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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.
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.
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.
Japanese retailer Muji announced that the U.S. arm of its business will file for Chapter 11 bankruptcy. Muji currently has 18 stores in the United States, and is reportedly mulling scaling back that footprint. It's certainly not the only retailer facing similar hardships, but the Japanese company has had its own set of problems since before the pandemic.
Global retail markets are beginning to reopen. The question remains whether consumers are ready to go back into public. With lockdown restrictions now being eased by some governments, small green shoots of recovery are beginning to emerge. Modern Retail and Glossy reporters took a (virtual) trip around the globe to see where shopping is beginning to restart and if shoppers are ready to spend money once again in the real world.
At this point, many factory and facility workers have stopped going to work, due to quarantine orders and restricted transit. And following last month’s Chinese New Year holiday, the result is a backlog of unfulfilled shipments that continues to grow. While dips in overall sales figures aren’t yet being seen by all, the fear of running out of stock going into the coming months has sellers on high alert to plan ahead.
On Monday, Amazon announced a partnership with brick-and-mortar chain Future Retail, that will allow customers to order products from the company through Amazon India. With six different chains and more than 1,500 stores, Future Retail is one of the largest brick-and-mortar retailers in the country. Amazon has had a 3.58% stake in Future Retail since February, and also has stakes in Indian supermarket operator More, and fashion label Shoppers' Stop. Meanwhile, its biggest competitor Walmart completed a $16 billion acquisition of Flipkart, the biggest e-commerce player in the country, in August. It was Walmart's biggest acquisition to date.
As Gap, Inc. prepares for a future without Old Navy, one of the ways it's looking to fuel growth is by taking Athleta, which has been one of the few bright spots in its portfolio, overseas.
Tehmina Haider is the head of Harry's Lab, which both builds new CPG brands as well as invests in and acquires existing ones. Haider described the operation as being a "diversification engine." She joined the Modern Retail Podcast and explained how she's built out the program over the last three years.
Read MoreAt the Modern Retail Marketing Leaders Forum, we’ll bring together senior retail marketers to discuss the challenges they’re facing and the solutions they’re seeking in the era of smarter retail.
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