September 22, 2018
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EU antitrust regulator eyeing Amazon’s use of merchant data

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The European Union’s competition commission is looking into how Amazon uses data from retailers selling via its ecommerce marketplace, Reuters reports.

Competition commissioner Margrethe Vestager revealed the action today during a press conference. “We are gathering information on the issue and we have sent quite a number of questionnaires to market participants in order to understand this issue in full,” she said.

It’s not a formal antitrust probe at this stage, with Vestager also telling reporters: “These are very early days… we haven’t formally opened a case. But we are trying to make sure that we get the full picture.”

The Commission appears to be trying to determine whether or not third-party merchants selling on Amazon’s platform are being placed at a disadvantage vs the products Amazon also sells, thereby competing directly with some of its marketplace participants.

“You have these platforms that have sort of dual purpose, they are both hosting a lot of merchants to enable maybe the smaller guy to have his business, to be found, to do his commerce, and at the same time thgey themselves are merchants — big merchants. So they’re both hosts and they also do the merchant business themselves. And the question here is the about the data,” Vestager also said.

“Because if you as Amazon get the data from the smaller merchants that you host which can be of course completely legitimate because you can improve your service to these smaller merchants. Well, do you then also use these data to do your own calculations? As to what is the new big thing? What is it that people want? What kind of offers do they like to receive? What makes them buy things? And that has made us start a preliminary… antitrust investigation into Amazon’s business practices.”

Companies found to be in breach of EU antitrust rules can be fined up to 10 per cent of their global annual turnover.

We’ve reached out to Amazon for comment.

In recent years the ecommerce giant has greatly expanded the own-brand products it sells via its marketplace, such as via its Amazon Elements line, which includes vitamin supplements and baby wipes, and AmazonBasics — which covers a wide array of ‘everyday’ items including batteries and even towels.

The company does not always brand its own-brand products with the Amazon label, also operating a raft of additional own brands — including for kids clothes, women’s fashion, sportswear, home furnishings and most recently diapers, to name a few. So it is not always immediately transparent to shoppers on its marketplace when they are buying something produced by Amazon itself.

Meanwhile, tech giants’ grip on big data has been flagged as a potential antitrust concern by Vestager for several years now.

In a speech at the DLD conference back in 2016 she said: “If a company’s use of data is so bad for competition that it outweighs the benefits, we may have to step in to restore a level playing field,” adding then that she was continuing to “look carefully at this issue”.

It’s not clear how the Amazon probe will pan out but it signifies a stepping up of the Commission’s action in this area.

The EU also issued Google with a recordbreaking $5BN fine this summer, for abusing the dominance of its Android mobile operating system.

That fine followed another recordbreaking penalty in 2017, when Google was slapped with an $2.7BN antitrust fine related to its search comparison service, Google Shopping.

Google is appealing against both rulings.

News Source = techcrunch.com

Africa’s Jumo raises $52M led by Goldman to bring its fintech services to Asia

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Asia’s fintech scene is poised to get a little larger after Jumo, a company that offers loans to the unbanked in Africa, revealed plans to expand into the continent. To get the ball rolling, Jumo has opened an office in Singapore to lead the way and landed a massive $52 million investment led by banking giant Goldman Sachs to fuel the growth.

The new round takes Jumo to $90 million raised from investors. While Goldman is the lead — and standout name — the round also saw participation from existing backers that include Proparco — which is attached to the French Development Agency — Finnfund, Vostok Emerging Finance, Gemcorp Capital, and LeapFrog Investments.

Jumo launched in 2014 and it specializes in social impact financial products. That means loans and saving options for those who sit outside of the existing banking system, and particularly small businesses. To date, it claims to have helped nine million consumers across its six markets in Africa and originated over $700 million in loans. The company, which has some 350 staff across 10 offices in Africa, Europe and Asia, was part of Google’s Launchpad accelerator last year and it is led by CEO Andrew Watkins-Ball, who has close to two decades in finance and investing.

Watkins-Ball told TechCrunch that he believes Jumo’s experience working in Africa sets it up perfectly to offer similar services in markets across Asia.

“We grew up in a very tough play yard,” he said in an interview. “We built our initial success in Tanzania which is probably one of the hardest [financial] markets in the world. A lot of these environments [in Asia] look more attractive.”

Unlike the West, where challengers are trying to unseat banks, fintech startups in emerging markets work with the existing system. That isn’t some cop-out, it actually makes perfect sense. Banks simply aren’t equipped to deal with customers seeking small loans in the hundreds of U.S. dollar bracket.

Jumo CEO Andrew Watkins-Ball believes his company’s work in Africa is ideal preparation for its expansion into Asia

Financially, the returns aren’t there from these customers and it doesn’t make sense for banks to invest resources sounding out a prospective loan. Even if they wanted to, they couldn’t vet these would-be customers, though. Many emerging markets simply don’t have the formalized credit checking systems that exist in the West, while many of the unbanked (or ‘less banked’) consumers wouldn’t even show up if they did due to a range of factors.

That’s where a new approach is needed. Fintech startups essentially act like a funnel. They manage the customer acquisition and retention, develop systems to assess credit based on alternative signals and, over time, build up a customer profile that reduces credit risk. That suits banks because they don’t need to handle the nitty-gritty and, when it works well, the startups bring them larger enough volumes of small loans that are a worthwhile opportunity for financial institutions.

Just looking at recent funding deals, the model is evident in markets like India — where ZestMoney pulled in funds last month — and Southeast Asia, where Experian backed fintech startup C88.

Watkins-Ball said Jumo is aiming to do the same having already proven its model in Africa. He acknowledged that a number of startups are also tackling the problem and welcomed the increase competition and growth potential across the fintech and micro-financing space.

“We’ve offered services to millions of new customers who weren’t part of the banking ecosystems,” he explained. “Essentially we grow the addressable market for banks.”

Already, Jumo has begun offering services in Pakistan and it has plans to open up in more markets in Asia, although Watkins-Ball isn’t saying which ones or when right now. But, in addition to proving its model, he believes that Jumo has already shown it can adapt to new markets.

“The differences between countries like Ghana, Tanzania and Zambia are as great as those between India, China and Indonesia,” he told TechCrunch. “So we’ve had to learn to use our platform, which we built to be flexible, and localize in order to fit the customer.”

That’s backed up by Goldman Sachs executive director Jules Frebault, who said in a statement: “There’s an immense opportunity across Africa and beyond for Jumo to build on their successful track record developing digital marketplace infrastructure to offer mobile subscribers access to relevant financial products.”

In addition to Asian expansions, Jumo’s new capital will also go towards expanding its current selection of productions in Africa. In particular, Watkins-Ball says the company is working to partner with more banks and it plans to introduce “new generations” of saving products.

While it isn’t taking its foot off the pedal in Africa, he said Jumo will likely devote the majority of its resources to the Asia expansion plan. That’ll make Jumo a very notable addition to a fintech scene that is already showing significant potential across the Asian region.

News Source = techcrunch.com

Amazon takes on The Honest Company with an exclusive brand of eco diapers, Earth + Eden

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Last November, Amazon quietly re-entered the diapers market with the launch of its own private label diapers under the Mama Bear brand – its first diaper brand since pulling its Amazon Elements line back in January 2015. Now, Amazon has added a new, exclusive premium diapers brand, this time under the new name of Earth + Eden. Unlike Mama Bear, which is the Amazon equivalent to something like Pampers, Amazon’s Earth + Eden appears to be more of a competitor to premium diapers, like those sold on Honest.com.

The Honest Company touts its diapers’ super-soft, safe, gentle, hypoallergenic, and most importantly, sustainably-sourced materials, as does the Earth + Eden diapers’ product page.

The Amazon diapers are described as:

Cruelty free – not tested on animals; Made with SFI Certified sustainably sourced fluff; Printed with non-toxic water-based inks; Produced in a Zero Waste to Landfill Facility

In the Q&A section of the product page and in the images, the manufacturer also notes other “green” choices it made – like how the diapers are “free from harsh chemicals,” have “no lotions, parabens, fragrance, latex, or chlorine bleaching,” and use “non-toxic, water based inks.”

The product images themselves also have an eco vibe to them with photos of babies in green grass fields, or mothers cuddling little ones with flowers and trees all around them.

Also like Honest.com’s diapers, the Earth + Eden diapers come in prints instead of just plain white. However, its print is not all over the diaper as with Honest’s diapers – just a band at the top. (And frankly, Earth + Eden’s prints are a little boring by comparison.)

But the new diapers may not be competing so much on looks, as they are on price.

The diapers range in price from $0.21 each (size 1) to $0.51 each (size 7), which puts them more in line with a mainstream disposable diaper brands, like Luvs, Huggies or Pampers – not premium diapers like Honest or Pampers Pure, for example.

The website This Just In was first to spot the diapers’ launch, and notes that the manufacturer identifies themselves as by “First Quality Enterprises” of Great Neck, N.Y.

Multiple sources initially told TechCrunch the diapers were a new private label. In addition, the listing for the Earth + Eden diapers shows up under a heading entitled “Our Brands” when shoppers search for baby diapers on Amazon’s site. (See photo below)

However, Amazon said that this is not an “Amazon” brand – it’s a new exclusive brand to Amazon.

Amazon explains that despite listing the product (as pictured above) as “Our Brand” that doesn’t mean it’s an Amazon brand. Instead, the company tells us it will refer to things that are manufactured by others but made exclusive to Amazon as “Our Brand,” as well.

That seems a bit misleading – the text should probably read “Amazon Exclusive,” in that case.

The new diapers arrived on Amazon in July, we’re told. Amazon Some customers received them for free through Amazon Vine, the retailer’s own program that connects manufacturers to trusted reviewers.

Diapers are a huge business, but one where Amazon could still do better.

While its Amazon Elements line of wipes had achieved a 14% market share as of the time the Mama Bear brand of diapers launched last November, those same diapers are currently the #46 best-seller in their category.

In addition, Amazon last year exited its Quidsi business, whose flagship property was Diapers.com. That URL now redirects to a landing page on Amazon.com, where baby products are listed. (The Earth + Eden brand appears on this page, as well, when you click on the link to view the diapers.)

The Honest Company now has its own Amazon storefront where shoppers can buy its diapers, overnight pants, lotions, shampoos, and other personal care products. The storefront was launched last year, as part of the business’ larger shift from e-commerce to omnichannel.

For The Honest Company, it was already difficult to compete with Amazon.com, despite its eco focus. Now, Amazon is adding products to its site that will directly compete with an Honest Company top seller.

Update, 9/17/18, 5:30 pm et: Post updated shortly after publication, as Amazon reached out to clarify the brand is a new exclusive product to Amazon.com, but is not a private label. See above text in bold for details.

News Source = techcrunch.com

Instagram Shopping gets personalized Explore channel, Stories tags

in Advertising Tech/Apps/Delhi/eCommerce/India/instagram/Instagram Explore/Instagram Shopping/Instagram Stories/mobile/Pinterest/Politics/Social by

Instagram is embracing its true identity as a mail-order catalog. The question will be how much power merchants will give Instagram after seeing what its parent Facebook did to news outlets that relied on it. In a move that could pit it against Pinterest and Wish, Instagram is launching Shopping features across its app to let people discover and consider possible purchases before clicking through to check out on the merchant’s website.

Today, Instagram Explore is getting a personalized Shopping channel of items it thinks you’ll want most. And it’s expanding its Shopping tags for Instagram Stories to all viewers worldwide after a limited test in June, and it’s allowing brands in 46 countries to add the shopping bag icon to Stories that users can click through to buy what they saw.

Instagram clearly wants to graduate from where people get ideas for things to purchase to being a measurable gateway to their spending. 90 million people already tap its Shopping tags each month, it announced today. The new features could soak up more user attention and lead them to see more ads. But perhaps more importantly, demonstrating that Instagram can boost retail business’ sales for free through Stories and Explore could whet their appetite to buy Instagram ads to amplify their reach and juice the conversion channel. With 25 million businesses on Instagram but only 2 million advertisers, the app has room to massively increase its revenue.

For now Instagram is maintaining its “no comment” regarding whether it’s working on a standalone Instagram Shopping app as per a report from The Verge last month.  Instagram first launched its Shopping tags for feeds in 2016. It still points users out to merchant sites for the final payment step, though, in part because retailers want to control their relationships with customers. But long-term, allowing businesses to opt in to offering in-Instagram checkout could shorten the funnel and get more users actually buying.

Shopping joins the For You, Art, Beauty, Sports, Fashion and other topic channels that launched in Explore in June. The Explore algorithm will show you shopping-tagged posts from businesses you follow and ones you might like based on who you follow and what shopping content engages you. This marks the first time you can view a dedicated shopping space inside of Instagram, and it could become a bottomless well of browsing for those in need of some retail therapy.

With Shopping Stickers, brands can choose to add one per story and customize the color to match their photo or video. A tap opens the product details page, and another sends them to the merchant’s site. Businesses will be able to see the number of taps on their Shopping sticker, and how many people tapped through to their website. Partnerships with Shopify (500,000+ merchants) and BigCommerce (60,000+ merchants) will make it easy for retailers of all sizes to use Instagram’s Shopping Stickers. 

What about bringing Shopping to IGTV? A company spokesperson tells me, “IGTV and live video present interesting opportunities for brands to connect more closely with their customers, but we have no plans to bring shopping tools to those surfaces right now.”

For now, the new shopping features feel like a gift to merchants hoping to boost sales. But so did the surge of referral traffic Facebook sent to news publishers a few years ago. Those outlets soon grew dependent on Facebook, changed their news room staffing and content strategies to chase this traffic, and now find themselves in dire straights after Facebook cut off the traffic fire hose as it refocuses on friends and family content.

Retail merchants shouldn’t take the same bait. Instagram Shopping might be a nice bonus, but just how much it prioritizes the feature and spotlights the Explore channel are entirely under its control. Merchants should still work to develop an unmediated relationship directly with their customers, encouraging them to bookmark their sites or sign up for newsletters. Instagram’s favor could disappear with a change to its algorithm, and retailers must always be ready to stand on their own two feet.

News Source = techcrunch.com

Walmart to acquire Mexico & Chile-focused grocery delivery service Cornershop for $225M

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Walmart is ramping up its grocery delivery business on the international stage with today’s announcement that it has acquired the crowdsourced, on-demand delivery marketplace Cornershop for $225 million. The rapidly growing service offers on-demand delivery from supermarkets, pharmacies and specialty food retailers in Mexico and Chile, which will continue following the deal’s close, Walmart says.

Founded in 2015, Cornershop last year raised $21 million in a round led by Accel, according to Crunchbase, in order to expand its service in Latin America. At the time, CEO Oskar Hjertonsson credited Instacart’s success in the U.S. as inspiring enthusiasm for grocery delivery in other international markets, as well, saying ” I think Instacart can build a profitable business in the US, as can we down here.”

To date, it has raised $31.7 million, Crunchbase says. Other investors include ALLVP, Creandum, NMT Network, Jackson Square Ventures, and Endeavour Catalyst.

Similar to Instacart, Cornershop works with contractors who visit the stores to shop then deliver customers’ orders. However, it also lets you order from several stores – like grocers, speciality wine or meat shops, and others – in one order.

The service has been expanding its reach a fast pace, Walmart’s announcement points out. Over the past 12 months, it has seen the number of unique customers double.

Cornershop’s three founders, including CEO Oskar Hjertonsson; COO Daniel Undurraga, and CTO Juan Pablo Cuevas, and their teams, will continue to run the business following Walmart’s acquisition.

“We are focused on making life easier for customers and associates by building strong local businesses, powered by Walmart,” said Judith McKenna, president and CEO of Walmart International, in a statement.

“Cornershop’s digital expertise, technology and capabilities will strengthen our successful businesses in Mexico and Chile and provide learning for other markets in which we operate. This is an opportunity to leverage both of our brands, as well as Walmart’s strong supply chain and store network. Combining Cornershop’s innovative, crowdsourced delivery platform with Walmart’s unique assets will allow us to accelerate growth for both companies, delighting our customers by saving them both time and money. We are excited to welcome Cornershop to the Walmart family,” she added.

The acquisition is one of several investments Walmart has made in order to compete on grocery delivery in international markets.

The retailer just last month announced it co-led a $500 million investment in Chinese online grocery service Dada-JD Daojia, which is part-owned by JD. And in January, Walmart partnered with Rakuten on a wide-ranging partnership that includes grocery delivery in Japan as well as the sale of Rakuten e-readers, e-books and audiobooks in the U.S.

Walmart’s top rival Amazon has also been focused on international expansions of its grocery delivery business, with launches in markets like London, Berlin and Tokyo, for example. It’s also aiming to bring its online shop to more countries through international versions of its site, as well as acquisitions of its own. Last year, Amazon bought SOUQ to go after the Middle East, and today it says SOUQ shoppers in the Kingdom of Saudi Arabia can now shop over 1 million products from Amazon’s Global Store.

Walmart says the Cornershop acquisition will be subject to regulatory approval and is expected by the end of the year.

News Source = techcrunch.com

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