The 10 ecommerce stories for the week of 23 August 2013

Amazon invests $13 Billion into warehouses, Bing sunset Bing Shopping, VANCL raises its 7th round of funding and much more.

The last week made me realise something (nothing profound) and that is that ecommerce is now global. It is done primarily via 2 models – either take a recognizable name and open businesses across the globe ( Amazon and Rakuten) or invest into businesses in multiple regions (MIH / Naspers, Rocket Internet and Tiger Global). The point is that the Internet has provided an opportunity for entrepreneurs to sell pretty much anything online. (For those interested, this past week – I had a delivery from Japan, the US and 3 originating in South Africa). I cant think of any other business that has that kind of opportunity for entrepreneurs and executives to create meaningful businesses.

Jeff Bezos is a clever man. Long time readers will be aware that I consider him the standard for ecommerce executives. However, Bezos is increasingly having to face challenges from multiple angles. One, I think retail businesses have now realised in the US that they need to be aware of the threat that Amazon possesses. That is nothing new but the considerable advantages that Amazon had over traditional retail is slowly becoming less. The marketplace act will ensure that tax is now collected in every state. I find it very interesting how everyone thinks this is a problem from Amazon – Bezos is already on the way to make that into a benefit for Amazon. How? He has invested heavily into distribution centers. I think we can safely assume that Bezos has already planned for any eventually. One – he is making his competitors ( hello Walmart, eBay and Rakuten) spend heavily. Secondly – one thing we all forget is that Amazon has become a habit and one click buying is easy to do. Why does everyone still question whether Amazon will be around in 5 years time? I think I am going to answer that in another post soon.

On the East Coast of the US, there are 2 ecommerce companies that have the potential to become billion dollar companies – Etsy is one and Wayfair is another one. Etsy is something that fascinates me as I think this marketplace for handcrafted goods has the potential to be a global business.

The 10 stories that caught my attention this past week are:

  1. Alibaba broadens its international e-commerce operations – Has the potential IPO for Alibaba started the  investment into non-Chinese ecommerce businesses? Alibaba has shares in a few US companies but it may be starting to accelerate that position.
  2. Hungary: Online sales rising steadily – It seems that Hungary is steadily growing its ecommerce industry. If rumors are to be believed Amazon is considering entering the market. I am not so sure about that..
  3. Digital First: Facebook Kills Physical Goods Delivery in Gifting Service – Increasingly facebook is showing its directionless strategy. I have been thinking and I am convinced that facebook sandbagged their mobile business, the growth in the last quarter.. anyway the Gifting service had lots of potential but as most things go at facebook, the focus is changing to digital and gift cards. I ask again – does commerce have a place at facebook?
  4. 8 crazy ideas to boost online shopping experience – This is a thought exercise that contains some very interesting ideas. 1-Scan, Augmented reality and 3D printing I think we can safely assume is on the horizon. However, these concepts is all about execution and startups who do them will become acquisition targets for the ecommerce behemoths.
  5. Condé Nast-Amazon deal makes magazine subscriptions quicker, but watch the fine print – This is a head scratcher for me. I thought magazines did not want to be associated with commerce businesses due to margins etc. Is it another channel for potential Condé Nast subscribers? One business that now have been placed on notice is Zinio..
  6. How Myntra Managed One Hour Delivery For Some E-commerce Purchases – I must say this post is one I reread a few times. The consequences is that customer satisfaction is now under the merchants control. What we as ecommerce executives forget is that these factors add to the unique selling proposition we offer our customers. It is another reason for customers to be able to make a purchase decision.
  7. It’s official: Rakuten and MNC’s joint venture in Indonesia is OVER –  I wish I could say I am surprised over this news but increasingly I am beginning to understand how difficult ecommerce joint ventures are. Is it a case that Rakuten expected to much from MNC or that MNC had little idea of the big implications that a partnership with Japan’s biggest ecommerce has? Who loses in cases like this? The customer.
  8. eBay Looks For Russian Distributor – I think it is pretty clear that eBay wants to play a bigger role in Russian ecommerce. However, distribution and logistics are massive challenges for any company in Russia. This is the single reason why I think Ozon.ru is the market leader in Russian ecommerce.
  9. S. Korea’s top online retailer aims to lead mobile shopping business – Gmarket is the market leader in ecommerce in South Korea. The fact that they are trying to capture market leadership in mobile commerce is indicative of how difficult m-commerce is.
  10. Brazil accounts for 60% of all Latin American e-commerce sales in H1 – “Online sales in Brazil during the first half of the year totaled 12.7bn reais (US$5.2bn), up 24% year-on-year and representing 60% of all e-commerce transactions made in Latin America in the period, according to data from e-commerce consultancy E-bit, part of the Buscapé group. Over 35.5mn transactions took place from January to June this year, an increase of 20% year-on-year. The average online purchase grew by 4% over the first half of 2012, reaching 359.49 reais.” Some very interesting data on Latin American ecommerce.

Bonus Links:

Onwards..