E-COMMERCE - Branching out from techie heaven - Newegg racks up big sales of geek gear online. Now, it's trying to entice mainstream consumers.
Newegg Inc., a City of Industry company that sells computers and electronic gear, has quietly become a major online retailer by developing a fervent following among techies. Its motto pokes fun at the paradox of its profitable obscurity: "Once you know, you Newegg."
The company is privately held, which means it doesn't have to submit certified financial statements to federal regulators. But its executives said Newegg reaped about $1.5 billion in sales last year, putting it in the top echelon of e-commerce sites.
After six years of catering to its core -- young men who spend as much as $3,000 a year on PCs, data storage equipment and other technology -- Newegg is trying to attract the mainstream customer.
The company says the approach appears to be working. Boding well for a strong holiday quarter, the online store reported 1 million visitors the day after Thanksgiving. The following Monday, a big Internet shopping day, the firm said it shipped more than 60,000 orders and saw revenue jump 89% compared with the same day last year.
"We're never going to forget the original guy who built our business," said Bernard Luthi, Newegg's vice president of Internet and product marketing. "But we are looking at ways to make the site different, to make the soccer mom feel comfortable."
Doing both might be hard. Newegg.com still feels like a young man's hangout, where geeks can satisfy their need for technical specificity.
Computer aficionados, such as serious video-game players, go to Newegg to buy one-off computer parts including motherboards, modems, hard drives and fans so they can build their own souped-up machines. Through Newegg's online forums, guys addicted to gaming can debate the merits of the latest consoles or ask one another whether it's possible to pay enough attention to both their children and their Nintendo Wiis. (The consensus: Gaming suffers at first, but the kids eventually become gamers too).
Newegg was founded in 2001 by Fred Chang, a Taiwanese immigrant. Its predecessor was a mail-order company called ABS Computers, based in Whittier, that made high-end PCs and gaming systems. Customers indicated that they'd rather buy components and make their own computers. So even though the Internet bubble was deflating, Chang launched a new company and called it Newegg, to signify a fresh start.
"We saw ourselves as the new birth of e-commerce done the right way," said Lee Cheng, the firm's general counsel.
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