The 10 e-commerce stories for the week ending 17 August 2012

Rocket Internet pruning their investments, LivingSocial to pull out of the Middle East and become.com redesigns.

The e-commerce stories for the past week is dominated by Rocket Internet. The German clone factory raised additional capital for its European fashion company Zalando. They added J.P. Morgan Asset Management and Quadrant Capital Advisors as its newest backers and I believe Zalando will over time become more important for the Rocket Group… It seems from the outside that something is going on at Rocket Internet. More on that later.

Secondly, Comparison Shopping engines got a few mentions this past week. Generally the industry is quiet and reliant on insiders to blog about things. However, the always useful CPCStrategy provided their top 10 Comparison Engine report for Q2 2012.

So, the stories that got my attention this past week was:

1. US internet deals giant LivingSocial to pull out of Middle East – I must say this is a bit of surprise as I thought that LivingSocial would have a long term strategy for global expansion. I wonder whether this is a sign of group buying losing its appeal or a regulatory change in the Middle East that lead to LivingSocial looking to offload their offering?

2. Tokobagus Founders Have Left the Building – TokoBagus is one of my favorite ecommerce websites to browse on. Before you wonder, how? I use Chrome that has a translation plugin that makes browsing possible. The founders of the business have left it in the capable hands of Michal Klar. In cases like this I believe the exit of the founders can be a good thing in the long run for a startup that has matured.

3. Become.com Launches Website Redesign – Let me be clear Become.com has a lot of potential. Their previous UI was difficult to use and the redesign done is a definite upgrade. I like their iPad app a lot but the search is not optimal.

4. Shopping: Just One More Arena Where Online Augments (Rather Than Replaces) the Offline World – Boston is one of the regions in the US I keep an eye on as the ecommerce businesses that are based there are innovators. Mobile apps will become the default solution for all retail activity in commerce. Swirl, an mobile commerce app I think will lead to the demise of Shopkick.

5. Amazon and the Non-Level Retail Playing Field “Why single out Product Ads? Because by supplementing product sales with ad revenues, Amazon is radically changing the terms of competition. It’s no longer bound to a model where you only keep score based on the percentage of visitors you convert to a sale” – If the Elephant in the room keeps being fed it will only become bigger…

6. Wal-Mart gets restricted approval to raise stake in China e-commerce firm – Wal-Mart increasing its shares in Yihaodian underlines how import overseas markets are becoming for Wal-Mart. Keep in mind, that in India and China majority shareholding must be with local business and not with an international behemoth. Significant moment for Wal-Mart which flew below the radar.

7. Rocket Internet to sell Latin America and Africa stake to Millicom in €340 million deal– Is this Rocket Internet pruning their global investments? I tend to think so.. notice that South East Asia is not part of the deal between Millicom and Rocket Internet. One other thing to keep in the back of your mind is that both Rocket Internet and Millicom have investment from one backer, Swedish Investment Company Kinnevik.

8. Rocket Internet: I, formerly known as Kasuwa now wishes to be known as Jumia – The Samwers Amazon clone in Nigeria, Kasuwa had a name change in latter part of this week. “Changing it from a dot com to a dot com dot ng also presumes that Jumia would be more favorable as an African brand instead of Kasuwa / Sabunta which were derived from Nigerian languages”. Jumia is also found in Egypt and Morocco, this leads me to believe that Jumia is a strategic play to long term grow into something that is the largest ecommerce store / brand  in Africa.

9. The Bloody Price War Starts At 9am Today, 360Buy Vs. Suning/Gome/DangDang/51Buy – B2C ecommerce in China is about as competitive as it gets in any market worldwide. However, this may the greatest PR tactic I have seen in a while. Call it out your competitors to look good in the mind of your consumer is an old tactic.. however was this ever a real Mexican standoff?

10. RichRelevance Raises Another $8 Million To Bring Personalized Shopping To E-Commerce Sites – RichRelevance is a recommendation provider that enables ecommerce websites to monetize their websites better.  “The company was founded by the architects of Amazon.com’s recommendation technology, and are making similar options available to other retailers. With product recommendations, targeted promotions, and advertising, retailers can better monetize their websites.” I like this concept a lot as it gives everyone a change to compete against Amazon’s recommendation service.

The bonus link this week is something I wrote earlier with regards to subscription ecommerce in South Africa. I think the model has great potential but has some limitations in our market.

Onwards..