It’s that time of the year again: “online trade is over,” according to the summary by Grundersyene.de, based on a study from VC Capnamic Ventures. The venture capitalists analysed the financing requests from 2014 and came to the conclusion that the number of e-commerce start-ups has significantly decreased. Why? Clearly every niche is already full and there isn’t any space for new companies. So this time it is the investors who are holding the eulogy.
The online trade trend is over
Requests for financing in the area of e-commerce with Capnamic Ventures sunk by 11 percent in 2014, while requests in the areas of e-health and (big)-data increased dramatically. The entrepreneurial scene took this up and announced the end of the “e-commerce hype” unanimously with Capnamic Venture. The conclusion is about the same as an idiotic political statement and has the same long –term effect on young entrepreneurs: don’t go there, there’s no space for you. But it is exactly start-ups, like Project Collins(ABOUT YOU) or Rocket Internet’s investments in online grocery trade, that show there is still space in the world of e-commerce – space for innovative ideas. It is important that trends like Virtual Realtiy, the Internet of Things or other wearables which are just getting started, don’t replace online trade but complement it.
It’s working, but not in Germany
In Germany we started the e-commerce year 2015 with the opening of a completely mundane online shop in the news. What are the others doing better?
86.7 milliard US dollars – this is how much VCs invested in young companies in 2014 according to Ernst & Young. Of the 6507 investment 1460 were in Europe and 3682 in the USA. The consulting company Catcap got similar results: there are investments, but Europe still has to catch up here. Especially in Germany, investors are less willing to take risks and companies are scared of implementing innovative technologies. But what was there first? The fear of investing in new ideas, or the fear that the VCs won’t want to take on the risk of such investments – chicken or egg?
» Much of success is just a numbers game. Try more things and you are more likely to find a winner. Innovation is like sales – you never know which idea will be the winner until you try things. Jim Estill «
No less than number 1
Admittedly, the wheel isn’t exactly being reinvented in the USA at the moment, but e-commerce startups from the States still approach things differently. For instance, there was Jet.com, which was able to collected Jet.com, das schon vor dem Launch 220 million US dollars already before its launch. Product prices are determined on the platform according to multiple actors, like home address. Dynamic pricing at its best. An obvious aim for Jet.com: push Amazon off the throne. This by no means a new idea, but it could change price calculation in e-commerce completely. Another example is Piccing, a social shopping platform, which has already gained a foothold in Germany. And so the list goes on. These are all ideas which have all been done before one way or another, but weren’t even tried out. This now might be the right time for idea X, tomorrow is too late.
What do we learn from this?
Startup cultures are different in different countries. The entrepreneurial scene has also realised this, and areas like e-health, big data, and FinTech are increasing – of course. But maybe VCs, like Capnamic Ventures once again ask themselves if a decrease in financing requests really means the end of online trade trends, or if their own willingness to take on risks leaves something to be desired.