China has more e-commerce activity than any country in the world today. According to China’s National Bureau of Statistics, Chinese consumers spent $750 billion online in 2016—more than the US and the UK combined. That is a jaw-dropping number, but even more interesting is how differently China’s digital marketplace, technology platforms, and online behaviors have evolved compared with those in Western markets.
Quartz has put together a nice piece on the Jet.com exit to Walmart. Most interesting is the chart of Ecommerce Exits since 2009:
I’d take a guess that none of these companies were profitable at exit and all of them would have been extremely fast growing. In exiting to the likes of Walmart, Liberty, Alibaba, Unilever, Richemont etc it’s once again underlined how difficult it is to take an ecom company public.
WSJ reports Walmart is in talks with Jet.com, the barely one year old ecommerce startup:
For Jet, a takeover by an old-line retailer would demonstrate the challenges of attempting to go it alone in the hypercompetitive e-commerce market.
This business is capital intensive, heavily reliant on brand and a massive slice of luck..
Cross-border commerce is growing fast. As the FT recently highlighted, much of this is being driven by Chinese consumers purchasing goods from the west. This is from sites like Amazon, eBay and marketplaces as well as the usual array of speciality retailers like Macys, Saks etc.
But this is far from a one way street; in fact, it’s a global phenomenon I’m calling Business to World or B2W. This is the notion that businesses now sell to the world and perhaps must in order to remain competitive. Indeed, many China and Asia based companies like AliExpress, LightInTheBox, DHgate and DX have been trading internationally for years.
The question is, in a business like retail where margins are already low single digit in the vast majority, how do you manage the basics of ecommerce; namely logisitics and customer service?
Shipping goods around the world is changing as more and more software is being deployed by large carriers. That’s not deflating prices however and it’s increasingly looking like customers will have to bear the cost. There’s also the issue of customer service in both foreign languages and domains to consider; short of opening offices and hiring staff (an expensive gambit) it’s difficult even for those with deep pockets.
So one could argue that it’s not an opportunity worth pursuing? Amazon and Alibaba disagree but even startups can experiment. Apps like Localize can translate your content instantly and fulfilment from Shipwire can get your goods to customers faster than perhaps many realize.
If you get the supply chain and customer service problem solved, perhaps the world’s literally your oyster.
The inevitable has happened – clothing is the number one ecommerce category by sales according to ComScore.
As we all know I’m sure, Consumer Electronics has long been the King among stuff sold online, in part because of the early adopters of the Internet where more inclined to buy this stuff (read: geeks). Nevertheless, what’s perhaps more surprising is how long clothing has taken to surpass electronics.
There are three reasons for this I believe. The first is the aforementioned change in the makeup of consumers aka now everyone buys online, not just those geeks. Secondly, the smartphone has both consumed the entire electronics category – the PC, Laptop, Home Audio, TV, Camera, Camcorder and other devices are now largely mobile devices. Lastly, retailers are finally accepting folks want to buy clothes wherever – at home, in the office and not all in store anymore.
This is profound change and as always there will be winners and losers. Free shipping and returns – a standard for clothes where people often try before they buy – will put further pressure on bricks and mortar retailers. Brands will also begin participating in more direct to consumer stuff i.e why give a retailer margin when you can sell direct?
All in all, the brands stand to win and off course consumers will win. But what about both offline and online merchants? They have to suck it up.
How products and services are being delivered to customers is going through frame-breaking change, according to ex Apple Retail boss and now Enjoy CEO Ron Johnson. Johnson argues the capabilities of new channels to deliver great experiences through service and information is turning traditional retail on its head. Whether or not you agree it’s an interesting thought.
Check out the full interview below.
Fortune touches upon how Holiday Season shopping is a bit different to times gone by:
This suggests a shift in the way that Americans shop. In the past, retailers had to hire more people to work cash registers and sales floors; Amazon’s holiday workers will be fulfilling warehouse roles in fulfillment and sorting facilities.
Yes, we still love to browse stores during a time when many of us take a break to enjoy family-time. And yet, people browsing are increasingly doing the buying part online. As the article suggests, that means more orders in the carts of online retailers and less in the carts of physical stores unless the latter is on top of multi-channel.
All of this means getting your warehouse into order has never been more important.