The week was one that featured a major story from Amazon and the realities and impact surrounding Alibaba became real. That is the summary of the past week. The Fire phone release was not unexpected but Amazon did cause some head scratching with costs of the device. I am writing a larger post of the Fire phone as the implications of it – is not to be underestimated.

Alibaba’s impact on Asian and global commerce is now in the public domain. The updated SEC filing contained a variety of details about Tmall and Taobao. Every ecommerce executive should take a look at the impact of this Chinese behemoth has had in its home market and consider the impact it can have on your market. The next set of questions relates to their IPO – how much money is Alibaba looking to raise? What are the strategic next steps for Alibaba?

Snapdeal seems to be starting the road to an IPO as well. The Indian marketplace is part of Indian ecommerce, which is a hotbed and a capital hungry industry at the moment. The Snapdeal story is one that is interesting – they started as a daily deals business which pivoted to a full price ecommerce business. The business has evolved into a marketplace and has also raised significant capital. The question that both Flipkart and Snapdeal raises for me – on what basis will investors be contributing to their potential IPO’s? Potential of the market, size of the opportunity or long term investment into a new emerging ecommerce market. This will be interesting to follow.

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I have been ill and thus am still catching up on reading all the stories that have happened in the ecommerce industry over the last week. There are 2 major stories that has my attention at the moment – Amazon is currently in tough negotiations with Hachette and Warner Brothers.  Secondly, Alibaba has updated their IPO prospectus after the initial draft was deemed lacking of detail (critical detail I might add).

I wrote in 2012 that Amazon is potentially its biggest competitor and the happenings of the last 2 weeks have reinforced my belief that Amazon needs to be careful regarding supplier negotiation. Hachette’s books not being in search results or having buy buttons on their product pages only affect one company – Amazon. Remember that Amazon is the starting point for users looking to purchase products and if the products are not available, users will leave the Seattle based based and head off to Walmart, Google Shopping. What complicates this situation is that Amazon is the largest seller of books in the US (I would not be surprised if it was the same for DVD’s etc).  Clearly there is more this story but Amazon is having to play defence at a time in which ecommerce is changing due to a Chinese behemoth…

Alibaba on the other hand have filed an updated IPO filing with additional details such as key partners and more details about their 2 marketplaces (Tmall and Taobao). I find the timing of the unveiling of 11main also very interesting – it feels to me like it is almost a research and development business that will lead to a bigger acquisition. Alibaba is going to be controversial – the partnership structure as well as how the business is structured is going to pose questions for would be investors. As I said and keep saying – this will change ecommerce as an industry unlike any other IPO.

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Alibaba Files IPO in the U.S, Four problems that irritate Amazon, but threaten Alibaba’s existence, Apple is No. 2 after Amazon in online retail, Zulily’s Delivery Problem: the Packages Pile Up, Aramex Partners With InPost For Middle East Parcel Locker Network, Singapore’s GIC leads $170 mln investment in Brazil’s Netshoes and much more

It is finally here – Alibaba has started the process to go public and be listed in the US. They are clearly managing the process – they still have not indicated whether they will be listing on the NYSE or the Nasdaq. The initial document contains a few caveats and is indicating that only a billion dollars is to be raised (that is not the final number) and I suspect that the investment banks are fighting between themselves for position. Potentially there is a $400 million prize awaiting the successful investment bank /s that ensures a successful IPO for Alibaba. There is a lot of information in the initial documents but not a single mention is seen regarding Taobao and Tmall (which in my mind is a potential gold mine for investors). Alibaba also faces challenges that normal western businesses are not privy to. Everyone seems to think that mobile is their biggest challenge for the future but I disagree (that is another blogpost coming soon).

A story worth noting is the giant $170 million round of funding that Netshoes raised. Netshoes is a business that gets very little press coverage but it is a giant pure play ecommerce business in Latin America. “This investment round is the largest in the history of Netshoes. It happens at a time of relative economic instability in the country, which proves the fact that good companies with solid fundamentals remain able to attract the attention of blue chip investors“, says José Rogério Luiz, Vice President of Corporate Development for Netshoes.” I can’t help but think we are close to a bubble in terms of ecommerce investment.

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Ozon raises $150M capital, Rakuten to enter India?, Google acquires Rangespan, Amazon working on a computer chips, Mobile users contribute 50% of Snapdeal’s sales, Rakuten Taiwan and Google join forces in e-commerce market, Looks Like Groupon Wants to Take on Costco (And Amazon Pantry, Too) and much more..

Rakuten is talking about entering the Indian ecommerce market. It seems that they are interested in entering the market via a travel business. The Japanese company has global ambitions but I cant help feeling that they are entering the market to late. Flipkart, Snapdeal and Amazon have pretty much sown up the market and entering the market for Rakuten this late will cost millions of Dollars. The travel market is also competitive and thus this concept is one that Rakuten already executes well in Japan. Time will tell what Rakuten wants to do in India but it will be spending lots of money by entering a very competitive landscape.

Groupon has also shown its hand with Groupon Basics. The daily deals business that grew at an astonishing rate has been pivoting over the last 12 months to a combination of local and now pure play ecommerce. The problem that Groupon will face with this vertical is selection. Currently they have a 100 products for sale and the competition (Costco, Amazon Pantry and Sam’s Club) has a much bigger selection. Can Groupon really afford the battle with these grocery behemoths? I think not..

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Target sees product subscriptions as a big push to counter the ‘Amazon Effect’, Birchbox announces $60M Series B investment, Wal-Mart will turn the electronic receipt into a sales tool, Russians flocking to Taobao, Etsy buys Grand St, Amazon test it’s own logistics network and much more

This past week is one that influences ecommerce greatly. Amazon posted its Q1 results and has in the process finally come clean about one of their great challenges. Shipping/ logistics costs are becoming increasingly seen as a large balance sheet problem. Let me be clear – for any ecommerce business – the costs for shipping items to customers is a large challenge. From a business point of view – businesses can either put the shipping costs into the profit margins on products or pass the shipping costs on to the customers. Amazon has for years taken the costs through its Amazon Prime business but clearly the Seattle based business is looking for a way in which they can distribute some of that costs to other sellers (marketplace) or platforms (owning the last mile).

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