Alibaba buys stake in U.S. e-commerce site Zulily

Alibaba Group Holding Ltd. has taken a stake of more than 9% in U.S. e-commerce site Zulily Inc., giving it new exposure to the American consumer market.

The stake was disclosed in a securities filing the showed Alibaba spent around $56 million buying stock in Zulily, much of it as the U.S. The company’s shares plunged in recent days.

It wasn’t previously known that Alibaba owned Zulily shares. The Seattle-based website sells a wide range of clothing and other merchandise mostly aimed at moms. It offers deep discounts in “flash sales” that typically have time limits.

The company considers Alibaba BABA, -0.09%  a competitor, according to Zulily’s ZU, +12.82%  filings.

Alibaba, which has made minority investments in a number of U.S. Technology companies, isn’t looking to acquire Zulily outright, a person familiar with the matter said.

Five-year-old Zulily went public in November 2013 at $22 a share. The shares then surged above $70 in early 2014, as the company reported fast sales growth and added new customers at a rapid pace. Its sales topped $1 billion last year, making it one of the fastest retailers to reach that milestone.

But Zulily’s shares have plunged this year in the wake of disappointing quarterly reports that showed sharply decelerating sales growth and difficulty holding on to customers, many of whom aren’t returning to Zulily’s website after making a first purchase.

Zulily’s shares closed at $13.30 on Friday, down 43% so far this year but off a record low of $9.09 touched this past week. The company’s market capitalization is now close to $1.5 billion.

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Australian Retail e-commerce Sales to Top $10 Billion in 2015

Retail e-commerce sales will account for 4.5% of retail sales in the country this year 

Retail e-commerce sales in Australia will rise 14.4% this year to pass $10 billion, according to marketer’s latest estimates of retail sales, online and offline, around the globe. In 2014, e-commerce sales in the country increased 17.3% to account for over 4% of total retail sales, and that share will expand to 4.5% in 2015. Low double-digit gains will continue through 2017, and by the end of our forecast period, retail e-commerce sales will total $14.52 billion and represent 5.6% of retail sales in the country. 

Australia falls in the middle of the pack in both absolute terms and percentage of total retail e-commerce sales when compared with the other Asia-Pacific countries for which we produce estimates, behind China, Japan and South Korea and ahead of India and Indonesia.

Interestingly, digital buyer penetration among internet users in Australia is the second highest in Asia-Pacific. EMarketer estimates that 79.4% of internet users in the country will purchase via any digital channel this year, behind only Japan (82.0% penetration). Due to its size, though, Australia has the smallest digital buyer population in Asia-Pacific, at 12.1 million.

Australia’s e-commerce landscape is crowded with international competitors—especially eBay-owned properties—according to October 2014 data from Experian Hitwise Australia. EBay Australia catalogued the highest number of visits, 23.1 million, during the week examined, accounting for 12.9% of retail site visits during that timeframe. 

The local edition of eBay-owned classifieds site Gumtree was second with 13.3 million visits and a 7.4% share, followed by eBay with 13.2 million for a 7.4% share, and Amazon with 11.6 million for a 6.5% share. [Note: The Australian version of Amazon’s site, Amazon.com.au, sells only ebooks.] 

The remaining top 10 e-commerce sites, with visitor shares of around 1% or less, included user-supported deals-posting site OzBargain, consumer electronics retailer JB Hi-Fi Australia and hardware chain Bunnings Warehouse, Apple’s site, Alibaba Group-owned discounts site AliExpress and department store chain Target Australia. The list reflects a landscape dominated by consumer-to-consumer resale sites, alongside options for business-to-consumer transactions.

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