A blog on eCommerce, Social Commerce, Comparative Shopping Engines & Business

By Hendrik Laubscher

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The 10 e-commerce stories for the week ending 8 March 2013

Cobone acquired by Tiger Global Management, Google selling cars?, Hybris raises money and much more

I missed writing last week’s summary and boy this week has been full of news. Google is rumored to be building a Amazon Prime competitor. I find this interesting, how does it fit into the commerce value chain at Google? (at the moment this seems like a program to be run on top of Google Shopping? ). Secondly, it raises a very interesting question – if I am a merchant why would I take part in this program? Amazon Prime is the world’s greatest loyalty program and it is very successful for Amazon’s customers. The mere fact that Bezos keeps the user numbers secret tells you of the importance. Google has a serious disconnect with “Google Shopping Express” and needs to ensure that it compliments its services or it will go nowhere.

Are we beginning to see the building blocks for a marketplace from Google? Maybe, but Google has bigger problems to worry over – vertical search as seen with apps is cannibalizing its advertising business(the goose that lays the golden eggs for Larry and co), Android has lost ground in comparison to iOS for the last 2 months and Motorola seems to be having less staff every month.

I am going to say it as it has been on my mind for the last few weeks – anybody that wants to directly compete with Amazon needs lots of cash, patience and has to be 4 steps ahead of Bezos. No one has won when going head to head with Amazon.com (only when using the courts have Amazon lost) – they are the kings of margins and closing down industries. Google must be real sure that they want to go head to head with Amazon. I have seen what they do to companies – it aint pretty.

A few weeks ago I wrote about a potential IPO for Hybris software. Well, in the last few days they have announced a new round of funding by some serious investors. Meritech’s additional investing is interesting as they are a late stage fund and I think it signals that this investment is primarily done for growth. Let us be honest for a moment, enterprise commerce solutions is at the moment an open market. Oracle has spent billions on acquisitions, eBay has a interest via GSI Commerce and IBM has also spent millions on acquisitions to ensure that they have a total solution for merchants. Hybris is in my opinion a company to watch and I have a feeling that they will target specific functionality to add to their current offering. The IPO will come as they will need to raise money to challenge Oracle ATG in the enterprise commerce platform industry.

Africa and the Middle East are regions that I look at closely. Ecommerce in both regions are it is infancy but the investors are all here spending millions to ensure that they have a business/es to cater for customers in both regions. The Middle East has seen an influx of investment (LivingSocial etc) and then saw those same investors move out of the markets. It is almost like the ecosystem lost momentum which ensured business closures, investors leaving etc. Cobone is a early market leader who received funding from LivingSocial (whom are also under some pressure) and then lost the investor due to LivingSocial leaving the region. Earlier today, it was announced that Tiger Global has acquired Cobone with original investor Jabbar Internet Group exiting the investment. I note that  Tiger Global Management is investing heavily in Africa and MENA – it almost looks like a consolidation of holdings has been happening over the last 6 months.

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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.

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The big battle for ecommerce domination

It is the month of February and  Q4 seems like a lifetime away. I am beginning to see one story develop in more detail as time goes by. Ecommerce in North America is becoming a battle between Amazon and Google. It is Jeff Bezos vs Larry Page, the State of Washington vs California and it all boils down to owning the commerce vertical online.

Background

Regular readers will be aware that I believe that Amazon is the gold standard for ecommerce. Their value proposition is attractive for customers and they control the entire ecommerce value chain when a customer acquires a product from them. The only thing that Amazon does not have a 100% control over is logistics, the final step to getting the product into the hands of the customer. I believe that Amazon is solving that problem by coming closer to their customer’s location through fulfillment centre’s.

Google on the other hand is a technology company not really sure what it’s core offering is. It is a media company (via Adwords, Product Listing Ads), a lobbying behemoth (they spent $18 million dollars in Washington, as seen in the graph below), a mobile operating system company (via Android and Motorola Mobility), provide analytics and software for business (Google apps). It is becoming clear that they have ambitions for retail which makes sense. Increasingly it is being shown that they also want to be part of ecommerce.

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The 10 e-commerce stories for the week ending 15 February 2013

Google shutters commerce search and wants do retail, eBay not keen on the new The Marketplace Fairness Act and ecommerce news from Africa, France and Russia

We have gone past the middle of February and this past week was a historic one. It flew below the radar but Amazon this week got the wheels moving on their “tax problem”.  Most ecommerce businesses fear 2 businesses – Google and Amazon (outside North America, Rocket Internet is added to the conversation) and both have a considerable say in what happens in ecommerce. I  believe Jeff Bezos is a master negotiator and many people have said that tax collection was going to become a problem for Amazon.com. However, if you are skating where the puck going is to be then this supposed liability becomes a huge asset. Let me explain.

Amazon has had the advantage of not collecting sales tax in a large part of the company’s history. That tax was never collected as Amazon found ways to ensure that they pay the lowest taxes to ensure their sustainability. Needless to say, that tax money was never collected but that was given to users when they bought via the Internet. Wait what? The money was never given to the user but the fact that Amazon was cheaper than retailers or competitors was and is in some cases a competitive advantage. This is one of the big pillars of the Bezos mantra and something that most business executives don’t understand (the only person that does was Sam Walton). Lower prices is a huge asset for any retail business and Bezos has ensured that his company is seen as being pro-consumer. Low prices and a great experience is one of the big things that drives Amazon. In the last few years tax collection has become something that many thought would cripple Amazon, yet it is becoming increasingly clear that it is becoming asset.Why?

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PriceMachine shows Wize Commerce’s future

About a year ago, I found a company based on West Coast that had strong connections with Comparison Shopping Engines (CSE). I researched and read everything I could about Wize Commerce and was left confused.

I have been keeping an eye on the Comparison Shopping environment in the US as Google continues to circle around the industry.  I am going to say it as I don’t think anyone else will, I fear for the industry in the US and believe now more than ever that 2013 is a make or break year. Google and Amazon are slowly taking developed markets under their control. Google Shopping, Product Listing Ads, Amazon.com and Amazon product ads are all taking clicks and eyeballs away from Shopzilla, Nextag, PriceGrabber, TheFind, Pronto, Shopping.com and Bing.  Shopping.com and Bing is in a different situation as they are part of an ecosystem for their respective owners (eBay and Microsoft) and have in my mind less pressure to be profitable.

Jeffrey Katz is one of the most vocal CSE President’s and he has not flinched in calling Google out on their operations on Google Product Search. I noted that when Google Shopping came around he has started to talk more on general ecommerce trends. I am not going to debate Google’s impact on ecommerce or Comparison Shopping as that is another long form post in itself.

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