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Tag: amazon

  • Amazon India rolls out Prime

    Amazon India rolls out Prime

    Online retailer Amazon India has rolled out the global Prime membership service, giving customers access to unlimited free one- and two-day delivery on more than 100,000 products.

    It is also introducing its Prime video service, giving members access to movies and TV shows from India and around the world.

    “Prime provides unlimited convenience all year long,” says Amazon India VP and country head Amit Agarwal.

    Offering a free two-month trial period, Amazon.in has revamped its on-site and app experience.

    Members can also use Prime Early Access to buy top deals 30 minutes early every day.

    “Since its international inception, Prime continues to evolve as we add millions of additional items that can be delivered incredibly fast and free,” says Amazon Worldwide Prime VP Greg Greeley.

  • China’s Growing E-Commerce Addiction

    China’s Growing E-Commerce Addiction

    I am admittedly an Amazon shopping addict, so it was interesting to have a long conversation recently with Chinese colleagues in Nanning about their own growing addictions to online shopping. They are big fans of Taobao, although they also use other e-commerce sites likeJD.com and Suning.com. My colleagues are representative of a larger trend of Chinese consumers shifting partly from brick-and-mortar shopping to online shopping, and expanding online shopping in its own right. E-commerce now represents a high-growth sector.

    Though relatively new to online shopping, Chinese consumers already make up for almost half of global online retail sales, and are only growing in numbers. Online retail sales amounted to $581.61 billion in 2015, surging 33.3% from the previous year. The volume of online sales in China now exceeds that in the US, and online sales are expected to grow 20% annually by 2020. Furthermore, online shoppers represent the vanguard of China’s growth story, since they tend to be young, urban, and highly educated. They have a different attitude toward shopping than older generations, which were shaped as savers by more challenging political and economic circumstances. Younger shoppers are more willing to spend.

    Compared to brick-and-mortar retailing in China, e-commerce sales often experience fewer licensing requirements and quicker customs clearance. As a result, e-commerce is to some extent replacing shopping in physical marketplaces, and will comprise 42% of growth in private consumption by 2020 according to Boston Consulting and AliResearch. For this reason and others, hypermarkets such as Carrefour and Walmart have shut down a number of stores. Online shopping also allows consumers to access products that are not available in stores, including organic foods and some luxury products from overseas.

    As consumers in Tier 1 and Tier 2 cities (think Beijing, Shanghai, but also Chongqing and Chengdu) become increasingly savvy online shoppers, there continues to be large potential for online sales particularly in Tier 3 and 4 cities. E-commerce penetration amounts to 89% in Tier 1 and 2 cities, but only amounts to 62% in Tier 3 and 4 cities, as per the McKinsey iConsumer China 2016 Survey. The online shopper base in Tier 3 and 4 cities is 257 million, a population number that is larger than that of almost all countries in the world (except India, China as a whole, and the United States). That is serious market potential.

    To keep up with increasing demand from smaller urban and rural areas, online retailers are seeking to expand logistics infrastructure and services. For example, Alibaba ’s logistics arm, Cainiao, now owns 180,000 express delivery stations for the shipment of products and has recently expanded its fresh food distribution centers across China. The firm recently completed its first external funding round and is expected to spend $16 billion over the next five to eight years to expand its network. Growth in China’s underdeveloped logistics sector can certainly be expected to accompany the expansion of e-commerce.

    *originally posted by Forbes

  • AWS opens first Indian region

    AWS opens first Indian region

    AWS has launched two data centers in Mumbai, taking the total number of Availability Zones to 35 across 13 technology infrastructure regions globally. With these data centers, Mumbai becomes AWS’ sixth region in Asia Pacific.

    The new AWS Mumbai Region consists of two separate Availability Zones at launch. Availability Zones refer to data centers in separate, distinct locations within a single region that are engineered to be operationally independent of other Availability Zones, with independent power, cooling, and physical security.

    AWS customers focused on high availability can architect their applications to run in multiple Availability Zones to achieve even higher fault-tolerance.

    According to Andy Jassy, CEO of AWS CEO Andy Jassy said more than 75,000 customers in India are using other AWS Regions.

    “These same 75,000 Indian customers, along with others interested in starting use of AWS, have asked for an AWS India Region so they can move their applications that require low latency and data sovereignty,” he said.

    “We’re excited to make this available today, with the same pay-as-you-go pricing, ability to get started immediately without having to negotiate enterprise agreements or wait days for access, and unmatched functionality that customers enjoy in AWS Regions worldwide.”

    AWS is also partnering with India’s National Institute of Electronics and Information Technology to train 25,000 people on cloud technologies.

  • Alibaba Group Holding Ltd Should Stop Fooling Stakeholders on Counterfeits

    Alibaba Group Holding Ltd Should Stop Fooling Stakeholders on Counterfeits

    On Tuesday, founder and chairman of Alibaba Group Holding Ltd, Jack Ma wrote to its investors, customers, and traders highlighting that his recent words about counterfeited goods was taken out of context and his company has no tolerance for fake goods trading on its e-commerce portal.

    Mr. Ma said in his article: “When Alibaba went public in 2014, I told our customers, employees and investors that what we had earned was trust—in myself, my team, and our company’s mission, vision and values.” Mr. Ma further highlighted that with trust come great responsibility and Alibaba’s responsibility is to protect all of its stakeholders.”

    Last week, Mr. Ma released a statement saying that “counterfeited goods are better than original products,” after which Alibaba came under fire and many foreign brands owners challenged the company’s credibility and its efforts to fight against fakes traded on its e-commerce platform.

    He stated: “The problem is the fake products today are of better quality and better price than the real names. They are exactly the [same] factories; exactly the same raw materials but they do not use the names.”

    Yesterday, Mr. Ma indicated that whatever he said was an observation and has nothing to with the reality. He further added that “Failing to protect original designs, trademarks, and technology is akin to thievery, and it is detrimental not only to innovation but also to the integrity of the marketplace,” and Alibaba will never forgive any act of stealing.

    Last year, several leading foreign brands filed lawsuits against the Chinese e-commerce giant, accusing it of deliberately promoting the counterfeited goods traded on its websites.

    Kering SA, a French luxury goods holding company filed a lawsuit against the Chinese e-commerce giant last year, claiming that Alibaba is directly involved in the promotion of counterfeited goods. However, the company denied all such accusations and later, the case was resolved on mutual consent. Like Kering, many other foreign brands have alleged Alibaba of doing little to stop the trading of fake goods on its leading platforms including Taobao and Tmall.com. Likewise, many of them have even shifted to other e-commerce stores including those of JD.com Inc.

    Last year, Alibaba also narrowly escaped the US black list for notorious goods; however, it received official warning from the US trade officials to quickly resolve the issue and prevent sale of counterfeited goods on its leading online platforms such as Taobao. Mr. Ma saw this escape a huge victory and assured the trade officials that his e-commerce firm is 100% committed to lead the fight against global counterfeiting, both online and offline.

    The Chinese e-commerce giant has invested heavily and devoted significant efforts to develop an unparalleled level of technology to put a stop to this counterfeiting work. The Chinese e-commerce giant takes out full-bodied data processing and analytics to enable real time scanning of nearly 10 million new products a day by looking at key features such as pricing, trademarks, and buyer and seller identity. Despite such aggressive measures the world’s second largest retail network is yet to satisfy customer, trade officials, and most importantly brand owners.

    In his write up, Mr. Ma emphasized on the fact that a cooperation spread globally is needed to fight the counterfeited goods issue. It’s a “long term crusade,” he said, a battle against human greed for which there are no short term fixes and easy way out.

    Mr. Ma’s statement was not welcomed with gratitude by investors, brand owners, and trade officials. According to some analysts by terming the case a long term crusade, Mr. Ma has indicated that the counterfeited goods is likely to continue to trade on Alibaba’s online platform. He said he expected Alibaba to become the “fifth largest global economy” after Japan by 2020. This is likely to happen because China’s middle class consumption has increased massively, and the country’s middle class holds about $4.6 trillion in savings.

    Recently, Security and Exchange Commission (SEC) have inquired Alibaba to present complete details of the company’s accounting policies and for one of its delivery affiliate, after the company was accused of using inappropriate financial measures and not disclosing complete transactions of its delivery affiliate.

    In May, the Chinese e-commerce giant was handed a suspension from International Anti-counterfeiting Coalition (IACC), a supervisory body for retail industry after several leading members threatened to step down against Alibaba’s inclusion. Those members included Tiffany, Gucci America, and Michael Kors.

    Role of Chinese Government

    Though the Chinese e-commerce giant faces tremendous international criticism and pressure from trade officials, the government has done little to tackle the counterfeited goods issue i.e. no more than a few warnings. Even Mr. Ma himself proclaimed that the Chinese government can’t even ban his company for two hours due to its significant economic importance. We believe that there are solid reasons as to why the Chinese government can do very little to take action against Alibaba.

    The following revenue table clearly depicts that Alibaba’s retail business generates significant profits, which is a vital catalyst for growth in China’s deteriorating economy. The country’s GDP growth is at its slowest in the past 25 years, and with crude oil continuously remaining on a lower side, the Chinese government is shifting to services and retail sector to inject growth in the Chinese economy, and Alibaba is the big connection to it.

    It is indicated that Alibaba’s China retail business amounted to nearly 78% of total revenue generated in the quarter, while international retail also surged 15% year-over-year (YoY).

    Its international retail segment growth also highlights the company’s eagerness to expand its footing in the international market. We depicts Alibaba’s international retail revenue for the past six years.

    Though the growth is imminent but many analysts opine that is far below the expectations. As a result of counterfeited goods scandal, the company’s international retail revenue growth has plummeted 41% on average in the past five years.

    At the recent investor’s day conference, the Chinese e-commerce giant also released its annual revenue forecast estimating a 48% YoY surge, mainly driven by the acquisitions of Youku Tudou and Lazada the Asian e-commerce giant. It said: “The Company expects to record 6 trillion yuan ($912 billion) in gross merchandise volume (GMV) in fiscal 2020, nearly double 3.09 trillion yuan in fiscal 2016.”

    Despite achieving significant success, the Chinese e-commerce giant is surrounded by controversies since the past few years. Earlier on Wednesday, it also won the dismissal of a US lawsuit accusing the company of defrauding its stakeholders by “concealing a regulator’s warning about its ability to suppress counterfeiting on its websites.”

    Overall, analysts have been keeping a mix view on whether Alibaba is right or wrong; however, Mr. Ma indicates that his company works hard each day to ensure that its stake holders are protected and its consumers are not fooled by shoddy fake products. However, he asserted that to completely eliminate the issue from the root cause, a time period is required and global assistance is necessary.

    We believe that it is high time now that Alibaba should stop fooling customers and brand owners and should work with sincerity, rather than consoling and giving false hopes. Authenticity of the product is of key importance and Alibaba should return its stakeholders a favorable response or get ready to lose customers. We also believe that the Chinese government should embrace the rule of law. The government should stop promoting double standards and treat both foreign and domestic firms at permissible level. Has it been Amazon Inc or any other foreign e-commerce retail network, the consequences and treatment would have been different.

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  • Amazon chooses Oregon for latest offline store

    Amazon chooses Oregon for latest offline store

    Online retail giant Amazon has decided on Oregon as the location of its third brick and mortar store.

    The new store will open at the Washington Square mall just outside Portland, in what US media describe as a “bookish metro area” – Tigard.

    The retailer appears to be choosing sites which house Apple stores and are frequented by university students.

    Amazon’s first bookstore opened in Seattle’s University Village mall and its second in San Diego’s Westfield UTC mall.

    amazon-books-washington-squarejpg-8af21425db3e2dba

    While Amazon describes its stores as bookstores, John Mutter, editor of bookseller newsletter Shelf Awareness, prefers to call it “an electronics store that sells books”.

    “It has a very misleading name,” he said.

    One of the US’ much-loved specialist bookstores Powell’s Books is headquartered in Portland and CEO Miriam Sontz told USA Today it was no surprise Amazon should choose the city for one of its first physical locations.

    “When asked why he robbed banks, Willy Sutton reportedly replied ‘because that’s where the money is.’ I am certain that Amazon has the data to show that opening a store in the Portland area will be financially beneficial to the company,” she said.

    Mutter predicts Amazon will open 12 to 18 stores over the next two years or so.

  • Amazon To March Into Indonesia With $600 Million: Winners And Losers

    Amazon To March Into Indonesia With $600 Million: Winners And Losers

    Amazon.com has said it plans to expand its e-commerce empire to Indonesia, with a $600 million investment for the first year.
    It makes perfect business sense. Indonesia’s e-commerce space is only about $3.2 billion in sales, a tiny fraction of its $150 billion retail market. Indonesia is also the world’s 4th most populous country with 250 million population.

    When Amazon moves in, the market shudders. Who are the movers and shakers in the Indonesian e-commerce space right now?

    It turns out Amazon will be competing with start-ups backed by Alibaba Group and its buddy SoftBank.

    Lazada, a direct-sales marketplace that spans the entire ASEAN, has 75% of its transactions coming from Indonesia. It was founded by Rocket Internet and was recently valued at $1.5 billion through an investment from Alibaba. It generated $1 billion GMV last year and made $275 million in sales.

    Tokopedia is an Indonesian pure play. It is backed by SoftBank and Sequoia Capital.

    Bukalapak is smaller than Tokopedia and is 49% owned by local media conglomerate PT Elang Mahkota Technologi, or Emtek Group.

    Warehouse logistics companies can benefit if Indonesia’s e-commerce picks up. Mega Manunggal Property  is one stock we can look at.

  • Amazon Named Top Retailer on Social Media

    Amazon Named Top Retailer on Social Media

    Web giant Amazon have been named as the top retail brand on social media, according to Social Insights on the Retail Industry, a report by social media monitoring firm Brandwatch. Making up the top three were two other retailers, Etsy (2nd) and Ebay (3rd), with Walmart the top Bricks & Mortar retailer in fourth. Target made up the top five.

    A comprehensive study analysing and scoring the world’s top retail brands and their visibility, sentiment and mentions on social media, the Retail Social Report examined over 10 million interactions over four months, giving each retailer a score across five categories: Social Visibility, General Visibility, Net Sentiment, Reach Growth and Social Engagement & Content.

    The key findings from the study, which awarded retailers a total score out of a possible 500, included the following:

    • The top five retailers all scored upwards of 300, with Amazon scoring 349, Etsy 336, eBay331, Walmart328 and Target 320
    • Positions 5-10 in the study were held by Toys R Us (with a score of 320), Lowes (315), Kohls (307), Sephora (299) and Bed, Bath & Beyond (292)
    • The individual category winners were: Amazon (General Visibility), Sanborns (Social visibility), Sams Club (Net Sentiment) Kmart (Reach Growth) and Debenhams (social engagement & content
    • Facebook is the clear leader in engagement, with consumers nearly three times as likely to share brands’ content on the platform than they would on Twitter.
    • Surprisingly, 99% of all content retailers share on Facebook is visual, with only 1% exclusively status copy.
    • The average response time from a retailer on social media is 7hours and 33 minutes, with Petco having the quickest average response time

    The study also found that when it comes to responsiveness, retail brands scored better than other industries, such as automotive and television networks with a retailers’ tweets a third more likely to be a direct response to a consumer.

    When it comes to gender, retailers’ online audiences are predominantly female and in terms of engagement, women are twice as likely to comment on a retail brand’s social media post than men are. As an illustration, Amazon’s online audience is 56% female and primarily interested in books and family, Etsy’s audience is 86% female with a core interest in fashion, fine arts and family while eBay’s online audience is 65% female and interested in shopping, fashion and family.

    The report has also identified that consumers have continued to adopt an additional step in their shopping routine, normalising the behaviour of ‘showrooming’. The art of ‘showrooming’ explores the decision making process that consumers implement before they make a purchase. However, pre-purchase research goes both ways with 80% of consumers researching products online before they buy in store, with 41% looking in store before they ultimately purchase items online.

    James Lovejoy of Brandwatch said: “Customer service has always been core to the reputation of the retail industry, but as the number of communications channels increases, providing a quality experience for consumers is increasingly difficult.

    Most retailers now will recognise the important part digital plays and that it is now imperative to develop a clear social media intelligence strategy if retailers want their customers to remain loyal advocates of their brand.”

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  • China online payments tightened

    Service providers and their millions of users are affected by a significant regulatory change to China online payments announced by the Chinese Central Bank.

    From July 1, third-party online payment service providers must ensure that all user accounts bear the real name of the account holder. In addition, accounts will be categorised into three types based on security requirements, capped with maximum annual payments.

    The policy was created with an aim of preventing large deposits of money into third-party payment accounts unprotected from bank deposit insurance.

    China’s third-party mobile payments market reached RMB9.31 trillion (US$1.4 trillion) last year, up 57.3 per cent from 2014. Analysts expect the industry will continue to grow at a fast rate in the coming years, reaching RMB52.11 trillion by 2018.
    Mobile payments have become a useful tool for companies in their China market strategy. The two largest third-party online payment platforms in China are Alipay and WeChat.

    Dominant player

    Dominating with roughly half of the market, Alipay is a subsidiary of Alibaba Holding Group, serving Alibaba’s B2B eCommerce network similar to how PayPal works with Amazon and eBay. Alipay co-operates with Visa and around 65 banks, including the Bank of China, China Construction Bank, the Agricultural Bank of China, and the Industrial and Commercial Bank of China.

    As well as being the primary payment method for Alibaba.com and Taobao, it serves more than 500,000 external merchants, covering online retail, gaming, communications, air tickets, commercial services and utility bill payments.

    Its international version, Alipay Global processes payments in RMB and automatically converts them to the merchant’s currency of choice. It supports 12 currencies, with exchange rates decided by either the Bank of China or China Construction Bank. Alipay Global’s transaction fee is 2 to 3 per cent.

    Account procedure

    To set up a service account with Alipay China, a company must first register an account, providing company information for verification. Once approved, an application can be made and a QR code issued.

    Applicants must provide a business licence, ID card information and public bank account details. If the applicant is not the company’s legal representative, a power of attorney must be provided.

    WeChat Payment was launched by Tencent Holdings in 2013. It is different to Alipay in that it serves as both a payment platform and an instant messaging service. It also differs from Tencent’s TenPay, which is similar to Alipay. WeChat Pay can be used to pay in stores, on websites, WeChat shops and third-party apps, with its payment procedure easier and for both customer and company alike.

    Paying through WeChat has revolutionised how retailers and customers interact, with a huge number of customers depending on its social media and instant messenger service.

    To set up a service account, a company first needs to apply for an official WeChat account, specifying reasons for the application and supplying the category or type of company.

    Applicants need to supply the full name of the contact person, phone number and email address; the website address of the company (not necessary for non-IT companies); full company name; description of the product; customer service number; and company bank account information.

    For non-financial entities such as Alibaba and Tencent to provide third-party online and mobile payment services in China, a payment business licence must first be obtained. Regulations stipulate that the business scope, qualifications and contribution ratio of foreign-invested institutions applying for the licence will be decided by the People’s Bank of China and State Council separately.

    Pile of documents

    Meanwhile, Apple Pay has entered the China market, partnering with China UnionPay and nearly 20 Chinese banks. In its first two days, more than three million bank cards were linked to its service, which uses Near-Field Communication (NFC) contactless payments as opposed to QR codes, which are used by Alipay and WeChat Pay.

    Apple Pay, along with Edenred and Sodexo, is among the few foreign-invested companies with a Chinese payment business licence.

    Applicants for the licence must be companies established in the China and must submit a pile of documents to a local branch of the People’s Bank of China – a written application specifying the name, domicile, registered capital and organisational structure of the applicant business, payment business being sought, a copy of the company’s business licence, articles of association, verification certification, financial and accounting reports audited by an accounting firm, feasibility study report, acceptance materials on anti-laundering measures, certification on technical safety testing and authentication, resumes of senior management personnel, certification that the applicant and senior management personnel are free of criminal records, relevant materials of major capital contributors, and an authenticity statement regarding the application materials.

    Entry into China’s lucrative third-party online payments can unlock huge market potential, but the requirements are strict and the application process and approval is by no means easy.

    In comparison, the process for obtaining an online payment QR code is relatively straightforward, but the recent restrictions imposed on payment account types and security checks might change both the way third-party online payment platforms work as well as consumer behaviour.

    • From China Briefing, published by Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and other ASEAN countries.
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  • M&S, Debenhams stand most to gain from BHS breakup

    M&S, Debenhams stand most to gain from BHS breakup

    Only the very bravest of investor should consider retaining BHS in its current dilapidated state. But if such a buyer cannot be found, and a BHS breakup ensues, with the store estate sold to other retailers, Marks & Spencer and Debenhams would be the main beneficiaries.

    As the deadline for bids for BHS looms, hopes are rising that a buyer can be found for the entire store estate and that its 11,000 employees can be protected. Even if such a buyer is found, it is likely to have to conduct major surgery to revive the moribund brand. Verdict data shows that it has consistently lost market share to its competitors in all its key sectors, and its weak multichannel offer, dated brand and underinvested store environment mean any buyer would have to think seriously about retaining the BHS name.

    BHS’ clothing proposition has become ever more irrelevant over the years, and many of its clothing shoppers have already defected to more agile competitors, leading to its market share more than halving in the 10 years to 2015.

    BHS clothing market share 2010-15

    BHS’ predominantly 45+ shopper base enjoy the convenience of shopping for a disparate variety of products under one roof, which means that department store rivals such as Debenhams and M&S would be first in line to benefit from its fallout. The grocers should also receive a much-needed boost given the similarity of their clothing proposition to BHS in terms of design and affordability.

    This is backed up by looking at where BHS clothing shoppers also tend to shop (from Verdict’s March 2016 How Britain Shops survey of 10,000 consumers) – M&S is the clear leader, and should be able to translate this into an increase in market share.

    Where BHS clothing shoppers also shop for clothing

    Clothing specialists at the value end of the market, such as Matalan, Primark and New Look are also likely to benefit; as are online pureplays such as Amazon – albeit to a lesser extent.  It is, however, those retailers that make a concerted effort to draw in BHS shoppers, through customer acquisition initiatives such as targeted promotions or local marketing campaigns that will see the maximum gains.

    BHS homewares market share 2010-15

    BHS’ unopposed trudge toward mediocrity has had a significant impact on where its remaining shoppers are likely to now go for homewares purchases. The retailer’s brand positioning means its shoppers will have also shopped at the ever growing homewares discounter set, like B&M and Home Bargains. However, it is Amazon and Argos, both value focused retailers with modern and extensive delivery/channel offers that have been the main beneficiaries of disaffected BHS shoppers in the past and will undoubtedly be so in the future.

    High street retailers M&S and Debenhams are also in line to see a marginal upswing as high street focused customers seek out alternatives. The former has the most similar customer profile to BHS and hence is more likely to be a first choice. However, M&S has made some strategic moves to appeal to younger, more fashion-conscious homewares shoppers in recent years, therefore BHS’ customers may be a little surprised about what is on offer when they visit, aside from its core bedding and bathroom offer.

    Living room textiles: Home Retail Series market share 2015

    BHS is currently strongest in softer, more aesthetic categories, such as living room textiles and lighting, as opposed to functional products such as cookware. Therefore its demise would be unlikely to have a significant impact on the grocers. Conversely, Dunelm and Next share a similar emphasis on textiles and design-led categories, and as such, their already strong performance in the homewares category is likely to be bolstered further should BHS disappear altogether.

     

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  • A $5 Billion South Korean Startup Is Beating Amazon At Its Own Game

    A $5 Billion South Korean Startup Is Beating Amazon At Its Own Game

     Jeff Bezos has no interest in bringing Amazon to the 51 million people in South Korea, and Bon Kim is the reason for that. Kim is the CEO of Coupang, the fastest growing e-commerce site of all time in South Korea. The startup, founded in 2010, grossed nearly $300 million in 2014 and is expected to show it quadrupled that amount in 2015, when those numbers are available. Last summer, Coupang raised $1.3 billion in funding. Kim has a 19% stake in the company, which gives him a net worth of $950 million.

    Kim and Coupang have mastered something Jeff Bezos and Amazon are still trying to figure out. Coupang offers on-demand e-commerce with same-day delivery. Amazon is trying to offer this to its bajillion customers, but so far, hasn’t been able to make the margins work. It is either too expensive for the consumer or for Amazon and often for both. Remember, Coupang was founded in 2010, the company has managed to do this in remarkably less time in business than Amazon.

    Bon Kim didn’t set out to become the e-commerce king of South Korea. He was born in Seoul and from the age of seven, he spent much of his life abroad. At 13, he went to boarding school in Massachusetts. He was a varsity athlete in track and wrestling. When it came time for college, Kim stayed local and went to Harvard, where he started a student magazine called the Current. Newsweek took the magazine over in 2001, a year after Kim graduated. He also interned at the New Republic.

    DENIS CHARLET/AFP/Getty Images

    Kim enrolled in Harvard Business School in 2010, but dropped out a year later. He had been bitten by the e-commerce bug and wanted to start a business in Seoul. At the time, Groupon was a hot commodity and Kim set his sights on the daily deal model. Coupang became the 30th Groupon clone in South Korea. Kim registered as a limited liability corporation in the U.S. to make it easier to raise money from American investors. He spent nearly a million on advertising. However, he soon learned that daily deals are a lousy business model. Customer retention is nearly nil.

    By the summer of 2013, Kim had transformed Coupang into an e-Bay style site while experimenting with true e-commerce. Two years later, Coupang had $400 million in capital from Silicon Valley behemoths Sequoia Capital and BlackRock and had made a big commitment to its own inventory. Kim made a more than billion dollar investment in logistics infrastructure.

    Remember, Kim spent many years in the U.S. and Coupang’s structure reflects that. The company’s head of marketing is a former Zappos employee whom Kim convinced to move to Seoul with his family last year. Kim wanted Coupang to have a Western perspective to e-commerce. Coupang has more than 200 non-Koreans on its staff, including former Amazon executives, consultants, and engineers fresh from Silicon Valley. Kim hired a battalion of translators to act as translators for its American employees and as mediators for its Korean employees.

    In just the past two years, Coupang has built a network of customized delivery truck, warehouses controlled by an algorithm that allows it to be the fastest delivery in Korea. The company’s algorithms allow it to inform employees on which stock to move where, so that the most frequently purchased items are closest to the people buying them. Deliveries are made by 3,600 “Coupangmen,” who hand out balloons and candy to kids and text customers pictures of their boxes when delivered, if they are not home to receive them. The average Coupang driver delivers 120 packages each during a 10-hour shift. In South Korea, other retail establishments take two to three days to deliver their goods. Coupang is blowing the competition completely out of the water by delivering in a day or less. Customers can even cancel a shipment already on its way. Oh, and by the way, they don’t charge for delivery.

    South Korea has the second largest GDP in Asia. Almost everyone is on a smartphone and a high-speed network. Half of the country’s population lives in and around Seoul, making it easier for Coupang to deliver on their impressive promise of same day delivery. In South Korea, 15 cents of every retail dollar is spent online. In the U.S. that figure is nine cents.

    Bon Kim has become the e-commerce king of Korea and beaten Jeff Bezos at his own game. Amazon currently operates in 13 countries. Alibaba dominates China and Rakuten is the leader in Japan. Kim is content to keep his business running in Korea alone. At least for now.

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  • AWS to be anchor customer for Hawaiki cable

    AWS to be anchor customer for Hawaiki cable

    In March, the Hawaiki cable project announced its contract with TE Subcom had come into force. They had raised the necessary funds to kick off the construction phase, and yesterday we learned where some of those funds came from.

    Amazon’s AWS division has stepped up for a large chunk of capacity on the system, becoming a high profile anchor customer on a submarine cable system for the first time.

    The Hawaiki cable is the latest project aimed at hooking up Australia and New Zealand directly with the west coast of the USA, stopping in Hawaii and branching off to American Samoa with options to reach several more.

    It’s a route dominated today by the longstanding Southern Cross cable system, and one on which we have seen several failed attempts to build an alternative – especially by partisans on the New Zealand side. This is the first time the money has finally added up though. As currently planned, the cable will stretch 14,000km and deliver as much as 30Tbps of capacity.

    Amazon AWS joins Vodafone, REANZ, and American Samoa Telecom as anchor customers. It’s Amazon’s first foray into the world of submarine cable systems, but surely not its last.

    The cloud giant is merely joining its tech brethren like Google, Facebook, and Microsoft in taking an active role in the underlying infrastructure they all depend on, taking up some of the slack as global telecommunications operators themselves continue to shy away from undersea investments in favor of wireless and terrestrial fiber.

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  • How big brands can make online marketplaces work

    How big brands can make online marketplaces work

    Online marketplaces, those giant shopping sites like eBay and Amazon Marketplace, can be a mixed blessing for brands and merchants.

    Marketplaces offer retailers broad exposure to millions of consumers, as well as delivery, payment and other solutions. Still, most marketplaces leave merchants wanting in one very important aspect: brand control. While the platforms provide virtual shelf space for listing products, merchants are generally limited to one-size-fits-all templates for their online storefronts—thus restricting their ability to set themselves apart from rivals with brand-building presentations and content.

    Not all marketplaces are created equal, however. In China, where marketplaces are overwhelmingly favored by online shoppers, e-commerce leader Alibaba Group has been returning branding power to merchants through the company’s Tmall.com B2C marketplace.

    Tmall, which positions itself as China’s top online destination for domestic and foreign branded merchandise, has developed a suite of tools that allows merchants to customize their Tmall.com storefronts with the logos, fonts and colors for which they’re known the world over, as well as with videos, interactive features and other content. Moreover, merchants can combine these tools with Alibaba’s trove of data on shopping behavior to tailor their storefronts to individual consumers visiting their e-shops at any given moment.

    This approach gives merchants far more than a place on the internet to list and sell products. It offers them the ability to present their brands as effectively as they do on their company-run websites, boosting their opportunity to reach consumers among Alibaba’s 400-million-plus active buyers and build lasting customer relationships. Merchants “have total control,” said Paul Fu, the San Mateo, California-based head of Alibaba’s User Experience Design team.

    This is a significant departure from the “one webpage to serve them all” marketplace model. Tmall offers as many as 55,000 different storefront templates across about 30 different business sectors for merchants to choose from. Another 3,000 templates exist for product pages, and there are a thousand designs for marketing material such as e-mails and SMS alerts, according to Fu. If these packaged solutions don’t satisfy certain merchants, they can design their own right down to the page breaks and <p> tags, and then upload the code to Tmall.

    Major international brands have used this enhanced flexibility to build unique and engaging Tmall storefronts. For example, GoPro, the U.S.-based maker of wearable video cameras, produced a series of videos that appear on its storefront showing GoPro cameras being used in extreme situations, such as geologists staring into the mouth of a volcano or snowboarders doing double backflips as they race down a mountain.

    The Tmall storefronts of other household names such as Starbucks, L’Oreal, Maserati and Zara also offer fully branded experiences that experiences that mirror the look and feel of their corporate e-commerce sites, including multipage navigation according to product category and even full brand histories. Still others take the experience a step further in an attempt to boost the time consumers spend on their pages. Case in point: L’Oreal in the past has given consumers easy-to-follow guides and tips for using its beauty products.

    L’Oreal engaged consumers with hair-coloring tips posted on the company’s Tmall storefront.

    Fu says that Tmall storefronts are based on so-called “responsive” design, which means they look as good on mobile devices as they do on the web. But customization options for Tmall storefronts go even deeper.

    Using consumer data collected by Tmall, merchants can present not just personalized product recommendations based on shopping history to storefront visitors, they can also offer different homepages tailored to particular types of shoppers. For example, German personal-care brand Nivea displays three different storefronts on Tmall depending on whether a shopper is a first-time visitor, new buyer or loyal fan. First-time visitors are shown low-cost products that may tempt them to experiment with the brand. Fans, meanwhile, see sets of higher-value products bundled together as a way to boost their total purchase.

    Three different customers, three different mobile presentations. First-time visitors, new buyers and loyal fans all see products tailored specifically to them when they visit Nivea’s Tmall site.

    By making it possible for merchants to tag and manage their customers by attributes and personalize storefronts for each visitor, individual customers are exposed to highly relevant content, which drives higher conversion rates. Fu said after Nivea implemented personalized storefronts, “the data showed that the browsing conversion rate was improved by 70 percent and transactions increased by 150 percent—more than double the previous number of purchases,” he said. Browsing conversion is the rate at which shoppers click through to find out more about a product.

    Fu says Alibaba analyzes buyers based on five different behaviors: attention, interest, decision, action and sharing, all of which are part of the Tmall shopping cycle. A certain product may draw the attention of a shopper, which prompts him or her to click through to the seller’s store where they can learn more about the item. Then they decide whether or not to bookmark it or add it to their shopping cart; a purchase constitutes action. Sharing comes after, once a consumer tells a friend about their purchase or leaves a review on a merchant’s Tmall store.

    “We provide this capability for the seller to do these kinds of very sophisticated analyses,” Fu said. “Later, because we opened up this technology and data [to merchants], the seller can come up with their own model to do the analysis.”

    Still more tools are to come. Merchants currently log into a content-management system of sorts that lets them set up and manage their storefronts, including text, photos and slide show placement. They can also choose the products they want displayed as recommendations when a shopper is viewing, say, hand cream or razors or a sweater. Up next is a tool that will allow merchants to create banner advertisements on the fly, rather than turning to a designer to handle what is often a time-consuming task. That’s expected this quarter.

    Tmall also helps merchants synch their online stores with their bricks-and-mortar outlets. Fu said the goal is to make sure all points of sale are linked up, including mobile, desktop and offline. One key advantage for merchants to this so-called “omnichannel” approach is the ability to manage inventory across physical and virtual sales channels. Another is the ability to know a buyer’s location so that the nearest warehouse is used for shipping, which speeds up delivery.

    “All areas of the ecosystem are working together for merchants,” Fu said. “Before they had to figure this out on their own. But now we’ve come up with a system, and built the right tools to help them.”

    * Originally published by Alizila.com – the independent, but Alibaba Group-funded website of news about the Chinese eCommerce giant.

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  • Amazon Q1 profits surge

    Amazon Q1 profits surge

    E-commerce giant Amazon.com posted its fourth straight profitable quarter, boosted by a 28 per cent sales increase and a surging growth in its Amazon Web Services division.

    Amazon reported a net income of $513 million for the first quarter, or $1.07 per share, compared with the net loss of $57 million, or $0.12 per diluted share, in first quarter 2015.

    The Seattle online retailer saw a 28 per cent increase in its net sales for the first quarter compared with the $22.7 billion in the previous corresponding period. Excluding the $210 million unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 29 per cent compared to first quarter 2015.

    “Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year,” said Jeff Bezos, founder and CEO of Amazon.com.

    “Earlier this week, the $39 Fire TV Stick became the first product ever — from any manufacturer — to pass 100,000 customer reviews, including over 62,000 five star reviews, also more than any other product ever sold on Amazon. Echo too is off to an incredible start, and we can’t yet manage to keep it in stock despite all efforts,” Bezos said.

    Bezos added they are building premium products at non-premium prices, and they are thrilled many customers are responding to their approach.

    Amazon’s retail business saw a 31 per cent increase for the quarter to $20.5 billion, up from the $15.6 billion from the previous corresponding period.

    Amazon Web Services, with customers that include Netflix, Airbnb, Yelp and Expedia, saw a 63 per cent increase to $2.6 billion, up from the $1.6 billion from the same period the previous year.

    For the second quarter of 2016, the company expects its net sales to be between $28.0 billion and $30.5 billion, or to grow between 21 per cent and 32 per cent compared with the previous corresponding period. Operating income is expected to be between $375 million and $975 million, compared with the previous period’s $464 million.

  • AWS still dominates cloud infrastructure market

    AWS still dominates cloud infrastructure market

    Amazon Web Services (AWS) continues to dominate the cloud infrastructure services market with a 31% worldwide market share, dwarfing the chasing pack, according to new Q1 data from Synergy Research Group.

    The big three followers – Microsoft, IBM and Google – in aggregate accounted for 22% of the market, while the next 20 top-ranked cloud providers accounted for another 27%. The good news for Microsoft and Google is that they both achieved growth rates of well over 100% so they are at least slowly gaining some ground on the market leader.

    Outside of the big four, the next 20 cloud providers are growing at an average 41% per year, but in a market that is growing at over 50% that means that most of them are losing market share.

    The next 20 providers include Alibaba, CenturyLink, Fujitsu, HPE, NTT, Oracle, Orange, Rackspace, Salesforce, and Vmware.

    With most of the major operators having now released their earnings data for Q1, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and private & hybrid cloud) have now comfortably passed the $7 billion milestone.

    Growth rates remain somewhat similar across the major regions meaning that the United States continues to account for around half of the worldwide market.

    “This is a market that is so big and is growing so rapidly that companies can be growing by 10-30% per year and might feel good about themselves and yet they’d still be losing market share,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group.

    “The big question for them is whether or not they are building a sustainable and profitable business. This can be done by focusing on specific regions or specific services, but the bulk of the market demands huge scale, a broad footprint, very deep pockets and a long-term corporate focus.”

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  • Telstra to launch Cloud Gateway in June

    Telstra to launch Cloud Gateway in June

    Australia’s largest operator Telstra will launch a product for businesses needing to connect to multiple cloud environments.

    The company has also added Amazon Web Services (AWS) to its list of supported cloud platforms. The service, named Cloud Gateway, will launch in June 2016.

    Cloud Gateway aims to provide private and secure connectivity directly into multiple public cloud platforms. This one-to-many “gateway” model connects an IP network service to the cloud with data carriage, cross connect in the hosting data center, configuration and support.

    Organizations are expected to be able to access their chosen cloud platform from around the world simply and securely, with increased application performance via Telstra’s IP network.

    Initially, Cloud Gateway will offer customers around the world connectivity to AWS and IBM SoftLayer, while Australian customers can also connect to Microsoft Azure, Office365 and VMware vCloud Air. More infrastructure and SaaS platforms are expected to join over time.

    Telstra executive director for global products and solutions Philip Jones said Cloud Gateway aims to help customers take full advantage of multiple cloud-based workloads.

    “Most organizations don’t realize the full value of cloud out of a single service. Instead, our customers are investing in sophisticated hybrid cloud environments, which come with their own range of fragmented networking challenges,” said Jones.

    “These include managing multiple vendors, portals and contracts, while trying to maintain a high level of security, performance and operational efficiency. We believe that just because these solutions are sophisticated, doesn’t mean that they should also be complex. Cloud Gateway is Telstra’s simple way to connect multiple clouds, and create hybrid environments.”

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