Stay in Touch
Southeast Asia’s biggest e-commerce company Shopee is reportedly headed to Poland, India and Argentina — three markets that fit squarely into its focus on rapidly digitizing economies. But the Singapore-based company may have difficulty scaling.
European grocers are testing out U.S. expansion. Alongside successful rollouts, like Aldi and Lidl, are the failed U.S. expansions of British discounter Tesco and Russia’s X5 Retail Group. But these European chains seem to be betting that U.S. demand for small-format, discount chains will only continue to balloon in the coming years.
Bargain clothing retailer Primark is readying a new digital strategy that has ignited rumors of a move into e-commerce, an area it has long ignored in order to keep a lid on costs. The company has said it is building a "digital platform" to "create new digital capability within the business" -- though it has given few details on what the new digital platform will look like.
Hard seltzer witnessed a hot streak in the U.S., accounting for $2.7 billion in retail sales in the 12 months to June last year. But, with the hype now tempering, a number of alcohol brands -- both established and startups -- are hoping to keep growth apace by targeting the U.K.
Sourcing everything from cardboard to aluminum cans is likely to remain a headache for consumer brands. The prices of raw materials are continuing to rise -- meanwhile, brands are also having to pay a premium to expedite their products while ports remain congested. Put together, that means that brands are having to buy further out in order to get enough product, and get creative to keep prices low for customers.
After the successful IPOs of Beyond Meat and Oatly, plant-based behemoth Impossible Foods is reportedly preparing to enter the public market -- and Asia is key to its success. “The bigger a footprint Impossible has in the Asian market, the bigger their expected long-term value is going to be,” said one investor.
In its quest to become the dominate e-commerce marketplace in Africa, Jumia has historically placed profitability on the backburner for the sake of growth. But now, the company is starting to prioritize certain investments for the sake of profitability. This week, Jumia released its 2021 first quarter earnings, showing an 11% increase of gross profits and 24% decrease of debts. However, the company remains unprofitable 8 years since its 2012 founding and 2 years after its April 2019 IPO. The American e-commerce giant with a similar marketplace model, Amazon, took 6 years to become profitable.
Like many e-commerce platforms, Walmart-owned Flipkart saw major growth during the pandemic. Flipkart saw a nearly 50% increase in new users right after the initial pandemic lockdowns last year, amid an e-commerce explosion in India. But, while the majority of retail sales still take place offline in India, Flipkart and Amazon are still competing to become the indisputable e-commerce leader in the country.
For years, Rakuten was the go-to third party marketplace for Japanese shoppers looking to buy anything from electronics to tennis shoes online. But then, in a dynamic that's played out in other countries around the world, Rakuten found itself on the defensive as Amazon started making greater inroads in Japan. Now Amazon, not Rakuten, is the bigger e-commerce player in Japan, by some estimates. And that's put Rakuten on the defensive.
Buoying Pinduoduo's surge is a group-purchase model that gamifies the shopping process: in order to complete a purchase, and ensure bulk discounts for all individual consumers, shoppers can organize their friends or acquaintances into buying groups. That is a marked contrast with Alibaba, which built itself up using the same one-to-one buying approach that's a feature of e-commerce companies like Amazon: an individual buyer makes a purchase from an individual seller. But by taking a more community-oriented approach, PDD has proven the power of targeting groups of buyers, rather than individuals.
In 2020, Argentine e-commerce company MercadoLibre proved itself to be a global presence. But its growth is dependent in expanding into more regions -- and fast. But Amazon is trying to encroach on its space as well.
Amazon just bought Perpule, an India-based tech company that helps local mom and pop stores -- called kirana stores -- move their product catalogs online and implement contactless checkout. Amazon’s interest in kirana stores goes much deeper than a desire to just make profits from digitizing small businesses -- instead, Amazon sees small stores as both drivers of fulfillment for the company and as sources of growth for other Amazon products, including Amazon Pay.
Logistics experts who spoke to Modern Retail did not express fears of mass delays and shortages on the scale of what the world saw in the spring. Retailers and logistics companies alike are far more prepared for the surge in vaccine capacity now than they were for the e-commerce rush in March. But for food products that -- like the vaccines -- require cold storage, smaller-scale shipping delays and price increases are not out of the question, especially for small and mid-sized businesses that might not have the resources to fight for their slot in the cold-storage chain.
In the U.S., only a tiny sliver of people shop on WhatsApp. But the potential for WhatsApp -- which boasts over 2 billion users worldwide -- is significant. That suggests WhatsApp's biggest benefit might not be for international brands, but for local stores without a lot of money to spend on a slick e-commerce site. In turning WhatsApp into a shopping platform, Facebook is actually placing a bet on localized e-commerce.
With the US.. still very much in the clutches of the pandemic, it’s hard to imagine what a return to normal could look like, let alone an entirely new normal. But retailers in China and Hong Kong, which have both been in some stage of reopening for a matter of months, have managed to tease out some kind of normalcy -- using a variety of new, old and updated tricks. All the while, they’re likely leading the way for the rest of the world.
Watch this on-demand webinar where experts discuss the changes to the back-to-school season and what it means for retailers now and in the future.
In 2020, Amazon Logistics delivered 4.2 billion parcel shipments, up from 1.9 billion in 2019. It now makes up, by volume, 21% of the parcel shipments in the U.S., behind the USPS (38%) and UPS (24%) but ahead of FedEx for the first time (16%).
Read MoreAt the Modern Retail Summit, retail executives will come together to discuss effective strategies for driving sales by building a loyal customer base both online and offline.
Book Passes
