The week contained stories in which ecommerce companies are looking for future business success (Rakuten) and a look into the success of PayPal prior to their acquisition by eBay. Rakuten seems to be going more horizontal and after a serious streak of acquisitions they seem to be looking at something akin to what Google is doing with Google Ventures. Rakuten is a multi-national technology company that has ecommerce in their stable of companies. Hiroshi Mikitani made the majority of his wealth with ecommerce in Japan but has steadily diversified with payments, marketing services, regional ecommerce businesses and now with this $100M investment fund. I think one just needs to look at what  Jeff Bezos and Jack Ma have done with regards to investing in startups to realise that this is somewhat normal.

PayPal seems to be having a year of spotlight; first from Carl Icahn and then their CEO leaves and they are clearly in a spot of bother. eBay is going to have to make some decisions regarding PayPal in the next 18 months and what I find really interesting is that none of the founders is trying to make a case for them to stick with eBay. PayPal was a catalyst for the mobile payments industry and the sad reality is that they have became a victim of their initial success. They have bought a lot of mobile payments companies but it still seems to me that they have a cultural problem. Compare the current state of PayPal with that of new kids on the block Stripe and Klarna (they are in combination what PayPal is currently). It is clear that the newer companies are growing faster and in the long term  could become competitors for PayPal.

1. Amazon embroiled in EU tax crackdown (CNBC) – “European officials have demanded that Luxembourg hand over documents relating to Amazon’s tax affairs as the online retail giant becomes embroiled in a crackdown that has already drawn in Apple, Starbucks and Fiat’s financial arm. The EU’s competition commission has sent a request for information to the Grand Duchy, where Amazon’s main European operating company is based, about whether its decisions on corporate tax complied with state aid rules, two people familiar with the matter said.”
2. China’s version of PayPal is mounting one of the biggest challenges to Chinese banks (Quartz) – “A little over a year ago, we argued that Yu’e Bao, the Alibaba-affiliated platform for money-market investment, could challenge the Chinese state-owned banks’ monopoly on savings deposits. The platform’s promise of higher yields capitalized on the backlash against the punishingly low, government-set deposit rates available to savers—a politically risky but potentially super-profitable gambit.And, clearly, it has turned out to be both. In just a year, Yu’e Bao—which is owned by Alipay, the online payment platform that Alibaba Group spun off in 2011—amassed 574.1 billion yuan ($92 billion) in assets. That makes it the Zeng Libao, the actual money-market fund in which Yu’e Bao invests its customers deposits, the biggest in China, and the fourth-largest in the world.“
3. Unions from 5 countries meet over Amazon working conditions (Toronto Sun) – “German union Verdi, which has organized a series of strikes at Amazon distribution centres over the last year, hosted the meeting in Berlin with unions from Poland, the Czech Republic, Britain and the United States. “International solidarity and cross-border networking of trade unions sends an important signal to Amazon and is essential to push through better working conditions for Amazon employees in Germany and other locations,” Verdi board member Stefanie Nutzenberger said in a statement.”
4. An E-Commerce Site Where You Can Haggle Down The Price (TechCrunch) – “Founders Andrew Kurland and Joe Marrapodi created their e-commerce negotiation site, Greentoe, out of frustration. The two were spending too much time trying to find the best deals online. That was proving time-consuming and difficult.Yes, it’s a weird name for an e-commerce site. Marrapodi says it has to do with a college nickname. We’ll get to that in a bit, but for now he says to “Think of Greentoe like Priceline for Amazon.”
5. Indian Startup Funding Report 2014Q2: Deals Pick Up Pace; E-Commerce Continues to Suck Money In (NextBigWhat) – “As compared to 58 reported deals in the previous quarter, there were 74 this time. That is, a 27% increase in deal volume. Just like the previous quarter, e-commerce investments dominated the deal landscape. Internet* & Enterprise companies raised a fair amount of money and health care and education startups got some attention as well.”
6. Q2 E-Commerce VC Funding (StrategyEye) – “After a decade long boom, the global e-commerce market is starting to show signs of maturity. Investment only continues to soar, with StrategyEye tracking USD3.8bn worth of VC backing across 163 e-commerce deals in Q2. We’re seeing the momentum of that investment shifting to emerging economies, as remarkable growth in Western markets over the past few years starts to even out.”
7. INFOGRAPHIC: China’s Top 30 B2C Websites (China Internet Watch) – “Tmall, JD, Amazon are well known online retailers in Chinese market, but who else?” Some fascinating insights into the Top 30 B2C businesses in China.
8. Why did One Nordic get acquired by Fab? A new superbrand (ArcticStartup)– “However, there are signs that indicate the birth of a new global brand and that in the very centre of the signs we see the acquisition of a Finnish start up you might remember from Slush last year: One Nordic Furniture Company. Now, signs and suspicions are no more; the furniture e-commerce are soon joined by a new brand, Hem, which is a result of a long strategic business expansion led by online design giant Fab and joined by MassivKonzept and One Nordic.”
9. eBay-Owned E-Commerce Platform Magento Shuts Down Services Aimed At Smaller Retailers (TechCrunch) – “E-commerce platform Magento, owned by eBay’s Enterprise division, is closing down two of its products designed to reach small to medium-sized online retailers: Magento Go and ProStores. The company has posted notices and informational guides on both product websites, directing current customers to “Migration Center” dashboards and various FAQ’s that will help them move their businesses to other platforms.”
10. Greater competition raises standards of online grocery shopping (Evigo) – “Between the value year period of 2009 and 2014, the value was £175 billion and is believed to grow by 16% for the value year 2019 to £203 billion. According to the research, supermarket and hypermarket sales will be worth £70.8 billion by the value year 2019 amounting to the total grocery market of 35%.”
11. Mobile commerce is in a ‘monetisation Stone Age’ (Wired UK) – “Digital commerce is held back by inefficient monetisation processes, according to Sebastian Siemiatkowski from mobile payments platform Klarna, speaking at Wired Money. He said that of 100 people who go to the checkout of a website on a desktop, only 33 of them finalise the purchase. “Imagine if 100 people went to the check out [in a physical retail store] and 77 of them would just leave. The store manager would go crazy,” he said, adding that in the digital space that’s exactly what happens.”
12. eBay and Argos move to next stage of Click & Collect partnership (PaymentEye) – “eBay and Argos have announced that they have entered an agreement to extend their offering of Click & Collect services via Argos stores.This extension will allow shoppers to select products from a much wider range of eBay sellers for collection from about 650 Argos stores.”
13. Wal-Mart doubles down on e-commerce in Brazil (Internet Retailer) – “To keep pace with web sales growing twice as fast as e-commerce in general in Brazil, Wal-Mart Stores Inc.  will continue to build out its e-commerce infrastructure and product inventory at a rapid pace, Walmart.com.br president Flavio Dias tells Internet Retailer. Dias says that over the next few years Walmart.com.br will open three e-commerce fulfillment centers throughout Brazil to keep pace with rising e-commerce sales. Internet Retailer estimates that web sales for Walmart.com.br grew 67.4% to $640.5 million in 2013 from $382.7 million in 2012. Internet Retailer basis that estimate on monthly visits of 28.4 million from web traffic measurement firm comScore Inc., an estimated monthly conversion rate of 2.47% and an average ticket of $76.”
14. Some of the challenges of eCommerce in Africa (ZDNet) – “Jumia isn’t the only company with stars in their eyes. The buzz surrounding online retail in Africa has been growing louder over the past several years, despite the fact that relatively speaking, internet retail has barely made a dent in Africa’s retail market.”
15. For Bonobos, a Good Fit in Stores as Well as Online (NYTimes) – “Bonobos, the e-commerce business best known for its well-fitted men’s pants, was never supposed to have brick-and-mortar shops. Then, all of a sudden, they opened a few and money came pouring in. “We said we would never be offline, and then, wait a second,” said Andy Dunn, the co-founder and chief executive of Bonobos. “We hit a big turning point. We realized offline really works.””
16. Rakuten confirms acquisition of minority stake in AirAsia Japan (TechInAsia) – “Why would an ecommerce conglomerate join hands with a budget airline? It’s all about merging the ticket booking with the actual flying. Rakuten maintains a stronghold on Japan’s ecommerce space with its Rakuten Ichiba marketplace, but maintains a steady stream of customers with other services, including Rakuten Travel, which the company claims has 17 offices in Japan.”
17. Same-Day Delivery Startup Deliv Snags Amazon Logistics Manager (Re/code) – “Deliv, a startup that employs a network of part-time drivers to deliver packages from retailer stores to customer doors on the same day they are purchased, has hired Amazon logistics manager Jeff Helms as its head of delivery operations. Helms will report to Deliv CEO Daphne Carmeli.”
18. Online Groceries: Service Beginning to Equal Produce Quality in Importance (Atelier) – “The New York-based company, founded in 2012, offers home delivery of fresh, high-quality foodstuffs geared to a menu plan. It will bring you all the ingredients in exactly the right proportions, ready to cook a particular set of meals, promising a revolution in culinary habits in the home. The recent success of brands which specialise in culinary offerings demonstrates how the food retail business is changing in line with busy consumers’ new needs. Competition in this market is still sluggish, but this is changing fast on both sides of the Atlantic.”
19. Bitcoin a PayPal competitor – not currency – for retailer (CNN Money) – “Yet another big retailer has started accepting Bitcoin. This time it’s online computer and software seller Newegg.That means you can buy an Asus Transformer tablet on Tuesday for $375 — or 0.5751 BTC. And it shows this independent digital currency thing is actually gaining steam.”
20. Old retail dogs learn from Amazon’s new tricks (NRF) – “Wal-Mart’s online sales growth outpaced Amazon’s last year, but only because the brick-and-mortar chain was starting from a smaller place. Amazon’s sales grew by $10 billion last year, making it the first online-only retailer to break into STORES Magazine’s annual roster of Top 100 Retailers.”
21. Netshoes settles in for a long run at Latin America e-commerce (Internet Retailer) – “The last year for online sales growth was good but not great for Netshoes.com, an online sporting goods retailer and one Brazil’s biggest web merchants. But that’s perfectly fine with Netshoes, which increased web sales 13.8% to $595.2 million in 2013 from $522.9 million in 2012.Like a long-distance runner, Netshoes sees e-commerce development in Brazil as a more of a marathon than a sprint and is settling into a long-term strategy for growth, says chief marketing officer Juliano Tubino. And Netshoes, No. 4 in the 2013 Internet Retailer Latin America 400 has plenty of cash in the bank, having raised $170 million last month in a new funding round led by GIC, Singapore’s sovereign wealth fund.”
22. Tencent’s WeChat platform to benefit from 58.com  partnership (South China Morning Post) – “That deal announced last Friday will provide Tencent, Asia’s largest listed internet company, with a 19.9 per cent equity stake in New York-traded 58.com, which runs the mainland’s biggest, Craigslist-like online classifieds site serving local merchants and consumers.Development of the online-to-offline (O2O) market is widely seen as key to driving expansion in the mainland’s retail industry because it involves closer ties between e-commerce and traditional bricks-and-mortar retailers and service providers.”
23. Amazon opens up new markets to Chinese sellers (Internet Retailer) – “Chinese companies are rapidly increasing their cross-border sales on Amazon.com Inc. marketplaces and now can sell in two more countries, an Amazon executive said today at a conference in Ningbo, China. Amazon’s marketplaces in Canada and Japan are now open to Chinese sellers, Ye Weilun, vice president of Amazon China’s third-party platform, announced at the 2014 Chinese Consumer Brands E-Commerce Summit in this port city south of Shanghai. They were already selling on Amazon sites in six other countries: the United States, United Kingdom, Germany, France, Italy and Spain.”
24. How the ‘PayPal Mafia’ redefined success in Silicon Valley (Tech Republic) – “The PayPal Mafia — a term that’s used with affection and awe in Silicon Valley — is defined as the Mountain View PayPal team either pre-IPO or pre-acquisition, depending on which founding member you ask. While those may seem like vastly different stages in a company’s life, it’s more like splitting hairs as PayPal’s IPO happened only a few months before it was acquired. Former PayPal CEO Peter Thiel estimates the PayPal Mafia to be around 220 people.”
25. Amazon and the “insurance policy” acquisition (David Jackson) – “(1) What’s the breakfast octopus analogy? Perhaps Bezos meant this: “Woot has an approach that’s completely different to the way we think, and it seems to be working. That’s potentially threatening to us. So we bought you to understand what you’re doing. It’s an insurance policy.”
    (2) If you’re happy to sell only for the money, fine. If you want your company to survive and thrive, perhaps “insurance policy acquisitions” aren’t great.”
26. Japanese E-Commerce Giant Rakuten Launches $100M Global Investment Fund (TechCrunch) – “June is barely over, but Rakuten has already had a busy year. In addition to purchasing messaging app Viber for $900 million, the Japanese consumer Internet conglomerate also made investments in several companies based in Southeast Asia or Japan, including Carousell, Visenze, Coda Payments, and Send Anywhere, from its $10 million fund dedicated to the region. “
27. How a Mexico e-retailer aims to get shoppers to pay full price (Internet Retailer) – “Five years ago two of the earliest online retailers in the emerging Mexico online sales market were flash-sale retailers, Rodate says. One such e-commerce site, a private sales site called Brands Club, was run by Rodarte in Mexico. That site, which launched first in Brazil, and then expanded to Mexico in 2009, and another popular members-only sales site called Privalia based in Spain, were among the first major online shopping sites in the country, Rodate says. And that meant deep discounts were the norm for Mexico online shoppers, he says.”
28. E-commerce could challenge bricks and mortar retail in Africa (How We Made It In Africa) – “Speaking at Source Africa – a pan-African textile and clothing trade event recently held in Cape Town – Breuss said e-commerce will make up for the lack of modern bricks and mortar retailers in many African countries.“Lagos today has a population probably between 20m to 25m people … and they have two malls,” he said, making a comparison with Cape Town that has around 10 larger shopping malls that serve a population of under four million people.”

Till Next Week. Onwards..