Bonobos founder Andy Dunn explains in an interview at Code Commerce rather candidly why Bonobos thought selling to Walmart was better than going public:

At a decade old, Bonobos was looking at three “really exciting” options to help fuel some of its growth, Dunn said.

One was to take a small, $15 million round of funding and stay independent, but without getting any liquidity for founders, employees or investors.

Another option could have been to sell a chunk of the company to a private equity group, which would have probably meant ceding control. Not fun.

A third option turned out to be the move Dunn chose: Selling to another company — in this case, Walmart.

This got liquidity for shareholders, even if it wasn’t at a billion dollar valuation. And it also fetched some potentially useful tools for future growth, such as the infrastructure Jet is building out to get shipments to consumers faster, and access to a wider range of customers than Bonobos had been able to attract itself.

​Now, that does not sound either inspiring nor imaginative. Here is more:

“It’s a weird time to be a retail company,” Dunn said. “If you’re not Nike or Under Armour, or one of these really big vertical brands, or Chanel, or have tens of billions of dollars … it’s hard.” The struggle as a mid-sized player fed into his decision.

​This perceived struggle more than anything may be the real reasoning behind the decision. If one sees one‘s market like that it certainly makes sense to go into a Walmart online holding and betting on the infrastructure and distribution Jet.com is hopefully building.

It just doesn‘t sound like coming from a position of strength. And in the grand scheme of online things neither Walmart and Jet.com come from a position of strength.

More on this topic:

• Walmart Is Acquiring Bonobos for $310 Million in Cash
• We Finally Know How Walmart.com and Jet.com Will Differ From Each Other
• How Walmart’s E-Commerce Acquisition Spree Is Going

Since Groupon has there not been a similarly botched IPO as we witnessed this year with Blue Apron. The meal-kit company wanted to go public for $3 billion, went actually public for $2 billion and today is worth $1 billion.

At this week’s Code Commerce conference, Blue Apron founder Matt Salzberg talked about this and other issues:

“We’re not going to go and be a head-to-head mass-market grocer like Amazon and Whole Foods are trying to be,” he said. “We don’t want to be everything to everybody. We are a curated brand with a point of view on home cooking … and that lifestyle that surrounds that.”

“We’re going after a gigantic, gigantic market opportunity, and we think we’re in the very earliest innings of a gigantic transformation of the offline food industry,” he later added.

Watch the full interview here:

Matt Salzberg is confident and expressed amazement at the public disregard for the company’s entrepreneurial performance. He sees the main challenge now in getting comfortable with the new situation as a publicly traded company.

Meanwhile, other meal-kit companies in the US explore exits in the wake of the Blue Apron IPO which explicitly don’t include going public. The Information (paywall):

Executives at Albertsons Companies, which owns Safeway, have recently discussed buying meal-kit startup Plated, according to two people familiar with the matter. It’s unclear whether the two sides are close to an agreement. […]

Investors say enthusiasm for companies that deliver grocery ingredients has cooled in part because of a high rate at which customers have halted their subscriptions. Their potential profitability also has been an open question. The services still need to justify that it is less expensive and more convenient than grocery shopping or eating at restaurants, according to a March report from Raymond James. There also is debate over how large the potential market is of people who want to regularly use these services. […]

Consumer-packaged goods companies are another possible buyer of meal-kit firms. Some are already investors in the startups. Nestlé led a $77 million funding round in June for Freshly, which ships prepared food to homes, while Campbell’s Soup Company has invested in Chef’d, a Blue Apron competitor that doesn’t require customers to book a weekly subscription and also worked with companies like The New York Times to sell branded meal kits.

This ‘panic’ seems a bit premature. Meal-kits are still a fascinating way to bundle food and create a service and business around that bundle.

HelloFresh, no. 2 in the US and internationally active, may or may not go public as well this year. Investor Rocket Internet certainly could use an IPO exit by now, but the Blue Apron IPO made this one far more complicated and uncertain.

After Blue Apron’s numbers shenanigans we could certainly use another set of numbers on the meal-kit business. (HelloFresh is already publishing some numbers. See for example this latest quarterly report from June (PDF).)

By Marcel Weiß and Jochen Krisch

More on this topic:

• What People are saying About Blue Apron’s Q2 Results
• Amazon’s Meal-Kits Are Better Than Blue Apron’s in This One Important Dimension
• What Blue Apron’s S-1 Numbers Don’t Want to Tell Us

Amazon at Alibaba‘s Tmall

Amazon seems to see yet another opening at the Chinese market. The company is at least hiring at every level. South China Morning Post (which is owned by Alibaba):

The online retail giant lists almost 400 Chinese-based openings on its careers website and more than 900 on LinkedIn. They include senior executives to manage and acquire content, a leader to expand its fledgling Amazon Lending programme and a head for its storefront on Alibaba’s Tmall. And it’s hiring a hardware engineer to, among other things, evangelise for digital assistant Alexa, which works with third party products even though the Echo speaker is not available in China.

Amazon has been beaten severely in China..:​

Its sales represented just 1.1 per cent of China’s online gross merchandise value in 2015, and by 2016 that figure had dropped to 0.8 per cent, according to an ICBC note that cited iResearch.

​..but it seems that cross-border commerce looks like a possible savior for Amazon, being able to bring foreign goods to Chinese customers:

But Amazon has used its global reputation to keep a foothold in the business of importing goods for China’s rising middle class, who seek safe foods and authenticity. In the fourth quarter of 2016, Amazon controlled 7 per cent of the country’s cross-border commerce, according to ICBC. It launched its Prime free-shipping service in late 2016. […]

Ocean Audit, which tracks the global movement of goods, said Amazon imported 14,885 shipping containers’ worth of goods in 2016. This year it’s predicted to reach 20,000, according to Chief Executive Officer Steve Ferreira.

​Amazon also is building out its content / entertainment arm to better compete with Alibaba et al:

Beyond e-commerce, it’s building a Chinese content team to woo studio heads and negotiate deals for local movies and TV shows, including original content. But launching a domestic video service would be a bold step in a country where media is heavily censored by regulators. Netflix chose to sell content to local player iQiyi instead of entering the market directly, while Apple’s movie service has been blocked since 2016.

​Does this make sense strategically?
​
​The Chinese market is huge, let‘s just state the obvious right here. Even a sliver of that market is very valuable. But going against Alibaba, JD.com and a growing ecosystem of homegrown Chinese giants will keep being expensive and risky. (It also seems unlikely that Chinese regulators will ever allow a foreign company to get anything close to being a market leader.)

​Amazon is fighting a long and costly battle in India. There and elsewhere Softbank and its $100 billion private equity Vision fund have emerged as a strong adversary. Microsoft and other big companies keep putting money into Amazon competitors as well.
​
​And the company just made the biggest acquisition yet in its home market.
​
​ ​It does not really look Amazon needs yet another epic fight for marketshare. It makes sense to not give up completely on the Chinese market. And the cross-border commerce opportunity begs to be exploited.
​ ​
​ ​But I would be very surprised and a little bit concerned if the company would go all-in again in China.
​
​More on this topic:
​
​* Amazon’s New Nemesis: Softbank Pouring Billions Into Each Flipkart, Snapdeal AND Paytm
​* Fanatics and the Rise of E-Commerce Top Investor Softbank
​* Amazon’s Ruthlessness and Growing Power Across Industries Creates Powerful Enemies
​* The Implications of Amazon’s New-Found Financial Firepower
​* 5 Reasons Why China’s Online Retail Is so Successful AND Structurally Ahead of the West

It appears that Wayfair is selling the same item on several online shops, its own and others -among them also Amazon- for different prices. Outstanding piece of reporting by Quartz:

After analyzing a random selection of items on Wayfair, Quartz discovered that the company often lists what appear to be identical products with different prices across its sister sites, often with completely different names. To make matters more confusing, those same pieces of furniture can often be found on completely different websites, like Amazon, or department store sites like Walmart or Sears, with different names again, and different prices.

​The price differences can be quite stark. Here‘s an example via Quartz:
​

Wayfair: Bryson 5 Piece Dining Set ($194.99)
AllModern: Bryson 5 Piece Dining Set ($194.99)
Joss & Main: 5-Piece Delano Counter Dining Set ($189.99)
Amazon: Simple Living Delano Two-tone 5-piece Wood Dining Set by Simple Living ($172.91)
Sears: Target Marketing Systems Delano 5 Piece Dining Table Set ($230.82)
Walmart: 5-Piece Delano Dining Set, Natural ($139.00)

Asked about this, Wayfair points to its organizational structure:

There doesn’t appear to be any rhyme or reason behind Wayfair’s branding and pricing decisions across its companies. Sometimes a product has the same name on different sites, sometimes it does not; sometimes Wayfair is more expensive than its other brands, sometimes it’s the cheapest. A representative for Wayfair told Quartz that each of its brands runs its own independent merchandising and pricing strategy “to create a unique brand experience,” and that things like the average order value or basket size is taken into consideration when pricing goods.

​This smells like an approach that may bring short-term gains but will get you nowhere over the long run. For starters, this only works as long as there are interchangable brand names behind the items. Meaning, people neither search for the brand itself but the generic description and ​nor can they easily compare the items across retailers.
​
​So, by betting on convenience (which is almost always a good bet) one may maximize, or at least increase, sales across marketplaces and online shops. But the price for that is to never gain any brand recognition.
​
​Think, on the other hand, about pure online brands. Take, for example, Anker. Anker, through relentless focus on quality and durability became a household name for gadget accessories. This approach allowed Anker to carve out a place for them on top of one of the most ruthless marketplaces in history, without having much of a backing to start with. In a category that is as unsexy and commodity as it gets. They would not have gotten there with a Wayfair approach to ‚branding‘.
​
​Even if one comes to the conclusion that building up a brand over the long run doesn‘t move the needle nowadays: It still begs the question if having multiple entries for the same item under different names on the same marketplace makes a lot of sense. (See screenshot, courtesy of Quartz, above.)
​
​Here are some reasons why multiple entries produce a lot of opportunity costs:
​
​* User reviews get divided amongst the entries.
​* Marketing spend gets complicated.
​* Marketplace search ranking (based on reviews and sales) is being cannibalized by your own product entries.
​
​Frankly, I‘m a bit puzzled by this strategy.

Quartz:

Much like when Quartz uncovered that Amazon sells items from dozens of house brands that it doesn’t make clear are Amazon properties, it’s not always obvious who makes the products customers buy online or where they are produced. In the case of this furniture, it’s likely that many products are available on so many sites because they’re produced by a few low-cost distributors in China or another exporting country and are repurposed for each retailer’s needs.

​There is a bigger issue here that I have been thinking about for a while now. Private labels become an increasingly popular approach among online retailers. For good reasons:
​
​* The margins are better.
​* If successful, private labels can provide a weapon against big marketplaces. (And, on the flip side, they can provide a way to be on those marketplaces in a meaningful way.)
​
​But first, that comes at a cost to consumers. Just because a given (online) retailer decides to go sell private label items now doesn‘t mean they suddenly are running factories. The private label phenomenon is a white label phenomenon. Depending on the category, this can mean you as a customer just don‘t get to know anymore who the actual manufacturer is because the retailer slapped their private label onto the product. It is thus not uncommon in retail, both offline and online, that you may find very similar products at different retailers. The product is obviously the same, coming from the same manufacturer. They are just not labeled as such. Private labels at drugstore chains are a perfect example for such a category.
​
​Amazon Basics products produce some interesting ‚investigative‘ user reviews because of this.
​
​The bigger picture: Now, put yourself in the shoes of your customers. People can and do talk about your products online. On marketplaces such as the Amazon Marketplace those discussions happen right on your product page. What happens once your customers realize you are ‚playing games‘ with prices and labels? (Maybe you see that differently. What matters is how it is perceived by your customers though.) What happens once they realize you and other retailers have created an almost impenetrable jungle of meaningless labels?
​
​They get exhausted. And annoyed.
​
​That‘s the perfect environment for new strong brands to emerge.
​
​Those brands will use that jungle to their advantage, betting heavily on consumer trust and reliability. They will oversell that. But people will be increasingly hungry for straight-forward ‚trustworthy‘ online brands.

​​Set your private label strategy accordingly.​​
​​
​More on this topic:
​
​* Private Labels and More From Stitch Fix at Shoptalk 2017
* Fight for India: Flipkart is Planning Private Labels While Still Ahead of Amazon And More
* Amazon’s Private Labels Are Fueled by Amazon’s Rich Market Data, Workout Clothes Edition
* Data from Dash Buttons Will Lead to Evolution of Brands & Amazon’s Private Labels
* Amazon’s Secret Brands and the Marketplace Conundrum
* And Just Like That, Brandless’ Unique Selling Point Evaporates
* Here Is What a Big Part of Amazon’s Endgame Looks Like

Best Inc, which has a market share of 8.6 percent in the Chinese market, is going public on the 20th of September.

Reuters:

Best Inc, a Chinese logistics company backed by Alibaba Group (BABA.N), is launching a U.S. IPO that is seeking about $930 million to fund an expansion of its supply chain network, develop new technology and open more convenience stores. […]

China is the world’s biggest logistics market, with $1.6 trillion in revenue in 2016 and demand for express delivery services seen up 17.9 percent annually in the six years to 2021, Best said, citing forecasts from consulting firm iResearch.

The company’s share of China’s express delivery market grew to 8.6 percent in the six months to June 2017, from 2.7 percent in 2012, Best said. […]

The IPO is slated to be priced on Sept. 19 and its market debut is set for the following day.

​Alibaba is the largest shareholder in Best. The stronger Best, the better for Alibaba which needs a strong logistics partner to keep competitors like JD.com at bay. The latter is building its own logistics infrastructure.
​
​South China Morning Post (which is owned by Alibaba):

The fundraising plan came after Best, in which Alibaba Group has a 23.4 per cent share, reported sizzling business growth for 30 consecutive months, which could put it in a better position to pit against the five dominant players – SF Express, YTO Express, STO Express, ZTO Express and Yunda Express.

Business Insider on the relationship between Best and Alibaba which makes up 70% of the express business for the former:

Alibaba’s backing helped Best grow to capture 8.6% of China’s express delivery market in the six months leading up to June 2017, up from a 2.7% share in 2012, according to Best. Alibaba is Best’s largest shareholder and client — the e-commerce behemoth made up 70% of Best’s express deliveries from January to March 2017. Cainiao Network, Alibaba’s logistics affiliate that coordinates the vast majority of its e-commerce deliveries, also has a 5% stake in Best.

It is a given that Best Inc will keep pushing its internationalization:

Best intends to use part of the funding to fuel its continued geographic expansion. In addition to its nationwide delivery network in China, the company also has warehouses in Japan, South Korea, Australia, the US, and Germany. Best said that $300 million of the new funding would go to expanding its store network and logistics services, with another $100 million going to technology investments, and the rest set aside for general business purposes. Continuing to grow its footprint overseas could help Best both increase its business with Alibaba, which is also expanding into other parts of Asia, and attract new clients in foreign markets.

After all, someone needs to fulfill all that cross-border e-commerce everyone‘s been buzzing about!

More on this topic:

• Now, JD.com Creates a Logistics Unit as Well
• Taobao Villages: Alibaba Is Deeply Entrenched in More and More Rural Regions in China
• What Alibaba, JD, China Post See in Turning Small Stores Into Franchise Touch Points
• Alibaba’s On-Demand Services Unit Koubei to Raise $1.2 Billion
• Alibaba: “Our Ultimate Strategy Is to Build the Future Infrastructure for Global Commerce”
• Alibaba’s Smart City in Macau: Retail in a World of Conglomerates

Okay, Amazon is big. We all know that. But it sometimes help to put into perspective how big Amazon really is.

So, I’m sorry, but here is the most businessinsider-ish Business Insider article on Amazon I have seen in quite a while: „7 insane facts that reveal how big Amazon has become“. Don‘t worry though, here are the highlights:

7.5% of Seattle’s working-age population are Amazon employees. […]

300,000 employees worldwide, and 40,000 in Seattle alone. […]

Amazon accounts for 43% of all online sales [in the US]. […]

1 out of every 4 US adults has Amazon Prime. […]

Amazon ships 1.6 million packages a day. […]

45,000 robots roam the floors of Amazon’s warehouses. […]

Amazon is more valuable than all major brick-and-mortar retailers combined. […]

Amazon’s $356 billion valuation is so big, it’s larger than Wal-Mart, Target, Best Buy, Macy’s, Kohl’s, JCPenney, and Sears combined.

​

Techcrunch:

Souq has acquired Wing.ae, a startup that is building out a network for Prime-style same-day and next-day deliveries for various e-commerce marketplaces (including Souq.com). […]

Souq previously made an undisclosed, strategic investment in Wing.ae and had been working together with the company to help it scale. In fact, since Wing was founded in 2016 by Muzaffar Karabaev, Souq had been the only investor that it had ever disclosed, according to Crunchbase.

​Business Insider:

Same- and next-day delivery could help Souq build on its lead in the Middle East and North Africa (MENA) region. Souq is already the market leader in the region, with 45 million site visits per month and millions of product offerings, but improving its fulfillment capabilities could allow it to grow further. Fast delivery is becoming the norm in many e-commerce markets, so Souq could benefit greatly from being at the forefront of speedy delivery in MENA, especially as the region’s e-commerce market is expected to reach $6.7 billion in 2017, up from $4.8 billion last year.

After Whole Foods, ​there has been a lot of speculation about what company -and what kind of company- Amazon may buy next. US retailers hope for being bought by Amazon as well. (Not realising that Amazon does not want to go into traditional retail just because it bought Whole Foods to kickstart Amazon Fresh et al.)

Wing.ae more than Whole Foods provides a framework for predicting Amazon‘s future M&A activities.

More on this topic:

• US Retailers Begging Amazon to Buy Them Next
• Now Belonging to Amazon, Souq Starts Integrating With the Giant
• Analysis: Whole Foods in an Amazon Go/Flex/Fresh World | Early Moves

Amazon keeps working hard at the fashion front to find out what works and what doesn‘t. After the new Echo Look and the end of the Style shows, now Shopbop, which Amazon took over in 2006, gets a makeover with one major new addition: a new loyalty program. The Observer:

The program will offer exclusive access to pre-sales, birthday discounts and invitations to various events. Chinese customers will have a new payment options, thanks to the introduction of Alipay.

All of these changes will be reflected on both the mobile and desktop version of the Shopbop site, including the mobile app. In fact, the mobile changes were designed first and then the rest trickled down. Shopbop, like many of their competitors, sees quite a large chunk of sales made from iPhones and Androids alike, but Penick was unable to disclose those exact figures.

This new loyalty program launched on September 7th and will be rolled out as an opt-in to all customers worldwide over the course of this month.

Retail Dive on the new loyalty program:

Shopbop has become well known within fashion circles — it’s familiar to Fashion Week followers and it’s a destination similar to Net-A-Porter. A new loyalty program aims to build on that. With no minimum spend to participate, customers now receive benefits like early access to new product and sales, birthday discounts, and invites to special events, among other perks.

Business of Fashion on the broader context for Amazon:

The Shopbop redesign comes as Amazon is ramping up its visibility within fashion via its own private labels, but it still has a way to go: yesterday, it was reported that Amazon was shuttering its private label Paris Sunday after only a few seasons, an indication of its restless and relentless strategy to achieve success in this field. Ownership of Shopbop allows Amazon a market share without the financial risks associated with launching a new label, in the same way its recent acquisition of Whole Foods offers some ownership of the grocery market.

Amazon has already started integrating services across its companies: Prime customers get free two-day shipping on Shopbop. It highlights Amazon’s intentions to further merge its brands — the traditionally offline Whole Foods is also set to launch e-commerce.

Amazon Fresh is already a loyalty program within the loyalty program Amazon Prime, which is an Amazon trend to keep an eye on.
​
Amazon keeps experimenting its way to a successful fashion business. As I said above, Amazon‘s Style Code Live Shows are already cancelled again. And also recently, Amazon killed BuyVIP as well. Thanks to being a large online retailer in the US and Europe, period, Amazon is also a large fashion online retailer in those markets. But that should not detract from the fact that Amazon is comparatively weak in fashion. (Especially in Europe the rise of Zalando and Asos etc. are evidence to that. Also, fashion is still fertile ground for many startups. Think Stitch Fix et al.)

Fashion is one category that keeps making visible the limits of Amazon‘s “we sell everything in more or less the same way” approach.

More on this topic:

• Forget Today’s Echo Look, Think Instead About Amazon Fashion in Voice-First in 10 Years
• The Fundamental Difference Between Amazon Prime Wardrobe & Zalando’s “Only Pay What You Keep”
• Why Did Amazon Kill Its Style Code Live Show Before Bringing It to Mobile and Fire TV?
• Official: Amazon Closes Down BuyVIP by May 31st

Voice interactions, and with them a meaningful percentage of ‚conversational commerce‘, are going to differ from other means of discovery by one main aspect:

The algorithmic answers to the users‘ questions won‘t be lists of options but, in most cases, be one result. One result. That means one spot. Either you‘re in, or you‘re out.

Voice interfaces will only ever make up a portion of the interfaces in use; they will never take over all of computing or even the majority of it. (Multi-touch isn‘t going anywhere.) But that fraction of computing, whoever large or small it will end up being, will see a strong winner-takes-all dynamic.

As we have said before regarding the buy box on Amazon, which sees similar dynamics (intentionally, I might add): Imagine a Google that only gives you one result at a time.

How would that change your approach to SEO?

However the dominating discovery mechanism in voice will look like (Will it be search? Will it be something more pro-actively?), the market dynamics in voice will spill over to the rest of your market. Whichever brand will be strong on voice will have an advantage elsewhere as well.

A brand you come one comes across via their voice assistant, is a brand one might remember next time while browsing a marketplace. That brand has a higher chance of getting their app downloaded to one‘s smartphone. And on it goes.

Depending on your market, that advantage will sometimes be stronger, sometimes be weaker. (It‘s highly dependent on the product category, obviously.)

Given all this, it makes a lot of sense for every brand to start thinking about voice in their market context. Even though voice doesn‘t matter for today‘s business and will not for at least another couple of years. Once it does matter, it‘ll potentially matter a great deal.

The earlier you start learning from the market, the better. Winner-takes-all also means that feedback loops will skew heavily in favor of early adopters.

One brand working on this today is Diageo, the company behind brands such as Johnnie Walker, Smirnoff and J&B.

Here’s Digiday on how Diageo is planning for voice-based search:

Much of Diageo’s early voice search efforts involve brainstorming what naturally spoken questions may be asked about its brands, especially because there’s a chance that cost per click could rise if there is only room for one paid search placement. […]

There will come a time when many search queries won’t be “mai thai” in text form; instead, it will be “how to make a mai tai” as a verbal query, said Benjamin Lickfett, head of digital innovation at Diageo. When that happens, Lickfett believes it will be a “winner-takes-all” market in the sense that searching using personal tools such as Apple’s Siri or Alexa provides instant answers rather than a page with a list of results. […]

Lickfett stressed it is still early for Diageo’s brands in voice search, which comScore predicts will account for 50 percent of all search activity by 2020.

​It should come as no surprise that brands love the potential of devices like the Amazon Echo Show:

Lickfett is eyeing Amazon’s Echo Show, an Alexa-powered device with a display, in particular. He said the Echo Show is of interest because it’s specifically designed for the kitchen, meaning potential opportunities exist for brands like Johnnie Walker and Guinness to appear on the device’s screen.

(See, screens will keep their place!)
​
For Amazon, voice is still by far the best shot the online retailer ever had at becoming a general interest platform provider. And the company keeps pushing to make sure this becomes true.

CNET recently did an Q&A with Daniel Rausch, Amazon’s vice president of smart home:

Do you see a world where you just screw in the lightbulb, Alexa immediately recognizes it and it’s done?
Rausch: We want to extend that same simplicity exactly as you said it. It should be as simple for customers as picking the product that they would otherwise love — a door lock that aesthetically matches the look of their home, a lightbulb that they like — and it just works. […]

Where do you see Alexa ten years from now?
Rausch: Alexa will become a fabric in the home. In my home today, it’s in most places but it’s not in every single nook and cranny. I think what customers really want is that same degree of simplicity to be afforded to them everywhere they are in their homes. The other side of that equation is extending control to many more products. As your refrigerator becomes connected in your home, your dishwasher, your garage door, your front door, your lights, you’ll see us working hard for customers to expand that simplicity of control to all of those different devices.

Home appliances that are by default connected to Alexa (and the customer‘s account), will in due time get better treatment on the Amazon Marketplace than those that don‘t.

​That‘s one way marketplace SEO will shake out..​

More on this topic:

• Shopify’s 500.000 Merchants Can Soon Run Their Business Via Alexa and Bots | Early Moves
• Jeff Bezos on Alexa’s Raison D’être | Early Moves
• From Hotels to Gadgets, Omnipresent Amazon Alexa Will Be the Dominant Voice Platform | Early Moves
• How Amazon Is Fostering a Developer Community With ‘Alexa Champions’ | Early Moves
• Post-PC Online Retail: Why and How Amazon is Building the Alexa Voice Platform | Early Moves
• Amazon’s Buy Box Is Creating the Most Brutal Conditions for Merchants | Early Moves

SoftBank Group Corp’s Vision fund strikes again and invests $1 billion in online sports merchandise retailer Fanatics.

We recently talked about this deal when it was rumored:

Fanatics is a fascinating case for how an online retailer can entrench itself into the industry it is working in.

But Softbank is the bigger story here: The Japanese company is shaping up to become not just a major investor in e-commerce companies, but by far the largest one worldwide regarding capital given out. (One can also easily argue they already are a major investor, see below.) The $100 billion tech fund Softbank leads provides the Japanese giant with a lot of cash for investing. Contrary to most other investors in a similar league, Softbank already has quite the experience in investing in online retail.

Reuters:

The new funding will value the Jacksonville, Florida-based company that runs online sales for the National Basketball Association and the National Football League at $4.5 billion – more than twice the $2 billion in revenue expected this year, the company said.

The majority of Fanatics’ business is in the United States where it licenses merchandise and handles e-commerce sales for items such as sports jerseys for teams.

CNBC:

The NFL also invested about $95 million and Major League Baseball added $50 million earlier this year, according to the Journal. […]

Fanatics sells licensed sports apparel on its website, and also operates the web sales for many big sports leagues. Doug Mack, who became CEO in 2014, has emphasized data as the “heartbeat” of the company.

​TechCrunch on the valuation and the fear in the industry that Softbank overvalues the startups it invests in, in part thanks to the sheer size of its Vision fund:

Despite the lofty valuation Fanatics was just assigned, [executive chairman Michael Rubin] suggested that SoftBank isn’t throwing around its money, driving up valuations as has become a growing concern for many in the venture industry. He told CNBC instead that SoftBank wasn’t “easy from a valuation perspective. We had even bigger expectations. But we knew they’d be the right partner for us, because if they think it’s strategic and it’s going to be huge, they’re going to figure out a way to get [the deal] done.”

​Softbank keeps investing large sums and thus is not only becoming a king maker but is also becoming an investor with unprecedented holistic insights into the global state of online retail. No one else comes even close.
​
​More on this topic:
​
​* Softbank, Giving Out Money Like Candy, Is the Biggest E-Commerce Investor Worldwide | Early Moves
​* Amazon’s New Nemesis: Softbank Pouring Billions Into Each Flipkart, Snapdeal AND Paytm | Early Moves
​* Top Investors: Behind the Scenes at Baillie Gifford, the Scottish Unicorn Hunter | Early Moves