News

19 Jun, 2019
Brands and tech giants come together to launch first digital safety alliance
Marketing Week

Sixteen of the world’s biggest advertisers including Procter & Gamble, Unilever, Adidas and Mastercard have joined forces to launch a global alliance with the aim of improving digital safety.

Founded by the World Federation of Advertisers, the Global Alliance for Responsible Media is rallying publishers and platforms to do more to address harmful and misleading content. It also wants them to work together to develop and deliver against a concrete set of actions, processes and protocols for protecting people and brands.

Other advertisers involved include Bayer, BP, Danone, Diageo, General Mills, GSK Consumer Healthcare, LVMH, Mars, Mondelēz International, NBCUniversal, Nestlé and Shell, while experts at Dentsu, GroupM, IPG, Publicis and Omnicom Media Group will represent media agencies.

In addition to Google and Facebook, media companies and platforms at launch include NBCUniversal, Teads, TRUSTX, Twitter, Unruly and Verizon Media, while supporting industry associations include the ANA, 4As, Interactive Advertising Bureau, ISBA, Mobile Marketing Association, Coalition for Better Ads, Effie Worldwide and WFA alongside their local advertising association members.

Speaking to Marketing Week at Cannes Lions 2019, P&G’s marketing boss Marc Pritchard said: “Now all the measured platforms have measurement and verification in place for viewability, audience reach and anti-fraud, we’re moving to transparency 2.0, which is auditing of brand safety and control over content quality.

“Civility of editorial comments and cross-platform measurement to ensure we don’t have excess frequency of advertising, that’s the next generation, which is one of the reasons why we’re now banding together as an industry consortium.”

An immediate focus will be to form and empower an inclusive working group charged with prioritising a set of concrete steps already under consideration by the Alliance.

This is the first time an alliance that represents all sides of the media industry is forming, underpinned by a working group committed to meeting regularly and reporting back on its progress to members and the industry.

“When industry challenges spill into society, creating division and putting our children at risk, it’s on all of us to act,” says Luis Di Como, Unilever’s EVP global media.

“We’ve achieved a lot through Unilever’s Responsibility Framework but to do more, we must do it together. Founding this Alliance is a great step towards rebuilding trust in our industry and society.”

Isabel Massey, global media director, Diageo, adds: “We take our role as a responsible marketer very seriously, as do many others, which means there’s no better time to move the industry forward collectively.

“You’ll hear me start every meeting in Cannes with one simple question: ‘What more could we do together?’ I ask others to do the same.”

The move follows the launch of the Conscious Advertising Network in the UK, voluntary coalition of brands, agencies, tech providers, and also NGOs and interest groups, which are working together on the idea that ethics need to catch up with the tech side of advertising.

It focuses on ad fraud, diversity, informed consent, hate speech, children’s wellbeing and fake news, aiming to tackle these six key issues. Companies including Accenture, The Body Shop, eCover and method have signed up, while the network is also supported by ISBA.

18 Jun, 2019
Amazon to introduce 30 minute drone delivery ‘within months’
Inside Retail Australia

Amazon expects to offer customers drone delivery in under 30 minutes ‘within months’.

The e-commerce giant unveiled the latest Prime Air drone design at its re:MARS Conference in Las Vegas last week.

Jeff Wilke, CEO of global consumer at Amazon said in a blogpost that the company has been working hard at building “fully electric drones that can fly up to 15 miles and deliver packages under five pounds to customers in less than 30 minutes”.

“With the help of our world-class fulfillment and delivery network, we expect to scale Prime Air both quickly and efficiently, delivering packages via drone to customers within months,” Wilke said.

The Prime Air drone features a hybrid design and can do vertical takeoffs and landings.

Wilke said that Prime Air is one of many sustainability initiatives to help achieve Shipment Zero, the company’s vision to make all Amazon shipments net zero carbon, with 50 per cent of all shipments net zero by 2030.

“When it comes to emissions and energy efficiency, an electric drone, charged using sustainable means, traveling to drop off a package is a vast improvement over a car on the road,” Wilke said.

18 Jun, 2019
Bunnings to have full e-commerce offer by Christmas
Inside Retail Australia

Bunnings managing director Michael Schnieder has announced he expects the homewares and DIY retailer will have its e-commerce operations online and fully operational nationwide before Christmas 2019.

The business has trialled a more limited online offering in select locations, but has previously stated it would roll-out a more robust offering by September 2020. 

“We believe that, done right, our click and collect offer will be rolled out across Australia by Christmas – well ahead of schedule,” Schneider told Inside Retail.

“This follows the successful introduction of click and collect in Tasmania in April. We’ve been really delighted with the progress and customers’ response to the offer.

“This is a real testament to our team, who have worked hard to make this happen, ensuring we are building an offer that delivers choice and convenience when it comes to how people want to shop with us.”

Schnieder also indicated that he expects lower interest rates and the Coalition’s incoming tax cuts to spur customers into spending, delivering some relief in a difficult retail environment – one which NAB chief economist Alan Oster said fallen to levels not seen since the GFC.

Bunnings has the fourth most visited shopping and classifieds website in Australia, but only enabled online ordering of select items in June of 2018.

The DIY retailer has previously said it will shift some of its focus toward first-time DIY customers to target the "next generation of customers".

The trends of high-density living and long-term renting have informed the business’ products moving forward, as opposed to its more traditional large-scale renovation focus. 

 

 

18 Jun, 2019
Bunnings to have full e-commerce offer by Christmas
Inside Retail Australia

Bunnings managing director Michael Schnieder has announced he expects the homewares and DIY retailer will have its e-commerce operations online and fully operational nationwide before Christmas 2019.

The business has trialled a more limited online offering in select locations, but has previously stated it would roll-out a more robust offering by September 2020. 

“We believe that, done right, our click and collect offer will be rolled out across Australia by Christmas – well ahead of schedule,” Schneider told Inside Retail.

“This follows the successful introduction of click and collect in Tasmania in April. We’ve been really delighted with the progress and customers’ response to the offer.

“This is a real testament to our team, who have worked hard to make this happen, ensuring we are building an offer that delivers choice and convenience when it comes to how people want to shop with us.”

Schnieder also indicated that he expects lower interest rates and the Coalition’s incoming tax cuts to spur customers into spending, delivering some relief in a difficult retail environment – one which NAB chief economist Alan Oster said fallen to levels not seen since the GFC.

Bunnings has the fourth most visited shopping and classifieds website in Australia, but only enabled online ordering of select items in June of 2018.

The DIY retailer has previously said it will shift some of its focus toward first-time DIY customers to target the "next generation of customers".

The trends of high-density living and long-term renting have informed the business’ products moving forward, as opposed to its more traditional large-scale renovation focus.

14 Jun, 2019
Katrina Lake’s Fortune Swells $45 Million In One Day After Stitch Fix Smashes Earnings
SOURCE:
Forbes
Forbes

Stitch Fix founder and CEO Katrina Lake became $45 million richer in just one day after her e-commerce company delivered another quarter of double-digit growth.

The online personal shopping service, which uses a combination of data science and human stylists to send customers personalized outfits in the mail, smashed expectations in its quarterly earnings report on Wednesday evening.

Shares of Stitch Fix gained 24% in after-hours trading, opening at around $29 on Thursday morning. The stock paired some of its gains over the course of the day, but still locked in a 14.7% gain on Thursday. The jump in the stock price boosted Lake’s net worth by $45 million at market close, to $375 million. Her fortune stems from the roughly 13 million shares that she owns in the company.

Earlier this week, Lake, 36, made her debut at number 55 on Forbes’ Self-Made Women list , which ranks the richest and most successful female entrepreneurs in the country and includes the likes of Oprah, Tory Burch and Sheryl Sandberg. The minimum net worth to make this year’s list, which was expanded to 80 women from 60, was $225 million.

Stitch Fix said on Wednesday that its revenue grew 29% to $409 million in the third quarter, topping analyst estimates of $395 million. Net income fell from $9.5 million, or 10 cents per share, to $7 million, or seven cents per share, compared with the same period a year ago. However, it still topped the three-cent loss that analysts had anticipated. Stitch Fix also said that its number of active clients swelled 17% year-over-year to 3.1 million people.

“In an environment where many retailers face growth challenges, we remain confident in our ability to deliver personalization at scale using our unique combination of human judgment and data science to continue delighting clients and growing our business,” Lake said on the company’s earnings call.

14 Jun, 2019
Wesfarmers buys Catch to help bring Kmart, Target into digital age
The Sydney Morning Herald

Retail giant Wesfarmers expects the relatively tiny Catch Group will inject online savvy and a "growth culture" into its business to help brands like Kmart and Target adapt to the digital age.

The conglomerate, which also owns home improvement retailer Bunnings and office and stationery group Officeworks, acquried Catch for $230 million, seeing it as both a growth opportunity and a source of digital knowhow.

"Catch has built a really successful and scalable and business model that can continue to grow in its own right - that excites us," Wesfarmers managing director Rob Scott said.

"We also think that we can learn a lot from the capability of [CEO] Nati [Harpaz] and the team at Catch; that we can learn a lot about a more entrepreneurial, growth-oriented culture."

Catch Group started life in 2006 as Catch of the Day, which put one discount product on offer every 24 hours, but now stocks tens of thousands of products and has more than 1 million active customers.

A team of buyers scour the world for distressed, out-of-season or unsold products from leading brands that Catch then sells at below-market prices.

Mr Scott said Catch gave Wesfarmers access to a market it did not currently reach with its bricks and mortar department stores, given most (80 per cent) of what Kmart sells is now its own private label products.

Only about 3 per cent of sales across Kmart and Target are online, compared to around 10 per cent across the retail sector as a whole. Mr Scott said that was growing at around 50 per cent a year, with the strongest growth coming in click-and-collect orders.

"So we see the future is very much about having a high quality store footprint complimented by a world-class digital offer," Mr Scott said. "That’s what we’re building through the investment in Catch."

Catch Group managing director Nati Harpaz said Catch would "continue to deliver innovation in the online market in Australia, with the focus of delivering great value and savings to our customers."

Catch, which as recently as late last year was looking to list on the ASX, reported $262 million in revenue in the 12 months to June 30 last year, up 18 per cent on the prior year, according to accounts lodged with the corporate regulator.

Catch's turnover equates to less than one percent of Wesfarmers' $67 billion in revenue last year, and about 3 per cent of the Kmart and Target's $8.8 billion in sales.

Catch made an underlying profit of $1 million in 2018, down from $7 million a year earlier, and ran at a $4.2 million loss when including a write down to the value of its LUX Products brand, which was shut down.

The company's co-founders, brothers Hezi and Gabby Leibovich, own about 90 per cent of the company, after buying out previous investors in the past three years, which have included James Packer and Seek co-founder Andrew Bassat.

The Catch aquisition is the latest in a string of transactions under Mr Scott that are reshaping Wesfarmers.

This year alone Wesfarmers has made a $776 million takeover bid for Kidman Resources - a miner and producer of the lithium used in batteries for electric vehicles - which is likely to go through; and an as-yet unsuccessful $1.5 billion bid for the rare earths miner Lynas Corp.

Last year it spun off its largest business, Coles, into a separate ASX-listed company, and kept 15 per cent of its shares. It has also recently sold stakes in two coal mines for a combined $1.5 billion, and Kmart Tyre and Auto for $350.

Mr Scott said Wesfarmers' two live transactions - Catch and Kidman, worth about $1 billion together - were relatively modest considering Wesfarmers' $46 billion market capitalisation.

He said he felt no urgency in putting Wesfarmers' flush balance sheet to work with further acquisitions, and would only buy new businesses when they would improve returns for shareholders.

 

12 Jun, 2019
Amazon beats Apple and Google to become the world’s most valuable brand
Marketing Week

has broken the longstanding reign of Apple and Google to become the world’s most valuable brand worth $315.5bn – the first new brand to claim the number one spot in 12 years.

According to Kantar’s latest global BrandZ ranking, Amazon’s value grew 52% between 2018 and 2019, while Apple grew 3% to $309.1bn and 

has broken the longstanding reign of Apple and Google to become the world’s most valuable brand worth $315.5bn – the first new brand to claim the number one spot in 12 years.

According to Kantar’s latest global BrandZ ranking, Amazon’s value grew 52% between 2018 and 2019, while Apple grew 3% to $309.1bn and Google by 2% to a little just under that at $309bn.

Microsoft, which sits in a comfortable fourth place with a value of $251bn, recorded the second-best increase in value in the top 10, up 25%, followed by Visa in fifth place, up 22% to $178bn, and Alibaba in seventh, up 16% to $131bn.

Amazon’s global value this year is 409% higher than Microsoft’s was in 2006, which was the first brand to hold the top spot when the ranking launched.

“Amazon’s rise in brand value has been steady over the past few years as it has evolved from an online, price-led retailer to an ‘ecosystem brand’,” says Graham Staplehurst, BrandZ’s global strategy director. “It has successfully connected the values and positive brand associations from one business – ease of use, speed, reliability – to other areas.

“Enabled by developing technologies, and not being afraid to try and fail at times, Amazon has diversified into a range of offers from cloud computing to smart devices, from payment systems to the best in entertainment. As the boundaries between traditional businesses blur, Amazon has been ideally positioned to seize emerging opportunities.”

The only brands in the top 10 to decrease their value are Facebook (sixth) down 2% and Tencent (eighth) down 27% – although Tencent’s blow can largely be explained by a new constraint on gaming revenues in China.

Overall, the top 100 has gained almost a third of a trillion dollars ($328bn) in value over the past year to reach $4.7tn – roughly the combined GDP of Spain, Korea and Russia.

Total value grew by 7%, almost twice the growth rate of the global economy, despite the US and China trade war impacting consumer confidence. Much of this growth has come from consumer technology brands, which are now worth more than $1tn collectively.

Challengers

While, the top 10 has remained largely unchanged in terms of the brands within it, a couple of contenders are poised to disrupt the status quo.

Mastercard (12th) is one of the strongest challengers, with a 30% year-on-year increase in value – 1,138% times higher than 10 years ago – meaning it is far outpacing the aggregated growth rate of the top 10 (9.7%) and highly likely it will break through into the top 10 next year.

“Mastercard is a particularly interesting one because it shows the value of brand and some changes in the world around us as well,” Staplehurst says.

“Brands that are able to have a clear identity, have some meaning for consumers, but also operate across more sectors [have the best potential for future growth]. This is what Mastercard is doing, it’s inserting itself into these ecosystems that are developing in a very useful for itself way.”

As Mastercard’s marketing boss Raja Rajamannar told Marketing Week earlier this year: “We are innovating non-stop in how we work. We try to bring those innovations to the table and see how we can partner with other companies to bring these to life. So the innovation could come from within Mastercard or from outside of the company.”

Verizon (11th) is also outpacing the top 10 with 11% growth over the past year and 434% growth compared with 2009. However, it is Instagram which is the fastest riser this year, up 95%.

Newcomers and dropouts

There are nine newcomers this year – the majority of which are Chinese and US technology brands. These are Didi Chuxing (71st), Xiaomi (74th), Meituan (78th), Dell Technologies (81st) – which re-enters the ranking now it is no longer a private company and its financials can be valued – Xbox (87th) and Tata Consultancy Services (97th).

Other newcomers include Chanel (31st) – another re-entry for the same reason as Dell, Indian insurance brand LIC (68th) and Haier (89th).

According to Kantar, the newcomers score much higher than other brands on a number of measures including salience (146 vs 124), social presence (123 vs 110), purpose (118 vs 110), brand experience (117 vs 109), creativity (115 vs 105) and ‘interested to see what they do next’ (120 vs 110).

This means nine brands have fallen out of the ranking this year: China Life, Bank of China, eBay, SF Express, ANZ, BT, Ford, Honda and Pepsi.

This doesn’t necessarily mean that they’re not growing, but they’re not growing at a fast enough rate to stay in the top 100. The minimum value needed to get into the top 100 is now 217% higher than in 2006 when it was around £4bn, making it a tough field to play – and stay – in.

It is worth noting the brands that have dropped out the top 100 have almost equal salience with their global competitors, but they lack ‘meaning’ and ‘difference’, which shows salience is no longer a guarantee of growth but merely a maintenance factor.

Just three UK brands made the top 100 this year: Shell (65th) up 2%, Vodafone (49th) down 8% and HSBC (56th) down 2%.

by 2% to a little just under that at $309bn.

Microsoft, which sits in a comfortable fourth place with a value of $251bn, recorded the second-best increase in value in the top 10, up 25%, followed by Visa in fifth place, up 22% to $178bn, and Alibaba in seventh, up 16% to $131bn.

Amazon’s global value this year is 409% higher than Microsoft’s was in 2006, which was the first brand to hold the top spot when the ranking launched.

“Amazon’s rise in brand value has been steady over the past few years as it has evolved from an online, price-led retailer to an ‘ecosystem brand’,” says Graham Staplehurst, BrandZ’s global strategy director. “It has successfully connected the values and positive brand associations from one business – ease of use, speed, reliability – to other areas.

“Enabled by developing technologies, and not being afraid to try and fail at times, Amazon has diversified into a range of offers from cloud computing to smart devices, from payment systems to the best in entertainment. As the boundaries between traditional businesses blur, Amazon has been ideally positioned to seize emerging opportunities.”

The only brands in the top 10 to decrease their value are Facebook (sixth) down 2% and Tencent (eighth) down 27% – although Tencent’s blow can largely be explained by a new constraint on gaming revenues in China.

 

Overall, the top 100 has gained almost a third of a trillion dollars ($328bn) in value over the past year to reach $4.7tn – roughly the combined GDP of Spain, Korea and Russia.

Total value grew by 7%, almost twice the growth rate of the global economy, despite the US and China trade war impacting consumer confidence. Much of this growth has come from consumer technology brands, which are now worth more than $1tn collectively.

Challengers

While, the top 10 has remained largely unchanged in terms of the brands within it, a couple of contenders are poised to disrupt the status quo.

Mastercard (12th) is one of the strongest challengers, with a 30% year-on-year increase in value – 1,138% times higher than 10 years ago – meaning it is far outpacing the aggregated growth rate of the top 10 (9.7%) and highly likely it will break through into the top 10 next year.

“Mastercard is a particularly interesting one because it shows the value of brand and some changes in the world around us as well,” Staplehurst says.

“Brands that are able to have a clear identity, have some meaning for consumers, but also operate across more sectors [have the best potential for future growth]. This is what Mastercard is doing, it’s inserting itself into these ecosystems that are developing in a very useful for itself way.”

As Mastercard’s marketing boss Raja Rajamannar told Marketing Week earlier this year: “We are innovating non-stop in how we work. We try to bring those innovations to the table and see how we can partner with other companies to bring these to life. So the innovation could come from within Mastercard or from outside of the company.”

Verizon (11th) is also outpacing the top 10 with 11% growth over the past year and 434% growth compared with 2009. However, it is Instagram which is the fastest riser this year, up 95%.

Newcomers and dropouts

There are nine newcomers this year – the majority of which are Chinese and US technology brands. These are Didi Chuxing (71st), Xiaomi (74th), Meituan (78th), Dell Technologies (81st) – which re-enters the ranking now it is no longer a private company and its financials can be valued – Xbox (87th) and Tata Consultancy Services (97th).

Other newcomers include Chanel (31st) – another re-entry for the same reason as Dell, Indian insurance brand LIC (68th) and Haier (89th).

According to Kantar, the newcomers score much higher than other brands on a number of measures including salience (146 vs 124), social presence (123 vs 110), purpose (118 vs 110), brand experience (117 vs 109), creativity (115 vs 105) and ‘interested to see what they do next’ (120 vs 110).

This means nine brands have fallen out of the ranking this year: China Life, Bank of China, eBay, SF Express, ANZ, BT, Ford, Honda and Pepsi.

This doesn’t necessarily mean that they’re not growing, but they’re not growing at a fast enough rate to stay in the top 100. The minimum value needed to get into the top 100 is now 217% higher than in 2006 when it was around £4bn, making it a tough field to play – and stay – in.

It is worth noting the brands that have dropped out the top 100 have almost equal salience with their global competitors, but they lack ‘meaning’ and ‘difference’, which shows salience is no longer a guarantee of growth but merely a maintenance factor.

Just three UK brands made the top 100 this year: Shell (65th) up 2%, Vodafone (49th) down 8% and HSBC (56th) down 2%.

12 Jun, 2019
Instagram is growing its value faster than any other brand
Marketing Week

A wide variety of brands with diverse marketing approaches are rising up in this year’s global BrandZ ranking of the top 100 brands by Kantar, showing that any sector or category is ripe for disruption.

Facebook-owned Instagram is this year’s fastest riser, climbing 47 places after a 95% increase in brand value takes it to $2.82bn.

The second-fastest riser is Lululemon (77%) followed by Netflix (65%), Salesforce (58%), Adobe (57%) and Shiseido (56%).

All of these brands have grown at a faster rate than this year’s leader Amazon, which increased its value by 52%. Other fast risers include Uber (51%), LinkedIn (46%), YSL (45%) and restaurant chain Chipotle (40%).

“Some [brands] are still establishing themselves, growing by reaching previously unexposed audiences, such as Instagram. Some are reminding consumers of what they stand for like Chipotle, or refreshing their positioning and perceptions like YSL,” explains Graham Staplehurst, BrandZ’s global strategy director.

“Others are extending and innovating into new sectors, as we are seeing with Uber expanding into home food delivery with Uber Eats and even underwater ride hailing ScUber on the Great Barrier Reef.”

He adds: “Many of the fastest growing brands are tapping into evolving consumer ecosystems, or are creating their own, like newcomers Meituan (78th) and Didi Chuxing (71st) in China. They are brands that keep themselves relevant to consumers and easy to choose and use.”

Due to an increased focus on lifestyle and wellbeing, luxury brands are having somewhat of a renaissance and are the fastest growing category this year (29%). Alongside YSL, top performances come from Dior (29%), Louis Vuitton (15%), Gucci (13%) and Hermes (10%).

Luxury is driving growth in the premiumisation of the personal care category too, with high-end personal care brands (Clinique, Estée Lauder, Garnier, Lancôme, L’Oréal, Shiseido) up 14% collectively, while mass personal care brands (Colgate, Crest, Dove, Gillette, Head & Shoulders, Nivea, Olay, Oral-B, Pantene) are down 4%.

Retail is the second fastest growing category (25%), and the strategies of the highest performers – including Amazon, Home Depot, Walmart, Costco, Ikea, Lowe’s and Aldi – indicate that if brands move with changing consumer needs and behaviours to deliver high quality experiences they can still win in a challenging retail landscape.

Of course, not all brands are growing in value. After Tencent, the biggest losers are GE (-32%), Baidu (-22%) and DHL (-19%), with other value-declining brands including Zara (-16%), Marlboro (-12%), IBM (-11%), Samsung (-6%) and Gillette (-8%).

Not one car brand increased its value in 2019, with BMW and Mercedes-Benz both down 9% and Toyota down 3%, while Ford and Honda drop out of the ranking completely. Meanwhile, with a brand valuation of $9bn, Tesla is close to entering the ranking for the first time.

 

11 Jun, 2019
WiseTech cranks out fortunes for leaders
Australian Business Review

Richard White’s software logistics firm, WiseTech Global, is the new millionaires’ factory, with the billionaire set to be joined by three other directors and executives among the ranks of Australia’s wealthy elite.

White was ranked 20th on The List- Australia's Richest 250 when it was published by The Australian in late March with wealth of $3.3 billion, a stunning amount given WiseTech (WTC) floated on the ASX with market capitalisation of $1.19bn only four years ago.

He was joined on The List by fellow WiseTech shareholders and non-executive directors Charles Gibbon and Michael Gregg, who had wealth of $470m and $320m respectively.

WiseTech has since gone on another good run, hitting a high of $27.07 late last week, which sees White’s stake in the group reaching about $3.8bn.

At that amount, White now would be behind 15th-placed James Packer’s $4.23bn.

Shares in WiseTech are up 59 per cent since January 1 and have doubled in value since August last year to give the company a market capitalisation of more than $8.5bn. The company last week told the market to expect earnings before interest, tax, depreciation and amortisation of $100m to $105m for this financial year, which reaffirmed previous guidance but still impressed investors.

They are also up from the $20.50 mark the company raised $300m from institutional investors at in March, a raising the Wise­Tech directors also took part in under a share purchase plan.

The share price performance also means the WiseTech trio on The List could be joined by another member of the company’s board, Maree Isaacs.

A WiseTech executive director and also its company director, Isaacs co-founded WiseTech in 1994 with White and has been an executive ever since.

She keeps a low profile and is, according to WiseTech’s annual report, focused on invoicing and licensing, group operations, quality control and administration.

Her connection with White goes back to the 1980s, working with him at the private computer system services and consulting company Real Tech Systems Integration and computer equipment distributor Clear Group.

Isaacs owns 8.17 per cent of Realwise Holdings, the investment vehicle controlled by White which is WiseTech’s biggest shareholder. Her stake is now worth about $305m alone, meaning she is closing in on the $320m cut-off mark to rank among Australia’s richest 250 on The List.

While White owns apartments and office space and data centres in the US that are rented to WiseTech, for which he charged a combined $1.6m for last financial year, he and the wealthy WiseTech group also have a diverse collection of outside investments.

White has a stake in the private audio and lighting group Jands, which had $60m revenue in 2018 from which it made a pre-tax profit of $5.17m. Gibbon, meanwhile, has a small shareholding in a fast-growing and ASX-listed digital audio networking technology company, Audinate Group.

Audinate shares have surged since listing at $1.22 in June 2017, recently hitting a record high of $8.15. The shares are up 124 per cent since January 1 alone.

It raised $20m from institutional investors earlier this month to accelerate global sales and marketing plans and to help develop its Dante software platform. A $4m share purchase plan for existing shareholders at $7 per share opens this week.

Gibbon and Gregg are also founders of a new $50m venture capital fund, Shearwater Growth Equity, formed with entrepreneur and Conversant Media founder Zac Zavos.

The trio have put their own funds into Shearwater, which last month contributed $2.5m of a $6m capital raising round in private fintech start-up Earlytrade. The funding round also reportedly included former Fortescue Metals chief executive Nev Power.

Earlytrade is an online marketplace which connects suppliers with corporate clients and allows them to offer discounts or lower fees for early payment of debts.

Gibbon is a serial investor who was an early stage investor in Conversant Media and also sports media company The Roar, both of which have been sold to the ASX-listed HT&E in recent years. He was also a director of meat processor Monbeef, bought by Japan’s S Foods in March.

He also has investments in start-ups such as radio tracking technology company Wildlife Drones, dental company Emudent Technologies, concert and festival marketing firm Audience Republic and online booking software company Nabooki.

11 Jun, 2019
Afterpay sells vision as founders sell down
Financial Review

 

Of course it’s irrational that investors who preach diversification to their clients don’t like it when company insiders take money off the table to chase diversification of their own. But who said markets were rational?

So it will be fascinating to see how the market reacts to news that the founders and management team of white-hot fintech Afterpay are doing just that – co-founders Anthony Eisen and Nick Molnar will reap about $100 million gets a handy $8.7 million.

We won’t see the reaction for a few days, because the selldown was wrapped up in a trading halt that contained two crucial pieces of news.

The first is that the buy-now, pay-later leader will raise $300 million via a fully underwritten capital rasing to be run by Citi.

6 Jun, 2019
L’Oréal to bring virtual make-up testing to Amazon
Inside FMCG

L’Oreal’s virtual make-up testing technology ModiFace will soon offer Amazon shoppers the opportunity to try on lipsticks using live videos on mobile or through selfies. 

The French beauty company announced the contract with Amazon on Tuesday, saying it will provide the testing beyond its own products, covering thousands of lipsticks available on the e-commerce site. 

L’Oreal bought ModiFace in March 2018 to help grow online beauty sales and also collaborated with Facebook to bring the augmented reality makeup experience to users via Facebook Camera. 

“We are excited to team up with ModiFace to make shopping for cosmetics online even easier by offering customers the ability to virtually try-on before they buy,” Nicolas Le Bourgeois, head of Amazon Beauty said.

“With this new AI-powered virtual experience, Amazon customers can now conveniently try-on thousands of lipstick products, save photos on their devices to share with friends and ultimately purchase with greater confidence –wherever they are, whenever they want, with products delivered right to their doorstep. This launch is another important milestone in our vision to be the best possible place for customers to discover and buy beauty products online.”

The service will launch in the United States and Japan in mid-2019 and is limited to lipsticks for now.

6 Jun, 2019
Cycling start-up Peloton secretly files for $US8b float
Financial Review

New York | Pelton Interactive has filed confidentially for an initial public offering, the latest in a string of technology companies seeking to join the public markets in 2019.

The home-exercise start-up has submitted its draft listing documents to the US Securities & Exchange Commission, New York-based Peloton said in a statement on Wednesday (Thursday AEST).

The company is working with Goldman Sachs Group and JPMorgan Chase to lead its listing, which could value the company at more than $US8 billion ($11.5 billion), people familiar with the matter said in February. Peloton said on Wednesday that the number of shares to be offered and the price range haven't yet been determined.

Technology companies have raised more than $US15 billion on US exchanges this year, data shows. Uber Technologies' $US8.1 billion offering topped the list of start-ups tapping public market investors after years of private ownership. Performances have been mixed, as Uber and ride-sharing rival Lyft both have traded below their IPO prices, while shares in both Pinterest and Zoom Video Communications have jumped.

Peloton was founded in 2012, pitching an at-home spin bike for a hefty price tag of about $US2000, plus a monthly subscription of $US40. When it first launched, investors often scoffed at the company's prospects, seeing it purely as a fitness-equipment maker and citing the high price of the product as a potential hurdle to growth.

Digital subscriptions

Co-founder and CEO John Foley has long argued Peloton isn't a hardware company, but a media company, as the bulk of its revenue comes from the monthly fee. As well as its at-home bicycle, treadmill and in-studio classes, Peloton sells a digital video subscription service for $US19.49 a month that also streams yoga, meditation and bootcamp classes.

"We say we are platform agnostic with our content," Foley said. "Wherever you want to consume Peloton fitness ... we're there for you." Last month, Foley said the company has close to 500,000 subscribers.

Rather than compete with companies such as SoulCycle, which made a name for itself building out studio locations where a single class costs more than $US30, Peloton has one cycling studio where it films its content and members can attend live classes. SoulCycle submitted paperwork for an initial public offering in 2015, only to withdraw it three years later.

Some of Peloton's early backers include Tiger Global and Uber CEO Dara Khosrowshahi. It raised $US550 million in a funding round last year led by venture capital firm TCV that valued that company at $US4.15 billion.

Along with Peloton, the second half of 2019 is likely to herald several more multibillion-dollar tech listings, including WeWork. Food-delivery pioneer Postmates Slack Technologies is taking its own route to go public on June 20, choosing a direct listing rather than a traditional IPO.

6 Jun, 2019
Amazon Fashion drops first influencer collection
Inside Retail Australia

Amazon Fashion has just released the first collection from an influencer as part of its new shopping experience, The Drop.

For the next 30 hours, customers will be able to purchase pieces made on-demand from the collection designed by influencer Paola Alberdi via the Amazon app or mobile browser. The Drop collections are available in more than 100 countries and regions. 

Fashionistas are encouraged to sign up for Amazon text alerts, as the next Drop influencer collaboration could be released at any time. Other influencers slated to design future collections include Emi Suzuki, Sierra Furtado, Leonie Hanne and Patricia Bright.

“Influencers are able to turn their creativity and style into beautifully designed collections that capture the latest street style trends from around the world,” said a statement from Amazon. 

“Amazon Fashion is excited to enable influencers to be designers and bring fresh Fashion assortments directly to customers via The Drop.”

Amazon Fashion is also offering Staples By The Drop, wardrobe staple pieces to complement the influencer collections.

“I am beyond grateful to Amazon for entrusting me to be the first influencer to launch The Drop, their innovative new shopping experience. I have worked hard for many years to create a brand that is true to myself and did the same with this collection,” said Alberdi. 

“Fashion can be so expensive but my belief is that it should not have to be expensive to feel beautiful. The primary goal of my collection is simply to help women feel good about themselves. I’m so excited to share these pieces with the world!”

Other retail brands have been tapping into the power of influencers and collaborating with them on collections for some time, such as Nordstrom, which is currently selling the Cupcakes and Cashmere range from fashion blogger and designer, Emily Schuman. 

When the department store engaged with influencer Arielle Charna in 2017, her collection reportedly brought in $1 million in sales in less than 24 hours, according to an article from Fashionista.

5 Jun, 2019
Amazon continues to shrink retail operations
Retail Dive

Sellers are once again alarmed at perceived moves to hustle them onto the Marketplace — but that might be good for everyone.

Vendors that to varying degrees depend on Amazon for their wholesale revenue were once again shaken last week by indications that the e-commerce giant might be culling its supplier base within its first-party — aka retail — operations.

Rumors and questions swirled after a Bloomberg report of a "purge" of smaller wholesalers. According to the report, vendors with annual sales of less than $10 million are being shunted to the Amazon Marketplace, "although that will vary by category," Bloomberg reported, citing its discussions with "three people familiar with the plan." 

Learn to pinpoint areas with the highest potential impact on growth.

Amazon denied that characterization, both to Bloomberg and to Retail Dive.​ In an interview with Retail Dive, an Amazon spokesperson said that moving to the Marketplace, which now accounts for over half of goods sold, is often a choice made by the brands themselves.

"We informed Bloomberg prior to publication of their article that their sources and story are wrong," the Amazon spokesperson told Retail Dive in an email. "We review our selling partner relationships on an individual basis as part of our normal course of business, and any speculation of a large-scale reduction of vendors is incorrect. Like any business, we make changes when we see an opportunity to provide customers with improved selection, value and convenience, and we do this thoughtfully and considerately on a case-by-case basis."

According to firms that work with Amazon sellers, however, pressure on sellers to move from operating as wholesalers to selling directly through Amazon’s third-party marketplace is indeed happening. "Like most things that are so consequential, it will happen in stages. I believe it’s already started, we’re already seeing it happening," John Ghiorso, founder and CEO of Orca Pacific, a full-service Amazon agency, told Retail Dive in an interview. "I also don’t think that anyone’s going to know when it's done."

While the press coverage suggests that vendors might drop off a cliff, any shift will likely be gradual and could come through indirect action, according to experts who work with sellers. Those familiar with how Amazon's model works say a reduction on any scale could be accomplished at least in part through new rules and requests that might force a company to ditch Amazon's first-party operations, known as "Vendor Central" or "1p."

In recent weeks, for example, some sellers were given 60 days notice to enroll in Amazon’s brand registry, which requires a trademark, according to Fahim Naim, a former category manager at Amazon and now founder and CEO of e-commerce growth consulting firm eShopportunity.com, who works with sellers on both the vendor and direct to consumer seller platforms. A requirement like that could effectively knock out several brands, either because obtaining a trademark is time-consuming or because the seller’s name can't be trademarked for some reason, he said.

Furthermore, any time a seller moves from the 1p platform, whatever the reason, it can take time, which puts sales at risk. Per Amazon rules, already wholesaled goods must be depleted at Amazon’s warehouses before third-party Marketplace sales can begin, according to companies working with sellers on both marketplaces.

The notice in some cases may not even be that direct, according to Ghiorso. "The easiest way to know is, if you were a vendor and you didn’t have Amazon reach out to renegotiate the terms this year — you’re not staying on 1p," he said.

Uncertainty, fear — and the upside

Among many of the vendors that depend on Amazon's purchase orders for a significant portion of their sales, letters like the one stipulating brand registry signup or other indications of change, along with the press reports, are fomenting uncertainty and fear, according to agencies that work with sellers.

Last week's report came just a couple of months after Bloomberg reported a similar clear-out Bloomberg reported a similar clear-out by Amazon of sellers that the e-commerce giant said was meant to weed out those dealing in counterfeits. This round, the timing is especially thorny in light of the holidays, which, for suppliers and retailers, are officially looming.

"It's terrifying because there's not much time till Q4 — I do think it’s going to be chaotic," Naim told Retail Dive in an interview. "At Amazon, there are so many different teams involved and it's not an easy change. I think Amazon expected to have this change happen a while ago."

 

While change is always difficult, especially amid so much uncertainty, for most vendors there's likely an upside to moving to the third-party marketplace, according to those firms working with them. 

"There will be short term pain. If you were on Vendor Seller for over a decade with six-figure P.O.'s and you've lived on this rhythm, it can take four months, all of a sudden, without any stable money coming in," Naim said. "But many of those brands will be very happy one year from now. In the long run, one year, two years from now, as long as they can make it through, they’re going to be happier."

Indeed, Naim and others at such companies said that many if not most brands will find that operating as a third-party seller is actually an improvement because their margins are likely to be higher and because they have access to customer information that Amazon doesn't share with its wholesalers.

 

"The advantage of selling directly to Amazon was that it’s really easy. Now you just lost your biggest customer," Ethan McAfee, CEO and founder of Amazon outsourcing partner​ Amify, told Retail Dive in an interview. "The good news is that there was demand for $10 million of your product widgets when Amazon was selling it, and there’s still going to be $10 million of demand when you’re selling it."

The win-win

It's fairly well established that Amazon gets more for less effort out of its Marketplace channel, collecting fees for its platform, warehousing, fulfillment and shipping without taking on the inventory risk. In its move to function less like a retailer, the company may also be wary of implications from lawmakers and antitrust advocates that it controls too much of the market, as when it backed off from requiring Marketplace sellers to offer their cheapest prices on Amazon. 

But Marketplace's benefits don't only flow one way, experts say. There's already a strong inclination among smaller Amazon wholesalers to consider the third-party marketplace instead. A survey of brands selling on Amazon from marketplace commerce platform Feedvisor, for example, found that more than 81% of wholesale brands indicated they want to move to the Amazon Marketplace. ​

"The growing interest from brands in this expansion stems from a collective desire to get in front of a large audience with their broader catalog, increase their competitive presence, and have more control over their pricing and inventory," Feedvisor President and COO Dani Nadel told Retail Dive in an email. "However, moving to the 3P marketplace is not without its challenges. Amazon is a dynamic, complex marketplace that requires reputation management, agile operations, and brand visibility in order to be successful. This may require skills that wholesale brands may not yet possess."

That demand has stepped up since March, according to Amify's McAfee. "We’re getting a lot of calls largely from people who say we haven’t been cut off yet but we’re fearful and want to become proactive, for when we can no longer count on Amazon for those large purchase orders."

Firms like Amify, Feedvisor, eShopportunity.com and Orca Pacific all stand to gain from the move. While some larger sellers may have the in-house capability to accomplish the many tasks that come with operating as a third-party seller, a brand partner can be essential to those that don't, those companies say.

"I understand that it can be scary. The important thing for the 1p seller to keep in the mind is that they need to transition their business from 1p to 3p, and that is different from starting a 3p business," Ghiorso said. "I think long term in the aggregate this is actually better for everybody. I think it’s better for the customer, I think it’s better for suppliers and it’s better for Amazon."

5 Jun, 2019
New chair and CEO for shoe manufacturer
The National Business Review

New Zealand shoe manufacturer and retailer Ziera is expanding its e-commerce presence, transforming its range and boosting its leadership team to accommodate its growth plans.

The brand, which combines technology and fashion to create women’s shoes, will now be sold through the online retailer The Iconic’s marketplace channel. 

Ziera also has a new head of product design – Rosie Jamieson, who has more than 20 years’ experience in footwear creation, much of it in her native UK with brands such as Hush Puppies, Sacha London, Hotter and other leading fashion retailers. 

Andrew Robertson, the third generation of his family to run Ziera since it was founded in 1946, is now chairman and has appointed Martin Bremner as chief executive. Bremner was previously chief executive of Super Liquor Holdings and is a change management specialist, having helped transform a range of companies in New Zealand and offshore.

“These developments are all part of the transformation Ziera is undergoing,” Robertson said. “We are evolving from a traditional bricks-and-mortar speciality retailer to a digital-first omnichannel business, and Martin is leading the charge on our growth strategy.”

Since Bremner joined late last year, Ziera’s online sales have increased by 33% and the website is now its single biggest ‘store.’  About 70% of turnover is generated in Australia.

This is supplied content and not commissioned or paid for by NBR.

5 Jun, 2019
Why generation Z will drive the growth of visual search
Marketing Tech

eCommerce navigation and exploration has remained largely unchanged in recent years, even as retailers have scrambled to pinpoint more effective and personal ways to engage their customers in the process of product discovery.

This is likely why there’s been no shortage of hype surrounding voice search technology, despite ample grounds for skepticism: A recent report found only two percent of people with Alexa-equipped devices have made purchases through voice search this year, highlighting the vast gulf between expectations for the technology and the reality of its usefulness.

Even as developers and retailers fine-tune their voice search products and strategies in hopes of capturing a market filled with promise, a growing realisation has emerged that eCommerce search must account for more than what words simply can’t capture alone.

Enter visual search technology.

Much more sophisticated than text-best search, visual search uses an image as its query for results by analysing how a variety of components such as colors, form, and objects come together. Pioneers like Microsoft’s Bing have been experimenting with visual search functions as early as 2009, even sunsetting its product in 2012 due lack of accuracy. But with the launch of both Google Lens and Pinterest Lens, consumers are ready to ride a new wave in visual search, inspiring older plays like Bing to revamp its technology.   

With a newfound ability to conduct visual searches based on parts of an image via cameras and augmented reality applications at greater levels of confidence, Pinterest now sees 600,000,000 visual searches on its platform every month. Contrary to voice, there’s a significant user base ready to embrace visual search tools in ways that will drive engagement and purchases in relevant sectors like fashion, beauty, home design, and more – with Generation Z as the linchpin of the revolution.

Digital natives disrupting search

As digital natives, it’s no surprise members of Gen Z are attuned to the benefits of visual search – in fact, they’re craving the kinds of experiences the technology can provide.

Avid users of social media, the nature in which they maintain relationships and connect with the world around them is intrinsically image-driven – and with millennials and Gen Z slated to dominate retail, it’s this visual-savvy cohort that has the power to reshape eCommerce experiences in a big way. Take Snapchat’s recent partnership with Amazon, a new feature codenamed “Eagle” which allows users to scan an object or barcode from directly within the app to surface a product’s details (or similar items) on the commerce giant’s site.

Considering forecasters expect mobile to account for 48 percent of all retail site visits over the upcoming 2018 holiday season, retailers have been working assiduously to optimise their sites for mobile. And in their hunt to offer consumers the most authentic, personalised interactions possible, visual search will ultimately become a game-changer in a retailer’s arsenal when it comes to driving deeper engagement with shoppers, connecting consumers with the products they want via the channels they love.

Highly tailored search tools are already reaping dramatic rewards, like in the case of Pinterest, a site made popular by millennials and Gen Z which leverages a smartphone camera and machine learning applications to match customers to objects and designs for a rich product discovery experience. After acquiring Kosei back in 2015 to help them better understand and categorise images, over time, Pinterest saw its monthly visual searches increase 140 percent between February 2017 and February 2018, surging from 250 million to 600 million. And with current features like ‘Shop the Look’ and plans to monetise visual search within its paid advertising package, there’s no doubt retailers will soon wise up to the chance at modernising their strategies.

Looking towards the future

Visual search is on the ascent, but in order for it to chart a new path in eCommerce during 2019, key hurdles must be cleared first.

While prime visual shoppers constitute a fairly young population whose choices are shaped by ever-changing digital trends, celebrities, and influencers, the older generation is less inclined to pull out their cameras and snap their way into shopping carts. Long-term sustainability makes visual search a clear performer given the growing predominance of digital natives and their influence on technology in the marketplace, but brands must find ways to also resonate with other demographics.

Moreover, while sectors like fashion are well-suited for visual search, retail industries like electronics, automotive, and other industrial eCommerce sectors who typically target shoppers according to brand loyalty may pass over the bells and whistles. So, while visual search will continue to grow in importance, the opportunity won’t be a one-size-fits-all for retailers. 

Make no mistake, text-based search isn’t going the way of the dinosaurs, and voice search may well see significant improvements in the years to come. But visual search is set to become an indispensable piece of the eCommerce puzzle, already driving meaningful results with Gen Z shoppers, whose influence and adoption of the unique technology makes it highly relevant to key sectors. The sooner retailers adapt their strategies to the diverse marketplace of today and tomorrow, the better-positioned they’ll be to not merely succeed but thrive.

5 Jun, 2019
Ziera closing stores as it shifts focus online
Internet Retailing

New Zealand women’s shoe brand Ziera has appointed a new CEO and chairman to transform the business into a digital-first omnichannel retailer.

Ziera has announced a new partnership with The Iconic to grow its e-commerce presence, which will make it less reliant physical locations. The retailer plans to have fewer high street stores but offer higher quality service in the top locations is retains.

“We will always have flagship stores on the ground where customers can come in, check out the range and get fitted properly,” said Ziera chairman Andrew Robertson. 

“But, once we have customised their footprint, their details can be stored online and they can then also buy with confidence from one of our digital channels.”

In addition to its partnership with The Iconic, Ziera has also forged an exclusive trading relationship with Foot Mechanics, a New Zealand-based podiatry business, which will offer a core Ziera range at its 17 clinics as well as  online.

This relationship will make Foot Mechanics one of Ziera’s largest wholesale partners in New Zealand. 

Additionally, three of the brand’s stores will close in July as a result of expiring leases – Bridge Road in Melbourne, Garden City in Brisbane, and Orange in New South Wales – further pushing the brand to embrace online capabilities. 

New direction, new leadership

The retailer has appointed a new chairman in Robertson, a new chief executive in Martin Bremner, and a new head of product design in Rosie Jamieson.

Bremner was previously chief executive of Super Liquor Holdings, and has helped businesses through similar transformational periods before. Since Bremner joined in 2018, Ziera’s online sales have grown by approximately 33 per cent, and has become it’s biggest “store”. 

Jamieson has more than two decades of experience in footwear creation, having previously worked at Hush Puppies, Sacha London, and Hotton. According to the brand, her involvement has seen the “reinvention” of the Ziera range. 

“Exciting times lie ahead of Ziera as we transform our business into an omnichannel retailer that provides customers with a convenient and easy experience, allowing them to shop however and whenever they choose,” Robertson said.

28 May, 2019
The remarkable photo with Xi Jinping that helped Blackmores crack China
SOURCE:
The Age
The Age

Australia Post chief executive Christine Holgate has some unconventional advice for businesses looking to export products to China.

"Go see a fortune teller, get yourself a photo with the president and you’ve nailed it," Ms Holgate told an audience of small businesses at Australia Post's Crossborder Ecommerce Expo last week.

That advice stems from Ms Holgate's own, remarkable experience when she was chief executive of vitamins company blackmores and was invited by then prime minister Tony Abbott to attend the G20 in Brisbane in 2014.

Ms Holgate's sales team urged her to try and get a photograph with Chinese president Xi Jinping at the high profile summit of global leaders, in a bid to boost Blackmores' sales in China. At the time, the company was generating sales of under $1 million for the year despite spending around $10 million in the country on staff and marketing.

Advice from a fortune teller

"Because everyone told me I didn’t stand a chance, I went to a fortune teller," Ms Holgate said. "The fortune teller told me I had to wear a piece of green, so I wore a white dress with a green necklace".

Wearing her green necklace Ms Holgate chatted with Qantas chief executive Alan Joyce, BHP Billiton chief executive Andrew McKenzie and ANZ chief executive Mike Smith as they waited to enter the G20 event.

"[Mr Joyce] said ‘Who do you want to meet tonight?’ He wanted to meet Barack Obama, Mike Smith from ANZ said Angela Merkel," Ms Holgate says. "I said ‘I only just need a photograph with Xi Jinping’. He said ‘You are off your head, he will be covered by security guards’. I said ‘Tony Abbott promised me I am going to meet him’."

However much to Ms Holgate's dismay, attendees were forbidden from taking electronic devices including phones into the event.

"I had this white dress on... it had one of those slip pockets," Ms Holgate said. "I don’t know how it happened, my mobile phone jumped out of my handbag, into that slip pocket ... just as I got through security and handed my bag in."

Tony said ‘Pass me your phone, I’ll take the photograph’. I said ‘Tony, no, I think I would like two leaders not just one’.

Christine Holgate

In what Holgate describes as "a miracle", Mr Xi arrived at the room and Mr Abbott beckoned her to meet him.

"Tony turns to the president and says ‘She wants a photo with you, she has her phone in her pocket’," Ms Holgate said. "Now forgive me Aussies, anyone who has Asian blood will understand what I did next. Tony said ‘Pass me your phone, I’ll take the photograph’. I said ‘Tony, no, I think I would like two leaders not just one’. So I passed the phone to Alan Joyce and Alan Joyce took the picture."

The following week, Ms Holgate visited China with the Blackmores board, where team members had distributed the photo widely.  At Shanghai Pharmaceutical, a local chemist retailer which sells Blackmores products in China, the photo of Ms Holgate with Mr Abbott and Mr Xi was blown up to "the whole size of the whole wall".

That year Blackmores sales in China reached $50 million and the following year they surged to $500 million."Was it the photograph or was it wearing a piece of green?" Ms Holgate asked the audience.

Speaking at the expo with Chinese fortune cookies provided at the entrance and a koala mascot dressed in Australia Post livery, Ms Holgate outlined her advice to small businesses looking to export to China and South East Asia.

Push for small business exports

Australia Post's research shows 60 per cent of Australian businesses which sell online don't sell overseas. Of those that do export overseas, only 15 per cent sell to China with most selling to the United Kingdom, United States and New Zealand.

"If I am frustrated about anything its that there are incredible opportunities not just in China," Ms Holgate said. "We are in the best possible space and yet we still don’t have enough Aussie companies really expanding in the region."

With Australia Post's revenue from letters continuing to plunge, falling 10 per cent to $1.1 billion for the second half of 2018, ecommerce is increasingly important for the post office as well as small businesses.

Annette Carey, Australia Post's executive general manager for for international services, said exports from Australian businesses are "absolutely critical" to Australia Post.

"You have domestic ecommerce and Australia Post has a really strong network," she said. "We are using that internationally as a hook with our Australia Post Global business and strategy to integrate into our Australia Post Global platform to offer us the best lines in China."

Ms Holgate said while the China Australia Free Trade Agreement is "very important" it doesn't assist small businesses with the restrictions going through China's ports.

"Health products, food products trust me you cannot get those products simply into the retail market," Ms Holgate said. "To sell into the retail market often they say you have to test your product on animals. There is a fantastic opportunity in the retail market but the biggest opportunity is through the free trade zones."

Ms Holgate warned small businesses not to discount their products.

"Do not fall in a trap to the wonderful Chinese distributor who wants to invest in your business because he is just going to buy your stock and discount it," she said. "You fall into a world of pain. Don't make the same mistakes some of us have already done. Keep your price at a premium."

Ms Holgate recommended small businesses engage Chinese university students studying in Australia.

"You don't have to spend a fortune on consultants," she said. "We are small and medium businesses, we have to use our cash carefully. Just go down to the local university and you will find fantastic young people with all the skills and knowledge. Don't waste your money on marketing agencies get yourself some students who know how to use WeChat."

She also plugged Australia Post's joint venture with China Post as a simple way to export to China.

"We are the only company in Australia that has a joint venture with the Chinese government," she said. "We now have customs inside the warehouses and the ports. This is a significant benefit to anyone trying to bring product into the country."

Lessons from Blackmores

Ms Holgate recommended businesses look to poach staff from Austrade and said when she was at Blackmores she recruited the head of Austrade for China.

"Steal from Austrade and EFIC [Export Finance and Insurance Corporation] and your business will go a long way," she said. "These organisations are full of very good people."

Ms Holgate established Blackmores as a wholly owned foreign entity ('WOFE') to enter China, a structure she descried as "worth the pain".

My honest view was you have to persevere and stay there and keep investing in the challenging times as well as the good times.

Christine Holgate

"I personally am not into big joint ventures, not in life or business, it is hard enough being married to someone," she said. "Imagine how hard it is having a JV in a foreign country. Going the WOFE route is the route to go."

Ms Holgate also touched on the challenges Blackmores faced when in 2016 the Chinese government tightened restrictions on health and food products, including the company's infant formula, with little warning or notice.

"That was an interesting moment in time," she said. "My honest view was you have to persevere and stay there and keep investing in the challenging times as well as the good times."

Diversification is important Ms Holgate said.

"Don't put all your eggs in the China basket," she said. "I just think it is a huge opportunity, it does take huge perseverance."

24 May, 2019
Kogan.com shares slide after ACCC alleges misleading promotions
The Business Review

The consumer watchdog has accused online retailer Kogan.com of jacking up prices just ahead of a cut-price, year-end promotion, and has launched legal action.

Announcing Federal Court action, the Australian Competition & Consumer Commission alleged Kogan.com ads for 10 per cent discounts in June 2018 were misleading, because the company had increased the prices of more than 600 products immediately before the promotion, in most cases by at least 10 per cent.

Kogan.com has denied the allegations and says it will defend the case. Kogan shares slumped on the news, closing down 6.4 per cent at $5.85.

“We allege that Kogan’s advertisements were likely to have caused consumers to think they were getting products below their usual prices,” ACCC commissioner Sarah Court said.

“In fact, Kogan had inflated product prices which we say created a false impression of the effective discount.”

Kogan.com sells electronics as well as mobile, internet and insurance products online. The company also announced in November that it would start offering home loans.

In examples in its statement of claim, the ACCC alleges that an Apple MacBook was selling for $2099 ahead of the promotion before the price rose to $2449 the day before the sale kicked off. By July 2, the price had allegedly dropped back down to $2149.

A Nikon D7500 camera was allegedly selling for $1799 before the price hit $1949 in time for the promotion, before a reduction below the original price to $1789 by July 2.

The ACCC alleges that a Garmin Edge 820 was $599 before the price lifted to $629 during the promotional period, ahead of a price drop to $549 — below the original price — by July 2, when the promotion had ended.

Kogan.com said it strongly denied the allegations and that it would defend the proceedings.

The retailer said the ACCC action ignored critical facts about online retailing, adding the advertising was drafted specifically to avoid the type of confusion alleged by the watchdog.

“Kogan.com is disappointed that the ACCC has nevertheless decided to issue proceedings against Kogan.com — a highly pro-competitive company that benefits consumers,” it said.

The retailer said it gained no material financial benefit as a result of the promotion.

It added: “Kogan.com does not expect any adverse change to its ongoing promotional activities as a result of this matter.”

The ACCC alleges that Kogan.com breached Consumer Law when it made false or misleading statements about a 10 per cent discount promotion between June 27 and 30 last year, when shoppers could get a discount on most products by using a discount code.

The ACCC also alleges that towards the end of the promotional period, Kogan.com advertised “48 hours left!” and “Ends midnight tonight!” to give the impression that consumers only had a limited time to purchase items at those prices. However, Kogan.com had reduced the prices to pre-promotion levels shortly after the promotion ended, it said.

“Businesses must not make claims to consumers about discounts or sales unless they are offering genuine savings,” Ms Court said.

According to the ACCC filing: “The harm that was or was likely to have been suffered by consumers includes the loss, or serious distortion, of genuine consumer choice. Kogan’s conduct may also have unfairly disadvantaged its competitors.”

The ACCC said it was seeking penalties, injunctions, declarations, corrective notices and costs from Kogan.

17 May, 2019
Tech giants pledge unprecedented action to tackle terrorist content
SOURCE:
The Age
The Age

US technology behemoths Google, Facebook, Microsoft, Amazon and Twitter will join forces as part of an unprecedented push against the sharing of terrorist content in the aftermath of the Christchurch massacre.

In a nine-point agreement released overnight, the first of its kind, the competing multi-billion dollar businesses pledge to reconsider livestreaming safeguards and to work together to develop tools to improve the detection of extremist violent content.

The move comes amid intensifying global pressure on the companies to be more accountable for stopping violent content on their platforms after Facebook's live technology was used to share footage of the New Zealand terror attack in February.

A joint statement from the companies, released to The Sydney Morning Herald and The Age, said the horrifying nature of the attacks in New Zealand meant it was "right that we come together, resolute in our commitment to ensure we are doing all we can to fight the hatred and extremism that lead to terrorist violence".

"Terrorism and violent extremism are complex societal problems that require an all-of-society response," the statement said.

"For our part, the commitments we are making today will further strengthen the partnership that governments, society and the technology industry must have to address this threat."

Under the agreement, all the tech giants have agreed to identify "appropriate checks on livestreaming, aimed at reducing the risk of disseminating terrorist and violent extremist content online".

This could include more vetting measures, moderating specific events and checks on livestreaming.

The competing companies said they would develop new technology, and collaborate with global governments, including sharing data, in an effort to improve machine learning and artificial intelligence as well as developing open source and shared digital tools.

A "crisis protocol" would also be put into place to respond to new urgent events, with information to be shared among the companies, governments and non-government organisations. Each company has agreed to create an incident management team to coordinate and share information.

After the Christchurch massacre was livestreamed, the tech giants grappled to keep the video from appearing online after different versions were uploaded millions of times across platforms like Facebook, Twitter and Google's YouTube.

New Zealand Prime Minister Jacinda Ardern, as part of a "Christchurch Call" pledge supported by a swathe of countries, has asked the social media giants to take a closer look at any software directing people to violent content and has pushed for examination of their algorithms. British Prime Minister Theresa May has also called for action from the social media giants.

The Australian government pushed through tough legislation in the wake of the attacks that could see tech companies face billions of dollars in fines and have their executives jailed if they did not quickly remove objectionable content.

The tech companies have also now promised to update their terms of use to explicitly make it against the rules to allow terrorist content, ensure there are specific methods for users to report or flag it and to publish reports about enforcement efforts.

Facebook on Wednesday has also independently introduced a new "one strike" policy for livestreaming for its 2.3 billion users after widespread calls for limits on the technology.

Facebook vice president of integrity Guy Rosen said, in a post uploaded to the social media company's blog on Wednesday afternoon (AEST), that those who broke the social network's "most serious policies" on one occasion would now be blocked from using its livestreaming technology for 30 days.

This includes a no-tolerance approach to those who link to, or share, terrorist or violent content.

These restrictions will soon be extended to stop the same users from creating advertisements.

In the past, content that broke the rules on Facebook was removed by moderators and those who continually did so were blocked for a period of time or, in extreme cases, banned.

"Following the horrific terrorist attacks in New Zealand, we’ve been reviewing what more we can do to limit our services from being used to cause harm or spread hate," he said.

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