deep dive: online marketplaces - coresight research · online marketplaces disrupt the traditional...

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DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

D E B O R A H W EI N S W I G M a n a g i n g D i r e c t o r ,

F u n g G l o b a l R e t a i l & T e c h n o l o g y d e b o r a h w e i n s w i g @ f u n g 1 9 3 7 . c o m

U S : 6 4 6 . 8 3 9 . 7 0 1 7 H K : 8 5 2 . 6 1 1 9 . 1 7 7 9

C N : 8 6 . 1 8 6 . 1 4 2 0 . 3 0 1 6

This report looks at online marketplaces, which bypassretailerstolinkbuyersandsellers.Thesecompaniescomprisea high-growth and fast-developing segmentwithin the retaillandscape:

1) The top three: Alibaba Group’s Taobao is the world’slargestconsumer-to-consumer(C2C)marketplace,sellingUS$295 billion of goods in 2015. Tmall (also AlibabaGroup) is the biggest business-to-consumer (B2C)marketplace, with US$191 billion in sales 2015. eBay isthe third-biggest marketplace, based on 2015 grossmerchandisevolume(GMV)ofUS$78billion.

2) Third-party sellers gaining traction: We estimate thatthird-party sellers onAmazon sold aroundUS$69 billionworth of goods in 2015.We forecast that Amazon willovertake eBay this year in terms of annual globalmarketplace sales. Additionally, Amazon looks likely tobecome amajoritymarketplace this year, as third-partysellers are expected to sell more units on its site thanAmazondoesitself.

3) Retailmarketplaces:IntheUS,Walmartisrampingupitsmarketplacebyrecruitingnewsellers,buyingJet.comandinvesting in JD.com. In Europe, Zalando has launched amarketplacemodelforbigfashionbrandsandhasstartedofferingfulfilmentonbehalfofitsthird-partysellers.

DEEP DIVE: Online

Marketplaces: Disrupting Retail

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TABLEOFCONTENTS

EXECUTIVESUMMARY........................................................................................................................3

MARKETPLACES:DISINTERMEDIATINGRETAIL....................................................................................5

THEWORLD’STOPB2CANDC2CMARKETPLACES:AMAZONLIKELYTOOVERTAKEEBAYTHISYEAR.....6

KEYCOMPARISONS:PROPOSITIONANDPRESENCE.............................................................................7

NEWDIRECTIONSANDDEVELOPMENTS............................................................................................10

ADVANTAGESOVERDIRECTRETAILING.............................................................................................12

1.MARGINGAINS..............................................................................................................................12

2.NOINVENTORYRISKS.....................................................................................................................13

3.GREATERCHOICEBOOSTSCUSTOMERSATISFACTION..................................................................13

4.FLEXIBILITYINENTERINGNEWMARKETS......................................................................................14

KEYTAKEAWAYS...............................................................................................................................14

APPENDIX:COMPANYTIMELINES......................................................................................................15

AMAZON............................................................................................................................................15

EBAY...................................................................................................................................................16

TMALL................................................................................................................................................17

WALMART..........................................................................................................................................18

ZALANDO...........................................................................................................................................18

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EXECUTIVESUMMARYThisreportlooksattheonlinemarketplacemodel,withafocusonrecentdevelopments,andtheadvantages ithasovertraditional,directretailing.Online marketplaces disrupt the traditional retail model by replacing itwithamoredirectrelationshipbetweenbuyerandseller.Similartootherdisruptors, such as Airbnb,Uber and Facebook,marketplaces aremerelyplatformproviders.

Weidentifythreephasesintheevolutionofonlinemarketplaces:

1) Directretailing:Inthemidtolate1990s,e-commerceintheUSandWestern Europe was dominated by direct retailing. The majorexceptiontothiswaseBay,whichwasthedominantmarketplaceinWesterncountries.

2) Marketplacemodel: Subsequently, inAsianmarkets suchasChinaandIndia,e-commerceemergedwiththemarketplacemodelatitscore. Sites such as Taobao, Tmall, Flipkart and Snapdeal dominateonlineretailthere.

3) Marketplace growth: Now, in the US and Europe, we are seeingmarketplaces grow substantially, both in number and sales, as bignamessuchasWalmartandZalandopilein.

Source:Shutterstock

AlibabaGroup’sTaobaoistheworld’slargestconsumer-to-consumer(C2C)marketplace,withUS$295billionin2015grossmerchandisevolume(GMV—thetotalvalueofgoodssold).Tmall (alsoAlibabaGroup) isthebiggestbusiness-to-consumer (B2C) marketplace, with US$191 billion GMV in2015.eBayisthethird-biggestmarketplace,basedon2015GMVofUS$78billion.

This year,Amazon looks likely tobecomea “majority”marketplace,withthird-partysellersexpectedtosellmoreunitsonitssitethanAmazondoesitself, and,byourestimates, it is set toovertakeeBay in termsof globalmarketplaceGMV.

AlibabaGroup’sTaobaoistheworld’slargestC2Cmarketplace.

Thisyear,byourestimates,AmazonissettoovertakeeBayintermsofglobalmarketplaceGMV.

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Walmartisrampingupitsmarketplacebybringingnewsellersonboard;ithas also acquired Jet.com and made investments in JD.com.Walmart isreportedly also looking into investing in Flipkart. In Europe, Zalando haslaunched a marketplace model for big fashion brands, and has startedofferingfulfilmentonbehalfofitsthird-partysellers.

Source:Shutterstock

Wenotefourbenefitstothemarketplacemodel:

1) Margingains:Themarketplacemodel ishighlyprofitable,becausethesitescanchargedouble-digitcommissionsforsimplyactingasaportal.

2) No inventory risks: Marketplaces are protected from the risksassociatedwithowningstock.

3) Greaterchoiceboostscustomersatisfaction:Shoppersareless likelytowalkawayunsatisfied,as the long tailofproductdemandcanbesatisfied at little effort to the retailer, in turn building loyalty andrepeatvisits.

4) Flexibilityinenteringnewmarkets:Amarketplacemodeloffersanasset-lightwayofenteringnewregionalmarkets.

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MARKETPLACES:DISINTERMEDIATINGRETAILMarketplacesareonepartofthewaveofindustrydisruptorsthatincludesnames such as Airbnb, Uber and Facebook. Similar to these firms, sitessuch as eBay, Tmall and Amazon’s marketplaces are purely platform-providersthatenableothercompaniestoprovidegoodsorservices;theydonotprovideanythingtangiblethemselves.

Asset-lightandinventory-less,marketplacesarenotretailers; infact,theycutoutretailers,whoholdinventory,curateproductandaddamarkup,infavor of a more direct relationship between shoppers and brands,manufacturers or other sellers. Marketplaces therefore disintermediatetheshoppingprocess—atleasttoanextent,givenconsumersstillinteractwiththemarketplaceasasubstituteforaretailer.

We identify three phases in the development ofmarketplaces, from thesomewhat peripheral position of these sites in the first wave of e-commerce inWestern countries to theexplosion inmarketplacesweareseeingtoday.

Figure1.EvolutionofE-CommerceandMarketplaces

Source:FungGlobalRetail&Technology

ArecenttrendistheemergenceofmarketplacesintheUSandEuropethatfocus on offering brands a showcase to sell new product, rather thanallowing small-scale sellers a chance to offload their unwantedpossessions. The charge into themarketplaces segment by retailers thatpreviously focused on an inventory model is bolstering this diversity:AmazonandWalmartareamongthenamesfromtheretailworldthatarerampinguptheirmarketplaceofferings.

In this report,we focus our comparisons on fivemajor or emerging B2CandC2Cmarketplacesites:Amazon,eBay,Tmall (includingTmallGlobal),WalmartandZalando.Thefollowingsectionsofthisreportconsider:

US/Europe:Retail-dominatede-commerce.

Keymarkeplaces:eBay

ChinaandIndia:Marketplacesbecomedefaulte-

comformat.Keymarketplaces:Taobao,Tmall,

JD.com,Flipkart,Snapdeal

US/Europe:Marketplaceboom;retailerspileinKeymarketplaces:Amazon,eBay,

Etsy,Walmart,Zalando

1990s

SimilartofirmssuchasAirbnb,UberandFacebook,sitessuchaseBay,TmallandAmazon’smarketplacesarepurelyplatform-providersthatenableothercompaniestoprovidegoodsorservices.

Today

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• ThetotalsalesofmajorB2CandC2Cmarketplaces,includingthosebeyondourfivefocuscompanies.

• Keymetricsforourselectedmarketplaces.

• Recentdevelopmentsandthemesinthemarketplacesegment.

• Fourmajorbenefitsofthemarketplacemodel,comparedtodirectretailing.

The report excludes business-to-business (B2B) marketplaces, such asAlibaba.com.

Weprovidetimelinesforourfocuscompaniesinanappendix.

THEWORLD’STOPB2CANDC2CMARKETPLACES:AMAZONLIKELYTOOVERTAKEEBAYTHISYEAR

WebeginbyrankingmajorB2CandC2CmarketplacesbyGMV—which isthe totalvalueofall thegoods thatareagreed tobesold.GMVtypicallydoesnot factor inproducts that are returned for refundsor transactionsthatarenevercompletedbecauseofcancellation.

Source:Shutterstock

Herearesomekeytakeaways:

• Amazon’smarketplaceGMVisrapidlyapproachingthatofeBay,weestimate. We expect Amazon marketplace to leapfrog eBay inmarketplace GMV this year, based on the trajectories of the twocompanies.

WeforecastAmazonmarketplacewillleapfrogeBayintermsofmarketplaceGMVthisyear,basedonthetrajectoriesofthetwocompanies.

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• JD.com is much smaller than its Chinese rivals Taobao and Tmall,whicharebothownedbyAlibabaGroup.

• In India, Flipkart iswell aheadof Snapdeal and it is growingmuchfaster. The still-small scale of these players relative to peers fromothercountriessuggestsmuchscopeforgrowth.

Figure2.SelectedMajorB2CandC2CMarketplaces:GlobalGMV(USDBil.)

2014 2015

Taobao 258.1 295.3

Tmall 136.9 191.1

eBay 79.6 78.1

AmazonMarketplace(est.) 51.2 68.7

JD.com 39.4 67.0

Rakuten* 23.1 22.2

Flipkart** 4 10-12

Snapdeal(Est.) 2-3 3.8-5.7

Etsy 1.9 2.4

*Domestic-marketGMVonly.**2015isthecompany’sstatedtargetfortheyearendedMarch2016.Thisisaprivatecompany,sodisclosureislimited.Source:Companyreports/FungGlobalRetail&Technology

WehavenodataonGMVforWalmart,whichrampedupitsmarketplacethis year, or Zalando, whichmoved into themarketplace format only in2015. Jet.com,which launchedonly in July 2015, had aGMV run-rate ofUS$1.2billionasatAugust2016,accordingtoitsnewparent,Walmart.

KEYCOMPARISONS:PROPOSITIONANDPRESENCE

Zalando’snewmarketplace isrestrictedtobrandsthatwanttoselldirectonitssite;small-scalesellers,ofthetypethatpopulateeBayandAmazon,donotsellonZalando.

Long-establishedeBayhasaheadstartinsellernumbers.

Source:Shutterstock

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Figure3.TypesofSellersonSelectedMarketplaces

Retailer TypeofSellers

Amazon Individualsandsmallandlargebusinesses.FulfilledbyAmazonenables businesses to sell without having to process, hold ordispatchinventorythemselves.

eBay Individualsandsmallandlargebusinesses.

Tmall Smallandlargebusinesses.

TmallGlobal Westernbrandsandretailers.

Walmart Selectedretailers.Sellersarevettedandpreviously theycouldonlysellonaninvitation-onlybasis.

Jet.com Smallandlargebusinesses.

Zalando Selected large fashion brands. Fulfillment by Zalando enablesbusinesses to sellwithout having to process, hold or dispatchinventorythemselves.

Source:Companyreports

Long-established eBay has a head start in seller numbers. However,becausesomemarketplacesfocusonlyonbrandsandretailersandnotonindividualsellers,thecomparisonisnotalwaysonalike-for-likebasis.

Walmart’sSeniorVicePresidentofGlobalMarketplace,SethBeal,statedthecompanyisaimingtohave1,000merchantsonitsmarketplacebeforethe end of 2016. However, press reports indicate the company hadalreadyreachedthistargetbytheendofSeptember2016.

Figure4.NumberofThird-PartySellersonSelectedMarketplaces

Marketplace SellerNumbers Period

Amazon 2millionsellers End-2014

eBay 25millionsellers 2015

Tmall 70,000brands;50,000storefronts 2015

TmallGlobal 5,400brands End-2015

Walmart 1,000merchants September2016

Jet.com 2,400partners August2016

Zalando 100brands End-2015

Source:Companyreports/InternetRetailer

Justasthetypesofsellersthemarketplacesfeaturecanimpacttheirtotalsellernumbers,sotoocantheirgeographicalpresence.eBayandAmazonenjoythewidestpresence.

eBayandAmazonenjoythewidestgeographicalpresence.

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Figure5.NumberofCountriesCoveredbySelectedMarketplaces

Marketplace Countries CountryCount

Amazon Brazil,Canada,China,France,Germany,India,Italy,Japan,Mexico,Spain,UK,US

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eBay Australia,Austria,Belgium,Canada,China,France,Germany,HongKong,India,Ireland,Italy,Japan,Korea,Malaysia,Netherlands,Philippines,Poland,Singapore,Spain,Sweden,Switzerland,Taiwan,Thailand,Turkey,UK,US,Vietnam

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Tmall China 1

TmallGlobal China 1

Walmart US 1

Jet.com US 1

Zalando Austria,Belgium,Denmark,France,Finland,Germany,Italy,Netherlands,Norway,Poland,Spain,Sweden,Switzerland,UK

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Source:Companyreports/InternetRetailer

Thefiguresbelowaregenerallythoseprovidedbythecompaniesontheirrespective websites. We expect that major sellers, such as big-namebrands, strike theirowndealswithmarketplaces,and that theseoperateondifferentfeescales.

Figure6.MarketplaceFees/CommissionsChargedasa%ofSellingPrice

Marketplace Fee(%)

AmazonAverage 15%

AmazonRange 7-45%

eBay 8-10%

Tmall 0.3-5%

WalmartAverage 15%

WalmartRange 6-20%

Jet.comTypical 15%

Jet.comRange 6-15%

Zalando Unknown


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Attheendof2015,Amazonsaiditwasfulfillingnearlyhalfofallthird-partysales,upfrom“morethan40%”attheendof2014.

NEWDIRECTIONSANDDEVELOPMENTSWeofferfulltimelinesofourselectedmarketplacesintheappendix.Here,wewrapuprecentdevelopmentsamongmajorglobalplayersandidentifykeysegmentthemesfromthese.

Enhancedfulfillment:

• Amazon has begun allowing goods shipped directly from somethird-party sellers tobeeligible for its Primeexpedited,no-chargeshipping program. Previously, only goods shipped by Amazon(whethersoldbyAmazonorbythird-partysellers)wereeligible.

• At the same time, the proportion of Amazon marketplace ordersthatarefulfilledbyAmazonisgrowing.Attheendof2015,Amazonsaid it was fulfilling nearly half of all third-party sales, up from“morethan40%”attheendof2014.

• Zalando isnowundertakingfulfillmentofordersplacedwiththird-partysellersonitssite.Similarly,Jet.com,launchedinJuly2015andrecentlyacquiredbyWalmart,offersfulfilmentoforders.

Cultivatingbrandrelationships:

• Big-name brands are pushing onto marketplaces such as Zalandoand Tmall Global which focus on providing dedicated shopfronts,andsoofferbrand-buildingopportunities.

• Amazon is crackingdownoncounterfeitswithnew“brandgating”feesandrestrictionsonselectedbrands.Sellersofselectedbrandsmustprovideinvoicesfrommanufacturersordistributors,andpayanonrefundablefeeofUS$1,500perbrand.

Source:Shutterstock

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Walmart’sacquisitionofJet.combroughtthelatter’s14.8millionproductlistings,210millionuniquevisitorsandUS$1.2billionGMVrun-ratetoWalmart.

• Brands such as Birkenstock are becoming nervous about allowingtheirbrandsontoAmazon,due tocounterfeiting. Inasimilarvein,some major brands are reported to limit the range of productsofferedonWalmart,toprotecttheirbrandimageinaprice-focusedoffering.

Competitionheatsup:

• Walmartlauncheditsmarketplacein2009,buthasbeengrowingitssellernumbersveryrapidlythisyearasitfocusesoncompetingwithAmazon. As a result, around onemillion SKUs are being added totheWalmartwebsitepermonth.

• Walmart’s acquisition of Jet.com brought the latter’s 14.8 millionproductlistings,210millionuniquevisitorsandUS$1.2billionGMVrun-ratetoWalmart.WalmarthasalsomadeinvestmentsinJD.comin China, taking its stake to around 10.8%. And it has reportedlybeen in talks about investing in Flipkart in India. Thesemoves arefurtherbolsteringitsexposuretothemarketplacesegment.

• FacebooklauncheditsmarketplaceonOctober3.Themarketplaceuses geo-location to show local ads, is currently only in theFacebookapp,andisfocusedfirmlyonC2Ctransactions.

Marketplacesmoveontomarketplaces:

• AmazonopeneditsownstoreonTmallinMarch2015.

• Zalandosays itplanstosell itsprivate-labelfashionrangesonrivalwebsites,whichalmostcertainlymeanscompetingmarketplaces.

Source:Shutterstock

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WeareonthebrinkofseeingAmazon’sthird-partysellerssellmoreunitsthanAmazonitselfdoes.

Themarketplacemodelishighlyprofitable,becausethesitescanchargedouble-digitcommissionsforsimplyactingasaportal.

Amazonsettobecomeamajoritymarketplace

AmajortrendisAmazon’sgradualshiftfromaninventory-basedmodeltoamarketplaceone.Weareonthebrinkofseeingitsthird-partysellerssellmoreunits thanAmazon itself does. In the thirdquarterof 2016,half oftotalunitssoldweresoldbythird-partysellers.

Figure7.MarketplaceUnitsOrderedasa%ofAllUnitsOrdered


According to a survey by financial services firm RW Baird in the thirdquarterof2015, the shareofproductsofferedbymarketplace sellersonAmazonwasashighas90% incategoriessuchaspatio, lawnandgardenproducts,and89%inappliances.

AdvantagesOverDirectRetailingWeidentifyfourkeybenefitstothemarketplacemodelversustraditionalretailing:1)gainstoprofitmargins;2)fewerrisksassociatedwithholdinginventory; 3) satisfying consumers through wider choice; and 4) greaterflexibilityinenteringnewmarkets.

1.MarginGains

Themarketplacemodel is highlyprofitable, because the sites can chargedouble-digitcommissionsforsimplyactingasaportal.

Amazon typically takesa cutof15%of the sellingpriceonproducts soldthrough itsmarketplace, although fees varyby category, and range from7% on computers and large appliances to 45% on Amazon deviceaccessories;andAmazonislikelytostrikebespokedealswithmajorbrandsthatwanttosellonitssite.This15%averageisasubstantialmargin,givenAmazon’s only obligations are to showcase the product on its site and

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3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16

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process the payment. This compares to a 2.1% overall EBIT margin atAmazon.cominfiscal2015.

Forthose itemsfulfilledbyAmazon,thecompanychargesadditional feesfor holding, processing and mailing products out to customers. Amazonreportedlyleviesanextra8-15%feeforordersthatitfulfils.

Similarly, Zalando has signaled margin benefits from its nascentmarketplace model. In the first half of fiscal 2016, the company notedgross-marginbenefits from itsgrowingBrandPartnersprogram,althoughithasnotpublishedanyspecifics.

NoInventoryRisks

Marketplacesareprotectedfromtherisksassociatedwithowningstock—notably:

• Write-downs:Whereone-timewrite-offsimpactonthebottomline.

• Markdowns:Whereretailershavetotakeahit tomargins toclearstock.

2.GreaterChoiceBoostsCustomerSatisfaction

For those sites that both retail directly and offer amarketplace (such asAmazonor Zalando), thebenefit in termsof theproposition is enhancedproduct choice. Shoppers are less likely towalk away unsatisfied, as thelongtailofproductdemandcanbesatisfiedatlittleefforttotheretailer,inturnbuildingloyaltyandrepeatvisits.

Moreover,eveniftheretailsideoftheoperationlosesasaleofaproductto a third-party seller, the generousmargin yielded from that is likely tomorethanmakeupforthelossofthesale.

Marketplaces are growing their offerings to provide ultimate choice.Walmart says it is adding one million SKUs per month online, largely

WalmartsaysitisaddingonemillionSKUspermonthonline,largelythroughitsmarketplaceoffering.

Source:Shutterstock

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throughitsmarketplaceoffering,andbytheendofthesecondquarteroffiscal2017itplanstoofferaround15millionSKUs.

3.FlexibilityinEnteringNewMarkets

Amarketplacemodel offers an asset-light way of entering new regionalmarkets.WhenAmazonentered India in2013, itdid so throughapurelymarketplace mode. This was due to the country’s prohibition of foreigndirectinvestmentine-commerce.AmazoncircumventstheFDIrestrictionsby selling on its own website through a joint-venture company withCatamaranVentures,calledCloudtailIndia.

KeyTakeaways• The marketplace format has established itself as the default

e-commerce format in fast-growing, nascent markets. It is nowseeingaboominmature,Westerne-commercemarketssuchastheUSandWesternEurope.

• Epitomizing this growth is the shift at Amazon, which this year islikelytobecomeamajoritymarketplacebyshareofunitssold,andwhichissettoovertakeeBayintermsofmarketplaceGMV,byourestimations.

• Theasset-lightmarketplacemodelbestowsanumberofadvantagesover direct retailing, including strongmargins and the absence ofinventoryrisk.

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APPENDIX:COMPANYTIMELINES

AmazonAug30,2016 Introduces “brand gating” restrictions to curb counterfeits: sellers of selected brands must provide

invoicesfrommanufacturersordistributorsandpayanonrefundablefeeofUS$1,500perbrand.

Jul20,2016 FootwearbrandBirkenstockannouncesitwillstopsellingonAmazonandthatitwillnotauthorizethird-partymerchantstosellonthesite.

Jul28,2016 Saysitplanstoopen18fulfillmentcentersin3Q16.

May12,2016

Cancelstheexpectedacquisitionoftheremaining75%stakeinColisPrivé,SAS.Thecompanyoffersparceldeliveryservicesfromwebmarketerstocustomers.Amazonacquireda25%stakein2014.

May04,2016 Expands logistic service, “Pan-European Fulfillment by Amazon,” which allows merchants to ship theirinventorytoanyAmazonwarehouseinEurope.

Oct08,2015 Challenges craft marketplace Etsy with the launch of “Handmade At Amazon,” a marketplace forhandmadegoods.

Jun12,2015 ExpandsPrimeeligibilitytogoodsshippeddirectfromthird-partysellers;previously,onlyordersfulfilledbyAmazonwerePrime-eligible.

Apr28,2015 AnnouncesthelaunchofitsB2Bmarketplace,AmazonBusiness.

Mar06,2015 OpensstoreonAlibabaGroup’sTmall.

Mar11,2015 Launches Amazon Exclusives new store tomake Amazon the destination for brands and innovators tolaunchandselltheirexclusiveproducts.SellersonExclusivecanonlyselltheirproductsonAmazonandontheirownwebsitesandintheirownphysicalstores.

Jun5,2013 EnterstheIndianmarketwithitsfirstmarketplace-onlysite.

2000 LaunchesAmazonMarketplace.

1999 LauncheszShops,thefirstiterationofitsmarketplacemodel.


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eBay


Oct-05,2016 Acquires Corrigon Ltd, a pioneer of visual search technologies, to enhance the eBay shoppingexperience.

Sep12,2016 Investsina10%stakein4Gifters,ane-giftingplatform.ThecompanyprovidesgiftingservicetobuyanddelivergiftstodifferentcitiesinEurope.

Aug26,2016 CompletestheacquisitionofTicketUtilstoprovideaneasierandmoreeffectiveinventory,distributionandpricingonglobalscaleticketing.

Aug04,2016 Completes the acquisition of Ticketbis, an international ticket marketplace with a presence in 48countries,toprovideagreateraccessandchoiceinticketingforStubHubcustomers.

Jul22,2016 CompletestheacquisitionofSalesPredictLtd.toleverageadvancedanalyticstopredictcustomerbuyingbehaviorandsalesconversion.

Jun26,2016 PartnerswithMallForAfrica.comtoreachAfricancustomers.

May19,2016 CompletestheacquisitionofExpertMakerAB,tohelpadvanceeBay’sstructureddatainitiative.

May09,2016 BritishauctioneerSotheby'spartnerswitheBayforhigh-profileartauctions.

April30,2016 LaunchesanewUS-basedsitecalledeBayWineandapartnershipwithstartupDrynctobringabroaderselectionofreds,whitesandroséstoeBay'snewonlinestore.

May10,2016 eBayKorea’sGmarketandJapan’sRakutenPartnertoboostcross-bordertrade.

May06,2016 PartnerswithIndiaPosttoopen15dedicatedcountersforeBaysellersacross10Indiancities.Thenewcountersprovideaseamlessdeliveryserviceforgoodsboughtandsoldonline.

Mar29,2016 AcquiresCargigiInc.toimprovetechforautodealers.

Mar22,2016 eBayMotorsandWeGoLookpartnertoprovideonsiteinspectionsforvehicles.eBaysellerscanimprovebuyerconfidenceinvehicletransactionswithWeGoLook’son-siteinspections.

Mar14,2016 eBay&Shypexpandintegrationtomakesellingeasier.Shypwillpickuptheitemsthesellersoldwithin20minutes,professionallypackthemandmailthemstraighttothebuyer.

Feb17,2016 PartnerswithinkFrogtohelpsmallbusinessesscale,andimproveinventoryandordermanagement.

Dec03,2015 Signs a strategic partnership agreement with the TianjinMunicipal Government to strengthen cross-bordertradecooperation.

Jul20,2015 AcquiresMinno(Twice),asecond-handclothingsellerstartup.PayPalisspunoffbyeBay.

Jul01,2015 EBay’s PayPal acquires Xoom Corporation, a digitalmoney transfer provider to expand themarket inMexico,India,thePhilippines,ChinaandBrazil.

Mar02,2015 EBay’sPayPalacquiresPaydiant,amobile-walletstartuptobroadenitsmobileofferingsformerchants.

1995 eBaylaunches.

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Tmall

Sep03,2016 Alibaba Group and the Canadian government sign cooperation agreement to connect small businesseswithChineseConsumers.

Jul01,2016 AlibabaGroupannouncesanewonlineplatformaimedatstreamliningthetakedownprocessavailabletobrandsinthefightagainstcounterfeitsontheChinesecompany’se-commerceplatforms.

Jun29,2016 MarsandAlibabaGrouplaunchglobalstrategicbusinesspartnership.

Apr28,2016 FitbitandTmall.comsignamemorandumofunderstanding(MoU)toexpandtheconnectedhealthandfitnessmarketinChina.

Oct29,2015 AnnouncesseveralmajoragreementsonpartnershipsandcollaborationswiththeDutchConsulate.AlbertHeijnandAttentopentheirnewflagshipstoresonTmall.

Oct22,2015 Ocean Spray Launches first online flagship store in China on Tmall Global. The company is a renownedAmericanagriculturalcooperativeofcranberryandgrapefruitfarmers.

Sep01,2015 Launches “Tmall VineyardDirect” program through theopeningof theRobertMondaviwines exclusiveflagshipstoreonTmall.com.

Aug12,2015 Macy’sformsajointventurewithFungRetailingtoopenashoponTmall.

Jul30,2015 Announces partnerships with one of South Korea’s top duty-free chains, The Shilla Duty Free, andThailand’sleadingduty-freechain,KingPower,toenhancetheduty-freeshoppingexperienceforChinesetravelerstothesetwocountries.

Jul26,2015 RealMadrid,theworld’sleadingsportsclublaunchesitsofficialonlinestoreonTmall.

Jul24,2015 Promotessame-daygrocerydeliveryinBeijingcity,China.

Jul08,2015 Announces strategic investment inMei.com,which is aChina’s leading flash salesplatform for luxury andfashionproducts.

Jun24,2015 Announces an expansion of its cross-border e-commerce initiatives, including the launch of 11 officialcountrypavilionsonitsTmallGlobalplatformandcooperativepartnershipsbetweenJuhuasuan,Alibaba’sgroup-buyingplatform,and26foreignembassiesinChina.

Feb19,2014 AlibabaGroupofficiallylaunchesTmallGlobal.

2011 TmallbecomesanindependentbusinessunderAlibabaGroup.

2010 TaobaoMallrelaunchesasTmall.

2008 AlibabalaunchesthefirstiterationTmall,underthenameTaobaoMall.


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Walmart

Oct6,2016 WalmartstatesthatJet.comhas14.8millionproductslistedforsaleandhas210millionuniquevisitors.AtAugust,Jet.com’sGMVrun-ratewasUS$1.2billion,accordingtoWalmart.

Sep17,2016 Walmartmarketplaceoffers10millionSKUsandisgrowingthenumberofitemsbyonemillionpermonth,thecompany’sDirectorofBusinessDevelopment forMarketplace tells InternetRetailer.Sellernumbersreach1,000.

Aug23,2016 Cloud-based inventory management service Commercehub reaches an agreement for integrating withWalmart’smarketplace.SimilarpartnershipsarealsoagreedwithSolidCommerceand4Psite.

Aug18,2016 In its 2Q17 results, Walmart states that it has added around 7 million extra items to its marketplaceassortmentsincethestartoftheyear.TotalSKUcount,includingfirst-partyitems,isputatapproximately15million.

Aug8,2016 Walmart acquires one-year-old marketplace Jet.com for US$3.3 billion. Jet.com will remain a distinctbrand.Atthetimeoftheacquisition,JetwasseeingaGMVrun-rateofUS$1billion;itoffered12millionSKUsinitsfirstyear.

May19,2016 In its 1Q17 results,Walmart states that the SKUs onWalmart.comhave reach 10million and that it isgrowingthisnumberthroughamixoffirst-partyandthird-partyitems.

Apr12,2016 Walmart agrees to work with cloud-based e-commerce solutions provider ChannelAdvisor to integratewith Walmart’s marketplace. ChannelAdvisor will facilitate retailers and brands listing products onWalmart.comandoptimizetheirmerchandisesales.

2016 Walmartstartstogrowitsnumberofmarketplacesellers,openingupmembershipfrominvitationonlytoanapplicationbasis.

2009 Walmartlaunchesitsmarketplace.Itoperatesonaninvitation-onlybasiswithonlyaround500sellersuntil2016.


Zalando


Sep20,2016 Planstoexpandits17own-labelfashionbusinesstoaccessuntappedmarketsandrivalsaleschannels.

Aug24,2016 Abercrombie&FitchCo.announcespartnershipwithZalando,toexpanditsonlineretailchannel.

May25,2016 Acquiresanunknownminoritystake inLenewblackS.A.S,whichprovidesB2Be-commerceplatformforretailersandbrands.

May12,2016 AcquiresTradebyteSoftware, tostrengthen itsability todigitalizepartnerstockandconnect it to retailchannels.

Mar23,2016 Announces its new service, “Fulfillment by Zalando”, for third-party brand sellers. Brands benefit fromZalando’s15-countrycoverage.

May22,2015 Acquiresa20%stake inAnatwine,whichprovides customized software tohelponline fashion retailersandbrandstointegratetheirprocesses,systemsandstockfiles.

2015 Launches Brand Solutions Area on its website, allowing brands such as Adidas, GAP and Nike to selldirectlythroughZalando.

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NOVEMBER3,2016


DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJohnMercerSeniorAnalyst

EvanHuangResearchAssistant

HONGKONG:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406LONDON:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NEWYORK:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017

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