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

By Hendrik Laubscher

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The 10 ecommerce stories for the week of 26 July 2013

Amazon earnings, Google retires it is mobile shopping apps, Bigcommerce raises capital, eBay takes Now to the desktop and much more.

The week that finished was full of ecommerce news. Needless to say it was dominated by Amazon’s earnings which missed. I am not too surprised as Bezos has been investor mode since early January. Content has been acquired aggressively and increasingly I think Amazon is playing defensively to ensure that Google has no impact on their future. Tom Szutak, provides the minimum amount of information on analyst or investor calls as Amazon ensures that no-one has an idea about their future.

Google on the other hand are also making their ecommerce play known. The rumored hangouts play called Helpouts is supposedly to use hangouts to facilitate a marketplace like experience. Surprising? Not at all, in actual fact this sounds alot like what Taobao does between sellers and customers. The question arises – how does Google facilitate transactions on this platform? I still don’t think we have seen Google’s commerce play but increasingly they are doing their bit to become a commerce player. I also think that commerce will be done the Google way.

The announcement that Google is shutting down their comparison apps is also not too surprising. Why? Think about it, what has Google been focusing on the last 12 months? Product Listing ads, which have a mobile product as well. Apps dont allow for these ads to show so Google is driving users to use mobile search to enable conversions to occur via the mobile product extensions.

We want to focus our efforts on Google Shopping and Google Search, to create a better, more consistent shopping experience across all devices. To help us focus on that goal, we’ll be shutting down the standalone Google Shopper app on August 30.
Going forward, you can search directly on Google (or use the Google Search app on mobile devices) or visit google.com/shopping in any browser. Our best features are there: you can compare prices, shop on the go, find a product in stock locally, check out product photos, read reviews or find product details.

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Amazon goes grocery shopping outside Seattle

Jeff Bezos must be the pied piper of commerce. His creation Amazon is slowly moving out of its traditional market (online) and disrupting retail. He clearly wants to ensure that Amazon can supply any product to any shopper in the US. (International focus is to intensify in the next 5 years in my opinion as current countries of operation become saturated)

The onslaught into retail and the high street started with the Amazon Price Check app. The idea was to enable shoppers to scan and compare products and then buy through Amazon at a discount.  In this specific case Bezos used the shopper as an intelligence network that would enable Amazon to create pricing data for retailer product.  It is telling that this happened in 2011 and if one looks back it was the beginning of their challenge to retailers in the US.

On Dec. 10, Amazon promoted a new “Price Check” mobile phone app by offering shoppers a 5% discount—valid only for that one day—on items they found in brick-and-mortar stores, but purchased online through Amazon instead. The app enables in-store shoppers to scan or snap a photo of a product. It then immediately compares prices with Amazon’s. The app is prompting an outcry from small retailers, who say the site is using their independent stores as its own showroom.

“The goal of the Price Check app is to make it as easy as possible for customers to access product information, pricing information, and customer reviews, just as they would on the Web, while shopping in a major retail chain store,” he said.

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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 23 November 2012

Black Friday stories, Tiger Direct consolidates, A virtual measuring tape, E-commerce industry insights from Turkey, India, South Africa and Brazil.

What a week, that is the first thing that I can think of when reflecting about the last 5 working days. Today is Black Friday in the United States and my inbox looks in pretty bad shape, the intensity of this years marketing by eretailers feels to have gone up a notch. Black Friday made in appearance in South Africa as eretailers try to get on the bandwagon (Expect a post on this topic in the coming days) of a phenomenal day for retail in the US.

Amazon this week did something I was expecting. It threw down the gauntlet to Google with a very clever concept called Amazon pages. It is a Pinterest like execution designed to draw more content around Amazon’s rubik’s cube. Bezos in my opinion never does anything for free and there is always a strategy around everything done by Amazon.com. The pages concept to me feels like a challenge to Google as this product will have content that is not found in the Google index. This topic is going to be one that is to be revisited as Amazon is in a mode I have never seen before. Bezos has been calculated and slowly making moves in publishing, advertising and technology; the difference is that this is being managed by Amazon with how much is shown to the world controlled by them.

E-commerce in developing nations is pretty close to home for me. I live in a developing economy, have it as my occupation and it is something I am pretty interested in. The next phase of ecommerce in my mind is a shift towards new battle grounds which will see the eBays, Amazons of the developed ecommerce markets going into regions where a Buscape, MercadoLibre, Alibaba, Flipkart, Souq, Trendyol or Ozon is found. In my mind platforms, resources and execution is going to be what determines who survives..

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Amazon launches the Kindle FireTV & Amazon Dash, Homeshop18 to IPO – eCommerce stories of the week

Flipkart and Mynta to merge?, Google licenses Room 77 software, Alibaba will impact e-tailing in the US, Online Fashion: A Venture Scale Opportunity That Silicon Valley Does Not Understand, Amazon launches the Kindle FireTV & Amazon Dash,  Homeshop18 to IPO , Amazon builds India business quietly, Fanatics announces Doug Mack as new CEO and much more

Last week was one of my favorite ecommerce weeks of the year. Amazon announced that they are to announce their results and Bezos’s typical shareholder letter contained a few nuggets. Let me say this, Amazon missed a huge marketing moment by not having Bezos unveil the new Kindle FireTV. If Amazon wants to play in the same ecosystems as Google, Alibaba and Apple then Bezos needs to be used more as a marketing angle. So where was Bezos, as seemingly not even Amazon staffers knew his location ( loved the New York times asking Bezos to call his office)? I suspect he was in Seattle ensuring that the AmazonDash launch goes without any hiccups, don’t tell me he was completing the ComiXology purchase, that was completed months ago by Jeff Blackburn (folks, trust me the Internet mergers and acquisitions space is one that is controlled by CEO’s, lawyers and secrecy).

Talking of mergers, in India the merger between Myntra and Flipkart is supposedly almost complete. India is clearly the current battle ground for ecommerce investors such as eBay, Amazon, Tiger Global, Naspers and Accel. The flipkart deal in my mind is another step in market consolidation in Indian ecommerce. Tiger Global and Accel got tired of doing investments in 2 companies that are battling eBay and Amazon. Rather invest into 1 powerhouse and move towards a point of market ownership. Flipkart, as much as their management will deny will buy businesses in verticals that they believe they are weak in.

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AmazonFresh to open in San Francisco, Amazon and Drones, Wayfair to hit $1 Billion after a massive year – eCommerce stories of the week

AmazonFresh to open in San FranciscoAmazon and Drones, Wayfair to hit $1 Billion after a massive year, Zalora raises more capital and much more

The week that contained Cyber Monday had a story that dominated the press for the entire week. Drones, drones and drone delivery by Amazon is the easiest summary after Jeff Bezos gave 60 Minutes an exclusive look at the future. It is clear that Bezos hit a nerve as Eric Schmidt said that drones must be banned. Funny how driver less cars are OK..eBay CEO John Donahoe called Amazon’s drone ambitions “long term fantasies”, funny how there is no mention of his own plan for shoppers to be delivery people..

The point is that Amazon is going to be pushing the envelope as they are willing to take risks. Lest we forget that Amazon already has an army of robots that will save them up to a billion dollars in warehouse inefficiencies. I would love to know how much free marketing this drone story got Amazon the evening before Cyber Monday.

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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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Should Amazon be doing more regarding Tax Nexus in the US?

Let me start off by saying that I am not an accountant nor a financial professional but I believe that there is a story that has been developing that can impede Amazon’s dominance in the US. Amazon is a hybrid marketplace in the US as it is both a retailer and allows third parties to sell to their customers to ensure that they can be the “Everything Store” that has virtual shopping isles that has an infinite length.  Amazon has inadvertently created a situation in which sellers are generating sales to States without them knowing the location of their products due to them using Fulfillment by Amazon (FBA). As Amazon moves products to warehouses all over continental US these sellers are generating Tax Nexus in States that could lead to an increase in tax to certain States.

Amazon has been seen by many and a certain leader as not paying tax and thus negatively impact retailers in the US. Amazon has started collecting taxes in most states to ensure that they can build logistics facilities closer to customers in various US States.

According to CNBC, after 1 April, the only states in which Amazon won’t collect taxes are Alaska, Delaware, Oregon, Montana and New Hampshire. These five states don’t have sales levies.

Map of US State Sales Tax Collection


Amazon has over the years made it clear that they are not responsible for the products that are sold on their marketplace nor are they required to enforce the collection of sales tax by third party sellers.


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Google and Product Search

I have been reading and thinking about the latest edition of the ecommerce cold war between Google and Amazon.

Google Inc. plans to push deeper into online commerce by enhancing its Google Shopping service with features that more directly challenge Amazon.com Inc.

Google has approached retailers about creating a “buy” button for its online shopping site that would be similar to Amazon’s popular “one-click ordering” feature, according to people familiar with the discussions.

It is becoming increasingly clear to me that Google has serious concerns over the ambitions and dominance of Amazon in product search.  Bill Gurley made a very interesting point in a recent interview on Bloomberg (video) where he said that Eric Schmidt said the following when asked about their biggest competitor:

If you are looking to buy something, perhaps a tent for camping, you might go to Google or Bing or Yahoo or Qwant, the new French search engine. But more likely you’ll go directly to Zalando or Amazon, where you can research models and prices, get reviews, and pay for your purchase all at once. Research by the Forrester group found that last year almost a third of people looking to buy something started on Amazon — that’s more than twice the number who went straight to Google.

For one thing, these companies are each others’ biggest competitors, because in tech competition isn’t always like-for-like. Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon. People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon. They are obviously more focused on the commerce side of the equation, but, at their roots, they are answering users’ questions and searches, just as we are.

The context is important here – Schmidt was talking to a European audience at a time when he was defending Google’s business to European legislators whom are currently looking at Antitrust cases for Google’s various businesses. The point is that Amazon was until this conversation never publicly mentioned as a search competitor for Google huge search index.

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Amazon launches the Fire phone, Alibaba provides more detail – eCommerce stories of the week

The week was one that featured a major story from Amazon and the realities and impact surrounding Alibaba became real. That is the summary of the past week. The Fire phone release was not unexpected but Amazon did cause some head scratching with costs of the device. I am writing a larger post of the Fire phone as the implications of it – is not to be underestimated.

Alibaba’s impact on Asian and global commerce is now in the public domain. The updated SEC filing contained a variety of details about Tmall and Taobao. Every ecommerce executive should take a look at the impact of this Chinese behemoth has had in its home market and consider the impact it can have on your market. The next set of questions relates to their IPO – how much money is Alibaba looking to raise? What are the strategic next steps for Alibaba?

Snapdeal seems to be starting the road to an IPO as well. The Indian marketplace is part of Indian ecommerce, which is a hotbed and a capital hungry industry at the moment. The Snapdeal story is one that is interesting – they started as a daily deals business which pivoted to a full price ecommerce business. The business has evolved into a marketplace and has also raised significant capital. The question that both Flipkart and Snapdeal raises for me – on what basis will investors be contributing to their potential IPO’s? Potential of the market, size of the opportunity or long term investment into a new emerging ecommerce market. This will be interesting to follow.

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Alibaba files for IPO, Alibaba future challenges – eCommerce stories of the week

Alibaba Files IPO in the U.S, Four problems that irritate Amazon, but threaten Alibaba’s existence, Apple is No. 2 after Amazon in online retail, Zulily’s Delivery Problem: the Packages Pile Up, Aramex Partners With InPost For Middle East Parcel Locker Network, Singapore’s GIC leads $170 mln investment in Brazil’s Netshoes and much more

It is finally here – Alibaba has started the process to go public and be listed in the US. They are clearly managing the process – they still have not indicated whether they will be listing on the NYSE or the Nasdaq. The initial document contains a few caveats and is indicating that only a billion dollars is to be raised (that is not the final number) and I suspect that the investment banks are fighting between themselves for position. Potentially there is a $400 million prize awaiting the successful investment bank /s that ensures a successful IPO for Alibaba. There is a lot of information in the initial documents but not a single mention is seen regarding Taobao and Tmall (which in my mind is a potential gold mine for investors). Alibaba also faces challenges that normal western businesses are not privy to. Everyone seems to think that mobile is their biggest challenge for the future but I disagree (that is another blogpost coming soon).

A story worth noting is the giant $170 million round of funding that Netshoes raised. Netshoes is a business that gets very little press coverage but it is a giant pure play ecommerce business in Latin America. “This investment round is the largest in the history of Netshoes. It happens at a time of relative economic instability in the country, which proves the fact that good companies with solid fundamentals remain able to attract the attention of blue chip investors“, says José Rogério Luiz, Vice President of Corporate Development for Netshoes.” I can’t help but think we are close to a bubble in terms of ecommerce investment.

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Rakuten to enter India, Google acquires Rangespan & Amazon working on computer chips – eCommerce stories of the week

Ozon raises $150M capital, Rakuten to enter India?, Google acquires Rangespan, Amazon working on a computer chips, Mobile users contribute 50% of Snapdeal’s sales, Rakuten Taiwan and Google join forces in e-commerce market, Looks Like Groupon Wants to Take on Costco (And Amazon Pantry, Too) and much more..

Rakuten is talking about entering the Indian ecommerce market. It seems that they are interested in entering the market via a travel business. The Japanese company has global ambitions but I cant help feeling that they are entering the market to late. Flipkart, Snapdeal and Amazon have pretty much sown up the market and entering the market for Rakuten this late will cost millions of Dollars. The travel market is also competitive and thus this concept is one that Rakuten already executes well in Japan. Time will tell what Rakuten wants to do in India but it will be spending lots of money by entering a very competitive landscape.

Groupon has also shown its hand with Groupon Basics. The daily deals business that grew at an astonishing rate has been pivoting over the last 12 months to a combination of local and now pure play ecommerce. The problem that Groupon will face with this vertical is selection. Currently they have a 100 products for sale and the competition (Costco, Amazon Pantry and Sam’s Club) has a much bigger selection. Can Groupon really afford the battle with these grocery behemoths? I think not..

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