Cadeera is doing AI visual search for home decor

In recent years we’ve seen a whole bunch of visual/style fashion-focused search engines cropping up, tailored to helping people find the perfect threads to buy online by applying computer vision and other AI technologies to perform smarter-than-keywords visual search which can easily match and surface specific shapes and styles. Startups like Donde Search, Glisten and Stye.ai to name a few.

Early stage London-based Cadeera, which is in the midst of raising a seed round, wants to apply a similar AI visual search approach but for interior decor. All through the pandemic it’s been working on a prototype with the aim of making ecommerce discovery of taste-driven items like sofas, armchairs and coffee tables a whole lot more inspirational.

Founder and CEO Sebastian Spiegler, an early (former) SwiftKey employee with a PhD in machine learning and natural language processing, walked TechCrunch through a demo of the current prototype.

The software offers a multi-step UX geared towards first identifying a person’s decor style preferences — which it does by getting them to give a verdict on a number of look book images of rooms staged in different interior decor styles (via a Tinder-style swipe left or right).

It then uses these taste signals to start suggesting specific items to buy (e.g. armchairs, sofas etc) that fit the styles they’ve liked. The user can continue to influence selections by asking to see other similar items (‘more like this’), or see less similar items to broaden the range of stuff they’re shown — injecting a little serendipity into their search. 

The platform also lets users search by uploading an image — with Cadeera then parsing its database to surface similar looking items which are available for sale.

It has an AR component on its product map, too — which will eventually also let users visualize a potential purchase in situ in their home. Voice search will also be supported.

“Keyword search is fundamentally broken,” argues Spiegler. “Image you’re refurbishing or renovating your home and you say I’m looking for something, I’ve seen it somewhere, I only know when I see it, and I don’t really know what I want yet — so the [challenge we’re addressing is this] whole process of figuring out what you want.” 

“The mission is understanding personal preferences. If you don’t know yourself what you’re looking for we’re basically helping you with visual clues and with personalization and with inspiration pieces — which can be content, images and then at some point community as well — to figure out what you want. And for the retailer it helps them to understand what their clients want.”

“It increases trust, you’re more sure about your purchases, you’re less likely to return something — which is a huge cost to retailers. And, at the same time, you may also buy more because you more easily find things you can buy,” he adds.

Ecommerce has had a massive boost from the pandemic which continues to drive shopping online. But the flip side of that is bricks-and-mortar retailers have been hit hard.

The situation may be especially difficult for furniture retailers that may well have been operating showrooms before COVID-19 — relying upon customers being able to browse in-person to drive discovery and sales — so they are likely to be looking for smart tools that can help them transition to and/or increase online sales.

And sector-specific visual search engines do seem likely to see uplift as part of the wider pandemic-driven ecommerce shift.

“The reason why I want to start with interior design/home decor and furniture is that it’s a clearly underserved market. There’s no-one out there, in my view, that has cracked the way to search and find things more easily,” Spiegler tells TechCrunch. “In fashion there are quite a few companies out there. And I feel like we can master furniture and home decor and then move into other sectors. But for me the opportunity is here.”

“We can take a lot of the ideas from the fashion sector and apply it to furniture,” he adds. “I feel like there’s a huge gap — and no-one has looked at it sufficiently.”

The size of the opportunity Cadeera is targeting is a $10BN-$20BN market globally, per Spiegler. 

The startup’s initial business model is b2b — with the plan being to start selling its SaaS to ecommerce retailers to integrate the visual search tools directly into their own websites.

Spiegler says they’re working with a “big” UK-based vintage platform — and aiming to get something launched to the market within the next six to nine months with one to two customers. 

They will also — as a next order of business — offer apps for ecommerce platforms such as WooCommerce, BigCommerce and Shopify to integrate a set of their search tools. (Larger retailers will get more customization of the platform, though.)

On the question of whether Cadeera might develop a b2c offer by launching a direct consumer app itself, Spiegler admits that is an “end goal”.

“This is the million dollar question — my end-goal, my target is building a consumer app. Building a central place where all your shopping preferences are stored — kind of a mix of Instagram where you see inspiration and Pinterest where you can keep what you looked at and then get relevant recommendations,” he says.

“This is basically the idea of a product search engine we want to build. But what I’m showing you are the steps to get there… and we hopefully end in the place where we have a community, we have a b2c app. But the way I look at it is we start through b2b and then at some point switch the direction and open it up by providing a single entry point for the consumer.”

But, for now, the b2b route means Cadeera can work closely with retailers in the meanwhile — increasing its understanding of retail market dynamics and getting access to key data needed power its platform, such as style look books and item databases.

“What we end up with is a large inventory data-set/database, a design knowledge base and imagery and style meta information. And on top of that we do object detection, object recognition, recommendation, so the whole shebang in AI — for the purpose of personalization, exploration, search and suggestion/recommendation,” he goes on, sketching the various tech components involved.

“On the other side we provide an API so you can integrate into use as well. And if you need we can also provide with a responsive UX/UI.”

“Beyond all of that we are creating an interesting data asset where we understand what the user wants — so we have user profiles, and in the future those user profiles can be cross-platform. So if you purchase something at one ecommerce site or one retailer you can then go to another retailer and we can make relevant recommendations based on what you purchased somewhere else,” he adds. “So your whole purchasing history, your style preferences and interaction data will allow you to get the most relevant recommendations.”

While the usual tech giant suspects still dominate general markets for search (Google) and ecommerce (Amazon), Cadeera isn’t concerned about competition from the biggest global platforms — given they are not focused on tailoring tools for a specific furniture/home decor niche.

He also points out that Amazon continues to do a very poor job on recommendations on its own site, despite having heaps of data.

“I’ve been asking — and I’ve been asked as well — so many times why is Amazon doing such a poor job on recommendations and in search. The true answer is I don’t know! They have probably the best data set… but the recommendations are poor,” he says. “What we’re doing here is trying to reinvent a whole product. Search should work… and the inspiration part, for things that are more opaque, is something important that is missing with anything I’ve seen so far.”

And while Facebook did acquire a home decor-focused visual search service (called GrokStyle) back in 2019, Spiegler suggests it’s most likely to integrate their tech (which included AR for visualization) into its own marketplace — whereas he’s convinced most retailers will want to be able to remain independent of the Facebook walled garden.

“GrokStyle will become part of Facebook marketplace but if you’re a retailer the big question is how much do you want to integrate into Facebook, how much do you want to be dependent on Facebook? And I think that’s a big question for a lot of retailers. Do you want to dependent on Google? Do you want to be dependent on Amazon? Do you want to be dependent on Facebook?” he says. “My guess is no. Because you basically want to stay as far away as possible because they’re going to eat up your lunch.”   



from eCommerce – TechCrunch https://ift.tt/2NC3bjR
via IFTTT

Record Mirakl 110% Year-over-Year GMV Growth, $3.1B Transacted

Mirakl Growth

Mirakl have announced a massive 110% year-over-year revenue growth and over $3.1B (£2.26B) in gross merchandise value (GMV) transacted on their customers’ Mirakl-powered Marketplaces in 2020. Record Mirakl growth saw them sign up 73 new customers and launch 55 new marketplaces during the year.

The record Mirakl growth should be no surprise with much of the high street closed around the world and many bricks and mortar retailers never to open again. It’s worth noting that when a retailer such as Debenhams close it’s not just their business that’s impacted. They have a ton of concessions in their stores and those brands also lose their footprint on the high street. There’s a ready market of brands who need to build a new route to market and retailers who need to get their businesses online and marketplaces give ever more reasons for a consumer to visit their websites.

The news follows Mirakl’s securing of $300M (£219M) in series D funding led by the UK’s Permira, placing the company’s valuation over $1.5B (£1.09B), and demonstrating Mirakl’s unique ability to enable the world’s leading organisations to seize the platform opportunity.

Ecommerce accelerated dramatically in 2020 and marketplaces captured a disproportionate share of that growth – UK consumers are now four times more likely to buy from an online marketplace than a retailers’ own website. In order to capitalise on this opportunity, leading enterprises chose Mirakl for its best-of-breed SaaS solution, expertise, and Mirakl Connect ecosystem. As a result, Mirakl signed a record 73 new customers in 2020, including numerous Global 2000 companies, while launching 55 new marketplaces.

2020 also saw the company strengthen its presence in the UK market, announcing plans to invest $31M (£23M) by 2022, with London being used as a hub to accelerate growth throughout Europe. This expansion is already bearing fruit, with Mirakl marketplaces enabling retailers to unlock valuable new revenue streams despite lockdown restrictions. During the Black Friday period, sales on Mirakl-powered marketplaces increased by 60% compared to 2019.

“2020 was the ultimate test that proved the resilience and agility of the platform model, and through it all, Mirakl’s best-of-breed marketplace solution rose to the challenge. We remain committed to offering the most advanced, reliable, and secure enterprise marketplace platform on the market, so that every one of our customers continues to thrive.”
– Philippe Corrot, co-founder and CEO, Mirakl

“We chose to partner with Mirakl on our marketplace because of their proven expertise and first-class technical solution. In 2020 we saw excellent growth increasing our customer base to 1.3 million and growing our online offering to 35,000 products from more than 800 established niche, independent and challenger brands.”
– Sarah Mile, Chief Executive Officer, Feelunique

Mirakl also expanded its global team, with 270 new hires in 2020 and has plans to hire 1,000 employees over the next three years. In the UK, Mirakl’s in-region team grew by 54%, with key hires including a Director of Business Consulting, Senior Director of Alliances & Partner Sales EMEA, and a Vice-President of Corporate Development. This growth trajectory will continue in 2021, with further hires planned across all departments in the UK.

Other major Mirakl business highlights for 2020 include:

  • Signing several marquee global brands across industries including BayWa AG, Galeria Inno, La Redoute, Musgraves, SalonCentric, TradeInn, UNFI, and many more.
  • Launching new marketplaces:
    • B2B including: ABB, Airbus Helicopters, Thales, Maykers, TetraPak and Z-Tech (part of ABInBev).
    • B2C, including: Carrefour France, Changi Airport, Decathlon Belgium, H&M Home, The Kroger Co., La Poste, Leroy Merlin France, Maisons du Monde, and Verishop.
  • Launching, in under 48 hours, a B2B marketplace, StopCovid19.fr in response to French President Macron’s “Tech for Good” initiative, resulting in the first and only COVID-focused marketplace providing critical protective and sanitation supplies to address shortages and resolve supply chain issues. Since launch, the site has delivered over 125 million masks, more than 1 million liters of hand sanitizer, 13 million gloves and 80,000 antigenic tests to over 6,135 healthcare facilities and 23,170 enterprises.
  • A testament to the company’s broader impact, Mirakl earned global recognition as a Technology Pioneer by the World Economic Forum for empowering B2B and B2C organizations to disrupt traditional industries and thrive in the digital age by platforming their businesses.

Further, in just six months, Mirakl doubled the size of its Mirakl Connect global marketplace ecosystem, becoming the world’s only independent network of curated, high quality, marketplace sellers and value-added services and solutions. Mirakl Connect ensures Mirakl-powered Marketplaces launch faster and grow bigger across industries. In 2020 operators who accessed Mirakl Connect saw up to 30% increase in their Marketplace GMV.

“Our customers, who we celebrate as Platform Pioneers, are redefining go-to-market strategies to lead in this digital-first economy, achieving remarkable growth in one of the most challenging economic environments in recent memory. We’re proud to stand alongside them and celebrate their successes – and to those who have yet to start their platform journey, there’s no better time to get on board.”
– Adrien Nussenbaum, co-founder and U.S. CEO, Mirakl

The post Record Mirakl 110% Year-over-Year GMV Growth, $3.1B Transacted appeared first on Tamebay.



from Ecommerce – Tamebay https://ift.tt/3iZtqfL
via IFTTT

Tony Kyberd becomes the new CEO of Volo Commerce

Tony Kyberd becomes the new CEO of Volo Commerce

Volo Commerce have a new CEO, Tony Kyberd!

Tony has over thirty years’ experience in senior customer-centric roles, many of which have been overseas. He’s also President of US-based Freestyle Solutions, another established company within the FOG Software Group. Tony tells us we’re fortunate that his photo features ‘pre-lockdown hair’!

Volo was acquired by FOG Software back in 2019 and Sandy Scott, Portfolio Manager, Retail, Textile, and Apparel Tech at FOG took the helm. Sandy has worked with many Volo Customers and managed the Volo team through the transition since the acquisition by FOG Software Group announced in September of 2019 and, he says, has thoroughly enjoyed that experience.

“In parallel Tony has been more or less leading this business operationally for the better part of a year and now takes over as the new CEO. He has done a phenomenal job to date in my view and I believe is a great fit to lead the business into the future.”
– Sandy Scott, “Outgoing” CEO, Volo Commerce

Before the acquisition by FOG, Volo had retreated into their Cheltenham offices having received massive investment which failed to generate growth and sales. They needed a total reboot and that’s what FOG delivered when they acquired the Volo Origin business and Tony has been instrumental in this turnaround. FOG have have never yet sold a business that they’ve acquired and are firmly behind Volo and Tony is ready to continue revitalising its position as one of the key multichannel management solutions in the UK.

Over the past year 16 months since acquisition Volo has transitioned from customers no longer submitting bugs because they were ignored, to fixing an enormous backlog of bugs that hadn’t been addressed, to adding meaningful new functionality to create value for customers. They have moved from encountering a frustrated, neglected customer base to partnering with a set of customers whom we actively support and who appear satisfied with their experiences on the Origin and Vision platforms.

Bluntly, from a position of having almost no new customers in a very long time, Volo are adding new customers again and every turn, Tony and the team at Volo have been leading the charge and doing the hard work.

“As we turn the corner into 2021, I am confident that the path forward for Volo includes growth driven by our customers’ success, and very much look forward to supporting the business as a key piece of our broader FOG retail strategy. Please join me in welcoming Tony as incoming CEO and in wishing him, the team and of course you the best of success in 2021.”
– Sandy Scott, “Outgoing” CEO, Volo Commerce

Here at Tamebay we’ve collaborated with Volo on a number of projects over the past year. If you are serious about growing your business then our joint white paper on how to build, grow and industrialise ecommerce is a must read free download. It examine how to industrialise ecommerce on a grand scale and, especially if you started and initially grew your business on marketplace, how to take ownership of your business and migrate to the majority of your income coming from your own websites.

For those who want to dive into the day to day running of their business, Volo partnered with Tamebay on a series or posts looking at the different metrics you should be monitoring to assess the health of your business. These have been collated into an ebook which you can download here.

Tony Kyberd has also become a regular contributor to Tamebay and you can read his articles here. Watch out for Tony’s posts in the future.

The post Tony Kyberd becomes the new CEO of Volo Commerce appeared first on Tamebay.



from Ecommerce – Tamebay https://ift.tt/39urp8s
via IFTTT

Retail Returns in 2021: What should retailers expect now?

Retail Returns in 2021: What should retailers expect now?

Luke Toudup ZigZag Global on Retail Returns in 2021Today, Luke Toudup of ZigZag Global discusses what retailers should expect from Retail Returns in 2021 and how retailers can, and in some cases already are, adapting to serve customers in the new retail landscape created by COVID.

Retail Returns in 2021

Lockdown III was released to closed cinemas across the UK at the start of January. The (hopefully) final installment of the poorly received lockdown trilogy will once again force non-essential stores to shut, only this time retailers are far more prepared.

Whilst the word ‘unprecedented’ may just be the most frequent and irritating word to hear right now, it does accurately describe the record-breaking ecommerce levels of 2020. With physical stores shut, consumers were forced to dip their toes into ecommerce, and many were satisfied with the convenience, speed of delivery, and cost. Ecommerce sales have remained at this new level since the first week of lockdown in March 2020.

Whilst many retailers struggled with the first lockdown, and will still face issues this time, they are better prepared. Fashion retailers worldwide increased their ecommerce capacities by expanding warehouses, increasing pick and pack teams, partnering with more carrier services, and improving their websites. This time, retailers will be ready to meet online demand right from the start.

Retail returns volumes to steadily increase alongside the new norm of ecommerce orders

Returns are a natural byproduct of ecommerce sales. You can’t have one without the other. Whilst many e-tailers have developed their websites and infrastructure to provide customers with the most hassle-free, intuitive online experiences possible, there will always be shortcomings. Whether it’s sizing issues, colours not as depicted through their screen, or delivery deadlines narrowly missed, returns are unavoidable.

US consumers are expected to return items bought over the Christmas period to the tune of $70bn (Wall Street Journal, 2021). ZigZag retailers have similarly seen a growing number of return requests from their customers, with return volumes rising by 20% since the first lockdown in March 2020. M&M Direct jumped to 3 million new users and Boohoo’s customer base increased by 27% in 2020. As ecommerce retailers welcome new customers to their online stores, increased returns should be expected. Unfamiliar customers may need to test out the sizing whilst those completely new to online shopping may not properly read descriptions or include items in their basket accidentally.

What’s new with returns?

Stores are shut temporarily but even when they do reopen it is likely that changing / fitting rooms will as well. COVID-19 guidelines state that the retailer must quarantine items tried on by a customer for a set period of time. Smart mirrors have been utilisied by brands such as Adidas and John Lewis, whilst Burberry has had success with “virtual try-on capability of its mobile app” to plug the CX hole created by closed fitting rooms. Whilst these technologies provide promise, they have not yet been adopted by all brands or customers. Wardrobing, the practice of purchasing multiple sizes with the intention of returning those that don’t fit, was something 45% of consumers participated in before the closure of fitting rooms. It is sensible to suggest this will become even more commonplace now.

ZigZag has seen a spike in collection from home requests from customers. With so many of us now working from home, socialising via Zoom, and even exercising in our living rooms with Joe Wicks, there’s only really one convenient place to hand over a return. Whilst not always a free option offered by retailers, it is becoming increasingly more popular for consumers.

Due to Brexit, ZigZag is also strongly encouraging retailers to refund on first scan. Whilst our returns are clearing daily, backlogs across the retail supply chain still exist and some orders still don’t have accurate or complete data, which causes delays. Retailers and brands that refund on the first scan can reduce the resource and cost associated with customer service teams answering “Where is my refund?” enquires.

The slow recovery of pre-COVID-19 footfall

In the run up to Christmas, the high-streets did start to feel a bit busier. In the first week of December, there was a rise in footfall of 21.2% from the previous week on UK highstreets. However overall footfall levels were still down nearly 30% overall from 2019 (Internet Retailing, 2020). The improving spirits of the public towards shopping in brick and mortar stores came tumbling down once again as the UK government announced stricter restrictions to stop the spread of a new COVID-19 variant.

Back in June of 2020, EY’s research revealed that four in five people said they would be uncomfortable trying on clothes in a store. Brands and retailers have largely done all they can to ease the public back into stores by promoting social distancing, installing hand sanitiser stations and closing changing rooms. However, with the ease to which shoppers have adopted online shopping in 2020 and new variants of the virus to consider, it could be a struggle to get customers back into stores again.

New ways of doing business for brick and mortar stores

Brick and mortar stores need a rebrand, a reboot. We are likely to see physical stores become attractions that engage customers with creative, personalised experiences. Shops will need to offer something different to what can just as easily be done online. With changing rooms likely to stay closed for the foreseeable future, this will likely have to be achieved with exciting new tech, be it through VR, AR Smart Mirrors or autonomous shopping carts.

Even how retailer’s traditionally pay rent could change. With non-essential stores, such as those owned by fashion labels, it may become necessary for stores to pay rent based on turnover or profits.

New fashion lines

Milan fashion week is likely to feature loungewear more prominently than ever before. Why not dedicate more of your budget to high-quality clothes meant for chilling out at home? Not only are tastes changing but so are needs. With so much time spent at home, many are opting to have more variety in those more comfortable apparel items such as slippers, gowns, and tracksuit bottoms.

Fast fashion could also see a dip in its popularity. Whilst our own figures still show an increasing appetite for fast fashion items, there’s always the possibility that as people socialise and go out less, the need to have different and current outfits becomes less apparent (Fashion United).

Green is the new black

A study by Edie showed that just “30% of professionals said their company was continuing to invest in sustainability and energy-saving technology during the pandemic.” Whilst the world may have become more sustainable, almost by accident, with reduced air travel and commuting, companies have been more focused on survival. Consumers however are demanding more sustainable business practices from their brands, with 74% willing to pay more for more eco-friendly packaging and 45% of consumers said they’re making more sustainable choices when shopping and will likely continue to do so (Accenture Survey 2020).

As an Ellen MacArthur Foundation member, ZigZag helps retailers reduce their carbon emissions impact through consolidation and more energy efficient routes for their returns. Our paperless returns solution was adopted by more than 65% of consumers last year, cutting the paper wastage by up to 60% for some of our retailers.

The post Retail Returns in 2021: What should retailers expect now? appeared first on Tamebay.



from Ecommerce – Tamebay https://ift.tt/3t6iT7g
via IFTTT

Mind the gap: E-commerce marketers should revise their TAM and SAM estimates

2021 is going to be another glorious year for e-commerce.

It is that time of the year when most of us are looking back at the “total addressable market” estimates to plan for specific campaigns. Unlike us, if you had your 2021 kick off in Q3, bless your soul. You are an enlightened being.

For the rest of you, for whom e-commerce is a strategic market, I have a question — have you built your total addressable market (TAM) and serviceable addressable market (SAM) estimates for 2021 considering how things evolved in 2020?

It’s important to understand the underlying business model dynamics of companies and visualize TAM from those perspectives.

For most of us, research is a mind-numbing, repetitive exercise of clicking through links on Google until they all turn purple — at which point we start seeking the simplest possible explanation. For e-commerce, addressable market estimates come in the form of headlines from platforms like Shopify. The company quotes a merchant count number in its earnings calls and that becomes the basis for guesstimating the current TAM of e-commerce companies.

The other, rather simplistic approach is to look at the user-base count from several databases that publish tech platform-level user stats.

In reality, the simplest answer is not the right answer.

Mind the gap

Let’s take e-commerce shopping cart installations. Shopify, Magento, WooCommerce, BigCommerce and others publish installation numbers that run into millions.

Here is the dichotomy that should frame your TAM discussions.

E-commerce is long-tail heavy. Yes, there are millions of merchants, but e-commerce revenue is a fat-tail phenomenon — meaning, a disproportionate amount of e-commerce revenue comes from a few tens of thousands of companies.

PipeCandy publishes bottom-up TAM estimates with detailed data cuts by technology, logistics and payment system adoptions by firms across revenue tiers across all major markets. One of the common misconceptions we see in how firms misinterpret TAM estimates is that they equate revenue to spend potential.



from eCommerce – TechCrunch https://ift.tt/2MgJ3n0
via IFTTT

Storetasker revamps its Shopify developer marketplace

Storetasker is an online marketplace focused on connecting Shopify merchants with developers and other experts who can help grow their business.

The product is now owned by the startup previously known as Lorem. Co-founder and COO Charlie Fogarty explained that while Lorem originally had a broader mission of connecting small businesses and developers, “We realized that Shopify and e-commerce was by far our best customer segment … so we basically acquired our main competitor, Storetasker, and merged the two business” under the Storetasker name.

The acquisition (which included the Storetasker product and expert network, but not the team) actually took place last year, and Fogarty said, “We’ve spent the last 10 months basically rebuilding the product from the ground up. We’ve taken years of learning and combined it into a rebrand, a new product and a new end-to-end customer experience.”

The core proposition is still the same, however. A Shopify merchant should be able to visit Storetasker, describe their project in simple terms and then within a few hours, Storetasker will match them up with one of the experts in the network, who they can work with directly.

Storetasker has already been used by more than 30,000 brands on Shopify, including Boll & Branch, Chubbies, Aisle, Alpha Industries, Truff Hot Sauce and Branch Furniture. Fogarty said the average project size is just $300 and usually involves adding custom designs and unique features to a Shopify store.

Storetasker screenshot

Image Credits: Storetasker

You could use a general marketplace like Upwork or Fiverr to find a freelance developer, but where Storetasker has conducted more than 5,000 interviews to vet its talent and picks the right expert for each customer, Fogarty said that on other platforms, “You have to sift through unvetted talent … The hiring burden is placed on the brand.”

Plus, he noted that brands can use Storetasker for more than development help — they also use it to find experts on conversion and “all the different aspects of e-commerce.”

In addition to the new product, Storetasker is also announcing that it raised $3.2 million in Series A funding last year from Flybridge, Founder Collective, and FJ Labs.

Looking ahead, Fogarty said he sees plenty of room to grow while remaining focused on the Shopify ecosystem. After all, there are more than 1 million stores on the platform, with $200 billion in total sales to date.



from eCommerce – TechCrunch https://ift.tt/3ckpdlB
via IFTTT

Scalapay raises $48M to scale its buy now, pay later service in Europe

Buy now, pay later services — which let consumers finance the purchase of goods online by paying back the total in installments over time — have been growing in ubiquity this past year. Today, Scalapay, one of the companies that’s building a platform to enable buy now, pay later (BNPL) and related features, has raised a round to boost its position in the race for customers against competitors like Klarna, Afterpay and Affirm.

The Milan, Italy-based startup has picked up $48 million in funding, money that it will use to continue building the tech in its platform, scaling its service in Europe, and to begin working on efforts to break into the U.S.

The round was led by Fasanara Capital and also included Baleen Capital and Italian family office Ithaca Investments. This is the startup’s first significant funding since launching in 2019.

Scalapay’s service is based around a basic model involving a quick sign-up, and then an agreement to repay the full amount in three equal installments, debited from your bank account or a credit card.

Like others such as Affirm, Scalapay does not charge consumers interest or other fees: its business model is based around taking a commission from the merchants on each transaction, the argument being that offering an easy and quick BNPL service will increase conversions and shopping cart size.

The startup currently has around 1,000 merchants in Europe using its service in France, Italy and Germany, including well-known, mulitnational European retailers like Decathlon, Calzedonia, Bata, Aosom and Bricobravo. It claims to be the biggest provider of BNPL services in its home country.

It also inked a recent partnership with banking “marketplace” Raisin Bank, and through that, Scalapay will soon be able to offer its merchant customers the ability to offer BNPL services in any European country.

The plan will be to add on more originating countries, said CEO and co-founder Simone Mancini, as well as related payment features in areas like customer acquisition, conversion, retention and the back office tasks associated with taking and fulfilling and order.

For a start, on its own site, Scalapay lists merchants that offer its BNPL service, and the startup has found that these links are on average generating 1 million referrals each month. Mancini said the company is working on a way of building a product around this concept as part of its expansion.

There was a time when it was not that common to find installment-based payment options on sites, with BNPL a carryover from the world of brick and mortar where people might have in the past paid for items using layaway or other in-store finance options, in particular for more expensive items like televisions.

But the traction of older online services like privately-held Klarna (valued now at over $10 billion), as well as Affirm in the U.S. and Afterpay in Australia (both of which are publicly traded), have paved the way for more recent entrants like Scalapay (which was founded in 2019) and other newer players like Alma.

All of them have in part been lifted by the conditions that we are living under at the moment.

E-commerce usage has seen a huge surge of activity due to people staying away from physical stores (when those stores are even open) to help with social distancing. But at the same time, many consumers are in less financial stable situations as a result of the pandemic, so options to help them stretch out payments and remain more flexible with their money have grown in appeal.

This has also meant that the average price of the kinds of items that people are buying on installments is also changing. Mancini said the average sum people are paying on Scalapay currently is around €100. That underscores the value that people are not willing to pay up front, so from a microeconomics perspective it will be interesting to see how that figure rises or falls in the future.

The fact that the sums are not particularly high right now, meanwhile, might be one reason why Scalapay has seen some strong numbers in terms of defaults and approvals. Mancini said that “first purchase approval rates” are about 93% right now, higher or lower depending on the category. And its default rate is below 1.5%.

These are not bad, but also not markedly different from its competitors.

Going forward, the big challenges for a company like Scalapay, therefore, will not just the usual ones of building solid algorithms to ensure that they are not financing people who are likely to default on payments, making sure its system stays fraud-free, and so on. They will also include finding a way to distinguish itself from the rest of the pack of companies providing the same kinds of basic services.

Perhaps a small detail, but it’s notable to me that Scalapay’s site doesn’t look unlike Klarna’s. Both even lean heavily on pink as a color theme.

It’s also worth mentioning that Mancini moved to Italy from Australia (where his co-founder Johnny Mitrevski still lives and runs R&D) to start Scalapay because Australia, he said, was going to be too hard to break into because of the dominance of Afterpay.

“Australia is one of the most competitive markets, versus Italy being one of the most underdeveloped markets,” he said. “It was an easy pick, with heaps of opportunity here for BNPL.” The company’s focus on building more beyond basic BNPL should also help with building a profile and diversifying the business.

“I was impressed with the fast growth of the company and the underlying model,” said Francesco Filia, CEO of Fasanara Capital, in a statement. “They have shown resilience during a difficult period and I’m excited by where the company is headed.”

“Scalapay’s platform delights customers while driving dramatic results for merchants,” added Fang Li, Managing Partner of Baleen Capital, in a statement. “As a long-time investor in the BNPL industry, I have been beyond impressed by Scalapay’s team, execution, and product vision. I believe the company is on the way to building a valued and leading partner for European retailers.”



from eCommerce – TechCrunch https://ift.tt/36k7QO4
via IFTTT

Online wholesale retailer Boxed taps Aeon for Asia expansion

Boxed, the New York-based online retailer that sells and delivers bulk-sized groceries, makes its foray into Asia by partnering with Aeon, one of Asia’s largest brick-and-mortar retail operators.

Unlike its consumer-focused business in the U.S., which has been described as “Costco for millennials,” Boxed is exporting its nascent software-as-a-service solution to Aeon in Malaysia. As part of the tie-up, the American startup will create an end-to-end e-commerce solution to aid Aeon’s digital transformation, which includes a storefront platform and inventory-picking software. Boxed declined to disclose the value of the deal but said it’s in the “several tens of millions of dollars.”

Malaysia, which is home to more than 30 million people, is Boxed’s first stop in Asia and Aeon’s biggest market outside its home base of Japan. Aeon employs some 10,000 staff in Malaysia, where it has pledged to spur local employment amid the pandemic through its virtual mall.

With Boxed’s technology, Aeon customers will have the flexibility to pick their chosen number of items and have them shipped in a box to their doorstep. Boxed doesn’t intend to provide last-mile delivery in Asia but will instead tap local courier services. Grab, for instance, is a potential partner, Boxed co-founder and CEO Chieh Huang told TechCrunch in an interview.

Foray into Asia

Through a mutual friend, Huang got in touch with Aeon, which was established 263 years ago in Japan and today operates 21,000 locations, from clothing chains, convenience stores to general merchandise stores, across 14 countries.

Working with Aeon was challenging at first, Huang said, as there were differences not only in time zones but also in cultural norms due to Aeon’s colossal size. It took numerous in-person meetings and international calls to eventually bridge the gap.

The partners are also exploring opportunities to work together in other Southeast Asian markets. Boxed will keep its enterprise-facing angle by licensing software to local retailers rather than expanding its consumer business to the region, which is already crowded with established e-commerce players like Shopee, Lazada and Tokopedia.

Digitizing traditional retailers

An Aeon mall / Source: Aeon

Prior to the SaaS deal, Aeon was already an investor in Boxed. In 2018, it led the e-commerce startup’s $111 billion Series D funding round so it could tap Boxed’s intel in retail digitization. Huang believed his company was chosen because it was one of the few e-commerce operators alongside JD.com and Amazon that have full control over the supply chain and users’ purchasing experience.

Boxed builds its own warehouse robots as well because “we are able to do it much cheaper ourselves than buying the robots,” argued Huang. “Most of the robots are very advanced because they are not able to control the environment. We own the fulfillment center so we can delete a lot of the things that are expensive, such as Lidar.”

Furthermore, the startup’s “box” model helps flat out the costs of shipping with each incremental item delivered, giving the platform a price advantage, the founder said.

Future of Boxed

Founded in 2013, Boxed has accumulated over seven million registered users. With a staff of 500 employees across the U.S., it’s now generating hundreds of millions of dollars in annual revenue.

In all, Boxed has raised over $270 million. Since its last financing round in 2018, the company has had little publicity. During that time Boxed was focused on fine-tuning its retail software solution, which has become its second and more profitable line of business. The firm’s margin is improving every year and getting close to profitability in 2021, said Huang. And like other e-commerce companies, Boxed saw growth in user demand through the pandemic.

Going public is “always on our mind,” said Huang. “I think it will surprise a lot of people how close we are to profitability.”

Reuters reported in September that Boxed was weighing up “a sale or going public through a merger with a blank-check acquisition company that could value it at around $1 billion.” To that, the startup gave a somewhat indefinite response:

“As a result of the shift to online, we’ve also seen increased demand from many parties looking to partner with us to accelerate growth both in our marketplace and new SaaS business. We are thoughtfully considering these options when it comes to the long-term success of Boxed.”



from eCommerce – TechCrunch https://ift.tt/3qRCGW6
via IFTTT

Berlin Brands Group commits $302M to acquire D2C and Amazon merchants

If the rise of direct-to-consumer businesses has been one of the big e-commerce trends of the last decade, then the growth of startups raising huge rounds to consolidate D2C players, to bring more economies of scale to the model, has definitely been a related theme of the past year.

In the latest move, a startup out of Germany called the Berlin Brands Group has announced that it plans to invest €250 million (about $302 million at today’s rates) to buy up smaller companies and bring them into its fold.

While a lot of the company’s would-be competitors in the consolidation race are focusing primarily on the Amazon Marketplace — leaning on fulfillment by Amazon (FBA) to carry out the distribution and logistics — Peter Chaljawski, the founder and CEO, tells us that it’s a different story in its existing target market of Europe.

“In the M&A market, one big difference between the U.S. and Europe is that the latter is more fragmented,” he said. “In the U.S., D2C sellers do a lot on Amazon. In Europe, there are still lots of alternatives. And in some markets like France, consumers don’t even like Amazon.” This is in addition, of course, to selling directly to consumers and bypassing marketplaces altogether, an area that Chaljawski said will continue to be a big focus for BBG. In all, BBG today says it uses some 100 channels to sell its products.

BBG is not your typical e-commerce startup, in that up to now it’s managed to build a big and profitable business largely on its own steam. And despite being a big e-commerce player in Berlin, BBC has no connection to Rocket Internet, the famous incubator of e-commerce businesses founded in the city.

The $302 million earmarked for acquisitions is coming off the startup’s own balance sheet. And from what we understand, it’s also coming ahead of BBG raising a significant round of outside funding to continue its growth. Although BBG has raised money (of an undisclosed amount, per PitchBook) in the past, this would be its first significant equity round when it closes.

BBG itself has built its own profitable direct-to-consumer business from the ground up. Founded in 2005 first focused on audio equipment (Chaljawski had ambitions to be a DJ in a past life) it has some 14 brands today, covering 2,500 items, that it has hatched and grown itself, which it sells in 28 markets.

The conglomerate model that BBG has taken covers a variety of categories, mostly in consumer electronics (including audio gear, fitness equipment and home appliances), and are sold under a range of different brands like auna, Klarstein and Capital Sports. To date, it says it has sold more than 10 million products, and it is profitable, making €300 million (around $363 million) in revenues in 2020.

Its focus for new acquisitions will include more brands and products in garden, home and living goods, sports, electronics and household appliances, with targets generating anything from €500,000 to €30 million in revenues.

While BBG has mostly been about organic growth, it started taking its first foray into inorganic expansion last December, with the acquisition of home goods brand Sleepwise, which Chaljawski describes as making “a very nice blanket.”

The comfort of a nice blanket might come in handy. Despite its success to date, a number of challenges lie ahead for BBG.

First of these are competitors. BBG’s strategy shift and acquisition plans come at a time when consolidators in the space are starting to emerge, armed with fistfuls of dollars to consolidate smaller brands that have emerged with success on marketplaces like Amazon’s (in fact, primarily the Amazon marketplace) but perhaps without obvious paths to scaling.

They include the likes of Thrasio (which most recently raised $500 million in debt to use to buy companies), SellerX, Heyday, Heroes, Perch and more.

This story from December in the FT (before that most recent debt round of Thrasio’s) estimated that there has been at least $1 billion raised collectively by these companies to build out new online consumer empires based on this model.

The vision for all of them is very clear: they want to create the next Unilever, P&G, or Sony, and they are leveraging new economic models and technology to bring in manufacturing, logistics, economies of scale, sales analytics and new innovations in marketing to do it.

Another challenge is how successful and efficient a company, which has up to now taken a very deliberate and organic path, will be in integrating lots of new brands, with the cultures and business partnerships relationships that exist with those, in tow.

The third is the sourcing of quality brands themselves. As we’ve pointed out before, taking just Amazon as one example, there is a ton of junk sold there, including a whole industry of those who buy off wholesale sites and resell on Amazon, which is one reason why so many merchants sell what look like identical products in specific categories. These marketplace sellers leverage things like SEO and armies of reviews to get their products sifting to the top of huge piles of search results, and they can often sell well, even if they are not great buys for you the consumer. That means misleading signals for a potential consolidator looking for hot companies to snap up.

The balance between how marketplaces are leveraged versus how much brands and their owners try to build these things on their own will be an interesting one to watch in the coming years. Amazon and its ilk have only continued to grow and become more efficient, although this sometimes means they are too powerful rather than more useful for third parties:

On the other hand, we’re seeing another persistent theme to help them: the presence of startups and bigger companies continuing to make tools to help the smaller players stay in the game on their own terms. They include biggies like Shopify, but also newer players like GoSite, Shogun and Xentral.



from eCommerce – TechCrunch https://ift.tt/3qVu2WD
via IFTTT

Ula raises $20 million to expand its e-commerce marketplace in Indonesia

Tokopedia, Lazada, Shopee, and other firms created an e-commerce market in Indonesia in the past decade, making it possible for consumers to shop online in the island nation. But as is true in other Asian markets, most small retailers and mom-and-pop stores in the Southeast Asian country still face a myriad of challenges in sourcing inventory and working capital, and continue to rely on an age-old supply chain network.

Nipun Mehra, a former executive of Flipkart in India, and Derry Sakti, who oversaw consumer goods giant P&G’s operations in Indonesia, began to explore opportunities to address this in 2019.

“Much like India, much of the Indonesian retail market is unorganized. In the food and vegetable category, for instance, there are lots of farmers who sell to agents, who then sell to mandis (markets). From these mandis, the inventory goes to small wholesalers, and so on. There are lots of players in the chain,” said Mehra, whose previous stints include working at Sequoia Capital India, in an interview with TechCrunch.

Mehra and Sakti co-founded Ula in January of 2020. With Ula, they are trying to organize this sourcing and supply chain for small retailers so that there is a one-stop shop for everybody.

Despite the pandemic, Ula made inroads in the Indonesian market last year and today serves more than 20,000 stores. And naturally, investors have noticed.

From left to right: Derry Sakti, Nipun Mehra (screen), Riky Tenggara, Ganesh Rengaswamy (screen), Alan Wong, and Dan Bertoli. Photo credit: Ula

On Thursday, Ula announced it has raised $20 million in a Series A financing round. The round was led by existing investor Quona Capital and B Capital Group. Other existing investors including Sequoia Capital India and Lightspeed — that financed Ula’s $10.5 million Seed round in June last year — have also participated in the Series A.

“If you look at the whole retail value chain, especially for essential goods, FMCG, staple, and fresh produce, it’s significantly fragmented,” said Ganesh Rengaswamy, Managing Partner at Quona Capital, in an interview. “Whereas the market has moved on in terms of being able to more efficiently consolidate, demand and supply. Ula is trying to redo the retail distribution ecosystem with a significant technology overlay. It’s connecting some of the largest players in the supply side to the smallest retailers and consumers.”

Additionally, Ula is providing these micro retailers, who usually operate from small shops that are extensions of their homes, with working capital so that they don’t have to wait to be paid by their customers to buy the new batch of inventory. (It’s a serious challenge that micro-retailers face in Asian markets. These shops have strong bonds with their customers, so often they sell them items without getting paid upfront. Collecting this payment often takes longer than it should.)

“Frictionless payment and offering credit to retailers so that they can more efficiently manage their cashflow are critical components of modern digital commerce,” said Rengaswamy. For Quona, which has backed several e-commerce and fintech startups in Asia, Ula checks both the boxes.

Mehra said last year was largely about expanding the Ula team and building the technology stack. The startup now plans to deploy the capital to reach more small retailers and expand within the nation.

Indonesia will remain Ula’s focus market. The opportunity in the region itself is very large. The retail spend is expected to surpass $0.5 trillion over the next 4 years, said Kabir Narang, Founding General Partner at B Capital Group, in a statement. Traditional in-store retail accounts for nearly 80% of the total retail market, according to some estimates.

Ula currently operates in the FMCG and food and vegetable spaces, but it intends to broaden its offerings to include apparel and eventually electronics.


A few more things from my notes:

  • Like many other startups in Asia, Ula largely relies on feet-and-street sales people to spread the word out about its offerings and onboarding new shops. The key to growing, said Mehra, is to get a few retailers who are very happy with the services and see its value and then tell their friends about it. It’s a learning he credited to Indian business-to-business e-commerce platform Udaan co-founders Amod Malviya, Vaibhav Gupta and Sujeet Kumar, whom he worked at Flipkart back in the day. Udaan co-founders have backed Ula.
  • Electronics is a category that is very popular among B2C and B2B e-commerce platforms. Mehra said he has always known that the startup could expand to electronics, so it has chosen to focus on other categories first that test the supply chain network.
  • Indonesia comprises of more than 17,000 islands, but only a handful of islands including Java and Sumatra contributes most to the GDP.
  • I asked Quona’s Rengaswamy to draw parallels between e-commerce and payments markets of India and Indonesia. He said India has made more inroads with creating frictionless payments. But on the flip side, this has created potential for startups in Indonesia to solve additional challenges.


from eCommerce – TechCrunch https://ift.tt/39pIfFd
via IFTTT

How 2 startups scaled to $50M ARR and beyond

The current list of venture-backed private companies we expect to go public — and the number of companies that might say yes to a SPAC-led debut — underscore just how many large startups there are in the market.

After years of rising venture capital investment and a wave of huge rounds, many startups and unicorns could leave the private markets this year or the next.

Last year, The Exchange wrote about former startups that had scaled to around the $100 million annual recurring revenue (ARR) mark, or had revenues that were roughly equivalent if they didn’t sell software. But that wound up being a bit less interesting than we’d hoped, as companies that have reached that scale tend to be fully baked by the time we got them on the phone.

So, we’re shooting for the $50 million ARR range this year. Our goal is to see what we can ferret out from companies that are moving from the middle-late startup years and into the unicorn realm.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


What broke during the last year? Which teams have they doubled down on? How has hiring gone? We have questions. And, happily, companies have raised their hand. Today, we’re talking about OwnBackup and Assembly. Next week, it’s SimpleNexus and Kaseya. And we have Picsart on deck as a company somewhat in between our two target revenue bands.

But before we start, a final note. The following bits of journalism are more exploratory than hard-hitting. But as private companies tend to share nothing other than the occasional press release strained of personality and flavor, I’m working to bring more raw data points and observations to you even if they do not constitute the grittiest reporting you’ve ever read.

Let’s get into our first two $50 million (or around there) ARR companies.

OwnBackup

OwnBackup is a company you might have heard of as it raised a $50 million round last July, an event TechCrunch covered. The company reached out regarding our $50 million ARR series by noting that its growth had accelerated since that round, so we decided to find out more.

The Exchange spoke with CEO Sam Gutman and CMO Jamie Grenney about OwnBackup’s recent growth.

According to the execs, OwnBackup is around $50 million ARR today. The company, as its name hints, provides cloud backup services to other companies. And it’s built atop the Salesforce platform, a service had a good 2020 when nCino, another company that leverages the service, went public to great effect. (That debut led to TechCrunch reporting on the trend of building atop someone else’s software to IPO scale.)

And OwnBackup has lots of room to grow inside of its current platform home. It thinks it has around 2% penetration of the Salesforce ecosystem, meaning that its current 100% yearly growth pace can continue for quite some time without a material change in strategy.

Asked if OwnBackup was worried about platform risk, Gutman and Grenney said they weren’t. Not only is Salesforce Ventures an investor, the execs noted, but the Salesforce platform is a huge SaaS ecosystem; it’s not something that could be switched off like a Google web product and consigned to the ash heap of the Internet.



from eCommerce – TechCrunch https://ift.tt/39l5gJy
via IFTTT

Brexit 3 weeks in analysis webinar – What you need to know

Brexit 3 weeks in analysis webinar

RegisterAt 11am today we will kick off our Brexit 3 weeks in analysis webinar where we’ll be unpicking what happened in 2020 with peak, Covid and Brexit and then take a look at the first three weeks of January to check where we are, what barriers to trade Brexit has already presented and discuss real solutions that you can implement for your business.

This webinar is designed for sellers shipping as few as 20 parcels a day, so if that’s you sign up now because the webinar starts shortly at 11am today, Wednesday the 27th of January, and you won’t want to miss it.

I’ll be joined by logistics experts Bobbie Ttooulis, Executive Director of GFS, and David Harding, GFS Customer Director. Together they have a wealth of experience and have spent the past few weeks keeping track of everything ranging from carriers returning undelivered parcels that were destined for the EU and other carriers who have stopped shipping certain items. How can you cope with this disruption… simply click here to register ready for when the webinar starts.

Brexit 3 weeks in analysis

We’ll be looking at:

  • What impact did COVID, Brexit and Peak have on ecommerce delivery?
  • How did successful retailers adapt delivery to come out on top?
  • What’s the outlook for ecommerce delivery in 2021?
  • How can you adapt delivery to succeed no matter what?

We’ll also be asking the real life questions that you need answering such as how to deliver low value goods duty paid to meet Amazon’s requirements, what about shipping to Northern Ireland, and a host of other Brexit related issues

Brexit 3 weeks in analysis – Free Bonus Downloads

We know that shipping to the EU got a whole lot more complicated since the beginning of the year, so everyone that attends the webinar will receive two free downloads to assist you with your business:

  1. A 4-point Action Plan for ecommerce Delivery in 2021
  2. A post-Brexit survival guide for shipping to the EU

The Brexit 3 weeks in analysis webinar starts at 11am so register now to be ready when we go live!

The post Brexit 3 weeks in analysis webinar – What you need to know appeared first on Tamebay.



from Ecommerce – Tamebay https://ift.tt/2KQuJRx
via IFTTT

TDC 2021 registration open with international speaker roster

The Delivery Conference 2021 TDC 2021

Metapack will virtually host leading retailers, brands and carriers at The Delivery Conference (TDC) on the 2nd-3rd of February, 2021 and have announced a roster of high calibre TDC 2021 speakers. Presenting powerful industry insights, this year’s agenda has been carefully created to help the industry understand the pandemic-led events of 2020, the exponential growth of ecommerce, changing consumer expectations and the future of retail as we move forward into 2021 and beyond.

“2020 has not only been a year of unexpected challenges but it has also been a year filled with immense opportunity. TDC has long been a key event within ecommerce and delivery for over a decade and we’re once again looking forward to an action-packed agenda with brilliant speakers, thought-provoking panels and presentations from across the industry. We’ll be looking back at what has been an extraordinary year and peak, but more importantly we’ll be looking ahead together at how to tackle the different challenges, new trends and rising expectations that await us.”
– Bruce Fair, CRO, Metapack

TDC 2021 Opening Address and Industry Keynotes

The conference will open with an address from Bruce Fair, CRO at Metapack. The keynote speakers at TDC 2021 include:

  • Richard Lim, CEO, Retail Economics on ‘the next big challenges for pandemic-era retail and beyond’
  • Ines van Gennip, UK Country Lead, Amazon Shipping on the ‘fulfillment experience of the future’

Additional Featured Speakers

A roster of international speakers across the ecommerce industry will partake to deliver presentations, panels and fireside chats. These include:

  • Brian McAllister, Global DTC Operations Manager – Burton Snowboards
  • Paz Khorana, Head of Multichannel Operations – Holland & Barrett
  • Gary Grant, Founder and Executive Chairman – The Entertainer
  • Karl Harwood, Head of Distribution – Supply Chain – Missguided
  • Jo Causon, CEO – Institute of Customer Service
  • Martyn Oakley, Customer Operations Director – Laithwaite’s Wine
  • Sarah Taylor-Jones, Head of Marketing – Hermes
  • Kent Allen, Co-founder – GELF
  • Jon Nicholson, Sales Director – Royal Mail Parcels
  • Gilles Ferrandez, Commercial Sales Director – An Post Commerce

Registration is completely free so to find out more about TDC 2021 and to register click here.

The post TDC 2021 registration open with international speaker roster appeared first on Tamebay.



from Ecommerce – Tamebay https://ift.tt/3a5zNtV
via IFTTT

Forget winning, can Amazon survive in India?

During a visit to India in 2014, Amazon chief executive Jeff Bezos made a splashy announcement: His firm was investing $2 billion in the South Asian nation, just a year after beginning operations in the country.

Amazon’s announcement underscored how far India had come to open up to foreign firms. The nation, which had largely kept doors shut to international giants between its independence in 1947 to liberalization in 1991, has slowly transformed itself into the world’s largest open market.

In a televised interview in 2014, Bezos said that there was a perception about India not being an easy place to do business. But Amazon’s growth in the country, he said, was proof that this belief is not accurate.

“Are there obstacles? There are always obstacles. Anywhere you go, every country has its own regulations and rules,” he said.

Six years, and more than $4.5 billion of additional investments later, Amazon today appears to be facing more obstacles than ever in India, the second-largest internet market with more than 600 million users.

Long-standing laws in India have constrained Amazon, which has yet to turn a profit in the country, and other e-commerce firms to not hold inventory or sell items directly to consumers. To bypass this, firms have operated through a maze of joint ventures with local companies that operate as inventory-holding firms.

India got around to fixing this loophole in late 2018 in a move that was widely seen as the biggest blowback to the American firm in the country at the time. Amazon and Walmart-owned Flipkart scrambled to delist hundreds of thousands of items from their stores and made their investments in affiliated firms way more indirect.

Now the nation is set to further toughen this approach. Reuters reported last week that New Delhi is considering making adjustments to some provisions that would prevent affiliated firms to hold even an indirect stake in a seller through their parent.

The Confederation of All India Traders, an Indian trade body that claims to represent over 80 million businesses, told the publication that Indian Commerce Minister Piyush Goyal has assured the organization that it is working to shortly address concerns about alleged violations of current rules.

The forthcoming policy change is only one of the many headaches for the world’s largest e-commerce firm in India.

Offline retailers in India have long expressed concerns about what they allege to be unfair practices employed by Amazon in India. Last year, during Bezos’ visit to the country, they held several protests. (Photo by SAJJAD HUSSAIN/AFP via Getty Images)

Amazon is aggressively fighting a battle to block a deal between its estranged partner Future Group and Reliance Retail, the two largest retail chains in India.

Last year, Future Group announced that it would sell its retail, wholesale, logistics and warehousing businesses to Reliance Retail for $3.4 billion. Amazon, which in 2019 bought stakes in one of Future Group’s unlisted firms, says that the Indian firm has breached its contract (which would have given Amazon the right to first refusal) and engaged in insider trading.

Despite technology giants and investors ploughing more than $20 billion to create an e-commerce market in India in the past decade, online retail still accounts for only a single-digit pie of all retail in the country.

In recent years, Amazon, Walmart and scores of other startups have embraced this realization and sought to work with neighborhood stores that dot tens of thousands of cities, towns and villages in India.

With Reliance Retail and telecom giant Jio Platforms, two subsidiaries of one of India’s largest corporates (Mukesh Ambani’s Reliance Industries) entering the e-commerce market, and receiving the backing of global giants including Facebook and Google last year, cornering a big stake in Future Group is one of the few ways Amazon can accelerate its growth in India.

The American e-commerce firm has had little luck so far in overturning the deal between the Indian firms. Last year, Amazon reached out to Indian antitrust body Competition Commission of India, and market regulator SEBI to block this transaction. Both the bodies have ruled in favor of Future Group and Reliance Retail.

Amazon must have foreseen this outcome because it initiated the legal proceedings at an arbitration court in Singapore. It’s no surprise that the firm chose to also pursue its legal argument outside of India.

Most cases that reach the Singapore International Arbitration Court have come from India in recent years. Vodafone, which has invested more than $20 billion in India, and has been dealt with billions of dollars in unpaid taxes by the country, is another high-profile name to have knocked on the door in Singapore. After losing in India, it emerged victorious in the Singapore arbitration court last year.

Amazon on Monday filed a new petition in Delhi High Court in which it is seeking to enforce SIAC’s ruling (which ordered last year that the deal should be temporarily halted) and prevent the Indian firm from going ahead with the deal based on CCI and SEBI’s judgements.

The company alleges that Future Group “deliberately and maliciously” disobeyed the international arbitration ruling from SIAC. In its petition, Amazon is also seeking detention of Kishore Biyani, the founder and chairman of Future Group.

“Vocal for Local”

As India grappled with containing the spread of the coronavirus last year, India’s Prime Minister Narendra Modi urged the 1.3 billion citizens to make the country “self-reliant” and “be vocal for local.”

The move to turn inwards contrasts with his major promise in the first few years of assuming power in 2014 when he pledged to make India more welcoming to foreign firms than before. In recent years, India has proposed or enforced several regulations that hurt American firms, though none appear to suffer as much as Amazon.

Last year, New Delhi started to enforce a 2% tax on all foreign billings for digital services provided in the country. The U.S. Trade Representative said earlier this month that India was taxing numerous categories of digital services that are “not leviable under other digital services taxes adopted around the world.”

The aggregate tax bill for U.S. companies could exceed $30 million per year in India, USTR’s investigation found. In conclusion, it found India’s digital tax move to be inconsistent with international tax principles, unreasonable and burdening or restricting U.S. commerce.

Modi’s new way of life for India will be music to the ears of Mukesh Ambani, the chairman of Reliance Industries, an ally of the prime minister and India’s richest man.

Before selling stakes worth over $20 billion in Jio Platforms and more than $6 billion in Reliance Retail to marquee foreign investors, Ambani famously made a speech in 2019 in which he urged the need to protect Indians’ data in patriotic terms.

“We have to collectively launch a new movement against data colonization. For India to succeed in this data-driven revolution, we will have to migrate the control and ownership of Indian data back to India — in other words, Indian wealth back to every Indian,” he said.

Why so many international firms have invested in one of Reliance’s properties remains a big question. A senior executive at an American firm told TechCrunch on the condition of anonymity (out of fear of retribution) that the investments in Jio Platforms, which is India’s largest telecom network with nearly 410 million subscribers, and Reliance Retail is a déjà vu moment for the nation, where a few decades ago one of the only ways to do business in the nation was to partner with a local firm with massive political clout.

In a series of tweets, Raman Chima, a former policy executive at Google and who now works at nonprofit digital advocacy group Access Now, alleged that the Android-maker had weighed in 2011-12 partnering and investing in a firm like Reliance to “turn-the-page on Indian political risks.”

The idea prompted concerns about Google’s values, he claimed. “More than one executive involved in those discussions flagged concerns around Reliance’s reputation, particularly around problematic approaches towards gaining influence with policymaking civil servants and politicians, money, ethics in govt-business relationships.”

Amazon itself was rumored to be interested in getting a multi-billion-dollar stake in Reliance Retail last year, but it appears the two firms have stopped engaging on any matter.

BJP MLA Ram Kadam and his party workers protest against the Amazon Prime web series Tandav outside Bandra-Kurla Police station, on January 18, 2021 in Mumbai, India. (Photo by Pratik Chorge/Hindustan Times via Getty Images)

While Amazon sorts out these issues, last week delivered another blow to the firm. A senior executive with the firm as well as Indian makers of a mini-series for Amazon Prime Video are under threat of criminal prosecution in the country after Modi’s ruling party deemed the show offensive to the country’s Hindu majority.

A Hindu nationalist group, politicians with the ruling Bharatiya Janata Party, and a BJP group representing members of India’s lower castes, were among those who had filed police reports against the nine-part mini-series “Tandav” and Amazon. The company bowed to the pressure and edited out some scenes.

“The true reason for the complaints against ‘Tandav’ may be that the show holds up a mirror uncomfortably close to Indian society and some of the problems blamed on Mr. Modi’s administration. In the opening episode, the show features protesting students and disgruntled farmers, echoing events that have taken place in recent months,” The New York Times wrote.

“Mirzapur,” another show of Amazon, also attracted a criminal complaint in India last week for hurting religious and regional sentiments and defaming the Indian town. The Indian Supreme Court has issued notices to the makers of “Mirzapur” and has sought responses.

In the aforementioned interview, Bezos said Amazon’s job was to follow all the unique rules various countries require it to comply with and “adapt our business practice to those rules.”

In India, the company is increasingly being asked how far it is willing to adapt its business practice. How far is it willing to bend that it’s no longer the Amazon people cared for.



from eCommerce – TechCrunch https://ift.tt/3sUcdJb
via IFTTT

New Government – Labour Small Business Agenda

We’ve are all waking up to a new Government today, with the Labour party about to take control of the country and what should be top of your...