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AMAZON'S B2B WHOLESALE MARKET IS A SLEEPING GIANT: Amazon is quietly building one of the most disruptive businesses online - a business-to-business wholesale market called AmazonSupply. Amazon launched the business in 2012, and it's seldom ever mentioned on earnings calls - or anywhere for that matter. Wholesalers generated $7.2 trillion in revenues in 2012 (that's online and offline sales), according to the U.S. Census, while retailers took in $4 trillion in revenues selling to consumers. If Amazon executes as well as it did in the retail market, AmazonSupply could grow into an even larger business than the merchandise it sells to consumers on Amazon.com.
SIGNS THAT E-COMMERCE IS BOOMING FOR RETAIL CHAINS: Online sales increased nearly 20% year-over-year in the first quarter for more than 100 retailers, according to e-commerce software company MarketLive. Although the retailers weren't named specifically, we know that MarketLive's clientele includes major brands such as Aveeno, Design Within Reach, Modell's, Fossil Inc., and Helzberg Diamonds. This is the sixth straight quarter that MarketLive clients have posted double-digit online sales growth. All of MarketLive's top clients appear to be retailers that originated as physical stores, but now operate across channels (commonly referred to as "omnichannel" retailers). Bricks-and-mortars are becoming increasingly effective at leveraging e-commerce to gain new customers and also retain loyal ones who might be doing more shopping online, rather than in stores.
ALIBABA IPO OFFERS GLIMPSE INTO CHINA MOBILE COMMERCE: E-commerce giant Alibaba filed for an IPO earlier this week in the U.S., giving us a better look at how consumers shop online in China. More than three in four mobile commerce dollars spent in China last year flowed through Alibaba's online marketplaces. That suggests that any further smartphone penetration in China will directly benefit Alibaba - and we predict a lot of upside. As of last month, only 37% of 1.3 billion Chinese mobile subscribers were on 3G and 4G wireless networks. Tablets and smartphones channeled 20% of Alibaba's purchase volume in the final quarter of 2013 (see chart below), roughly double the proportion as in the same period a year ago. We expect the share Alibaba sales attributable to mobile to increase significantly over the next year.
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ZULILY EARNINGS EXPOSE FULFILLMENT ISSUES: Zulily, a daily deals site for mothers, is growing its business faster than expected, but that's causing all sorts of growing pains for the company. Sales totaled $238 million for the first quarter, which is up 87% from the same time period last year, and the number of paying customers were up 93% to 3.7 million for the quarter. This surge in business caused fulfillment problems at the end of March - shipment times were averaging 13 days. Zulily CEO Darrell Cavens said on the earnings call yesterday that he's not concerned about long shipping times when there's a surge in orders, because people don't purchase from Zulily based on need. That's risky thinking at a time when e-commerce sites are becoming ultra-competitive on shipping times.
COUPONS.COM EARNINGS SHOWS THERE'S PLENTY OF ROOM FOR COMPETITION IN ONLINE COUPONING: Coupons.com posted strong first quarter earnings yesterday. Quarterly revenues totaled $51.5 million, which is up 41% from the same time period last year. Earlier this week, one of the company's chief competitors, RetailMeNot, posted quarterly revenues of $61.3 million, an increase of 51% year-over-year. The fact that both companies are performing so well indicates that there is plenty of room in the growing business of online couponing. This is a result of more consumers going online to shop, and carrying their smartphones - ideal vehicles for coupons - when shopping offline. These shoppers are now being conditioned to check these coupon sites for discounts before making any kind of purchase.
TRIPADVISOR'S BUSINESS PICKS UP AFTER WINTER WEATHER: TripAdvisor revenues totaled $281 million in the first quarter, which is a 32% increase over the previous quarter and 22% bump over the same time period last year. The quarterly growth was a result of relatively mild weather compared to this year's harsh Northern Hemisphere winter, which led to an uptick in travel. We expect online travel bookings to continue to increase in volume over the next few months. On the company's earnings call, CEO and President Steve Kaufer announced that TripAdvisor now has more than 150 million customer reviews covering four million hospitality businesses and attractions around the globe. For comparison, Yelp has just over 57 million reviews about local businesses.
Tiger Global led a $15 million investment in LimeRoad, an online shopping site for women in India. Tiger Global seems to be investing heavily in Indian e-commerce, as it already has stakes in Flipkart and Myntra.
Apple's new Head of Retail Angela Ahrendts has received more than 113,000 units of restricted Apple stock which is valued at more than $68 million. The stock-options are a sign that Apple has high hopes for Ahrendts since a portion of her compensation will be directly tied to how the company performs.
PERSONNEL MOVES:
Airbnb has hired Jonathan Mildenhall as its new chief marketing officer. Mildenhall previously worked at Coca-Cola where he was senior vice president of integrated marketing communication and design excellence. Mildenhall was recognized by Ad Age in 2012 as one of the most creative professionals working in advertising.
Travelocity CEO and President Carl Sparks has reportedly left the company,according to Skift. The reason for his departure is still unknown, and a replacement has not yet been named.
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