Electric Thoughts in a Digital Era

Author: Hendrik

  • The 10 e-commerce stories for the week ending 25 January 2013

    Will Google Shopping Become a Marketplace? Google exceeds expected financial results, Amazon invests in a  text to speech service and much more.

    The past week contained quarterly results for Google.  Google exceeded the market expectations primarily due to its advertising business. Google’s results were very interesting as international revenue was 54% of  Q4 revenue generated. The Motorola acquisition is in my mind a long term financial disaster for both companies. Google will continue to sell assets that Motorola Mobility business had until they are left with almost nothing. Did anyone else notice the lack of facts about Google Plus during the results presentation?

    One idea that continually raises its head is the thought that Google Shopping might become a marketplace. It makes sense as Google has a lot of services that can be used to create the commerce value chain. Google Wallet, Merchant feeds, Google Trusted Stores, Bufferbox which can be used as a logistics solutions and an advertising platform that be used to build a solid competitor against Amazon. Whether Google wants to play in the marketplace space is another question for another post.

    I missed mentioning eBay’s results from the 16th for some unknown reason. I think eBay is no longer a company that can be seen as a commerce nobody. Yes, I know their search is broken and that they are not seen a traditional ecommerce businesses. I must confess, eBay has flown below the radar for a while and I think 2013 is a year in which they make their case for being an Amazon competitor. Yes, I said it. Amazon competitor. Disrupt the disruptor and John Donahoe has done that with his mobile play. In my own mind, eBay is the furthest advanced in terms of of mobile commerce than any of the big players. Thus the lessons they have learned is going to benefit them greatly in the long run..

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  • The 10 e-commerce stories for the week ending 18 January 2013

    Jack Ma to retire, Hybris to IPO? and ecommerce in South Africa

    The past week has been an interesting one. IPO’s seems to be a topic of note in 2013 and Alibaba is seemingly getting their house in order to go public in the next 18 months. Ma is retiring in May 2013 from being CEO of Alibaba and moving away from being in charge is a strategic move. Ma has been accused in the past of not disclosing information regarding holdings and if he is seen as being in charge of Alibaba when they do go public it will hurt their potential of investment. Even if Ma is not CEO or President of the company, he will likely become chairman of the company, so he will still be in control of the long term strategy. Alibaba is his offspring and he will ensure that it does well in the long term.

    If Alibaba goes public, I think we will see an increasing amount of Alibaba businesses going into Asia and Australia. Asia is at the moment a straight battle between 2 giants (Alibaba and Rakuten) and upcoming ecommerce businesses which are either funded (Rocket Internet, MIH, eBay and Amazon) and unfunded (startups).

    At the moment ecommerce platforms or software providers is a vertical that is tightly monetised and scrutinised by corporates. The corporate owners of ATG, GSI Commerce, Magento and Hybris are all looking to own a specific part of ecommerce landscape and make considerable returns on investment. ATG is owned by Oracle and has flown by the radar for a very long time and service businesses like Walmart. GSI Commerce and Magento is owned by eBay and it is slowly becoming clear what the value of the holdings are for eBay. Hybris is a company that intrigues me and has flown below the radar. Enterprise ecommerce solutions is going to become increasingly important as ecommerce becomes more mainstream in developing economies.

    The stories that caught my attention for the past week:

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  • The 10 e-commerce stories for the week ending 11 January 2013

    Foundem starts legal proceedings against Google in the UK, Bezos does not care about profit margins and 2012 was a good year for South African ecommerce

    The first real  working week of 2013 is in the record books and the news from across the ecommerce globe confirms it. Legal issues is starting to make news again and it seems that the word “anti-competitive” is back in the lights. Google has been accused of being anti-competitive by UK vertical search engine Foundem. The European part of the Google ruling has not been done and may potentially not be like those seen with the FTC.

    Secondly, the Bazaarvoice acquisition of Power Reviews may also be potentially create results that ensures that the acquistion ensures changes to the Reviews market in North America. I am not a lawyer but it seems anti competitive acquisitions by companies that have potentially have huge implications on a specific market or vertical always creates activity for the Department of Justice.

    One other story that has really interesting implications is Rakuten’s decision to “retire” buy.com and rebrand the business to Rakuten Shopping. It is becoming clear that this is the strategy that Rakuten does. Acquire a business, rebrand it and then potentially change the business model. Marketplaces seems to be their business model of choice.

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  • Rocket Internet to IPO?

    Earlier today I read Thomas Baldwin’s post on Rocket Internet preparing to go public and I must say it is at the moment a rumor. What is the ramifications if they do go public?

    Preface

    The last 18 months – I have been reading and observing a German accelerator going through the gears and starting businesses faster than I have ever seen any company do. They are a controversial topic and have 3 brothers that are the commanders in chief of this business.

    They are not everyone’s cup of tea nor are they without any controversy. Blitzkrieg and all of the other things that have gone into the public domain makes going public a interesting move, if true for Rocket Internet.

    Driven by success

    The Samwers are some very clever business people and what they have achieved should not be discredited. They have started a lot of businesses, hired a lot of staff, closed businesses and retrenched staff on a scale I have never seen. They are obsessed with execution and ROI. Whatever they do it is with one thing in mind – success.

    I am not going to debate their way of operation. They do take ideas from first world markets (Amazon, Zappos, IKEA, Square and Groupon) and then create businesses based on these concepts in emerging markets. Call it cloning, copying or whatever it is, it has made them handsome returns. The results seems to be good for their investors which is the prime focus for a startup accelerator. Ultimately, it boils down to culture and personal beliefs. You either like it or hate it. There is no in the middle with the way in which Rocket Internet operates.

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  • The 10 e-commerce stories for the week ending 4 January 2013

    Fab wants to become like IKEA, Rocket Internet helps the Brazil ecosystem, eBay offers more logistical opportunities for retailers and are considering investing into Snapdeal

    The first calendar week of 2013 is in the record books. In South Africa, I reckon we will see more online shops re-opening and starting to process orders that was placed in the festive season. I wonder if in other markets this phenomenon also happens? Closure over the festive season is something I have become accustomed to.

    My thoughts this past week was over the sudden emergence of potential retail for ecommerce businesses. Fab.com is seemingly keen on physical retail. I must say I am slightly surprised by this as I wonder how this would affect their bottom line? Well for starters I am assuming that they have data for their states in which the big sales occur. So, those I am expecting will be the first locations in which their retail operations would be opening. E-commerce is primarily done to ease the costs of retail locations and to create the ability for shoppers to buy any item they desire from their current location. Retail is they way in which commerce is done in a large scale across the globe. Maybe, my Amazon tinted glasses is ensuring that I don’t see the potential of physical retail for ecommerce merchants. I believe ecommerce businesses should stay away from bricks and mortars as long as they possibly can.

    The other story which dominated this past week has been Google getting nothing more than a slap on the wrist from the FTC. I find the resolution in the US to be disappointing. I really would like to have seen that the FTC ensuring that Google is kept in check to ensure an Internet that provides potential for all businesses and not a select few.

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