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B2C (Business to customer) news
Walmart posted results this past week and if you read all the pixels and ink given to it, you would think that everything is going OK. I take a contrarian view - you cannot yet compare quarters as Jet was acquired in Q3. The growth was seen at Walmart.com and according to Doug McMillon it was organically driven. Also note that Walmart has changed their reporting and are no longer breaking out ecommerce per region... Fortune
Shopify is selling 5.5 million shares to fund potential acquisitions and invest in infrastructure and marketing. The Canadian software as a service business is growing rapidly and this potential $495 million will accelerate their growth. The question for me is does Shopify make sense as an acquisition by Adobe, eBay or by a PE investor? Bloomberg Technology
Purchases on Google quietly opens beta for requests in US. US merchants can now request access to Google's 'buy button' program. As Amazon is using PLA's and driving up advertising costs this gradual opening to others make sense as it provides higher in the funnel chances of customer acquisition. Search Engine Land, Sales and Orders
Wayfair has launched “Search with Photo,” a visual search tool that leverages artificial intelligence to help users find products among its selection of more than 8 million home furnishings that match or are of a similar style to items they take pictures of with their mobile phones. Retail Dive
Promote Made-in-Nigeria Products To Develop e-Commerce Base, Experts Tell Operators. After reading this article I sense that niche ecommerce is still under developed in Nigeria. As a nascent ecommerce market that has 2 well funded horizontal businesses in it, there will be growing pains. Leadership Nigeria
The Genie is out of the bottle regarding Chinese cross border shopping. Cross border shopping is used as a way to side step regulation and could grow 3x if not impacted by legislation. Bloomberg
Google has announced at I/O that they are rolling out a job search feature called “Google for Jobs” in the coming weeks. We first spotted Google testing this a few weeks ago, and the screen shots we shared there were similar to what we saw in the test. Search Engine Land
Dish Network, Amazon In Wireless Talks. In a deal that could link up two of the richest chief executives in the world, Dish Network and Amazon are in talks that would make the giant internet retailer a foundational customer of the wireless network Dish Network hopes to launch within the next few years. TV News Check
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D2C (Direct To Customer) news
Target is emerging as a partner for direct to customer ecommerce startups that want to scale. It makes sense for them as they ensure that they can expose their brand to new shoppers and provide startups such as Casper, Bevel and Harry's with more points of purchase. Casper saying no to a billion dollar exit tells me that their last round investors are looking for a few billion more for a mattress business. I note with interest that the Casper deal also includes exclusive products that will only sell on Target's website. Recode
Away, which was founded by 2 Alumnus of Warby Parker raised money from new and existing investors. The interesting thing is that in 18 months they have sold almost 100 000 suitcases and have investment from the venture arm of Rocket Internet (Global Founders Capital). They were attracted by Away’s $50 million revenue run rate and strong unit economics that should make it profitable this year. TechCrunch
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Marketplace news
Alibaba posted quarterly results and in general it was positive.A few interesting things worth noting - Alibaba is now investing heavily in media and on the cloud (sounds familiar). Not mentioned in their data is that Taobao has less gross than the entire group at 38% which is interesting as it feels like TMall is becoming a bigger pillar in the Alibaba ecosystem. Fortune, China Daily
One of the best breakdowns of Amazon's ecosystem that was explained in a powerful way. Amazon is a multi faceted platform company that is powering third parties in a variety of industries. TechCrunch
Could Amazon be looking at entering the pharmacy space online? It makes sense as it is a highly regulated industry that would generate repeat interactions with customers and potentially remove friction from a painful experience for customers. CNBC, Reuters
Noon.com is making headlines for the wrong reasons. They are yet to launch publicly and have lost key staff and seemingly look disorganized where as Souq look to be driving revenue for Amazon. Zawya, Gulf Business
Is Amazon squeezing their logistics partners? This past week one of the first public occurrences of a lawsuit against Amazon Fulfillment Services was filed. This could be very interesting and worth following. Waco-based Central Freight Lines has filed suit against Amazon Fulfillment Services, claiming the high-profile online retailer owes millions of dollars in shipping fees, broke its contract and tried to bully Central into providing service at reduced rates. Waco Tribune-Herald
Snapdeal being bought by Flipkart could be slowed down by investors and online seller group All India Online Vendors Association (AIOVA). It seems that 2 large investors have yet to agree to the sale and merchants have dues based on sales made on Snapdeal. The Economic Times, Bloomberg Technology
The Barbarians Are at Etsy’s Hand-Hewn, Responsibly Sourced Gates. Was Etsy irresponsible in spending or did they plateau their creation of shareholder value? They have 2 large levers that will determine their future - community and revenue generation. Bloomberg
Carousell is finally trying to monetise by allowing users to boost listings for a fee. Today, it has become the darling of Singapore’s startup scene, raising big funding rounds and making several acquisitions. But one question that has been remained on everyone’s mind was: how will it monetise? Today, we have the answer — a premium feature that will allow sellers to boost their listings. e27
Lazada is getting entrenched inside the Alibaba ecosystem. Lazada, the leading online shopping destination in Southeast Asia, and Singapore Post Limited, the country’s postal and eCommerce logistics service provider, today announced that Lazada Singapore has moved its warehouse operations to SingPost Regional eCommerce Logistics Hub in Tampines Logistics Park. Keep in mind that Alibaba has an investment in Singpost. Singpost
Repeat purchases are a key factor for a dominant marketplace in any market. In Turkey, EBay’s Gittigidiyor.com introduced an additional way to pay for products which are known as “fast-moving consumer goods”, and which are repurchased with regular intervals. Payment of these products follows a different, time-saving procedure. AIM Group
MallforAfrica (MFA), Africa’s prominent e-commerce and m-commerce platform, announced today that it has launched a new dedicated website for eBay shopping enthusiasts in Africa. The website ebayforafrica.com is now available in Nigeria and Kenya. eBay
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Fashion ecommerce news
Zalando must have a great reverse logistics operation. This past week an increase in Swiss exports of clothing and shoes isn’t quite what it seems. Foreign shipments of textiles and footwear rose 10 percent in 2016, second only to pharmaceuticals and chemicals. Yet what that really reflects is dissatisfied shoppers sending back their purchases. Bloomberg Markets
Latin America's $160 Billion Fashion Opportunity - a fascinating read. “Initially, some are sceptical about executing online sales in the region. However, after they realise how developed e-commerce already is in several countries in South America and see the special care brands receive… they end up wanting to work with us for their entire collection,” claims Ricardo Alonso, chief executive of e-commerce at Falabella Chile. Business of Fashion
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Mobile commerce
Lola, a Boston based travel agent in your pocket startup is pivoting to focus on business travelers. I sense a bit of a trend here as consumer based travel services are struggling to grow against larger incumbents (Expedia, PriceLine etc). Skift
Wish has raised an undisclosed amount of funding from a variety of investors but one stands out, Everbright-IDG Industrial Fund, an investment vehicle jointly established by China Everbright Ltd and IDG Capital. Could this be the last round of funding before an IPO? China Money Network
The Tricky Business of Comparing Delivery Apps. i found this article fascinating and it raises interesting questions when mobile apps are compared by investors for funding. Skift
Could partnering with a logistics provider be a more profitable solution for food delivery apps / businesses? Baidu Inc.'s food delivery unit, Baidu Waimai, is rumored to be in deal talks with delivery giant SF Express. According to the rumors, the two companies may jointly establish a new company to operate the food delivery business and significantly expand its reach via SF Express' vast network. China Money Network
Facebook is now making it easier for you to order food from your favorite restaurants directly within its app, without having to navigate away to a delivery service or restaurant’s own app or website. In the main Facebook navigation on both web and mobile, a new option called “Order Food” is rolling out to select users. TechCrunch
China’s already-big WeChat is searching for how to get even bigger. The answer? Search. Today the company publicly unveiled (link in Chinese) a feature—called “Search,” simply enough. Quartz
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Stats and other interesting news
Amazon is now worth two Walmarts. On the 20th anniversary of its IPO, Amazon’s market cap stands at $459 billion. Walmart’s? $228 billion. Recode
Delivery robots are seen as novelties, job-killers and a gimmicky way for restaurants to reach nearby customers. The newest entrant in this logistics segment is a Swiss startup called Teleretail AG. The company has put a twist on the personal delivery device—its machines, still in prototype, were designed to cover long distances, up to 50 miles, and to serve rural and suburban markets along with city residents TechCrunch
Amazon’s profitless path to world domination - Quartz normally is on point but this graph does not tell the full story. Shareholders look for future growth as a part of stock ownership and I believe that Amazon will drive significant return for investors in years to come. Quartz
Deals to e-commerce startups increased for the first time since Q1’16, reaching 190 deals in the first quarter of 2017. Funding also increased last quarter, more than doubling the $2.3B seen in Q4’16. The top three deals in Q1’17 to Flipkart, Koubei, and Uxin Pai accounted for 63% of total dollar funding during the quarter. CB Insights
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Thoughts on the news from this past week
"Based in Q1 results, Walmart's acqui-hire for Jet.com might prove to be the retail equal of Facebook's deal for Instagram. Dan Primack"
I would like to mention that when I saw his tweet and a variety of articles this week I realised that folks dont understand this thing called ecommerce. Amazon has 20 years worth of knowledge and a founder that will not relent so I believe calling victory now is unrealistic and bordering on ignorance. Yes, Walmart had good results but calling victory is shortsighted and exactly what Bezos would want. Nothing is more motivating to him and his team in Seattle than bold statements and doubt.
As i said earlier I take a contrarian view on this quarters results: quarter vs quarter comparison does not adequately show the impact of all the acquisitions. They disposal of assets in China to JD.com would have been positive but calling this the retail equivalent to Facebook buying Instagram is nuts. Anyone notice that Lore was not part of the quarterly call?
Et tu Etsy? (and you Etsy?) I have been thinking about Etsy as clearly they are under siege. Was it irresponsible spending or has Private Equity investors decided that they want to acquire it and make it a profitable marketplace? I believe it is a bit of both and realise that profitable marketplace is also worth looking at. The marketplaces that are dominant, pay their executives stock based compensation and dont splurge but rather focus on customer focus. A craft marketplace is ultimately a long tail keyword based business that is difficult to scale due to the lack of differentiation. Etsy has had to spend more on digital advertising which we know is a lever that leads to unsustainable growth.
The Snapdeal sage needs a mention as well. How does Softbank convince two business legends in India to sell at a valuation that is between 4 -7x less than when they invested at. What does Flipkart get when buying Snapdeal? Customer overlap, staff and logistics and 2 founders that are departing. Flipkart has been given one last chance to win in India with partners such as eBay, Microsoft and Tencent. I feel that this Snapdeal acquisition has the possibility to swing the Indian ecommerce market in Amazons favor.
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