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Happy Friday, everyone! We’re halfway through May and the second quarter of 2015. With back-to-school and the holiday season preparation still a few months out, right now is great timing for ecommerce players to make big moves. From the unlikely pairing up of Walmart and Alibaba, to the 350 alcohol distributors gearing up for door-to-door delivery, mobile applications are changing the face of ecommerce as we know it.
Below, catch up on this week’s top ecommerce news to stay in the know on the industry’s biggest movers and shakers.
Walmart and Alibaba Team Up to Tackle International Mobile Commerce
If you can’t beat them, join them –– or so it appears this old mantra is Walmart’s newest international strategy. In an announcement on Wednesday, Walmart said that it will soon begin accepting Alipay, Alibaba’s version of a mobile wallet, in all of its Chinese stores. To help this initiative gain serious traction with consumers, customers using Alipay at Walmarts in China will get cash back of up to RMB 15 ($2.42) on their purchases for the next month.
Up to now, Alibaba, the world’s largest ecommerce retailer, has been heralded as the biggest competitor to both Amazon and Walmart, which makes the news that America’s most notorious big box chain and China’s quick-to-conquer-all commerce platform will soon work together all the more unexpected.
However, with the need to optimize both mobile commerce and international business, the companies are leaning on one another to boost their bottom line and innovation. For Walmart, which has been struggling for years in the Chinese marketplace, the partnership will help to bring more foot traffic into its 400 China-based stores. For Alibaba, this is an opportunity to further the adoption of Alipay as the company sets it sights on competing with the likes of Apple and Google on similar mobile wallets.
Interestingly, back in the U.S., Walmart has been the most vocal mobile payment hold-out. It has so far refused to accept payment through Apple Pay in favor of holding onto an independent mobile payment application, CurrentC. CurrentC was announced more than three years ago and forged by a dwindling partnership of dozens of retailers. That application is still in beta testing, and retailers including Walmart and Target continue to delay utilizing mobile payment competitors to CurrentC, including Apple Pay and Google Wallet. Other retailers, however, like Best Buy and Home Depot, have recently forgone the CurrentC waiting game, and opened their stores to accepting mobile payment options popularly used by the public.
In addition to the Alipay news, Walmart and Alibaba also helped mobile messaging app Tango break into the mobile commerce industry this week. This partnership will extend Tango’s reach into the mobile shopping side as its 300-some million users can now browse and shop on Walmart.com or AliExpress via the Tango shopping app.
In all, it looks like Walmart’s business strategy has shifted in order to gain the upper hand in mobile commerce abroad.
Alcoholic Beverage Delivery Coming Soon to a City Near You
Another industry slow to embrace ecommerce is alcohol –– but that is about to change. This week, the largest liquor distributors in the U.S. invested in a startup technology company, hoping to accelerate ecommerce in the alcohol industry.
The Wine & Spirits Wholesalers of America, which represents more than 350 distributors in the U.S., acquired a minority stake in Drizly Inc., a tech company started to enable consumers to place mobile orders for alcoholic beverages. With the news of the acquisition, Wine & Spirits Wholesalers said it will encourage liquor stores throughout the U.S. to use Drizly, which is trying to increase its city-based door-to-door delivery service of alcoholic beverages.
With the minority stake and extra capital, Drizly upped its plans to open in 12 additional U.S. cities this year to 18 –– meaning the service will be available in 30 cities by end of year, effectively boosting its total retail sales to more than $100 million.
The major hurdle for the alcohol industry in expanding its ecommerce presence has been the need to verify that someone is 21 years or older before they purchase. Drizly has solved that problem, it says, by equipping delivery people with iPhones carrying software that can scan an identity document and determine if it is valid.
In all, it looks like mobile and delivery are two ecommerce services the bigger brands are struggling to provide –– and for which tech disruptors are effectively solving.
The Wearable Tech Industry is Booming — And FitBit is Proof
Sure, the Apple Watch may be easy to hack, not to mention unaffordable for most, but one thing is very clear in 2015: the wearable technology market is booming. For proof, take a look at FitBit’s IPO filing for $100 million on May 8. That’s right –– a wearable technology company is about to go public.
“It really signals that the fitness tracker category has finally penetrated the mass market,” Wes Henderek, an industry analyst with the NPD Group, told CNET. “It’s no longer just a niche category and is appealing to a much wider range of consumers who are not fitness buffs.”
Beyond FitBit’s product category, however, there are multiple unusual –– but extremely positive –– data points to note on this particular IPO. One of them is this: most tech companies go public prior to profitability, but not Fitbit. In 2014, the company ended the year with $745.4 million in revenue, generating net income of $131.8 million with adjusted EBITDA of $191 million. That’s a significant improvement over 2013, when it earned $79 million on $271.1 million in revenue.
So, the company is extremely profitable and its potential competitors list is equally impressive, including Apple, Google and Microsoft. Keep in mind that FitBit first hit the market in 2011, gaining serious market saturation only a year ago.
With that in mind, the wearable technology industry isn’t going anywhere anytime soon. The technology is already common place at tech startups and some insiders predict it will soon be mandatory wear for those in the insurance, field service, event management and retail industries very soon. What’s more is that some studies are even showing wearable technology is improving employee happiness and productivity.
Looks like the wearable tech industry is one in which your online business may want to diversify.
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