Intel shuts down pilot Web Store

First attempt at clicks-and-mortar model for developing countries flops despite heavy-hitting backer

Chip giant Intel has quietly shut down its first-ever Web Store in the world in Malaysia and nixed plans to open similar stores in developing countries in the region.

Josie Taylor, regional corporate communications manager for Intel Asia Pacific, said that store based at the Sunway Pyramid shopping centre, near Kuala Lumpur, was shut down 1 December.

Taylor said the store was a 'pilot project' that was discontinued after Intel had "reviewed the business and the acceleration of public Internet access facilities in Malaysia".

"Looking at the increasing awareness of Internet access centres we decided that we could add more value by working with companies planning to set up their own access centres rather than operate a facility ourselves," said Taylor.

Intel opened the store on 16 April last year offering high-speed Internet access, online shopping without credit cards, and on-hand staff called Web Guides to assist customers.

It was managed by Intel Application Development Centre (IADC), a Multimedia Super Corridor-status company, and had 53 Pentium III processor-based PCs, a VIP section, a leisure area where drinks were served, and a kids' section.

Customers were charged RM10 (£1.78) per hour during peak periods and between RM6 and RM8 per hour for off-peak periods using stored-value cards.

The store had its own website, intelwebstore.com.my, and played middle-man for online purchases from its partner merchants accepting cash for everything from books to flowers, perfumes and tour packages. Partner sites included MyFlowers.com.my, Asiatravelmart.com, Arthursbooks.com, Fragrance.com.my, Watchesplanet.com, Sunnyfilm.com, Sportsi.com and BarnesandNoble.com.

When launched, Manuel Torres, then IADC's director of new business, development and marketing, indicated plans to open similar stores in the Klang Valley as well as other developing countries in the Asia Pacific.

Taylor confirmed today that Intel was no longer committed to such plans. The Intel spokesperson was unwilling to disclose how much had been invested in the pilot store, but stated that "about ten people" were affected by the closure who were either re-assigned or offered severance packages that were "more generous than statutory requirements".

Taylor also contends that the pilot project was "successful in meeting its objectives of encouraging more consumers to get online". "Feedback from customers was that they appreciated the service provided by the Web Guides and the leading edge technology," said Taylor.

Intel operates multiple chip assembly plants in Penang and Kulim in Malaysia and has been taking small stakes in Internet and e-commerce companies across the region in recent years to boost demand for PC and PC-related products.

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