Why Alibaba Is a Big Deal, Amazon to acquire Sears?

High expectations for eBay to prove tech prowess, Amazon Launches New Twist on Product Reviews, Pickie Acquired By Digital Coupon Giant RetailMeNot, Snapdeal Buys Product Discovery Portal Doozton, Why Alibaba Is a Big Deal, Zalora launches fashion marketplace in 3 countries, Czech e-commerce giant says Google ‘concessions’ would worsen conditions on local market, Alibaba to Offer Mobile Phone Service in China From June and much more

If you look closely at the stories above then you will notice that ecommerce has become a global business. The global business that in my opinion is getting closer to a major moment (The Alibaba IPO). We are currently seeing IPO’s at an astonishing rate especially in ecommerce. I have been trying to not think about it, but does everything change when Alibaba becomes a public company? Think about the following – Alibaba was invested and bought at least 5 companies since January 2014. Earlier this week they also announced that from June they will become a mobile network in China (Amazon is an MVNO in the US) but as far as I know no other ecommerce business has gone down the MVNO (mobile virtual network operator). The similarities between Amazon and Alibaba are increasing.

Robin Lewis, whom I respect as a visionary in terms of retail, wrote an opinion piece on his own blog in which Amazon acquires Sears. Initially I thought this was a giant news story but after a few google searches I realised that Lewis was speculating on this acquisition. Why would Amazon spend billions on Sears? The only reason I can see is that Amazon will refactor the Sears retail shops into logistics centers. Bezos has had ample opportunity to invest into retailers such as Borders and more recently Barnes & Noble but I doubt if Amazon will spend the massive amounts of capital to purchase mountains of debt from a retailer which is under stress. Secondly, this is completely against the type of companies which Amazon buys (generally they are entrepreneurial, are small and have books or market leading capabilities in which Amazon has been unable to become market leader..).

The stories that caught my attention the last week:

High expectations for eBay to prove tech prowess (San Jose Mercury News) – “The company that people have for years known as an auction website is today a purveyor of top-notch mobile technology, e-commerce applications, same-day delivery services, global retail and shipping services, and Web payments systems, all stored under one roof in San Jose. It has the deep pockets, the talent and the sophisticated technology to one day go head-to-head with Amazon, analysts say.” Is 2014 an important year for eBay? The article seems to make the case it is – why is this an important year for eBay? Could it be that the heavy investment into mobile, acquisitions etc now needs to return value?
Amazon Launches New Twist on Product Reviews (EcommerceBytes) – “Amazon spokesperson Erik Fairleigh said Amazon launched the Ask an Owner feature in November 2012 – the decision was based on customer feedback. It benefits sellers as well – Amazon heard from buyers that the feature gives them the confidence to make purchases, Fairleigh said.” Amazon is not the first company to try and use the opinions of actual product owners to boost customer confidence prior to purchase. This is yet another way in which Amazon refactors a part of their business to ensure a better customer experience.
U.K. e-retailers post strongest Q1 performance in three years (Internet Retailer) – “”With online transaction values reaching the highest level recorded in six months, and the average conversion rate for March at pre-recession levels, these results not only demonstrate an overall increase in consumer confidence, but also that online shopping is becoming a larger part of our everyday lives,” says Tina Spooner, chief information officer for IMRG.” A few things that I believe that has contributed to this improvement – the UK economy has seen improvement due to better economic conditions in Europe. Secondly, I strongly believe that more UK retailers are investing into ecommerce.
Personalized Shopping App Pickie Acquired By Digital Coupon Giant RetailMeNot (Techcrunch) – “RetailMeNot has a history of making small acquisitions: over the years it’s swallowed up startups such as Actiepagina, Miwim, VoucherCodes.co.uk, and eConversions. As part of this acquisition, Pickie will be shut down immediately, and some members of the team will be moving to Austin to become part of RetailMeNot. Otherwise, terms of the deal weren’t disclosed.” This seems to be an acqui-hire for the team that created Pickie. I sense RetailMeNot might be working on adding newsletters and beautiful apps for their platform.
Big retail is watching you, & Brickstream is helping them do it (Venturebeat) – “Brickstream provides sensors that retailers install inside their stores. The sensors then track and analyze data to help retailers manage waiting lines, track foot traffic, reduce theft, increase security monitoring, and extract other behavior intelligence.” Technology for retailers what will enable them to get an advantage on the habits of their customers is a category inside technology that is growing. The question is – as a retailer is it your job to tell your customer that you are tracking them? I tend to think so..
Here’s A Peek Inside Amazon’s Culture Of ‘Frugality’ (AMZN) (Business Insider) – “For instance, being frugal means that Amazon will only pay for economy air travel, even for senior execs, Amazon Web Services Senior VP Andy Jassy told CRN Australia. If an employee wants an upgrade to business or first class, they have to pay for that out of their own pockets.” Amazon has a culture of being frugal. It is one of their leadership principles.
Amazon quietly launches Kindle Fire sale for Prime members (Geekwire) – “Amazon has started offering 10 percent off its tablet line-up to those belonging to its Prime loyalty program.” This is not too surprising and one has to wonder whether this is being driven due to the increase in price of Amazon Prime.
The Near Future Of Ecommerce (Retail Prophet) – “The ecommerce experience is due to become decidedly more physical, sensory and immersive and many would argue it’s a shift that’s long overdue.” Doug Stephens makes a great point about the changing nature of ecommerce as it will become a combination of physical and digital.
Snapdeal Buys Product Discovery Portal Doozton (DealCurry) – “Snapdeal has acquired a year old bootstrapped fashion & lifestyle product discovery site Doozton for an undisclosed amount. With the acquisition Snapdeal seeks to provide a personalized way of listing and suggesting fashion merchandise on its ecommerce portal.” Snapdeal needs to invest into fashion as Flipkart has acquired the biggest fashion business in Indian ecommerce (Myntra). Doozton reminds me a lot of an early Pinterest, but looks to be heavily focused on mobile. Does Snapdeal in the next 6 months close Doozton?
Why Alibaba Is a Big Deal (WSJ) – ” The next big opportunity to find out a lot more about Alibaba — its operations, finances and ownership – will be when the company actually files for a U.S. IPO. Its IPO prospectus should provide potential investors with a lot of new material to digest. Alibaba last month said it has decided to start the process of an IPO in the U.S., but it still hasn’t made the IPO filing.” Alibaba is a big deal and the most dominant ecommerce business in their home country / region. Their IPO filing will open their entire business in detail to the rest of the ecommerce world and I believe we are going to be shocked (in a good way) about their dominance.
Amazon’s Dash Scanning Device Wins Early Kudos (WSJ) – “Amazon.com’s new handheld grocery ordering device, the Dash, has begun arriving in people’s homes. And to hear users tell it, virtual shopping carts might fill up just a bit more.” Dash is a big deal and I think Amazon has stepped up their investment in to their grocery business. Dash might seem to be a gimmick but like a mobile app the only business that will know the impact of it is Amazon.
Zalora launches fashion marketplace in 3 countries (Tech In Asia) – “After announcing its plan for a marketplace for third-party merchants in January, the ecommerce company launched the platform yesterday in three countries: Indonesia, the Philippines, and Vietnam”. Zalora is powering forward to become the fashion retailer for Asia, by having the marketplace in multiple countries they have almost gotten to the point in which they are safe from competitors..
Czech e-commerce giant says Google ‘concessions’ would worsen conditions on local market (Radio Praha) – “South African-based media and e-commerce company Allegro, which operates the Heureka, Aukro, and Mall.cz sites in the Czech Republic says it is taking its fight against the proposed settlement to other European Commissioners so that they block Almunia’s proposed deal. “This proposal deal is worse than the Commission dropping the case entirely,” commented Allegro’s head of strategy, Chris Sherwood.” The google concessions in Europe is clearly not desired by competitors. Will google ever be properly managed? I doubt it.
Why your mailbox is still filled with catalogs when you buy everything online (WSJ) – “The old-school marketing format has survived to play a crucial creative role in modern e-commerce. Today, the catalog is bait for customers, like a store window display, and a source of inspiration, the way roaming through store aisles can be. The hope is shoppers will mark pages they like and then head online, or into a store, to buy.” Fascinating read on the impact of catalogs in the US.
Alibaba to Offer Mobile Phone Service in China From June (Bloomberg) – “The service will include voice and third-generation data packages on network capacity leased from all three state-owned carriers, according to Alizila, a website run by Alibaba. The packages will be sold through Alibaba’s Taobao and Tmall sites and can be paid for with Alipay, the company’s e-payment affiliate.” Alibaba is becoming a complex business that has an impact on many Chinese industries. I wonder if Alibaba is seen as a business that drives pricing down?
Zalando Said to Appoint Freshfields for Online Retailer’s IPO (The business of Fashion) – “Zalando, based in Berlin, hired Freshfields Bruckhaus Deringer LLP to help prepare for a listing, said the people, asking not to be named as the details aren’t public. The company, which could be valued at more than 4 billion euros ($5.5 billion), has spoken to investment banks, though hasn’t officially mandated advisers, they said.” When does the Zalando IPO occur? Late 2014 or is it dependant on quarterly results?
A radical solution to the region’s payment challenges, from e-commerce guru Moustafa Mahmoud (Wamda) – ““Everybody says that COD is so prevalent in the MENA because of a lack of education about credit cards,” Mahmoud says. “I couldn’t disagree more.” People in the UAE not only have credit cards, he says, but they use them every month to pay their utility bills, buy their plane tickets, etc. “People [in the UAE] have credit cards but they choose not to use them… because COD is more convenient.”” Fascinating post full of great nuggets of information on payments in the Middle East.
A retailer in India uses tablets to expand its store footprint (Internet Retailer) – “Big Bazaar Direct already is one of India’s largest retailers. But it wants to be bigger, and rather than open more bricks-and-mortar stores, it’s arming small Indian merchants with tablets pre-loaded with a special Big Bazaar app that enables shopkeepers to place online orders on behalf of their customers, most of whom do not have Internet access.” Fascinating concept and one wonders how the users of the tablets are compensated..
Instacart Could Raise A Big New Round Of Funding Valuing It At $400 Million (Techcrunch) – “On-demand grocery startup Instacart is fielding term sheets for a big new round of funding, according to sources. We’ve heard the new financing could be led by a non-VC investor, and according to one source it would value the company at up to $400 million.” The grocery delivery business is clearly hot and getting a lot of interest. Does Instacart look to partner with a retailer soon or look for investment from a non-VC?
PriceGrabber & StellaService Partnership to provide more consumer power (The eTail blog) – “PriceGrabber will incorporate StellaService metrics data throughout their website. An online shopper will be able to click on a product, see its customer service rating, performance rating, and customer feedback. These figures will allow the customer to gauge the overall demand for a product they search for. Simply put, the two services together can aid in taking the mystery out of online shopping.” PriceGrabber is looking to add a service that is used by Google Shopping in terms of customer service etc. Interestingly, no reference of this partnership on the StellaService website..
The collision of tech and fashion: Q&A with Sarah Watson, Net-a-porter (The Guardian) – “Looking internally, we are concentrating on getting the basics right. Mobile presents a lot of opportunity to do some funky stuff, but it actually comes back to getting the basics right first. These are often really simple, like making sure it’s a really easy and intuitive experience for the customer.” I found this post and Q & A very informative. Net-a-Porter is a company that is on the cusp of mobile..
JD+, Smart Hardware Accelerator by Chinese Online Retail Giant JD.com (Technode) – “arlier this year, the company launched JD+, an accelerator for smart hardware products, offering funding, marketing support or other resources individual makers otherwise can hardly access.” Interesting that JD.com felt the need to create an accelerator for a vertical that is bet at best at the moment.
Alibaba’s Alipay payment service says konichiwa to Japan as it inks deal with Rakuten (Tech In Asia) – “250 shops on Rakuten Global Market will open up transactions with Alipay, though the company intends to increase that number gradually. Currently, 10,000 of Rakuten’s 42,000 domestic vendors sell goods internationally on Rakuten Global Market.” Rakuten doing a deal with their biggest competitor is indicative of the power that Alipay has. Chinese customers are clearly the focus but why would Rakuten allow an Alibaba business to collect payment?
Indian e-commerce market is nowhere near maturity – eBay India GM (The Hindu) – “It is the global ‘Big Daddy’ of the e-commerce business. After entering India through the acquisition of Baazee.com almost a decade ago, California-headquartered eBay has come a long way, ushering in a burgeoning e-marketplace. Latif Nathani, Managing Director, eBay India, spoke to The Hindu about eBay’s ‘first mover’ advantage in India, and the challenges facing the rapidly evolving industry.” A very interesting article full of interesting data points on Indian ecommerce.
Chinese Online Cosmetics Retailer Jumei Files For IPO In US (China Internet Watch) – “Jumei tried to compare itself with Vipshop, and its financial report seemed even better than Vipshop’s. For example, Jumei’s mobile terminal sales accounted for 49%, while Vipshop had 23% in mobile terminal. Jingdong’s mobile sales accounted for 18%, dangdang’s accounted for 10%.” Jumei has 2 important challenges – the sale of counterfeit cosmetics and not being aligned with any of the big Chinese ecommerce businesses.

Till next week. Onwards.