Modnique Launches into Four More Countries, Amazon hikes the price of Prime in Europe, The eBay Turnaround that Never Had to Be, Zalora to IPO?, Amazon rejected in Czech Republic, Snapdeal to be a the most interesting IPO in Indian ecommerce?, The phases of commerce and much more

It has been an interesting week in ecommerce to say the least. Lots of interesting news on acquisitions, businesses planning to IPO and strategic changes made by businesses. The changes are almost all related to Amazon which clearly is going to be increasing the price of their Prime shipping product. The sign that kind of gives that indication is the change in pricing seen in the UK and Germany. Amazon will lessen the change by offering additional services to customers in the various markets in which prime operates. In the US, I suspect that the addition of a TV Box will be seen as a reason to pay for the price increase. They have already added Lovefilm in Europe to lessen the price change in the mind of their customers. Amazon has also added Kindle coins to their businesses as a further sign of the importance of their appstore which is primarily aimed at Kindle Fire owner.  Gaming, video and book content is the target purchases for users of Kindle coins inside apps.

What would a commerce blogpost be without a mention of Rocket Internet? I believe strongly that their businesses in South East Asia (Zalora and Lazada) have gone past the point of infliction. If eBay or Amazon was to purchase those businesses then it should have happened already. The simple truth is that Amazon buys companies that they believe they cant compete with and if we are honest South East Asia is not really their focus at the moment. eBay is in my opinion the company that might be a dark horse but they already have an entrant in South East Asia (Blanja in Indonesia) and thus this leaves Rocket Internet in a position to do a few things – they can either take Zalora and Lazada public or bundle them with Zalando to potentially create a global online fashion business powerhouse (this I think is very unlikely). Rocket Internet seems to be in a position to launch successful fashion ecommerce businesses but the rest of their investment are still in a growth phase.

The news that caught my attention this past week:

  1. The eBay Turnaround that Never Had to Be: Now Here’s the Rest of the Story – “eBay never bothered to develop sophisticated search technology. This made it dependent on Google ads, which took a bite out of profits. And it made it hard for users to find products they wanted to buy, dragging down sales. Likewise, eBay under Whitman never developed a product recommendation algorithm to match Amazon’s — despite the fact that Amazon credits 30% of its sales to the tool. Better search, and the ability to do merchandising and product recommendation like Amazon’s. What if I told you eBay was offered a finished technology solution to each of these problems way back in 2001 and they completely blew it off as uninteresting for their business?” If this is true which I think is the case then eBay missed a major asset and a position to change their history. We all know that they are playing catch up against Amazon..
  2. Why India’s answer to Alibaba & eBay is the tech IPO to watch – Snapdeal is set to pull in $500 million in revenue this fiscal year and is likened in the press to eBay and Alibaba. Bahl confirmed exclusively to VentureBeat that he is plotting to take the company public in the U.S. soon. It will likely list in the next 12 to 24 months, although Bahl revealed in an interview that “it could be sooner.” Indian ecommerce is obviously a very important market for investors (it is debatable whether the importance is over-hyped) but the market will change significantly if either Snapdeal or Flipkart goes public before the other business. Whomever does it first will be in a very advantageous position.
  3. Zalora prepping IPO in the US, job posting suggests – “Zalora, a fashion e-commerce store in East Asia, could be gearing up for an IPO in the United States. The Rocket Internet company last week posted a job ad seeking an IPO project manager in Singapore.The person will be tasked with preparing all documents needed for a public listing, and will work with the US Securities and Exchange Commission (SEC) to include relevant data in its filings”. Zalora going public will add very interesting dynamics to ecommerce in Asia as they have 10 businesses in 10 different markets.
  4. 1-800-Flowers botches Valentine’s Day – and apology, too – “Three days after Valentine’s Day, 1-800-Flowers is still apologizing to customers whose flowers and candy never showed up. 1-800-Flowers sent nearly 1,000 individual apologies on Twitter, plus more on Facebook, but many customers still weren’t satisfied.” I dont wish this on any ecommerce business as this is reputation damage that will take years to fix. Most important lesson – be honest and manage the expectations of customers.
  5. Amazon to use own logistics network in India – “In the next two years Amazon, the world’s largest retailer, will use its own logistics network to deliver nearly every product sold on its Indian portal.”We don’t want to repeat the mistakes we made in China,” said Amit Agarwal, the country head of Amazon India at a three-hour meeting with about half a dozen of the company’s top engineers on the last Friday of January.” It is clear that India is important for Amazon and they are investing heavily into the market.
  6. Myntra follows Amazon’s footsteps, launches hybrid marketplace model – “Indian fashion and lifestyle portal Myntra announced launching a new hybrid marketplace wherein it shall allow local offline stores and boutiques to sell their products through the Myntra website. It will not store inventory of the local retailers, but will connect them to buyers.” It seems like marketplace ecommerce is the model chosen by most of the big ecommerce businesses in India. Myntra have some very important questions to answer – who will do the logistics? and is the marketplace part of the Myntra platform or a new seperate platform?
  7. Marks & Spencer launches £150m ecommerce site ending seven-year Amazon partnership – “The website is designed to be flexible to enable it to adapt to “emerging customer and technology trends” and will be backed by a “dedicated tablet experience” and an update of all its mobile sites and apps.By moving away from the Amazon platform, M&S hopes to transform itself from a British retailer into an international, multichannel retailer, and a marketing campaign to promote the new site is planned for late spring.” This is a trend we will be seeing more of – retailers moving away from the Amazon platform but one hopes that Marks & Spencer does not go the way of Target in the US whom have struggled with stability and uptime issues.
  8. No longer just a clone factory, Rocket Internet has huge plans for global e-commerce – “Rather than floating a company with business that is operational in eight countries in Southeast Asia (a region not known for high consumer spending), it could unite the businesses in Africa, Europe, the Middle East, Latin America and Southeast Asia and float a genuinely global company.That’s quite a number of ifs and buts and an IPO may not even occur – but the prospect of such an event shows just how far Rocket Internet has moved from its initial position as a clone factory.”
  9. Amazon Prime price hike might not lead to defections – “Ever since Amazon.com said it’s considering raising membership fees for its Prime free-shipping service, there’s been plenty of speculation that customers would walk away from the service.But that’s not what happened when Costco raised rates. William Blair & Co. analyst Mark Miller studied the membership program at the Issaquah warehouse club and found that the renewal rates held steady or actually climbed each time Issaquah-based Costco hiked fees.” Amazon in the US is such a large part of their users daily shopping that an increase in price will not lead to a significant amount of users leaving Prime. Amazon will provide greater value to the increased price..
  10. Amazon’s Czech Development Plan Rejected in City of Brn0 – “U.S. retailer Amazon Inc.’s (AMZN) development plan to build highway connections to an envisioned logistics center in the city of Brno was rejected Friday by the Brno city council, potentially threatening the investment.”This result for me is a disappointment. Losing roughly 2,000 potential jobs is unfortunate,” said Jan Mladek, Czech minister of industry.” Amazon will negotiate until they get the solution they want and in all cases uses employment as a negotiation tool.
  11. How social media is driving online retail in Nigeria – “The innovative application of social media platforms, notably Facebook and Twitter by online retailers (Konga.com, Jumia.com, gloo.ng, gidimall) in Nigeria to drive customer awareness, interaction and marketing campaigns has been identified by industry watchers as a fundamental factor responsible for their massive success. Nigeria is ranked tops in terms of social media usage with over 11 million users. A new report by Portland Communications, a Kenyan-based public relations agency, says Nigerians are the third most active Twitter users on the continent.”
  12. When Toyota met e-commerce: Lean at Amazon – “The spirit of lean management was already at Amazon when I arrived in 2007. Since the day he created Amazon, Jeff Bezos has been totally customer-centric. He knew that customers would not pay for waste—and that focus on waste prevention is a fundamental concept of lean.” Fantastic article by Marc Onetto on how efficient / lean management is done at Amazon distribution centers and call centers.
  13. Rewiring Commerce: Four Phases – “Rewiring Commerce is much more than Apple’s beacons talking to you when you shop, it’s about how local suppliers/producers could meet needs locally, providing manufactures with tools to better estimate demand (eliminating waste and transportation), mass customization,  resource optimization, value orchestration..  yada yada yada.Who is impacted by rewiring commerce? Everyone that buys or sells. What is key? Data, trust, identity, platform.” Tom Noyes does a great job describing the future of commerce. I have reread the article a few times and am pondering over it..
  14. Behind eBay’s Ads Business: We Think Our User Data Is ‘Pretty Important’ – “The thing we have that very few other companies have is a shared identity across devices. We know who you are when you’re in the eBay environment on mobile, because you have to log in. All of the user profile data we leverage on desktop, we can now leverage on mobile. We don’t depend on cookies, and our underlying technology platforms coordinate and match IDs, so when you switch from an iPhone to an Android phone, we figure it out as soon as you touch eBay.” eBay clearly has done some serious behind the scenes work on their Ads business. Lots interesting insights..
  15. Why Can’t Amazon And Apple Catch a Break on Madison Ave? – “Advertising sales are a tough slog for both — and for a lot of the same reasons. Media buyers say they are slow, cocky and downright stingy. Both take too long to develop ad products. Amazon’s sales approach is too pushy; Apple is too reticent to foster relationships. Most frustrating: Neither is willing to cough up enough of the consumer data that attracts advertisers to them in the first place.” This is also a very interesting article both critical of the 2 elephants in the room regarding advertising. Is it a case of a lack of focus on these businesses or not showing the size of these opportunities to competitors? I cant seem to decide on 1..
  16. The Future of Retail: It’s Online AND In-Store – “I believe that using technology to digitize, analyze, make recommendations off of actual human behavior will be the key. The newly Empowered Consumer, who has leveraged technology to shift the balance of information away from retailers and into (literally) their own hands, will be met by the Savvy Retailer, who understands that mobile, social, data and cloud applications have disrupted almost every aspect of the way they interact and transact with shoppers.” A great article about the future of retail..
  17. What Souq has to say about those rumors, and its new mobile strategy – “Just as chatter is sweeping the tech world that Souq.com may be courting Amazon for a potential acquisition, the Dubai-based e-commerce giant has announced the release of its new mobile applications, for iOS and Android. With “mobile customers now represent[ing] 40% of all purchases on Souq.com,” as CEO Ronaldo Mouchawar revealed in a statement, launching native mobile apps is a logical step for the e-commerce company. Some might wonder why Souq.com, which launched in 2005, hasn’t already released an app, but today’s Souq is now squarely focused on mobile.”
  18. Rakuten opens the Rakuten Institute of Technology in Paris – “R.I.T. focuses its research on projects which will support the development of the global e-commerce industry; ultimately to provide e-retailers with innovations to grow their brands. With this in mind, the institute will commission projects to help revolutionise data analytics, fraud detection, language, recommendation systems, image processing, user interfaces, and the ‘online to offline’ transition in e-commerce.” This sounds like a really interesting concept and increasingly all of the ecommerce superpowers have these innovation labs across the globe.
  19. eBay Acquires PhiSix To Integrate 3-D Virtual Try On Technology Across The Marketplace And More – “It looks like 3-D virtual try-on technology will soon make an appearance on eBay. The marketplace giant is announcing the acquisition of PhiSix, a company that develops 3-D visualization and simulation technologies for clothing.” This clearly is technology that is on the way to all ecommerce businesses and will clearly change fashion online retail.
  20. Shopzilla Acquires Connexity To Strengthen Audience-Buying Division – “Shopzilla on Wednesday announced it has acquired Connexity, a demand-side platform (DSP). Shopzilla says it will link Connexity’s programmatic media-buying platform to its Aisle A division, which specializes in audience-buying.” Shopzilla is clearly interested in technology to help with audience buying as this is a logical extension of a partnership that lead to an acquisition.
  21. Modnique Launches into Four More Countries, Including Australia – “Starting with a Russian-specific launch in November 2013, the brand has now added four more nations to this growing list: Australia, Canada, Belarus and Ukraine. These country-specific digital offerings are designed to provide exclusive access to regional sales and promotions, prices displayed in local currencies, improved shipping and tracking features as well as extended customer support hours in local time zones.” Very interesting that Australia was seen as market to move into but clearly it is a high growth online fashion market.
  22. Shop ’til you drop: First look at a shopping list app for Google Glass – “Shop [x] for Glass is an early alpha app that isn’t looking to reinvent shopping lists; it simply wants to bring them closer to your field of vision so that you don’t have to stare at a smartphone while shopping.” I still think that Google glass will be a huge game changer for connecting online and offline retail but will normal customers want to wear those glasses?
  23. Tencent, JD.com may combine e-commerce business source says – “Any deal between two of China’s largest online companies would help narrow the huge gap between e-retailers and Alibaba Group Holding Ltd, which dominates China’s booming online commerce market. Tencent and JD.com are considering several options, including Tencent getting a 6 percent stake in JD.com in exchange for merging its less-popular online shopping operations with JD.com’s more established platform, Bloomberg said in an earlier report.” Simply put JD.com needs to get closer to Alibaba before their IPO as the gap will only widen when Alibaba has billions to invest into their ecommerce businesses.
  24. AmazonFresh poised for global expansion – “A senior manager at online giant Amazon has hinted strongly that the group is preparing to expand the company’s fresh produce retail business worldwide. Speaking at the City Food Lecture in London, vice-president of Amazon UK Doug Gurr said that the successful trial of AmazonFresh in Seattle had resulted in a roll-out across the rest of North America, making a global push more likely.” A few interesting things to consider here – one was Doug Gurr authorise to say that and does global expansion mean Amazon will move AmazonFresh to Europe (UK, Germany and Italy)?
  25. Groupon Tests Out a Staples Competitor, Groupon Supplies – “Groupon CEO Eric Lefkofsky has boldly proclaimed that he wants Groupon to eventually be the digital storefront where people start any online shopping trip. Now it seems Groupon may aspire to serve the same role for business owners.” No Mr Lefkofsky you have this wrong – you and your board want Amazon to acquire Groupon. Seriously – it is becoming quite clear that Groupon is now just another ecommerce business that has some degree of local in their operation. Remember Amazon.com Mr Lefkofsky? Yes, that small company in Seattle run by Jeff Bezos?
  26. Google shuts down Bufferbox delivery service to work on Google Shopping Express – “In a blog post, Bufferbox says that “we’ve made the difficult decision to begin winding down the standalone BufferBox service, instead bringing the learnings, technology and expertise of the team to future Google Shopping products, like Google Shopping Express.”” Google clearly have plans for BufferBox inside Google Shopping..
  27. Koos Bekker steps down as Naspers CEO – “It’s the end of an era. Naspers has announced that its long-serving CEO, Koos Bekker, 61, is stepping down as CEO. Bekker, who will stand down from the Naspers board for a year, will be succeeded by the media and technology group’s head of e-commerce, Bob van Dijk, 41.”
  28. The real reasons behind Rakuten’s Viber purchase – Why did Rakuten acquire Viber? I wrote this prior to facebook spending $19B to acquire WhatsApp. Rakuten bought Viber to ensure that they stay relevant in Asia..

Onwards.. till next week!