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

By Hendrik Laubscher

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Rocket Internet sells, Wayfair to IPO – eCommerce news of the week

Readers, since my last post a lot of things have happened. It clearly is the last 6 months of the year as news keeps breaking, Amazon launches new product after new product, Alibaba is still to IPO etc. Over the last 2 weeks, 2 companies have been on my mind: Rocket Internet and Wayfair. Both are in the process of raising funding and both operate in 2 verticals that are not dominated by Amazon.

Wayfair in my mind is an example of 2 founders that understood the market and benefits of having a central business before anyone else did. Let us be honest, Wayfair started as a collection of niche ecommerce businesses that consolidated into CSN Stores and then into what we all know as Wayfair. Think about this – in 2011 when this company announced that they did a $1 billion in total sales I remember seeing a lot of posts about “who is this company”.  Well fast forward 3 years and we have the IPO of a Boston behemoth that is going to be a big vertical business that will make things difficult for Amazon, eBay, Etsy and One Kings Lane. What is interesting to note is how little VC investment they have taken as well as how much control the founders have.  I think their IPO will be a success (In ecommerce terms they will be known as the company that IPO’d before Alibaba).

Well, what can I say about Rocket Internet. They are one of the few companies that I know of that is able to add $1 billion to their valuation inside 7 days. Clearly something is going on at the German incubator as they have sold 20% of their business to 2 investors. First they sell 10% to the Philippines Long Distance Telephone (PLDT) company which valued the business at $4.5 billion. In less than 7 days they sold an additional 10% to United Internet from Germany at a valuation of $5.7 billion. Just when we all thought the selling off of parts of Rocket Internet companies were complete, they announce a consolidation of shares with existing shareholder (Holtzbrick Ventures) which leads to Holtzbrick Ventures owning 2.5% of Rocket Internet. Are we going to see the much anticipated Rocket Internet IPO?

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Alibaba & Amazon comparison; Amazon, eBay, and Wal-Mart are the big 3 in mobile, Meet Vipshop – eCommerce Stories Of The Week

Alibaba & Amazon comparison, Amazon, eBay, and Wal-Mart are the big 3 in mobile commerce, Meet Vipshop  and much more

It is Black Friday today in the US and having a look around the globe this marketing driven event is clearly now part of global ecommerce. Merchants worldwide have decided to latch on to the day in which buy, buy and more buy is the goal for shoppers. Walmart had major performance issues which lead to unhappy customers and in Nigeria, Konga was surprised by all the shoppers accessing their sales. I am going to be tackling this topic in the coming weeks as I believe the phenomenon could also be adversely effecting ecommerce businesses..

The Alibaba and Amazon comparisons have begun. I can honestly say that I think it will only be gaining more momentum as when Alibaba goes public I think the Yangtze crocodile will be swimming into North America. Let me state that I believe global commerce is in for a massive shake-up as Alibaba with capital is going to be a disruptor. Amazon has clearly accelerated their investment into logistics and one has to wonder if that was to counter the possible entry of Alibaba in North America? Alibaba has scale and they can directly compete with Amazon..

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Rakuten announces $100M fund and the PayPal mafia – eCommerce stories of the week

The week contained stories in which ecommerce companies are looking for future business success (Rakuten) and a look into the success of PayPal prior to their acquisition by eBay. Rakuten seems to be going more horizontal and after a serious streak of acquisitions they seem to be looking at something akin to what Google is doing with Google Ventures. Rakuten is a multi-national technology company that has ecommerce in their stable of companies. Hiroshi Mikitani made the majority of his wealth with ecommerce in Japan but has steadily diversified with payments, marketing services, regional ecommerce businesses and now with this $100M investment fund. I think one just needs to look at what  Jeff Bezos and Jack Ma have done with regards to investing in startups to realise that this is somewhat normal.

PayPal seems to be having a year of spotlight; first from Carl Icahn and then their CEO leaves and they are clearly in a spot of bother. eBay is going to have to make some decisions regarding PayPal in the next 18 months and what I find really interesting is that none of the founders is trying to make a case for them to stick with eBay. PayPal was a catalyst for the mobile payments industry and the sad reality is that they have became a victim of their initial success. They have bought a lot of mobile payments companies but it still seems to me that they have a cultural problem. Compare the current state of PayPal with that of new kids on the block Stripe and Klarna (they are in combination what PayPal is currently). It is clear that the newer companies are growing faster and in the long term  could become competitors for PayPal.

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The select eCommerce crowd

I have a confession to make. After I started my current job, I started to look for the important people in eCommerce to follow. You know the type, the individuals who play an important role in shaping the market/ environment thorough their expertise. When they speak at conferences or are featured in magazine articles the information become gospel. If they speak then the market listens. I have looked high and low and have found nothing, nada that is helpful. So I decided to make a list.

The people I respect due to their work and thoughts are the following (in the coming weeks, each one will get a post with further explanation as to why they are here)

  • Jeff Bezos – Founder, president, Chief Executive Officer (CEO), and chairman of the board of Amazon.com.
  • Sam Walton –  Founder  Wal-Mart and Sam’s Club
  • Jack Abraham – Director of Local @ eBay & Founder of Milo.com.
  • Romero Rodrigues – Founder and president of BuscaPé
  • Tara Hunt – CEO, Buyosphere
  • Tony Hsieh – CEO, Zappos.com
  • Jack Ma – CEO, Alibaba

This list is not in any rank or order as that would complicate the matter even further..

Update: I forgot to add Jack Ma from Alibaba to the list

What is in a name?

I have been thinking, and it seems that I have missed a detail. Not my style or how I operate daily. I made a decision a year ago and assumed that I would one day explain it. The time has come for a brief description of my domain name.

So the obvious one would be hendriklaubscher.com right? I thought about it and in general the personal domain thing is a bit too in your face for me. So after some research I decided on haimrich.com. It is the founding definition of my name, Hendrik. Just to be clear, it is not “ha im rich” which has been mentioned in various discussions. I hope this settles the naming of this domain.

Think about it, naming of companies are difficult. Get it right and your customers can remember your name. Get it wrong and you are just another ecommerce website.

The key differences between Google Product Shopping and other CSE’s?

An ominous “warning” from Google to other Comparison Shopping Engines.

Q: From a retailer’s perspective, what are the key differences between Google Product Shopping and other CSE’s out there? How should I allocate my CSE budget?
A: The main difference between Google Product Search and other comparison shopping engines is that Google gets the most traffic and spends the most money on their engine.  If your budget allows you to be on only one engine, it should be Google Shopping. However, it’s better to be on a variety of other engines because they can all be profitable with the right datafeed management.  If you are able and budgeted to expand and are willing to spend the time to manage them all, you should enlist on other CSE’s, notably the Big Four: Nextag, Shopzilla, Shopping, and Pricegrabber. Luckily, you can refer to lucrative channels on our quarterly rankings of big CSE’s.

The high level of traffic is the product of providing a service for free.  Spending the most money on the CSE is a very interesting tidbit from Google. I am aware that they have acquired Like.com, moved all the technology from boutiques.com to Google Product Search. Then they also acquired Sparkbuy which was a very good recommendation engine and British financial comparison service BeatThatQuote.

So Google Product Search at the moment = Like.com + Sparkbuy + BeatThatQuote + Google technology

I can most probably also add the ITA acquisition as well as that has to do with flight comparison technology. It is pretty clear to me that the changes in progress to Google Product Search will have a large set of implications for  Google.

I am of the belief that online retailers should list with all comparison shopping engines and then determine for themselves which CSE converts the best. Trying to list with just one comparison engine (if it is not the most dominant one in a particular region) is a bad idea. Your conversions should make the decisions not the talk from the account or product manager from a particular Comparison Shopping Engine.

Disclaimer: I have issues with how Google operate.

Best Buy Launches Its Own Marketplace

The Marketplace concept is one that both intrigues me but it also scares the living daylights out of me. Call it an oxymoron but its greatest strength could be it biggest challenge. Let me explain.

So yesterday when Best Buy announced that is adding a marketplace to its offering..  The first problem that this creates for me is that this is not a unique offering. There are many other online retailers that does it and while it provides additional content to your offering for the long tail it may cause harm.

Best Buy is following Amazon.com, eBay, Mastercard, Sears, Walmart and others in opening an online marketplace that gives consumers access to products from other merchants in addition to its own. According to a Financial Times report, Best Buy is responding to the development of its unintended role as “Amazon’s showroom”, the situation where consumers visit the chain’s stores with smartphones to comparison shop and eventually make their purchases online. CEO Brian Dunn, in a statement, called the Best Buy Marketplace “a key development to our multi-channel platform … that enables consumers to shop how they want and encourages additional reasons to visit and purchase at BestBuy.com.” ANT Online, BeachAudio.com, Buy.com, Mambate, SF Planet and Wayfair are third-party sellers that are participating in the launch of the Best Buy Marketplace.

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The 10 e-commerce stories for the week ending 17 August 2012

Rocket Internet pruning their investments, LivingSocial to pull out of the Middle East and become.com redesigns.

The e-commerce stories for the past week is dominated by Rocket Internet. The German clone factory raised additional capital for its European fashion company Zalando. They added J.P. Morgan Asset Management and Quadrant Capital Advisors as its newest backers and I believe Zalando will over time become more important for the Rocket Group… It seems from the outside that something is going on at Rocket Internet. More on that later.

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The return of the giant called eBay

When I see the words eBay in my mind the first thought that comes to mind is the marketplace concept in which users can list their second hand goods in either a “buy-now” or auction environment.  It was the element that placed eBay on the map and subsequently provided a launch pad for them to raise capital to buy shopping.com (comparison shopping engine), paypal.com (payment gateway) and stubhub.com (live event ticketing platform).

Many people are not aware that eBay is also in the classifieds space through their Kijiji group who have the popular South African classified provider Gumtree in their stable. The point that I am trying to make is that they have a multi-channel platform to capitalise on the entire eCommerce value chain.

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The 10 ecommerce stories for the week of 06 September 2013

Amazon powers ebook market in Japan, Rakuten acquires Viki, eBay acquires decide.com and much more..

I have had a busy September thus far – travelled to an undisclosed location, thinking about some ecommerce related posts and digesting all the ecommerce news that is hitting my inbox and RSS feeds. Thus you are not seeing things – I am writing catch-up posts that should have been written earlier in September.

Rakuten must feel like they can’t win. They are the dominant ecommerce business in Japan and they have expanded to other markets (UK, Germany and Brazil) but in most cases they end up against one business Amazon.com. Amazon has also not been shy in competing in Rakuten’s backyard and cleaning out certain verticals. I must confess I read Marketplace 3.0 written by the CEO of Rakuten and am left unsure whether Rakuten has the foresight to be able to compete against Amazon, Alibaba and others. Rakuten has also bought business to equip itself against competitors (Kobo etc) but in the greater scheme of things are these businesses scalable to compete against the heavyweights?

Rakuten acquired Viki which can be seen as an entry into the streaming of digital content and also will play a great role in validating Singapore’s startup community. I have a feeling we are going to be seeing a lot more startups being acquired out of Singapore.

On a sad note – one of my favorite ecommerce businesses will be shutting down at the end of September. Decide.com has been acquired by eBay and will be used in the seller side of the marketplace. I cant help but notice the irony in eBay acquiring a Seattle company to beef up its marketplace business. Decide.com I believe is going to be seen as a mark in the sand as I don’t think this is the last time we will see machine learning and data orientated ecommerce startups flying below the radar. eBay is essentially doing a acquihire of some of the smartest people in ecommerce. eBay will need to ensure that they leverage the decide.com IP as they will add massive value to eBay sellers tools in order to price better etc.

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Amazon acquires GoPago, MTN enters the commerce race and eBay wants to help retailers – eCommerce news of the week

Amazon acquires GoPago, MTN enters the commerce race, eBay wants to help retailers, Social Network Odnoklassniki Shuts Down E-commerce Marketplace, Alibaba to enter Brazil and much more

It is the second last week of 2013 and on reflection it has been a massive year for ecommerce. Amazon continued to show the lead for all ecommerce but in 2014 will be facing a new competitor indirectly, Alibaba. If I can summarize 2013 into a few thoughts – the globalisation of ecommerce. The ecommerce industry saw significant growth in all markets (Africa, Asia, Europe and both North and South America) and it will continue to grow more speedily in certain markets in 2014.

If I look at the stories of the last week then Amazon acquiring the GoPago technology is one that raises a few questions. It literally is all about the technology and the details from Seattle has been sketchy on this acquisition. I think it is interesting that Amazon will acquire a business only for its technology and then not be able to retain the founder of the business. It is supposedly for an ambitious project – and if I guess it has something to do with collection of bought items.

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@WalmartLabs – The big retailer moves into digital

Walmart is the biggest retailer in the world and arguable the most controversial. Labor disputes and being in the news not for financial results seems to happen fairly often.

Wal-Mart Stores, Inc., (NYSE: WMT) serves customers and members more than 200 million times per week at more than 9,600 retail units under 69 different banners in 28 countries. With fiscal year 2011 sales of $419 billion, Walmart employs more than two million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity.

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Great Resources For Learning About Startups & Technology

The last few weeks I have found some really nice sources for information on technology in South Africa and startups. Startups are an interest of mine and on the Bloomberg channel (channel 411) on DStv there is a show dedicated to it. The show is hosted by Cris Valerio and she travels all over the world to report on start-ups and challenges they face. I have noticed that on her show, her guests are more willing to communicate on certain issues than on blogs. Venture is shown on Saturdays and Sundays in South Africa.

Bloomberg describes “Venture gives viewers an inside look at what it takes to be a successful entrepreneur. The weekly half-hour program, hosted by Cris Valerio, will feature interviews with entrepreneurs and small business owners, focusing on issues and policy that impacts the way Main Street does business.”

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eBay acquires Shutl, same old Amazon seen in quarterly results, Fab redesigns – Ecommerce stories of the week

eBay acquires Shutl and is subject to an investigation, same old Amazon seen in quarterly results, Fab redesigns and much more.

It was a bumper news week for the ecommerce industry. Amazon announced a second quarter in which they made a loss but their stock price increased. I have been thinking about Amazon.com in some detail and think these quarterly results is only giving the world a partial look at the Seattle based business. Amazon has increased their free shipping amount for the first time in 10 years to $35 and then in the analyst call mentioned that “millions of Prime members were added in the last quarter.” Coincidence? I think not.

Google is increasingly using maps and local to compete with Amazon. For me the hypocrisy seen in the last few weeks regarding Hummingbird, Banner ads in Search and these new PLA managment campaigns are all designed to do one thing – make Google more money. I can honestly say – Google is no saint but their “we care about our users” line can be kept in Mountain view meetings. Anyone notice that since Marissa Mayer left all the things she stood for has been changed.

Alibaba has not yet decided where they want to do their IPO. First it was Hong Kong, then New York and now Hong Kong is seemingly back in the good books of Alibaba management. The bigger story is that Alibaba has unveiled an investment group that will be seen in the US. I personally think Alibaba is going to hard into the US. Why? Jack Ma wants to show Amazon, eBay and other that his company is the most powerful ecommerce business in the world. He will invest in startups like ShopRunner, Fanatics and others. Alibaba will be able to invest a few billion if they want to.

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The 10 e-commerce stories for the week ending 22 March 2013

The Samwers launches a new fund, Price Comparison gets hot in South East Asia, Walmart gives us a glimpse into the future and more.

Is Rocket Internet going to be around in 5 years time? That is the question I have had on my mind for the last few weeks. Internet businesses is a funny thing, the movement in the markets can mean that irrelevance happens quickly. Groupon is a great example of this.

Thus the news that Manuel Koser is moving away from being MD of Zando is indicative of an entrepreneur who is moving on to a new venture and not one being sidestepped by investors. Rocket Internet has a recipe that works and their staff are some of the most efficient individuals I have met.

Emerging market ecommerce is a high stakes game full of risk, trust and lots of work. Will Rocket Internet IPO? As time goes on, I am leaning more towards one of their vehicles (Big Foot 1 or Big Foot 2) being made the investment opportunity.

Bigfoot I, in which Kinnevik owns 33%, was the first fund they launched and comprises
Dafiti (online shoes and fashion in Brazil), Lamoda (online shoes and fashion in Russia)
and Namshi (online shoes and fashion in the Middle East). These three companies are
built on the same platform and systems as Zalando, and Lamoda and Dafiti in particular
are performing very well. Dafiti currently has the best infrastructure and very high volumes while Lamoda has the best momentum. Bigfoot I is well funded but might need some
additional injection to fully progress with the expansion plans.

Bigfoot II, in which Kinnevik owns 34%, was the second fund they launched and
comprises The Iconic (online shoes and fashion in Australia), Zalora (online shoes and
fashion in South-East Asia) and Zando (online shoes and fashion in South Africa). This
fund is a little younger and might need some additional funding to progress with the
companies’ expansion plans.

The other story that dominated my thoughts was the sudden split between Rakuten and their joint venture partner in Indonesia. Rakuten has now done this on 2 occasions and everytime it has left a deal after 12 months. I think it is clear that Rakuten are slowly learning that joint ventures sometimes is not the best way to enter a market. Hiroshi Mikitani clearly wants a bigger slice of global ecommerce but they have to manage their market entrance strategy better.

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The 10 e-commerce stories for the week ending 11 January 2013

Foundem starts legal proceedings against Google in the UK, Bezos does not care about profit margins and 2012 was a good year for South African ecommerce

The first real  working week of 2013 is in the record books and the news from across the ecommerce globe confirms it. Legal issues is starting to make news again and it seems that the word “anti-competitive” is back in the lights. Google has been accused of being anti-competitive by UK vertical search engine Foundem. The European part of the Google ruling has not been done and may potentially not be like those seen with the FTC.

Secondly, the Bazaarvoice acquisition of Power Reviews may also be potentially create results that ensures that the acquistion ensures changes to the Reviews market in North America. I am not a lawyer but it seems anti competitive acquisitions by companies that have potentially have huge implications on a specific market or vertical always creates activity for the Department of Justice.

One other story that has really interesting implications is Rakuten’s decision to “retire” buy.com and rebrand the business to Rakuten Shopping. It is becoming clear that this is the strategy that Rakuten does. Acquire a business, rebrand it and then potentially change the business model. Marketplaces seems to be their business model of choice.

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The 10 ecommerce stories for the week ending 12 October 2012

Walmart testing same day delivery, eBay make big changes and Bezos finally tells the world the truth about the Kindle pricing strategy.

This past week has been a big one for ecommerce and was full of story lines but most importantly, it will be remembered as the week in which Walmart made steps toward same day delivery. Let us all agree on one thing, same day delivery is going to be a huge value add for whoever does it first.

What can I say about eBay? Well for starters they are a brave company. We are weeks away from the festive season and all that it brings with for ecommerce retailers. I am not sure whether eBay will ever be able to loose their marketplace mantra. Perception plays a huge role in ecommerce but eBay it seems are trying… Mobile first development is interesting but changing their interface and search functionality is all important but the timing is of concern for me. Surely, the changes should have been made individually over a period of time.

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The 10 ecommerce stories for the week ending 21 September 2012

Amazon vs Walmart – A heavyweight fight coming to an Internet connection soon, Naspers further invests in Indian ecommerce, An overview of opportunities in BRIC nations and some news in relation to South African ecommerce.

The week past was a busy one for me, but is one that I think signals a head on battle between 2 heavyweight retailers. Amazon vs Walmart was ratched up a notch with Walmart announcing that they will no longer be selling Kindles. Target was the first retailer to do this, but I wonder is this a defensive move or an offensive move on Walmart’s part?

Amazon also announced that they are shutting endless.com down, which  was their initial competitor for Zappos.. Well we know which one won in the end.

Let me be very clear on one thing. Ecommerce is a global activity done by millions of people, however the future of ecommerce is in developing companies. I am aware that this may seem ironic, but Africa, South East Asia and the Middle East is starting to gain more attention. The Middle East I think is going to be getting alot more attention from investors that are based in Turkey. If the market is expensive to get into, businesses start looking at other high growth markets to enter. I know this is obvious but high growth regions are no longer available in mass numbers. Africa is a long term play, it is going to need a lot of investment, but the right products will make investors very happy..

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The 10 ecommerce stories for the week ending 14 September 2012

Google vs Amazon, eBay changes their logo, Google goes ecommerce local in China and Alibaba claims that they are the world’s biggest ecommerce business in terms of value of sold items.

Phew, what a mouthful. The week has sped by but the above is only a smidgen of ecommerce news. Let me say this once, we are at the beginning stages of one of the biggest rivalries the world has seen. I can’t get the Google vs Amazon storyline out of my mind. The implications is huge and impacts the ecommerce industry and user wallets. We are going to be seeing a lot more of this. Secondly, I fear for flash sales and group buying companies. It seems the ship has sailed..

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The 10 e-commerce stories for the week ending 24 August 2012

JP Morgan invests in a Rocket, LivingSocial confirms exit of MENA, Turkish ecommerce delights and Kindle launches in India.

It is Q3 and it is obvious that global ecommerce companies are gearing for the end of 2012. Heck, the M&A activity is hot and happening. As an observer of ecommerce activity it is becoming ever increasingly visible that developing ecommerce markets is the new battleground for the big players. There is not one part in the value chain that has not seen a spike in activity.

This past week has raised serious questions on MENA for me. Egypt is rapidly becoming a battle field for companies looking to get first mover advantage. I thought when LivingSocial entered MENA via an acquisition that the market would become more mature in the coming 12 months. The news this week that LivingSocial is moving out of the market poses questions on just how viable the Middle East is.

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