Abstract:

In the research and practice of virtual business theory, we proposed a brand new business model for retailing industry, i.e., Virtual Retail Enterprise (VRE) model. Benefitting from the success of VRE model in practice, a unique and astonishing exponential growth phenomenon has emerged in the retail company with VRE during the past decade. This paper finds and first illustrates the exponential growth effect in retailing industry. Additionally, we review the origin and concept of virtual business theory, propose the novel spiral framework of business mechanism innovation model, and introduce the fundamental innovative practice such as multiplication rule, replicating law and Fat Headquarters-Thin Stores (FHTS) model. Based on these works, we elucidate the business principles of VRE model and reveal the source for the exponential growth effect. The case study shows that VRE model make retail chains develop well at low-cost and rapid speed.

Key words: virtual retail enterprise model, exponential growth effect, fat headquarters-thin stores model, multiplication rule, virtual business, case study