Newegg Commerce, Inc. is an American online retailer of items including
computer hardware
Computer hardware includes the physical parts of a computer, such as the computer case, case, central processing unit (CPU), Random-access memory, random access memory (RAM), Computer monitor, monitor, Computer mouse, mouse, Computer keyboard, ...
and
consumer electronics
Consumer electronics or home electronics are electronic (analog or digital) equipment intended for everyday use, typically in private homes. Consumer electronics include devices used for entertainment, communications and recreation. Usually r ...
. It is based in
City of Industry
City of Industry is a city in the San Gabriel Valley, in eastern Los Angeles County, California, United States. The city is almost entirely industrial, containing over 3,000 businesses employing 67,000 people, with only 264 residents as of t ...
,
California
California is a U.S. state, state in the Western United States, located along the West Coast of the United States, Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the List of states and territori ...
. It is majority-owned by
Liaison Interactive, a multinational technology company.
History
Early years and growth
![Newegg C Suite](https://upload.wikimedia.org/wikipedia/commons/9/9f/Newegg_C_Suite.jpg)
The company was founded by
Fred Chang, a U.S. immigrant from
Taiwan
Taiwan, officially the Republic of China (ROC), is a country in East Asia, at the junction of the East and South China Seas in the northwestern Pacific Ocean, with the People's Republic of China (PRC) to the northwest, Japan to the nort ...
, in 2001. "Newegg" was selected as the company name to signify new hope for e-commerce during a period when e-commerce businesses were struggling to survive.
In 2004, Newegg established Rosewill as a private-label reseller of computing and household products from many manufacturers.
In 2005, Newegg.com was named one of the Internet's Top 10 retailers by ''Internet Retailer Magazine'', with 2004 sales revenue of just under $1 billion. Newegg.com grew an additional 30% in 2005, bringing annual sales to approximately $1.3 billion. Newegg launched NeweggMall.com in July 2008, Newegg.ca in October 2008, and NeweggBusiness.com in August 2009. In 2009, it was listed as on the Forbes America's Largest Private Companies list.
Chang had been Newegg's
chairman
The chairperson, also chairman, chairwoman or chair, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the grou ...
and CEO until August 1, 2008, when it was announced he would step down as
CEO
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
and chairman while remaining a member of the board of directors and executive committee.
He was succeeded by Tally Liu.
Chang also retained his position as president of Newegg's Chinese operations.
[
]
Attempted 2009 IPO and Newegg Marketplace
On September 28, 2009, Newegg Inc filed for an IPO (initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
) with the U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
. The filing stated that Newegg has been profitable every year since 2001 and generated sales of $2.1 billion in 2008. The company's largest outside shareholder is New York-based venture-capital firm Insight Venture Partners
Insight Partners (previously Insight Venture Partners) is an American venture capital and private equity firm based in New York City. The firm invests in growth-stage technology, software and Internet businesses.
History
Insight Partners was fo ...
. The IPO was managed by JP Morgan
JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, the wo ...
, Bank of America
The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank w ...
, Merrill Lynch
Merrill (officially Merrill Lynch, Pierce, Fenner & Smith Incorporated), previously branded Merrill Lynch, is an American investment management and wealth management division of Bank of America. Along with BofA Securities, the investment bank ...
and Citi
Citigroup Inc. or Citi (stylized as citi) is an American multinational investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking giant #Citicorp, Citicorp and financial ...
. In 2011, the company withdrew its registration for filing for an IPO, saying it would continue to explore alternative options for funding.
It launched Newegg Marketplace in 2010, and exceeded $2.5 billion in revenue that year. The company has more than 1,500 employees.
In 2010, Liu departed, and Chang became CEO again.
Subsequent expansion
On June 15, 2017, during London Tech Week, Newegg announced a global expansion plan to serve key parts of Asia Pacific, Europe, Latin America and the Middle East. Once complete, the online retailer is expected to reach customers in a total of 50 countries. On November 2, 2017, the company announced key global milestones, including localized payment options, enhanced customer service and a greater product selection for its international customers.
Liaison Interactive buyout and SPAC merger
In 2016, Liaison Interactive (), a Chinese technology company, acquired a majority stake in Newegg in an investment deal. In 2020, Newegg entered into a merger agreement with Lianlou Smart Limited (NASDAQ
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
: LLIT), a special-purpose acquisition company
A special purpose acquisition company (SPAC; ), also known as a "blank check company", is a shell corporation listed on a stock exchange with the purpose of acquiring a private company, thus making it public without going through the traditional i ...
, wherein Newegg stockholders became majority owners of LLIT. Following the consummation of the merger, Newegg listed as a publicly traded company on Nasdaq (NASDAQ: NEGG) in May 2021 as Newegg Commerce, Inc.
Services
In November 2016, Newegg announced a new checkout feature that lets Newegg.com customers choose to have their package held for pickup at one of more than 2,500 FedEx
FedEx Corporation, formerly Federal Express Corporation and later FDX Corporation, is an American multinational conglomerate holding company focused on transportation, e-commerce and business services based in Memphis, Tennessee. The name "Fe ...
Corp. locations, including 1,800 FedEx retail stores.
In January 2017, Indiegogo and Newegg announced a partnership whereby Newegg provides select crowdfunding campaigns with social exposure; guidance on go-to-market and sales strategies; and assistance with order fulfillment, shipping and logistical options to help get their products into customers’ hands quickly and efficiently.
In May 2017, Newegg formally rolled out Newegg Logistics, designed to help B2C and B2B e-commerce sellers and other organizations streamline order fulfillment, shipment and returns.
In October 2017, Newegg unveiled ''Newegg Now'', a weekly livestream featuring tech commentary and reviews, as well as time-sensitive deals available exclusively during each ''Newegg Now'' broadcast.
In February 2019, Newegg announced a program called Newegg online work, Employees interested in part-time work are randomly selected to make purchases.
In May 2020, Newegg formally launched a direct-to-consumer (D2C) initiative to help its vendor partners maximize their reach within the Newegg platform.
In June 2020, Newegg introduced the Newegg PC Builder, an online configurator that lets customers configure and source all the components needed to build a custom PC. While the June 2020 release was limited to customers in North America, in August 2020, the company expanded the configurator to the countries it serves in Europe, Asia Pacific, Latin America and the Middle East.
In February 2021, Newegg announced a program called Newegg Shuffle, where consumers interested in hot tech devices are chosen at random to make a purchase.
In May 2021, Newegg launched an automotive category offering with a vehicle-specific year/make/model/options navigation interface.
In June 2022, Newegg debuted Gaming PC Finder, a personalization tool to evaluate gaming PC specs, components and performance options.
In July 2022, Newegg launched JustGPU.com, a research and e-commerce site dedicated to graphics cards. The site allows customers to evaluate, review and compare GPU details to consider a purchase.
Newegg offers services to its third-party-logistics (3PL) clients and other e-commerce companies. In April 2020, Newegg announced Newegg Staffing, a staffing agency serving the logistics, manufacturing, clerical and supply chain management industries. In August 2020, the company expanded its in-house staffing agency to the Midwest and East Coast with new locations in Indianapolis, Indiana, and Edison, New Jersey. And in June 2020, Newegg established Newegg Bridge, which provides customer service management and social media monitoring to its 3PL clients.
Controversies
In March 2010, Newegg sold 300 counterfeit Intel Core i7
The following is a list of Intel Core i7 brand microprocessors. Introduced in 2008, the Core i7 line of microprocessors are intended to be used by high-end users.
Desktop processors
Nehalem microarchitecture (1st generation)
"Bloomfield" ...
-920 CPUs. The problem was first exposed by a member of the website HardOCP who posted on the site's forum about receiving the fake CPU. Newegg at first released a statement saying that the processors were "demo units", but later said that they discovered that the processors were actually counterfeit, and that the company was terminating its relationship with one supplier in response. The company offered replacement units to the customers who received counterfeit processors, while Intel stated that they had been made aware of the problem and were investigating as well.
In early 2018, customers in the state of Connecticut were notified that Newegg had not collected state sales tax due on out-of-state purchases in the past three years. Newegg was given a choice of collecting such tax in the future or turning over customer information to the state's Department of Revenue Services, which would require customers to file a sales tax form for the past three years of purchases. Newegg chose to furnish the customer information; as Newegg did not have a physical presence in Connecticut, Newegg believed it did not need to collect state sales tax from the ruling in ''Quill Corp. v. North Dakota
''Quill Corp. v. North Dakota'', 504 U.S. 298 (1992), was a Supreme Court of the United States, United States Supreme Court ruling, since overturned, concerning use tax. The decision effectively prevented states from collecting any sales tax from ...
''. Connecticut's Department of Revenue Services later issued tax bills to these customers.
In September 2018, Newegg announced that malicious code
Malware (a portmanteau for ''malicious software'') is any software intentionally designed to cause disruption to a computer, server, client, or computer network, leak private information, gain unauthorized access to information or systems, depr ...
had been placed on their servers for over a month, allowing hackers to access customers' credit card information upon check out.
In February 2022, the YouTube
YouTube is a global online video platform, online video sharing and social media, social media platform headquartered in San Bruno, California. It was launched on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim. It is owned by ...
channel Gamers Nexus uploaded a video detailing business practices in regard to Newegg's RMA department. The video explains that Newegg shipped a motherboard to Steve Burke of Gamers Nexus, which he returned without opening the box due to him not needing a motherboard anymore. Newegg claimed it was damaged and refused to refund the product. The video has been viewed over 1 million times as of Feb. 15, 2022. After the video was posted, other customers and YouTube channels, such as UFD Tech, came forward with other complaints. This resulted in Newegg issuing an apology and changing its open box RMA policy.
In September 2022, Newegg began offering AM5 motherboards bundled together with DDR4 RAM kits for a discount. This is an incompatible combination, as AM5 motherboards support DDR5 RAM exclusively and are physically incompatible with DDR4. This was reported by Gamers Nexus in October 2022, who accused Newegg of using these combo deals to mislead potentially unwitting customers into buying incompatible hardware in order to offload unwanted inventory.
Gaming and esports
Newegg has sponsored gaming tournaments for titles including ''Counter-Strike
''Counter-Strike'' (''CS'') is a series of multiplayer tactical first-person shooter video games in which teams of terrorists battle to perpetrate an act of terror (bombing, hostage-taking, assassination) while counter-terrorists try to preven ...
'', ''Warcraft III
''Warcraft III: Reign of Chaos'' is a high fantasy real-time strategy computer video game developed and published by Blizzard Entertainment released in July 2002. It is the second sequel to ''Warcraft: Orcs & Humans'', after ''Warcraft II: Tides ...
'' and '' Rome: Total War''. Newegg had a monthly case mod contest in 2005 in which contestants submitted pictures, descriptions, and directions describing how to personalize their computers with esoteric appearances and functions.
In March 2019, esports entertainment company Allied Esports named Newegg a founding partner and the official e-commerce partner of the HyperX Esports Arena in Las Vegas, Nevada. In June 2019, Newegg and Allied Esports co-hosted the Triple Crown Royale at the HyperX Esports Arena Las Vegas. Participants competed in three popular titles: Apex Legends, Fortnite and PlayerUnknown's Battlegrounds (PUBG). The competition gave select members of the public the opportunity to compete against professional players from Counter Logic Gaming (CLG), including Marksman & Psalm from the CLG Fortnite team, and Emy & GooseBreeder from the CLG CS:GO Red team. In January 2020, Counter Logic Gaming announced an expanded partnership with Newegg as CLG's presenting partner and online technology retail partner for its North American League of Legends Championship Series (LCS) team.
In October 2020, Neweg
relaunched
its hardware subsidiary ABS to focus on the gaming community. ABS (also known as Advanced Battlestations) offers a full range of gaming PCs for everyone from beginners to advanced video game enthusiasts.
Litigation
On February 10, 2010, Newegg was sued by three former employees accusing it of numerous labor and business abuses, such as violating "a slew of labor laws, overworking and abusing immigrant workers, and ordering employees to hack into competitors' computer systems". In an official statement denying the claims in the lawsuit, the company stated:
Newegg is aware of the allegations made by two former employees and a former consultant. Newegg has always taken pride in the fairness of our labor and hiring practices and to ethical business practices toward our competitors, vendors and most of all, our valued customers. We have always been fully committed to compliance with all applicable laws and regulations. Accordingly, we strongly deny the assertions made by the individuals filing this lawsuit, and intend to defend ourselves vigorously and thoroughly against claims that have neither merit nor basis in fact.
Patent troll cases
Newegg has become known as a company that fights "patent troll
In international law and business, patent trolling or patent hoarding is a categorical or pejorative term applied to a person or company that attempts to enforce patent rights against accused infringers far beyond the patent's actual value or ...
s".
In January 2013, Newegg won a victory over Soverain Software when the Court of Appeals for the Federal Circuit overturned the district court ruling in favour of Soverain and invalidated a shopping cart patent by citing prior art from 1984, CompuServe
CompuServe (CompuServe Information Service, also known by its initialism CIS) was an American online service provider, the first major commercial one in the world – described in 1994 as "the oldest of the Big Three information services (the oth ...
’s Electronic Mall. On January 13th, 2014, the Supreme Court refused Soverain Software's petition for writ of certiorari to rehear a January 2013 decision of the Court of Appeals, effectively ending Soverain's case.
In November 2013, Newegg lost a case in Texas against TQP Development over Newegg's use of https:// protocol mixing SSL and RC4
In cryptography, RC4 (Rivest Cipher 4, also known as ARC4 or ARCFOUR, meaning Alleged RC4, see below) is a stream cipher. While it is remarkable for its simplicity and speed in software, multiple vulnerabilities have been discovered in RC4, ren ...
. Whitfield Diffie
Bailey Whitfield 'Whit' Diffie (born June 5, 1944), ForMemRS, is an American cryptographer and mathematician and one of the pioneers of public-key cryptography along with Martin Hellman and Ralph Merkle. Diffie and Hellman's 1976 paper ''New Dire ...
and Ron Rivest
Ronald Linn Rivest (; born May 6, 1947) is a cryptographer and an Institute Professor at MIT. He is a member of MIT's Department of Electrical Engineering and Computer Science (EECS) and a member of MIT's Computer Science and Artificial Intell ...
, the inventors of public-key cryptography
Public-key cryptography, or asymmetric cryptography, is the field of cryptographic systems that use pairs of related keys. Each key pair consists of a public key and a corresponding private key. Key pairs are generated with cryptographic alg ...
and RC4 encryption respectively, testified for Newegg.
On July 6, 2015, after 20 months of waiting, Newegg filed an extraordinary petition urging US District Judge Rodney Gilstrap to issue judgment so that they would be able to file an appeal. On July 15, 2015, Gilstrap ruled that Newegg did not infringe on a patent belonging to TQP Development.
Awards
Newegg has been the recipient of various awards, including:
* Computer Shopper Shoppers' Choice Awards: 2011, 2008, 2007, 2006, 2005, 2004, 2003
* Forbes.com Best of the Web
References
External links
* {{Official website
2001 establishments in California
American companies established in 2001
Companies based in the City of Industry, California
Consumer electronics retailers in the United States
Deal of the day services
Online retailers of the United States
Retail companies established in 2001
Companies listed on the Nasdaq
Computer companies of the United States