More earnings calls in commerce this week. Shopify, good news! Walmart...not so great. Here are this week’s top stories.
Make no mistake, Alibaba is continuing their buying spree of American companies. They put their stamp on Zulily by snapping up 9% of the company last May and this buy of Groupon gives yet another signal to the market that they’re not interested in stopping. They’ve got plenty of cash to spend and will continue to look for deals in the U.S.Shopify Shares Jump After Strong Results, Outlook
Revenue at Shopify doubled from the prior year and crushed analyst estimates. This isn’t surprising to us. We’ve worked closely with Shopify for a long time and are continually impressed by them as a company. While the market is very volatile right now and there will be ebbs and flows, I’m looking at a very positive future for our pals from Ottawa.
Even with heavy investment in eCommerce, Walmart continues to struggle. Store closures and a strong dollar are weighing on them, but what’s more concerning is that their investment in eCommerce isn’t paying off yet. They only saw 8% growth in eCommerce in the quarter despite a 17% growth in Q1. For comparison, Amazon saw a 26% revenue growth in the fourth quarter, compared to 15% in Q1. Yikes!
Etsy hasn’t increased fees in four years, but their seller fees only account for about half their revenue now. Etsy is realizing in a big way that their sellers are looking for services to help them be more successful (e.g. shipping, payments, and inventory). This is great news for businesses like us because they will likely do more to make sure their system is compatible with outside services. Even if they build some of the functionality themselves, their core business is a platform to sell so there is plenty of room for third-party service providers to work in an open API world.
Consolidation in the 3PL world continues. Not unlike Alibaba, Chinese company Tainjin Tianhai is looking to expand their global footprint in the U.S. by acquiring Ingram Micro. While they’re saying Ingram will continue to operate independently from their headquarter in Irvine, CA, there are still a lot of regulatory hurdles to jump through before this deal closes, so it won’t likely happen until later this year.