?? Could TikTok dethrone Amazon??? Plus: Temu's Retention Shocks AliExpress & Wish?

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This week’s highlights:

1. Article ??? Could TikTok dethrone Amazon???

2. Statistics ??? Temu's Retention Shocks AliExpress & Wish?

3. Headlines ?? ?? Amazon, eBay, Wish, Pinterest, Allegro ?? Coupang, Adidas, Secret, Shein, ASOS ?? Just, Wolt, Ocado, Swiggy, Glovo ?? Thrasio, Kaufland, Klarna, DHgate, Aldi

4. Startups/M&A??? Wallapop, Drive, Choice

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1. Article of the week ??

TikTok has soared to international stardom, boasting over 1B active users globally. In 2023 TikTok shop expanded into the U.S. and various Southeast Asian markets, introducing a suite of features including a dedicated shopping tab, live video shopping, shoppable ads, and affiliate programs, positioning itself as a formidable rival to Amazon.

In 2023, the TikTok Shop seller app saw an explosive 400% growth, reaching approximately $20B, with ambitious aims to hit a $50B Gross Merchandise Value (GMV) in 2024, as per Bloomberg's reports. This target suggests a bullish outlook for TikTok's e-commerce strategy. Although goals aren't always achieved, they aren't set blindly. Experiences from the past few years show that TikTok Shop's annual targets have been met. Lets look at some points in favor and against meeting those crazy targets going forward:

• ?? Pro: Proven E-commerce Success in AsiaIf you're not frequently active on TikTok, the idea of a short-form video application that rivals Amazon might seem absurd. However, upon closer examination, The success story of Douyin, TikTok's Chinese counterpart, where consumers spent $208 billion in 2022, underscores the platform's e-commerce potential.
• ?? Pro: More Efficient Business ModelUnlike traditional e-commerce marketplaces that rely on external platforms for user acquisition, TikTok leverages its massive user base to reduce customer acquisition costs significantly. Innovations such as live streaming sales and video-based product identification could herald a new era in online retail, akin to a digital-age QVC.
• ?? Mixed: Adjustments in Fee Structure and Creator EngagementInitially, TikTok enticed merchants in Asia with discounts and waived commissions. However, to balance out losses, TikTok announced in Jan 2024 an increase in sales commission from 2% to 8% over the coming months in US, aligning closer with Shein (8%-12%) and Temu (6%-10%) but still below Amazon's 15%. This strategic adjustment aims to maintain a competitive edge while ensuring sustainability but can hamper growth.
• ?? Challenges: Cross-Border ComplexitiesTikTok's innovative video recommending algorithm provides you best entertainment no matter where it comes from. Users are engaged on cross-border content and selling items from e.g. USA to Europe is not that easy.
• ?Challenges: High Thresholds for Seller Entry TikTok Shop has implemented rigorous entry criteria for sellers, including high sales volume requirements and strict compliance standards. These measures, while ensuring platform integrity and quality, may limit the diversity of merchants on TikTok Shop, potentially impacting its growth in a fiercely competitive e-commerce environment.

2. Statistics of the week ??

Last week, Earnest Analytics dropped a bombshell case study on Temu , showing its rapid ascent in the ecommerce world, challenging incumbents like Wish and AliExpress, and the underwhelming impact of its Super Bowl ads. Despite an impressive 840% sales growth, Temu's battle with retail titans Amazon and Walmart is just beginning. Below key insights from the case study:

• Explosive Growth ??In a jaw-dropping display of ecommerce muscle, Temu's sales skyrocketed by 840% between January 2023 and 2024, peaking with an 1100% surge during the holiday season. Within its first year, this powerhouse not only outpaced Shein in the US but also boasted a higher customer lifetime value than Walmart. Talk about a shopping spree!
• Super Bowl Fumble ??Despite shelling out big bucks on Super Bowl ads in both 2023 and 2024, Temu's efforts to woo new and existing customers fell flat. According to Earnest's data, the ads didn't convert into the sales spike they hoped for, showing that even the biggest stages might not guarantee a win in the ecommerce game.
• Retention Mastery ??Temu isn't just about attracting eyeballs; it's keeping them glued. With over 28% of customers returning 16 months after their first purchase, Temu's retention rates are soaring high above Walmart and Target, though still chasing Amazon's tail. This "retention smile" curve showcases how Temu keeps shoppers coming back for more.
• Cross-Shopping Craze ??Here's a kicker: nearly half of Wish and AliExpress's customer base is playing the field with Temu. This newcomer is not only siphoning off customers from online discounters but also making inroads into the clientele of TikTok Shop, Ollie’s Bargain Outlet, and even traditional dollar stores. Temu is stirring the pot, signaling a shift in where discount seekers drop their dollars.

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3. Headlines of the week ??

Before we dive into the whirlwind of news, I've got something to share. To inject a little more life into our community, we're tweaking how we handle links in our news. When you click on a link, it'll take you away to our MarketMaze LinkedIn page right to the article in question where you can like it, comment on it, share your thoughts, or dive deeper into the details. It's our way of opening the door to a richer, two-way conversation.

?? Mass merchant

Allegro rolls into Slovakia, eyes set on expansion

????? Allegro's Slovakian launch marks its second international move, following Czech success. With allegro.sk live, it's easing seller entry and promising millions of products at top prices, backed by Allegro Protect and Allegro Smart! delivery perks.

www.marketmaze.me/article/allegro-rolls-into-slovakia-eyes-set-on

????? Amazon's EU Lobby Ban: A Rare Parliamentary Move . Amazon, now banned from the European Parliament, joins Monsanto in an exclusive club. Amidst concerns over transparency and working conditions, Amazon's 14 lobbyists lose access. This bold move underlines the EU's serious stance on labor rights and corporate responsibility.

??? eBay's Q4 Earnings Highlight Shift to Enthusiast Ecommerce. eBay's Q4 showcases a 2% revenue bump to $2.6B and a push towards enthusiast ecommerce. With $18.6B GMV, their focus on niche markets and advertising pays off, despite a flat overall GMV. Emphasis on luxury, motors, and refurbished items points towards a tailored shopping experience.

????? Wish kickstarts trade-in service, ignites Europe's eco-drive . Wish teams with Remarketed for a tech trade-in program in Europe, starting in the Netherlands. Instant cash for old gadgets promises to cut e-waste and refresh tech arsenals, making second-hand the new gold.

????? Pinterest spices up shopping with streaming TV . Pinterest partners with Tastemade for "Deliciously Entertaining," a shoppable streaming series aiming to blend inspiration with instant shopping. The show, hosted by Danni Rose, promises to turn Pinterest trends into tangible experiences.

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?? Fashion & Beauty

Adidas aims for $250M from "fake" Yeezy sale

????? Adidas is stirring the sneaker world by launching a Yeezy sale on Feb 29, aiming for $250M, despite Kanye West slamming the move as selling "fake" shoes. The drama unfolds as Adidas and Ye's partnership crumbles, with accusations and financial claims flying.

www.marketmaze.me/article/adidas-aims-for-m-from-fake-yeezy

????? Coupang's grand plan to revolutionize Farfetch . Just a month after acquiring Farfetch, Coupang's CEO, Bom Kim, shares bold plans. Despite challenges, including shareholder protests and partner departures, Coupang's Q4 shines with $6.6B revenue and 21M active customers. The future of luxury e-tail looks exciting under Coupang's wing.

????? Secret Sales sprints ahead with 85% growth . Secret Sales (fashion marketplace) notches an 85% jump in 2023, outpacing the industry with strategic expansions and brand partnerships. Key growth in women's fashion and beauty sectors, and expansion into Spain and Ireland, showcases its marketplace dominance.

????? Shein eyes London IPO, dodging US regulatory maze . Shein, the fast-fashion behemoth, is flirting with London for its IPO, leaving New York's stringent scrutiny in the rearview. This strategic pivot could ignite London's IPO scene, especially after a dire year for debuts.

????? ASOS revives influencer program with a stylish twist . ASOS relaunches its influencer program, now starring its own stylish staff. From pandemic pause to digital showcase, 36 insiders are set to blend fashion expertise with genuine passion.

?? Food & Grocery

Glovo's €205M headache with Spain's regulators

????? Glovo, Spain's startup darling, is wrestling with €205M in fines over rider employment status. As legal battles mount, the company's financials wobble, with losses hitting €420M in 2022 and €209M in 2023.

www.marketmaze.me/article/glovo-s-m-headache-with-spain-s-regulators

????? Just Eat Takeaway eyes profit leap in 2024, faces hurdles . Just Eat Takeaway aims for a 40% EBITDA jump in 2024 after a $1.95B loss. Despite efforts, Grubhub challenges persist. The company bets on Northern Europe and tech for a turnaround.

????? Wolt spices up the office life with "Wolt for Work" . Wolt launches "Wolt for Work," turning meal deliveries and office supplies into perks. This new service caters to the growing demand for workplace flexibility and food benefits, promising a revolution in employee benefits and office procurement.

????? Ocado's legal drama & profit comeback tale . Ocado's return to profit with a ￡51.6M EBITDA uplift contrasts its ￡394M loss, amidst a sales hike to ￡2.8B. Legal tussles with Marks & Spencer over a due ￡190.7M add a spicy twist to the plot. Growth and disputes color Ocado's year.

????? Swiggy rebrands for IPO, eyeing $1Bn issue size . Swiggy, prepping for a monumental IPO, flips its name from Bundl Technologies to Swiggy Pvt Ltd, aiming for brand proximity. This $1Bn IPO move is to mirror its core brand more closely, enhancing stock market presence.

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??General

Thrasio's bankruptcy tale: a $3B rollercoaster

? ???? Thrasio, once a beacon of e-commerce, has hit bankruptcy, despite raking in over $3B. With $90M in emergency funds, it's a story of rapid rise and fall, reshaping the Amazon marketplace landscape.

www.marketmaze.me/article/thrasio-s-bankruptcy-tale-a-b-rollercoaster

????? Kaufland launches game-changing FBK service . Since Kaufland acquired Real's online marketplace in 2020, it's been a rising star in Germany's e-commerce sky. With the launch of Fulfillment by Kaufland (FBK), it's not just selling products but also fulfilling dreams across Europe.

????? Klarna's AI assistant outperforms 700 employees . Klarna's AI, developed with OpenAI, now handles two-thirds of customer service chats, cutting query resolution time from 11 to 2 minutes. This shift is projected to boost profits by $40M in 2024, demonstrating AI's growing impact in fintech.

??? DHgate and Seel guarantee on-time eco-shopping!. DHgate partners with Seel, adding a guaranteed arrival date and carbon offset for online purchases. A big win for eco-conscious shoppers with Seel's 250,000 kg carbon offset and DHgate's 34M listings!

????? Aldi and InPost revolutionize shopping with lockers . Aldi's new trial with InPost introduces parcel lockers at 22 stores, blending online order convenience with grocery shopping. Customers can now easily pick up or return their online orders while grabbing their groceries, making shopping trips doubly efficient.

4. Startups/M&A of the week??

Drive.no shakes up Norway, Farie secures $4.5M

????? In a week of automotive shake-ups, Norway's dealer-backed Drive.no launches to challenge Finn.no, while Switzerland's Farie boosts its coffers with a $4.5M funding round. Big moves in the car world!

www.marketmaze.me/article/drive-no-shakes-up-norway-farie-secures-m

????? Wallapop secures €81M, eyes unicorn status in Spain . Wallapop, with a fresh €81M in its pockets from a Series G round led by Naver, is now valued at €771M. With €72M in 2022 revenues, it's gunning for unicorn status, eyeing further expansion in Southern Europe.

????? Choice spices up Europe with a $2.5M investment . Choice, the B2B SaaS platform, just cooked up $2.5M to digitalize restaurants in Europe. With $4.1M in the pantry, it's seasoning the market from Poland to Ukraine with tech that knows your birthday and if you're allergic to peanuts.

That’s all. See you next week in the ??Maze!