Last week was dominated by 2 stories – eBay posting disappointing results and Amazon unveiling a “all you can read” Kindle package. The eBay news is not surprising – Google hit the company with a search penalty based on low quality content and also eBay is still battling with the after effects of being hacked. Those two elements by themselves will harm any Internet business – together they will harm a large business for a few quarters. The bad results could not come at a worse time for eBay. They have potential competition entering a part of the business (11 Main)  and am also facing less than desired results on their eBay Now business.

Amazon seems to be moving at a faster rate than normal with regards to the ecommerce business. The Kindle unlimited service seems to me to be an unAmazon product. The selection at launch is poor (not one of the big 5 publishers has books that you can read) and seemingly this product went to public release inside 7 days. I am still trying to understand why Amazon would want to do this? Is it a reaction to Oyster? Is it to force the big 5 publishers to provide them with ebooks? or is this primarily to drive more revenue to the Amazon published ebooks?

The stories that caught my attention last week:

  1. How The Big 5 Publishers Hobbled The Amazon Unlimited Launch (TechCrunch) – “Amazon Unlimited was dubbed the Netflix of books. That is correct as long as you imagine a Netflix consisting of an endless array of low-budget indie releases and some major small-studio films. In truth, Amazon’s new $9.99 all-you-can-read service features no books by “big 5″ trade publishers, an issue on which Amazon has remained mum.”
  2. E-commerce drives logistics in South East Asia (Bangkok Post) – “Southeast Asia’s burgeoning online shopping industry is giving a leg up to regional e-commerce logistics companies as it opens an entirely new market for players in the field.”
  3. Welcome to ‘the Matrix’: At FedEx’s sorting hub, 1 night, 1.5M packages (CNET) – “At its most complex, FedEx’s hub operation is a giant machine with thousands of moving parts, all of which must be well oiled to keep the whole thing running smoothly. But at its most elemental, the process is simple: bring in many hundreds of thousands of packages every night and day; sort them by size and destination; and then put them back on planes and send them off again. Visually, it’s amazing. And almost every time, you get the FedEx package right when you’re supposed to. As Armstrong put it, “We have a 99 percent [accuracy rate]. And then we’ll do it again tomorrow.””
  4. Square’s $5 Billion Gamble To Change The Commerce World  (The Digital letter) – “What follows is a tale about where Square came from and an analysis on its sustainability along its bumpy road to create a new paradigm in the purchasing world. Even amid all the criticism, it’s my belief that Square has established the foundation to effect change in how we view paying — it’s re-established the human connection between merchants and consumer.”
  5. EBay says in-store pickup gains traction faster than same-day delivery (Mobile Commerce Daily) – “EBay is doubling down on its shop-anywhere Click & Collect service in Britain because of how quickly it is gaining traction but says that same-day delivery service eBay Now is not experiencing the same level of enthusiasm. During a conference call with analysts this week to discuss eBay’s second quarter results, executives said that while mobile’s influence at the point of sale happening more slowly than online, buy online and pick-up in-store is one area showing strong potential. Executives also pointed to a planned test later this year for mobile advertising on its auction marketplace and the fact that more PayPal mobile payments now take place off eBay than on it.”
  6. Rakuten Teardown: Setting Its Sights on Amazon (CB Insights) – “When Pinterest raised $100 million in 2012, the round was led by Rakuten, a firm that recently created a new $100M global venture fund to follow up its $10M Asia-focused fund, and which based on recent history is going to become an even bigger player in technology circles as both an investor and acquirer. For those unfamiliar, Rakuten is the largest eCommerce site in Japan with over $4B in annual sales and a market cap that currently sits at over $17B. Rakuten has already been an active acquirer and with new VC funds at its disposal, we wanted to take a look at the firm’s historical acquisition and investment activity to understand where it’s been and where it may be going.”
  7. Berkshire Hathaway acknowledges investment failures in retailing due to their “facing major threats” from technology (WSJ) – “But the retail sector continues to confound the billionaire investor and his partner Charlie Munger. They have bemoaned their bad luck in retail investing for years, speaking about their retail “failures” at annual meetings and in interviews. More recently, the duo—famously averse to technology bets—have lamented how the Internet is rapidly reshaping shopping habits and affecting Berkshire-owned retailers in ways they didn’t expect.”
  8. Alibaba and the future of e-commerce in the U.S. (Smart blogs) – “E-commerce is an industry that seems to be in a constant state of growth, with emerging technology and the increasingly mobile consumer. You don’t have to be an industry expert to know that Amazon is the major player in the U.S. e-commerce industry, but with Chinese e-commerce giant Alibaba’s IPO and growth plans that include the U.S., online retail could face a shake-up.”
  9. Amazon sales growing but still behind top retailers (Tampa Bay Times) – “Despite all the talk about how Amazon has revolutionized shopping and sent brick-and-mortar stores into a tizzy, the online retailer is not as big as you might think. The latest Top 100 list of largest retailers ranks Amazon ninth in U.S. sales, behind Walgreens, Home Depot and other retailers considered more mundane than planet changing. No surprise, Wal-Mart topped the list, followed by Kroger supermarkets, Costco and Target. The list was compiled by Kantar Retail, consulting for the National Retail Federation, the world’s largest retail trade association.”
  10. Catch of the Day Hacked Three Years Ago, Personal Details Stolen (Power Retail) – “An email has been received by all Catch of the Day customers, informing them of a cyber intrusion that compromised personal details, including sensitive financial data. Accounts registered with CatchOfTheDay before May 7, 2011 have been compromised according to a recent email to all of the business’ subscribers.As the email states, the breach occurred  in early 2011 and is described as an “illegal cyber intrusion, which compromised names, delivery addresses, email addresses and hashed (encrypted passwords)”.”
  11. Alibaba opening Seattle-area outpost, recruiting developers and expanding U.S. presence as IPO nears (Geekwire) – “Chinese e-commerce and technology giant Alibaba is recruiting for Seattle-based engineering jobs, signaling plans to open a new outpost in Amazon’s backyard in advance of Alibaba’s initial public offering. Recent email messages from the Entrepreneurs & Experts in Seattle group, Alibaba’s strategic partner in the Seattle region, list a series of job openings for mobile engineering positions — offering prospective employees the ability to be based in the Seattle region or in Alibaba’s home region in Hangzhou, China.”
  12. Cross-border e-commerce in Western Europe to more than double in 4 years (Webrazzi) – “Free trade and competition rules for EU members seem working best for online sellers and shoppers in Western Europe. Cross-border sales of business-to-consumer e-commerce platforms in the UK, Germany, France, Italy and Spain are expected to total $56 billion by the end of 2014, according to a new eMarketer report, “Western Europe B2C Ecommerce Trends: Omnichannel Is the Watchword as Markets Gain Sophistication.” In Western Europe, the non-domestic sales are 14% of total e-commerce transactions in the region today, and expected to rise even more in the next couple of years. The report says that the cross-border sales will more than double by 2018, to account for 20% of the region’s total e-commerce sales.”
  13. Alibaba Teams Up With Brazil Postal Service Firm (WSJ) – “Chinese e-commerce giant Alibaba is cultivating is overseas customer base while preparing for its initial public offering in New York, which could be one of the largest initial public offerings in history.For the past few months, Alibaba has been going around the world — France, Australia, Singapore and Italy to name a few–signing agreements with governments and logistics providers to attract more overseas merchants to its Chinese online marketplaces.”
  14. Zalando hit 1 billion euros in revenue for the first half of 2014, operating profit in Q2 ( – “In the run-up to a much-anticipated IPO, European online retail powerhouse Zalando has recorded an operating profit in the second quarter of 2014, and hit more than 1 billion euros in revenue for the first half of the year, the company said in a statement this morning. In the first quarter, Zalando’s revenue had already grown to 501 million euros but the company’s wasn’t yet operating profitably for the full group. In the first half of 2014, group revenues increased to up to 1,06 billion euros, the company said, up from 809 million euros during the same period last year. EBIT margin was nearly break-even (compared to -9% in the first half of 2013).”
  15. eBay: Google SEO Changes Hurt Core Business And Revenues (Marketing Land) – “Yesterday, eBay announced second quarter earnings which just beat analysts’ expectations. However, revenue fell short of projections. The company earned $0.69 per share (vs. $0.68 expected) against revenue of $4.37 billion (vs. $4.38 billion expected). During the quarter, eBay suffered a major security breach and global password reset. In addition, it faces intensifying competition from Google, Amazon and a host of smaller rival”
  16. Retail: “I don’t think we should see connected objects in opposition to the human side” (Atelier) – “We’re currently thinking about how connected objects could be used in-store to make people’s lives easier. Firstly to demonstrate products. People are gradually starting to use connected objects to manage their data, help monitor their homes remotely, and improve their health. That being so there are some very interesting areas to pursue. The uses I’ve just described open up a wide field, in which we’d certainly like to grow.”
  17. China’s takes aim at Alibaba with Paipai relaunch (Reuters) – “Chinese e-tailer on Thursday relaunched its Paipai online marketplace, opening a new front in its escalating battle against the country’s e-commerce market leader Alibaba Group Holding.Paipai’s relaunch marks the first time that, the No.2 player by market share, has directly taken on Alibaba’s core e-commerce offering, Taobao. Paipai and Taobao both provide an online marketplaces for consumers and small businesses to sell goods to one another.”
  18. South Africa’s PayFast Incorporates Bitcoin as Payment Option (WSJ) – “ayFast, a leading South African payment processor, on Thursday started offering the digital currency bitcoin as a payment option, making it available to the firm’s 30,000 merchant customers. It becomes the first payment processor in South Africa, and one of the first anywhere, to offer the cryptocurrency as an option. The company is partnering with BitX, a South African digital-currency exchange, for the bitcoin integration, but PayFast founder and managing director Jonathan Smit acknowledged the move was largely exploratory. He noted that consumers and merchants know very little about bitcoin in the young market.”
  19. Fashion’s EBay Obsessives (Business of Fashion) – “In recent years, there has been a veritable explosion of fashion resale startups — from Vaunte, ThredUp and Covetique to The RealReal and Poshmark — aiming to disrupt eBay, the long-dominant player in the market for vintage clothing and accessories. These new launches offer slick, highly curated sites, promise hassle-free service and stock top labels like Proenza Schouler and Azzedine Alaïa. But for certain members of the fashion tribe, it’s the decidedly unpolished and uncurated eBay that continues to excite — albeit not for its eBay fashion business initiatives.”
  20. Amazon Sunday delivery: Key facts to know as USPS rolls out service nationally (Geekwire) – “The U.S. Postal Service is known for working through rain, sleet and snow, but not on Sundays or holidays, right? That is changing, quickly, through a deal with Amazon. In many parts of the country, products ordered from Amazon now arrive at your home seven days a week, year-round. As GeekWire reported last week, the rollout is expanding nationally even faster than originally expected.”
  21. Line’s new ecommerce app for Thailand is the scruffy cousin to its shopping app in Japan (TechInAsia) – “Thai shoppers, rejoice – popular Japanese chat app Line, which has 24 million registered users in the Land of Smiles, just rolled out a standalone ecommerce app specifically for its fans in Thailand. The move follows the company’s release of a similar app for Japan last March. We took that app for a test drive but couldn’t really get more than a superficial understanding of what it was about due to this writer’s inability to read Japanese. Luckily, however, Thailand’s Line Shop is partially in English, so it’s time to jump iTunes’ fence again and go for a spin.”
  22. Yahoo’s dependence on Alibaba is starting to get silly (Pando) – “While Yahoo was reporting its second quarter earnings today, its chief development officer Jaqueline Reses was at Fortune’s Brainstorm Tech conference saying that the company won’t spend any money from Alibaba’s coming IPO on a Google Ventures like investment arm. Which was ironic – and maybe even too bad. Yahoo’s protracted and still unproven turnaround is being supported in good measure by returns on earlier investments it made in companies like Alibaba. If past is prolog, Yahoo might consider bringing back Jerry Yang to oversee such investments. Because Yahoo has been making more money by investing in successful Internet companies than trying to become one again.”
  23. Whatever happened to Morocco’s ecommerce pioneer (Wamda) – “For a few months now, one question has been on many Moroccans’ lips: is daily deals website really “on hold, to rise from its ashes” as their website is putting it, or has it simply shut down? Whatever happened to the first Moroccan daily deals website? On Friday, a new development seemed to confirm the second option: MyDeal’s website has stopped working. So, now, can we actually say that the website that processed $4 million USD worth of sales its second year is dead? “
  24. Amazon offers two-day delivery service within EU for Prime customers (The Retail Bulletin) – “Amazon has begun offering its Prime customers in the UK a two-day delivery service for products stored outside of the UK in the EU. The new service will incur no extra charge. Previously, products stored in Amazon’s European fulfilment centres outside the UK have been available to order on with a delivery time of between three and seven days.”
  25. Amazon delivers nearly a third of orders for marketplace sellers (Internet Retailer) – “Sales by outside merchants on Inc.’s marketplace were up 34.4% in June 2014 compared with June 2013, according to ChannelAdvisor. The company produces monthly reports that compare its merchant clients’ sales through various online shopping portals and marketing channels, including, eBay Inc., Google search and Google Shopping. ChannelAdvisor has added two new data points to its monthly report in response to requests for information about the Fulfillment by Amazon program, a service that lets merchants store inventory at Amazon warehouses with Amazon handling delivery to the customer. The new “Percent FBA” measures the percentage of Amazon gross merchandise volume of ChannelAdvisor clients that was fulfilled with Fulfillment by Amazon. For June 2014, 31.8% of Amazon gross merchandise volume was shipped through the Fulfillment by Amazon program, up from 28.7% in June 2013. The second new data point, “FBA non Amazon,” measures the percentage of gross merchandise value shipped through the Fulfillment by Amazon program that was not sold through Amazon’s Marketplace. These are sales from a merchant’s own site or other marketplaces that Amazon fulfills. In June 2014, that was 1.8%, up from 0.9% in June 2013.”
  26. Jack Ma: The C2B business model is an “undeniable trend” (TechInAsia) – “Masayoshi Son’s SoftBank empire has been getting a lot attention in recent months, with a US$20 million splash of venture funding for the Phillipines, the debut of Pepper, the family friendly robot, and, the impending financial windfall from Alibaba’s IPO. Today, at the SoftBank World 2014 event, Alibaba’s founder and executive chairman, Jack Ma, talked about Alibaba’s business philosophy and the coming shift of Customer to Business (C2B) corporate strategies. Traditionally, business models are created with the assumption that a business will sell to other businesses (B2B) or simply to customers (B2C). According to Ma, customers will soon completely dictate to businesses what their needs are.”
  27. Nordstrom in Talks to Buy Trunk Club, a Men’s Personal Shopper Service (Recode) – “Nordstrom has invested in several digital-based startups, but it hasn’t acquired many to date. That could change soon. The Seattle-based, high-end retailer has recently held acquisition talks with Trunk Club, an e-commerce company that offers a personal styling service for men, according to people familiar with the talks. It’s not clear if the talks will result in an acquisition or a strategic investment. It is also possible that neither of those transactions will occur.”
  28. Groupon SA offers more than a budget deal (MarkLives) – “On an organisational level, the focus has shifted to becoming sustainable. The company has also announced its intention of becoming a service provider for local merchants by providing them with a tablet point-of-sale (POS) system, aimed at small- and medium-sized retail outlets, called Gnome (pronounced “Genome”), in addition to Breadcrumb, a POS system aimed at high-end restaurants. Of course, all this data it’s collecting from merchants on consumer behaviour will feed back to its own customer-relationship management systems. This in turn will assist with the group’s aim to build customised deals for consumers.”

Till later in the week. Onwards.