AmazonFresh to open in San Francisco,  Amazon and Drones, Wayfair to hit $1 Billion after a massive year, Zalora raises more capital and much more

The week that contained Cyber Monday had a story that dominated the press for the entire week. Drones, drones and drone delivery by Amazon is the easiest summary after Jeff Bezos gave 60 Minutes an exclusive look at the future. It is clear that Bezos hit a nerve as Eric Schmidt said that drones must be banned. Funny how driver less cars are OK..eBay CEO John Donahoe called Amazon’s drone ambitions “long term fantasies”, funny how there is no mention of his own plan for shoppers to be delivery people..

The point is that Amazon is going to be pushing the envelope as they are willing to take risks. Lest we forget that Amazon already has an army of robots that will save them up to a billion dollars in warehouse inefficiencies. I would love to know how much free marketing this drone story got Amazon the evening before Cyber Monday.

Cyber Monday was a straight fight between the online ecommerce businesses. Amazon, eBay and Walmart saw significant traffic which lead to a record breaking day for US ecommerce. “According to the Adobe Digital Index survey, mobile sales rose 80% from last year, and overall sales were up 16%.Wal-Mart, the world’s largest retailer, said more than 1 billion people visited its website on Monday.” PFS Web has a great infographic that contains all of the highlights of this mega day of online shopping beautifully illustrated.

The stories that caught my attention this past week:

1. Network Rail launches the first railway station parcel collection point that’s open to all retailers and carriers – I am beginning to think that places that provides customers with a primary function – .ie travel via train stations or bus stations could be disrupted by ecommerce companies using them as collection points. If the item cant be delivered at your residence then a place which you pass on your way home can feature as a collection point. I think we are going to see a lot more of this globally.
2. Ecommerce in Russia: trends, problems and winning local players – A great in depth look at Russian ecommerce. This country is atop of mind for investors but has significant challenges that has to be overcome in order for success to be achieved.
3. Home Goods E-Retailer Wayfair’s Sales Set To Hit $1 Billion After An Explosive Year – Wayfair is a company that flies below the radar as they are not a big name Internet ecommerce business such as eBay or Amazon. I believe that they will IPO in 2015 as that will provide them with the ability to create another good year for potential investors to retrospectively look at.
4. James Hardy, Head of Europe, Alibaba.com: Top E-Commerce Trends for 2014 – It is a bit early to do these kinds of posts as we still have 3 weeks left of 2013. Hardy makes some interesting observations but I am not convinced that there will be a shift to B2B at such a grand scale as he mentions.
5. Silvertree Capital Acquires 24% Stake In Cybercellar – Silvertree Capital continues to build a portfolio of ecommerce businesses in Africa which seems to focus in verticals that have great growth potential. It is great to see new investors in the ecommerce space investing into businesses.
6. Supermarkets Offer Personalized Pricing – An interesting new take on retail – Take a concept seen in ecommerce – personalisation and reuse it inside retail. I can see many retailers using this in loyalty programmes as it will generate loyalty from customers but also great troves of data in which predictive analytics can be used for future purchases.
7. Newegg Opens First Retail Location – This is now becoming something of a trend where ecommerce businesses create physical retail spaces in order to showcase new gadgets and create a location for customers to collect their purchases. I am still not convinced this is a good idea..
8. Next in Commerce: 10 e-commerce trends for 2014 and beyond – I reread this post a few times and can honestly say it contained a few interesting concepts. Speed retail and returns processes where among the characteristics that got me thinking..
9. Rocket Internet’s Zalora and The Iconic split $112m funding round – Another week and another round of capital raised by Rocket Internet. What I find interesting is that the Zalora group also contains another ecommerce business, The Iconic. What do all the Rocket Internet businesses do with all of these millions? Marketing?
10. Northern European ecommerce to grow to €31bln – “The Northern European countries (Sweden, Denmark, Finland, Norway, Iceland, Estonia, Latvia and Lithuania) now account for 9.2% of the total European market, which makes the Northern European region the third biggest region.” Danish ecommerce seems to be growing at a rate of knots.

Must read:

1. Amazon and the Benefits of Vision – Ben Thompson writes a great post on the value that Amazon has with its long term vision. The bigger conclusion is that vision at a minimum seems correlated with relevance on one hand, and stock performance on the other. All of the truly successful technology companies have a vision that is visible to their staff, competitors and to their customers.
2. Ecommerce Unicorns lining-up at IPO starting gate. How to identify one early.
   – Greg Bettinelli has a great post on looking for ecommerce companies that will become mega businesses. The short version:

   • You are an incredibly well run company
   • That is growing a rapid rate (think >100% YoY)…..
   • In a very attractive market (mom’s spend money and kids grow)…..
   • With a pathway to long term profitability (margins are good enough and pointed in the right direction)…..
   • And have a defensible market position

3. The Tablet-First Retail Startup – A great read with some very interesting thoughts on tablet first strategies that will be seen in the coming year.”I don’t think any of these have been tablet first, but very soon and particularly in retail, I think we will see tablet-first/primarily tablet apps reach tremendous scale. The unit economics are just that compelling.”

Bonus Links:

• Amazon & eBay Drive Heavy App Usage, While Multi-Channel Retailers Rely on Mobile Web – “The reason for the contrast is simple: mobile users only download so many apps. App “real estate” is a limited commodity, as is a mobile device’s storage capabilities. The result is that most people are only going to download their favorite one to three retail apps and use their web browser if they ever need to shop online somewhere else.” Fascinating insight into an advantage that pure play ecommerce business have over their multi-channel competitors.
• How social is Amazon? – “Unlike the majority of retailers that believe brand to fan engagement is the primary goal of social media, Amazon has always concentrated on methods to gather crowd-sourced product information and sophisticated algorithms to personalize the shopping experience,” he says. “Amazon believes social discovery is the most important aspect of social commerce.” Amazon is scary good at social commerce and most ecommerce executives believe that Amazon has no idea about social commerce..
• Emerging Markets: Brazil, eCommerce Statistics and Challenges – Some great stats about a region that is critical to global ecommerce powerhouses.
• eBay India And Snapdeal Start Cross Promoting Products; First Step To Acquisition? – Snapdeal is in my opinion a critical part of eBay’s future. The fact that eBay is willing to invest and be seen as a partner at this early stage is the sign for me that we are on the road to an acquisition. India is at the moment an unknown in terms of ecommerce importance for investors but if one looks at the big picture it is a battle ground for global ecommerce investors.
• How This Entrepreneur Went From Internet Illiterate To E-Commerce Billionaire – The story of Michael Rubin is one that fascinates me. He flies below the radar but clearly is a massive disruptor who understand ecommerce. “I think about the way e-commerce disrupted retail,” he says. “Mobile is going to change e-commerce the way e-commerce changed traditional retail.”
• Amazon Fresh coming to San Francisco next week – Amazon’s bright green grocery trucks might finally make their way to the heart of California’s tech world. It seems that Amazon Fresh is another Trojan horse for Amazon that is disrupting certain areas of the US.
• B5M Bets Big on Shopping Search in China – Shopping search in China seems to be an attractive vertical again. “Altough Alibaba’s Etao is a giant that can hardly be beat, B5M is confident it will have stable foothold in China’s online shopping search market. It believes it surpassed Huihui, the shopping search ran by Chinese Internet company Netease, several months ago and now is ten times bigger in terms of traffic and has indexed many more items than it, becoming the second largest shopping search in China.

Onwards.. Till next week!