Amazon acquires GoPago, MTN enters the commerce race, eBay wants to help retailers, Social Network Odnoklassniki Shuts Down E-commerce Marketplace, Alibaba to enter Brazil and much more

It is the second last week of 2013 and on reflection it has been a massive year for ecommerce. Amazon continued to show the lead for all ecommerce but in 2014 will be facing a new competitor indirectly, Alibaba. If I can summarize 2013 into a few thoughts – the globalisation of ecommerce. The ecommerce industry saw significant growth in all markets (Africa, Asia, Europe and both North and South America) and it will continue to grow more speedily in certain markets in 2014.

If I look at the stories of the last week then Amazon acquiring the GoPago technology is one that raises a few questions. It literally is all about the technology and the details from Seattle has been sketchy on this acquisition. I think it is interesting that Amazon will acquire a business only for its technology and then not be able to retain the founder of the business. It is supposedly for an ambitious project – and if I guess it has something to do with collection of bought items.

Another story that caught my attention is Alibaba entering Brazil. This is a significant move for Alibaba as when they complete the market entry into Brazil it would ensure that they are operational in the 3 big emerging ecommerce markets (China, India and Brazil). Don’t be fooled Alibaba is quietly ensuring that they can become a truly global business and are using different parts of their ecosystem to enter emerging markets. I think 2014 will be the year in which we see the Chinese super powers, Alibaba and Tencent aggressively move into international markets as their backyard is maturing into a market with clear leadership in certain ecommerce verticals.

The news that caught my attention for the week ending on 20 December 2013:

1. Amazon Reportedly Buys Mobile Payments Startup Gopago, Working On An ‘Ambitious’ New Project – A typical Amazon transaction / acquisition. Little detail about the costs and how the business fits into Amazon’s ecosystem but I am guessing it is related to payment for goods at a location. Amazon continues to cherry pick their acquisitions to ensure that they protect their business from competitors and verticals (payments which Amazon is light in comparison to eBay and Alibaba).
2. The next battleground for e-commerce is Indonesia – As the world’s fourth most populous country—after China, India and the US—the potential size of the Indonesian ecommerce is is staggering, and an e-commerce war is heating up between Tokobagus (a classifieds behemoth) and Kaskus (a C2C play that was a forum originally).
3. EU Commission wants to boost e-commerce by completing the Single Market for parcel delivery – This could potentially open a lot of doors for the EU in terms of competition inside the logistics ecosystem. Why the sudden focus now? Economic conditions in the EU or lobbying by the big logistics businesses..
4. Odnoklassniki Shuts Down E-commerce Marketplace – The second biggest social network in Russia starts a marketplace and inside 6 months closes it. This reads like either a reaction to a competitor (Yandex) or an experiment..
5. Going Acquires Diligo.co.za In E-Commerce Consolidation Move – An interesting development inside South African ecommerce. A late entrant (going.co.za) buying a flash sales business inside a specific vertical which seemingly is to provide the business with more scope for customers to shop in.
6. For Google, it pays to be evil during the holidays – “Evil or not, the ads have been embraced by consumers and merchants alike. Jefferies said that for every dollar retailers spend on a product ad, they generate $9 in sales, on average.  That’s prompted retailers such as Macy’s, Amazon, Walmart and Home Depot to become heavy users of PLAs”. It is should be noted that these are Amazon business such as Quidsi and Zappos that are spending on PLA’s and not Amazon.com.
7. Forget Vietnam’s Lazada and Zalora, Hotdeal.vn makes 10,000 deliveries per day –  A daily deals business selling more than a 2 horizontal ecommerce businesses. Not surprising but 2014 could be a year in which Hotdeal.vn gets serious competition from Lazada and Zalora, both who are well funded.
8. Asian e-commerce firm iBuy seeks $37M in IPO – This IPO will most probably fly below the radar as it is a relatively small one. A very interesting way to raise funding to purchase ecommerce businesses in Asia. “$31.5 million will be used to pay for e-commerce websites in Hong Kong, Singapore and Malaysia. These websites are BeeCrazy.hk, Deal.com.sg, Mydeal.com.my and Dealmates.com.”
9. EBay’s Strategy for Taking On Amazon – A great read containing some themes that eBay will continue mentioning as ways that they will compete with Amazon. Payments, partnering with retailers etc which has been seen in lots of the press coverage in 2013. The short term result is still the same – eBay is playing catch up against Amazon.
10. Amazon: Nearly 20 Years In Business And It Still Doesn’t Make Money, But Investors Don’t Seem To Care – A great read containing the details about the anomaly that is Amazon.com. Any other business would be seen in another light, yet Amazon continues to gain in share price and grow market share in the US.

Bonus links:

• Tablets facilitate impulse shopping for many – New research out of Boston College indicates that consumers feel a deeper affinity for products they touch on a screen than those selected using a laptop touch pad or a mouse. A fascinating look into the future of ecommerce and the research highlights the importance of a tablet strategy.
• Online Shopping Choices: Less Is Sometimes Better Than More – A fascinating article from
  Wharton School of the University of Pennsylvania regarding the old adage of “Less is more”.  Attention online retailers: Product images please consumers, but only in small doses.
• India’s Flipkart sees soaring revenues & wider losses – Is Flipkart growing too quickly or is it a case of a similar tale to that seen at Amazon.com?
• AmazonFresh vs. supermarket: A hands-on shopping test – CNET’s Sharon Vaknin has long hungered to shop for groceries online, and now that AmazonFresh has arrived in San Francisco, she finally can. But how does the experience stack up to a regular supermarket? A tad more expensive than what is seen at a supermarket but AmazonFresh is going to disrupt grocery retail.
• Facing fierce competition at home, China’s e-commerce firms test global waters – “If Chinese online retailers are serious about taking on global companies such as Amazon.com and eBay, they need to build their own logistics centers abroad for more efficient handling. So far, neither Jingdong nor AliExpress manage their own shipping or logistics, choosing to use partnerships instead.”
• The Year in eCommerce VC: The Most Active Investors, Largest Deals and Top Exits of 2013 – “In fact, the top 5 non-U.S. eCommerce rounds which include the likes of Shopify and Flipkart saw 25% more funding in aggregate than the top 5 U.S.-based eCommerce rounds. Four of the top 10 international financings went to Rocket Internet companies.”
• Amazon Says It Is Not Buying Google’s New Shopping Ads – It’s not clear whether eBay, Amazon, and the other retailers here are buying Google’s PLAs because Google has pushed down their organic search results or because they find the new ads effective. Amazon wont purchase PLA’s as that cannibalizes their offering; as it provides Google with the intelligence on popular products and hurts their margins as well..
• MTN pumps R4.27 billion (300 million Euros) into e-commerce – “In the first, announced on Tuesday, the two companies together with Millicom International Cellular are set to develop internet businesses in Africa through Africa Internet Holding. MTN and Rocket Internet will create a joint venture to develop internet businesses in the Middle East, with each company a 50% shareholder in Middle East Internet Holding”.

Onwards.. Till next week!