ChannelAdvisor reported a 29.5% increase in revenue in the first quarter, and CEO Scot Wingo argues that there’s plenty of growth ahead in the online marketplaces that are at the heart of the company’s business. The company specializes in helping retailers sell on web shopping malls like Amazon, eBay, Rakuten Shopping, Walmart.com and others, as well as facilitating sales through comparison shopping sites and search marketing.
Online marketplaces capture a 90% share of e-commerce sales in China but only 25% in the U.S. Is the U.S. leading or trailing on this trend, Wingo asked in a conference call with stock analysts yesterday, according to a transcript provided by Seeking Alpha.
“We think the U.S. is lagging and that leads us to believe that we are in the early stages of a surge in marketplace share in the U.S.,” he said. He calls this the “marketplaces are eating the e-commerce world” trend.
“We believe over the next five years there will be continued use towards the marketplaces and you’ll see several indications,” he said. “Retailers will continue to add marketplaces; existing global marketplaces such as eBay, Amazon and Alibaba will accelerate their global expansion out of their normal region; companies like Google, Apple, Facebook and Twitter that do not currently operate marketplaces may potentially enter the space.” Alibaba Group Holding Ltd. is the operator of the dominant online marketplaces in China, and the company has announced plans to go public on a U.S. stock exchange this year.
Wingo also outlined new ChannelAdvisor products that might help e-retailers take advantage of the marketplace trend. A tool for fulfillment allows retailers to prioritize which distribution center handles which orders based on filters such as location and profit. The company also added features to its re-pricing tool designed to predict pricing trends and detect real-time price changes.
ChannelAdvisor also reported its first quarter earnings. For the first quarter ended March 31, it reported:
- $19.3 million in revenue for the first quarter of 2014, up 29.5% from $14.9 million for the first quarter of 2013.
- 136 added core customers, an increase of 28% from 2013. ChannelAdvisor added 136 core customers in the first quarter, bringing its total to 2,565. (Core customers are those who subscribe to at least one product excluding those from two companies ChannelAdvisor acquired prior to 2008.)
- 7% increase in average revenue per customer, up to $30,833 from $28,730 in the first quarter 2013.
- 73% of revenue came from fixed subscriptions to ChannelAdvisor services, up from 65% in the first quarter of 2013. Variable subscription fees accounted for 27% of revenue, compared to 35% for the first quarter 2013.