The second online store by revenue in the US, Newegg, is not so popular among mainstream audience. Its CEO, Fred Chang is even less known. He made it a rule not to talk to the press. And he continues to follow it even now, when success of the company, established in 2001, turned the businessman into a billionaire.
Meanwhile, he clearly has something to tell: in 2012 Newegg revenues reached $ 2.8 billion. According to this indicator, the company trails only the absolute leader in the industry, the online store Amazon, created by Jeff Bezos. According to business world articles, Chang’s share in Newegg is more than 30%. If we compare Newegg with the competitors like Amazon and Overstock.com and apply the price/revenue multiplier, the businessman’s financial position can be estimated exactly $ 1 billion.
Through a spokesperson, Chang declined to confirm or deny these findings. And it is not surprising: since the foundation of Newegg, the entrepreneur, who, according to Forbes, is now 56 years old, has not given a single interview. Despite this, something about him we yet known.
A native of Taiwan, Chang has a bachelor’s degree in applied mathematics, which he got in the Chinese Culture University in Taiwan. Newegg is not the first company of his. Before it he had ABS Computer Technologies. Chang is a naturalized citizen of the United States, who, however, prefers to live at home in Taiwan, as the sources close to the Newegg say.
How did Chang achieve such impressive success in e-commerce? Newegg, which headquarters are located in the suburbs of Los Angeles, has gamers, programmers and other individuals involved in the IT-industry as its target customers. These 18 million customers buy mainly computer hardware and software. This audience is loyal to the brand Newegg. Online store reciprocate by sponsoring IT-events and game tournaments.
According to the research editor of the magazine Internet Retailer, the most astonishing thing was the Newegg’s achievement of $ 1 billion revenue in the fourth year from the company’s foundation.
Now the growth is more restrained: in 2012 the revenues of the online store increased by only 4%.
What can we expect from the retailer in the future? Experts assess the prospects for Newegg ambiguously. Some analysts think that Newegg must keep up the market growth of 10-12% per year, otherwise their proportion will decline.
However, there is no confidence that Chang’s progeny will maintain this pace. With a high level of service and flexible price line, the retailer clearly lacks Amazon’s awareness. They rely too much on marketing through search engines. Outside the devoted circle of customers the brand of Newegg is still poorly recognized.
Realizing this, Newegg attempts to win new users in new regions. The company’s motto, which boosts the global promotion of the brand, sounds very simple: “Once you know, you Newegg”.
When the retailer has submitted documents for the preparation of IPO in the Securities and Exchange Commission in 2010, the materials defined: “Our growth plan depends on the success of the business expansion in China, where e-commerce is still in its infancy.” These hopes did not come true: the Chinese Internet market was divided between Alibaba and Suning. Newegg suffered losses.
However, the company was not discouraged. The head of China’s subsidiary of the retailer said in an interview with local media that Chinese Newegg should earn at least $ 480 million, which will help it to become profitable again.