Blue Nile uses web to extend across Atlantic

Blue Nile, an online seller of diamonds and jewellery, is to become one of the first “pure play” US retailers to cross the Atlantic, in a move that reflects the growing interest of such companies in international expansion.

The potential of international sales for US retailers has been demonstrated by Amazon, the world’s largest retailing website. Amazon’s sites in the UK, Japan, Germany, China and France accounted for 46 per cent of the company’s $3bn sales in its first quarter, and rose faster than North American sales.

Scott Silverman, executive director of Shop.org, an association whose membership is made up of US e-commerce retailers, said he had seen evidence of growing interest in international markets as his members became more confident.

“Companies such as Blue Nile that have been around for six or seven years are pretty big. They are seeing some signs that 50 per cent per year growth cannot continue, so international expansions seem to be an increasingly attractive op­tion for them,” he said.

At the same time, UK underwear retailer Figleaves.com and the Italian fashion site Yoox have established US offshoots.

Jim Okamura, partner at JC Williams retail consultancy, noted that online-led international expansion is being explored by US chains that have started to reach the limits of market growth at home.

“It’s not for everyone, but we’ve definitely seen a growing interest in international expansion strategies that use an e-commerce platform as an initial entry point,” he said, citing efforts by JC Penney and Victoria’s Secret to develop online sales in Canada.

Blue Nile says its operation will be in Ireland and involve “only a handful of employees”, with site technology handled from the US. So far, it has sold goods worth about $3.3m to UK customers using a trial site with products priced in dollars.

A report out on Monday says US online sales excluding travel rose an estimated 29 per cent in the past year to $146.5bn.