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Happy Friday, everyone! It’s been a long week packed with international news on ecommerce as well as announcements around interesting acquisitions and spin-offs.
From Staples acquiring Office Depot to consumer electronics lifting discount selling bans in India, the state of global ecommerce is experiencing high disruption as well as massive growth, both in the U.S. and beyond. Catch up on what you need to know about the most recent developments in the industry below.
Staples Acquires Office Depot, Sets Sights on Outcompeting Amazon
Staples announced Wednesday that the company would be buying competitor Office Depot for $6.3 billion, merging two of the U.S.’s largest office supply retailers. The announcement comes nearly 20 years after this same merger was proposed and then rejected by U.S. regulators.
“Staples began discussions to acquire Office Depot in September 2014,” the companies said in a news release. “The agreement has been unanimously approved by each company’s Board of Directors.”
It is still unclear whether or not the two companies will be allowed to merge.
It is still unclear whether or not the two companies will be allowed to merge. In 1996, the Federal Trade Commission voted 4-1 against it. The retailers took the ruling up in court, but lost. However, in 2013, Office Depot acquired and then merged with OfficeMax, bringing its annual sales up to $17 billion, with some 66,000 employees and 2,200 stores worldwide.
At the time of that merger, Staples was cited as owning 40% of the market with the Office Depot and OfficeMax group owning 35%. Now, however, it seems that 15% has grown, preferring to shop at outlets including Walmart, Costco and Amazon for cheaper deals.
“For normal stuff like paper, pens, folders and ink, I go to Costco and Sam’s,” said Thomas Kean, the owner of a property broker that employs 10 people in the Chicago suburb of Park Ridge. “I think most small business guys do the same thing.”
Staples was cited as owning 40% of the market with the Office Depot and OfficeMax group owning 35%.
Of course, when it comes to ecommerce, via which 40% of internet users worldwide have purchased an item, Amazon often reigns, especially when it comes to bulk items and cheap prices. Staples has long had a successful ecommerce strategy, though, and more than half of the retailer’s sales are online. In fact, Staples is the third largest online retailer in the U.S. after Amazon and Apple.
All said and done, the Staples/Office Depot merger will likely be approved and combined, this office supply hybrid will use both ecommerce and brick-and-mortar to beat Amazon at it’s own price and convenience game.
Sony, Samsung, Panasonic to Resume Ecommerce in India
China isn’t the only international marketplace gaining exposure via ecommerce. India, too, has been seeing a rising boom in online sales via digital marketplaces and this week, major consumer electronic brands including Sony, Samsung and Panasonic announced their plans to resume ecommerce in the country. These companies will now be encouraging trade partners to sell their products online, lifting a ban on such sales imposed due to heavy discounting on ecommerce marketplaces.
Snapdeal, Amazon India and Flipkart are leading India’s ecommerce boom, which is particularly strong in the northeastern states of the country. Sony, for one, has partnered with all three marketplaces to appoint ecommerce sellers of Sony goods on those platforms.
Snapdeal, Amazon India and Flipkart are leading India’s ecommerce boom.
“This will ensure customers would face no issues with product availability, serviceability and that pricing is stable,” said Sunil Nayyar, sales head at Sony India.
According to a report by research firm eMarketer, online retail sales in India are likely to surge 45% to $7.69 billion in 2015 and estimates have the Indian ecommerce segment hitting $32 billion in size by 2020. In all, however, ecommerce is India still makes up less than 1% of overall retail sales in the country.
U.S. Census Bureau Finds Small, Mid-Sized Businesses Core of American Economy
The U.S. Census Bureau updated its data on businesses this week. The data is a reflection of 2012 census data, and shows that 99.9% of businesses in the U.S. operate with less than 500 employees.
The report calls this a “powerful reminder that the economy is all about small and mid-size businesses.”
99.9% of businesses in the U.S. operate with less than 500 employees.
The industries that are most made up of small and mid-sized businesses are manufacturing, energy, telecommunications, pharmaceuticals, software and motion picture and sound recording.
“When policymakers make decisions regarding taxes, regulations, trade and protecting intellectual property, for example, impacting industries such as those above, it is critical to keep in mind that these sectors are overwhelmingly about small and mid-size firms,” the report stated.
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