More Related Content More from Linda Gridley (20) Billion Dollar Babies: Trends and Opportunities in the New E-Commerce World2. A Word from Gridley & Company, LLC
The e-commerce industry has undergone massive transformations since the launches of early industry
leaders Amazon and eBay that created the backbone of the industry as we know it today. Although
Amazon and eBay are still dominant players in the industry, major forces of disruption have taken
place in the last few years that took e-commerce to an entirely new level.
Social networks like Facebook and Twitter have been spreading like wildfire – the term “social
commerce” was coined and the networks became huge drivers of a new e-commerce wave. The daily
deal site Groupon launched in November 2008 and infamously turned down Google‟s $6 billion offer in
December 2010. The e-commerce industry was never the same again with over 100 similar companies
launched, attempting to share a slice of the pie. Private sales companies like Gilt Groupe and GSI-
owned Rue La La started offering deeply discounted luxury clothing via flash sale in the midst of one
of the worst recessions ever and successfully built an empire of online sample sales – there are more
than 80 of such companies to date. In addition, new technologies like tablets and 3G/4G smartphones
have become an enormous catalyst of mobile commerce.
In this comprehensive study, we focus on the major disruptions that are changing the course of the
e-commerce industry. More importantly, we have identified the opportunities necessary to capitalize on
these trends. We hope you enjoy the industry overview and our perspectives. Please give us a call to
discuss the content of this presentation.
Linda Gridley
President & CEO
Karen Yau Smith linda.gridley@gridleyco.com Pratik Patel
Vice President 212-400-9710 Vice President
karen.smith@gridleyco.com pratik.patel@gridleyco.com
212-400-9718 212-400-9712
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© 2011 Gridley & Company LLC
3. Table of Contents
I. Overview of the E-Commerce Industry
II. New Emerging Business Models and Disruptive Subsectors
A. Private Sales Model
B. Group Buying / Local E-Commerce
C. Mobile Commerce
III. Overview of the E-Commerce Service Providers
IV. Summary of Opportunities
Appendix
A. Summary Data on Public E-Commerce Companies
B. Gridley & Company LLC Overview
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4. I. Overview of the
E-Commerce Industry
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5. Evolution of the E-Commerce Industry
Mobile
E-Commerce
Daily Deals /
Local E-Commerce
U.S. Broadband
Posted First Reached 200mm
Ever Profits Users
Adwords
Backbone of Launched for Surpassed $21bn $177bn in
E-Commerce College in Revenues E-Commerce Sales,
Formed Students +13% from 2009
1995 2003 2007 2010
2000
1994 1997 1998 2002 2006 2009
Teamed Up with
Acquired Acquired
First Company Google
Netscape to Reach Launched
Launched To Compete
$1mm in For $1.5 bn with Google
Online Sales For $1.65 bn
USPS Private Sales Traffic Surpasses
Launched Model
e-Stamps
SSL Encryption iTunes became
Enabled Online largest digital Social Traffic
Shopping music retailer E-Commerce
(>1 bn downloads)
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6. E-Commerce is Growing at 5x Traditional Retail
• Online sales are expected to overtake traditional sales in less than 10 years
• The U.S. was the 2010 leader in global e-commerce sales at 27% of worldwide volume; U.S. e-
commerce retail sales totaled about $177 billion in 2010, up an average of 13% from 2009
• New avenues for e-commerce, e.g. daily deals, private sales, etc. boosted the sector‟s
momentum in 2010 and will contribute an increasingly larger share of the e-commerce market
in the next few years
10 Years of Acceleration: Online Dollar Growth to
Eclipse Offline by 2019
year-over-year change in sales by channel ($ billions)
$80
$70
$60
$50
$40
$30
$20
$10
$0
E
E
E
E
E
E
E
E
E
E
E
10
11
12
13
14
15
16
17
18
19
20
20
20
20
20
20
20
20
20
20
20
20
On-Line Growth Off-Line Growth
Source: Goldman Sachs Research and International Data Corp. estimates.
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7. Summary of E-Commerce Landscape Today
Traditional E-Commerce Emerging E-Commerce(1)
Third Party Seller
eRetailers -- Brands eRetailers -- Stores Daily Deals Mobile
Platforms(1) Private Sales
Commerce
LOCAL
BUSINESS MODELS
Push
Shopping
Penny
Auctions
Infrastructure(1) Marketing(1) Execution / Integration(1) Processing / Fulfillment(1)
PROVIDERS
SERVICE
Note: (1) These lists reflect only some of the companies in the categories; the detail lists of companies are in section II and III.
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8. Convergence Themes
• E-commerce models are converging as different marketplaces and disruptive business
models are springing up and growing fast
– investment in – „s rejected offer for
– acquisition of
• E-commerce is no longer just a distribution channel but a way for brands and merchants
to reach consumers in a targeted manner
– Convergence of e-commerce distribution and services with full marketing
– E.g. has much success with its custom recommendations for customers
• E-commerce is converging with content and social to create strong audience relationships
and enable sophisticated audience segmentation and targeting
– E.g.
– Higher content engagement, greater content stickiness
– Higher consumer yield and customer lifetime value
– Greater audience reach and segmentation through social mechanisms
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9. Ten Key Trends in E-Commerce
• Social media driving consumption
• Continued consolidation among private sales companies
• Evolvement of daily deals / local e-commerce sector
• Emergence of industry leaders in private sales and daily deals
• Mobile commerce catching up to traditional e-commerce
• Emerging new business models: push shopping and penny auctions
• Expansion of virtual goods and currencies
• Online merchandising becoming increasingly sophisticated
• Focus on high return initiatives
• Proliferation of third party seller platforms
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© 2011 Gridley & Company LLC
10. Download complete report at:
http://slidesha.re/fFLvgg
Gridley & Company LLC
10 East 53rd Street, 24th Floor
New York, NY 10022
212.400.9720 tel
212.400.9717 fax
Twitter: @gridleyco
www.gridleyco.com
© 2011 Gridley & Company LLC