Shopifreaks E-commerce Industry News Recap ?? Week of Aug 26th, 2024

Hi LinkedIn - I'm Paul Drecksler and I follow the e-commerce industry closely for my Shopifreaks E-Commerce Newsletter.

This is a summary recap of the 188th Edition published Aug 26th, 2024. Check out the full edition for links and sources and subscribe here.

STAT OF THE WEEK: Mobile shopping accounted for $280.4B in sales so far in 2024. This record breaking spend represents a 10.2% YoY growth from the same period in 2023. — According to Adobe Analytics

YouTube and Shopify are now allowing all eligible Shopify Plus and Advanced merchants in the US to sign up for YouTube Shopping's affiliate program through the Google & YouTube app on Shopify. This update will make thousands of brands available for creators to tag in shopping content across YouTube. Shopify and YouTube originally partnered in 2022 to let merchants sell their products on YouTube via livestreams, videos, and store tabs, and the two companies are now extending their collaboration. Additionally, Google added a new Chrome extension that enables US creators in the affiliate program to save products while browsing a Shopify merchant's website, making it easier to tag the products in a video later. Creators can also discover how much they would earn from promoting the product in their YouTube videos without leaving their Shopify site.

Peloton pissed off customers after announcing a new $95 activation fee for anyone in the US or Canada who buys a secondhand bike on Facebook Marketplace or Craigslist (or any other secondhand marketplaces). This fee is in addition to the $12.99/month or $24/month subscription required to operate the bike after purchasing it. The activation fee includes a $25 spare parts credit, 50% off coupons for up to three pairs of Peloton cycling shoes, a bike mat, and a virtual onboarding session. Peloton wrote in a letter to shareholders that it wants to “ensure these new Members receive the same high-quality onboarding experience Peloton is known for” and that the new activation fee will be “a source of incremental revenue and gross profit” for the company, which will help it improve the “fitness experience” for members. Sounds great Peloton. Add more value and make it optional!

Have you ever wanted to own a slightly used piece of furniture from Ikea? Historically we've called those items “garbage,” but now the furniture maker is hoping to that its new peer-to-peer platform for buying and selling second hand furniture will breathe new life into your Ikea coffee table. “Ikea Preowned” marks the company's entry into the peer-to-peer secondhand market and positions it as a direct competitor to resale marketplaces like eBay, Craigslist, Kaiyo, and OfferUp. Sellers list their furniture by uploading photos and setting a price and then Ikea's AI automatically adds promotional images and measurements to enhance the listing. Once sold, the buyer collections the item directly from the seller, who can choose to receive payment in their local currency or an Ikea voucher with a 15% bonus (or get paid in meatballs, LOL). It's not yet clear how much of a commission or transaction fee Ikea takes from the purchases. I joked in the intro about used Ikea furniture historically being called “garbage” — but in all sincerity, I applaud the company's sustainability efforts and hope to see more programs like this from retailers in the future.

Instacart is launching new money-saving features for customers that are “designed to put affordability front and center in the Instacart app and help our customers stretch their dollars further.” The features include a personal digital flyer to showcase deals, $0 delivery fee on next day grocery orders over $10, $0 pickup fees on orders over $35, loyalty card savings at more stores, and expanded EBT / SNAP access. Instacart cited a LendingTree survey in its announcement that found that 40% of consumers expect to go into debt over back-to-school shopping this year, at an average cost of $793, as their incentive for launching the new money saving features.

Adyen and PayPal are partnering up to offer the Fastlane by PayPal checkout experience to Adyen's enterprise and marketplace customers. The rollout will begin with Adyen's customers in the US and then extend globally. Fastlane is a new guest checkout experience that allows customers to make purchase using their saved payment info without having to log into their account on an e-commerce website. PayPal introduced Fastlane in January and expanded its availability earlier this month to any business using PayPal's Complete Payments or Braintree platforms.

In other PayPal news… the company is planning to challenge Apple in the EU by developing a mobile wallet for EU users that takes advantage of the iPhone's newly opened-up NFC capabilities in the region. During a recent earnings call, PayPal CEO Alex Chriss noted that some of the changes coming in Europe around NFC would open opportunities for the company, and that PayPal would be prepared to “play in that space.” Moving forward in the EU, consumers will be able to set a third-party wallet as their default on the iPhone instead of Apple Wallet, as part of Apple's compliance with new regulation.

A regional National Labor Relations Board director determined that Amazon is a joint employer of contractors hired as Amazon delivery drivers, marking a big loss for Amazon, which has long argued that its drivers were exclusively employed by its delivery service partners, not by Amazon. This relationship (or lack of) with its drivers has historically allowed Amazon to take no responsibility for bargaining with driver unions and no responsibility for alleged union busting. However now that golden era of lack of accountability may be coming to an end. The Amazon delivery drivers' union calls the decision “a groundbreaking decision that sets the stage for Amazon delivery drivers across the country to organize with the Teamsters.” Amazon claims that the Teamsters are trying to “misrepresent what is happening here,” and the company is taking issue with the union claiming that an NLRB determination on the merits of their case is a major win without it yet issuing a final ruling.

In a civil complaint filed in Washington DC, Shein alleged that Temu encourages sellers to steal other brands' designs, and then prevents the sellers from removing the products from the platform, even when the seller admits to infringement. Well isn't that the pot calling the kettle black! Temu rebutes Shein's accusations. A spokesperson told Nikkei Asia, “The audacity is unbelievable. Shein, buried under its own mountain of IP lawsuits, has the nerve to fabricate accusations against others for the very misconduct they're repeatedly sued for.” The spokesperson is referring to the fact that Shein has previously been sued by Uniqlo, H&M and Levi Strauss over similar allegations. If these allegations feel familiar, it's because Shein and Temu have previously been involved in similar lawsuits against one another, which ultimately they both dropped.

The District of Columbia's antitrust case against Amazon, which claims that Amazon illegally drives up prices on rival platforms, is back after an appeals court revived the case on Thursday. The DC Court of Appeals ruled that the allegations “plausibly suggest” that Amazon already has monopoly power over online marketplaces or is close to achieving it, and the company engages in anticompetitive practices by restricting third-party sellers from offering products on other online stores, including their own websites, for less than they charge on Amazon, effectively controlling the price of goods outside of its own platform. Former DC Attorney General Karl Racine initially filed the lawsuit in 2021, but it was tossed out of court in 2022. However now it's back under a new Attorney General. Amazon disagrees with court's decision to bring back the case.

TikTok?published?the latest version of its?Holidays For You?shopping guide, which includes stats and insights to help brands plan for their holiday marketing campaigns on the platform. The 16-page guide is formatted like an infographic, with extensive data points on each page including insights into key hashtags and content trends around the holidays, and shares how TikTok users are planning to shop.

Temu?is now?officially open?to merchants in Europe, who are invited to register as sellers on its platform. Merchants are responsible for their product assortment, inventory management, and fulfillment, while Temu determines the prices for the goods on its platform. Temu launched this type of marketplace model earlier this year in the US.

TikTok's legal team?asked for?a “special master” to be appointed to sift through the government's classified materials about the company, which claim that the DOJ has evidence proving the Chinese government's influence over the platform. The DOJ's lawyers are fighting back, arguing that a special master, who would be a federal judge, would cause delay in the case that needs the be resolved quickly. So the alternative is that TikTok has to defend itself against secret evidence? That doesn't seem right. A three-judge federal appeals court panel is set to rule on the issue in the coming weeks.

Reddit?is “winning over advertisers” since its IPO six months ago by?showing that it's different?than other platforms for targeting users for ads based on their interests instead of their personal information, according to Bloomberg. The platform surpassed expectations in its first two earnings reports, disclosing strong sales and better than expected growth, resulting in the stock being up 66% from its $34 IPO price in March. I guess here's the thing though… Reddit might be winning over advertisers, but advertisers aren't winning over Redditors, who notoriously hate ads. So I'll be curious to see if this increase in ad spend by advertisers lasts very long or if the ROAS just simply isn't there.?

TikTok?launched a new feature?that allows users to create AI simulations of their own voice, so that their voice over clips sound like them instead of those generic template speakers in the app. Research Jonah Manzano?posted a screenshot?showing that some users now have the option to “Create Your Own AI Voice” within their video voiceover options. The feature utilizes ByteDance's research into AI voice replication, particularly its “StreamVoice” system, which only requires a few examples of a person's voice to replicate it in real-time.?

Target's online sales?grew at more than 4x the rate?of total sales in Q2 with same-day fulfillment accounting for more than two-thirds of its online sales in the quarter. Target Circle Week generated the highest digital traffic of the year so far, bringing online sales up to almost one-fifth of total revenue in Q2.

68% of B2B sellers?have an e-commerce site?or an online portal, according to a new survey by DynamicWeb. The survey also found that 50% of revenue, on average, comes from e-commerce, and that 85% of B2B businesses will maintain or increase investment in e-commerce over the next 12 months.

The UK's competition watchdog?accepted Meta's proposed changes?to the way it uses the data of customers advertising on its platform after Meta pledged to limit its use to prevent it from gaining an unfair advantage. Under the original commitments, Meta advertisers could opt-out of their data being used to improve Facebook Marketplace, while the new proposal ensures that all of Facebook Marketplace's advertisers' data will not be used (ie: no having to opt-out).

State-linked Chinese entities?have been?found to be using cloud services?provided by Amazon and other US cloud providers, giving them access to advanced US chips and AI capabilities that they cannot otherwise acquire. The US government restricted the export of high-end AI chips to China over the past two years, citing the need to limit the Chinese military's capabilities, however providing access to these chips through the cloud is not currently a violation of US regulations — which the government is attempting to change soon.

Klarna?revealed plans?to relaunch?Laybuy, the now-defunct New Zealand-based BNPL firm that Klarna acquired the assets of earlier this year. Klarna has already begun contacting Laybuy customers in the country, informing them about the next steps, which will include continuing to operate under the Laybuy brand, but moving all of its customers onto Klarna's books.

Walmart+ members?can now enjoy 25% off?Burger King?digital orders every day and a free Whopper every three months as one of their membership perks, in a first-of-its-kind partnership with Burger King. To activate the new benefit, Walmart+ members will need to link their membership with their existing Burger King Royal Perks account or create a new account for free, and then they can visit the Burger King app or website to place an order. Whether you're a fan of Burger King or not, that's an amazing perk! Whoppers cost between $5.49 and $10.19 depending on the location and type of Whopper, and Walmart+ memberships are only $98/year (and they often run 50% off your first year of membership promotions), so that's like 20-40% of the value of your Walmart+ membership right there in free hamburgers.? Your move, Amazon and McDonalds.

In a leaked recording,?Amazon Web Services CEO Matt Garman?told employees?that software engineers may have to develop other skills when AI takes over most coding tasks. Garman shared his thoughts on the topic during an internal fireside chat in June, according to a recording of the meeting obtained by Business Insider. He noted, “It just means that each of us has to get more in tune with what our customers need and what the actual end thing is that we're going to try to go build, because that's going to be more and more of what the work is as opposed to sitting down and actually writing code.”

Stripe?and?Zip?are?teaming up?in Australia to offer Zip's BNPL services through the Stripe platform. The partnership is currently in a “testing and integration” phase, with a full launch expected by the end of the year. Zip also recently integrated with Mastercard and Google Pay, and the company hinted that its not done yet and may soon announce additional partnerships with other major payment companies.?

A new report by TikTok?reveals?that the social media platform is continuing to grow in the EU despite rumors of plateauing. TikTok disclosed that it had an average of 150M monthly active users in the European Union between February 2024 and July 2024, up from 134M users the year prior. TikTok is releasing these reports in accordance with its obligations under the Digital Services Act.

Speaking of TikTok growth, the?government of Nepal?decided to lift the nation's ban?on TikTok last week, which was issued last November by previous government leaders, who claimed that the platform spread negativity in society and disturbed social harmony. Prime Minister Khadga Prasad Oli, who came into office in July, called for all social networking sites to be treated equally and led the decision during a cabinet meeting.?

Triple Whale, an analytics platform that consolidates data from all your platforms into one dashboard, is?now available?on?BigCommerce. The platform has historically only been available to Shopify merchants since it launched in 2021, but is now casting a wider net to reach BigCommerce's 50k merchants. Shopify?invested?in Triple Whale's Series B round early last year

Amazon India?launched?“Project Ashray” (not “Ashtray“, like I first read it to be), an initiative that establishes dedicated rest points in major cities across the country for Amazon Drivers. The project will initially set up five centers in busy locations throughout Delhi, Bengaluru, and Mumbai, which?will provide drivers with amenities like comfortable seating, clean drinking water, mobile phone charging stations, and bathrooms. Wow, seating?and?water? You spoil me, Amazon.

In other Amazon India news, the company is?reducing selling fees?by up to 12% across multiple product categories ahead of the festive season.? But that's not enough to stop India's commerce minister from?accusing Amazon, Flipkart, and other US e-commerce companies that operate in the country of predatory pricing practices. Commerce Minister Piyush Goyal said on Wednesday, “When Amazon says we are going to invest a billion dollars in India and we all celebrate, we forget the underlying story that the billion dollars is not coming in for any great service,” and that the losses “smell of predatory pricing.” Is that what that smell is coming from the Ganges river?

Wiwynn, a Taiwanese IT infrastructure provider, is?suing?X?for non-payment of $120M in components that it procured for the business. The company was able to recoup some of the costs and is suing for $61M that it says is still owed by X. According to the complaint, Wiwynn had a purchase agreement with X, formerly Twitter, that dates back to September 2014, but the company stopped honoring its agreement after Musk's acquisition in 2022. What a shocker!

In other news about people who hate X…?After hearing that X is planning to move its headquarters out of San Francisco, city attorney David Chiu?told the New York Times, “I share the perspective that most San Franciscans have, which is good riddance.” San Francisco Mayor London Breed said that she had met with Elon Musk several months ago, but that she didn't extend offers aimed at keeping X in the city, saying, “I'm not going to beg anybody.”?

Replenium, a Seattle-based e-commerce startup, is?suing?Albertsons?for allegedly terminating their three-year partnership and misappropriating the company's trade secrets to create its own version of its automated grocery replenishment technology. Replenium claims that Albertsons encouraged the startup to continue developing its platform despite missed deadlines and delays, causing the company to incur millions in expenses, but all the while, Albertsons was using the company's trade secrets and confidential information to build its own competing replenishment solution.?

Shopify?is?discontinuing?its advanced cash-on-delivery app in India by the end of the month, which could impact over 50,000 e-commerce and D2C merchants in the country, whose large portion of business comes from COD. Shopify did not give a reason for discontinuing the app, but recommended a few alternatives includig GoKwik's COD app and COD King.

TikTok?revealed?its Top 10 Songs of the Summer for the US, and it turns out that 60% were from independent (ie: unsigned) artists. According to TikTok, the songs are ranked “by total creations over Summer 2024″ — which means how many TikTokers used the music in their videos.?

C-suite post-earning selfie videos?have?become a hot trend?in corporate communications with CEOs from companies like Blackstone, Shopify, and Spotify posting videos to engage employees and customers about what's happening with their businesses. LinkedIn posts from CEOs at firms with at least 5,000 employees jumped 23% over the past year, with those types of posts generating 4x more engagement on the platform than average, according to LinkedIn.?

Plus 14 seed rounds, IPOs, and acquisitions of interest including Walmart unloading the entirety of its $3.6B stake in JD-com to pursue growing its own brand in China.

I hope you found this recap helpful.

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See you next week!

Paul Drecksler