Electric Thoughts in a Digital Era

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  • Amazon Coins come to UK & Germany, Magento Becomes Part of eBay Enterprise – eCommerce Stories Of The Week

    Amazon Coins come to UK & Germany, Magento becomes part of eBay enterprise, Microsoft closes Bing Shopping , eBay has not given up on China and much more

    eBay has finally done what everyone expected when they acquired Magento. They have made it part of eBay enterprise which is the old GSI Commerce. Magento for me has been something of a Pandora’s box regarding the future of this open source shopping cart. eBay is clearly trying to become a platform company that has a dominant platform for users globally and in select markets. A few interesting tidbits to consider – why did eBay wait almost 2 years to announce this? Will Roy Rubin and co stick around and what now happens to the GSI commerce assets? Magento is a shopping cart that has made massive steps forward for small to medium size ecommerce businesses but what happens now? Are they becoming an enterprise solution that no longer focuses on their core business?

    eBay are also looking at re-entering China after getting humiliated by Alibaba in the early 2000’s. It is pretty clear to me that eBay wants to be a player in emerging market ecommerce. However, entering markets with clear market leaders is gonna be tough. Consider that with a marketplace that is not eBay’s strength is now seen as asset in India, China and other regions one has to wonder if this is a case of long term thinking or ignorance..

    The other big story for the past week is the arrival of Amazon coins in the UK and Germany. The coins is aimed at Kindle Fire owners in the UK or Germany. Virtual Currency is a huge potential revenue maker for Amazon as it will get users to splurge on Amazon content (Games and eBooks) which Amazon already has paid for. The revenue made on the sale of the digital goods is clean profit.

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  • Fab Continues With Layoffs, Russia is not China or Brazil and the Kindle Arrives In Australia – eCommerce Stories Of The Week

    Fab Continues With Layoffs, Russia is not China regarding ecommerce, the Kindle Arrives In Australia, Zulily goes public and much more

    So Zulily is now a public company. First of the flash sales businesses to become a public company and worryingly is very thin on revenue. The problem I have with this whole situation is about expectations and that the Zulily IPO will make future ecommerce IPO’s difficult. I personally cant see how they are valued so highly and they are trading at multiples of the reality of Zulily’s business. Think about it – they are a low margin, marketing driven commerce business worth 50% of a mega business called Nordstrom. How does the CEO of Zulily handle these market expectations?

    The Kindle has arrived in Australia and the global impact of the Kindle is being seen in board rooms of publishers and ecommerce businesses. So that is the Digital Kindle business open in Australia, Brazil, India and Japan. Amazon has a presence in 2 of these markets and in the other 2 they are standing on the outside looking inside of potential revenue.

    It is another week of fab.com layoffs. I find no pleasure in writing the news but I have to wonder whether this is what Jason Goldberg had in mind when this process started. It seems that a large majority of senior staff is about to be made redundant and then will leave employment at Fab in early 2014. I must say it is becoming clear for me that fab is close to it’s Andrew Mason moment. Is it a case that they grew out of proportion with finance pressure or that Goldberg believes that he is driving force behind fab.com. Remember the last few months of Andrew Mason’s tenure at Groupon..

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  • Alibaba breaks records on Singles day, Amazon partners USPS and a conversation with Sina Afra – Ecommerce stories of the week

    Alibaba smashes records on Singles day, the most fraudulent ecommerce countries, Amazon partners USPS,  a conversation with Sina Afra and much more
    Folks, I am aware that I am a bit late but I wanted to wait until the end of this day to post anything. Why? Simple today is Singles day in China which has become a statement for Alibaba. If you wanted a sign of the power and the ability to disrupt that Alibaba has then 11 November is that sign. I understand that deep discounts impacted this day but to put it into perspective this is 2.5x Cyber Monday and according to Bloomberg:

    The Alibaba Group Holding Ltd. said transactions on its websites yesterday topped 35 billion yuan ($5.75 billion), surpassing last year’s single-day sales of 19.1 billion yuan.

    Amazon then did something that no-one saw coming. It unveiled USPS as its delivery partner for Sunday deliveries. It is not using it’s longstanding logistics partner UPS or FedEx but rather the US Postal Services. Increasingly it looks like Amazon is adding more reasons for users to select Prime as their preferred way to interact with Amazon.

    Amazon.com, Inc. (AMZN) is working with the U.S. Postal Service to deliver packages on Sunday, starting in the Los Angeles and New York metropolitan areas. Amazon Prime members, who receive unlimited, free two-day shipping on millions of items, can now receive their packages on Sunday in these areas. Amazon and the U.S. Postal Service plan to roll out this service to a large portion of the U.S. population in 2014 including Dallas, Houston, New Orleans and Phoenix, to name a few.

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  • A conversation with Sina Afra

    I had the opportunity to meet Sina Afra while I was in Turkey. Afra is the Co-founder and CEO of Markafoni a flash sales commerce business that was acquired by Naspers in July 2011. Markafoni is after Ventee-Privee the number 2 flash sales business in Europe.

    Sina Afra, is one of the few CEOs of a big commerce business that writes a blog that has become something akin to a must read for me. His annual state of Turkish commerce posts have always been a favorite of mine as it is in-depth and contains a lot of really good insight. I see Afra in the same light as some of the big ecommerce founders – visionary, thought leader and most of all a key part of his country’s ecommerce ecosystem.

    A few things were highlighted for me in our conversation:

    1. Sina is fiercely loyal to the Turkish ecommerce industry. He made no attempt to hide that which was great to see. In general most commerce executives I meet are in general stuck at watching the big players (Alibaba, Amazon and eBay) but forget about their local ecosystem. He made the point that in his mind Turkey is in the top 5 of the most important developing markets.
    2. He was absolutely inspirational in describing his business to me. The mere fact that he could recite key metrics made me realize just how in tune he is with his business. I am going to be trying to be more like him here as that ability to be fully aware of the business was beyond impressive.
    3. He made a great point of being able to look at the founders of commerce businesses in more detail regarding their education, background etc. I have heard this thinking once before (Jack Ma of Alibaba in one of this many videos) and after thinking about it in some detail I realized that this is something I have not thought about in more detail. This becomes very important when a new competitor enters your market as then you are able to understand their thinking and strategies.
    4. He also made a very clear case that the flash sales vertical is alive and well. Markafoni, Gilt and others are still making sales and delighting customers. I found this to be quite refreshing as I thought that the flash sales industry is under pressure.
    5. He made a very important point regarding emerging markets and that is that the ecosystem is very dependent on investors, angels and VC’s. We tend to forget about this factor when looking at a specific market. A great point to be aware of and also to keep in mind.

    I can honestly say – that the time I spent with Sina Afra was inspirational and highly educational. Turkey is very lucky to have him in their ecosystem as he has experience that not many commerce CEO’s have.

  • Amazon misunderstood, Fab buying and changing, China ecommerce grows – Ecommerce stories of the week

    Amazon Misunderstood?, fab buys assets and announces a massive change, Chinese ecommerce continues to show no sign of slowing down and much more

    Is Amazon misunderstood? Eugene Wei wrote a very insightful post on his previous employer. I understand what he says in terms of Amazon’s goals being out in the open but my question is what makes Amazon different? Customer centric is great, long term thinking is Bezos’s way of speaking to WallStreet but name me one other business that is so overvalued like Amazon? Take away Bezos and the Amazon.com name and I am willing to say that investors would call for the CEO’s head and investors will not be keen on investing. I am going to tackle the topic in the coming weeks as it is has been on my mind.

    Fab.com continues to acquire assets and make radical changes. Bradford Shelhammer becoming an advisor is symptomatic of a company that needs a long look at itself. I initially liked the fab.com concept as I believe flash sales is not going to disappear from the ecommerce vertical model chart. Why? You are providing an win for both the brand can customer. Why can businesses like Vente-Privee, One Kings Lane and Markafoni continue to be successful? Simple, leadership and long term belief in the model. I am beginning to think Jason Goldberg is maybe on the similar road to what Andrew Mason was a year ago..

    China and Chinese ecommerce has also been on my mind.  I believe that the ecommerce world is not giving Alibaba enough respect and as soon as they IPO the global ecommerce landscape is going to change. Consider the following hypothetical situation – Alibaba is valued at $150 billion dollars and have $15 billion dollars in the war chest to disrupt markets? Chinese Internet companies will always be black swans as they have scale not seen anywhere in the world. Suddenly – the whole ecosystem changes as top talent will be going to these companies, they will be able to acquire their way into markets and as they have billions in the bank they can crush companies. I have spent the last 6 months pondering about global ecommerce – spoken to a variety of thoughtleaders and have realised Chinese companies are about to start aggressively moving into markets. Alibaba and Tencent have already started the process and that should leave many of us to ponder our businesses.

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