Nicolás

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On March 5, 2019, Nicolás commented on ‘Just Do it’ with innovation! :

Clearly multi-brand and department stores are being one of the losers of this shift. But now the question for Nike will be what strategic path to take in the Amazon world that we are all living. There is a natural trade-off between the value creation that Nike is generating with all these innovations and the value capture part, being a world class manufacturer in an e-commerce world dominated by Amazon. For many years Nike said that they will not sale on Amazon,and Nike tried to develop a strong own eCommerce chanel. But this just changed few months ago when both companies reached to a partnership agreement. If Nike is who is creating the value trough innovations, they will aim to capture that value trough their own website or retail stores and not share any of the “pie” with Amazon. As Nike start selling on Amazon, and start capturing sales volume, Amazon will have more power on Nike and will start capturing more and more of the value that Nike will create.

On March 5, 2019, Nicolás commented on Sephora vs. Birchbox: Winning through Digital Retaliation :

Thanks for your article!

One of the not so obvious losers of this disruption of subscription models in beauty are departments stores, which for many years were able to attract traffic to their stores offering all kind of cosmetics samples and beauty services in their stores, partnering directly with world class brands that did not have many distribution alternatives for their products. With the boom of sephora first, and subscription players in a later stage offering samples of all kind of cosmetics and beauty products to customers in a super convenient way, department stores lost one of the key competitive advantages, (one of the “reasons why” women used to visits department stores in first place) as now this new digital enterprises are offering not only trials of high end products but also personalized consulting beauty services.

On March 5, 2019, Nicolás commented on Ebay Held at Bay :

Even I agree with the general consensus of this post that Ebay is facing a challenging competitive position due Amazon pressure, I don´t believe that this mean that nothing can be done for Ebay. Actually, if you look the Ebay financials after PayPal spin off couple of years ago, Revenue has been grown at 9.7% per year reaching $8.5 bn in 2018. This growth has been driven by its marketplace, that show strong fundamentals.
We don’t have to forget that Ebay is the clear dominant in the C2C marketplace, and even this is market with less revenue potential (due lower average tickets) is a market that provide huge volume of traffic and engagement with the platform. Amazon is focusing in being the absolute leader in the B2C maketplace, and in order to do this it has relegated the C2C second hand goods offering, in order to avoid reputation problems with manufactures
The real challenge for Ebay is how to monetize all the traffic that is able to generate, looking for new revenue streams specially now after PayPal spin off

On February 24, 2019, Nicolás commented on MercadoLibre: Latin America’s Free Market :

Thanks for your post!
Mercado Libre is a super interesting case of study from many angles!
One of the main challenges that they are facing today is how to move from a C2C platform to a traditional B2C marketplace platform like Amazon, with the objective of monetizing the strong brand awareness and traffic that they have built in the region in the last 15 years. A B2C marketplace has higher average tickets, driving higher revenues.
As you described one of the drivers of this change has been the rapid expansion of MercadoPago, a solution targeted to medium and small online business that at the same are the target suppliers on the B2C marketplace. MercadoPago has been able to offer a simple but efficient solution in highly complex banking environments in the region.
Looking forward, one the main challenges for the company will be in Mexico, where is competing face to face against Amazon (with its retail and marketplace model). This battle is crucial to determine if Amazon will decide to expand its presence to LatinAmerica or not in the next few years.

On February 24, 2019, Nicolás commented on Cornershop: Disruptive Chilean E-Commerce Grocery :

Thanks for your post Nicolas
Cornershop, as Instacart in the US, is taking advantage of one of the main challenges that traditional groceries players are facing today: What is the right move in E-Commerce? Should we pursue in-house growth of our online channels or should we outsource to thirds parties’ platforms such as Cornershop?
As we all know, Groceries is one of the categories where E-commerce is super underrepresented with penetration rates below 3% in the US and less than 1% in Chile. This make almost impossible to think in profitably in this sector for now; There is no grocery player in the world that is making money in their online business (apart from Ocado in the UK) with this level of online demand. And this is exactly the reason why players like Cornershop appeared and succeed in the market, they don’t face any of the huge fixed cost that running an in-house grocery operation demands (labor, IT systems, shadow stores, logistics) plus they are able to get enough scale on the demand side pooling customers from different companies. From an asset perspective, there is nothing unique or distinctive on Cornershop or Instagram, anyone could replicate the platform that they built…the real challenge for them will be once the online penetration of groceries explode, and grocery chains start developing their own online channels; will be a space for Cornershop in that world? My guess is no.

On February 24, 2019, Nicolás commented on Rappi: Creating value across 3 dimensions :

Thanks for your post Daniela!
What is happening in Latin America, with the explosive growth of platforms such as Rappi or Cornershop is super interesting. On the one hand, if you take Rappi business model and you breakdown it by parts, it is hard to find any competitive advantage or core competency or asset that is unique, irreplaceable and non-imitable by others players. What it would take to any player to enter this business and displace Rappi? Probably not much, just money to invest in at least equivalent technology and initial marketing to attract drivers. It is only a matter of time to see more entrants in these markets.
But on the other hand it is also true that, in the long run, this is a market where the “winner takes all” premise will be a big driver, as it plays in any platform business. There are significant economies of scale, and incentives to drivers and consumers to be “locked in” in only one growing platform.
Looking forward, once competitor arrive, I see that the main challenge for Rappi will be to avoid what is happening in the Uber/Lyft dynamic, where the lack of point of differences in the service and technology within both side of the platform, drivers and riders, has made price the only way to differentiate. Once Rappi start facing lower price competition (charging less to consumers or improving salaries to drivers) the question will be how strong is the brands and “locks” that the company was able to build in these years.