Virgin kicks off £50m cyber commerce plan

Richard Branson's Virgin Group has kicked off a massive e-commerce crusade in the UK starting with a £50m plan to wire his entire empire.
Written by Jane Wakefield, Contributor

The take-up of e-commerce strategies by well-known brands will revolutionise the way we buy, according to Virgin Net chief executive David Clarke. Today, Virgin Group announced it is to invest millions in the Internet, with virtually every part of Branson's empire, from flights-to-wedding dresses going online.

Clark believes consumers have been reluctant to cybershop because they do not trust online retailers. "People are nervous of buying things from people they have never heard of," Clarke said. "Online, brand names will become even more important than they are in the high street," he added.

According to Virgin's boss Branson, more than 95 percent of British consumers said they were aware of the Virgin brand, putting the company in a "unique position of trust and strength."

Branson explained the decision to put Virgin Group online: "We believe that within five years, 96 percent of British consumers will have access to the Internet, whether it be through a personal computer, a set top box or a mobile phone. We're the only company in the UK today in a position to deliver this revolution."

Virgin is not the first to use a trusted, household brand as a springboard to the information superhighway and e-commerce arena. The UK's no.1 supermarket Tesco and high-street electrical retailer Dixons have also banked the fact that technophobes are likely to buy from organisations they are familiar with. For consumers, Virgin online will offer a raft of new products. Virgin Trains will be launching a Web site for booking rail tickets, Virgin Atlantic will be pushing online air tickets, Virgin Direct will allow customers to manage their finances online, including buying a house and paying the gas bill. Virgin Net will join the free Internet access bandwagon with free access from the spring.

V2 Music, the group's music and record label arm, told ZDNet UK earlier this week that is "keenly looking at the potential" of distributing music via the Web and has already completed a pilot download of music from Indie band Underworld. A V2 spokeswoman stressed that copyright protection for artists was a priority, if Internet was to be a viable channel.

Marks & Spencer , another strong UK brand, is more reticent about discussing e-commerce plans. "We have a very successful Web site and the next step is constantly under review," said Andy Morrey, head of e-commerce at Marks & Spencer.

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