IVILLAGE UK SET FOR FALL RELEASE
Byline: Valerie Seckler
NEW YORK — Just 11 days after disclosing plans to exit its e-tail endeavors, women’s online network iVillage said it has struck a joint venture to launch a content-driven Web site in the U.K. — with an $18 million cash investment from Britain’s largest retailer, Tesco PLC.
The deal signals the network’s first foray outside the U.S., as well as its quest to attract more users to iVillage, which is currently sharpening its focus on providing content of interest to women. At the same time, iVillage will provide a platform for various e-commerce players via partnerships like the one it has fashioned with Tesco — but it will no longer fulfill purchases made online.
IVillage UK is slated to go live with its site, at ivillage .co.uk, in November.
“We look at Tesco as having the broadest and deepest connections to retail customers in the U.K.,” said Michele Anderson, senior vice president of strategic development at iVillage Inc. “They have a direct marketing relationship with more than 50 percent of U.K. consumers, including a Clubcard magazine that reaches 14 million people and creates a sense of culture.”
Anderson added, “Our goals are complementary. They want to drive e-commerce and we want to build our audience in the U.K.”
Tesco has 646 stores in the Republic of Ireland, which produced sales totaling $13.4 billion (converted at current exchange rates) for the fiscal year ended in February. Its e-tail site at tesco .com gets an average of 48,000 orders per week, according to the company, while more than 500,000 people have registered to use the online grocery service.
Tesco and iVillage plan to provide a total of roughly $70 million in cash, marketing, branding, and other resources in support of the venture via online and offline activities, with the deal’s $18 million cash component to be furnished by Tesco during the next three years.
IVillage UK will be based in London and will function as an independently managed entity that will offer women an array of interactive services, such as content channels, e-tools and planners, quizzes, message boards, online chats and newsletters. Its board of directors will be formed by three representatives each from iVillage and Tesco and a jointly elected chairman not affiliated with either party.
Both companies expect to reach profitability after approximately three years of operation. Women are seen accounting for 60 percent of the U.K.’s Internet users by 2005, according to the joint-venture partners.
Currently, about 15 percent of iVillage.com’s traffic comes from abroad, the company stated. The site pulled roughly 166,000 users from the U.K. in June, Anderson said Thursday, citing statistics from Dart, a Europe-based Web ratings group. She added that depending on whose statistics one quotes, iVillage draws the most or second-most U.K. users of Web sites aimed at women; the other leading Net destination, she noted, is Handbag.com.
“We believe you need to translate content for local markets,” Anderson said of the need to create a U.K. site. “Although our reach is already number one or two, we believe in adopting content for a local market.
“The tone and humor of the site also will be different from the U.S. version,” she added, “even though it will be in the same language.”