Tesco reported online sales up by 11% to £1bn during the first half of the year.
Profits at Tesco's online retail business, which includes grocery sales and Tesco Direct, rose 21% to £58m.
The company plans to drive online sales with the launch of a clothing range from this month. It aims to make it easier for customers who do not live near a large Tesco store to buy higher-value fashion lines via its website.
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The number of customers using Tesco's online grocery business grew to over one million during the first half of the year, Tesco said. The retailer has improved service levels and reported reduced numbers of lapsed customers and fewer calls to the service centre.
It has high hopes for its financial services arm, Tesco Bank, which saw profits up 11% to £221 on sales of £1.7bn.
Tesco has signed an agreement with Fortis to build a platform to develop Tesco Bank's insurance business and it has also selected the core technology platforms for its banking products.
Tesco direct, which retails non-food items over the internet and catalogues reported sales up 29%. The service delivers to customers homes or to 240 in-store Direct desks.