The week is in the history books and it contained news that will have significant impact on ecommerce over the next 12 – 18 months. Google is to increase their investment into same day delivery to the rumored amount of $500 million. Commerce is one of the few online industries in which Google is not the dominant first point of contact for Internet users. In terms of their core business (which is advertising) the fact that Amazon is the first place on which customers search for products means that Google is losing the opportunity to show ads and make revenue.

Flipkart is at the moment the market leader in ecommerce in India. They are raising money at astounding rates and will most probably IPO in the next 12 months. Flipkart is having to battle Amazon in India which is burning the cash they raised. They are supposedly looking to raise another $500 million before they go public but I keep wondering whether they are growing too fast – what Amazon took 20 years build, Flipkart has almost done in 25% of the time.

Alibaba is also on route to their IPO. The investment banks are all trying to get a piece of the action as the money they will make from this event is astonishing. Goldman Sachs was an early investor in Alibaba and then sold their stake way too early. Goldman Sachs invested  $3.5 million and then sold that stake for $22 million in 2004 – I wonder what that stake would be worth today?

The stories that caught my attention this past week:

Amazon India entry has raised consolidation pace in eCom: study (Business Standard) – “Entry of e-commerce giant Amazon in the Indian market in June last year has not only spurred heightened competition, but has also increased the pace of consolidation in the $2.3 billion e-tailing market, a report said. According to report by consulting firm Technopak, the sector could witness mergers or acquisitions between firms with same investors, while niche and specialty players could be acquired by larger firms.”

Why Jack Ma Separated Alipay In Alibaba’s Words (WSJ) – “In its latest filing, Alibaba said that in June 2010, the People’s Bank of China, the country’s central bank, issued new regulations requiring non-bank payment companies to obtain a license in order to operate in China. The PBOC at the time provided license application guidelines only for domestic Chinese entities, and said it would clarify rules for foreign companies at a later date. Like many other Chinese Internet companies, Alibaba has incorporated itself offshore—in the Cayman Islands—so it can attract foreign investors without running afoul of restrictions on non-Chinese ownership of sensitive companies. Key licenses to operate Alibaba’s Internet businesses in China are held by domestic entities that are tied to the offshore entity through contracts. But this structure makes Alibaba technically a foreign-invested entity, and Alipay at the time was still part of Alibaba Group.”

Judge orders unmasking of Amazon.com  “negative” reviewers (Arstechnica) – “A federal judge has granted a nutritional supplement firm’s request to help it learn the identities of those who allegedly left “phony negative” reviews of its products on Amazon.com. The decision means that Ubervita may issue subpoena’s to Amazon.com and Cragslist to cough up the identities of those behind a “campaign of dirty tricks against Ubervita in a wrongful effort to put Ubervita at a competitive disadvantage in the marketplace” (PDF).”

Nordstrom integrates Instagram to create shopping experience (Luxurydaily) – “Department store chain Nordstrom is using Instagram to encourage consumers to purchase products featured on the social media platform. The retailer posted an image July 9 with a link to a site that compiles all the products from Nordstrom’s Instagram into an ecommerce experience. The inability to directly click on a link within the Instagram application may prevent consumers from pursuing the address, but for those willing to open their browsers and view the Web site, it will likely create a stronger relationship between the consumer and a brand and its social media use.”

Flipkart Fights to Keep India E-Commerce Lead Over Amazon (Bloomberg Businessweek) – “Despite the market’s growth potential, Amazon has a good chance to overtake Flipkart on its home turf, says Mahesh Murthy, a managing partner at Seedfund, a venture capital firm in Mumbai. “I believe that one viable business will dominate the niche. However, it increasingly appears that Flipkart may not be that company,” he says. Amazon, he notes, “has come to within striking distance of Flipkart … and it continues to have deep pockets, and it’s a patient player.””

Southeast Asia E-Commerce Set to Boom (WSJ) – “That threatens traditional retailers, since Southeast Asia’s consumers are already visiting online retailers 41 times for every single visit to traditional platforms, despite obstacles such as poor retail logistics systems and limited credit card usage. Online retailers, which have already gained market share on brick and mortar stores, will flourish as more and more users get Web access, Maguire writes in the report, which was released last month to UBS’s clients.”

Logistics challenges could stifle Singapore’s e-commerce boom (TodayOnline) – ““The lines are blurring between logistics and e-commerce,” said Mr Roger Egan, co-founder and chief executive officer of local online grocery store RedMart. “There is a misconception that e-commerce is all about the front end — website design and mobile applications. But those who can control the entire supply chain and logistics will win.”Some players in the field are thus seeking to beat the game by creating their own supply and logistics chain, including having their own fleet of delivery vehicles and customised delivery times, and partnering brick-and-mortar firms to provide pick-up points.”

With eBay’s Earnings on Tap, Its Data Breach and SEO Penalty Loom Large (Recode) – “May was a very bad month for eBay. Next week we’ll see just how bad it was. On Wednesday, eBay will report financial results for the second quarter. Analysts are expecting average earnings of 68 cents per share on $4.38 billion in revenue. But the combination of two negative events that occurred halfway through the quarter could mean eBay’s results come in below those estimates.”

France ties Amazon’s hands behind its back to give indie booksellers a fighting chance (Pando) – “Amazon has taken a break from exploiting customers and tempting authors in its negotiation efforts with publishers to do something good for users: It’s circumventing a French law forbidding it from offering free shipping by charging one-tenth of a euro instead. The law also prevents Amazon from discounting book prices, and that aspect hasn’t been quite as easy to avoid, with the company saying in a statement that it can no longer offer price cuts. The Wall Street Journal reports that the law is known as the Anti-Amazon law in the country, where it was introduced to defend independent booksellers from retailers like Amazon, which was previously thought to become its largest bookseller some time in 2017.”

Amazon to FAA: Let us fly our drones (CNN Money) – “Amazon(AMZN, Tech30) has asked the Federal Aviation Administration for permission to conduct outdoor tests near its Seattle headquarters. Amazon, in a letter to the FAA, said that it has already conducted indoor tests.It says its drones will “travel over 50 miles per hour, and will carry 5-pound payloads.” That would cover 86% of products sold on Amazon, the company said.”

Google’s new Shopping Express and the risk of online partnerships (RetailWire) – “In response, Google has created a localized online marketplace, Google Shopping Express, which delivers products to consumers from local retail locations. Google promises to deliver products picked up at retail locations to the consumer within specified time windows. In Manhattan, Google’s new service still seems to be dominated by national chains — Target, Costco, Walgreens, Staples, etc. — but they are asking consumers to let them know about local retailers. Google allows consumers to shop by store and category, but also warns that all items might not be available at a particular outlet. All in all, it seems a little cumbersome to me and it is only available in a few locations. Then again, Google is just getting started.”

Fashion forward: Here’s 20 fashion e-commerce startups to watch in Europe (tech.eu) – “However, as technological innovation continues to bring incredible amounts of change to the world of fashion, we’re seeing many European companies with the potential to (re)shape this space, particularly in fashion e-commerce. Unsurprisingly, a good chunk of them hail from fashion capitals such London, where veteran online retailers ASOS and Net-a-Porter are based, and Paris. Whether it be flash sales, online consignment, social curation or online marketplaces, fashion eCommerce startups in various forms are trying to crack the market.”

Local Listing Service 58.com  to Offer Loans to Small Businesses – Taobao of local services (Technode) - “Chinese local listing site 58.com (NYSE: WUBA) announced on July 7 to build a peer-to-peer lending platform to finance local merchants who post listings on its site. The service will be jointly established with consumer financing service provider United Asia Finance Ltd., a subsidiary of Sun Hung Kai & Co. Ltd., Hong Kong’s leading financial institution.“

Credit cards, internet access, and online bill pay: Moroccan e-commerce is booming (Wamda) – “According to Maroc Telecommerce, the first e-commerce operator in the country, the amount of purchases and payment online has increased from $3.8 million USD in 2008 to $90 million USD in 2012, with more than 1.25 million transactions on the platform alone. The Interbank Monetary Center (CMI) also reported high figures, claiming that 9.5 million credit cards were in circulation in 2013, and more than 171 million online bill pay transactions were undertaken between January and September 2013, totaling $17.7 billion USD.”

Woot Founder Does It Again. Meet Meh.com (eCommerceBytes) - “Meh.com, launched this week, is similar to Woot. When asked what he was doing differently with his new company, Mediocre Labs, Rutledge told EcommerceBytes, “Because Meh.com is a single experiment we’ll run, we can be more idealistic and keep it focused,” he said. “There are other business facings to lean on and new site ideas to launch without interfering with what we believe can remain simple and fun. We also have some fun differences in brand, tone and site function, but these are best left discovered.” One of those differences is how Meh handles shipping. Many ecommerce experts say consumers demand free, fast shipping, though merchants will tell you there is no such thing as free shipping. So it’s interesting to see how Meh.com handles the issue, given that Rutledge spent time at Amazon, which offers a shipping membership program.”

Powerful Network Effect Makes Alibaba a Rare Find (MorningStar) – “Alibaba’s network effect is unusual, having been established in a category that we expect to have a very long runway for growth based on consumer disposable income and consumption trends, Internet adoption levels, and a highly fragmented retail market. This is in contrast to many other industries, which have often reached a more mature state by the time leading players establish a meaningful network effect.’

Google Goes After The Travel Market (StrategyEye) – “Amid all the attention on eye-catching initiatives such as self-driving cars, drones and Google Glass, the world’s biggest search company is quietly disrupting another industry. Google Flights, a site where users can browse dates and book, has been around for a while, but the service recently received a significant upgrade to make the service more visual. “

Mcommerce is booming in Austria (EcommerceNews.eu) – “Distance sellers in Austria have together sold products and services worth almost seven billion euros in the period May 2013 to April 2014. This corresponds to a growth rate of 8 percent compared to the same period last year. A new study shows ‘dynamic development’ and ‘changes consumer behavior’ in the Austrian distance trade during the period 2013/2014. Partly thanks to a booming mobile commerce industry.”

Jumia opens up online marketplace in Nigeria to empower offline SMEs  (Ventureburn) – “After celebrating its 2nd year anniversary, ecommerce store Jumia Nigeria has now announced the launch of its online Marketplace where third-party merchants can leverage its online presence to sell goods and services. This comes two weeks after it launched the Kenyan equivalent.The Rocket Internet-backed venture says that this marketplace bridges the gap between consumers and access to products. It’s one step closer to building Jumia’s vision of having a massive impact on the Nigerian economy.”

Tisch brothers raise $7.5M to build a high-end shopping mall on your phone (Recode) -”The lead investors were Thrive Capital, David Tisch’s investment firm Box Group and Groupe Arnault. The last of the three is the investment arm of LVMH, the luxury goods conglomerate that owns brands such as Louis Vuitton, Fendi and Dior. At a high level, Spring is building a shopping app for your phone through which different brands can sell their wares directly to shoppers. In an interview, David Tisch called it a “mobile marketplace … to create an experience that’s the easiest way to shop on your phone.””

3 Entrepreneurs Capitalizing On The World’s Fastest-Growing E-Commerce Market (MENA) (Forbes) – “Where startups in New York and Silicon Valley are largely relegated to finding niches within niche markets, startups in the Middle East are breaking ground with every success. There’s still a chance here to be the first bookseller, or first fashion powerhouse, or first major ecommerce platform. The companies built here, if they succeed, could find major acquirers and a handful will eventually make it to an IPO in New York or London. Here are three Jordanian startups poised to capitalize on this growth: ShopGo, Jamalon and Feesheh.”

Amazon at 20 years: From garage startup to global technology powerhouse (Geekwire) – “In July 1994 — 20 years ago this month — Jeff Bezos officially established the company that would come to be known as Amazon.com, setting up shop in the garage of his rental house on a winding suburban road in Bellevue, Wash., east of Seattle. The garage has since been converted into a living room, but at last check the home still featured an oversized mailbox at the curb — which, according to legend, was put there to accommodate all the book catalogs that the company was receiving in its early days.”

5 things I believe about the future of E-Commerce (Fits and Starts) – “In closing, I believe that e-commerce and technology enabled retail is a gigantic opportunity globally. This is especially true because it is possible for founders without engineering backgrounds to start one and succeed, due to the conditions around the commoditization of retail infrastructure, and due to the emergence of global cypto-currencies which open up market opportunities in third world countries.”

Amazon makes a direct offer to Hachette authors: Here’s the full letter (GigaOM) – “David Naggar, VP of Kindle content and independent publishing, sent a letter to a few Hachette authors, literary agents and Authors Guild president Roxana Robinson over the weekend suggesting that “for as long as this dispute lasts, Hachette authors would get 100% of the sales price of every Hachette ebook we sell. Both Amazon and Hachette would forego all revenue and profit from the sale of every ebook until an agreement is reached.” The idea, seemingly, is that that loss of ebook revenue would “motivate both Hachette and Amazon to work faster to resolve the situation.””

The six major ecommerce trends in Spain (Ecommercenews.eu) – “Rakuten, one of world’s largest internet companies by revenue and also one of the biggest ecommerce companies in Spain, has identified six trends for the summer season that has just begun. This summer, half of Spanish consumers will purchase something online. And while the desktop computer is still the most used method to buy things on the Internet, about 26% of Spaniards will order something online using their mobile phone, a report from Rakuten shows, according to Informaria.com.”

Linio, Rocket Internet’s Amazon Play In Latin America, Rakes In Another $79M (TechCrunch) – “Rocket Internet, the Berlin-based e-commerce incubator, is today announcing the latest chapter in its strategy to build out businesses in emerging countries. Linio, an Amazon-style e-commerce marketplace active in Mexico, Colombia, Venezuela and Peru, has raised an additional $79 million (€58 million), led by new investor Northgate Capital and Access Industries. The company says the financing will be used to expand its footprint to other large Latin American markets like Chile and beyond.”

Learning the Secrets of E-Commerce in China (NY Times) – “I buy most of my groceries online whether I’m in the United States or China. In America, the process takes 10 minutes, and groceries are delivered by the day’s end. In China, the ordering is simple but always involves many subsequent back-and-forth phone calls with the company that fulfills the order. Simple items like bread or bottled water can generate a call to discuss substitutions of brand or bottle size I will accept. The follow-up calls typically take up an additional half-hour.”

Is Bonobos paving the way for e-commerce showrooms? (RetailWire) – “Clearly a fan of showrooming as long as it leads to their own website, Bonobos Inc. has announced plans to have 40 “Guideshops” open nationwide by 2016. The Manhattan-based men’s clothing specialist currently operates 10 Guideshops. These shops allow customers to try on Bonobos merchandise and make assisted purchases online while in the location. Each shop has only enough space to display a limited range of men’s pants, shirts and suits in addition to the fitting room and the promise of one-on-one attentive service. With Bonobos.com serving as a virtual stockroom, investment in real estate for these “e-commerce stores” is minimal, with locations ranging up to 1,500 square feet.”

How A Lucky Run In Vegas Saved FedEx (Priceonomics) - “On Monday, however, he discovered the company’s checking account held $32,000. When Frock asked Smith about the source of the money, Smith replied, “I knew we needed money for Monday, so I took a plane to Las Vegas and won $27,000.” The leaders of Federal Express had been hoping for a group of investors to raise additional funding — something they’d expected for some time. Smith had met with the board of General Dynamics, a large defense contractor, and when they declined to offer money, he flew to Vegas instead of going home.”

Is Google Shopping Express Destined to Become Webvan? (Screenwerk) – “While online and offline commerce are blurring and more people buy things online, there’s a social-emotional component to offline shopping that can’t be fulfilled by shopping on the PC. People like to go out into stores, be with other people and see products physically. Shopping malls (horrific as they are) are entertainment environments — not just utilitarian collections of stores for consumer convenience. I could be completely wrong but I’m betting that while services such as Shopping Express and Amazon Fresh can deliver utility and will gain some degree of adoption, they’re not going to be the multi-billion dollar businesses their companies hope.”

Amazon quietly rolls out Sunday delivery in Seattle and Portland; Many cities to follow, including Bay Area & Boston (Geekwire) -  “After starting in selected cities around the country, Amazon and the U.S. Postal Service are closer to rolling out Sunday parcel delivery on a nationwide scale. In recent weeks, Sunday delivery has launched in Seattle and Portland, and various other cities are potentially only weeks from going live — including the Boston area and a huge swath of California, including San Francisco and Silicon Valley.”

E-commerce will contribute 10 % to Nigerian GDP —Konga CEO/Founder (Nigerian Tribune) – ” think it is still very early but I believe there has been a lot of job creation. Konga alone directly has created about 560 jobs and it is providing a platform for thousands of people to sell. We think that as we go on, you are going to start to see our effect on the economy in a very real way. I think e-commerce is ultimately going to be responsible for 5-10 per cent of our GDP.”

Profitless’ Amazon Myth Lives On Thanks To Lazy Financial Media (Peridot Capital) – “As a result, the relevent metric for Amazon (or any other company) when measuring profitability should be operating cash flow. It’s fancy term that simply means the amount of actual net cash generated (in this case “generated” means inflows less outflows, not simply inflows) by your business operations. In the chart below I have calculated operating cash flow margins (actual net cash profit divided by revenue) for five large retailing companies — Costco, Walgreen, Target, Wal-Mart, and Amazon — during the past 12 months. The media would have you belive that Amazon would lag on this metric, despite the cognitive dissonance that would result if you stopped to think about how Amazon has been able to grow as fast as they have and enter new product areas so aggressively. After all, if they don’t make any money, where have the billions of dollars required for these ventures come from? The answer, of course, is that Amazon is actually quite profitable.”

Online marketplaces tap India’s growing ecommerce market (Seattle Times) – “Greater profitability is another reason all major Web retailers in India have embraced the so-called marketplace model popularized by Alibaba Group. Individual sellers bear the costs of inventory, leaving website operators to focus on technology, marketing and logistics, said Mark Tanner, the founder of China Skinny, a Shanghai-based research and marketing firm. Operating a marketplace “effectively transfers almost all of the costs, risk and responsibilities to the vendor,” Tanner said. ”It’s a pretty good position to be in for e-commerce companies.’’”

Price comparison sites can boost e-commerce market (KhaleejTimes) – ” The UAE-based website, a price comparison portal, has found that prices for consumer goods in the UAE can differ up to 30 per cent between varying locations, leaving many customers across the emirate unlucky due to a lack of transparency in the market around pricing. “The price differentials in the UAE are among the highest in the world, putting some consumers at a disadvantage if they don’t have information about lower prices elsewhere,” pricena.com founder Haneen Dabain told Khaleej Times on Saturday.”

Zuora’s Journey To Managing The Subscription Economy (TechCrunch) – “Rao and Tzuo started the standard co-founder “dating” ritual. They met for coffee, took to the whiteboard for strategy sessions, and had a few double dates with their wives. Tzuo got the feeling that Zuora was on to something and this was his next step. So he went to talk to Benioff to get his approval and perspective. As Tzuo recalls, Benioff always said he had to go to his then-boss Larry Ellison at Oracle three times before he got the approval to leave. Tzuo expected Benioff to be equally as hard on him — but Benioff believed in the idea, and as Tzuo explains, “is a big believer in building.””

Apple signs deal with Saudi bookshop in regional first (Al Arabiya) – “n the first deal of its kind in the Middle East, Apple has inked an agreement with Saudi bookshop Jarir to supply all Apple products through the outlet, as well as providing an after-sales service. In an interview with Al Arabiya News Channel, Jarir’s chairman, Mohammad al-Aqeel, said that this agreement will allow the prices of Apple products sold at Jarir branches to be slightly reduced.”

Fab’s CEO, Still Standing, Is Plotting The Next 20 Years (Recode) – “Forget what you know about the old Fab. This time CEO Jason Goldberg thinks he’s finally got it right with a new furniture site called Hem. Investors can be forgiven for demanding Goldberg’s head given the sheer number of pivots the e-commerce site has endured. Goldberg is plotting yet another new path, and a new brand, to prove he can build a successful business on the back of $300 million in venture capital funding.”

Till later on in the week. Onwards.

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