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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eBay acquires Shutl and is subject to an investigation, same old Amazon seen in quarterly results, Fab redesigns and much more.

It was a bumper news week for the ecommerce industry. Amazon announced a second quarter in which they made a loss but their stock price increased. I have been thinking about Amazon.com in some detail and think these quarterly results is only giving the world a partial look at the Seattle based business. Amazon has increased their free shipping amount for the first time in 10 years to $35 and then in the analyst call mentioned that “millions of Prime members were added in the last quarter.” Coincidence? I think not.

Google is increasingly using maps and local to compete with Amazon. For me the hypocrisy seen in the last few weeks regarding Hummingbird, Banner ads in Search and these new PLA managment campaigns are all designed to do one thing – make Google more money. I can honestly say – Google is no saint but their “we care about our users” line can be kept in Mountain view meetings. Anyone notice that since Marissa Mayer left all the things she stood for has been changed.

Alibaba has not yet decided where they want to do their IPO. First it was Hong Kong, then New York and now Hong Kong is seemingly back in the good books of Alibaba management. The bigger story is that Alibaba has unveiled an investment group that will be seen in the US. I personally think Alibaba is going to hard into the US. Why? Jack Ma wants to show Amazon, eBay and other that his company is the most powerful ecommerce business in the world. He will invest in startups like ShopRunner, Fanatics and others. Alibaba will be able to invest a few billion if they want to.

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Apple appoints a new commerce chief, Google becomes a $1000 stock, eBay hires a CPO from Apple and Alibaba is no Amazon..

Apple is a brand trying to regain its vibrancy after the passing of their inspiration and leader Steve Jobs. However, one of the things Jobs did that gets lost in all the iDevices and rumors is the fact that Jobs understood the importance of retail. He was the only big technology CEO thinking about the long term effects of retail on his business.

When I travel, I make a point of visiting the local Apple store if they are in the country. Why? Apple has in my opinion created the closest execution of what I believe retail will be in the next 5 years. The news that Apple has appointed Angela Ahrendts as its new chief of retail is not a surprise at all. Ahrendts brings a few things to the table for her new role. She has turned around a brand that was almost dead into a highly successful global fashion brand. She has ensured that Burberry is a dominant player in Chinese luxury retail and lets be honest, Apple has battled in the emerging markets. I agree with Greg Betinelli that Ahrendts is going to have her hands full as Apple is a completely different challenge in comparison to Burberry.

I’m questioning the Angela Ahrendts chatter. $BRBY = $7B company. $AAPL = $450B. 65x difference. Major Leagues vs. Minor Leagues. Easy call.

— Greg Bettinelli (@gregbettinelli) October 15, 2013

Google had their earnings call this week and they had a massive quarter. Wall Street loved them and then the stock became a $1000. I suspect that in the next 12 months that will increase to anything in the range of $1250 – $1500.(Please note I do not own Google stock nor is this to be seen as financial advice).

Why? Google Shopping will have a massive 4th quarter as PLA’s will make a lot of revenue. Secondly, they are now beginning to show their hand related to commerce. Local is where they are going to be focusing on.  The local reviews and “City experts” is all about another data point for the Mountain view behemoth. Yelp is officially been placed on notice..  Google is now going to flex its commerce muscles – first by adding data to their Trusted stores program “when consumers roll over the Trusted Stores badges on e-commerce sites—the badges are typically found in the bottom corners of the sites—they will see performance data from StellaService.” They will also be adding (depending on user settings) customer images and reviews to ads.

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The Secrets of Bezos, Shoprunner gets funding from Alibaba, Flipkart raises more capital, Google being investigated in Brazil and Zulily wants to IPO

Readers – don’t stress this is the 10 ecommerce stories for the week of 10 October just with some changes. Moving forward the week ending post will contain the headline stories in the title as the old title was not doing it for me.

We had a bumper week of ecommerce news – Amazon’s secret sauce got into the public eye for the first time. I for one cannot wait for Brad Stone’s book on Amazon. I have a feeling it will become mandatory reading for any ecommerce executive who wants to understand Amazon’s business. I read One Click – the last book on Amazon and felt it was a regurgitation of known news. I think anyone could have guessed that the difference maker at Amazon is its founder Jeff P Bezos. There are 3 people in the ecommerce industry that I view in the same sentence as Bezos – obviously Bezos as the father of ecommerce, Jack Ma from Alibaba whom created a juggernaut. Lastly, the chairman of Naspers Koos Bekker is also in this conversation. All 3 are visionaries, skate where the puck is going to be and speak very seldom to the press. When the speak to the press they always mention the core of their business as the driver of their thinking.  I will be tackling this topic in some more depth in the coming months..

The Story of the week for me is ShopRunner raising $200 million which was lead by Alibaba. It is becoming clear that same day / 2 day shipping business is now where every ecommerce business in North America wants to be in. Amazon started the arms race but ShopRunner is a big story. Why? One – Alibaba leading the round of an potential bolt on is new (I think we will see this occurring a bit more until Alibaba does their IPO). Secondly, ShopRunner is part of the Kynetic stable which is a business I keep reading about. Kynetic was formed by Michael Rubin when eBay acquired GSI commerce and then they spun Fanatics, ShopRunner and Rue La La off into a new entity (Kynetic). ShopRunner is lead by Scott Thompson who was Yahoo!’s CEO until his qualifications got questions. Thompson is playing coy about what the funding will be used for but I think it could be a variety of things (international, additional partners etc).

Flipkart raised an additional $160 million for logistics and investment into payments and ebooks. I have seen this before and the Flipkart story is a beginning to a long journey. A few things stood out for me – only one existing investor took part in this round (Tiger Global Management) and that the round in total was $360 million. That makes the total investment into Flipkart a giant $550 million.

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Amazon interested in Europe, WeChat disrupts the shopping experience, Netshoes builds a mobile empire, Fab downsizes their New York operation and much more.

The first week of October is in the record books and it contained a lot of ecommerce news. In weeks gone by, I have had time to think and it is pretty clear ecommerce is now a global business. The competition might no longer be corner store but rather a very large venture backed business that can influence your customers . I have a suspicion that the visitors to this past weeks Shop.org Annual Summit was more international than in years past. (For the record, that is one event I still want to attend..).

If I look into the news of the past week – then it is pretty clear that mobile and logistics is the new differentiators. Mobile is still the one part of ecommerce that is still in its infancy (yes, I know it is important) but best practices etc is still very much kept inside businesses. Logistics on the other hand is the reason why venture capital and investors are putting their Dollars / Euros for the long haul ROI. Take the news that Amazon is looking at Distribution centres in the Czech Republic and Poland. Is that a reaction to the labour issues the business has faced in Germany or a case of getting closer to their customers? I tend to think it is a bit of both.

Netshoes is arguably one of the biggest ecommerce businesses in Latin America. Generally, there are few times in the year in which businesses like Netshoes provide detail. I found their mobile business as discussed at Shop.org interesting. Why? They are firmly aware of when users use their mobile app (hello football broadcasts) and have done specific features to leverage their own catalog. Geo-location and mobile remarketing via a partnership with Google. I have a feeling we are going to see businesses doing a lot of predictive analysis and personalisation to bolster their mobile products.

Well, Fab.com has laid of 101 of their staff members. They have since beginning of the year downsized their operation by 37%. AllThingsD had an article over the downsizing due to a bad bet over flash sales. I dont particularly agree with that as being the cause for their retrenchments nor is the answer a faster road to profitability. I am not going to go in detail as I am going to write a post on it as soon as this weekly recap is done.
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