Microsoft and U.K. grocery store chain Tesco PLC announced Tuesday an agreement to allow users to shop online over Microsoft Pocket PC devices and smart phones using the retail Web site portal Tesco Access.
"The mobile online service is available now to any one using the Pocket PC or smart phones," said Tesco spokesman Russell Craig.
Within two years, the service is expected to generate revenue of 1.2 billion pounds (US$1.68 billion) in Europe, Microsoft and Tesco said in a statement.
Tesco currently has a U.K. customer base of one million users who make 70,000 online orders per week, bringing in an annual turnover of 300 million pounds, Craig said, but he declined to offer any further growth projections for the mobile online service. "We don't tend to make projections because you become a hostage to fortune," Craig said.
The companies did not disclose any financial details of their agreement and did not outline how profits would be split between the companies. "I can say that there has not been any additional capital invested on our end to get this (deal with Microsoft) running," Craig said.
"This is really just in addition to the service that we already offer online. People want to shop online but may not have a computer and find that the cost of getting one can be quite prohibitive. Therefore we are trying to provide access to the service over things like the Pocket PC and digital TV," Craig said.
There is a standard fee of 5 pounds per delivery of online orders and there is no additional charge for ordering over a mobile device, Tesco said.
Unlike U.S. online grocer Webvan Group Inc. which filed for Chapter 11 bankruptcy earlier this month, Tesco has been able to build its online grocery business into a commercial success in the U.K. Last month, U.S. grocery store chain Safeway Inc. announced it was seeking Web site design assistance and other IT-related help, plus new funding, from Tesco in an attempt to juice up its GroceryWorks.com online shopping affiliate.
Craig said that a similar service with Microsoft's mobile devices could be offered in the U.S. though there are no current plans to do so.
"This sort of thing wouldn't work on the GroceryWorks Web site as it is now. We would have to develop a Tesco access site for GroceryWorks. At this time there are no plans to do so but it is a possibility," Craig said.