The second month of the year has started and last week was dominated by Amazon’s results. Amazon posted results that lead to a stock price increase. I think anybody that keeps an eye on ecommerce in North America would not be surprised with the record number of sales that Amazon did in 2012. The results did contain a few interesting snippets; third party marketplace transactions were more than those of merchandise sold my Amazon. I believe strongly that this trend will continue in the coming months. Secondly, digital media and in particular eBooks created several Billion dollars in transactions. This was a significant disclosure by the CFO of Amazon during the analyst call. Will Amazon ever become a profit making machine or will it continue to be a low margin high volume business?
Wired featured an article this week on Google’s Plan to Snatch Shopping From Amazon Is Working – It is linkbait and in all honesty contains thoughts that I don’t agree with. The big issue I have is that the author misses one thing. I agree with the fact that shoppers in the US either start shopping with a search on Google or open their browser on Amazon.com. The search on Google is being infiltrated by Product Listing Ads and in all honesty it is becoming more difficult to find non Google businesses in the search results in the US. What the author misses completely is that Amazon has a very successful loyalty program called Amazon Prime and that ensures that users don’t bother with doing any commerce related searches on Google. So my questions is simple, how does Google’s plan work with the users going directly to Amazon.com?
Long time readers will be aware of my respect of Marc Andreessen and he seems to love making statements of intent. This week he predicts the death of traditional retail. I must say ecommerce is in my own mind an extension of retail and in all honesty I wonder if this is not also a bit of marketing that Andreessen is doing here. I have said for a while that old school bricks and mortar is changing but saying that ecommerce will dominate it, sounds like the early 1999 talk before the Internet bubble burst. Traditional retail is in my own opinion in a transformative stage due to the effects of experiences (hello Apple), personalisation (hello Amazon), geolocation (hello Foursquare) and technology (mobile) etc. I also think that Mr Andreessen should be careful not to assume that everyone experiences the world in the same manner he does. So what do I think? In the next decade, I think the businesses that will win, are those that have technology that meet online and offline retail in such a manner that it ensures easy transactional commerce for users.
The 10 stories that caught my attention this past week:
- How Newegg crushed the “shopping cart” patent and saved online retail – This is one of the most interesting legal ecommerce articles I have read, in a very long time. Patent trolls is one of the most concerning trends I have witnessed in the media in the last 2 months. The article explains how Newegg ensured that a lot of ecommerce business can operate without concern over their shopping cart software.
- Middle East online businesses come of age – The Middle East is a market that fascinates me and has increasingly become a research point for companies interested in this potential success story. I wonder who will be the first bank that will allow multiple accounts in the different countries for an individual (without being a resident in the other countries)?
- Russia online retail to reach $25bn by 2014 – Russia it seems is going through a transition phase and is slowly becoming super competitive. Anyone interested in Russian ecommerce, this article contains an infographic full of data..
- Sallaty Brings Online Grocery Shopping to Jordan Is grocery shopping in emerging markets the next big vertical for ecommerce businesses? I tend to think so, however I note the absence from big retailers joining the battle and conversation.
- Buscapé Introduces New Features, Continues to Ride Brazil’s E-Commerce Wave – Buscapé has unveiled a few very interesting services to compliment their comparison shopping engine. Brazil is in my mind close to overtaking China as the most mature emerging ecommerce market.
- Advertisers Increased PLA Budgets By 600% In Q4; Trend Likely To Continue – The more I read about PLA’s, the more I think this is Google’s trojan horse that will be used to drive huge revenue in the next 2 years. One thing that scares me is the fact that PLA’s is another item that is going to devalue organic search results..
- Rakuten Opens Singapore Base, Eyes Southeast Asia Expansion – Rakuten opening an office in Singapore confirms their intention to aggressively enter South East Asian markets. Is this to protect assets from Rocket Internet or Alibaba?
- Takealot takes control of Mr Delivery– The online retailer has acquired a controlling 60% stake in the business-to-consumer delivery company. E-commerce businesses are going to be investing into logisitics a lot more in 2013. Same day delivery is the silver bullet that adds a lot of value to both business and customers in ecommerce.
- Amazon’s Growth Looks Like Walmart in the 1990s — But Even Better – If you need evidence of the similarities between Walmart and Amazon, then this is it.
- Google Quietly Releases Google Shopping For Suppliers – The similarities between Google Shopping for Suppliers and Alibaba is almost to good to believe. Why would Google go this route, hedging bets or trying to protect their dominance in North America?
- Payvment Pulls the Plug on Facebook Commerce – This in my mind confirms that Social Commerce never existed properly. Does facebook have commerce in their future?
- Google’s Plan to Snatch Shopping From Amazon Is Working This is linkbait but is a developing plot for a big story that will dominate the headlines in 2013.
- Amazon Outage Could Cost a Lot More Than 400,000 Pairs of Unsold Underwear Amazon’s net sales for 2012 came in at $61.09 billion, a tripling over the past five years. That comes to an average of $116,229.07 in sales every minute. Enough said..
- Interest in online shopping grew 128 % in 2012, mobile is a big contributor: Google report Mobile commerce in India seems to be driving an enormous amount of growth for ecommerce in India. I wonder, what is the conversion rates like?
- Barnes & Noble will close up to a third of its stores over the next decade – Barnes & Noble plans to close about 20 retail stores a year over the next ten year. I see this happening to a lot more retailers across the globe in the future.
- Ecommerce is a slog — what’s your angle? Fred Distin writes a great counter to Marc Andreessen’s thoughts on retail dying. A reflective article by a VC who has chrystal clear thinking on ecommerce.
- The Evolution of Ecommerce Business Models in India [Going back to where it started?] – A great summary on the various business models seen in ecommerce in India. Fascinating and thought provoking.
- Retailers in 40 US states authorized to charge extra for customers using credit cards – This has big implications for ecommerce businesses in the US. Interestingly not a single e-retailer has challenged this.