💻 E-Comm E-Merges
Online commerce is booming. Plus: Big year for unicorns, China IPOs, Apple vs. Tesla and status signaling in neobanks.
Wrapped Up Newsletter #6
Today’s Menu
Deep Dive: E-Commerce in 2020
Quick Bits: The Year of the Unicorn (and Rat)
Holiday Special: Bringing to you our favorite blogs and websites
What Else We're Following: 6 articles about everything from the art of cold e-mailing to breaking into VC
Tweet of the Week by Ankith Harathi
Jobs - Internships/Full-Time: 10 full-time jobs and internship postings
Feedback: Help us to deliver the right content straight into your inbox
Deep Dive 🤿
As the holiday season wraps up and the new year begins, one can only figure out what would be the most relevant topic to close out a newsletter with for the year. So much has happened, and we realize there's no good recap to describe how crazy 2020 was. In hopes for inspiration, we even looked at Google Trends, which aggregates quite nicely how random our search queries has been (and it was a great year for dalgona coffee, Among Us and Travis Scott).
From hoarding toilet paper from the grocery line to getting toilet paper delivered from our phones, it didn’t take long for us to have our "oh shit" moment.
It’s not new news how COVID-19 has changed the way we shop. While the transition into e-commerce was rather gradual in the past decade, things change quickly when you're shut within the confines of your homes.
Many brick-and-mortar companies have seen the imminent or ultimate demise of their businesses (we've seen around 610 U.S. bankruptcies to date), with roughly 20% of the filings categorized under nonessential retail. Essential or not, using technology (going digital) will be considered more than just a complement to a business, as consumer habits change and emergent players arise. We take a deeper look into few themes we see in the space of e-comm, primarily within DTC and marketplaces.
Direct-to-consumer gets down-to-earth
Last week, Coefficient Capital came out with their report on the new consumer in 2021. The 102-page slide deck is extensive but definitely worth a read; they draw some interesting parallels between the rise in online commerce and the desire for personalized brands, especially within the trillion-dollar F&B sector:
DTC reaped the benefits of online commerce as the overall segment saw a boost in revenue (with a slight decline in customer acquisition costs)
Large strategic players will fasten incumbent-DTC deals at more expensive valuations
Smaller, personalized brands that focus on building community and relationships with the consumer will be the ones that succeed
And by succeeding, we mean creating a niche cult following. SimilarWeb shared its rankings of this year's 15 fastest-growing DTC brands by web traffic and we realize you don't need to be a toilet paper brand to make the list.
Top of the list is Youth To the People, a brand that fuses superfood skincare with social activism
Other interesting mentions include Liquid I.V. (hydration supplement to quench your thirst) and Cuup (affordable, minimalist lingerie).
Apparel and fashion brands made the most headway into DTC during these times. However, finding future growth won't be easy due to rising competition within a maturing sector. Expect those that won the hearts of the online consumer to explore new distribution channels and possible M&A deals.
Becoming the digital Unilever
Amazon had a hell of a year (and not just because the pandemic accelerated spending on the platform).
Thrasio, an acquirer of Amazon 3rd-party private-label businesses and one of the top 25 sellers on the platform, raised at a $1 billion pre-money valuation and became the fastest U.S. company to reach profitable unicorn status
Anker, a Chinese electronics accessory maker and “Amazon-native” brand, made its debut on the public markets
Digital marketplaces have opened the doors for small businesses in the early wave of e-commerce, and merchants reaped the benefits of selling their goods on the now-ubiquitous mall of the world. From the creation of DTC unicorns to the proliferation of Amazon FBA acquirers like Razor, investors are taking a ~$1 billion bet into finding and building the next digital Unilever or P&G.
Independent merchants on Amazon's marketplace will accumulate to more than $200 billion in sales this year; tens of thousands have revenues of over $1 million per year.
For the small timers who have successfully built up their businesses virtually, the digital sky is the limit. Startups that strive to replicate Thrasio's business model are buying up dozens of emerging winners who have a solid track record on Amazon and integrating them into their portfolio. While the barrier to entry for this industry is still low, scaling up quickly and efficiently remains the challenge.
As Amazon continues to put the fuel into the tanks for these online merchants, we can expect more online consumer goods companies and marketplaces to rev up those engines in a post-COVID era.
Quick Bits 🌎
Recap in the West: The Year of the Unicorn
Salesforce bets and wins big in 2020. Snoop Dogg and a $100 million bet on cannabis. Great time to be in spacetech. Telegram wants to monetize. Huawei and ZTE get ripped off and replaced. Journalists get hacked. Move aside AWS, Google Cloud's now available 24/73. IBM doubles down on cloud consulting. Bolt (not the ride-hailing platform) gets a piece of the online checkout pie. Privacy platform OneTrust attracts some serious cash. Vimeo gets independent. Messaging takes another form with Honk. Octopus spreads its tentacles into energy supply with AI. Jack Dorsey's Square squares up with Jay-Z's Tidal. 5G goes auctioning. Apple said "no thanks" to Tesla and builds its own car. ACA provider Oscar Health looks to make its debut. Peloton wants to build its manufacturing arm. Ironclad gets an ironclad valuation. Opendoor opens its doors to investors. Zoom gets personal with calendar and email.
Recap in the East: The Year of the Rat
China's next bet on IPOs and tech startups. TikTok rival Kuaishou seeks publicity in the new year. Digital finance in China sees hurdles. Lalamove makes moves in on-demand logistics. Indonesia makes plays in insurtech. A love triangle in court between Amazon, Future and Reliance. The Philippines sets the stage for fintech. Xpeng's global ambitions for EV starts in Norway. Softbank and (possibly) Traveloka gets in on SPAC. Gojek goes more digital on payments. Temasek invests into Info Edge for info on tech. Local languages in India finds ground with its first local unicorn in the space. TikTok parent ByteDance goes gaming for deals. Google attempts to find India's TikTok and glances at lock-screen content. Chinese AI chip unicorn challenges Nvidia. WeRide rides on another cash infusion to make autonomous minibuses.
Holiday Special 🎄
Here are some of our favorite blogs and websites to keep you busy:
Ben Thompson's Stratechery – comprehensive analyses of the strategy and business side of technology and media, and the impact of technology on society
Sriram Krishnan's The Observer Effect – in-depth interviews with high-profile people from the startup world (e.g. founders of Andreessen Horowitz, Spotify and Shopify)
Marker by Medium – business news and articles for startups and leaders
Mark Suster's Snapstorms - a fun, engaging way to learn more about the dynamics of entrepreneurship and fundraising though videos
Paul Graham's essays - the Y Combinator co-founder delivers life advice for some post-festive-meal thought provocation
Take a look at First Round Review - the self-styled Harvard Business Review for Startups.
What Else We're Following 👀
Paraj Mathur @ BIP Capital tells his story about breaking into VC.
Food. Healthcare. Media. What to look out for in 2021!
A year of surprises, told by 5 prominent VCs.
Morning Brew's guide to help you land your next job via cold-emailing.
An interesting take on how status signaling (signaling-as-a-service) can influence banking for the future.
If you're waaaay behind on holiday shopping (blame it on shipping), you're not alone...here’s a list of gift-giving ideas keeping your family up with the times.
Tweet of the Week 🐦
Jobs - Internships/Full-Time 👩🏽💼
Entry Level (0-2 Years)
Atlantic Bridge - Investment Associate - London
Village Global - Investor - Remote
HomeToGo - Founders' Associate - Berlin
Starburst Aerospace - Venture Analyst Intern - Remote
Paladin Capital Group - VC Research Intern - Remote
Experienced (2+ Years)
Entrepreneur First - Head of Investor Relations - London
Taboola - Country Manager DACH - Berlin
Worklife Ventures - Chief of Staff - Remote
Legacy Venture - Investment Analyst - Palo Alto
Samsung Catalyst Fund - VC Intern - New York
Feedback
Hey there! We are Jeff, Dom and Vas, coming to you live from INSEAD. Thanks for reading Wrapped Up. We'd love to get your feedback - feel free to email us at jeffrey.dong@insead.edu! It will help us to improve the newsletter and deliver the content you want right into your inbox. Thanks!
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