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B2C (Business to customer) news
Flexe, a Seattle startup arrived out of literally no where and could be a big deal. They provide on demand warehouse space to ecommerce startups which then leads to their ability to provide overnight delivery to the entire US. I like the idea, Airbnb comparison is somewhat relevant and they provide a platform that is a industry changer. Bloomberg Technology
Groceries and grocery deliveries seems to be getting more investment traction. Yet the underlying unit economics are questionable. My concern for these startups are network effects on their growth driver - their drivers. On Wednesday, Deliv debuted a new service called Deliv Fresh, a delivery service for grocers, meal startups, and other food companies that want to get their perishable food to customers the same day that it is ordered. Fortune
Fanatics got 3 new strategic investors (NFL & NHL and NFL Players Association) which indicates to me that they are going to be almost impossible to counter in their space of the ecommerce market. Jacksonville’s Fanatics Inc. online sports apparel and memorabilia retailer has inked a deal with the NFL that calls for the league to invest $95 million into the company and boosts Fanatics worth to more than $3.17 billion. Jacksonville.com
Take-away food ordering and delivery service Delivery Hero has raised €387 million (about $423 million) from Naspers, a global Internet and media group that often backs and acquires companies in Europe. I suspect this is a 2 fold move - one make some return when Delivery Hero goes public and ensure that Delivery Hero does not adversely affect Naspers investment Rappido. Tech.eu, Moneyweb
Comparison shopping site turns to native advertising to reach online shoppers. NexTag uses Yahoo's Gemini advertising product to use keywords to drive click throughs. NRF Stores Magazine
E-commerce businesses may face further antitrust investigations, the European Union's top competition watchdog has warned. The European Commission hopes these investigations will lead to more choice and lower prices for consumers, online and off. It has just wrapped up a two-year study of business practices that raise competition concerns in the e-commerce sector, and published its final report on Wednesday. PC World
Customer service in ecommerce is becoming a more important touch point for long term repeat purchases, Truecaller Insights’ MENA report for the fourth quarter (Q4) of last year showed that Truecaller received more than 41.6m calls to and from e-commerce companies. Daily News Egypt
Amazon Goes North, Forcing Canada's Retailers Out of Hibernation. The nation’s 36 million people are spread out over 3.9 million square miles, including hard-to-get-to and frigid regions, making logistics in the country considerably more costly and complicated than in the U.S. or U.K. Bloomberg Technology
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Marketplace news
Amazon is a technology company that does retail ecommerce. Competitors kind of forget that with all of their experiments, yet them beating bots from Walmart is not surprising. Amazon product data will become harder to monitor as Amazon feels pressure from Walmart and other startups. Fortune
JD.com Posts Surprise Profit as Chinese Consumption Strengthens. JD.com Inc. posted a quarterly profit for the first time as a public company after revenue beat expectations, as the online retailer integrated Wal-Mart Stores Inc.’s Chinese web business and rode strengthening consumer spending. Bloomberg
Amazon is experimenting with furniture ecommerce. One of the hardest categories due to logistics challenges but this is to challenge Wayfair (not so Amazon proof) and Walmart. Online retail behemoth Amazon already sells the goods that line our bookshelves, drawers and cabinets. Its next goal is to sell the bookshelves, drawers and cabinets themselves. Los Angeles Times
A fund that is linked to Dubai billionaire Alabbar acquired JadoPado in the Middle East. As I mentioned last week - Alabbar is trying to buy their way into ecommerce in the Middle East. Noon.com is still not launched which indicates to me that Alabbar might have misjudged what it takes to build a marketplace. Zawya
Amazon India's effort to boost repeat transactions on its platform through its flagship membership programme Prime is paying off well in less than a year of launch. The top three categories on the Amazon India marketplace are seeing increased usage from Prime customers. The Economic Times
Jet.com partnered with Story to create a curated grocery store in New York. The choice of groceries is interesting and showcases that Jet/Walmart think that they can use groceries and store visits to gain market share away from Amazon. Jet.com is using this curated shopping as a marketing event. Fast Company
Snapdeal's board has started the process of selling to Flipkart. The only upside I see is Softbank becoming a potential source of new funding. Founders Kunal Bahl and Rohit Bansal will relinquish control of online marketplace Snapdeal to market leader Flipkart as early investors in the Delhi-based company give their consent to the sale, according to four people aware of the deal. The Economic Times
JD.com becomes first Chinese marketplace to join AAFA - this will become a large part of their business development focus when dealing with fashion businesses. One of the largest online marketplaces in China, JD.com, has signed up to the American Apparel & Footwear Association (AAFA) with a pledge to partner with international fashion brands “on issues surrounding IP protection”. World Trademark Review
Alibaba's Trojan Horse AliExpress is a step closer to Dutch customers. AliExpress, the business-to-consumer ecommerce marketplace of Alibaba, has selected Dutch postal service PostNL as the delivery partner for the majority of its packages to the Netherlands. Ecommerce News Europe
OLX Indonesia is getting a new CEO. Existing CEO Daniel Tumiwa will become an advisor but the timing is interesting. Indonesia is getting more investment and I believe that OLX Indonesia will be trying to start monetising sooner based on investor interest and competitors. Tech In Asia
Schibsted is doubling down in Latin America Via OLX Brazil and Yapo (Chile). They exiting parts of their stake in their Asian partnership with Telenor. Schibsted
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Fashion ecommerce news
Stitch Fix is for me an example of the new ecommerce investments that should inspire investors and entrepreneurs. They have raised little capital in comparison to other fashion ecommerce startups. They have created a growth engine based on data and generated $730 million in revenue in our 2016 fiscal year and they are profitable. Recode, The New York Times
Ian Rogers got a lovely profile on The New York Times. The facts are the following - he has little ecommerce experience and is using the Chairman Arnault's son to validate the new LVMH digital platform. I am giving this startup the benefit of the doubt but 24 Sèvres is arriving at a point in time when Farfetch is getting ready to IPO, Matchesfashion seems to be gaining momentum and Yoox-Net-a-Porter is on solid ground. The New York Times
StockX is expanding into handbags and watches. By doing so they gain categories that have larger margins but new competitors. Is this a sign of peak sneaker marketplaces? (I tend to believe so). TechCrunch
Zalando has launched its curated shopping service Zalon in Belgium. The free personal shopping service for men and women offers its customers personalized advice from fashion experts. Zalon by Zalando is now available in five European countries. Ecommerce News Europe
Fashion seems to be a vertical that is getting interest from Artificial Intelligence startups. Some interesting use cases are possible with machine learning and with Stitch Fix on a huge growth curve I would be surprised if there are not more data based fashion startups exiting well. Nanalyze
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Mobile commerce
Spring is aiming to be the department store for millenials. They raised new funding, have 2200 brands and have an average order size of $150. I believe that Spring is totally misunderstood and is potentially building a US version of Zalando with direct-to-customer brands that are not widely seen or discoverable outside the Spring marketplace. Recode
Tophatter, another mobile startup that has been silent has raised funding. A mobile marketplace that is on track to do $100 million in revenue this year. Unbranded goods that are low price are generally a good combination for mobile marketplace growth (Wish). I would simply question if the auction model is still relevant for ecommerce today? Fortune
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Stats and other interesting news
Alexa advertising is going to drive a lot of revenue for Amazon in quarters to come. Being that Alexa is an interactive experience, users will be able to ask questions about the advertised products, give feedback to the company behind the advertisement, or add the item to their shopping cart on Amazon. Tech Republic
American Express has joined the Amazon Alexa skills craze (second US bank) in which customer can use Alexa to settle bills. Engadget
Fascinating story of a reporter in Sweden doing bike deliveries for Uber Eats and Foodora. Summary - the salary generated is smaller than advertised. Breakit
How Iranian Women Became the Queens of Online Shopping. It’s about Persians claiming fashion as an expression of their own identities and values, not as products of either local religious authorities or foreign ideals. Stylish Middle Eastern women no longer need to look to Paris or New York for couture inspiration. Racked
WPP-owned Possible, a digital marketing firm, has acquired Marketplace Ignition, a consulting firm that helps brands refine advertising and e-commerce strategies specifically for Amazon. Business Insider
Evolving Empyr Unveils Way to Link Online Ads with Offline Sales. This is a problem that Google, Facebook have struggled to solve, Empyr looks interesting. Xconomy
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Thoughts on the news from this past week
As usual Amazon is showing us the future. Alexa and voice based commerce is going to be a big deal and Amazon is in market leading position. Voice is amazing powerful in terms of intent, habits and data that is not normally being saved on a server some where. Alexa is Amazons home data play in which brands and competitors have no direct way to access the customer but Amazon controls it via trust of the customer.
This past week 2 interesting things happened. Naspers bought shares in a company that Rocket Internet incubated (Delivery Hero). The 2 investment thesis could not be more different but clearly Naspers would like insights into the food delivery industry. Food delivery seems to be a market that requires a lot capital and scale that is either bought via acquisition (Delivery Hero) or long term investments (GrubHub, Delivery.com etc). Is this a late stage investment that is only to benefit ROI creation via going public?
Secondly, In Latin America and Asia, Telenor and Schibsted) traded away shares in businesses in markets to ensure that Schibsted has a 50% share in OLX Brazil and 100% share in Yapo in Chile. (There is also cash being paid in some cases for shares). The reason why this is so interesting to me is that Telenor, Naspers and Schibsted partnered in Asian and Latin American markets to ensure that marketing costs did not become ridiculous but to ensure that they continue to lead those markets from startups and others.
I keep rereading Primary's take on what keeps Direct To customer markers up at night. Direct to Customer ecommerce is something I am currently researching...
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