Amazon, Alibaba and eBay all had their latest figures out this week, while JD.com chairman and chief executive met Prime Minister Theresa May on her trip to China. Here’s what struck us about what they had to say on the changing role of marketplaces in the retail context.
Sales via marketplaces are still growing fast as more customers sign up
eBay reported record growth in its latest fourth quarter update, the last of its financial year. Revenue of $2.6bn (£1.8bn) in the quarter to December 31 was up by 9%, as active buyer numbers grew by 5% to 170m around the world, including the UK, Europe and its home US market. Over the full year, it made revenue of $9.6bn (£6.7bn), 7% up on the previous one.
"Q4 was a record quarter for eBay, representing the fifth quarter in a row of volume acceleration in our US marketplace," said Devin Wenig, president and chief executive of eBay. "We have made great progress transforming eBay while delivering meaningful growth and we expect further acceleration in 2018 as we continue to execute our strategy."
Amazon , meanwhile, has reported net sales of $60.5bn (£42.5bn) in its fourth quarter, up by 38% on the previous year, with net income – or profits – of $1.9bn (£1.3bn), up from $749m (£526.8m) a year earlier. Full-year sales of $177.9bn (£125.1bn) were 31% up, while net income of $3bn (£2.1bn) was up from $2.4bn (£1.7bn) a year earlier. The growth came as more new paid members joined Prime in 2017 than in any previous year, both in the US and around the world. Over the year, more than 5bn items were shipped via the Prime service.
The fastest growth of all came from Alibaba , which reported sales of RMB83 (US$12.7bn/£8.9bn) in the quarter, 56% up on the same time last year, with active customer numbers of 515m, up by 27m since September 30. Sales in its Singles Day Global Shopping Festival were 39% up on the previous year.
They’re staying innovative
Alexa is reinventing the customer experience, and Jeff Bezos says Alexa devices have beaten sales expectations. "Our 2017 projections for Alexa were very optimistic and we far exceeded them," said Bezos, Amazon founder and chief executive.
Earlier this week my colleague Paul Skeldon reported on eBay’s link-up with Mashable to create shoppable editorial. It’s a real step towards the headless commerce that will enable shoppers to buy from wherever they are online, not just from a dedicated ecommerce website. In eBay’s fourth quarter figures, the marketplace said strong holiday sales in its US market, allied to the "continued expansion of new user experiences" drove growth.
Meanwhile, Alibaba has focused on its interpretation of ’new retail’, which brings together online and offline channels. As of December 31 2017, it had 25 Hema stores, which, said Alibaba, "exemplifies the convergence of online and offline retail by leveraging our in-store proprietary technology, digitized supply chain system, consumer insights and mobile ecosystem to provide a seamless experience for consumers." It is also working with leading Chinese hypermarket the Sun Art Group to bring its online technology into the retailer’s more than 440 stores across China.
“Alibaba had another great quarter driven by the continued strength of the Chinese consumer and the wide and innovative range of services we provide for merchants and consumers,” said Daniel Zhang, chief executive of the Alibaba Group. “We are excited by the continued momentum in New Retail, which came to life during another record-breaking 11.11 Global Shopping Festival. We expanded the scale and footprint of our New Retail initiatives with the vision of delivering true convergence of the online and offline consumer experience through mobile and enterprise technology.”
They’re finding new ways that others can earn money
The fast growth of Amazon and eBay has come in large part because they enable others to earn money. Each of those people puts the effort into making their own businesses prosper, boosting the overall marketplace at the same time.
Amazon says its latest growth has come as it helped developers working on Alexa apps to make money too. “We’ve reached an important point where other companies and developers are accelerating adoption of Alexa," said Bezos. "There are now over 30,000 skills from outside developers, customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa, and we’re seeing strong response to our new far-field voice kit for manufacturers. Much more to come and a huge thank you to our customers and partners.”
New Alexa skills added during the quarter included beauty podcasts from Hearst and All Star game voting from the NBA. Those with premium paid content included the History Channel’s Ultimate History Quiz and The Ellen DeGeneres Show’s Heads Up! game. Meanwhile, those making devices from HP and Acer computers to Toyota cars are integrating the Alexa Voice Service, and the Dash Replenishment programme now enables smart appliances made by 3M, Hewlett-Packard and Bluestream, among others, to automatically reorder refills or replacements.
They’re a gateway to ever more new markets
Amazon’s Prime service opened in the Netherlands, Luxembourg and Singapore, while also enabling customers in Belgium to join Prime and shop in Dutch. Indian Prime members can now choose from more than 25m local products from third-party sellers.
Meanwhile, leading Chinese retailer JD.com this week said it aimed to sell £2bn of UK goods to Chinese consumers over the next two to three years. JD.com is to work with the Department of International Trade to make it easier for British companies to sell online to Chinese customers via its website. JD.com said that its sales in 2017 grew by 100% on the previous year. Among the most popular brands were Dyson, Clarks, Johnnie Walker and Lipton.
“Many British brands recognise the huge potential of China’s enormous e-commerce market,” said Richard Burn, Director General of DIT China. “JD truly understands what Chinese consumers want and has the resources to help British brands ensure success in the region. We’re looking forward to working with JD to bring more British brands to China in the future.”
Prime Minister Theresa May, who was on her first official state visit to China since becoming Prime Minister, met with JD chairman and chief executive Richard Liu to discuss, among other things, plans to help more UK brands reach JD’s more than 266 million customers.
The number of UK brands on JD has doubled over the last two years, with sales in 2017 growing 100% year-on-year. World famous brands Dyson, Clarks, Johnnie Walker and Lipton are among the most popular with JD consumers. Over the past three years, Dyson sales on JD have increased by more than 60 fold. One of the first steps in the new working relationship will be a 24 hour Celebrate Britain sales promotion for UK products this April as the site looks to introduce the "best of Britain" to Chinese customers.
“We’re pleased to be working with DIT to make it easier and more convenient for British brands to enter the Chinese market,” said Winston Cheng, president of international at JD.com. “We’ve seen rapid growth in demand for British products from our consumers in recent years, and will look to showcase the ‘Best of Britain’ on our platform even more through this agreement.”
They’re finding new and easy ways to pay
The Amazon Go store in Seattle now offers shoppers checkout-free shopping. Purchases are instead updated in the dedicated Amazon Go app as the shopper adds them to their basket, and at the end debited from their account, using stored payment details. "The checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, machine learning, and sensor fusion," said Amazon in its latest figures.