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.

The 10 stories that caught my attention this past week:

1. 10 Stats You Should Know About E-Commerce in the Middle East – A very informative video on the state of ecommerce in the Middle East. The take away is that cash on delivery is the payment method of choice and also a barrier to growth in the region.
2. Wal-Mart outlines its e-commerce priorities – Walmart is making the right noises for their ecommerce efforts. However in my opinion they lack one thing – a feature that will drive their efforts and differentiate from their competitors.
3. If You Think 10% Is A Good Transaction Fee For Your Marketplace, Then It Will Struggle – Marketplaces are the rage at the moment in ecommerce which makes for proper planning from beginning. The one thing with the marketplace model that needs to be properly calculated is the revenue made from sales of merchandise. Personally, 12% per item is what would be the ideal starting point for revenue generation but this also needs to be tweaked for high ticket items etc.
4. Rakuten: The biggest e-commerce site you haven’t heard of – I find the personalisation of the Rakuten service interesting. They clearly want to be different than Amazon but still be a global player in ecommerce.
5. After Two Years, Dealdey Sees Significant Growth In Nigeria’s E-Commerce Sector – Dealdey might not be a household name but they have made a big impact in Nigerian ecommerce. Certainly an African ecommerce business making great strides.
6. Decide.com lands $8 million, names former drugstore.com CEO to board – Decide.com has raised some additional funding and interestingly have ensured that most of their funding is from Seattle based venture capital funds. It is clear that the additional funds is going to be used to grow their catalog and staff count.
7. A deeper look at Amazon Prime – I find it very interesting how investment analysts do these Amazon Prime calculations. The facts are nobody really knows the true user count (I suspect only Jeff Bezos and some of the senior leadership does) but it is clear Prime is super important for Amazons’ future.
8. Sift Science Takes $5.5M to Wield Machine Learning Against Fraudsters – Sift Science is offering a service that will over time lead to either an acquisition or multiple rounds of funding. I am of the opinion that these secondary services will be more common place as startups recognize that ecommerce businesses will use these services to augment their own businesses and operations.
9. Let the Online Price Comparison Battle in Southeast Asia Begin – I am glad to see this emerging in other developing markets. Comparison Shopping Engines have a role to play in developing ecommerce markets.
10. The Exciting Uncertainty At The Intersection Of Content And Commerce – This development does not surprise me one bit. Content is one of the parts of the internet that drives innovation. Ecommerce adds opportunity for content creators whom face tough times in normal print.

Bonus links for this week:

• New CEO for kalahari.com – MIH have appointed a new CEO for their Kalahari business. Caren Genthner-Kappesz brings international experience to an ecommerce business that she will take to “next stage of its development.”
• Shoppers’ ‘Mobile Blinders’ Force Checkout-Aisle Changes – Mobile is disrupting retail in ways that forces retailers to rethink large parts of their operations.
• E-Retailers Now Accounting for Nearly Half of Book Purchases by Volume, Overtake Physical Retail – The book business is changing to be more online focused. “In 2012, for the first time ever, online channels accounted for more book purchases than bricks-and-mortar retail in the U.S., according to new data from Bowker Market Research.”
• Faster Than Overnight: How Etailers Get You Stuff the Same Day You Ordered It– I found this article fascinating as logistics is something that cannot be forgotten by ecommerce businesses. This process happens everyday which makes one wonder what more can be done to optimise the process.
• To Beat Amazon, Walmart Is Treating Its Stores Like Apps – This is if executed properly a huge disruption that will distance Walmart from their competitors. The idea makes a lot of sense and will speed up the process of getting shoppers out of physical stores faster than traditional cashier visits.
• Why Google is pulling the plug on Frommer’s – Google bought Frommer’s (one of the last acquisitions Marissa Mayer did while at Google) to augment their local offering. Travelers no longer open books in cities, it is tablet and mobile phones that are used when visiting a new city.
• Google launches flight search in UK, France, Italy, Spain & Netherlands – This is a concerning development as more search engine results will now be showing ITA results on top of pages instead of organic results.
• The Great Technology War between Giants – Regular readers will be aware of my thinking regarding the big five technology businesses. The post I wrote contains a great infographic from staff.com.
• Samwers Launch €150 Million Venture Fund – “Mr. Siegel said that they would be particularly interested in regions where funding was scarce. “I think MENA [Middle East, North Africa] is underfunded. There are a lot of very interesting things going on in Vietnam but very few deals being done. South East Asia has lots of opportunities for growth.” Enough said..

Onwards..