Electric Thoughts in a Digital Era

Category: Marketplaces

  • Another Marketplace

    Best Buy has announced its new marketplace that will offer 2x the product assortment. The electronics seller will now have a larger selection of computer products, licensed sports merchandise (a Fanatics fan shop), and small appliances. musical instruments, and indoor and outdoor furniture. Why will this work now?

    Best Buy started an online marketplace in 2011, and in 2016, it was forced to close its third-party marketplace because it only contributed 1% of group revenue and created returns.

    Yet, in 2025, Mirakl convinced Best Buy that it needed a curated marketplace. I wrote in 2016 that the marketplace business model is not for everyone.

    BestBuy has a new marketplace
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  • Amazon Terminates Vendor Agreements

    The more things change, the more they stay the same. My LinkedIn feed contained posts about Amazon mass terminating vendor (1P) agreements. These businesses have been given sixty days to move their businesses to sell via Amazon’s third-party seller platform. Why are these terminations news, and what impact will the terminations have? While I am sympathetic to these brands that have been bad news in Q4 before Prime Big Deals Day and the festive season, it could have been much worse.

    The viral screenshot of the Amazon Vendor Central email sent to select vendors.

    Amazon vendors must be reminded that selling via 1P is seemingly a privilege, not a right. Amazon uses supply and demand and exclusivity better than any e-commerce platform. The business model has been replicated by venture capital and private equity with little or lower margin. The business model only works for Amazon due to contribution profit. Using different parts of the Amazon business, such as advertising and logistics, combined with volume, will generate margins that make sense.

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  • Q4 – What Is Next?

    Over the last two weeks, I have been seeing signals that make me concerned about the next twelve months. As someone who has looked at patterns for a large part of my career, these signals individually can be seen as news, but combined, they highlight a challenging year ahead. What happens in Q4 and in 2025?

    What am I seeing? I am seeing customer spending patterns change worldwide and large incumbents laying off staff. These incumbents are large-cap companies that rarely do layoffs, which tells me companies see a problematic financial time ahead. Yes, in most cases, these companies overhired but laying off 1000 or more people is about cost savings or shuttering businesses. Is this an early sign of the artificial intelligence impacting employment? I think not.

    Source: Cheezburger

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  • Walmart Sells Its Entire JD.com Stake – Implications

    Over the past week, I have been thinking about Walmart selling its entire JD.com stake unexpectedly. The implications of this decision have not been described adequately, nor have the future impact been discussed. What are the consequences for both Walmart and JD.com?

    This story started in 2011 when Walmart made an undisclosed minority investment in Yihaodian. In 2015, Walmart acquired the remaining shares in the e-commerce platform Yihaodian for an undisclosed amount. It is important to note that in June 2015, the Chinese government started allowing total foreign ownership of some e-commerce businesses. This decision was to encourage foreign investment and competition in the e-commerce sector. In 2016, Walmart sold Yihaodian to JD.com and acquired 5% of JD.com stock at a valuation of $1.5B. The company also started a strategic partnership with JD.com.

    The strategic partnership included:

    • JD.com will acquire the Yihaodian marketplace platform assets, including the brand, website, and app. At the same time, Walmart will continue to operate the Yihaodian direct sales business and sell products in the marketplace.
    • Sam’s Club China plans to open a flagship store on JD.com, expanding its high-quality imported products availability in China, offering same- and next-day delivery through JD.com’s nationwide warehousing network.
    • Walmart and JD.com are partnering to enhance product selection across China by leveraging their supply chains and expanding the range of imported products.
    • Walmart will be listed as a preferred retailer on JD.com‘s O2O JV Dada, boosting online traffic and allowing customers to order fresh food and items for 2-hour home delivery while maintaining its physical stores.

    Source: Walmart

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  • Making Sense of Qoo10’s Demise

    I started researching Qoo10 six months ago as I had not heard of the company. A Singapore-based marketplace operator who acquired Wish for $173M. When I think of South Korea, I think about the market leader Coupang, who acquired Farfetch in a market that contains some of the most sophisticated consumers in the world. I believe only Chinese consumers are more sophisticated than those in South Korea.

    Years earlier, I heard about Gmarket, which eBay acquired in 2009 for $1.2B. Gmarket was one if not the most important assets eBay acquired to grow its international business. Gmarket was one of the companies I heard of behind closed doors. In 2021, eBay changed its global philosophy and started selling assets to exclusively focus on its most important assets. eBay sold a majority stake in its Korean business to Emart for $3.6B in 2021. eBay retained a 19.99% holding of its Korean companies, including G-Market, IAC, and G-9.

    Source: Emart

    I mention Gmarket and its demise from market leadership to being another competitor to Coupang as an example of how quickly a market changes due to mergers and acquisitions activity happening.

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