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.
RETAIL USE CASES FOR OCULUS RIFT: Facebook announced that it is acquiring virtual reality headset maker Oculus VR for $US2 billion in cash and stock. The company’s flagship product, the Oculus Rift, is widely considered to be the most advanced virtual reality gaming headset on the market (the developer market that is, as a consumer product hasn’t been released yet). Beyond gaming, Facebook could use Oculus’s technology for a number of things, including shopping. For example, virtual reality could make it possible for consumers to browse stores and purchase merchandise from the comfort of their own home. Think of it as a virtual showroom where you can inspect products from different angles, and in the context of other items or a background. (Click here to read Mark Zuckerberg’s statement on the acquisition)
QUOTE OF THE DAY: “After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home.” — Mark Zuckerberg announcing Facebook’s acquisition of virtual reality headset maker Oculus VR.
AMAZON’S GREATEST STRENGTH (AND WEAKNESS?): Amazon became one of the largest retailers in the world by offering low prices and convenient shipping. However, in doing so the company continues to sacrifice profits to invest in future growth. PandoDaily’s Kevin Kelleher argues that Amazon can’t keep losing money on customer acquisition costs. This is a common critique of Amazon’s business model. As the e-commerce market matures, increased competition and market saturation may continue to slow Amazon’s revenue growth. Nonetheless, it remains a formidable player. We estimate that Amazon grabbed one in every seven North American e-commerce dollars last year, capturing 14% of the entire e-commerce market in the region. (Pando Daily)
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BIRCHBOX OPENS BRICKS-AND-MORTAR STORE: Discovery e-commerce platform Birchbox, which mails customers samples of grooming products, is opening a store in Manhattan’s SoHo neighbourhood — the company’s first physical retail store. Birchbox joins a growing number of online-first retailers that have opened a bricks-and-mortar store in recent years. For example, Bonobos and Warby Parker both began as e-commerce pure plays that now operate as multi-channel (or, omni-channel) retailers. (New York Times)
SOURTH KOREA’S E-COMMERCE MARKET: Groupon is selling off its assets in South Korea and will be focusing its regional efforts on promoting its recent acquisition of Ticket Monster — an Asia-based e-commerce site. Groupon is one of a handful of global e-commerce companies that have had difficulty gaining market share in South Korea. Consumers in the Asian country typically prefer local Internet companies and services that have their roots in South Korea, such as Naver and Kakao. Sometimes the best emerging market strategies involve acquisitions and deals with local companies as they can be knowledgeable about consumers in that region. Recently, eBay acquired a $US134 billion investment in India’s Snapdeal. (Tech In Asia)
MORE ON THE EBAY PROXY WAR: eBay sent a letter to shareholders urging them to vote against Carl Icahn’s proposal to spin off PayPal into a separate company. Pointing to a 441% increase in company share price over the past five years, the letter insists that eBay and PayPal are stronger as one company. “Payments is an integral part of commerce,” the letter reads in part. “Technology, led by mobile, is creating a convergence of payments and commerce capabilities across our industry.” Pierre Omidyar, Thomas Tierney, and John Donahoe, eBay’s chairman, director, and CEO respectively, signed the letter. (eBay)
PAYPAL CO-FOUNDER FUNDS PAYMENTS STARTUP: New Zealand-based Vend received $US20 million in a Series B funding round led by PayPal co-founder Peter Thiel’s Valar Ventures and Square Peg Capital. Vend provides cloud-based point-of-sale software which allows merchants to do things like track inventory in addition to processing transactions. It’s among a host of companies that are beginning to provide point-of-sale solutions that venture into the realm of business management. (Finextra)
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