Archive for ‘eCommerce’

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02/10/2014

Facebook’s Mark Zuckerberg to Meet Modi in India – India Real Time – WSJ

Mark Zuckerberg, the founder of Facebook, will visit India next week to meet Prime Minister Narendra Modi and take part in a summit to find ways to get more people online–and probably signed up for his website.

India has around 200 million Internet users, a tiny fraction of its 1.2 billion population, and just over half of them have Facebook profiles. Mr. Modi is one of India’s most social-media savvy politicians and used Facebook and Twitter TWTR -3.04% heavily during his campaign ahead of elections which took place in April and May. But Internet use in general in India is still a minority affair with only 15% of the population online.

A report by McKinsey published Wednesday ahead of the internet.org summit which begins next Thursday said that between 2012 and 2013, the number of Internet users in India grew 22% compared to 9% growth in China and 7% increase in the U.S. over the same period. Over half (59%) of Internet users in India use mobile phones rather than computers to get online.

But, like Egypt, Indonesia, the Philippines and Thailand, India faces infrastructure challenges to getting more people online, the report said.

Almost half (45%) of the huge rural population has no access to electricity and further up the chain, the country is only in the early stages of deploying 3G networks.

There are some bright spots on the horizon for Internet usage in India however. The report says that India’s huge young population–around one in three people is currently aged under 15–will push the country online.

“We expect this younger age segment to be a significant driver of Internet adoption in developing countries, given their generally greater familiarity with technology and willingness to adopt it,” the report said.

via Facebook’s Mark Zuckerberg to Meet Modi in India – India Real Time – WSJ.

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05/09/2014

Alibaba’s Taobao, Tmall Transform Shopping in China’s Small Cities – Businessweek

Li Yuxin remembers when she had to travel from Zhangjiekou, her northern Chinese home town, to visit her half-sister in Beijing so she could buy the right clothes. Sure, Zhangjiekou has large shopping malls full of cheap t-shirts and baggy jackets, but not stores where the aspiring fashionista could purchase accessories from such foreign luxury brands as Prada (1913:HK) or even popular Western sportswear made by Nike (NKE) and Adidas (ADS:GR).

Checking deliveries from online marketplaces Tmall and Taobao at an express delivery company in Beijing

But since she started ordering clothes from Taobao and Tmall—websites owned by Alibaba Group—her options and her wardrobe have dramatically expanded. “Maybe I spend too much money now, but I have to catch up with Li Zhu,” her half-sister who lives in China’s capital, she says.

E-commerce has quickly changed the face of shopping and consumer marketing in China. Mirroring the rise of Amazon (AMZN) in the U.S., the ascendance of Alibaba in China has greatly accelerated this trend and turned China into the world’s second-largest e-commerce market.

via Alibaba’s Taobao, Tmall Transform Shopping in China’s Small Cities – Businessweek.

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15/08/2014

Online sites shake up hidebound retailing in India – Businessweek

Finding a way into India’s vast but vexing market has long frustrated foreign retailers. Now, overseas investors are pouring billions of dollars into e-commerce ventures that are circumventing the barriers holding back retail powers such as Wal-Mart and Ikea.

Some investors see India as the world’s next big e-commerce opportunity, with the upcoming mammoth public stock offering of Chinese online giant Alibaba hinting at the potential.

Online shopping is still in its infancy in India at $2.3 billion of an overall $421 billion retail market in 2013, according to research firm Crisil. But it is growing fast and the potential of reaching a mostly untapped market of 1.2 billion people has sparked a funding-and-expansion arms race.

Flipkart, a Bangalore-based company founded in 2007 by two former Amazon employees, last month announced it had raised $1 billion in mostly foreign capital after building its registered users to 22 million.

A day later, Amazon raised the stakes with founder Jeff Bezos saying the company would pour $2 billion into developing its India business.

Snapdeal.com, another Indian e-commerce contender, has raised at least $234 million in the past year, and recently local media have reported that Rajan Tata of India’s Tata Group conglomerate is considering a personal investment in the company.

via Online sites shake up hidebound retailing in India – Businessweek.

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30/07/2014

Indian online retailer Flipkart raises $1 billion – Businessweek

India’s largest online e-commerce company, Flipkart, says it has raised $1 billion in new capital as the company gears up for competition with Amazon‘s push into the Indian market.

Flipkart Flipkart Flipkart!!

Flipkart Flipkart Flipkart!! (Photo credit: samratm)

The company says the funds will be used to invest in expansion, especially in mobile technology.

Flipkart is sometimes called the Amazon of India. It was founded by two Indian brothers who left Amazon and came home to found their own online retailer.

Flipkart says it has 22 million registered users and handles 5 million shipments per month.

Amazon’s India division has been making a big push in the country’s small but fast-growing online retail market. It has been running front-page advertisements in newspapers and touting one-day delivery.

Flipkart itself recently acquired Indian online fashion retailer Myntra to strengthen market share.

via Indian online retailer Flipkart raises $1 billion – Businessweek.

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25/07/2014

Consumers Drive Chinese Internet But Enterprise Use Lags – China Real Time Report – WSJ

By some measures, China’s Internet dwarfs that of the United States.

China has the world’s largest Internet population with 618 million users, well over twice as many as in the U.S. China also has the world’s largest online retailing industry, with e-commerce giants like Alibaba that sprawl far larger than the likes of eBay EBAY +1.08%.

But a new study by the McKinsey Global Institute argues that enterprise use of the Internet is still lagging in China and that the country’s businesses will need to catch up in this area to unlock economic gains.

“The Web is just beginning to penetrate many Chinese businesses – and the most sweeping changes are yet to come,” said the report, which was published this week.

MGI estimates that increased adoption of Web technologies like cloud computing and big data by China’s enterprises can add 0.3 to 1.0 percentage points to China’s GDP growth rate. By 2025, it could translate to annual economic gains of between 4 trillion yuan ($645.5 billion) and 14 trillion yuan, the research firm said.

China’s Internet has outpaced the U.S. among consumers. Alibaba’s online shopping platforms Taobao and Tmall have nearly twice as many active buyers than the U.S. site eBay. Jonathan Woetzel, one of the MGI study’s authors and a partner of the firm, told The Wall Street Journal that Chinese consumers spend more time shopping online and make more purchases than their American counterparts.

“China’s consumer generation has shown up at the same time as the Internet,” he said. “They have the money, but the offline shopping platforms like malls haven’t been built up fast enough to accommodate their expectations and needs. So more of them shop online.”

But when it comes to China’s businesses, they still lag in use of Web technologies, he says. The typical Chinese company spends 2% of revenue on IT, half of the international average, according to an MGI survey of CIOs. The enterprise cloud adoption rate in China is 21% compared to 55%-63% in the U.S.

Some sectors that stand the most to benefit in China include the financial services, health care and automotive industries, MGI says. Big data can help financial firms manage risks and reduce non-performing loans, while remote monitoring of chronic diseases can save costs for the health care industry.

via Consumers Drive Chinese Internet But Enterprise Use Lags – China Real Time Report – WSJ.

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15/07/2014

Software products bring hot career choices as India looks beyond IT services | India Insight

When Zomato was setting up shop six years ago, the online restaurant search service had to woo engineers, but many weren’t interested in working for an unknown company. Instead, they wanted to work for larger and prestigious names. Slowly, that is changing.

Indian companies such as Zomato and Flipkart, which make their own technology products rather than provide services are becoming more attractive to the country’s engineering school graduates, and are hiring more people as they alter technology industry hiring patterns.

“We had to convince parents to let their kids work with us. Most people had no idea of what a products startup can offer,” said Gunjan Patidar, Zomato’s chief technology officer, talking about the company’s early days. “They know about Infosys and TCS because that’s where their cousins and friends have worked.”

Backed by Silicon Valley-based venture capitalists, these homegrown companies are not afraid to match salary packages offered by established foreign companies, and offer perks such as employee stock options.

Not everyone is born to be an engineer, but in India, many parents are determined to make it so for their children. India produces about 80,000 engineering graduates every year, according to Sandhya Chintala, vice president of the National Association of Software and Services Companies.

Engineering is considered a prestigious profession. In India’s close-knit family system, jobs can be associated with upward mobility, and can make a son or daughter a better marriage prospect. Children often have no say in the decision.

Working in information technology services with hundreds of thousands of employees, such as Tata Consultancy Services or Infosys, which handle other companies’ technology needs, has long been the easiest way for graduates to go abroad on job assignments, adding to their perceived social worth.

“I often say in India people first become engineers and then they decide what to do with their lives,” said Girish Mathrubootham, founder and chief executive of online customer support platform Freshdesk, which recently raised $31 million in funding from private equity firms Tiger Global, Accel Partners and Google Capital.

Freshdesk lost a potential employee in the early days to TCS because the employee’s parents wanted him to work for a well known company, Mathrubootham said. “Now we have an employee who went to work with Honeywell, but she came back within six months.”

via Software products bring hot career choices as India looks beyond IT services | India Insight.

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11/07/2014

Flipkart Fights to Keep India E-Commerce Lead Over Amazon – Businessweek

In 2007, when Indian software engineers Sachin Bansal and Binny Bansal were starting their online bookstore Flipkart.com out of a two-bedroom apartment, they faced a challenge Amazon.com (AMZN) founder Jeff Bezos never had: how to collect payment. At first the two, who aren’t related, accepted credit cards, but because few Indians use them, they needed a way to conduct e-commerce in cash. Payment-on-delivery was the obvious solution, but Flipkart didn’t want third-party couriers to carry large quantities of its money. So in 2010 the company decided to remake itself as a version of both Amazon and United Parcel Service (UPS).

A courier for Flipkart finishes loading his backpack as he prepares to deliver packages at a distribution hub in Bangalore

Becoming a delivery service brought a slew of infrastructure problems. India has no standardized street address system, and road conditions are rough. Often a building name, street, and series of landmarks are needed to locate a house. And customers have to be home to receive a package. “You cannot leave anything outside the door, because it will just disappear,” says Ashok Banerjee, Flipkart’s former vice president for logistics, now chief technology officer for e-business at Symantec (SYMC) in California.

The entrepreneurs looked at distribution as a technology problem. “The advantage we had was we were not a logistics company trying to do e-commerce,” says Mekin Maheshwari, head of human resources. “Because we were creating the systems completely in-house, we could actually solve it.” With venture funding from Tiger Global Management, Flipkart’s engineers developed systems to determine the best warehouse locations; it has six across the country. It alerts customers by text several hours before a scheduled delivery and has a lab dedicated to improving the final stage of deliveries, from local warehouses to buyers.

via Flipkart Fights to Keep India E-Commerce Lead Over Amazon – Businessweek.

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30/06/2014

Meme Manufacturing: China Taking Orders for Suarez Bite Bottle Openers – China Real Time Report – WSJ

Well known for his dives, Uruguay striker Luis Suarez is deft at selling fouls that didn’t happen.

Now he’s become a business opportunity for online vendors in China skilled at selling products that don’t exist.

With the hope of cashing in on Mr. Suarez’s infamous biting of Italian player Girogio Chiellini during Uruguay’s World Cup win over Italy last week, almost 200 merchants on Taobao, the e-commerce site run by China’s Alibaba, are selling Suarez bottle openers.

A screenshot shows an advertisement on Taobao for a Luis Suarez can opener. “One bite and its open, it says. Taobao

Using a Photoshopped image that went viral after the game of Mr. Suarez’s mid-bite visage grafted onto a plastic figurine and preparing to chomp down on a bottle lid, the vendors are selling the openers for as little as 15 yuan ($2.50).

“One mouth, one opener….one bite and it’s open,” read one advertisement.

Given the social media storm that followed the bite, the openers could sell briskly. The problem is, like part of Brazil’s World Cup infrastructure just weeks before the tournament, it doesn’t exist yet.

As cunning in the cut-throat world of Chinese e-commerce as Mr. Suarez is on the field, Taobao vendors contacted by China Real Time gave different motivations for putting up advertisements for the products.

One vendor, who was advertising the openers for an outrageously expensive 9,999 yuan, admitted he didn’t actually expect to sell the product. Instead, he said, he was using Mr. Suarez’s outburst as a marketing opportunity.

“Honestly, I won’t really sell it at that high price even if I have it on hand. It’s just for pleasure,” said the vendor selling under the name Drinchlee. “I was just doing it for entertainment around the World Cup, and you can take a look other stuff that I am selling, such as football teams T-shirts!”

Others were more serious about turning the meme into cash. One vendor with the screen name Lin Mumu0393 said he had received 108 orders and that he was still working with manufacturers to make the product. He said he would have limited supplies in two weeks.

via Meme Manufacturing: China Taking Orders for Suarez Bite Bottle Openers – China Real Time Report – WSJ.

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17/06/2014

China’s Gray-Haired Set Could Boost Digital Shopping – China Real Time Report – WSJ

Online shopping in China isn’t just for the young, according to a new survey. That could be good news for an already quickly growing e-commerce industry that largely caters to the young.

While the bulk of online shoppers are still in their 20s and 30s, a survey published Tuesday by data provider Nielsen said the number of online consumers aged 55 or older grew 72% between 2012 and 2013. It cited data from Taobao, one of China’s largest shopping websites, which is owned by Alibaba Group, though it didn’t release the underlying figures.

“China could become the world’s most aged society by 2030,” said Tao Libao, a Nielsen official with responsibility for e-commerce, in a prepared statement. “The elderly online consumers deserve more attention from both current online retailers and brick-and-mortar retailers who are going to venture online.” People aged over 60 could be 30% of China’s population by 2030, Mr. Tao said.

They survey said they tend to be more careful shoppers, attracted by easy price comparisons and special discounts given that they often have less income than younger people.

“It’s cheaper to buy online,” said Zhang Jinnian, a Beijing shopper in her fifties who has been using the internet to shop for the past year. In that time she has bought clothes, shoes and a bicycle online. “It’s always more expensive in a store,” said Ms. Zhang, who declined to give her exact age.

via China’s Gray-Haired Set Could Boost Digital Shopping – China Real Time Report – WSJ.

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23/05/2014

The Secret Weapon Behind China’s Booming Online Retailers? Women – China Real Time Report – WSJ

The secret weapon for many of China’s booming e-commerce companies is women, who shop more, spend more and generate bigger profits. Though the income of Chinese women is generally lower than that of men, they are also more likely to spend on themselves.

As the WSJ’s Wei Gu reports:

A new crop of Chinese e-commerce companies has harnessed the power of female consumers. Shares of Vipshop Holdings Ltd., which specializes in branded apparel at big discounts, have soared 30-fold since the company went public in New York two years ago. Women are 75% of the customer base and provide 90% of the revenue.

The company said it chose apparel because it is more profitable than alternatives such as electronics, which appeal more to male buyers. VIPshop’s gross margin is a healthy 25%.

…

The companies are embracing a research-supported stereotype: Devoted shoppers are disproportionately female. A third of Chinese consumers shopped online more than 40 times in 2013, according to iResearch, a Chinese Internet tracking firm, and 59% of those frequent shoppers were women.

“The ones that are succeeding in China’s e-commerce space are the female-dominated ones,” said Shaun Rein, founder of China Market Research. “The optimism level for female is considerably higher, and they drive retail sales.”

A survey of 1,000 Chinese consumers by China Market Research found that 62% of the women between 25 to 45 plan to spend more in the next six months than in the previous six months, compared with only 52% of the men in that age range. Younger women, aged 24 to 35, are the most optimistic of all.

If they found themselves with extra money, Chinese women say they would spend on clothing and health products, while also setting some aside as savings, according to Nielsen. Women in developed markets would spend on a vacation and pay off debt, as well as saving some. As many as 86% of Chinese women believe their daughters will do well financially, versus less than 40% of women in developed countries.

via The Secret Weapon Behind China’s Booming Online Retailers? Women – China Real Time Report – WSJ.

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