This week in eCommerce, our friends over at Shopify filed for an initial public offering, after hitting $105 million in revenue last year alone and $3.8 billion processed by its merchants. Photo-sharing application Instagram have slowly begun to introduce eCommerce into the platform, with links to product pages within advertisements. These ads don’t come cheap, as Instagram recognizes the risk of alienating their key audiences with in-your-face ads, but guarantees retailers that impressions count more than clicks. 2014 was a strong year for merchants on Internet Retailer’s Top 500 Guide, with web sales growing 6x more than store sales for the year! The top 15 Canadian Retailers in the guide had a combined sales grow 29% to $1.84 billion. Indian restaurant-search application Zomato recently raised $50 million bringing their valuation to over $1 billion, in addition to acquiring MaplePOS to expand their offering and reach into B2B. For all the details from this week’s eCommerce newsmakers, read-on below:
eCommerce platform files for an IPO
Once a small Canadian start-up based out of our nation’s capital Ottawa, Shopify is now the go-to eCommerce platform for entrepreneurs and established merchants. This week our friends announced plans to raise $100 million and be listed on the New York Stock Exchange under the name “SHOP”. Along with the announcement Shopify also released some interesting stats! Last year alone Shopify made $105 million in revenue with $37.3 million made in the last 3 months, 162,261 merchants using their platform as of last month in 150 countries, and $3.8 billion processed in Gross Merchandise Volume in 2014. To this date Shopify has raised $122 million in venture funding, and hopes to capitalize on a market of 46 million merchants globally. Of Shopify’s 300 million unique monthly visitors last year, 50% came from mobile devices! The future looks bright for this company from our homeland who we’re proud to say we’ve launched amazing projects on with our merchants.
Insta Inches Towards eCommerce
Does slow and steady win the race? Instagram is trying to leverage its app viewers and turn them into shoppers. In a recent ad campaign Instagram launch a strategy to get viewers to click to purchase by linking to product pages through its advertisements. Banana Republic was one of the first retailers to implement this new channel. The entry fee for retailers to buy ads on the platform? $200,000! The Facebook-owned photo sharing application has been trying to improve its marketing tools, and this buying implementation is the latest step. Instagram’s platform is a largely mobile experience, so the roll-out of these updated advertising and buying options for retailers and users has been slow and complicated. Instagram remains weary of these advertising options, as the platform would do-well to not invade, overwhelm, and generally displease its user-base with an onslaught of more integrated buying experiences. Conversely the platform is quick to justify the high-cost of its ad spots to retailers, pointing out that impressions, not clicks, alone are valuable to companies, which in-turn protect their user base.
Quick Sales Growth for Internet Retailer’s Top 500
Source: Internet Retailer
2014 was a strong year for Internet Retailer’s Top 500 merchants grew web sales by 16.2% to an astounding $256.27 billion. That’s a rate of grow that’s six times faster than store sales, which only increased 2.4%. The overall U.S. eCommerce market grew 15.4% to $304.91 billion in 2014. Canadian web sales for 2014 also outgrowth overall retail sales, with the top 15 Canadian retailers listed in Internet Retailers Top 500 Guide had combined sales grow 29% to $1.84 billion. The total retail increase in Canada was only 4.8% in comparison. Unsurprisingly eCommerce giant Amazon tops their list, with web sales that increased 17.1% ($79.48 billion.) despite this Amazon grew at a slightly slower rate than other web-only merchants (19.8%), who account for a huge proportion of the Top 500 in IR’s guide. The slowest growing companies in the Top 500 for 2014 were catalog and call centre companies, which only grew year over year by 8.8%.
India’s Zomato food-tech worth $1B+
Zomato, India’s start-up restaurant search application is now available in 22 countries and growing by the day. Recently the app raised $50 million more and made an acquisition outside of its sphere in buying the payments platform MaplePOS. source close to Zomato said that the company has been valued at over $1 billion. Info Edge, Sequoia Capital, and Vy Capital, led the Series F funding for the application, who’s total raised since being founded in 2008 is now at $164 million. To expand its presence in more countries globally, Zomato has made several acquisitions of other search applications, most notably acquiring Urbanspoon earlier this year to help break into the U.S. market. With the acquisition of MaplePOS, Zomato hopes to break into B2B offerings with a POS for food service. Zomato’s push to B2B also includes a mobile wallet product, Cashless. Zomato’s unique proposition is that they are the “only food-tech company in the world which is building products for consumers as well as restaurant owners”.