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‘Sooner, Faster, Now’ — the Companies Surfing the E-Commerce Wave

Online retail sales are growing at double-digit percentage rates in every western European country

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E-Commerce
People walk past a Debenhams store in Stockport, Britain, Jan. 4, 2018. VOA
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Amazon’s assault on the retail industry has brought misery to traditional retailers without a strong web presence.

Less well noticed is the patchwork of European companies that are turning the e-commerce revolution to their advantage, supplying online giants with everything from forklift trucks and storage space to cardboard boxes and automated warehouses.

Mainly bricks-and-mortar retailers such as Debenhams, H&M, and Marks & Spencer have faced a torrid few years as stretched consumers increasingly look online for bargains.

Online retail sales are growing at double-digit percentage rates in every western European country, according to consultancy the Centre for Retail Research.

ALSO READ: With third largest internet user base, India’s e-commerce still falls behind China’s e-market

E-Commerce
In Britain, a fifth of transactions is now conducted online, a five-fold increase over the last decade. Wikimedia Commons

The world’s dominant online retailer Amazon, whose shares have soared 73 percent in the last year, is outside the remit of most European investors because it is U.S. listed, so they have had to look for other ways of buying into the trend.

One is investing in companies that have benefited from the rise of e-commerce.

On February 16, warehouse owner Segro’s shares hit a decade-high after it said space-hungry clients, many in online retail and logistics, continued to buy up storage.

E-Commerce
“There is a bull market in impatience,” said Gary Paulin, head of global equities at broker Northern Trust. “Consumers want things sooner, faster, now.” Wikimedia Commons

 

He advises clients to buy shares in Kion, a German forklift truck-maker that is automating warehouses for online retailers, speeding up deliveries in the process.

He also flagged a turnaround at online supermarket Ocado. The company has long been targeted by short-sellers betting its share price will fall, but recently it has signed tie-ups with food retailers Casino and Sobeys, and its shares have more-than-doubled since November.

Martin Todd, a fund manager at Hermes Investment Management, owns shares in Kion as well as DS Smith, a cardboard-box maker which supplies Amazon as well as a number of other online retailers.

DS Smith is developing technology to custom-make boxes for Amazon that will help reduce large gaps in packages that increase freight costs.

E-Commerce
Buying some stocks exposed to online retail does not come cheap. Ocado shares are currently trading at more than 800 times forecast earnings, according to Eikon data. Wikimedia Commons

ALSO READ: E-commerce driving India’s SME growth

“You might think it is a pretty unsexy business … [but] it is getting a more high tech in what is traditionally a very low tech industry,” Todd said.

The company recently entered Britain’s blue-chip FTSE 100 index for the first time.

John Bennett, head of European equities at Janus Henderson Investors, said while traditional retailers were “absolutely dying,” stocks such as Kion were too expensive for him to own.

“It became a very popular name, and I tend to shy away [from widely-owned companies],” he said. “I am far too curmudgeonly on the multiples you pay.” (VOA)

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Apple Makes a Deal with Amazon, Which is Win-Win Game For Both

Amazon's volume sweet spot is in the much lower price tiers

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Google , US, Alexa
The logo of Amazon, online retailer is seen at the company logistics center in Lauwin-Planque, France. VOA

Aiming to boost sales in the wake of weaker-than-expected demand for new iPhone models, Apple has sealed a deal with retail giant Amazon to sell its range of products which is a win-win game for both the tech titans, market research firm Counterpoint Research has said.

According to Counterpoint, the move would allow the Cupertino-based giant to better manage pricing, warranties and the overall customer experience.

Third party vendors who are selling on Amazon’s platform will be phased out by January 2019, Maurice Klaehne, Research Analyst, Counterpoint Research, wrote in a post on Sunday.

“Apple is attempting to regain control over its iPhone sales on one of the biggest online channels. Third party vendors were selling on Amazon and it was near impossible for Apple to control the supply chain, assure quality control, price,” Klaehne added.

The move is likely to affect the third party vendors who sell new and refurbished Apple products on the e-commerce platform.

“Not only will this affect many smaller businesses in terms of iPhone sales, their service offerings will also be affected. The refurbished and repair market will also take a hit as companies will either have to move off the Amazon platform or go through the authorisation process,” noted Klaehne.

Apple
Amazon, Apple deal win-win game for both: Counterpoint.

The retail major would gain with the agreement.

Amazon does not compete with its own hardware or bundling opportunities directly with phones, wearables or even directly with tablets; Amazon’s Kindle Fire range is aimed at a different segment than the iPad.

The agreement gives Amazon sales and analytics on a segment of the phone market it has hitherto had limited information on-the premium/flagship market, according to Counterpoint.

Also Read- Samsung Plans To Launch its First Foldable Smartphone in 2019

Amazon’s volume sweet spot is in the much lower price tiers.

Counterpoint estimated the weighted average selling price (ASP) of phones selling on Amazon to be under $250. (IANS)