including the likes of Newegg, Wish and Allegro – are battling it out to be part of that upper tier.
Patel said he is confident Newegg can join the marketplace high society. The company is the largest technology retailer in North America, and it plans to raise its profile internationally and offer new product lines.
“We need to continue to grow into other markets and regions,” he acknowledged.
“People know us really well in North America. We’re getting deeper in multiple markets, we’re going to take some of those and invest very deeply in those markets – the UK is one of those. We don’t have the brand awareness that we need in those markets yet.”
Consumers and the retail industry should expect to see more live events, brand partnerships and digital content from Newegg very soon.