This piece from the NYTimes highlights that B2B (or B2B2C) can be sexy again. Consumerization in this space recently led by Slack, Zoom and Affirm, among others, has shown that there is an increased interest in the sector both from investors and enterprises/end users.
A lot of what we’re seeing in the news recently with public markets not being receptive to the latest wave of tech IPO’s is ultimately the result of quasi-IPO’s that have been led in the private markets as a result of significant later stage funding from conglomerates like Softbank and crossover firms like TRowe and Fidelity. This is an upward bias at its finest and cracks are starting to show in the thinking.
As Amazon took off here in the US, another similar startup business took its sights on the Far East. Alibaba may look similar to AMZN but under the hood they are very different. While AMZN handily beats BABA on top-line, BABA wins by a large measure on opex margins. This is inherent in their business model which is more similar to Ebay than to AMZN. Whereas AMZN primarily owns warehouses and inventory, BABA is lighter and collects a merchant fee as a middleman between buyers and sellers.
By guest author: Brandon Tendler
As Jorge Hernandes arrives at his destination in a darkly lit industrial complex off the beaten path in North Miami, he sees a small sign that says “pick up here”, Jorge enters the facility where about 7 other delivery drivers await, all of their names listed on the wall with real time updates tracking where their orders are in the kitchen. He notices in the back several separate units, each has its own prep area, kitchen and packing station. The to go bags leaving the facility are all adorned with different brands and contain different cuisines from new restaurant brands never heard of before.