E-commerce

Europe’s payments crown does not come cheap

15 May 2018

Worldline is paying 2.3 bln euros for the credit card processing arm of Switzerland’s SIX. That will strengthen its position as Europe’s largest electronic payments group. But the French company had to pay a hefty multiple - and accept a humdrum return - to secure its dominance.

Eddie Lampert takes self for ride on Sears do-over

9 May 2018

A deal to sell tires with Amazon added up to 20 pct to the struggling retailer’s stock, a boon to its CEO and biggest investor’s view that it’s undervalued. But his plan to prove that by buying parts of the business requires unrealistic assumptions about Sears – and his skills.

JD’s Alibaba defence strains “jam tomorrow” model

8 May 2018

Quarterly sales at the Chinese web retailer jumped by a third to $16 bln. But investments in logistics and new tech squeezed operating margins. For investors, JD's fierce battle with Jack Ma's e-commerce giant means profitability could well continue to be the chief casualty.

Flipkart bid would be rare defensive one by Amazon

3 May 2018

It'd be a coup if the e-commerce titan took control of its larger rival in India. Chasing the business started by former Amazon employees would suggest boss Jeff Bezos is worried by the idea of Flipkart uniting with Walmart. The battle underscores the significance of the market.

Amazon’s $10 bln subsidy is Prime for growth

19 Apr 2018

Boss Jeff Bezos says the free-shipping club has 100 mln subscribers. The annual fee would have to double for Amazon to break even on deliveries, Breakingviews calculates. But at under 6 pct of sales, the shortfall is a cheap way to retain customers and avoid price wars.

SoftBank fills its Indian online shopping basket

4 Apr 2018

Masayoshi Son's sprawling group invested in Snapdeal then Flipkart. Now it's taking a $400 mln stake in Alibaba-backed Paytm Mall. That exposes it to all the major e-commerce sites up against Amazon. As with SoftBank's similar ride-hailing logic, it could lead to consolidation.

Europe’s data tax war is worthy but hard to win

20 Mar 2018

The EU may tax tech groups’ revenue. The bloc is right to argue that current rules overlook the value firms like Google extract from its citizens’ data. A crude levy on sales is far from perfect, but might add impetus to longer-term international reform efforts.

Alibaba presses its advantage in Southeast Asia

19 Mar 2018

The e-commerce giant is pumping $2 bln more into regional subsidiary Lazada, and replacing the group’s founder-CEO with Alibaba veteran Lucy Peng. Armed with her fintech expertise, Lazada can use mobile payments to entrench its regional lead over rivals Amazon, JD and Sea.

Who broke Toys R Us? Toys R Us did

15 Mar 2018

The retailer is liquidating over 700 U.S. stores. The woes were mainly self-inflicted: high costs, declining sales and onerous interest payments wiped out profit. Amazon played a role. Yet basic retail and financial risks sealed Geoffrey the Giraffe’s fate, as it may for others.

JD’s ad boom is silver lining in Alibaba fight

2 Mar 2018

Costs are soaring at the $66 bln Chinese web retailer as competition with its arch-rival takes new forms. Hence a surprisingly big quarterly operating loss, which upset investors. At least JD's lucrative advertising business is growing fast, offering a welcome boost to margins.

Activist spat leaves Aussie chain in bargain bin

1 Mar 2018

Aggressive investors can benefit other shareholders but maybe not at Myer. Solomon Lew's Premier Investments slams the retailer’s board but offers only generic fixes, while he also has conflicts of interest. Sadly, there are no easy levers anyone can pull to boost value here.

Amazon rings up answer to last-foot problem

28 Feb 2018

Tech giants are racing to own the “smart home,” but opaque consumer benefits and long product cycles mean most residences are dumb. Amazon’s need to master fast shipping and thwart package thieves make it different - and explain why its smart-doorbell deal may ring up success.

Georgia gives Amazon one great reason to stay away

27 Feb 2018

The Peach State's Lt. Governor hoisted a big red flag for the e-commerce giant. By lobbying to remove tax breaks for Delta Air Lines, a punishment for withdrawing discounts for NRA members, he makes Georgia an untrustworthy partner – and a poor choice for Amazon’s new HQ.

Amazon’s growth risks irritating users

1 Feb 2018

The nearly $700 bln internet retailer turned in another remarkable holiday quarter. Advertising, third-party sales and private-label goods are some of the company’s fastest-expanding – and most profitable – businesses. They aren’t, however, necessarily great for Amazon’s image.

PayPal may benefit from eBay’s push from nest

1 Feb 2018

The online auctioneer bought the upstart in 2002 and spun it off 13 years later. EBay’s decision to go it alone on payments dented its former charge’s market cap by over $8 bln. But by now the $90 bln-plus PayPal is mostly weaned and ready to exploit its independence.

Jack Ma’s shopping adventures bring mixed results

1 Feb 2018

The Alibaba founder’s bets on bricks and mortar, logistics and movies weighed on the e-commerce giant’s margins in the December quarter. A 33 pct stake in payments affiliate Ant looks more promising. Even so, investors can only brace for the unpredictable impact of Ma's forays.

Walmart weighs online weapon in India’s retail war

31 Jan 2018

The U.S. grocer may buy up to 20 pct of Flipkart, Amazon's arch-enemy in India. The e-commerce firm, valued at some $12 bln, would secure a marquee backer ahead of a possible New York IPO. Walmart, which has struggled to open stores, would jump-start access to local consumers.

Amazon HQ2 choices disappointingly undisruptive

18 Jan 2018

The e-commerce giant has cut the field for its second headquarters to 20 prime locations including Dallas, Atlanta and New York. Hundreds of cities hoped Amazon would think outside the box, but a desire for talent and a welcoming environment led it to the usual hot spots.

Alibaba rival’s switch in logistics stacks up

16 Jan 2018

Chinese web retailer JD is raising $2 billion from investors to fund its warehousing and delivery unit, Reuters says. This sensible burden-sharing brings JD and Alibaba’s business models closer together. The trade-off is diluting existing shareholders in a promising venture.

Uber for everything will arrive in 2018

21 Dec 2017

The tech industry spent 2017 awash with cash and keen to disrupt the entire global economy. But loopy ideas, on everything from juice-making to how to treat co-workers, suggest a little hubris is creeping in. Breakingviews duly offers a few investment pitches for the year ahead.