E-COMMERCE AND THE GLOBAL EXPANSION TREND
There has been a lot of focus on what has been unfolding in the US retail sector recently, whether it’s been the decline of Sears or the dominance of Amazon. In the e-commerce space in particular, a battle has been waging between the titans of the industry, with Walmart and Amazon trying to outmanoeuvre one another to be crowned kings of the space.
This war has now gone international, with the whole globe providing a battleground for the biggest players to conquer. We’ll look at some of these plays, and the lessons that can be drawn from them.
Taking On Amazon in Europe
It’s not just Western companies looking east that’s grabbing headlines. Chinese retailer JD.com is eyeing expansion in Europe, and has Amazon’s dominance there firmly in its sights.
JD sets itself apart from competitors such as Alibaba and Amazon, in that the e-commerce company owns and runs its own logistics network. This means they can set up quicker, deliver quicker, and upgrade more effectively than other players who are built on older systems.
France is first for the Chinese company, which will launch its e-commerce platform and delivery services there next year. After that, they have earmarked the United Kingdom and Germany for the next stages of expansion. These comprise the largest markets in Europe, and JD is certainly putting their flag down in this case in their quest to conquer the continent.
The group’s founder and CEO Richard Liu has said that they will spend €1 billion in France over the next 2 years, and he has also been in talks with the UK Prime Minister Theresa May regarding future expansion in that market.
It’s not just goods that are planned to move between Asia and Europe with this move. JD plans to launch its first European research center in Cambridge, England in the first half of next year.
This will be only the second of the company’s research centers that will be outside of China, and will focus specifically on artificial intelligence and big data.
The Battle for Belgium
Continuing the theme of European conquest, Alibaba is betting on Europe big time, too.
Ant Financial, a subsidiary of the Asian giant, has been rumored to be opening a store in Brussels for a while now. Alibaba Founder Jack Ma has even apparently had conversations with King Filip about the idea.
Things are moving ahead quickly. Cécile Jodogne, whose responsibilities include Foreign Trade, is travelling to China in April to finalize details.
Many would have heard about Ant Financial after its bid for MoneyGram was blocked by the US government, for national security reasons. The company was willing to pay $1.2 billion for MoneyGram, when negotiations were still going on.
What is clear is that this is a bigger play than just a Ant Financial; it’s the advance guard of a massive move from Alibaba into the heart of Europe.
Bye Bye Brazil
On the other side of the world, Walmart have been hitting a number of setbacks with their Brazilian operation, and have decided that at this point a strategic retreat is the best option.
Unlike in Mexico, which is the company’s largest market outside the United States and where Walmart (Wal-Mart de Mexico) is the country’s No. 1 retailer, it’s all but official that Walmart is looking for a buyer for at least part of its operations in Brazil, where it has been struggling for a decade.
In 2016, the company had reported $9.4 billion in revenue from its Brazilian operations, which comprised around 500 stores. Walmart has been hit however by a combination of acquisitions that just didn’t fit, labor disputes, and an economic downturn in the South American country.
In a smart move, Walmart has looked to its growing e-commerce footprint to interest potential buyers. In December, the company combined its local e-commerce unit with its Brazilian brick-and-mortar operations, which make the overall package a lot more attractive.
Walmart’s Japan Play
Where Walmart is expecting a boom is with its partnership with Rakuten, the No. 1 e-commerce company in Japan.
In line with their online expansion, and with Amazon in their crosshairs, Walmart are pulling out all the stops to grow in this area. One of these methods is through strategic partnerships such as their alliance with Rakuten.
The initial stage of this partnership is the launch of online grocery deliveries in Japan. In the crucial second stage, Walmart will be adding a range of eBooks and audiobooks to their US product assortment, powered by Kobo, the Rakuten-owned digital book retailer.
This deal makes Walmart the exclusive mass retail partner of the Kobo brand in the US, and is a further development in what seems to be a winning strategy from Walmart to leverage their physical assets in order to boost their e-commerce business.
This 2-way partnership will strengthen the company both in the US as well as in Japan, as they attempt to outflank Amazon and grab the lion’s share of the e-commerce spoils.
Market Beyond is Your Global Partner
These trends make it clear that in a world that is more interconnected as well as distributed than ever, you need a partner who is in tune with the pulse of global e-commerce. The biggest brands in the world are investing in data and insights, and with Market Beyond you can have access to the most in-depth, product-level, real-time actionable insights out there, to lead your business to global success.