Yesterday Amazon released their 2017 Q1 results. For the first time Amazon reported quarterly revenues for marketplace seller services, showcasing the importance of the services it provides for marketplace sellers. Last time it broke out a new category was Amazon Web Services (AWS).
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On April 25th Etsy officially launched the previously announced Etsy Studio, a marketplace dedicated to craft supplies. Craft supplies is a big category, they already have sellers for it, and thus Etsy Studio will go from a new idea to a multi-million marketplace in a matter of weeks. We think it is a very smart move.
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Effective March 1st, 2017 there were two major changes which affected books sellers. To understand how this affected the market we looked at sales by books sellers on both Amazon and eBay and how it changed over time.
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At least 55 cents of every new dollar spent in US e-commerce is on Amazon, and analysts estimate that by 2021 Amazon will account for more than 50% of all US e-commerce spending. We think e-commerce business which fail to realize where the market is heading are going to waste a lot of resources trying to compete in a market they cannot win. Un-Amazon-Able are the only brands and e-commerce businesses that will be able to survive Amazon's growing e-commerce presence.
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eBay's future, at least in public, has been about structured data, new user experience development and efforts around AI and machine learning. eBay has been talking about the structured data initiative since at least the start of 2015, so it's been two years, and there isn't yet much to show for it. We think the biggest issue with the structured data initiative is it is taking too long.
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Amazon has unique and unrivaled visibility into the performance of hundreds of thousands of products and brands. Just like Netflix is investing into TV shows based on data they collect, Amazon is starting to build brands based on data. But Amazon could also avoid doing most of the work, and instead invest into the brands already performing well.
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Last week Walmart announced a new initiative - discounts for products ordered online, but picked up in stores. By the end of June the program is expected to expand to include over 1 million products. This is the opposite of what Amazon is doing. Amazon is building features for convenience, like same-day delivery in major cities. Thus this change by Walmart raises a question - are shoppers more cheap than they are lazy?
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Given the recent change in the US government, and policies yet to come, the question of how big of a role China plays in Amazon business is very interesting. The takeaway from this research is not the exact percentage of Chinese sellers. It's the fact that there are more Chinese sellers than one might assume, they are very competitive because of FBA, and the ratio is no doubt growing.
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India will eventually become the second largest e-commerce market in the world, overtaking US in the next 10 or so years. There are four players in the Indian market: Flipkart, Amazon, Snapdeal, and Paytm. However the market is shifting towards only three: Flipkart-Snapdeal, Amazon, and Alibaba-Paytm. Recent Alibaba investments into Paytm took its stake to over 50%. And Flipkart-Snapdeal merger seems to be just a matter of time.
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Amazon marketplace has advanced from a website where people list some random products on, to a platform where true retailers build their business. This meant that gaining access to a seller's Amazon account is potentially very lucrative. Not only can a hacker use it to gain insight about the seller's business, best products, ads performance, etc., but also cause big cashflow issues. We think the attacks on Amazon seller's accounts are only going to get more aggressive and sophisticated. Crime is moving online, and Amazon seller accounts are one of the targets.
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