The last 24 hours is the reason why Amazon has hired Jay Carney, a former Obama spokesperson to be responsible for global corporate affairs. Amazon has seen a fair share of controversy over the warehouse workers and working conditions. As usual the company has largely remained quiet and I believe this is one of the areas in which Carney will be more verbal.
The issue is in my mind – the technology chameleon that does ecommerce (Amazon) is still very reliant on human intervention when packing of purchases are done inside Amazon warehouses. Speed and efficiency which is sold to customers lead to very harsh working conditions for seasonal and temporary workers. Robots who don’t have unions can only work for so many hours until they need recharging. Also sometimes logic is needed for packing which cannot be seen inside a robot.
I have been thinking about Jet.com ever since returning from my 3 week US trip. Clearly they are a top of the hype list before any sale of merchandise has occurred. Marc Lore is an operator with a very successful past and someone that is clearly deeply in touch with ecommerce. Is jet.com a dot.com bust in the making or a potential game changer that will effect change in the ecommerce landscape?
Jet.com is an ambitious concept that is aiming at a part of the ecommerce landscape that has no clear market leader. It is not a marketplace – it is subscription based membership driven ecommerce business. The digital version of Sam’s Club / Costco that has a lot of technology under the hood to drive sales for merchants. It has been designed to disrupt these 2 large wholesale shopping clubs without the need for volume sales.
Alibaba’s IPO was one of the headline stories of 2014. The Chinese ecommerce business raised record amounts of cash that will allow them to pay shareholders back for showing faith in them. Alibaba is also in a position unlike any of their global competitors to aggressively acquire companies that will put them in good stead for the foreseeable future.
Alibaba has one major weakness and it is quite apparent in their M & A (mergers and acquisitions) strategy – they have done very little outside of China. It is understandable pre-IPO that they wanted to focus on China only and ensure that they are the undisputed market leaders in their home market. Post IPO they have to start looking at business outside China and ensuring that they are creating a sustainable business. I believe that in 5-10 years’ time that Tencent and JD.com would have made significant inroads on Alibaba.
2014 was a very interesting year for ecommerce on the African continent. There was acquisitions, mergers and overall lots of movement. Lets be honest for a moment – African ecommerce is not on the front pages of TechCrunch or on the radar of most investors. It is a long term ecosystem filled with the challenges such as logistics, low credit card penetration and most importantly customer distrust. When I wrote my year in review post, I wrote on regions which got lots of media coverage in 2014.
It is the beginning of 2015. I believe that 2014 contained some clues to the new year and the future of ecommerce. There were some stories that made us all go wow – (The Alibaba IPO) and also some interesting developments across the globe. Global ecommerce is a topic that interests me and it is clearly visible in all ecommerce markets (both developed and emerging). The year contained plenty of stories that could make an appearance in the following post but the following was what caught my attention consistently.
IPO’s (Initial Public Offerings)
We saw 4 ecommerce specific IPO’s. Alibaba, Zulily, Rocket Internet and Wayfair. Three of these IPO’s occurred in the US and Rocket Internet listed on the Frankfurt stock exchange. The biggest surprise is without a doubt Zulily – they are the anti-Amazon. Delivery is a longer than normal process and they are a niche based business. Alibaba – well what has not been said. The biggest IPO in history, Billions raised and now the next phase of their lifecycle starts. Investment into ecommerce businesses. Rocket Internet went public and have been told by market what they feel about their operation. Generally – the growth has been negative and their businesses continue to raise millions of Dollars. Wayfair had a quiet post IPO and I believe will be a business to watch in 2015.