Category: 10 stories that got my attention

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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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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Target sees product subscriptions as a big push to counter the ‘Amazon Effect’, Birchbox announces $60M Series B investment, Wal-Mart will turn the electronic receipt into a sales tool, Russians flocking to Taobao, Etsy buys Grand St, Amazon test it’s own logistics network and much more

This past week is one that influences ecommerce greatly. Amazon posted its Q1 results and has in the process finally come clean about one of their great challenges. Shipping/ logistics costs are becoming increasingly seen as a large balance sheet problem. Let me be clear – for any ecommerce business – the costs for shipping items to customers is a large challenge. From a business point of view – businesses can either put the shipping costs into the profit margins on products or pass the shipping costs on to the customers. Amazon has for years taken the costs through its Amazon Prime business but clearly the Seattle based business is looking for a way in which they can distribute some of that costs to other sellers (marketplace) or platforms (owning the last mile).

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High expectations for eBay to prove tech prowess,  Amazon Launches New Twist on Product Reviews, Pickie Acquired By Digital Coupon Giant RetailMeNot, Snapdeal Buys Product Discovery Portal Doozton, Why Alibaba Is a Big Deal, Zalora launches fashion marketplace in 3 countries, Czech e-commerce giant says Google ‘concessions’ would worsen conditions on local market, Alibaba to Offer Mobile Phone Service in China From June and much more

If you look closely at the stories above then you will notice that ecommerce has become a global business. The global business that in my opinion is getting closer to a major moment (The Alibaba IPO).  We are currently seeing IPO’s at an astonishing rate especially in ecommerce. I have been trying to not think about it, but does everything change when Alibaba becomes a public company? Think about the following – Alibaba was invested and bought at least 5 companies since January 2014. Earlier this week they also announced that from June they will become a mobile network in China (Amazon is an MVNO in the US) but as far as I know no other ecommerce business has gone down the MVNO (mobile virtual network operator). The similarities between Amazon and Alibaba are increasing.

Robin Lewis, whom I respect as a visionary in terms of retail, wrote an opinion piece on his own blog in which Amazon acquires Sears. Initially I thought this was a giant news story but after a few google searches I realised that Lewis was speculating on this acquisition. Why would Amazon spend billions on Sears? The only reason I can see is that Amazon will refactor the Sears retail shops into logistics centers. Bezos has had ample opportunity to invest into retailers such as Borders and more recently Barnes & Noble but I doubt if Amazon will spend the massive amounts of capital to purchase mountains of debt from a retailer which is under stress. Secondly, this is completely against the type of companies which Amazon buys (generally they are entrepreneurial, are small and have books or market leading capabilities in which Amazon has been unable to become market leader..).

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