We are a week or 10 days away from the Alibaba IPO. Alibaba’s IPO is currently driving the ecommerce industry as companies ensure that they are best prepared after Alibaba raises billions. One company clearly working hard to combat Alibaba’s potential impact is Rakuten. Rakuten has been acquiring US based businesses which they will add to their Asian based business. Interestingly – I wonder why has Rakuten not thought about acquiring businesses in Asia? Their last 2 purchases has been US based companies that for all intensive purposes will become bolt-ons. The eBates acquisition is in my opinion a clever acquisition – one it can be added to Rakuten’s global business but also provide intelligence towards where shoppers get most cash back post purchase. Is Rakuten looking to buy more ecommerce companies?
Something is happening at eBay and it is not good. Firstly – Apple conveniently does not mention PayPal as part of their Apple Pay product. For the record I think Apple Pay being US only is indicative of Apple trying to get all elements (partnerships, legislation etc) done prior to rolling it out globally. PayPal has a problem; Amazon, Google and now Apple are looking to add more value to their payments businesses while keeping PayPal outside their ecosystems.
I don’t agree with the news that eBay will be adding a mobile advertising network in Q4. It reeks of desperation as advertising inside mobile apps lead to confused users, a drop in click through rates that adversely affects mobile conversion rates (which are low in any case). I don’t see Alibaba, Amazon or any other mobile apps ecommerce business as adding advertising soon.. Also this story, every quarter that Google is to invest in eBay is either eBay looking for help from Google or an analyst that wants to increase the eBay share price for a few hours. I don’t see Google investing in eBay as that will in the long run create huge trust issues for Google inside the commerce industry.
The ecommerce news that caught my attention over the last 2 weeks:
Suning will likely adopt Amazon’s cross-border e-commerce model (Want China Times) – “Suning Appliance Company has set up a cross-border e-commerce unit and plans to build its own cross-border e-commerce system by the end of this year, to compete with the direct mail operations of Tmall and Amazon, Shanghai-based China Business News reports, citing unnamed sources from the company.
The success of the venture will hinge on whether Suning can establish a complete overseas supply chain and whether it can get preferential treatment from policymakers domestically, said Lu Zhenwang, an independent e-commerce observer.”
How Apple Pay Will Destroy the Online-Offline Shopping Divide (Wired) – “Apple Pay isn’t just a way to pay for stuff at places like McDonald’s, Walgreens, and Macy’s. It’s a new way to pay for stuff inside mobile applications like Uber, which lets you instantly order a car ride, and Instacart, which lets you instantly order groceries. In short, it equips your phone with a single way to pay for anything—online, offline, or in that new netherworld between the two recently pioneered by the likes of Uber, an app that lets you pay for an immediate offline experience using an online tool. “
Publishing and Reading (Medium) – “Bezos is proposing taking Earth’s biggest bookstore (a phrase that used to smack of hubris but is now merely descriptive) and using it to move the world closer to that state of affairs. He wants to increase access to ebooks in order to make money, of course, just as the publishers want to restrict access in order to make money. Bezos doesn’t love books (something his critics never fail to note, as if selling things designed to be sold is an atrocity) but his motivations are producing better outcomes than those of the dominant cartel. If we have to pick between two corporate strategies for making money, the one offering more access is better.”
‘Location, location, location.’ How where you live influences how you shop online (Washington Post) – “In the digital era, there’s no doubt consumers are more connected to each other and to global retail brands than ever before. But despite this connectivity, researcher David R. Bell makes the case in his new book, “Location is (Still) Everything,” that the neighborhoods we live in — and the acquaintances we encounter there — still have deep influence on how we shop.”
Amazon Displaying Segmented User Ratings (Marketing Land) – “Pioneering online retailer Amazon is tweaking its product pages to display user ratings by segment for some users, apparently hoping to encourage people to purchase when they see that others with similar characteristics rated a product favorably. The new display, which aggregates and displays ratings by Amazon Mom members for other Amazon Mom members, was spotted on a single Amazon-branded product this week. Spot checks of multiple other pages failed to turn up additional examples.”
EBay Prepping New Mobile Ad Network (WSJ) – ” “We know what these people bought, what they looked for, what they want to buy,” said Howard-Sarin. “We know exactly who the users are, so we know that the targeting will be relevant.” The mobile advertising network could be a new source of revenue for eBay. But it risks directing possible buyers away from eBay, to competing retail sites. The revenue from advertising is split between privately held Triad and eBay, though eBay declined to disclose the terms.”
Why Apple Pay Will Hurt PayPal (Re/code) – “In addition to allowing people to pay in stores, Apple Pay will also let owners of the newest iPhones buy things within participating apps by using the credit or debit card they have on file with iTunes or the App Store. This means they don’t have to go through the annoying process of typing in payment information on small screens.”
DHL starts delivery experiment with PaketButler (EcommerceNews.eu) – “Together with DHL, Zalando and Feldsechs, Deutsche Telekom has developed a mobile solution for the acceptance for parcels in case a customer isn’t home. In 2015, it will start an experiment with PaketButler: easily foldable bags consumers can place in front of their doors whenever they are about to receive a package that day, but won’t be available to accept it themselves.” Genius and a definite value add for DHL..
Here’s why Zulily is different from Amazon, eBay and other retailers: They don’t want to be ‘the everything store’ (Geekwire) – ““It is that storytelling and entertainment, much more like media engagement than your typical shopping,” he said. “I don’t see us changing the model. I think we will keep getting better and better at shipping. I think we will have great offerings, if you need something for a birthday party this weekend for you son, we are going to make sure that we have a way to get there, if you really want to buy it from us. But we are not going to change the model. You see the numbers. It is working pretty well, so we are going to stay focused there.””
Naspers Said to Seek Sale of Swiss Retail Site Ricardo (Bloomberg) – “Preparations for a sale are at an early stage, said the people, who asked not to be identified because the information is private. While Naspers is interviewing banks to discuss the process, it hasn’t yet hired an adviser, two of the people said. The site, which sells fashion and electronics and operates online marketplaces for cars and other products, may be valued at as much as $500 million, two people said. It could attract bids from Swiss media groups Ringier AG and Tamedia AG (TAMN), the people said.”
For Alibaba’s Small Business Army, a Narrowing Path (Foreign Policy) – “None of that will comfort the millions of Taobao shop owners struggling in China’s e-commerce landscape. In a March 2014 article entitled “Why has Alibaba abandoned small sellers on Taobao?” IT Age Weekly calls small sellers the “bottom of the food chain” because their numbers are swelling and the market is becoming more competitive. The platform has given mom-and-pop upstarts a chance to jump on the site’s giant bandwagon to broaden their entrepreneurship, but the fare to board that wagon is getting increasingly expensive, with many elbowed off by better-funded competitors. Alibaba still says it wants to help small businesses, but as the company steps into the glare of Wall Street’s spotlight, it remains to be seen whether that will stay true.” Fascinating read on the other side of Taobao and Tmall.
Brazilian e-retailer B2W Digital buys another logistics company (Internet Retailer) – “B2W Digital, the largest online retailer in Latin America, announced this month it has completed its acquisition of Direct, a Brazil-based logistics provider that specializes in deliveries of small items. The acquisition is part of the web-only retailer’s $188.17 million investment in logistics and technology in the first half of 2014 and the latest in a string of moves to improve fulfillment and logistics in Brazil, where e-commerce is hampered by poor roads and delivery infrastructure in many areas.”
Google Expands Product Ads Footprint With AdSense For Shopping ( Marketing Land) – “Google has announced its latest play in the product search arena: AdSense for Shopping. The new product brings Google’s image-based product listing ads (PLAs) to third-party retail and commerce sites. Walmart.com is among the limited number of retail sites using AdSense for Shopping. The sponsored ads show related products along the left-hand side of the search results on the site.”
India investigating Amazon for violating ecommerce laws (Pando) – “Just over a month after Amazon announced a whopping $2 billion investment into expanding its India ecommerce operations, India’s press is reporting that an arm of the Finance Ministry is investigating the company, along with Silicon Valley favorite Flipkart and other foreign-invested ecommerce outfits, for violating the country’s laws banning foreign direct investment in retail ecommerce.”
Rakuten Buys Ebates For $1 Billion (TechCrunch) – ” Rumors have been swirling around Japan’s Rakuten, which has been in discussions with rebate website operator Ebates.com, regarding a potential acquisition deal. That deal is now official, as the company announced today it has agreed to acquire Ebates for $1 billion. That’s roughly what Rakuten paid to acquire mobile messaging app Viber back in February. Rakuten is paying $1 billion in cash for the company, and will retain 100 percent of Ebates’ outstanding voting stock, as the deal completes.”
Amazon Global Shipping Charge Being Reduced for China Online Shoppers (China Internet Watch) – “Amazon China announced a tripartite memorandum of understanding with China (Shanghai) Free Trade Zone (FTZ) and Shanghai Information Investment Co., Ltd, under which Amazon plans to build logistics and warehousing centers in the free trade zone. Ebrun.com posted two screen captures showing the shipping cost to China from the US on Amazon US store of last month and this month respectively.”
Twitter launches new ‘Buy’ button to connect shoppers and products (Fortune) – “Twitter launches a new “Buy” button that allows users to directly purchase a product from a brand or artist’s tweet. Twitter is jumping into the e-commerce market. The social website is testing a new “Buy” button that will allow users to purchase an item directly from a tweet, the company announced Monday. The option will be open to a small percentage of U.S. users, and Twitter plans to expand the availability over time”
Alibaba in Brazil Challenges EBay-Amazon Market Grip (Bloomberg) – “Revenue from Alibaba’s international retail business rose 139 percent compared with a year earlier to $151 million in the 2014 fiscal year, according to its IPO prospectus. The increase came mainly from AliExpress sales in Brazil, Russia and the U.S. Alibaba generates 86 percent of its revenue in China and uses AliExpress for global expansion. AliExpress operates Portuguese and Russian language websites. Brazilians can also use the local “boleto” system to pay for goods bought on AliExpress instead of using credit cards, which are not widely used.”
Online shopping on mobiles overtakes desktop in UK (EcommerceNews.eu) – “The report also shows that British consumers spent approximately about 30.5 billion euros online during May to July, of which about 11 billion was being spent via smartphones and tablets. “With over half of all e-retail traffic now coming via smartphones and tablet devices, the latest results reveal a huge landmark in the growth of mobile commerce”, says IMRG chief information officer Tina Spooner. “Considering that as recently as 2010 mobile visits to e-retail sites accounted for less than 3% of traffic, this latest milestone represents staggering growth of 2,000% over the past four years.””
New Mobile Commerce Leverage (Semil Shah) – “I’m thinking about “new mobile commerce” all the time lately. If you are building something in this space, or have used products you love, please do reach out to me. While thinking about mobile commerce isn’t anything new or novel for most people, it is for me, and I’d like to continue to invest in the space. Recently, I looked back at how Haystack II is shaping up, and I noticed a little trend — consumer mobile apps centered around commerce.”
Why Amazon Has No Profits (And Why It Works) (Ben Evans) – “Amazon is a bundle. The clearest expression of this is Prime, in which (amongst other things) entertainment content is included at a high fixed cost to Amazon (buying the rights) but no marginal cost beyond bandwidth, as a way to enhance the appeal of being a Prime ‘member’. Prime membership in turn draws people to switch more and more of their online and offline spending to Amazon. Trying to look at the profitability of the video alone misses the point.” A great post from Benedict Evans on Amazon.
Asia is dominating the mCommerce market, puts US and Europe to shame (TechInAsia) – ”
The largest piece of pie for global mCommerce revenue comes from Asia, says Tim Merel, founder of research firm Digi-Capital. According to him, as with all things mobile, the largest area of mCommerce growth will continue to be in the eastern world. As an aggregate market, Asian countries account for nearly half of the global mCommerce revenue at US$230 billion. America and Europe are still massive growth areas, but entrepreneurs and investors in the space should ignore Asia at their own risk.”
Frugal Russians Fuel Alibaba’s Global Push Before IPO (Bloomberg) – “The average AliExpress order in Russia is about $25, or half that on EBay, according to Moscow-based researcher Data Insight. The Chinese site, which says it shipped 60,000 packages a day to Russia last year, could boost its transactions in the country to as much as $1 billion this year from an estimated $400 million to $500 million last year, Data Insight said. “
AmazonFresh tries using the US Postal Service to deliver its groceries (The Verge) – “AmazonFresh, the grocery delivery service run by the retail giant in selected US west coast cities, has started a trial program which sees the US Postal Service shipping its items. The 60-day program, which started in August, tasks the USPS with delivering food items, toiletries, and other everyday essentials to customers in the San Francisco area. Items are scheduled to be delivered between 3 AM and 7 AM, when most of the USPS’ trucks aren’t in use anyway. AmazonFresh’s perishable food items come shipped in insulated bags, meaning that the trucks don’t need to outfitted with costly refrigeration units.”
UPS plans to offer pickup points for online orders (Internet Retailer) – “United Parcel Service of North America Inc. began testing the service, called the UPS Access Point network, in July in New York City and Chicago, and plans to roll it out early next year, Alan Gershenhorn, chief commercial officer, told reporters today at a briefing in Louisville, KY. “Consumers don’t want to wait around for a delivery,” Gershenhorn said. “It’s easier to go to access points to pick up an item or make a return.” 26% of U.S. online shoppers say they want to receive deliveries somewhere other than their home, Gershenhorn added, citing data from a comScore Inc. study.”
Rakuten plans German expansion, moves HQ to Berlin (Telecompaper) – “Japanese e-commerce company Rakuten plans to expand rapidly in Germany in competition with Amazon and eBay, according to WirtschaftsWoche. Rakuten CEO Hiroshi Mikitani said in an interview with the magazine that German country manager Christian Macht is ramping up the tempo to improve its position and raise its number of users. The German headquarters are moving from Bamberg to Berlin, too. Mikitani plans to introduce a range of complementary services in Germany, which have been successful in Japan. Registered customers there can open a bank account, obtain a credit card and take out loans or insurance. Mikitani said he believes this approach should work in Germany as well.”
Alipay Wallet Teams Up with Huawei to Release Mobile Fingerprint Payment Solution (TechNode) – “Alipay Wallet, China’s largest third-party payment platform, and smartphone maker Huawei jointly rolled out a biometric security solution for mobile payments today. The new technology will be built into Huawei’s soon-to-be-launched smartphone, the Mate 7. Users of a new Huawei smartphone equipped with a fingerprint reader will be able to make mobile e-payments without passwords using Alipay’s Wallet app, Alipay said in a press release today.”
Till next week. Onwards.
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