Rakuten, the Japanese ecommerce giant has done it again. They have bought another company that has raised alot of questions about their merger and acquisition strategy. Viber, the messaging company that uses wireless internet to do phone call is now a Rakuten company.
The issue with Rakuten for me is that they have little or no strategy on acquisitions in comparison to their direct competitors like Amazon, Alibaba and eBay. The company seems to be moving away from being a commerce based business to being a media distribution company. Their recent acquisitions: Wuaki.tv (streaming movies), Pinterest (crowd sourced curated content), Kobo (eReader) are all not really commerce related but bolt on acquisitions for a company that does commerce.
Purpose of acquisition
Viber is a messaging and VoIP service operator and has approximately 280 million global registered users, and monthly active users over 100 million. Viber apps on smartphones allow users to have conversations, and through its high quality functions users can send and receive messages and images, thus Viber offers a hybrid range of services rarely found on competing platforms. Viber is rapidly growing numbers of users, especially in emerging countries.
The Company decided to acquire Viber to strengthen its global platform through the use of Viber’s range of customers in the Company’s E-Commerce and digital contents services.
Amazon’s Junglee Ties Up with Quikr, China’s Suning approved for international express delivery service, Alibaba to enter the US?, Vente-Privee Seeks $11 Billion Revenue, Gilt to go public in Q3 and much more..
This past week felt like a long list of announcements about ecommerce companies going public in the latter part of the year. Gilt, Alibaba, Jumei (not to be confused with Jumia) all are expected to list in the US before the end of the year. Alibaba is going to be the big story that will change ecommerce globally (we have already seen the first move) but the others are all having to go public to raise additional funding to grow their businesses. Alibaba’s pending launch into the US ecommerce market via 11 Main is a very interesting story. Details are very sketchy which makes me believe that this is the first big story that has Alibaba driving the storyline. Let me be clear Alibaba is going to disrupt B2C ecommerce in markets where there are not a clear number 1.
Ecommerce in India is seemingly becoming a 3 horse race. Flipkart, Snapdeal and Amazon.in are all trying to capture the large opportunity that is Indian ecommerce.
Aramex shows good results from its emerging markets theory, Amazon adds Flow to its mobile app, Flash sales have to go mobile or they will die, Newegg launches a Prime competitor, Alibaba valued at a $153 billion, Amazon enters Brazil with the Kindle, Wayfair valued at $2 billion and much more.
I have a question which is bordering on being rhetorical but it is worth ponder over. What is the total amount of money spent in ecommerce to counter Amazons total domination of the business? In the 20 years of its existence there has been billions of dollars invested to counter the movements of the Seattle based online retailer. They are currently single-handily changing the ecommerce ecosystem through most competitors going to the marketplace model (longtime readers will be aware that I don’t think that is a good idea) and indirectly leading to competitors going out of business. Amazon is the only business that can make little or no profit and the financial world is fine with it. The current race to compete with Amazon Prime is another economic impact for Walmart, eBay and now Newegg. So with that as background how many billions has been spent on combating Amazon?
Alibaba has been valued at a $153 billion but the more I read the more I wonder what businesses will be part of the IPO? From an investor point of view I believe they will be hoping for Tmall. Taobao and Alibaba, Alipay and Aliexpress but I think it will be Tmall, Alibaba and Aliexpress. I would be surprised if any other businesses are floated but I am speculating at the moment…