The 10 e-commerce stories for the week ending 22 February 2013

LivingSocial raise more funding, Egyptian commerce grows, Google Shopping vs Amazon Product Ads and much more

The past week has had some interesting stories which will have interesting story lines for the rest of the year. LivingSocial has been the topic of quite a bit of press the last week and in all honesty I think it highlights,  the lack of sustainability deal websites have. How long before Amazon exits completely by taking another write off? Dan Primack wrote a very good article on the funding that LivingSocial received and he has a great daily newsletter as well.

Google is also showing their long term plans for advertising. The much written about Chromebook Pixel, really looks like a Macbook Air but I think there is something everyone is missing. The Pixel will be completely under Google’s control (for the record, I won’t ever buy one – I shudder when thinking how much Google will mine the notebook for information). What stops Google from showing ads on the notebook ala what Amazon does with the Kindle? Google is an media company that makes its money from advertising. So then create another piece of real estate on which Google ads can show,right?  Google has been on my mind for the last few weeks and increasingly are showing their appetite for ecommerce. I don’t particularly think it will end well for Google as they are a chameleon that is not really sure where it is standing. In the US it is Amazon vs Google fighting for commerce ownership.

The stories that caught my attention the past week:

    1. Shopzilla Formalizes Display Ad Business With Launch Of ‘Aisle A’ Division – Shopzilla has taken the steps to start moving away from being primarily driven by Comparison Shopping Engines. Display ads for a large network makes a lot of sense to me. Is this a defensive move against Google? I tend to think so.
    2. Google Shopping global transition is underway – “On February 13, Google Shopping results in the United Kingdom, Germany, France, Japan, Italy, Spain, Netherlands, Brazil, Australia, Switzerland and the Czech Republic began to transition to a new commercial experience built on Product Listing Ads.” Need I say more?
    3. E-commerce in Egypt: A giant in the making – This article makes me happy. One, it is a great source of news on Egyptian ecommerce and secondly, it shows that ecommerce momentum is slowly starting in Egypt. All of the challenges seen in other developing ecommerce markets are seen in Egypt, but we are in the beginning. I can see that this market is going to challenge both South Africa and Nigeria in terms of opportunity for ecommerce investors.
    4. eCommerce in Africa: how Berlin incubators spotted the perfect climate for growth – a very informative article on how Rocket Internet started in Africa. My favorite quote – “Jeremy Hodara, a CEO for Rocket Internet Africa and France, sums up the positive macroeconomic and micro economic picture emerging:  It is the first time in the recent history of Africa that growth is not due to raw materials. It is really the middle class that is emerging. The other thing that is important for us when we look at Africa is that there are few strong competitors in the market.”
    5. What really happened at LivingSocial? – LivingSocial had to raise capital as their business was feeling some pressure. I think this is the tipping point for the end of daily deal operators. Groupon is going to be eaten alive by Google in the coming months and I can see that LivingSocial will consolidate their business before any more big announcements.
    6. Going Global Means Going Mobile – Kent Allen makes the argument which I believe is happening at commerce businesses around the globe. If you are going into an emerging market then mobile has to be thought about. If you are looking for any evidence to back it up – look at the comScore graphic in the article that shows how many hours users are spending on websites. Remember that in many cases the first browsing of a website in an emerging market may not be from a desktop or a notebook..
    7. EBay’s Future May Lie With Payments Unit PayPal – I wish I could disagree but PayPal plays a big role in eBay’s future. However, what needs to be remembered is that mobile is another avenue in which eBay needs return on investment. One the one hand PayPal needs to grow it is share of the total payments space in the US (they have no influence at traditional point of sale yet) and mobile is the commerce disruptor for them. PayPal + mobile = eBay’s long terms sustainability in my opinion.
    8. Amazon’s ‘price parity’ clause attracts attention of German antitrust regulator – Amazon is under the microscope in Germany for work conditions and price parity clause. “Amazon forbids third-party merchants that use its marketplace from offering the same goods cheaper elsewhere, and the German Federal Cartel Office is gearing up to do something about it.”
    9. Pricepanda Philippines Launches. Lazada Wins ‘Most Expensive Shop’ Price – Is this surprising? not at all. One of the biggest things that gets lost is that a price comparison engine has to be objective in the eyes of the merchants and users. If the businesses loses that trust, it is very hard to regain.
    10. Google Says No Comment On Why Interflora Was Penalized – Personally this is one element that Google has to do better. Penalising a business is understandable but providing accurate feedback is very important for all involved. This current process is broken and this is something that I think the competitors of Google should be doing better.

Bonus links for the week:

Onwards..