Industry Insights

The Future of eCommerce & Their Acquisition Sprees for 2018

Today, eCommerce and digital influences together make up 56% of in-store purchases, while eCommerce itself represents almost 10% of U.S. retail sales and that figure is growing by nearly 15% annually. Digital commerce has gone beyond “buying something on a website” to a series of interactions that rely on technology to move goods.

Figuratively speaking, stores can no longer survive without being present on their customers’ preferred channels which means retailers need to fully integrate digital commerce in order to thrive. Similarly, B2B is nearing the eCommerce tipping point and disruption will become more frequent in 2018.

In a report by Absolunet they shared some interesting statistics, a few of which were really interesting to me. They say by 2019, B2B firms will spend more on eCommerce technology than online retailers and in response to this, it was noted that eCommerce platform vendors (Magento, Insite, Sitecore, Oracle, Hybris and more) are rolling out B2C-like functionalities that co-exist with complex B2B business rules (partial orders, volume pricing, etc.)

To learn more about what drives the eCommerce market in terms of technology and strategy, you may find this article very interesting by my former colleague Venus Tamturk entitled E-commerce: What Happened in 2017 & What's Next in 2018.

She had some pretty interesting statistics in there: “Current retail trends show that 51% of Americans prefer online shopping, with e-commerce growing 23% year-over-year. According to Adobe's analysis of one trillion visits to over 4,500 retail sites and 55 million SKUs, the commerce revenue surged to $108.15 million in 2017, from $94.4 million in 2016. When it comes to digital engagement, compared with Q2 2016, retailers did a much better job at keeping people on their sites in Q2 2017. Visit duration increased by 1.2% year-over-year (YoY) for all retailers, according to Adobe.”

So, you may be asking yourself, what IS the future of eCommerce for 2018?  According to Shopify Plus, Shopify's enterprise eCommerce platform for large and growing online stores and brands, this is what the future of eCommerce looks like for 2018:

  • eCommerce is growing but only represents 11.9% of retail
  • Multi-channel eCommerce enables anywhere buying
  • eCommerce automation is an accessible reality for businesses
  • Mobile is the new normal but adds purchase complexities
  • Native social-selling is finally delivering results
  • International eCommerce remains largely untapped
  • Micro-moments are the new battleground for optimization
  • Content is the holy grail of eCommerce engagement
  • B2B eCommerce is dwarfing B2C eCommerce by over $5 trillion
  • Fragmentation is the future of eCommerce’s biggest challenge

For more of an in-depth look, I would highly recommend that you visit their article here as they dive deep into each topic.

In an eCommerce context, someone who likes Star Wars needn’t be classified into a generalized demographic group, their behavior and preferences is already rich with insight.
Charles Desjardins, Absolunet Associate

Game Changing eCommerce Acquisitions

There’s been quite a few eCommerce acquisitions so far in 2018 but I’m going to zero in on some of the major ones that really stood out and grabbed my attention.

Alibaba, a Chinese multinational eCommerce, retail, internet, AI and technology firm on Tuesday announced its acquisition (entire share capital) of South Asian eCommerce platform Daraz Group for an undisclosed amount. The company is also said to be incubated by Rocket Internet, who provides operational support to companies and helps to scale them internationally.

Products on Daraz include much of the same as to what Alibaba has to offer, consumer electronics, household goods, beauty, and fashion just to name a few.

The acquisition would help further growth in their main markets, adding that they were home to 460 million people, 60 percent of whom were under the age of 35 says Daraz.

Alibaba CEO Jack Ma has also been investing in research into advanced technologies such as driverless cars and artificial intelligence. 

The New York-listed firm added 98 million active consumers over the year ending March 31, to a total of 552 million using its eCommerce marketplaces. 

Also this week, Walmart has announced their signed definite agreement with Flipkart, an Indian company serving in the electronic commerce sector.

Walmart will own 77 per cent of Flipkart which was founded by two former Amazon employees. Having said that, according to YourStory Media Walmart beat Amazon to Flipkart with a $15B bid stating “Traditional foe Amazon had made a last-minute bid for Flipkart. While SoftBank, and even Tiger Global initially, preferred Amazon, the management and other investors preferred Walmart. Tiger first decided to side with management and finally SoftBank too agreed.”

Click here to view the Investor presentation that was given to Flipkart by Walmart during their live conference call on Wednesday, May 09, 2018.

In Walmart’s digital press release, they stated “The investment will help accelerate Flipkart's customer-focused mission to transform commerce in India through technology and underscores Walmart’s commitment to sustained job creation and investment in India, one of the largest and fastest-growing economies in the world.”

It’s said that this acquisition is the largest eCommerce acquisition in the world and will be one of the biggest tech M&As.

Walmart’s President and Chief Executive Officer Doug McMillon stated “India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market.

As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market. We are also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners. We are confident this group will provide Flipkart with enhanced strategic and competitive advantage. Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs.”

While Binny Bansal, Flipkart’s Co-founder and Group Chief Executive Officer said “This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India.

While eCommerce is still a relatively small part of retail in India, we see great potential to grow. Walmart is the ideal partner for the next phase of our journey, and we look forward to working together in the years ahead to bring our strengths and learnings in retail and eCommerce to the fore.”

Ending Notes

Speaking of eCommerce, there was a really great article that was written by BigCommerce discussing Why Retail is Dying: The Self-Inflicted Wounds Theory (and What’s Next). This article really interested me and it actually got me thinking about these big retailers and why they are all shutting down.

I was out of town last weekend and decided to do some shopping at some department stores that don't have locations in the town I live in. Not thinking much of it, I stepped into the Nine West store that had big, bright signs showcasing their 50-70% markdown. Little did I know, it was because they had filed for bankruptcy – Was this a surprise to me? No. By December 2017, it’s said that there were 26 major retail bankruptcies. It just makes me wonder if these bankruptcies have to do with online eCommerce that’s said to be booming in this day and age. Given that now everyone has all the selection they could want on their smartphones or desktop, the big box stores are obsolete.

It’s without a doubt that as smartphones let alone internet usage has increased, the importance of retail stores has declined. Will these bankruptcies slowdown in the years to come?

Be sure to also check out Venus’ article entitled eCommerce 2017 Stats Explained for Online Retailers.

Gabriella Pirrone

Gabriella Pirrone

Gabriella is the Digital Marketing Assistant for CMSC Media. She brings a wealth of knowledge from not only a CMS perspective but also content, SEO and eCommerce. She enjoys everything social media and staying ontop of the latest trends in the digital marketing world. 

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