* M&S bets on "bricks and clicks" to grow internationally
* UK retailers competitive on choice, prices, delivery
* UK online sales abroad seen at 28 bln pounds by 2020
* British government keen to support global drive
* Expansion not without risk as logistics costs rise
By Emma Thomasson and James Davey
BERLIN/PARIS, May 13 Marks & Spencer Plc
is making a new push to expand abroad, hoping e-commerce will
give Britain's biggest clothing retailer a better chance to
succeed than earlier attempts to enter new markets.
It is one of several retailers that are using expertise
developed in the UK's fast-growing e-commerce market to expand
overseas. Store chains like M&S are starting to emulate the
success of online-only fashion players like ASOS.
Britain is the world's most developed online retail market,
according to a ranking by commercial real estate firm Cushman &
Wakefield, followed by the United States, Germany and France.
M&S withdrew from mainland Europe in 2001 after a failed
expansion. The retreat was temporary. In March the firm said it
would use "bricks and clicks" - opening new stores in a few
markets while offering online sales in several more - to
accelerate growth abroad.
"Because we sit in the UK we sometimes forget how advanced
the UK is," said Laura Wade-Gery, M&S e-commerce executive
Although the United States is the biggest e-commerce market
by absolute turnover, internet orders make up a bigger portion
of total retail sales in Britain - about 11 percent in 2013 to
7.3 percent in the United States, Euromonitor data shows.
Britain's leadership position in e-commerce has been driven
by its compact size - which make delivery more cost-effective -
along with its relatively high internet penetration.
Retailers are seeking to ship more goods to shoppers abroad,
a drive the British government is supporting to diversify
exports from a heavy reliance on finance. It launched a plan
last year to help 1,000 retailers break into international
markets by 2015.
Consultants OC&C say UK retailers are beating domestic
competition overseas due to wider choice, better prices and fast
and reliable delivery. They predict overseas online sales by
British retailers will jump to 28 billion pounds ($47 billion)by
2020 from just 4 billion in 2012.
"You can go quite a long way with one warehouse serving the
world," said OC&C partner Anita Balchandani. "We should feel
pretty confident about the prospects for a nation of shopkeepers
with an advantage in the digital world."
GLOBAL MARKET PLACE
M&S is investing 1 billion pounds on logistics, IT and
systems. It launched a new web platform in February and is
ramping up a new distribution centre in central England to
fulfil all online orders.
It hopes that will help reverse nearly a decade of market
share decline at home and pay dividends abroad as it targets a
25 percent increase in international sales in the next three
years and a jump of 40 percent in overseas profits.
After its retreat in 2001, M&S started a tentative return to
the international stage in 2011 when it opened a store on the
Champs Elysee in Paris and launched a French-language website.
The move is part of Dutch Chief Executive Marc Bolland's
strategy to turn the British group into an international
"multi-channel" retailer, reaching customers through stores, the
web and mobile devices.
Credited with turning around grocer Morrisons, Bolland took
over at M&S from Stuart Rose in 2010.
M&S grew international sales by a third in three years to
account for 10 percent of the 10 billion pounds ($16.82 billion)
2013 total and more than 15 percent of operating profit.
Bolland's "bricks and clicks" mantra involves opening stores
in prime locations to publicise the brand, complemented by
online sales from local-language websites.
The attempt to meld stores and online presence is best
illustrated in Bolland's birthplace, the Netherlands, where M&S
launched a Dutch website and "e-boutique" store in Amsterdam
last year that allows shoppers to browse the full range of
clothes on life-size digital screens and then order online.
There was a 13 percent rise in overseas customers searching
for UK apparel retailers online in the first quarter of 2014,
according to a British Retail Consortium and Google study, with
growth strongest in China, Russia, France and Germany.
Nine local M&S websites are already live, with plans to
launch in Russia and Finland this year. M&S also hopes to add
250 stores abroad by 2017 to the current 455, including new
lingerie and beauty boutiques in Saudi Arabia and India.
It already delivers to countries including Australia and
Canada from its UK warehouses, a similar strategy to that
pursued by Next whose strong online growth has helped it
almost catch up with fashion sales at M&S.
Next, which sells from 200 stores in 30 markets and delivers
to 60 countries from a UK warehouse, saw international online
sales grow by 86 percent last year and expects a rise of another
50 percent this year to 150 million pounds.
However, the further afield that retailers stray from
Britain, the more they have to plough into local logistics.
ASOS, a darling of the stock market since listing in 2001,
saw its shares fall sharply in March when it said investment in
warehousing in the UK and Germany, as well as start-up costs in
China, would hit annual profit.
Sophie Albizua, co-founder of retail consultancy eNova
Partnership, cautions that e-commerce does not mean that
expanding abroad has suddenly become risk-free.
She notes that ASOS, which already makes almost two-thirds
of sales overseas, is still far more profitable in Britain than
abroad if the costs of the head office are taken into account.
"You should be careful with the myth that international
expansion online is easier than store expansion," Albizua said,
noting it is costly to create brand awareness online in new
markets, especially without the physical presence of stores.
"In practice there are few people who have managed to do
that profitably and successfully because the same rules apply as
to physical stores."
($1 = 0.5938 British Pounds)
(Additional reporting by Anthony Deutsch in Amsterdam; editing
by Janet McBride)