E-COMMERCE
On-line shop to offer one-hour delivery
15-01-2001
by Aoidin Scully
A new Internet shopping venture is to launch in Dublin, promising to deliver products like groceries, fast food and alcohol within 60 minutes.
OneHourCity.com has invested IEP5 million so far in its combined Internet and physical service, which will also deliver groceries and videos to customers. The company has already purchased 10 convenience stores, which will be rebranded as OneHourCity stores from March, and which the company claims have been generating profits for them for the last eight or nine months.
A new central warehouse has been established which will allow the storage space in each store to be converted into a local depot and dispatch point for the service.
"The premise we're operating on is that it effectively needs to be a fully integrated strategy. I don't believe in Internet shopping on its own. The whole idea is to have a physical branded presence backed up by a delivery service," said OneHourCity's founder Patrick Cumiskey.
Other on-line services promising fast urban deliveries have fared badly in Europe. In November French e-tailer Koobuycity ceased trading in Europe after failing to receive the STG2 million in needed in additional funding. The e-commerce site, which provided one-hour delivery to customers in London and Paris, filed for bankruptcy and has since shut down its operations.
Koobuycity's main rival, Urbanfetch, also recently closed its business-to-consumer delivery service to focus on US-based business-to-business operations, while another competitor, BagsOfTime.com, ceased trading in October after failing to secure further funding.
"The basic concept is right, but the big problem is that all of those guys operated a warehouse model," said Cumiskey. "If you have a million pounds worth of stock sitting in a warehouse and it's not selling, it becomes very expensive. Whereas if you're a retail group which has stock moving through it all the time, it gets over one of the core key funding issues."
OneHourCity plans to have expanded its operations to 20 retail stores by the end of this year, the profits from which will be used to offset the costs of the launch of the delivery service.
"We plan to break even this year and make a profit next year," said Cumiskey.
He said that the IEP5 million in backing had been raised from a number of private investors and a technology company.
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