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

By Hendrik Laubscher

Search Results for: "Amazon"

Rocket Internet to IPO?

Earlier today I read Thomas Baldwin’s post on Rocket Internet preparing to go public and I must say it is at the moment a rumor. What is the ramifications if they do go public?

Preface

The last 18 months – I have been reading and observing a German accelerator going through the gears and starting businesses faster than I have ever seen any company do. They are a controversial topic and have 3 brothers that are the commanders in chief of this business.

They are not everyone’s cup of tea nor are they without any controversy. Blitzkrieg and all of the other things that have gone into the public domain makes going public a interesting move, if true for Rocket Internet.

Driven by success

The Samwers are some very clever business people and what they have achieved should not be discredited. They have started a lot of businesses, hired a lot of staff, closed businesses and retrenched staff on a scale I have never seen. They are obsessed with execution and ROI. Whatever they do it is with one thing in mind – success.

I am not going to debate their way of operation. They do take ideas from first world markets (Amazon, Zappos, IKEA, Square and Groupon) and then create businesses based on these concepts in emerging markets. Call it cloning, copying or whatever it is, it has made them handsome returns. The results seems to be good for their investors which is the prime focus for a startup accelerator. Ultimately, it boils down to culture and personal beliefs. You either like it or hate it. There is no in the middle with the way in which Rocket Internet operates.

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African ecommerce – 2014 year in review

2014 was a very interesting year for ecommerce on the African continent. There was acquisitions, mergers and overall lots of movement. Lets be honest for a moment – African ecommerce is not on the front pages of TechCrunch or on the radar of most investors. It is a long term ecosystem filled with the challenges such as logistics, low credit card penetration and most importantly customer distrust. When I wrote my year in review post, I wrote on regions which got lots of media coverage in 2014.

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Sync Everything with Skubana

When I think of e-commerce, there are essentially two parts to it. The first is the lovely and beautiful UX of product pages and shopping carts that buyers use to purchase items from online retailers. The second is the tremendous amount of systems behind this UX that ensure the buyers actually receive the products they order.

And it is this backend infrastructure that is the major pain point for e-commerce sellers today. Just think of all that sellers can (and usually must) do to fulfill orders and run their business.

  1. Channel Integration – most e-commerce retailers sell on multiple sales channels (Amazon, eBay, Magento, Shopify, etc.), which means they need tools to communicate with those channels.
  2. Order Processing – whether shipping orders from their own warehouse, outsourcing fulfillment to a 3PL center, or drop shipping products directly from their vendors, sellers must rely on a myriad of software platforms to deliver their products to customers.
  3. Inventory Management – as orders come in, products leave the warehouse, and the challenge of synchronizing inventory across all channels becomes a huge headache because none of the channels communicate with each other.
  4. Purchasing – as soon as sellers start running low on inventory, they rely on purchase orders to their vendors to replenish stock.
  5. Accounting and Analytics – e-commerce is a tremendously competitive space, and unless a seller can keep track of their expenses and analyze sales data, they will likely get outperformed by the competition.

If the list above sounds complicated, it’s because it is. There are 5 million (and growing) small and medium e-commerce sellers in the U.S. alone that currently struggle to process their orders and manage inventory because they have to piece together a hodgepodge of software solutions to run their business. These are serious pain points that cause sellers to lose thousands of dollars each year due to overselling and being under-stocked.

One of those sellers is Chad Rubin, a very successful owner of the e-commerce company CrucialVacuum. While I was in the U.S. in October I caught up with Chad, and to my surprise found out that he might have the answer to the woes that plague e-commerce sellers today. The name is Skubana, and it is Chad’s latest and without a doubt greatest endeavor: the world’s first and only all-in-one cloud e-commerce backend platform.

To create such a revolutionary product, Chad knew he had to team up with the right technical resources.

Enter D.J. Kunovac, an enterprise architect and engineer who previously developed software for hospital networks while working for McKesson, the largest healthcare company in the world. The two have teamed up to create something no one has dared to try so far in the e-commerce world: an e-commerce unification platform.

And after seeing the platform in action, I believe that this is a potential game changer.

Skubana is based in New York and a stone’s throw away from where Quidsi was operating from. Currently Skubana is only focused on the U.S. market and is at the moment doing a private beta with select merchants.

You can sign up here: http://www.skubana.com/signup

Skubana has, in my opinion, the ability to democratize a part of the commerce industry that is not big enough for enterprise software, but is too complex for out-of-the-box solutions. They launch in the Spring of 2015, and the world of e-commerce may never be the same again. Stay tuned.

Disclosure: I received no payment for this post nor have any business interest in Skubana. Chad is someone whom I respect and his business is a part of ecommerce that no platform is looking at. This post is my opinion about a platform that I think can change a lot of things for business owners.

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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Is ecommerce a social event?

Social
noun: social; plural noun: socials

The last few months has provided me with a question that I have been thinking about – “Is ecommerce a social event?”.  As an ecommerce executive when planning is done for new features, the social aspect of shopping will get a mention. However – I feel that referral marketing is being seen as social commerce. Share a product via a facebook post, a tweet or an Instagram post. In some cases it will lead to a discussion on the respective product but it will not lead to a discussion over a possible sale..

Social commerce is a subset of electronic commerce that involves social media, online media that supports social interaction, and user contributions to assist online buying and selling of products and services. More succinctly, social commerce is the use of social network(s) in the context of e-commerce transactions. (Wikipedia)

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Is fab.com really that fab?

Fab.com has been on my mind the last few weeks as I wanted to have an indepth look at the company after I wrote about the refocus in May 2013. I don’t know whether I got bitten by all the hype but the fab.com story is beginning to feel like never ending story. At the momment the fab’s story goes like this:

Raise funding – Unveil a new feature – do Press ->  lay-off staff  – do press on the future of the company and then restart the process.

Pre-face

Fab.com is a business that started as a gay social network. Went nowhere and then pivoted to a flash sales business. Many iterations later and $300 plus million raised fab.com is now in a critical phase of its lifecycle. Why? The fact that they have raised hundreds of millions of dollars from investors (like Andreessen Horowitz) and for all intensive purposes have not a lot to show for it. Thus it will make raising money in future more difficult. What happened to all the raised money?

Acquisitions

Fab.com has been in my own opinion way too aggressive regarding acquisitions. They have acquired competitors in Europe over concerns that a investment accelerator called Rocket Internet may hinder their growth in Europe.  The businesses they acquired:

January 2012 – FashionStake (US)
February 2012 – Casacanda (Germany)
June 2012 – Llustre (UK)
November 2012 – True Sparrow (India)
May 2013 – MassivKonzept  (Germany)

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The Predictive Theory on Rocket Internet

E-commerce in emerging markets is one of the keys to commerce maturation that will be seen globally in the next 10 years. The fastest growing ecommerce markets are not saturated like what is seen in the UK, US or South Korea. Thus investors such as Naspers, Tiger Global Management and Rakuten are competing against one another in emerging markets as every business wants to ensure that they have their share of the long term returns that will be seen in these markets.

However an online venture builder and accelerator from Germany entered into this race about 18 months ago and have in a very short period of time created quite a few market changing moments across the globe.

I want to define what is an emerging market in my own mind before we continue with the fascinating race seen in emerging market ecommerce.

An emerging market is one that geographic area which is inhabited by customers whom have means to pay for products but are unsure of new technology to ensure a transaction occurs on the Internet between the customer and a commerce business. The markets also faces barriers for foreign businesses which deem the market to be heavy for investment thus the investment is taken to another country or region. Barriers are: credit card penetration, Internet connectivity and logistics to deliver the bought item to the user.

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The Ooh! Box – I Believe in Entrepreneurs

Let me start by saying that I believe we are at the tipping point for ecommerce in South Africa. A surge in ecommerce startups and growing user adoption of ecommerce (in all its shapes and sizes) leads me to believe that ecommerce is growing at a rapid pace.

Look local – the entrepreneurs are there
I spent an hour today with 2 entrepreneurs which after refelection makes me proud to one use their product and being able to spend time with them was something pretty amazing. Remember, doing a startup is not a designers jacket or a label but rather a battle. Everyday contains a million things that can go wrong and you are constantly focusing on making sure the wheels continue to turn. Having spent 2 years in the trenches with 2 entrepreneurs I can tell you it is not glamorous at all. In actual fact, I look back at 2 years as life education and no one can take that away from me. (Thanks Kevin and Onno, you made an impact and changed my life).

Lets be honest, starting any businesses is tough but an ecommerce subscription business in South Africa is a challenge fit for a team (minimum of 10 skilled individuals in my opinion) with considerable funding. There are more challenges facing these businesses; Smaller adoption rates, logistics and main stream ecommerce taking away users’ buying potential.

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The real reasons behind Rakuten’s Viber purchase

Rakuten, the Japanese ecommerce giant has done it again. They have bought another company that has raised alot of questions about their merger and acquisition strategy. Viber, the messaging company that uses wireless internet to do phone call is now a Rakuten company.

The issue with Rakuten for me is that they have little or no strategy on acquisitions in comparison to their direct competitors like Amazon, Alibaba and eBay. The company seems to be moving away from being a commerce based business to being a media distribution company. Their recent acquisitions: Wuaki.tv (streaming movies), Pinterest (crowd sourced curated content), Kobo (eReader) are all not really commerce related but bolt on acquisitions for a company that does commerce.

Purpose of acquisition

Viber is a messaging and VoIP service operator and has approximately 280 million global registered users, and monthly active users over 100 million. Viber apps on smartphones allow users to have conversations, and through its high quality functions users can send and receive messages and images, thus Viber offers a hybrid range of services rarely found on competing platforms. Viber is rapidly growing numbers of users, especially in emerging countries.

The Company decided to acquire Viber to strengthen its global platform through the use of Viber’s range of customers in the Company’s E-Commerce and digital contents services.

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The 10 e-commerce stories that got my attention this past week

It feels like yesterday, that the change to Google Product Search was announced. Yet, the story continues to make it into my RSS reading (it will most probably continue). I have been deliberately not speaking about in depth as I want to properly write about it. Anyway, this week was dominated by eCommerce in the Middle East and Africa, Google Product Search and Russian eCommerce. Also IRCE 2012, has been added to events that I would like to attend as content coming from the conference is of excellent quality.

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The 10 e-commerce stories that got my attention this past week

The past week has been an interesting one. If I ever win the lottery I have one event that I would like to do. Create an event in which 3 speakers of my choice come and speak to me and a select of individuals. Preferably the event should be held in US to ensure that the speakers make it. The 3 speakers are individuals whom I respect but also would love to have an audience with. So who is the three: Jeff Bezos, Marc Andreessen and Mary Meeker.

Mary Meeker provides some of the best presentations that are publicly available for anyone related to the business of the Internet. There is one other analyst whom I respect, Imran Khan but ever since he joined Credit Suisse it seems he has gone very quiet. (Can someone  please make something similar to “Nothing But Net” as that PDF provided information which was relevant for the entire year…). The changes of this event taking place are small but it is a dream…

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Daily group buying 2.0

The last few weeks have seen a fair amount of content on the future of the group buying ecosystem. I believe that the daily group buying model is starting or has started evolving. Call it daily group buying 2.0, but more on that in a bit.

The deal fatigue that users are experiencing in mature markets have been widely reported. It indicates that the buzz is dying as the users are no longer buying the deals.  The industry having low barriers to entry is ensuring that new companies enter the space on a daily basis (it is a bit of a vicious cycle).  It all boils down to deal quality and the providers ability to create an experience that will accelerate impulse buying. The group buying concept in its simplest form is “impulse buying with a credit card on the Internet” .

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Larry & the ‘new’ Google

“Great power involves great responsibility”
― Franklin D. Roosevelt

Google is arguably the single biggest part of the Internet but things are beginning to happen at their Mountain View offices that have me concerned. Very concerned actually. You know that feeling when you start seeing a story evolve that you have already read and seen before? I have, so let me explain.

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Flipkart is an outlier

Outlier – “a person or thing differing from all other members of a particular group or set.”

 

A week ago ZDNet broke the news that Flipkart was removing its mobile website and requiring users to use their apps to make purchases. The news actually started 2 weeks ago when Myntra (Flipkart’s first acquisition) announced that they and Flipkart would be turning off their mobile websites.

There are a few things that need to be mentioned before we delve into this decision. Flipkart is an outlier and to be quite honest unlike anything I have seen in ecommerce. They have raised an enormous amount of funding from a lot of investors. To be precise they have raised  $2.5 Billion in 11 rounds from 16 investors.

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