Ecommerce & Marketplaces Newsletter – Jan 14th, 2022
This week our main story features “From the Front Lines” by Bowery Capital that covers B2B marketplaces. It provides industry insights by doing a deep dive on various companies, interviewing founders and investors to help learn what it takes to become successful in the B2B Marketplace space. Forbes story has some valuable lessons on how negative rakes can drive network effects in the marketplace; it poses a beautiful question “what if there was a marketplace where each transaction rewarded users on both sides of the deal with more ownership and control.” Sounds interesting? Want to learn how MACH architecture enables dynamic stores? The blog from MACH Alliance shines some light on this topic. MACH’s agile, flexible, and channel agnostic nature makes this architectural approach appropriate and future-fitting to create innovative connected experiences. Apple paid developers a total of at least $60 billion in 2021. Lately, it has cut down on the commissions it charges in the face of regulatory scrutiny. The digital commerce industry will be roughly around 18 trillion dollars at CAGR of 15% by 2030, as per the report from Allied Market Research. From Nov. 1 to Dec. 31, US consumers spent over $200 billion this holiday season. Online spending rose 19.2% year over year during the weeks before Thanksgiving. The Retail Dive story has more details and analysis. PYMNTS blog has insights from Erika Duggan, Vice President of Products at payments platform EBANX, on how to succeed with payments in the Latin American market. Read this and more in this week’s edition.
Notable news from the past week
From The Front Lines: Tyler Ellison (ChemDirect)
This blog series from Bowery Capital team covers B2B Marketplaces. It does deep dives on various companies, interviewing founders and investors, and learning what it takes to build success in the B2B Marketplace arena. This week, Tyler Ellison, Founder & CEO of ChemDirect, and a client of McFadyen Digital answers some of their questions. He talks about the B2B marketplace built for chemical industry.
The Negative Rake: How Marketplaces Can Solve An Age-Old Dilemma
For anyone who’s spent their career building and investing in two-sided marketplaces that were doomed to fail, odds are that these marketplaces faced a fatal, potential-limiting flaw. It’s a problem familiar to anyone who has built or invested in these businesses: the fact that their path to profitability is an ever-increasing rake. Want to know how negative rake drives Network Effects, read on.
The technology and digital capabilities needed to create the dynamic store are here. When we talk about a store that shifts to meet the daily needs of the brand and the customer, and that offers highly personalized experiences to each shopper, often retailers think the ability to create such a store is still years away. The truth is today we have that ability, and the way to enable it. Now, we need brands with the will to make a shift.
Apple Paid Out Around $60 billion to App Store Developers in 2021
Despite facing numerous antitrust lawsuits and tighter regulations in certain markets, Apple reported new figures indicating record App Store growth in 2021. The company in a press release said it has now paid out more than $260 billion to app developers since the App Store first launched in 2008, a number that’s up from the $200 billion Apple reported at the end of 2020 — meaning, in 2021 alone, Apple paid developers a total of at least $60 billion..
Digital commerce market share the current estimation of 2021 is projected to be higher than pre-COVID-19 estimates. According to a recent report published by Allied Market Research, titled, “Digital Commerce Industry by Component, Browsing Method, Payment Method, Business Type, and Industry Vertical: Global Opportunity Analysis and Industry Forecast, 2021-2030,” The Digital Commerce Industry size was valued at $4.21 Trillion in 2020, and is projected to reach $17.53 Trillion by 2030, growing at a CAGR of 15.1% from 2021 to 2030.
This holiday season, from Nov. 1 to Dec. 31, U.S. consumers spent $204.5 billion online, up 8.6% compared to last year. But red-letter deals took a back seat this year, as consumers started early and spread out their spending, according to numbers from Adobe Analytics. Online spending rose 19.2% year over year during the weeks before Thanksgiving, but fell 1.4% during Cyber Week (the five days between Thanksgiving and Cyber Monday). Online spending picked up again between Nov. 30 to Dec. 31, growing 5.6%, Adobe found.
In Latin America, Consumers Want eCommerce With Local Payment Methods
The rise of the connected economy has opened avenues of commerce — where wielding everything from cellphones to tablets to cars, consumers can transact in more ways than ever before. And they can transact in more places than ever before. With all that connectivity comes the ability to engage in cross-border commerce. Erika Daguani, vice president of Products at payments platform EBANX, told PYMNTS in an interview that Latin America represents an attractive market for all manner of firms. But there is no one-size-fits-all approach to the region, and success depends on meeting consumers where they want to pay and how they want to pay..
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