Welcome to our new E-Commerce Insider newsletter, a morning email with the top news and analysis on the e-commerce industry, produced by BI Intelligence.
ALIBABA ACQUIRES STAKE IN INTIME RETAIL: China-based e-commerce giant Alibaba has agreed to pay $692 million to acquire a 35% stake in Chinese department store operator Intime Retail. The deal will allow Alibaba to close the gap between online and in-store shopping in China. For example, consumers who shop at one of Intime’s more than two dozen department stores might soon be able to purchase items with smartphones. Alibaba recently announced its plan to file for an IPO in the U.S., so many investors are trying to get a handle on the company’s strategy. This recent deal with Intime Retail reveals that Alibaba is serious about going after the entire retail market in China, not just online. (Wall Street Journal)
WOMEN AND MOBILE DRIVING INDIAN E-COMMERCE: Women and mobile shoppers are driving growth in the $3.1 billion a year e-commerce market in India, according to a new report from venture firm Accel India.
• Currently, approximately 130 million of India’s 213 million Internet users access the Web via mobile devices. Accel projects that by 2016, when India’s Internet population reaches 400 million, roughly 90% of consumers will access the Web via mobile devices.
• The number of working women in India grew 43% last year, which is having a major impact on e-commerce sales. Retail categories such as fashion, home decor, jewelry, and baby care are among the fastest growing retail segments in India. (TechCrunch)
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RETURNED ITEMS PLAGUE FASHION E-COMMERCE: One of the inherent difficulties of selling clothing online (or buying, depending on how you look at) is that consumers can’t try on clothes before purchasing. As many as 20-40% of online clothing purchases are returned, so fashion retailers have a big incentive to solve this problem. One company, PhiSix, which was recently acquired by eBay, is trying to do just that. PhiSix allows consumers to apply their waist size, inseam, height, weight, and body build, to a computer-generated mannequin. When dressed, heat maps on the mannequin’s body reveal areas where the clothing is tight- or loose-fitting. eBay hasn’t figured out yet how it will apply this technology but it’s an example of how technology can be used to improve the online shopping experience. (Washington Post)
WAL-MART VS. VISA: Wal-Mart’s massive $5 billion civil antitrust suit against Visa could be the opening shot in the retail giant’s bid to establish its own payments network, say industry experts.
The suit alleges that Visa and its large network of card-issuing banks engaged in “agreements not to compete and price-fixing schemes” in violation of federal law. The arrangement allowed Visa to collect fees totaling $350 billion over an eight-year period and inflicted “enormous damages” on Wal-Mart, the nation’s largest retailer, according to the suit. Visa did not respond to request for comment.
The suit could be Wal-Mart’s attempt to “flex their muscles” as the company prepares to unveil its Merchant Customer Exchange (MCX) mobile payments system, says analyst Madeline Aufseeser of Aite Group. MCX, a collaboration with a group of the nation’s top retailers, is likely to be a stand-alone payment network, meaning it has the potential to steal market share away from the large card networks. “They would like to see the Visa and MasterCard duopoly disintegrate,” says Aufseeser.
GILT EXPANDS BUSINESS: Gilt Groupe’s CEO Michelle Peluso says the company is expanding beyond flash sales to try its hand at selling full-priced merchandise. Experimenting with this new model, Gilt offered high-end boots for $600-700 each from designer Stuart Weitzman. Selling at full-price, Gilt sold more than $1 million worth of Weitzman boots in 20 days. Peluso says the idea to sell full-priced high-end merchandise was a result of customer analysis, and having a better understanding of just who was buying things on Gilt. “We know we have this very affluent audience and sometimes price is no object. We are working to take advantage of our audience and work with our brand partners in new ways,” she said. (Internet Retailer)
PAYPAL IN STORES IN TORONTO. PayPal has announced that customers will be able to make payments at 50 different restaurants, bars, and food trucks in Toronto using the PayPal app, according to the Tornoto Star. The payment method doesn’t require any tapping or scanning either. Customers check in with the PayPal app and place their order. Then, when they are ready to pay, the cashier identifies the correct account by selecting a photo of the customer displayed on the payment terminal and confirming the payment. (Toronto Star)
HANDSHAKE RAISES $8 MILLION: Business-to-business e-commerce company Handshake is expanding beyond mobile order management to make wholesale retail more like e-commerce. The company recently raised $8 million from Emergence Capital to pursue its new strategy. (VentureBeat)
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