May 24, 2011
By the ZippyCart Content Team
A group of investors led by Australian millionaire James Packer recently invested 80 million dollars in ecommerce solution “Catch of the Day,” the overarching company that holds “Scoopon,” a leading Australian daily deals ecommerce solution and holder of the “Groupon.au” domain name (more on that later). The company, led by brothers Gabby and Hezi Leibovich, now weighs in at an estimated valuation of $200 million. The new influx of capital will allow Catch of the Day to expand its product selection. Packer had this to say regarding the acquisition:
“Unlike many other players in the market, the team’s proven experience in building profitable e-commerce businesses means they have the skills, supplier networks and economies of scale to keep growing and leading the market.”
And Packer would know. He has a proven track record of buying up great properties, keeping them successful, and reaping the rewards. A $20 million investment in PCTools turned into $60 in the long run. He got a similar turnaround on $100 million sunk into an online car ads site eventually grew into $462 million. Probably the biggest payoff has been the $442 million result of a $33 million investment in online job advertising site Seek.com.
Tech stocks have been big money for years, but their appeal has become more nuanced of late. Sure, there are still powerhouses like LinkedIn getting massive IPOs, and the looming threat of a Facebook IPO, which could be so huge that it threatens to absorb the entire solar system. But in Australia, however, the tide could be turning the other day, with investors focusing on smaller niche companies. According to analyst Sam Yip with Telsyte:
“The bigger companies usually go in with something covering the entire country, but people are shifting to niches and that’s why you’re seeing that now.”
Recently Groupon (the real Groupon) just acquired CrowdMass, admittedly as more of a talent grab. They are still behind the eight ball, trying to compete with the Leibovitch brothers, who got the drop on the multinational daily deals giant by “squatting” on the Groupon.au domain name before Groupon could even expand into Australian. With this recent load of investment money from Parker, their reach and war chest may make them unstoppable.
Meanwhile, also on Packer’s ecommerce solution radar, his Ellerston Capital sunk some money into Deals Direct. They then turned around and bought up Kids Store. Money is contagious. The more of it there is going around, the more people it touches.
May 11, 2011
By the ZippyCart Content Team
- Australian supermarket Coles is experimenting with allowing shoppers to buy through their ecommerce solution and pick up in person.
Finding a way to integrate their ecommerce solution with the usuall real-world experience of grocery shopping has been a struggle grocery chains have been enduring for years. Growth in the online retail sector has been expanding steadily with the proliferation of broadband internet into more and more communities, along with decreased prices for computers. Wireless web through smartphones and other types of handheld devices has also contributed to the rise of online retail.
The problem for grocery stores has been how to take advantage of this boom. Online and electronic offers that can be cashed in at the store will online go so far. Lately more and more chains (like Walmart and others) have been allowing users to buy non-perishable goods online, and recently Walmart started testing out home-delivery schemes in communities around San Jose.
This is coupled with their roll-out of smaller, more numerous stores in more urban areas, as opposed to the normally suburban areas where Walmarts are usually found. Australian supermarket chain Coles is seeking to leverage their existing network of gas stations to support their supermarket locations. The new scheme, already being tested in a few Victoria-area communities, is to allow shoppers to pick out their groceries in their ecommerce solution, pay online, then pick them up at their convenience at the gas station location of their choice.
This is a strong system for a number of reasons. First off, it mirrors existing systems already in place at a number of major retailers. Walmart and Best Buy, for instance, already allow customers to shop and pay through their ecommerce solution, then pick up the goods in person at a store location. They have direct access to the in-store inventory, but can also pick from items available at warehouses which are then shipped to the store. These options usually don’t include shipping charges. These pick-up schemes are superior to home delivery in one way: the consumer decides when they get the goods, instead of waiting for the delivery man at home all day or worrying about missing him.
While Walmart and UK retailer Morrisons talk about new formats, home delivery, and increased online presence, Coles will be installing refrigerated storage lockers at numerous gas station locations (they have 650 of them!). Analysts caution that Coles will need to roll out a strong system right off the bat if they want to convince shoppers that this is a good idea, and something that they can make part of their lives.
May 6, 2011
By the ZippyCart Content Team
It’s been recorded that the US is one of the top countries in which consumers have fallen victim to hoards of ecommerce fraud, until recent studies have detailed an exponential increase of internet pirates in the land down under.
New data collected from over 2 million Australian credit and debit cards have revealed that ecommerce fraud is quickly blanketing the country, with concentrations around the more populated states like Queensland.
Even merchants who think their ecommerce software is protected from fraud have begun to see their solutions become subject to online buccaneering. RSA security specialist, Mason Hooper, explains that many of the Trojans spotted throughout the web are targeted toward small vulnerable ecommerce solutions.
“…security in these companies needs to be as big of an issue as it would be in larger firms as well,” says Hooper .
The collected data shows Queensland as ground-zero for internet fraud, with 1.4 percent of all cases showing criminal activity; Victoria follows closely behind, with 1.3 percent; New South Wales, Western Australia and Southern Australia trail the ecommerce fraud race, with online swindles showing up 1.1 percent, 0.5 percent, and 0.5 percent, respectively.
Austalian Capital Territory and Tasmania were the few states that showed the least amount of fraudulent activity, recording only 0.4 percent and 0.3 percent, respectively.
But, experts are saying it’s not the amount of online chicanery being recorded, but rather where it’s occurring. Hooper says that most of the fraud occurring in Queensland is focused around the moderately populated Sandgate, and veering from the more concentrated cities such as Brisbane and the Sunshine Coast.
Suburbs are actually the more common areas to experience online fraud. New South Whales, the suburb of Fairfield accounts for nearly seven percent of fraud, with similar sized suburbs, such as Gosford and Hurtsville, recording 5.4 percent and 2.1 percent, respectively.
So why is it that these smaller areas are more vulnerable to the infamous online Black Beard and not the denser cities, where there is obviously more money to be pilfered? Hooper explains that because these areas are less populated, it’s more likely that more people know each other and more than likely communicate amongst the whole community, causing the web infection to spread quicker.
Hooper explains that credit and debit card numbers are obtained by malicious software installations, usually caused by malware. Scammers create a false link or promote a viral video, luring users to click on infected files. Once clicked, the software kicks in and begins to extract personal data.
Once the data is obtained, criminals perform a number of illegal activities: buy plane tickets, take out a loan, set up fake eBay and PayPal accounts, rent an RV, email your girlfriend saying you want to see other people and that in fact you’ve been dating her sister for several months now.
As technology increases, so do the Trojans and malware, making it that much more difficult to detect, locate, and destroy. Hooper says the only thing one can do to protect themselves from these digital pirates is to be ever so vigilant. Keep your machines anti-virus and anti-spam software up to date, and regularly check credit card statements.
May 5, 2011
By the ZippyCart Content Team
I don't think you can buy a kangaroo or beautiful sunset on an ecommerce solution...
Australian merchants with ecommerce solutions are in the midst of the first wave of changes with the birth of Google Shopping in their country. The service (some say long overdue) allows Australian merchants to list their complete store inventories on Google’s expansive search database. This lets users find local (well, at least domestic) retailers who are selling online, meaning they can keep their money in their own country, which makes things like conversion rates, shipping, and returns much simpler.
The roll-out was pretty standard for a Google product, just an extra tab alongside all the other Google search functionality. Each reviews are mixed. Apparently the combination of some early buggy-ness and a lack of retailers on the service make for some pretty spotty results. One tester reported getting a laptop bag back at the first result when searching “laptop” (though this could easily be the result of someone’s over-zealous over-optimization of a page). There might be some initial issues matching product pictures to their descriptions as well.
Organizing data, a must-have for doing a proper product comparison on any ecommerce solution, was also a little spotty. Apparently shuffling your results by price overrides arranging them by category, which can be a real pain when you search “Chainsaw,” then re-order your results by price, putting “Texas Chainsaw Massacre” at the top of your list (which, while it might be a horrifying and gory flick, is not what you want when you have an old tree on your property and need it gone).
The Australian ecommerce landscape has been experiencing some major action lately. Groupon (operating there as “Stardeals”) recently acquired home-grown daily deals site “Crowdmass,” in what the daily deals giant calls more of a “talent acquisition” than a real buyout. Australian ski equipment retailers also launched a pushback against foreign ecommerce solutions by imposing a “fitting fee” for customers coming into their shops to try on ski boots so they could get their sizing right, then going off to purchase them (cheaper) online. As ecommerce solutions become more prevalent in the land down under, retailers and entrepreneurs will continue to evolve and adapt.
May 3, 2011
By the ZippyCart Content Team
So many ecommerce solutions vying for your daily deals business!
The daily deals market might just be one of the most competitive sectors for any ecommerce solution. For industry leader Groupon, their latest battlefields are in the east, where they face an uphill (some might say “losing” battle) in China and are the underdog in Australia. Their latest tactic to gain ground: acquire burgeoning deal site “Crowdmass.”
Crowdmass (whose name conjures up images of “critical mass,” the minimum amount of fissile material necessary for a sustained nuclear chain reaction) was an Australian deals site started by three friends: Tim Wu, David Wei and Ying Wang. At present Crowdmass and Groupon (operating in Australia as “Stardeals”) each control extremely small portions of the overall daily deals market. According to Sam Yip, a senior research manager at analyst firm Telsyte, the four biggest players in the Australian daily deals market are Scoopon (more on them below), Spreets, Cudo and Jump on It. Combined they control 80% of the action.
Yip says that Groupon’s deal with Crowdmass was a surprise:
“It looks like Groupon is looking to acquire at the lower end of the market. Everyone expected their first acquisition to be a much bigger operator. Crowdmass is very small. They’re obviously looking to build their database.”
No one knows what Groupon in thinking for sure, despite the fact that they are still the little guy in the fight in Australia (and China). The “never say die” atmosphere that permeates the modern business world can make it hard to get a clear message. You’ll never hear an official or representative from ever admitting that their business’ performance is anything less than where they want it to be.
Says Alexandra Podeanu:
“It is not our defined objective to acquire someone but you never say no. Our plans are to grow organically. Crowdmass is more a talent buyout. …Absolutely we want to be number one…I expect we will be a top three player by the end of the year.”
In Australia, however, Groupon’s troubles are largely not their fault (the way less-than-stellar management and some slightly off-target commercials featuring Tibet spelled woe in China). It all started with a blatant case of domain-squatting by some opportunistic businessmen in Australia who scooped up “Groupon.au” and put up a daily deals ecommerce solution site called “Scoopon.” They also incorporated a business called “Groupon Pty.” The end result was Groupon getting bogged down in legal action, losing ground and time in the Australian daily deals market, and just now getting a grip to pull themselves up to the top. It’s going to take a while.
April 11, 2011
By the ZippyCart Content Team
Brick-and-mortar retailers are lashing back at free-loading consumers by charging a fee for trying on clothing. Customers at some Australian ski shops are now being slapped with a $50 “fitting fee” to try on ski boots.
The charge, which is refunded if the customer buys a pair of ski boots in-store, is the product of an ever growing ecommerce trend where people will visit a store to try on clothing items then purchase the actual items through an online ecommerce solution at a better price.
With hopes of leveling the playing field, brick-n-mortar retailers want the federal government to abolish the tax break for overseas retailers, who are exempt from the 10 percent goods and services tax as well as the import duties of 10 to 15 percent on items costing less than $1,000.
Assistant Treasurer Bill Shorten explains that retailers need to look beyond the fact of discounted online shopping and focus on the advantages of face-to-face interaction and producing immediate customer service, something ecommerce solutions at webstores just can’t deliver.
“Competition is about more than just the price,” says Shorten. “Consumers might be able to find something cheaper online, but they won’t have access to personal service or advice.”
International Fashion Group managing director, David Mendels is less than enthused about Shorten’s response to the increase in overseas shopping, saying his turnover has dropped by 25 percent as Australian consumers turn to digital shopping carts for tax-free designer jeans directly from the US. Mendels says his revenue has fallen by at least $100,000 a month, and sales of True Religion designer jeans dropped by 8000 pairs in the last three months of the year. Following the lead of Australian retail giant Myer, Mendels has been playing around with the idea of setting up a foreign company to sell and mail his wares over the internet from Hong Kong.
As for the ski shops charging a fitting fee, they claim it’s a necessary evil that will hopefully deter potential customers from taking an unfair advantage of the ski shop’s services. Snowsports Industry of Australia chief executive Eric Henry yesterday said retailers had to pay high wages for specialist boot-fitters, who could spend the best part of two hours helping customers try on boots.
“Their time is valuable,” he said. “People will wander into a shop and spend an hour or two with the boot fitter, then go out and buy them off the internet…the owner of the store wants to ensure that if he doesn’t get the sale, at least he pays for their time.”
One can’t help but feel for these brick-and-mortar retailers. They are beginning to find themselves overwhelmed with alternative ecommerce solutions, staring down the barrel of becoming an unnecessary service; but charging consumers a ‘fitting fee’ (expensive one at that) is only a temporary fix that may create more problems in the long run than it solves.
March 7, 2011
By the ZippyCart Content Team
Search engine giant Google has been reported to be teaming up with ecommerce software developer MYOB in attempts to offer free website hosting to Australian small businesses for free. “Getting Aussie Business Online” aims to provide free websites to small businesses in Australia using the MYOB Atlas website creation tool.
The deal will provide online merchants with a free year of hosting, two years of domain registration (using .com.au.addresses), and $ 75 worth of AdWords. Upon expiration of the agreement, businesses can opt to continue receiving these services for $5 per month for hosting and $30 every two years for domain name registration.
According to the companies, millions of Australians regularly log on to research local shops and services, but yet two-thirds of Australian small businesses are unsearchable because they don’t have a website. Google and MYOB has realized that its a business owner’s lack of time, knowledge, and money that keeps them from obtaining a webpage or even ecommerce solution of their own.
“Websites don’t have to be fancy or expensive,” says Google’s head of local business, Claire Hatton. “Most of the time people are just looking for your phone number, your location of you have one, and a little bit of information that lets them know you can rebuild their kitchen landscape their garden or whatever they’re looking for.”
MYOB says a basic site can be set up in as little as 15 minutes. With the basic set-up provided, businesses can display photos, feature opening hours and include descriptions of their business. According to MYOB CEO Tim Reed, one of the key benefits of creating a site through MYOB Atlas (beside being free) is it’s automatic optimization on Google.
Google and MYOB’s initial goal is the provide at least 50,000 businesses with a free website this year.
This offer could not only give businesses more exposure to a more diverse audience of web users, it’s the perfect milestone that can motivate merchants to explore ecommerce software and open their own online store.
January 14, 2011
By the ZippyCart Shopping Cart Reviews Content Team
Location, location, location! In a bold attempt to gain ground in the online deal space, LivingSocial has taken majority stake in Barcelona based Let’s Bonus, a group buying site that is a leader in the Spanish Market serving Portugal, Italy, Argentina, and Mexico. At the same time, Groupon has announced they have expanded their international presence into India, South Africa, and Israel. For LivingSocial, muscling up their international operations is vital to the company if they want to keep in stride with Groupon. Back in November 2010, LivingSocial made a similar move by gaining a majority stake hold in Australian group buying site JumpOnIt.com. The deal included a $5 million investment, although terms of the Let’s Bonus deal were not disclosed.
The new stake brings LivingSocial to 25 new markets and has added 16 million subscribers to their services through Let’s Bonus. They will also take in a sales team of more than 200 employees to further their operations. Additionally, Let’s Bonus’ discounted travel packages expands LivingSocial Escapes’ international potential, bringing more European vacation deals to LivingSocial subscribers. This totals Living Social’s operations into 10 different countries and is now live in more than 170 markets. However, compared to Groupon’s 50 million subscribers (and aggressively growing) across 500 markets in 40 countries, could Living Social be caught in a bit of a rat race?
There is no doubt that LivingSocial has much ground to cover. Groupon, who has now become notorious for saying ‘no thanks’ to Google’s offer, has recently received a mega round of funding that totals nearly one billion dollars. The giant deal site has found an insatiable appetite for expansion and has basically gone on a rampant shopping spree buying out their competitors around the world. With one billion dollars to spend, it may be very difficult for LivingSocial to go head to head with Groupon. As of now, they remain extremely optimistic and are only just a couple steps behind. LivingSocial is expected to book upwards of $500 million in revenue this year, which will put them on par with roughly how much Groupon took in last year. Recently, the company has been backed by online retailer Amazon, which invested $175 million in the company at the end of last year. Although LivingSocial does not command the exact same numbers as Groupon (and no one blames them), LivingSocial should definitely receive kudos for not backing down and persevering as a formidable competitor.
January 6, 2011
By the ZippyCart Shopping Cart Reviews Content Team
Daily deals giant Groupon is suing Australian competitor/imposter Scoopon. The competing daily deals site, is operated by Australian’s Gabby and Hezi Liebovitch, who also own homegrown Australian deal provider catchoftheday.au. Groupon’s problem with the two brothers isn’t that their competing business is just a carbon copy of Groupon, it’s that they preemptively bought “www.groupon.au” and registered the company “Groupon Pty” in Australia. This blocks Groupon’s options of opening up business in Australia as Groupon (although they are working on an Australian daily deals site as “Stardeals”).
The brothers’ tactic is an old one, commonly referred to as “domain squatting.” A third party seizes a specific domain name in the hopes that a company associated with that domain name (in this case, Groupon) will buy it from them. Usually the target company (again, Groupon) which has spent considerable time developing their brand identity and goodwill (and in Groupon’s case, a ton of money) will spend a little cash to get the domain name that they really want, attempting to keep the brand united and keep search results high.
True to this formula, Groupon reportedly offered the brothers almost $300,000 for the domain and associated business registration, which they initially accepted. However, building up a competing company under the name “Scoopon,” and attempting to saddle Groupon with those costs as well may have appealed more to them. They reportedly reneged on the deal, demanding that Groupon also buy their own Groupon clone!
This might have struck Groupon as something akin to adding insult to injury, so they fought back in two ways. First off by bringing the Liebovitch brothers to court, both in Australia and Illinois (where Groupon is based). The other prong of Groupon’s attack was in the court of public opinion, by presenting the following (somewhat snarky) petition in their blog:
“If you’d like to see Groupon grow in Australia, show your support by joining the “Groupon in Australia” Facebook Group, and post a note for Hezi Leibovich, politely asking them to accept the $286,000 (which we are still willing to pay) so we can get on with business. Not a bad paycheck for simply registering a domain name and company name and applying to register another company’s trademark!”
Look, Groupon is everywhere. They’re big enough to say “no” to Google. They just sold some guy into marriage. Let’s all not mess with Groupon, okay?