Is Amazon misunderstood? Eugene Wei wrote a very insightful post on his previous employer. I understand what he says in terms of Amazon’s goals being out in the open but my question is what makes Amazon different? Customer centric is great, long term thinking is Bezos’s way of speaking to WallStreet but name me one other business that is so overvalued like Amazon? Take away Bezos and the Amazon.com name and I am willing to say that investors would call for the CEO’s head and investors will not be keen on investing. I am going to tackle the topic in the coming weeks as it is has been on my mind.
Fab.com continues to acquire assets and make radical changes. Bradford Shelhammer becoming an advisor is symptomatic of a company that needs a long look at itself. I initially liked the fab.com concept as I believe flash sales is not going to disappear from the ecommerce vertical model chart. Why? You are providing an win for both the brand can customer. Why can businesses like Vente-Privee, One Kings Lane and Markafoni continue to be successful? Simple, leadership and long term belief in the model. I am beginning to think Jason Goldberg is maybe on the similar road to what Andrew Mason was a year ago..
China and Chinese ecommerce has also been on my mind. I believe that the ecommerce world is not giving Alibaba enough respect and as soon as they IPO the global ecommerce landscape is going to change. Consider the following hypothetical situation – Alibaba is valued at $150 billion dollars and have $15 billion dollars in the war chest to disrupt markets? Chinese Internet companies will always be black swans as they have scale not seen anywhere in the world. Suddenly – the whole ecosystem changes as top talent will be going to these companies, they will be able to acquire their way into markets and as they have billions in the bank they can crush companies. I have spent the last 6 months pondering about global ecommerce – spoken to a variety of thoughtleaders and have realised Chinese companies are about to start aggressively moving into markets. Alibaba and Tencent have already started the process and that should leave many of us to ponder our businesses.
The stories that caught my attention for this past week:
- Online mall Lazada opens up its marketplace for fashion businesses – Lazada has been able to scale certain parts of their operation very quickly. The move to the marketplace model happened inside a year from first media coverage and now they have added the fashion category for businesses to list their items in. “After opening up its marketplace for consumer electronic, home appliances, living, toys and sport equipments in April this year, fashion is the sixth category, to find its place on the e-commerce platform.”
- Amazon Takes Huge Steps To Embrace Mobile Commerce – Amazon has in the last 6 months done a lot of things to make mobile commerce a bigger part of their business. They have made it possible for developers to earn commission on items sold through mobile devices as well as through in-app purchases. Those are massive potential growth enablers for Amazon to leverage network effects on their mobile businesses.
- The Surprisingly Simple Retail App That Could Juice Holiday Revenue – The digitisizing of retail catalogs is definitely gaining momentum worldwide. It is a low tech operation but the effects of catalogues are not to be seen lightly. “Versions of Retale have already been downloaded 12 million times in Brazil, France, Russia, Spain, and Germany—where it was initially launched five years ago. According to Gaiser, about one-third of the 5 million users in Germany cue the app to alert them to new circulars.”
- Why UPS Will Win Christmas, Scroogy Shopping or Not – The fact that UPS can say this is massive. Why? Their competitor called FedEx is also showing upside as more bricks and mortar retailers are getting the need for a logistics partners. UPS forecasts +4% package volume this holiday. At peak will ship more than 34M packages/day.
- Nordstrom Gets Real with Decision Making – “Luckily, Nordstrom had a technology vision and implementation strategy that provided the foundation for customer personalization and omnichannel retailing, making the steps to omnichannel enablement a natural process.” Nordstom is by far one of the most progressive thinking retailers globally. Fascinating the amount of detail an omnichannel commerce business needs to ensure a great customer experience.
- Hello, ladies: Bonobos finally launches a women’s line – Bonobos is clearly on the way to become a big player in the fashion vertical. They have it all now – golf line, mens clothing and now a line for women. Andy Dunn is clearly thinking big and I must say the fact that he is willing to acknowledge he needs assistance for another gender’s clothing is a sign of a forward thinking entrepreneur.
- Ozon seeks to raise $100 million – This is a big development and I think it has caught many ecommerce executives off guard. I thought that they had plenty of runway when they last raised capital. Logistics investment is a capital and CFO’s nightmare. I would love to know how they $100 is divided between logistics, Ozon travel and Ozon’s other assets. Who are they looking to potentially partner for this round of investment? More Rakuten or a new investor like Alibaba or eBay?
- Kroger Isn’t Afraid of Online Grocery Shopping – This was quite a shock for me to read. I think it borders on arrogance from the Kroger CEO to think that US customers wont buy groceries online anytime soon. What happens when Amazon enters the states in which Kroger makes a large percentage of their revenue? Secondly, globally the trend has been for grocery shopping to move online. Just look at the massive impact it has had in the UK and South Korea.
- Amazon Is Hiring Like Crazy – If you told anyone in ecommerce that Amazon would have a greater head count than Microsoft a year ago – I am willing to bet that you would have gotten looks of shock and lots of laughter. How many of these new appointments are developers and product development staff?
- Google introduces ‘Certified Shops’ scheme for UK ecommerce sites – This feature will be rolled out to all the markets in which Google Shopping is operational in. How objective this “Certified Shops” programme is – well that is a story for another day. The main purpose of this is to get users to click and for Google to make money.
- China’s Craigslist soars in IPO – This is not really a big shock. 58.com is the worlds biggest classifieds business. The only question for me on them is how much money will they be able to make in the coming 18 months?
- Why MercadoLibre Could Be Overvalued – MercadoLibre is one of the biggest ecommerce businesses in Latin America. However, they have some big potential headaches – monetary legislation in Venezuela and Argentina is a risk to say the least. Secondly, their biggest shareholder eBay has entered their market via a fashion app.