London, 8 March 2018 – Hampleton Partners, the international technology mergers and acquisitions advisor, releases its E-Commerce M&A Market Report today, outlining how challenging the environment is for any company providing goods and services, not just on the high street, but online in the growing ‘Amazon economy’.
In an age where anything – from screws to private jets – can be purchased at the touch of a keypad, the report reveals that it was consumers’ most basic need which fueled e-commerce M&A in the second half of 2017: food.
From GrubHub and Deliveroo to Amazon, JustEat, UberEats, and Ocado, the business of delivering restaurant, takeaway meals and groceries directly to homes is undergoing rapid transformation as online platforms acquire aggressively in the race to capture market share at home and abroad.
Meanwhile new online food strategies, demonstrated by the rise in meal kits provided by the likes of Blue Apron and HelloFresh, are increasing consumer’s choices, providing more convenient options than ever before and promising a new wave of future consolidation online, and contraction and failure offline.
Amazon’s $13.7 billion acquisition of Whole Foods Markets, attracted a lot of attention as the online gorilla bought its way onto the high street that it has been disrupting for years. But over the past 30 months, the most active acquirer in the online food sector was Minnesota-based food retailer Bite Squad, which consumed 17 online food delivery companies to propel it to the top place, including Café Courier Ohio and 256ToGo.
UK-listed takeaway food app, Just Eat, and Chicago-based online food ordering company, GrubHub, took joint position as the sector’s third most active buyer, with eight acquisitions each.
Ralph Huebner, digital marketing and e-commerce sector principal, Hampleton Partners, said: “Amazon‘s counter-cyclical acquisition of Whole Foods has driven a chain reaction of acquisitions, for instance, Walmart’s purchase in quick succession of ShoeBuy, Moosejaw, Bonobos, Parcel, Hayneedle, ModCloth and Spaitaland.
“We expect Amazon to continue its M&A spending spree throughout 2018, expanding into and disrupting other online consumer service segments such as financial services, and we’re watching closely how other big online players like Alibaba, Walmart/Jet, Flipkart and OTTO will react.
“The continuing high growth rate of online retailing and consequent declining footfall is increasing pressure on traditional retailers and their suppliers. As bricks-and-mortar businesses also continue to struggle with rising rents and hefty business rates they need to turn to M&A quickly to not just remain competitive, but to stay alive.
“Recent high street and big box failures such as Maplin’s and Toys R Us demonstrate clearly that standing still is not an option.”
High priority e-commerce targets
In addition to food delivery consolidation, Hampleton’s E-Commerce M&A Report identified that disruptive companies offering Artificial Intelligence; voice search services; analytics and measurement; logistic solutions and freight capacities are all high priority targets for acquirers looking to improve their e-commerce performance and efficiency.
Download the full Hampleton Partners’ E-Commerce Report here for free: https://hampletonpartners.com/hampleton-ecommece-report-2018