Broadband lures Tesco.com into Korean expansion

The online grocery service will be travelling to South Korea, where one in five of the population has access to a broadband connection, this winter
Written by Wendy McAuliffe, Contributor

Tesco.com is to extend its online shopping service to South Korea -- the country with the highest penetration of broadband in the world -- this winter.

The move follows the recent announcement of a joint Internet venture between Tesco and the US supermarket chain Safeway, which will make the home delivery service available to residents in the San Francisco Bay area.

"The Tesco.com strategy is international expansion -- either through its existing store network, or by brokering a deal with another store network," said Russell Craig, spokesman for Tesco.com.

South Korea was an obvious country for Tesco to target, as 20 percent of the population already has access to a high-speed Internet connection at home. In the UK, just over 100,000 residential customers have access to broadband.

Tesco already has seven supermarkets in Korea, and another five are scheduled to open in February 2002. "We never got into the race to expand, or the theory that having the first mover advantage is the best way to go on the Internet," said Craig. "Instead we settled on sticking with a store-based network," he added.

In recent months, many less successful supermarkets have been forced to shut down their Internet offerings. The online grocery store Webvan filed for bankruptcy in the US last month, having raked up losses of nearly £1bn. "Webvan was one of our biggest critics, and insisted that warehousing was the best way forward... but there are not enough people shopping on the Net at the moment to justify this model," said Craig.

Tesco.com currently has 70,000 regular customers.

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