The Secrets of Bezos, ShopRunner gets funding from Alibaba – Ecommerce stories of the week

The Secrets of Bezos, Shoprunner gets funding from Alibaba, Flipkart raises more capital, Google being investigated in Brazil and Zulily wants to IPO

Readers – don’t stress this is the 10 ecommerce stories for the week of 10 October just with some changes. Moving forward the week ending post will contain the headline stories in the title as the old title was not doing it for me.

We had a bumper week of ecommerce news – Amazon’s secret sauce got into the public eye for the first time. I for one cannot wait for Brad Stone’s book on Amazon. I have a feeling it will become mandatory reading for any ecommerce executive who wants to understand Amazon’s business. I read One Click – the last book on Amazon and felt it was a regurgitation of known news. I think anyone could have guessed that the difference maker at Amazon is its founder Jeff P Bezos. There are 3 people in the ecommerce industry that I view in the same sentence as Bezos – obviously Bezos as the father of ecommerce, Jack Ma from Alibaba whom created a juggernaut. Lastly, the chairman of Naspers Koos Bekker is also in this conversation. All 3 are visionaries, skate where the puck is going to be and speak very seldom to the press. When the speak to the press they always mention the core of their business as the driver of their thinking.  I will be tackling this topic in some more depth in the coming months..

The Story of the week for me is ShopRunner raising $200 million which was lead by Alibaba. It is becoming clear that same day / 2 day shipping business is now where every ecommerce business in North America wants to be in. Amazon started the arms race but ShopRunner is a big story. Why? One – Alibaba leading the round of an potential bolt on is new (I think we will see this occurring a bit more until Alibaba does their IPO). Secondly, ShopRunner is part of the Kynetic stable which is a business I keep reading about. Kynetic was formed by Michael Rubin when eBay acquired GSI commerce and then they spun Fanatics, ShopRunner and Rue La La off into a new entity (Kynetic). ShopRunner is lead by Scott Thompson who was Yahoo!’s CEO until his qualifications got questions. Thompson is playing coy about what the funding will be used for but I think it could be a variety of things (international, additional partners etc).

Flipkart raised an additional $160 million for logistics and investment into payments and ebooks. I have seen this before and the Flipkart story is a beginning to a long journey. A few things stood out for me – only one existing investor took part in this round (Tiger Global Management) and that the round in total was $360 million. That makes the total investment into Flipkart a giant $550 million.

The 1o ecommerce stories that caught my attention this past week:

  1. Flipkart: From a revenue-guzzler to an asset-light e-tailer – Flipkart was the first business in Indian ecommerce that went into the marketplace mode. Is it a case that the investors saw that as the solution to high capital spending or was it a long term strategy move.
  2. Amazon lines up three distribution hubs in Poland – Amazon moving into Poland is pretty big news. One – does this influence their labor unrest in Germany (the claim it is not the case)? Is this Amazon moving more into Europe?
  3. Billionaire Cannibals Erase $4 Billion in Son-Mikitani Fight – Rakuten is the dominant ecommerce business in Japan and that has provided Hiroshi Mikitani the cash to move into other parts of the world. Suddenly – Rakuten is having to battle on their home turf against Yahoo! Japan which is currently enforcing a unsustainable cost battle with Rakuten. This could hurt Rakuten badly..
  4. Amazon Launches ‘Login and Pay with Amazon’ for a Seamless Buying Experience – I laughed when I saw this article floating around the web. Paying via Amazon is not new. This is clearly a manner in which Amazon want to leverage its 215 million users and potentially grow that number.
  5. Google Shopping goes local – It has been a big week for Google. First they announce this local execution that is both geolocation enabled and also the local storefront concept has also been announced. The truth is that this is to be expected Google has always placed massive value on Local but now they have added into their commerce businesses. Add Google Wallet, Channel Intelligence and Buffer Box and then they have their marketplace to compete against Amazon.
  6. Russia’s first Internet price index unveiled – Yandex has unveiled a price intelligence service which is very clever and a massive win for Russian ecommerce customers. Yet another reason why Yandex keeps moving forward.
  7. Brazil investigates Google over antitrust charges – “Brazilian antitrust watchdog Cade said on Friday it is looking into accusations that Google has unfairly used rivals’ content, discouraged their advertisers and favored its own product listings in search results.” It is good to see that Google is still being investigated in Brazil as I thought this was no longer the case. The question is – how long will this continue?
  8. Amazon Wants In on YouTube’s Short-Form Video –  Amazon will do short form video – why? They need original content to monetise on their advertising business. Secondly, they are going into a space that has many content producers looking to move away from YouTube due to Google not valuing their partners. Remember Amazon has an online video product, owns IMDB and is rumored to be  working on a set top box.
  9. My reaction to Zulily’s IPO filing and Flash Sales explained – Greg Bettinelli did a great job of investigating Zulily’s S-1. It is scary to think that this business will be the first North American flash sales business to IPO. Who would have ever thought that?
  10. The Secrets of Bezos: How Amazon Became the Everything Store – The public email address, the story of how Amazon crushed Quidsi and then bought them are all gems in this great post by Brad Stone. Jeff Bezos is the only reason why Amazon is unstoppable..

Bonus Stories: