The Global eCommerce Newsletter 05.15.17 (No. 55)

[U.S.] Amazon Makes Major Push Into Furniture
Amazon is making a major push into furniture and appliances, including building at least four massive warehouses focused on fulfilling and delivering bulky items. The company is expanding its selection of products in the category, with offerings including Ashley Furniture sofas and Jonathan Adler home décor, and it is adding custom-furniture design services. Amazon is also speeding up delivery to one or two days in some cities. The retailer already has an approximately 17% market share in the broader home furnishings category, according to Morgan StanleyFurniture is one of the fastest-growing segments of U.S. online retail, growing 18% in 2015, second only to groceries, according to Barclays. About 15% of the $70 billion U.S. furniture market has moved online, researcher IBISWorld says.

Amazon is expected to rely on XPO and other third-party logistics providers to manage distribution centers and handle delivery of furniture and appliances for the near future. Companies such as XPO, Pilot, and Estes Express Lines are filling in a void left by UPS and FedEx to handle bulky items. Estes Express Lines plans to expand its new service to a majority of its more than 200 U.S. terminals by the end of 2017.

[Netherlands] AliExpress partners with postal service PostNL in the Netherlands
AliExpress, the business-to-consumer ecommerce marketplace of Alibaba, has selected Dutch postal service PostNL as the delivery partner for the majority of its packages to the Netherlands. Normally, consumers have to wait for weeks until orders from China arrive at their homes, now orders can arrive within 5 to 7 business days.

[Canada] Canadian Tire trials home delivery for online goods
Canadian Tire announced last Thursday that it will begin a trial of online home delivery orders this fall, but offered no further details about its location or scope.

The country’s biggest seller of sporting goods and housewares famously scrapped its sales website in 2009 after nine years, and relaunched it in 2013 as a click-and-collect model, allowing customers could pick up goods bought online at their local Canadian Tire stores.

[Germany] German grocery business: AmazonFresh enters the fray
AmazonFresh will be available in Berlin and Potsdam and exclusively to Amazon Prime members with a minimum purchase of 40 euros ($43.5). AmazonFresh will offer around 85,000 products from a wide variety of Berlin stores. All orders made before noon will be delivered on the same day while deliveries can be made in two-hour windows from 5 a.m. to 10 p.m.

According to German Retail Federation (HDE), just 1 percent of annual revenue in the German grocery sector generated through online purchases. Furthermore, the HDE estimates that two-thirds of Germans have never ordered groceries online while just 6 percent are regular online food shoppers. In addition, Germany has the fourth-highest number of stores per capita in the EU, according to 2016 figures from data analysts Nielsen. AmazonFresh will also face strong competition from other major players in the German grocery business such as REWE, Lidl, Aldi and the Metro Group.

[China] First quarterly profit recorded
Chinese e-commerce company has posted a surprise profit, its first since listing in 2014. Sales for the quarter to the end of March reached 76.2 billion yuan (US$11 billion) and quarterly profit was 239 million yuan. Last June, Walmart increased its own stake in to 12.1 per cent after exchanging its China e-commerce business for a 5 per cent stake in The etailer has since geared up its effort to integrate with Walmart’s business in China and its international resources. In the first quarter, the Chinese company’s cross-border shopping site JD Worldwide partnered with Asda, Walmart’s UK supermarket retailer.

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