Kaymu, a Rocket Internet-funded online marketplace for individuals and small shopkeepers, was launched almost two and a half years ago in Pakistan. Its business model relies on entering frontier markets in Asia where modern trade channels (i.e. hypermarkets, convenience stores) have not yet set foot.
The founders at Kaymu believe that the quick adoption of smartphones can help develop the ecommerce market as the primary retail channel even before the traditional brick-and-mortar retailers enter the market.
However, the open marketplace model employed by Kaymu faces several challenges such as counterfeit goods and increasing competition among local startups. Given the already low margins in frontier markets in addition to the challenges faced, it will be interesting to see how Kaymu continues to grow.
Entering the already-competitive market of online-to-offline (O2O) space in China, new wine startup BottlesXO, aims to provide consumers with quick delivery of mid-priced wines in major Chinese cities, with plans for future expansion to other cities in Asia.
The app allows consumers to shop for wines and also suggests food pairings to go along with each bottle. In addition, the app features the history of the type of wine, together with photos and descriptions of the vineyard.
So far, the company operates in Suzhou and Shanghai and has raised a USD1.7 million Series A round. They are preparing to raise their next round of funding to help them expand to other cities in Asia.
Once the major driver of sales growth, China and Hong Kong now pose the biggest drag on profits at Prada SpA, causing the company’s share price to drop by almost 50 percent over the last year.
Prada’s net profit fell by 25 percent in the first half due to slumping sales in China and Hong Kong. Local media in China also reported that Prada was discounting at its stores, a practice that is typically avoided by high-end luxury brands to avoid tarnishing its brand image.
According to CFO, Donatello Galli, the company expects to cut expenses and slow store openings. At the same time however, the company is working on a new line of handbags which it hopes to attract growth and higher margins.
According to CBRE’s latest report on the retail real estate sector, Tokyo is the world’s hottest city for new retailer expansion, attracting 63 new retail brands, followed by Singapore with 58.
Domestic demand in Tokyo is expected to grow via the government’s initiative to attract more tourists to the country. In Singapore, food and beverage operators were among the most active in snapping up new real estate leases.
On a related note, retailers still substantial growth opportunities in the Asia Pacific region as 41% of American retailers continue to focus on the Asia region, while 79% of Asian retailers continue to target their own regions for further business expansion.
Metro AG, Germany’s largest retailer, has formed an alliance with Alibaba to develop its ecommerce business and help more European consumer brands expand in the Chinese market. This comes as Metro recently completed its USD328 million acquisition of Classic Fine Foods Group, a Singapore-based distributor of gourmet food products.
One of India’s largest ecommerce companies, Snapdeal, announced that it will be introducing a new instand refunds system in its store, to attract more first time users to shop on its site.
Snapdeal has agreed to use the system refund all types of purchases, including offline and Cash-On-Delivery transactions. Snapdeal’s announcement comes after Flipkart made a similar move to provide refunds within 24 hours of receiving a returned product.
Major bookstore, Kinokuniya, has said that it had ordered 90 percent of Murakami’s Novelist as a Vocation to shake up the local publishing market. Kinokuniya is supplying more than half of what it ordered to local bookstores to ensure that online booksellers do not shut them out of the sales of the collection of essays.
According to Kinokuniya, the current distribution system of selling books from publishers to bookstores via distributors results in huge waste and high costs. As a result, the bookstore (one of Japan’s largest) is trying to disrupt the existing distribution method, in hope of reversing the decline in readership due to increasing online shopping and ebooks.
In the face of increasing shareholder pressure, China’s ecommerce companies such as Alibaba and JD.com have started to invest to pursue growth in rural areas. This comes at a time when growth in urban areas have slowed to 17% (compared to 41% growth in rural areas).
Alibaba is investing 10 billion yuan to set up 1,000 county-level distribution centers over the next 3 to 5 years, which will be operated by third-party service providers. On the other hand, JD.com intends to run its own network of warehouses while outsourcing deliveries to third-party logistics providers.
According to analysts, despite the high growth rate in rural areas, deliveries to rural areas make up only 10 percent of parcels generated from Alibaba’s marketplaces.