Amazon’s plans for shops
So Amazon announced that it is going to build a chain of urban grocery stores that will stock high margin beauty products alongside lower margin groceries.
It is thought that the chain will be distinct from Whole Foods, which it bought two years ago, and will be smaller than traditional supermarkets like those of Walmart, Kroger and Target but bigger than convenience stores.
This move will no doubt ruffle feathers among US retailers who have been playing catch-up with Amazon in online retailing, so Amazon’s invasion of their traditional territory comes at a difficult time for them.
It will probably be particularly galling for Kroger who recently signed a deal with Walgreens Boots Alliance to have an offering that sold food alongside beauty products, but I guess the only thing traditional retailers can take solace in is their hard-earned experience at marketing and helping customers to spend more money in the physical environment versus Amazon.
Still, Amazon has proved to be a fast learner with very deep pockets!
Tencent’s plans for esports
The second thing I wanted to talk about today was Tencent’s plans for esports as the world’s biggest video games company by revenues has announced that it will be investing more money in esports tournaments.
It already invests in two of the world’s most-watched – and one such tournament based on its Honour of Kings game has been sponsored by the likes of McDonald’s, Mars and VW while Nike just signed a four-year sponsorship deal with Tencent’s League of Legends Pro-League worth around $7.5m per year.
Esports is an area of huge potential – as the $840,000 prize money for winning the world championships of League of Legends last year would imply – and it could provide games developers with good future momentum.
I would also have thought that the potential for advertising revenues will be huge considering the audience sizes.