• Save
MIH eCommerce Outlook 2013
Upcoming SlideShare
Loading in...5
×
 

MIH eCommerce Outlook 2013

on

  • 425 views

 

Statistics

Views

Total Views
425
Slideshare-icon Views on SlideShare
423
Embed Views
2

Actions

Likes
2
Downloads
0
Comments
0

1 Embed 2

https://www.linkedin.com 2

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    MIH eCommerce Outlook 2013 MIH eCommerce Outlook 2013 Presentation Transcript

    • eCommerce Outlook Overview of key eCommerce business models and the potential threat that Google poses Joseph Okleberry, Internet Strategist, MIH 2013-07-30
    •  1) Online Retail  2) Marketplaces  3) Flash Sales  4) Apparel eCommerce  5) Assessing “The Google Threat” 2 Agenda
    • 3 Online Retail Source: Economist Intelligence Unit, PhocusWright, IDC, eMarketer, Morgan Stanley, MIH Joe.Okleberry@mih.com +27 21 406 4919 Retail is a huge market globally, several times larger than categories such as media, travel, and advertising $17 Trillion $0.9 Trillion $0.6 Trillion Retail Travel Advertising Global retail spend is 19x the size of travel spend, and 28x the size of advertising expenditures $2.0 Trillion Media & Entertainment
    • 4 Source: eMarketer January 2013, MIH Joe.Okleberry@mih.com +27 21 406 4919 Online Retail Developing markets are gaining share, APAC will soon eclipse North America as the largest eCommerce market 31% 36% 40% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2014 2016 Asia Pacific North America Western Europe Eastern Europe Latin America Middle East & Africa B2C eCommerce Sales Share Worldwide, by Region
    • 5 Source: AlphaWise, Morgan Stanley, MIH Joe.Okleberry@mih.com +27 21 406 4919 Online Retail A high percentage of Internet users have purchased online, but some categories of merchandise remain underpenetrated 22% 28% 29% 31% 35% 36% 36% 37% 38% 39% 40% 42% 46% 53% 0% 10% 20% 30% 40% 50% 60% Groceries Personal care Home improvement Home furnishings Auto parts Office supplies Jewelry Clothing Pet supplies Shoes Sporting goods Athletic apparel Consumer electronics Books Online Penetration by Category
    • Launching categories faster 6 Online Retail Source: Amazon Investor Presentation (Jun-2011), company reports, MIH Joe.Okleberry@mih.com +27 21 406 4919 B2C platforms offer flexibility for category and geographic expansion Product Category US UK Germany France Japan China Canada Italy Spain Brazil Physical Media 1995 1998 1998 2000 2000 2004 2002 2010 2011 Electronics 1999 2001 2001 2005 2003 2004 2008 2010 2011 Toys 1999 2001 2004 2007 2004 2004 2010 Baby 1999 2007 2007 2009 2007 2006 2012 Tools & Hardware 1999 2004 2004 2009 2011 Home & Garden 2000 2004 2004 2007 2003 2009 2010 Apparel & Accessories 2002 2008 2008 2010 2007 2010 Sports & Outdoor 2003 2007 2006 2010 2005 2006 2010 Jewelry & Watches 2003 2007 2007 2007 2007 2006 2010 2010 Health & Personal Care 2003 2008 2007 2009 2006 2006 Beauty 2004 2008 2008 2009 2008 2006 Shoes 2005 2007 2007 2009 2007 2009 Dry Goods 2006 2010 2010 2008 2010 Auto Parts & Accessories 2006 2009 2008 2009 2009 Digital Media 2007 2008 2009 2009 2010 2010 2011 Office Supplies 2008 2009 2009 2009 2009 2010 Entertainment Collectibles 2013 Kindle Store 2009 2010 2011 2011 2012 2012 2012 2011 2011 2012 App Store 2011 2012 2012 2012 2012 2012 2012 2012
    • 7 Online Retail Source: Company website, MIH Joe.Okleberry@mih.com +27 21 406 4919 Retailers like Amazon are launching 3P marketplaces insider their 1P business at an accelerating pace 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 +6 +5 +4 +3 +2 +1 +0 USA UK Germany France Japan China Canada Italy Spain Brasil India 1P Launch 3P Launch 1P Launch - pending 3P Launch - pending Year of Initial Launch YearsAfterInitialLaunch
    • 8 Source: Citi, MIH Joe.Okleberry@mih.com +27 21 406 4919 Online Retail B2C businesses often exhibit low EBITDA margins, providing minimal margin for error amongst heightened global competition 10% 8% 7% 6% 2% 52% 46% 38% 37% 37% 33% 24% 11% 0% 10% 20% 30% 40% 50% 60% EBITDA Margin (2013E) * Includes acquisition of Motorola B2C with Inventory Internet Leaders
    • 5% 7% 7% 7% 5% 6% 6% 6% 6% 3% 3% - 10 20 30 40 50 60 70 80 90 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Amazon: Historical Operating Margin and Revenue 9 Source: Morgan Stanley, MIH Joe.Okleberry@mih.com +27 21 406 4919 Online Retail Significant and sustained investment is required to build a strong fulfillment capability – critical for a successful online strategy OperatingMargin RevenueinBillions Heavy investment in fulfillment and digital offerings have suppressed Amazon’s operating margins
    • 10 Source: World Bank 2012 Logistics Performance Index, MIH Joe.Okleberry@mih.com +27 21 406 4919 Online Retail Logistics and strong distribution networks are a barrier to increased eCommerce penetration in some emerging markets 4.1 4.0 3.9 3.9 3.5 3.5 3.4 3.2 3.1 3.1 3.1 3.0 2.9 2.6 2.0 2.5 3.0 3.5 4.0 4.5 Logistics Performance Index, 2012 Strong logistics Developing logistics B2C companies may need to build out logistics infrastructure in some countries
    •  1) Online Retail  2) Marketplaces  3) Flash Sales  4) Apparel eCommerce  5) Assessing “The Google Threat” 11 Agenda
    • 12 Marketplaces Source: Citi, MIH Joe.Okleberry@mih.com +27 21 406 4919 Marketplaces appear to have a strong financial profile, with higher margins than other eCommerce businesses 37% 33% 24% 19% 13% 9% 8% 7% 5% 2% 0% 10% 20% 30% 40% EBITDA Margin (2013E) Online Marketplaces Other eCommerce Rakuten operates as both a marketplace and a B2C
    • 13 Marketplaces Source: Morgan Stanley, Amazon Whales Fulfillment Center, RBC, MIH Joe.Okleberry@mih.com +27 21 406 4919 Marketplaces typically require lower capital investment, enabling upstarts to scale quickly 1 Fulfillment Center (1M Sq. Feet) Automation Equipment $70-100M Building Infrastructure $30M Overall Cost $100-130M Building out fulfillment centers can be expensive, large ones can cost more than $100M each
    • 14 Marketplaces Source: MIH Joe.Okleberry@mih.com +27 21 406 4919 Marketplaces typically don’t compete with their seller community, removing potential conflicts of interest Pure marketplaces are mostly able to avoid these potential conflicts of interest, while hybrids and B2C’s may not: Merchandising: B2C companies with owned inventory may promote its inventory over that of seller community Pricing: B2C companies may underprice certain items to set a new market clearing price on the platform Overarching Objective: Primary goal of a marketplace is to help sellers succeed, focus is limited to that objective Inventory: When a seller introduces a new product that is successful, the B2C can look to source the same inventory
    • 15 Marketplaces Source: MIH Joe.Okleberry@mih.com +27 21 406 4919 Marketplaces do not have full control over the end-to-end buying experience, which limits their ability to compete Online Marketplaces B2C w/Inventory Pricing Merchandising Storage and Handling Shipping Customer Support Returns
    • 16 Marketplaces Source: Company websites, MIH Joe.Okleberry@mih.com +27 21 406 4919 Over time, shoppers may migrate away from a purely open marketplace model B2C E-tail Closed Marketplace C2C General Classifieds Open Marketplace Easier to UseBetter Buying Experience
    • 17 Marketplaces Source: Company website, MIH Joe.Okleberry@mih.com +27 21 406 4919 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 +9 +8 +7 +6 +5 +4 +3 +2 +1 +0 USA UK Germany France Japan China Canada Italy Spain India 3P Launch FBA Launch 3P Launch - pending FBA Launch - pending Year of Initial Launch YearsAfterInitialLaunch Marketplace competitors including Amazon are stepping up their game by launching fulfillment solutions Brasil
    • 18 Source: Company reports, MIH Joe.Okleberry@mih.com +27 21 406 4919 Marketplaces Top brands have turned to the courts – with mixed results -- to keep fake items off marketplace websites Site Court decisions in favor of brandsPrevious/Ongoing Litigation • LVMH/Dior: $63M • Nike: granted temporary injunction • E-Land Fashion: $1,600 USD
    •  1) Online Retail  2) Marketplaces  3) Flash Sales  4) Apparel eCommerce  5) Assessing “The Google Threat” 19 Agenda
    • 20 Source: Company reports, MIH Joe.Okleberry@mih.com +27 21 406 4919 Flash Sales Several of the larger US flash sale sites have recently turned profitable… # of Yrs to Profitability 2012 Revenues 1 2 3 4 5 0.2 0.4 1.0 0.6 0.8 Comparable: Vente-Privee 3 years to profitability (2004) 2012 revenues ~$1.7B 2012 profit margins ~6-7% USDinbillions
    • 21 Source: United States Census Bureau, Forbes The Rise of Gilt Groupe, MIH Joe.Okleberry@mih.com +27 21 406 4919 Flash Sales …But concerns remain about the business model’s long- term sustainability 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 -20% -15% -10% -5% 0% 5% 10% 15% 20% Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Inventory Y/Y Inventory to Sales Ratio Clothing retailers aggressively cut inventories Inventory to sales ratio spikes as demand falls faster than retailers cut inventory
    • 22 Source: Forbes The Rise of Gilt Groupe, MIH Joe.Okleberry@mih.com +27 21 406 4919 Flash Sales Whereas flash sales originally showcased high-end brands, the industry continues to shift down market Low LowHigh High Discount Opportunity BrandAvailability 2010 – 2009 Gilt Sample Brand Product Offering * due to supply constraints and global economic stabilization
    • 23 Source: Company reports, MIH Joe.Okleberry@mih.com +27 21 406 4919 Flash Sales Successful expansion into adjacent verticals has been hit or miss and several sites have scaled back newer ventures Women Men Home Travel Vente-Privee Rue La La Gilt Groupe Haute Look MyHabit Beyond The Rack ideeli Belle & Clive Food/ Wine Daily Deals Kids Other * * Park & Bond folded into Gilt MenExisting category Category closed / scaled back / for sale
    • 24 Source: Company reports, MIH Joe.Okleberry@mih.com +27 21 406 4919 Flash Sales Some sites are exploring non-flash sale models and permanent merchandise strategies Site Category Strategy Themed (e.g., housewarming gifts, weekend getaway) Home • Drive additional sales to existing customers • Partnering with certain brands/ products that will be always available (e.g., Cuisinart) Customer analytics • Plans to use latest funding round to extend business beyond the flash-sales model Pre-sale • Brands get insight for inventory forecasting/lower risk
    • 25 Source: Company reports, MIH Joe.Okleberry@mih.com +27 21 406 4919 Flash Sales Larger eCommerce and traditional retailers are acquiring/ partnering with flash sale sites Strategic Benefit Relationship Expanded inventory distribution Leverage established fulfillment network Exposure to flash-sale vertical • Nordstrom / HauteLook • GSI (eBay) / Rue La La • HauteLook / Nordstrom • Rue La La / GSI (eBay) • American Express/ Vente-Privee • Amazon / MYHABIT Structure • Acquisition • Acquisition • Acquisition • Acquisition • Joint Venture • Amazon launched
    •  1) Online Retail  2) Marketplaces  3) Flash Sales  4) Apparel eCommerce  5) Assessing “The Google Threat” 26 Agenda
    • 0 15 30 45 60 75 90 Consumer Electronics Apparel & Accessories Books / Music / Video Auto & Parts Furniture & Home Health & Personal Care Office Supplies & Equip Toys & Hobby Food & Beverage Other 2012 2016 27 Source: eMarketer March 2012, MIH Joe.Okleberry@mih.com +27 21 406 4919 Apparel eCommerce Within eCommerce, US apparel is forecast to grow at a CAGR of 16% through 2016, exceeding growth of all other categories USD in billions, % 2012-2016 CAGR +13% +14% +16% +7% +14% +15% +11% +13% +12% +7% Apparel is poised to grow faster than other eCommerce categories in the USA
    • 28 Source: Internet Retailer 2012 (USA), MIH Joe.Okleberry@mih.com +27 21 406 4919 Apparel eCommerce Offline retailers are the most pervasive type of retailer amongst those sites that sell apparel merchandise 0 20 40 60 80 100 120 140 Brand of Brands Rental/Subscription Retail-as-a-Service Flash-Sale Online Retailer Offline Retailer Retailer count by category amongst the top 171 apparel sites in the USA Nearly 75% of the top apparel retailer websites are run by offline retailers *Data available for 171 of the top 500 retailers
    • 29 Source: AlphaWise (Global), Morgan Stanley, MIH Joe.Okleberry@mih.com +27 21 406 4919 Apparel eCommerce The gap between willingness to purchase online and category wallet share is largest in the apparel category 0% 20% 40% 60% 80% Percent of global respondents who bought online Percent of respondants wallet share that was spent online Clothing showed broad online reach, but relatively low online penetration
    • 30 Source: AlphaWise (USA), Morgan Stanley, MIH Joe.Okleberry@mih.com +27 21 406 4919 Apparel eCommerce The need to “see, touch, try” apparel items before buying is the biggest barrier to increased online penetration 0% 20% 40% 60% 80% Shipping costs are too high Need to use / have the product immediately More convenient to purchase in stores Easier to return products if purchased in stores Need to see / touch / try on the product Clothing Footwear Athletic Apparel / Shoes
    • 31 Source: Morgan Stanley, MIH Joe.Okleberry@mih.com +27 21 406 4919 Apparel eCommerce Branded apparel companies are in a unique position to maintain wallet share online Control of inventory, distribution, and pricing Use optional distribution channels to: • Clear certain inventory • Highlight better selection on O&O sites e.g., Amazon e.g., Coach Factory on eBay Manufacturing Offline Retail Distribution Branded Retail Locations Department Stores Online Distribution Branded Websites Optional distribution Partnerships/ Online storefronts Flash Sale sites 3rd party sellers on non-O&O websites e.g., Gilt Groupe
    • 32 Source: MIH Joe.Okleberry@mih.com +27 21 406 4919 Apparel eCommerce Looking ahead, top performing online apparel players will share several common attributes Strong Fulfillment An estimated $8-10B invested in ~90 fulfillment centers globally Every employee rotates though customer service; high emphasis on personalized service Leverages 3rd party sellers and inventory to supplement 1P SKU count Consistent user experience across web, mobile, and tablet interface Customer Service Multi- Platform Integration Inventory Access
    •  1) Online Retail  2) Marketplaces  3) Flash Sales  4) Apparel eCommerce  5) Assessing “The Google Threat” 33 Agenda
    • 34 The Google Threat Source: MIH How much of a threat does Google pose to our eCommerce businesses?
    • 35 We analyzed 500 of the leading USA websites across 50 of the largest and most important Internet categories The Google Threat Source: SimilarWeb, ComScore, MIH Joe.Okleberry@mih.com +27 21 406 4919 Commerce (22) Content (22) Community (6) Apparel Group Buying Art & Music Maps & Local Info Email Auto Classifieds Health eCommerce Automotive Info National News File Sharing Auto eCommerce Home & Garden Beauty & Fitness Online Games IM Beauty & Fitness Jobs Classifieds Blogging Other News Online Dating Books, Music, Video Marketplaces Books & Literature Pets & Animals Photo Sharing Consumer Electronics Office Supplies Cloud Services Portals & Search Social Media Event Tickets Pets & Animals Education Info Reference Info Flash Sales Price Comparison Finance Info Science Info Gambling Property Classifieds Food & Drink Sports Info General Classifieds Shipping Services Health Info Streaming Media General Merchandise Travel Bookings Home & Garden Weather
    • 36 The Google Threat 0% 3% 6% 9% 12% 15% Percent of overall Internet page views by custom category (USA) Source: SimilarWeb, MIH Joe.Okleberry@mih.com +27 21 406 4919 3-month average April 2013 Although we will not account for the long tail in our analysis, most of the sizeable businesses will be included Portals & Search Engines Social Media Email Streaming Media In aggregate, our 50 custom categories account for 50% of overall Internet page views in the USA
    • 37 The Google Threat Source: MIH We identified four key metrics that can help quantify the threat:
    • 38 The Google Threat Key Variable #1: Search Dependency Which eCommerce categories are most dependent on search?
    • 39 Search Dependency 0% 10% 20% 30% 40% 50% 60% 70% Percent of overall inbound visits from search (weighted average) Source: SimilarWeb, ComScore, MIH 3-month average April 2013 eCommerce categories vary dramatically in terms of how much they rely on search engines for incoming traffic Overall Average 28%
    • 40 Search Dependency 58% 57% 51% 48% 40% 39% 39% 35% 0% 10% 20% 30% 40% 50% 60% 70% Percent of overall inbound visits from search (weighted average) Source: SimilarWeb, ComScore, MIH 3-month average April 2013 In the USA, vertical eCommerce and price comparison sites are highly dependent on search for inbound traffic Some eCommerce categories depend on search for more 35% or more of all inbound traffic
    • 41 Search Dependency 32% 32% 31% 29% 29% 27% 25% 0% 10% 20% 30% 40% 50% 60% 70% Percent of overall inbound visits from search (weighted average) Source: SimilarWeb, ComScore, MIH 3-month average April 2013 In the USA, general merchandise eCommerce and general classifieds are somewhat dependent on search It is common for an eCommerce site to depend on search engines for 25-35% of inbound traffic
    • 42 Search Dependency 23% 22% 21% 16% 16% 9% 9% 0% 10% 20% 30% 40% 50% 60% 70% Percent of overall inbound visits from search (weighted average) Source: SimilarWeb, ComScore, MIH 3-month average April 2013 In the USA, flash sales and group buying are two categories that only moderately depend on search Some eCommerce categories rely very little on search for inbound traffic
    • 43 The Google Threat Key Variable #2: Size of the Prize Which eCommerce categories offer the largest online opportunities?
    • 44 Size of the Prize Source: ComScore, IDC, Internet Retailer, Wordstream, Interactive Advertising Bureau, MIH Methodology: We leveraged a variety of 3rd party data to triangulate the market size of 22 eCommerce categories • ComScore eCommerce Brief • Internet Retailer (Top 500) • IDC eCommerce Estimates • IAB Online Ad Spend • WordStream (Google Ad Breakdown)
    • 45 Size of the Prize Source: ComScore Networks, MIH Merchandise Category 2012 Spend ($B) Computers / Peripherals / PDAs $36 Apparel & Accessories $27 Consumer Electronics (excl. computer peripherals) $14 Event Tickets $10 Office Supplies $9 Furniture, Appliances & Related Equipment $8 Books & Magazines $7 Home & Garden $5 Video Games, Consoles & Accessories $4 Music, Movies & Videos $3 Other (non-Travel) $32 ComScore does a good job of splitting out eCommerce spend by merchandise type, which was most useful
    • 46 Size of the Prize Source: Internet Retailer 2012, MIH Merchant Type 2011 Sales ($B) Mass Merchant $74 Computers / Electronics $29 Apparel / Accessories $22 Office Supplies $20 Books / Music / Video $6 Housewares / Home Furnishings $5 Hardware / Home Improvement $4 Food / Drug $4 Health / Beauty $4 Other $12 Internet Retailer reports data based on the type of merchant, which also proved useful
    • 47 Size of the Prize Google is likely most interested in double-digit billion dollar market opportunities Source: ComScore, IDC, Internet Retailer, Wordstream, Interactive Advertising Bureau, MIH $50B+ Travel General Merchandise Marketplaces Price Comparison $5-50B Consumer Electronics Apparel General Classifieds Group Buying Event Tickets Home & Garden Books / Music / Video Office Supplies Auto eCommerce Auto Classified Jobs Classifieds Property Classifieds <$5B Flash Sales Beauty & Fitness Health eCommerce Pets & Animals Shipping Services Gambling
    • 48 The Google Threat Key Variable #3: Brand Strength Which eCommerce categories have the strongest brands?
    • 49 Some eCommerce categories have high brand strength, including general classifieds and general merchandise Brand Strength Source: SimilarWeb, ComScore, MIH - 50 100 150 200 250 300 350 400 450 0% 10% 20% 30% 40% 50% 60% Relative Brand Strength (Direct traffic as a % of overall traffic) Trailing 12-month average (April 2013) AbsoluteBrandStrength (Averagemonthlyvisitsinmillions) General Merchandise eCommerce Marketplaces General Classifieds Consumer Electronics Shipping Services Price Comparison Automotive Classifieds
    • 50 The eCommerce categories below receive less than 50% of traffic via direct means, and little direct traffic overall Brand Strength Source: SimilarWeb, ComScore, MIH - 10 20 30 40 50 60 70 80 90 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Relative Brand Strength (Direct traffic as a % of overall traffic) Trailing 12-month average (April 2013) AbsoluteBrandStrength (Averagemonthlyvisitsinmillions) Price Comparison Automotive Classifieds Office Supplies Home & Garden Health eCommerce Event Tickets Property Classifieds Jobs Classifieds Automotive eCommerce Pets & Animals Beauty & Fitness
    • 51 The Google Threat Key Variable #4: Market Dominance Which eCommerce categories contain a dominant #1 player?
    • 52 Market Dominance 1.0x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.3x 1.4x 1.5x 1.6x 1.6x 1.7x 1.7x 1.8x 1.9x 2.9x 5.7x 10.7x 14.7x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x #22 #21 #20 #19 #18 #17 #16 #15 #14 #13 #12 #11 #10 #9 #8 #7 #6 #5 #4 #3 #2 #1 Total visits of #1 competitor vs. #2 competitor (by category) Source: SimilarWeb, comScore, MIH 12-month average April 2013 Google may have a tougher time disrupting eCommerce categories which have dominant #1 player KeyeCommerceCategories
    • 53 Market Dominance 2.9x 5.7x 10.7x 14.7x 0 2 4 6 8 10 12 14 16 Consumer Electronics eCommerce General Merchandise eCommerce Marketplaces General Classifieds Total visits of #1 competitor vs. #2 competitor (by category) Source: SimilarWeb, comScore, MIH 12-month average April 2013 In the USA, the categories below contain a dominant #1, driven by superior execution or inherent network effects Strong network effects in general classifieds and marketplaces provide the conditions for a dominant #1
    • 54 Market Dominance 1.3x 1.4x 1.5x 1.6x 1.6x 1.7x 1.7x 1.8x 1.9x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x Beauty & Fitness eCommerce Shipping Services Home & Garden eCommerce Automotive eCommerce Jobs Classifieds Group Buying Books / Music / Video eCommerce Office Supplies eCommerce Automotive Classifieds Total visits of #1 competitor vs. #2 competitor (by category) Source: SimilarWeb, comScore, MIH 12-month average April 2013 In the majority of eCommerce categories, the #1 player is between 1½ and 2 times as large as #2 player
    • 55 Market Dominance 1.0x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x 16.0x Price Comparison Travel Bookings Pets & Animals eCommerce Property Classifieds Health eCommerce Gambling Apparel eCommerce Event Ticket eCommerce Flash Sales Total visits of #1 competitor vs. #2 competitor (by category) Source: SimilarWeb, comScore, MIH 12-month average April 2013 The categories below contain no clear leader, which may make them more susceptible to competition from Google
    • 56 The Google Threat Proprietary Assets Which eCommerce categories are marked with proprietary data or technology? Scalability of Business Model Which eCommerce categories would Google have the most success scaling? Mobile Positioning Which eCommerce categories will benefit most from a platform shift to mobile? Margin Profile Which eCommerce categories offer the most attractive margins? Key Variables 5-9: There are a number of other variables that are important to consider, but they are difficult to quantify
    • 57 Low Threat: These eCommerce categories appear to face the least risk from future Google competition Source: MIH The Google Threat Categories (USA) Search Dependency Size of the Prize Brand Strength Market Dominance Overall Threat Shipping Services Low Low High Medium Lowest General Classifieds Medium Medium High High Low Marketplaces Low High High High Low Flash Sales Low Low Medium Low Low Group Buying Low Medium Medium Medium Low General Merchandise Medium High High High Low
    • 58 High Threat: These eCommerce categories appear to be most at risk from future competition from Google Source: MIH The Google Threat Categories (USA) Search Dependency Size of the Prize Brand Strength Market Dominance Overall Threat Price Comparison High High Low Low Highest Travel Bookings Medium High Medium Low High Property Classifieds High Medium Low Low High Auto Classifieds High Medium Low Medium High Auto eCommerce High Medium Low Medium High Home & Garden eCommerce High Medium Low Medium High
    • 59 Thank You