Electric Thoughts in a Digital Era

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  • Subscription Commerce – The next big ecommerce vertical?

    eCommerce is at the moment an industry which is hot. Hot in the sense that there is investment being done and new verticals are being created. Creative solutions that help users solve problems and make offline events happen online are emerging.

    The most obvious example of this trend is, group coupon buying which has been made popular by Groupon and Living Social in the US. I have my own doubts over this area but the reason I mention this here is to highlight the fact that 2 years ago this ecosystem did not exist. So in the space of 2 years, multiple players have emerged and some of done this with a twist. Dealify for example have gone into ensuring that they offer hyper local deals. Gemgem focus on the mom and baby market here in South Africa.

    Gemgem bases its business model on the successful US ‘Groupon-clone’ site called Plum District, which understands the importance of the family market. Its rising success is driven by the power of the mom population in the US. Plum District CEO Megan Gardner says, “We know we’re doing something different because of the narrow focus of the audience, no one is focusing on the moms and the other thing is the moms’ sales force. We are not a one-hit wonder media buy.”

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  • Best Buy Launches Its Own Marketplace

    The Marketplace concept is one that both intrigues me but it also scares the living daylights out of me. Call it an oxymoron but its greatest strength could be it biggest challenge. Let me explain.

    So yesterday when Best Buy announced that is adding a marketplace to its offering..  The first problem that this creates for me is that this is not a unique offering. There are many other online retailers that does it and while it provides additional content to your offering for the long tail it may cause harm.

    Best Buy is following Amazon.com, eBay, Mastercard, Sears, Walmart and others in opening an online marketplace that gives consumers access to products from other merchants in addition to its own. According to a Financial Times report, Best Buy is responding to the development of its unintended role as “Amazon’s showroom”, the situation where consumers visit the chain’s stores with smartphones to comparison shop and eventually make their purchases online. CEO Brian Dunn, in a statement, called the Best Buy Marketplace “a key development to our multi-channel platform … that enables consumers to shop how they want and encourages additional reasons to visit and purchase at BestBuy.com.” ANT Online, BeachAudio.com, Buy.com, Mambate, SF Planet and Wayfair are third-party sellers that are participating in the launch of the Best Buy Marketplace.

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  • @WalmartLabs – The big retailer moves into digital

    Walmart is the biggest retailer in the world and arguable the most controversial. Labor disputes and being in the news not for financial results seems to happen fairly often.

    Wal-Mart Stores, Inc., (NYSE: WMT) serves customers and members more than 200 million times per week at more than 9,600 retail units under 69 different banners in 28 countries. With fiscal year 2011 sales of $419 billion, Walmart employs more than two million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity.

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  • The tablet game is going to change

    Before I start this post, a disclaimer: I own both a Kindle and an iPad. So this may seem a bit weird but I don’t  view them as advisories. They both are market leaders in their respective ecosystems but they are not to be compared.

    Apple has been dominating the tablet space since the iPad launched and in all honestly I had my doubts. However, the last 18 months Apple has absolutely owned the tablet space.

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  • Indian eCommerce is developing

    India is at the moment one of the most written about ecommerce markets. The size of the country is contributing to the rapid development and investment into Indian ecommerce. Amazon is supposedly considering the market in 2012, so the local businesses are trying to get set before big A arrives.

    As it is a developing internet market it poses challenges to international companies who are considering entering the market. I believe everyone who is interesting in the market are either considering acquisitions to enter the market or are investing heavily to ensure that their offers will draw Indian internet users.

    Investment firms have pumped $140 million into e-commerce startups over the past six months, compared with just $48 million in 2010 — while the valuations of some startups soared four to six times, according to a recent article in Forbes India.

    The big thing is that companies who did not get involved in China for example are looking at India as a market to enter. The concern is that they don’t want the short end of the deal again.

    Entering a developing economy is not anything like the challenges facing investors going in a mature developed market. You will face bigger challenges which will be solved with creative thinking as seen with Flipkart.

    Founded in 2007 by Sachin and Binny Bansal, two Indians formerly employed at Amazon, Flipkart has succeeded by adjusting the e-commerce model to fit local conditions. With credit-card penetration low, and the postal service and couriers notorious for lost and delayed shipments, the company pioneered a cash-on-delivery payment system and an in-house courier system that covers almost one-fourth of the country. Now selling music, movies, games and software, mobile phones and electronics, as well as books, the company reportedly does $6 million in sales per month.

    Flipkart is the darling of the Indian market at the moment.. but many other competitors will arrive as other companies want part of the action.

    Update: After writing this post and thinking carefully about the fact that ecommerce is a global industry I failed to add that Amazon is definitely a factor in India. After  seeing an article from comScore I think that one needs to always keep in mind that the big eCommerce players will impact your market. It would be ignorant to not have Amazon, eBay etc in mind.