The week is in the record books and a few stories dominated the ecommerce industry. Unconfirmed reports that Flipkart is / has raised a billion dollar round. This round of capital is supposedly led by DST, Tiger Global and Accel Industries. Flipkart has me scratching my head – it is burning cash at astounding rates?  I get the feeling that investors are interested in the company due to the size of the opportunity in Indian ecommerce. Is this the last round of investment before an IPO? What will the company be doing with the fresh round of capital? I believe that Flipkart will be looking to augment their mobile commerce efforts – thus a mobile wallet / payment startup is a target. I suspect that some of the cash will be going to a new facility for the staff to work at (not to be confused with a distribution center). Is Flipkart going to be the Indian version of Alibaba?

The week also contained Amazon results and lots of blogposts and opinions have been made public about the companies poor performance. Lets recap what the company has done in 2014 – launched Kindle Fire TV, launched a Fire phone, invested heavily in Prime and grocery delivery. Then Amazon has been hiring new staff in all of their various businesses, spend millions on new content for their video platform and is facing pressure in their Webservices business which has lead to discounts for customers. Put all of that together and it is clear that Amazon is spending any profit back into their business which is what Bezos has been doing for the last 10 years. Is Bezos testing WallStreets patience or is WallStreet willing to continue to believe in Amazon and Bezos?

The news that caught my attention this past week:

1. Brick fills click: Retailers convert stores into online warehouses (SFGate) – “For the nation’s brick-and-mortar retailers, the end is near. I’m not talking about brick-and-mortar retailing itself, though plenty of people have been predicting the format’s demise with the rise of Internet shopping. I’m referring to the centuries-old idea that the physical store sells only to flesh-and blood-customers. Today, retailers like Macy’s, American Apparel and Gap in San Francisco are converting stores into mini-warehouses to fill both in-person and digital orders. In some cases, stores have unknowingly morphed into Internet fulfillment centers.”
2. Tech and Fashion’s Fight Over Talent Has Only Just Begun (Racked) – “In what experts are calling “a war for talent,” the fashion and tech industries are aggressively competing against one another for new recruits. It’s not hard to see why: These two seemingly disparate worlds have become increasingly intertwined over the last decade.”
3. How much is Alibaba ramping up its investment and M & A (CBinsights) – “Despite their global footprint and investments in various geographic markets, Alibaba has only acquired companies within two countries. China and the USA account for 70% and 30% of acquisitions respectively. The logistics of Alibaba’s public offering include seven investment banks, a multi-country roadshow, multiple law firms, and a team of people across three continents. Irrespective of where Alibaba falls on the post IPO valuation spectrum (estimates range wildly from $100B to $230B), it will be massive. Given the firm’s increasing investment and M&A appetite, this should portend good things for emerging tech startups as there will now be another well-heeled investor & acquirer of tech companies outside of the usual suspects.”
4. Apple Secretly Acquired “Pandora For Books” Startup BookLamp To Battle Amazon (TechCrunch) – “TechCrunch has learned that Apple has made another acquisition, one that it is using to boost its e-books effort and “beat Amazon at its own game.” It has bought BookLamp, a startup based out of Boise, Idaho, that developed big data-style book analytics services. [Update 6:45pm PST: Apple has confirmed our report of the acquisition. The company tells us “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”]”
5. Ebay continues Russian expansion despite sanctions (Retail Gazette) – “eBay continues its expansion in Russia despite the fact the country is facing increasing Western sanctions over the Ukraine crisis. The online marketplace was keen to reassure Europe’s largest internet base that the current situation will not halt the company’s growth within the country. eBays vice president, Wendy Jones, traveled to Moscow on Wednesday and stated that “Russia was … and remains today eBay marketplace’s number one priority for global expansion, and that’s why we are here today to continue to accelerate and improve the services that we are able to offer to our customers”.”
6. Thoughts on Amazon earnings for Q2 2014 (Beyonddevic.es) – “No-one but Amazon knows what it has planned for its long-term future, but I’m increasingly skeptical that it will ever be possible for Amazon to crank up margins without significantly impacting growth, especially as long as its results are dominated by e-commerce.”
7. Zalando report: what’s behind its first-time profit (Evigo) – “In the second quarter of 2014, group revenues were at 520-560 million Euro compared to 437 million in 2013. Success was in part due to ongoing operations at the fulfillment center in Monchengladbach and the launch of the mobile app across international marketing, which brought in mobile traffic share of 41% and over 3.8 million app downloads all in the second quarter.”
8. Augmented Reality Becoming an Essential Tool for E-commerce (Atelier) – “Augmented Reality can help to maximise the online shopping experience, with the recent advent of a new ‘markerless’ AR solution that enables consumers to visualise products in realistic 3D in their own homes, while browsing the web, or at a bricks-and-mortar store.”
9. Wall Street frowns on Amazon’s high-spending ways (Fortune) – “Many of the banks have readjusted their expectations because of the increased investment spending by Bezos. While Amazon’s sales over the second quarter grew an impressive 23% to $19.3 billion, expenses grew at an even faster 24% to $19.4 billion. The result was a $126 million loss for the quarter, almost twice the average analyst estimate, according to Bloomberg data.Investors have been happy to put up with Bezos high-spending ways because of what he says will be big payoffs down the line, but analysts are starting to question that promise and have readjusted mid-term expectations.”
10. 5 Coming Crises In The Retail Market  (Retail Prophet) – “So, while the current onslaught of change provides plenty to be concerned about, it also brings enormous opportunity for those retailers with the courage to challenge industry, category and corporate beliefs.  Some will use their energy to defend the past, while others dedicate it to pioneering the future. As with any evolution, survival is not linked to size or strength but to adaptability and the inherent willingness to change and change quickly.”
11. How A Regular Employee Helped Put Amazon On The Path To Billions Of Dollars (Business Insider) – “It was 2003, and Black was recently promoted to website engineering manager. As Black explains in a blog post, he wrote a short paper that outlined a way to restructure Amazon’s infrastructure, and at the end “mentioned the possibility of selling virtual servers as a service.” He writes that he worked on the paper with his boss, vice president of IT infrastructure Chris Pinkham, and that they drew from the ideas they had discussed with their team.”
12. With its parent company in bankruptcy, Modnique ceases operations and awaits its fate (Pando) – “Modnique, a Los Angeles-based online retailer with 300 employees across five offices and four countries, has ceased operations and may be forced to liquidate. The company’s website currently reads “Our site is under construction. Please check back soon.” But the reality is that the company’s lender has instituted foreclosure proceedings. Worse, the situation is not entirely one of its own making.”
13. Amazon to Nearly Double Product Selection in Next Two Years (EcommerceBytes) – “Selling 120 million different products in 30 different categories, Amazon anticipates reaching 200 million SKUs in the next two years. The normally tight-lipped Amazon has loosened its lips this month – the latest interview coming from a senior exec in the UK. Amazon UK Managing Director Christopher North spoke to the Daily Mirror about a range of issues. North told the British newspaper he believes Amazon will reach one billion SKUs “in our lifetime, probably much faster.””
14. 3 Reasons Why Online Retail Should Focus on Mobile Web Over Native Apps (CarlsonOnCommerce) – “When thinking of developing a mobile presence for an eCommerce site, many people think of apps first and mobile web second. For most, I think this is the opposite of what it should be, but many companies continue to get lured by the sexiness of app development, the possibilities of native platforms and the huge success of some apps.”
15. Food on demand: We tested 7 meal delivery services, and here’s who came out on top (Geekwire) – “The process of delivering food isn’t rocket science, nor is it novel. Someone orders a meal, and another person delivers it. But for whatever reason, there seems to be a food delivery bubble expanding nationwide — and particularly in Seattle.”
16. Rakuten’s Quarterly Report Shows Growth On All Fronts, With Mobile Commerce Up 87% (Marketing Land) – “Based on its 2014 2Q results, Rakuten Marketing has experienced year-over-year growth on all fronts, including mobile, search and affiliate marketing. The company reported mobile phone orders in its affiliate channel have increased 87 percent in the US. Rakuten also saw international mobile commerce growth, with the UK up 117 percent, Canada 197 percent, Japan 32 percent, and Australia 28 percent. Rakuten claims tablet orders increased 21 percent in the US, 37 percent in the UK, 157 percent in Canada and 55 percent in Japan.”
17. Amazon Considers Peer Fulfillment Option for 3P Merchants (EcommerceBytes) – “Amazon is apparently considering a peer-to-peer fulfillment option for when sellers are out-of-stock or otherwise unable to fulfill an order themselves. The marketplace is currently conducting a survey of sellers titled, “The impact of shipping speed on customers and performance.” Amazon reminded sellers, “Shipping speed is part of customer service and impacts your Seller Rating.”

Till next week. Onwards