Amazon’s Junglee Ties Up with Quikr, China’s Suning approved for international express delivery service, Alibaba to enter the US?,  Vente-Privee Seeks $11 Billion Revenue, Gilt to go public in Q3 and much more..

This past week felt like a long list of announcements about ecommerce companies going public in the latter part of the year. Gilt, Alibaba, Jumei (not to be confused with Jumia) all are expected to list in the US before the end of the year. Alibaba is going to be the big story that will change ecommerce globally (we have already seen the first move) but the others are all having to go public to raise additional funding to grow their businesses. Alibaba’s pending launch into the US ecommerce market via 11 Main is a very interesting story. Details are very sketchy which makes me believe that this is the first big story that has Alibaba driving the storyline. Let me be clear Alibaba is going to disrupt B2C ecommerce in markets where there are not a clear number 1.

Ecommerce in India is seemingly becoming a 3 horse race. Flipkart, Snapdeal and Amazon.in are all trying to capture the large opportunity that is Indian ecommerce.

However I am beginning to think Flipkart is in trouble, why?  In a space of 2 years they have already launched an eReader, a payment gateway / mobile wallet, a house brand fashion business and now are talking about doing logistics for competitors. These are all things that Amazon has done over their 20 year history but Flipkart seems to me to be growing really fast.. Snapdeal is quietly doing their thing and I think potentially making themselves into a must acquisition for eBay. Snapdeal has announced that they are expanding their 9 hour shipping programme in Mumbai. Amazon.in is doing the normal Amazon thing – quiet and building their business but another Amazon owned business is partnering with a classifieds service. Junglee partnering with Quikr is a very interesting concept but raises the question whether Junglee is feeling the need to show additional catalogue due to pressure from the big 3.

The stories that caught my attention the past week:

1. Vente-Privee Seeks $11 Billion Revenue With Flash Sales Online – “Granjon developed the practice of flash sales — where goods are offered at a discount for a limited period online — in France in 2001 and is now expanding into the rest of Europe and the U.S. Revenue rose 23 percent to 1.6 billion euros in 2013 as shoppers splurged on products from 20-euro Reebok sneakers to 2,300-euro three-week road trips in the U.S.” Vente-Privee is clearly thinking long term and has focus on ensuring that they dominate in Europe before going to faster growing markets like China. I like the fact that organic growth and profitability is part of their thinking as sometimes in ecommerce those go out of the window when businesses grow into new markets.
2. Vancl Closes Seventh Round of More than $100 Million Financing – “Chen Nian, founder of the company, said that Vancl will adopt a business model and positioning similar to Xiaomi’s and put more emphasis on mid- and high-tier products in 2014.” Vancl has gone through some very difficult times and have raised close to $500 million in multiple rounds. The fact that Xiaomi’s management will assist in ensuring that they turn the business around is interesting. The fact that Xiaomi uses Vancl’s logistics is also an interesting tidbit.
3. Alibaba Seeks Control of AutoNavi, a Chinese Mapping Company – “The Chinese titan has been moving to acquire stakes in businesses that it believes will help broaden its e-commerce empire. It has already purchased an 18 percent stake in Sina Weibo, a Chinese equivalent to Twitter, and a minority stake in ShopRunner, a retail shipping service run by a former chief executive of Yahoo.” Alibaba is ensuring that before they IPO they have a very solid ecosystem of companies in their asset register that will help them grow their business globally.
4. UK online retailers see big increases in searches from key export markets – “The figures showed a massive 231 per cent increase in German smartphone searches for UK brands as also a 78 per cent surge in French tablet searches for UK retailers. The results were also supported by big rises from other key markets, such as the Netherlands and the US.” Cross border ecommerce is becoming a key part of ecommerce business strategy due to the fact that global ecommerce is a reality.
5. China’s Suning approved for international express delivery service – “Suning, one of China’s largest appliance retailers, has obtained an international express delivery license from the State Post Bureau, becoming the country’s first e-commerce player to operate the service. The move will enable the Nanjing-based company to expand the overseas market for its online retailing business while competing with FedEx, DHL, UPS and TNT in international express delivery service.” I think we now have the reason for the investment by Alibaba into Suning that was done a few months ago. This is a big advantage for Suning over competitors like JD.com and Amazon.cn.
6. How Amazon is increasing shipping costs – “If e-commerce is changing the way we shop, it’s also changing the way we ship, and creating inefficiencies that weren’t present before. Unpredictable demand is just the tip of the iceberg. For years, UPS and FedEx have been raising rates, not because of higher fuel costs — the price of diesel hasn’t budged since 2011 — but due to a more adverse mix of packages. Online retail and free shipping have resulted in lighter, smaller boxes as consumers buy what they want when they want.” The reality is that customers want to purchase what they want when they want and have it in their hands in a few hours time after the purchase was made. FedEx, UPS both got caught out by the spike in need in late December. Amazon Prime is not increasing in price due to the  shipping costs from their partners but rather Bezos needs further funding to pay more staff..
7. Compared: Online Marketplaces in India – “After trying to sell on their own, Jain started experimenting with marketplaces like Tradus, Shopclues, Amazon & Flipkart. He’s come up with a comparison of online marketplaces based on parameters like shipping charges, cataloging and ease of inventory management.” Very interesting insight into marketplaces in India.
8. Holiday Results Call Price-Matching Policies Into Question – “To that end, Markey indicated that this year exposed the “Black Friday myth,” where deals on the landmark shopping holiday were actually higher in comparison to the rest of the holiday season. “Early returns seem to indicate that consumers largely relied on their perceptions of pricing and retailers with a low-price perception, notably Amazon and Walmart, that held or raised prices at this time delivered short-term gains,” Markey said. “It will be interesting to see how this plays out longer term and if their low price reputation and customer loyalty takes a hit.”” I don’t think that price-matching is a good idea as it is a race to the bottom for retailers that want to compete with Amazon, Walmart on Price.
9. Cross-border e-commerce in Singapore and Malaysia – “More than 40% of the global internet audience is from the Asia Pacific region. This boils down to over 600 million people, 10% of whom live in Southeast Asia. With 60 million people browsing the web, this is a significant market for e-commerce businesses. Singapore and Malaysia are the two countries in the region with the highest internet penetration.” Interesting insights into ecommerce in Singapore and Malaysia with graphs and stats.
10. Wayfair’s Ongoing Winning Streak to Fund Australian Expansion – “In the US alone, Wayfair offers more than seven million products from 12,000 different suppliers and is already transposing much of this business into the Australian market. The company operates a number of website brands under the Wayfair umbrella, including AllModern, Joss & Main and DwellStudio and it intends to use the full force of this presence to continue expanding locally.” Wayfair seems to be gaining momentum in terms of being the biggest online homewares and furniture retailer in certain markets. Australian ecommerce is also growing more with foreign investment from businesses that are in more mature markets.
11. Gilt Groupe to Go Public, Likely in Third Quarter IPO – “The online purveyor of discounted high-end clothing has toyed with the idea of an IPO a few times in the past, but began to consider it more seriously than ever in the second half of 2013. In November, I reported that the company was eyeing a late 2014 IPO as its financial performance improved under the helm of new CEO Michelle Peluso.” Gilt Groupe is going public later in the year but more interestingly is the development of them doing logistics for other flash sales businesses.
12. China Mobile Shopping Market Snapshot in 2013 – “China mobile shopping market reached 167.64 billion yuan (USD 27.459 billion) in 2013, with 165.4% YoY growth. The market kept increasing rapidly under the circumstance of a better network coverage system and higher mobile terminal penetration. In the same period, the size of online shopping by PC is nearly 1600 billion yuan (USD 262.08 billion), with a 35.7% YoY growth. The market size was predicted to get close to a trillion with a growth rate of 39.4% in 2017, according to iResearch.” China is a clearly a market in which mobile commerce is growing at an above average tempo.
13. brandsExclusive Sold for $36m less than two years ago, bought for $2m yesterday – “Smart50 finalist Aussie Commerce has bought online shopping club brandsExclusive from APN News & Media for $2 million plus giving APN an 8% equity share in Aussie Commerce. APN acquired brandsExclusive just 18 months ago paying $36 million but Aussie Commerce founder Adam Schwab told SmartCompany the $2 million price tag is no bargain.” This has to be one of the most interesting stories to happen in Australian ecommerce. How does a business suddenly lose $34m in value over a 24 month period?
14. Google vs. Yelp and the Battle for Local – “It’s no secret that there’s no love lost between Yelp and Google. They’re like Spain and Portugal in the 15th Century — rivals trying to carve up the local globe.” The battle for local is clearly still being fought between Google, Yelp, Foursquare etc. What is the end game?
15. Retail In Crisis: These Are The Changes Brick-&-Mortar Stores Must Make – “Retailers who understand their customers, leverage technology to evolve the customer experience, and focus on their differentiators and assets have the opportunity to thrive.” I am still not completely sold on retailers becoming a fulfillment centre (in actual fact click and collect is a better idea in my mind) but price-matching and not trying to adapt to the current wave of commerce is not an option for retailers.
16. Will London Underground Stations Become A New Delivery Option? – “The prospect of remote collection lockers and click & collect points replacing London Underground ticket offices sparked a round of strikes last week, creating havoc for commuters. The second round of planned strikes was only narrowly averted this week.” Re-purposing of assets such as underground stations is a very interesting concept but it will need to be done with careful thinking as if not it could lead to strikes.
17. How Rue La La stays ahead of mobile shoppers – “The members-only retailer designs for mobile first, building apps that help shoppers close limited-time sales in as few clicks as possible from wherever they may be, Rue La La’s chief technology officer says. More than half its sales in 2014 will be from mobile devices, she said.” Very interesting and insightful for ecommerce executives to think about.
18. WeChat links up with a major Chinese shopping center to launch offline-to-online purchases – “WeChat, China’s most popular mobile messaging service, has inked a cooperation deal with the Wangfujing Department Store in Beijing, a major shopping center located in one of the nation’s biggest tourism hubs. The deal marks the latest development in WeChat’s steady foray into mobile wallet-type services.” WeChat is clearly adding commerce to its messaging service, but is this only an Asia-specific play?
19. Rakuten to Buy Viber Internet Messaging App for $900 Million – “Viber will provide a distribution channel for Rakuten’s digital products, Mikitani said at a briefing in Tokyo yesterday. Rakuten also hopes to create a game platform on closely held Viber, which has 300 million users of its instant messaging and free Internet phone services.” A game is a bad idea as Vibers core functionality is to create free phone calls. Viber lets everyone in the world connect. Freely. Millions of Viber users call, text, and send photos to each other, worldwide- for free.
20. Amazon’s international growth slows – “While the e-commerce giant’s North American sales grew nearly 28% in 2013, its international sales grew by a lower 13.9% and accounted for a smaller percentage of total revenue than in 2012. The merchant also reported a decline in sales from Japan.” A few things to consider is that in most of Amazon’s important markets (Germany, UK and Japan) customers are facing tough economic conditions and that native language digital content is in its infancy.
21. VIPShop to Acquire 75% Stake in Online Beauty and Fashion Retailer Lefeng.com – “Chinese online discount retailer VIPShop (NYSE: VIPs) announced today it has acquired 75% stake in Lefeng.com — aka LAFASO, an online beauty and fashion retailer, for $132.5 million.” This makes a lot of sense as the businesses compliment one another as VIPShop focuses on clothing / shoes / bags and Lefeng on cosmetics.
22. Former Groupon Product SVP Jeff Holden Joins Uber As Chief Product Officer – “Prior to Pelago, Holden had spent years at Amazon where he was an early hire. Starting there in 1997, he held various roles in the supply-chain optimization and consumer applications divisions of the online retailer. He oversaw many aspects of the Amazon site experience, including search and personalization, and led the development of Amazon Prime.” This is a great hire by Uber..
23. Online Payment Service, Stripe Comes To Africa. Well, Sort Of. – “What this means is that a customer in South Africa would be able to buy a product online from a Stripe-enabled merchant site in one of the countries where Stripe is active (which at the moment include the U.S., Canada and Europe) with the South African rand, instead of dollars or pounds sterling.” This could be a very big market shaker when Stripe arrives in Africa fully but it is great to see that they are looking at Africa..

Till next week. Onwards..