Alibaba invests in Haier, Jack Ma named FT’s person of the year, Zalando getting their house in order for an IPO – eCommerce stories of the week

Alibaba invests in Haier, Jack Ma named FT’s person of the year, Zalando getting their house in order for an IPO, Amazon to launch “Pantry”,  Jason Goldberg  tries to provide context on Fab’s problems and much more

Phew what a week, having a look at the highlights – it is becoming more difficult to pick stories to highlight every week. A few major stories happened in the last 10 days which I believe will have a significant impact on ecommerce in 2014. Alibaba is going to be a massive story that will impact everyone in ecommerce, Amazon seems to have grocery shopping on their mind and Zalando will IPO in 2014.

Alibaba and Amazon are known quantities in their respective regions and both businesses have scale that can crush smaller businesses. Alibaba is also an unknown regards to their investments and long term plans. It seems that the one part of their business that they are investing heavily is logistics. The $364 million investment into Haier is in my mind a dual sided strategy – it gives Alibaba access to another logistics network that will be a stop gap until their logistics network is completed. It also provides Alibaba with a partner whom it able to install the items bought on Tmall and Taobao.

Jack Ma, the iconic chairman of Alibaba was named the Financial Times person of the year. He is a contradiction in so many ways but Ma embodies the tremendous importance that Chinese Internet companies have.

Alibaba’s sales now exceed those of eBay and Amazon combined and make up about 2 per cent of China’s gross domestic product. Seventy per cent of all Chinese package deliveries come from Alibaba sales. Roughly 80 per cent of Chinese ecommerce transactions are conducted through Alibaba’s sites.

Zalando is in my opinion, the crown jewel of all the Kinnevik Investments. When Rocket transferred their shares in August 2013 to Kinnevik, European Founders Fund and Access Industries it was clear to me that the wheels are starting to move to an IPO.  Technically it can be seen as an exit by Rocket Internet but in the months since August, Zalando has been working on their balance sheet. They are in the process of closing down Emeza and Kiomi and today announced a legal restructuring which will lead to the company being called in legal form as Zalando AG. Kinnevik sits with 37% of the shareholding of Zalando with the Samwer brothers controlling 20% through European Founders Fund. It is a matter of time before Zalando goes public but the signs to me point to them being a public company in 2014.

The Stories that caught my attention this past week:

  1. Get products from Amazon India in one day at just US$1.5 – Indian ecommerce is now a race between 3 companies. Flipkart, Amazon.in and Snapdeal are in direct competition with one another to ensure that they are seen as marketleader. Amazon has been pushing the market with their affiliate payments and shipping services that were launched in a very short period of time.
  2. Disruptions: At Your Door in Minutes, Delivered by Robot – Nick Bilton makes an interesting comparison to the current drone madness. Pizza Delivery is one of the few instances where a single event (ordering a pizza) leads to a single delivery that takes in mind traffic conditions etc. “he current systems for delivery — “With the exception of pizza” — were too cumbersome and expensive for today’s online shoppers. Autonomous vehicles, including drones, promise a faster, cheaper option.”
  3. Heavily funded flash-sale site Ideeli is for sale – As the winners in the flash-sale category start to emerge, one of the earliest heavily funded companies is searching for a buyer. Ideeli whom has raised in excess of $100 million is looking for a buyer, which raises the question what has changed. It seems that their competition have become more popular and thus make more sales.
  4. TBY talks to Ingo Babrikowski, CEO of Estafeta  on the growth of ecommerce in Mexico,integrating technology into the home delivery network, and Mexico’s potential as a logistics hub. – A fascinating interview full of nuggets on Mexican ecommerce and the challenges entrants will face
  5. Magento offers retailers more services as part of eBay Enterprise – “As part of the division, Magento clients may now purchase from eBay a bundle of e-commerce technologies and services, including order management, customer service, payment processing and fulfillment.” This is going to be a developing story which will feature in 2014. What is the endgame for Magento inside eBay enterprise?
  6. Cyber Monday formula: Mobile + desktop equals more than $2 billion – “The fact that mobile commerce accounted for close to one in five digital dollars, or 18.5%, spent on those two days is significant, comScore says, “because that percentage is far higher than we’ve ever seen in our quarterly spending data.” Cyber Monday was indicative of the shift happening inside commerce as more customers use their mobile devices to transact.
  7. Amazon China Starts Selling the New Kindle Paperwhite Today – I count 3 markets where the Kindle is being heavily marketed. Australia, Brazil and China.. 2 massive emerging ecommerce market and a market in which Amazon is a late entrant. The Kindle is the first wave of Amazon focusing on a market..
  8. After A Year In Hell, Fab CEO Jason Goldberg Speaks Out – I call this a PR rescue attempt by the fab.com CEO. Interesting that certain things were seen as problematic – disgruntled ex-employees, over transparency initially but most of all this reads to me like an attempt to provide another side to the fab.com story. Interesting to say the least.
  9. E-commerce start-up Shopify raises $100 million – Shopify is a startup that is going to be disrupting certain parts of commerce. I currently believe that they are pivoting to become a commerce company – both online and offline commerce. The company recently launched Shopify POS, an iPad application that lets merchants sell products from their Shopify online store in a physical retail setting. Billion dollar valution for a canadian based ecommerce company.
  10. How Alibaba Views International Expansion and Mobile: A Discussion With Joe Tsai – A must read interview which contains some interesting tidbits on Alibaba. “The concept for AliExpress is to bring Chinese manufacturers online and make a global B2C marketplace. eBay has done a cross-border marketplace well. AliExpress focuses on consumer markets in developing countries.  For example, we are the largest e-commerce site in Russia. We are also looking a lot at South America right now”.

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