Displaying items by tag: online shopping

Google files appeal against $2.8bn EU antitrust fine

Written on Tuesday, 19 September 2017 10:45

Alphabet-owned Google is fighting back against the $2.8 billion antitrust fine it was given by the European Commission in June this year. The Californian tech giant has filed an appeal against the fine, which was the largest penalty ever given by the European Union’s regulator.

The European Commission had ruled that Google’s positioning of its own shopping comparison service at the top of Google search results was an abuse of power. If the practice continued, the Commission said, more fines would come Google’s way.

At the time when the fine was imposed, the EC’s Competition Commissioner, Margrethe Vestager, said Google was conducting activity that was “illegal under EU antitrust rules.” Google “respectfully disagreed” with the ruling, but was given 90 days to end its “anti competitive” practices or else face another fine amounting to 5 percent of the average daily global earning of Alphabet.

The company “has systematically given prominent placement to its own comparison shopping service,” the Commission claims. Furthermore, “Google has demoted rival comparison shopping services in its search results.”

For instance, rival comparison shopping services appear in Google's search results on the basis of Google's generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. 

Evidence, according to the Commission, shows that even the most highly ranked rival service appears on average only on page four of Google's search results, and others appear even further down.

Google's own comparison shopping service is not subject to Google's generic search algorithms, including such demotions. As a result, Google's comparison shopping service is much more visible to consumers in Google's search results, whilst rival comparison shopping services are much less visible.

Google's “illegal practices” have had a “significant impact” on competition between Google's own comparison shopping service and rival services, the Commission claims. They allowed Google's comparison shopping service to make significant gains in traffic at the expense of its rivals and to the detriment of European consumers.

Given Google's dominance in general internet search, its search engine is an important source of traffic, the Commission claims. As a result of Google's practices, traffic to Google's comparison shopping service increased significantly, whilst rivals have “suffered very substantial losses of traffic on a lasting basis.”

The Commission is now looking at other areas where it suspects Google may have abused its monopoly power, notably its Android mobile operating system, speculates BBC Technology Correspondent Rory Cellan-Jones. The Commission’s ruling against Google “was seen as just the first shot in a wider campaign,” he said.

Published in Government

E-commerce giant Amazon has launched ‘Instant Pickup’ in the US – a free service where goods purchased online can be picked up by consumers from select locations within two minutes or less, instead of waiting hours for an item to be delivered, in the company’s latest move into brick-and-mortar retail.

“As shopping behaviors continue to evolve, customers consistently tell us that they want items even faster,” said Ripley MacDonald, Director, Student Programs, Amazon. “Whether it’s a snack on-the-go, replacing a lost phone charger in the middle of a hectic day or adding Alexa to your life with an Echo, Instant Pickup saves Prime members time. While Instant Pickup is available at select pickup locations today, we’re excited about bringing this experience to more customers soon.”

Items can be picked up at five of Amazon’s fully staffed pickup locations in Los Angeles, Atlanta, Berkeley, Calif., Columbus, Ohio, and College Park, Md. Items available with Instant Pickup include snacks, drinks and electronics, as well as some of Amazon’s most popular devices.

The Amazon App lists hundreds of “need-it-now” items like food, cold drinks, personal care items, technology essentials and Amazon devices like the Echo, Echo Dot, Fire TV and a selection of Fire tablets and Kindle e-readers. Users can browse the selection, place an order, even add last-minute items to an online order and pick it up from a self-service locker – all within two minutes or less.

Amazon said it would purchase Whole Foods Market for $13.7 billion in June, and has come to realize that certain transactions such as buying fresh produce are difficult to shift to online buyers. The company is betting on shifting shopping habits and catering to impulse buying.

Regular brick-and-mortar retailers struggle to keep up with e-commerce giants like Amazon, who offer more convenient options for shopping, even more so now with its Instant Pickup service. Before the launch of the new service, the fastest shoppers could expect to have an item delivered was one hour via the company’s Prime Now program, or within 15 minutes for grocery orders via AmazonFreshPickup.

Instant Pickup is available at five select pickup locations in the US and will be available at more locations in the coming months, Amazon said. The company operates a total of 22 staffed pickup locations on or near college campuses across the country.

Published in Apps

Reports indicate that Amazon is renewing talks to purchase UAE e-commerce site Souq.com for as much as $650 million after discussions stalled in January due to a disagreement over the price. Other firms that sought to purchase Souq.com included mall operator Majid Al Futtain.

Souq.com accounts for about 78 percent of e-commerce in the Middle East and North Africa, which means all of its coverage, will soon be a part of Amazon’s portfolio. According to Reuters, Amazon had agreed to the acquisition.

The e-commerce platform was valued at $1 billion in its last funding round in which it raised $275 million from investors such as Standard Chartered. Other investors in Souq.com include Tiger Management and South Africa’s Naspers Ltd. Reports suggest that the valuation of the acquisition deal is less than Souq.com’s last valuation.

Amazon will now have to take on Souq.com’s new competitor, the recently announced Noon.com, a $1 billion rival platform by Emirati real estate and property tycoon Mohamed Alabbar and backed by the Saudi Public Investment Fund. However, Noon.com missed its January launch, and no update has since been released.

Souq.com was an attractive bet for Amazon which hasn’t penetrated the MENA region in comparison to other markets such as India. Analyst Colin Sebastian from Baird Equity Research believes the company will likely draw experience from its 2004 acquisition of Joyo.com to gain a presence in China.

Souq.com could prove to be extremely lucrative for Amazon, with its 8.4 million product offering, after expanding into books and groceries. It operates directly in the UAE, Egypt, Saudi Arabia and Kuwait, and also does shipping to Oman, Bahrain and Qatar.

Published in Finance

Yahoo Japan Corp., formed as a joint venture between the American internet company Yahoo! and the Japanese company SoftBank, saw its latest quarterly earnings jump the most since 2013. The company attributed the earnings to growth in advertising and online shopping via smartphones.

Yahoo Japan shares surged as much as 17 percent in Tokyo and hit their daily upper price limit, according to Yahoo Finance. The shares were “15 percent higher as of 10:35 a.m. – adding about $3.4 billion in market value.”

The company’s operating income in the quarter through December was 58.1 billion yen ($460 million), compared with the 49.5 billion yen average of estimates compiled by Bloomberg. Analysts predicted sales of 219.5 billion yen, which were proven wrong when Yahoo Japan reported sales of up to 221.4 billion yen.

Yahoo Japan has been pushing into smartphones, which accounted for more than half of all advertising revenue for the first time in the company’s history. Online shopping through its auction service also gave Yahoo Japan a boost due to tighter cost controls and higher spending by users. In addition, the company’s financial services business, which settles online transactions and provides credit cards, performed better than expected by analysts.

“Almost all businesses such as ads, paid membership, shopping and credit cards were well-managed and provided positive surprises,” said Naoshi Nema, an analyst at Cantor Fitzgerald, in a Feb. 4 report about the company. “We were relatively pessimistic on its future potential but we now change our view and believe its sustainable growth.”

The analyst has since upgraded his price target for Yahoo Japan to 660 yen per share from 400 yen, and also boosted his outlook to overweight from neutral. Japanese financial services company Nomura Holdings Inc. also increased its price target for Yahoo Japan to 640 yen from 590 yen.

Yahoo Japan has the benefit of operating one of the country’s most popular websites providing everything from news aggregation to shopping through its auction platform. Yahoo Finance reports that monthly active users grew 16 percent from the previous year to 37.3 million, representing about a third of Japan’s population.

SoftBank Group Corp. currently stands as Yahoo Japan’s largest shareholder, with 36.38 percent of outstanding shares, according to Bloomberg data. California-based Yahoo! Inc. is Yahoo Japan’s second-largest shareholder, with 35.7 percent.

Published in Finance

Chinese e-commerce platform Alibaba reported strong revenue growth on Tuesday, 24 January, as demand for online shopping in China grows. The company said its revenues leapt 54 percent year-on-year for the quarter ended in December last year. Alibaba’s revenue reached 53.25 billion yuan ($7.7 billion) in the quarter, the company said in a statement.

Alibaba’s revenue is seen as a benchmark for China’s increasingly important consumer sector. The company’s net income attributable to ordinary shareholders was 17.9 billion yuan ($2.57 billion) in the quarter, up 43 percent over the same period the previous year, AFP reported.

Alibaba Group’s chief executive, Daniel Zhang, said the result “demonstrates the strength of the Chinese consumer and Alibaba’s ability to create value across our vast ecosystem.”

Alibaba dominates the Chinese online commerce sector, with its Taobao platform estimated to hold more than 90 percent of the consumer-to-consumer market. In addition, Alibaba’s Tmall platform is said to handle over half of business-to-business consumer transaction.

However, the e-commerce giant has been on the defensive recently since the office of the US Trade Representative put Taobao on its annual blacklist, insisting it wasn’t doing enough to stop the spread of fake and pirated goods. It was a blow to Alibaba’s efforts to improve its international image and boost sales, even though inclusion on the black list doesn’t come with any direct penalties.

Alibaba’s billionaire founder, Jack Ma, met with Donald Trump in January and boldly pledged to create one million jobs in the United States, a move which some analysts said was intended to win goodwill against political risks.

Alibaba, often compared to eBay and Amazon, has moved beyond its core e-commerce platform and into sectors ranging from sports to entertainment. Revenue from digital media and entertainment soared 273 percent to $585 million due to increasing earnings from mobile services such as news feeds and game publishing and consolidating its management team, Alibaba said.

Another big move by the company in October saw Alibaba Pictures take a minority shareholding in director Steven Spielberg’s Amblin Partners, a film creation company that includes Dreamworks Studios.

Sales in Alibaba's core commerce unit rose 45 percent year-on-year to $6.7 billion. The number of mobile users grew 25 percent year-on-year to 493 million. The company’s cloud computing segment doubled in revenue over last year, with paying customers growing by more than 100,000 since the previous quarter, according to a statement.

Alibaba’s chief financial officer, Maggie Wu, said the company raised its revenue guidance for the 2017 fiscal year to growth of 53 percent year-on-year, from 48 percent. With $4.9 billion in cash flow the company will "continue investing in growth areas globally, including cloud computing, digital media and entertainment and innovation initiatives,” Wu said.

Published in Finance

According to Deloitte, China hosts the largest number of fast-growing companies in Asia-Pacific. The number of smartphone-based mobile Internet users in the vast state of China reportedly reached 780 million in 2015, representing 57 percent of the entire population. Even though massive social media website Facebook, along with other websites, is banned in China, social networking and e-commerce websites were among the most frequently visited by Chinese people.

The popular Renren social network (formerly Xiaonei) has many features similar to Facebook, and complies with PRC Government regulations regarding content filtering in China. As of 20 August 2013, there have been reports of Facebook being partially unblocked in China, however it remains officially blocked.

GSMA Intelligence reports that China had around 1.3 billion mobile connections in 2015. Its mobile Internet user-base (3G and 4G users) reportedly expanded 32 percent year-on-year in 2015, accounting for 62 percent of total mobile connections, 80 percent of which were pre-paid mobile connections. A report by Internet Society of China and the National Computer Network Emergency Response Technical Team/Coordination of China, released the information.

DigiTimes reports that when broken down by brand, Apple had the biggest share of active smartphone users in 2015 in China with 16.7 percent share, followed by Samsung (15.8 percent), Huawei (15.6 percent, Xiaomi (14.2 percent), Vivo (8.66 percent), Oppo (8.66 percent), Lenovo (6.9 percent), Coolpad (4.3 percent), HTC (3 percent) and LG (1 percent). The report adds that around 1.5 million malicious software applications were found in 2015 in China, 99.6 percent of which were based on the Android OS.

What’s more, as a result of China’s increased Internet usage, the country’s online shopping market reportedly expanded 36 percent in 2015 to CNY3.8 trillion ($586 billion) accounting for 12.6 percent of total retail sales of consumer goods. Mobile revenue of China’s top two online retailers accounted for a staggering 72 percent of total online turnover.

According to Beijing-based iResearch, B2C (Business-to-Consumer) spending in 2015 represented about 52 percent of the total online gross merchandising volume (GMV), which was up from 45.2 percent in 2014. This represents the first time B2C spending had a large share of online shopping than C2C. Overall, the B2C market in China grew 56.6 percent in 2015, while the C2C market grew by only 19.5 percent.

iResearch further predicts that as the Chinese market matures, growth could fall to 25 percent in 2017 and 20 percent in 2018 when GMV approaches a whopping CNY7.5 trillion. Furthermore, in 2017, B2C is expected to account for 64 percent of total online retail shopping in China.

Alibaba, founded by Jack Ma, maintained its leading role in the B2C market in 2015 with its Tmall, giving it a 58 percent share of the market, followed by JD.com with 23 percent share, and Suning with almost 4 percent share. Alibaba is by some measures considered to be the biggest online e-commerce company in the world. Its retail marketplace revenue grew by 42 percent in Q1 2016, to CNY18.3 billion, while mobile revenue surged 149 percent to CNY13.1 billion, encompassing almost 72 percent of total retail turnover, according to China Internet Watch.

Published in Finance