Shopifreaks E-commerce Industry News Recap ?? Week of Feb 3rd, 2025

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 211th Edition published Feb 3rd, 2025. Check out the full edition for links and sources and subscribe here.

STAT OF THE WEEK: Meta’s Ray-Bans smart glasses sold more than 1 million pairs last year. Mark Zuckerberg said when revealing the figure, “We basically invented the category and our competitors haven’t really shown up yet. I think we’ll probably start seeing some of that maybe a little later this year, maybe next year, but we just have this wide open field right now to run and basically introduce as many people as possible to Meta AI glasses and we should take that opportunity.”

President Donald Trump announced significant tariff measures affecting imports from Mexico, Canada, and China, with substantial implications for the e-commerce sector. Effective February 4, 2025, the US will implement a 25% tariff on goods from Canada and a 10% tariff on Chinese imports. Canadian energy imports will see a lower duty of just 10%. Originally, it was planned that Mexico would also see a 25% tariff starting tomorrow until the country “cooperates with the US in the fight against drugs,” but today it was announced that Trump paused the tariffs for one month after Mexican President Claudia Sheinbaum agreed to immediately send 10,000 soldiers to her country’s border to prevent the trafficking of fentanyl and other drugs. There will be no exceptions to the tariffs, which affect all categories of products. Canadian Prime Minister Justin Trudeau plans to impose a 25% tariff on $20B of US goods tomorrow, followed by another $85B of goods three weeks later in retaliation. China’s commerce ministry said it would file a complaint with the World Trade Organization and take “corresponding countermeasures," but has not yet announced retaliatory tariffs.

UPS announced that it would be cutting its business with Amazon, its largest customer, by more than 50% by the second half of 2026, to focus on smaller, more profitable clients, rather than on simply increasing volume. Amazon accounted for 11.8% of UPS's total revenue for the year, or about $10.7B. CEO Carol Tomé said on a call with analysts, “Amazon is our largest customer, but it's not our most profitable customer. Its margin is very dilutive to the U.S. domestic business.” Tomé said that because the contract with Amazon came up for renewal this year, it was time to reassess the near 30-year relationship, “because if we take no action, it will likely result in diminishing returns.”

The EU is drafting new customs reforms that would make e-commerce platforms like Temu, Shein, and Amazon Marketplace directly responsible for the safety and legality of the products sold on their sites. Under the proposal reported by the Financial Times, these platforms would be required to provide customs data before goods enter the EU, shifting the importer role from the individual buyer to the retailer. The platforms would also need to collect the appropriate duties and VAT, and ensure that all products meet EU standards. The plan includes pooling customs data from all 27 member states under one IT system and establishing a central EU Customs Authority (EUCA), which would screen shipments for risks even before goods are loaded for transport or arrive in the EU.

In other EU news… As of Sunday, the European Union can ban the use of AI systems that they deem to pose “unacceptable risk or harm.” February 2 is the first compliance deadline for the EU's AI Act, a comprehensive AI regulatory framework that the European Parliament approved last March after years of development that is designed to cover a variety of use cases where AI might appear and interact with individuals, from consumer applications to physical environments. Companies that are found to be using any prohibited AI applications in the EU will be subject to fines up to €35M or 7% of their annual revenue, regardless of where they are headquartered.

Wix launched Business Launcher, a new AI tool designed to help entrepreneurs take business ideas from concept to execution. The tool guides the user through various steps of building a business while offering personalized ideas, action plans, and key tools needed to make the idea a reality. It's a cool concept, but it was obviously built as a gateway into subscribing to Wix's website builder and marketing tools. I can't imagine any true entrepreneur coming up with a revolutionary business idea with it, but maybe Wix will prove me wrong.

In January I reported that Trump signed an executive order to delay the TikTok ban for 75 days and give the company time to reach a deal with the US — the major caveat being that Trump wants 50% of the app to be owned by a US company. So who's going to buy half of TikTok? Trump told reporters that Microsoft is in talks to acquire TikTok's US operations. He also said he would be open to Tesla CEO Elon Musk or Oracle chairman Larry Ellison buying TikTok as part of a joint venture with the US government. Perplexity AI submitted a revised proposal, and a consortium of American investors including MrBeast, Jesse Tinsley, founder of Employer.com, David Baszucki, CEO of Roblox, and Nathan McCauley, CEO of Anchorage Digital, has raised over $20B for the bid, confirmed by Bloomberg. Meanwhile TikTok and ByteDance have been remarkably quiet since Trump reinstated the app. Neither company's representatives have issued any public announcement indicating they’re willing to sell half of the app.

X is?now suing more advertisers?in its antitrust lawsuit focusing on what its CEO Linda Yaccarino has claimed is a “systematic illegal boycott.” Nestlé, Abbott Laboratories, Colgate, Lego, Pinterest, Tyson Foods, and Shell have all been added to?Musk's hitlist?the lawsuit. The complaint alleges that these companies illegally conspired to “collectively withhold billions of dollars in advertising revenue” from X. “As a result of the boycott, X became a less effective competitor to other social media platforms in the sale of digital advertising and in competing for user engagement on its platform,” the complaint reads.

Companies not being sued? Amazon! In fact, Amazon is boosting its advertising spend on X after Jeff Bezos and Elon Musk buddied up at Trump's inauguration. To announce the new partnership, Musk posted on X a GIF from the movie Step Brothers with the movie's famous quote, “Did we just become best friends?” In 2023, Amazon withdrew all its spending on the app, but now people close to the situation expect that to change, according to the Wall Street Journal, which reported that Amazon CEO Andy Jassy has been involved in the move in recent weeks as the company tries out ads.

One of my 2025 Predictions was that this year will be the highest number of IPOs since 2021. Every company that has wanted to IPO in the past few years has just been biding their time for the market to turn and rates to drop (which they have), and last year, those same companies began putting out feelers for this year. I predict it's going to be a public money cash grab. TechCrunch put together a list of tech-related IPOs reported to be in the works for 2025 which includes eToro, Voyager Technologies, Karman Holdings, Chime, Klarna, Genesys, Clario, Cerebras, Circle, Harry's, Omada Health, Shein, General Atlantic, and Oyo.

OpenAI?plans to take pages?from DeepSeek and Meta's playbooks with some upcoming changes to its operations, according to an AMA with Sam Altman. The company plans to breakdown its newer models' reasoning into smaller steps, similar to how humans think through complex challenges, which is something that DeekSeek does. Altman also said that it would consider releasing some of its models as open source and publishing more research. Altman said, “I personally think we have been on the wrong side of history here and need to figure out a different open source strategy; not everyone at OpenAI shares this view, and it's also not our current highest priority.”

TikTok's traffic?rebounded to about 90%?in the US since briefly going offline and being removed from the Apple and Google app stores, according to Cloudflare data. However traffic to TikTok alternatives has also increased, peaking on Jan 19th, the day TikTok came back online.?

Meta?says?that its decision to discontinue its fact-checking program in the US has not affected advertising revenue. Ivy Liu from DigiDay writes, “No boycott. No grandstanding CMOs. Just quiet resignation that this is the cost of doing business online.” Despite frustrations over the policy change, most advertisers are staying the course with their ad spending, with one advertiser calling Meta a “necessary evil.”

Speaking of advertising…?TikTok?assured advertisers?that they are not breaking the law by running ads on its platform, according to a leaked e-mail to a media executive at a major brand. TikTok stressed that the law only applies to those who “distribute, maintain, or update TikTok by means of a marketplace,” such as Apple's App Store and Google Play, or service providers like Oracle. The e-mail clarified that advertisers and content creators do not meet either of those definitions.

Maersk, a global provider of container shipping and logistics, is?launching a new ocean network?called Gemini Cooperation, a long?term operational collaboration with?Hapag-Lloyd?that will create a streamlined, hub?and?spoke ocean freight network targeting over 90% schedule reliability by reducing port calls and sharing vessel capacity across key East?West trades. The transition period is expected to last until late May, beginning with 340 vessels, with June being the first full month in which the network is fully phased in with all vessels sailing on Gemini schedules.

Amazon?laid off?dozens of employees from its communications and corporate responsibility department, which includes its sustainability team, in an effort to cut costs and reduce bureaucracy. Under CEO Andy Jassy's leadership, the company has laid off tens of thousands of corporate jobs and killed a variety of projects since succeeding Jeff Bezos in 2021.?

Microsoft?began firing?its low-performance workers, leaving many without severance pay or health insurance, effective immediately, as the company takes a more aggressive approach to its workforce. The termination letters read, “The reason(s) for the termination of your employment include your job performance has not met minimum performance standards and expectations for your position.” Microsoft went onto inform fired employees that it will consider past performance and termination if the person applies for other jobs at the company in the future. People apply to work at companies that previously fired them?

Google?distributed a memo?to all US employees working on Android, Pixel hardware, and other projects that offers a “voluntary exit program” guaranteeing severance for anyone willing to step away from their role at the company. Google recently combined its Android and hardware team under SVP Rick Osterloh this past April and now it's looking to cut out redundancies in the department. Voluntary buyouts can often be a precursor to layoffs if not enough employees take Google up on its offer. Feels like an episode of Beast Games!

Block?created?its own open-source AI agent called “Goose” that allows users to complete tasks using LLMs such as looking for bugs or making code changes. Users can configure Goose to run on their preferred LLM including Anthropic, Gemini, OpenAI, and others, though the company says it works best with Anthropic's Claude 3.5 Sonnet and OpenAI's o1 model.

Amazon?is?introducing a shipping solution?called Easy Ship for sellers in the Netherlands and Poland, which the company says will help sellers ship their products faster and more cost-effectively. Polish sellers will be able to schedule a shipment pickup from their fulfillment location for around €0.80, while Dutch sellers will be able to drop off shipments at designated locations for around €2.33, but it's currently unclear where these locations will be. Parcels that are sent with Easy Ship will be selected for express delivery by InPost in Poland and DHL in the Netherlands, and customers will receive real-time shipment tracking and free parcel insurance.

Visa Direct?transfer app, which serves more than 600M users globally,?partnered?with?X?to support the ability to move money from a bank account to X Money's digital wallet accounts. The partnership enables secure, instant funding, and peer-to-peer payments for X users and significantly advances X's plans to become an everything app.?

At an all hands meeting inside Meta last week, Mark Zuckerberg?said that he had to be increasingly careful?about what he says internally at the company because, “Everything I say leaks. And it sucks, right? I want to be able to talk about stuff openly, but I am also trying to like, well, we're trying to build stuff and create value in the world, not destroy value y talking about stuff that inevitably leaks.”

Moments later, in an ironically leaked memo,?it was revealed?that Meta will fire staff for leaking company info such as messages and memos. Meta’s chief information security officer, Guy Rosen, said, “We take leaks seriously and will take action.”

Apple?has?cancelled its development of AR glasses, according to a new Bloomberg report, which were meant to compete with Meta's upcoming AR glasses named Orion that are set to deliver in 2027. However the company says it's still working on underlying technologies that could be used in AR glasses down the road, including custom microLED-type screens, as well as successors to the Vision Pro and AirPods with cameras.

Amazon?agreed to a $6M settlement?and to block the sale of skin-lightening creams containing dangerous amounts of mercury on its website, ending a decade-long lawsuit brought by the shareholder advocacy group As You Sow. The original lawsuit alleged that at one point, Amazon had 27 products for sale containing high amounts of mercury, sometimes at tens of thousands of times the allowable levels. Mercury is a neurotoxin that can cause prenatal defects and life-threatening kidney, brain, and central nervous system damage.?

eBay?is?raising fees?as part of its 2025 eBay Seller Update ranging up to 0.35%, beginning later this month. The company?listed its fee increases?on its website, where it wrote that the fee increase was?“to support our ongoing investments in enhanced tools and expanded protections to help your business thrive.”

Speaking of fee increases…?H&M?is?increasing its fee?on returned items from ￡1.99 to ￡2.95, which will be deducted from refunds made by all UK customers except for on faulty items or returns made to H&M stores. H&M joins companies like Asos and Boohoo in the country in implementing stricter measures on returns to help reduce abuse towards more lenient policies.

Cushion, a San Francisco-based platform that helped customers dispute overdraft and other banking fees and negotiate refunds, is?shutting down?after more than 8 years in business. The company's founder and CEO, Paul Kesserwani,?wrote on LinkedIn?that “despite bringing multiple new fintech products to market, we didn't reach the scale needed to sustain the business. We faced the reality that Cushion wasn't on track for a massive exit, and it made more sense to wind down rather than continue investing time and money.”

Google lawyers?slammed the European Commission?at an appeals hearing for making “grave errors” by failing to take into account that Android's success stemmed from successful innovation rather than brute force. The company accused European Union antitrust watchdogs of blundering their way through a probe that culminated in a record €4.3B fine for allegedly abusing the market power of its Android mobile-phone ecosystem. The Android fine is among a slew of EU penalties targeting Big Tech that President Trump called “a form of taxation.”

The?FTC?spoke with representatives?from?Temu?about Amazon's pricing policies, particularly about its practice of penalizing merchants by removing checkout buttons from their listings when it found the same items offered for lower prices on Temu. The communications took place before Jan. 20, when Biden-appointed FTC Chair Lina Khan stepped down and was replaced by Trump appointee Andrew Ferguson.

A UK Competition and Markets Authority?inquiry group?recommended?that the regulator investigate Amazon Web Services and Microsoft Azure under the new Digital Markets Competition and Consumers Act, which aims to rein in the power of dominant platforms and protect consumers. The regulator noted that the two companies share up to 40% of UK customer spend on cloud services and that businesses currently face a limited choice of providers when it comes to cloud services. Okay, so build some UK-owned data centers and stop approving new facilities for Microsoft and Amazon! Don't allow the two companies to grow their cloud divisions in your country and then fine them for doing so.?

Bookshop.org, an online bookstore that channels a portion of its sales back to local brick-and-mortar book shops,?launched an e-book platform?to give readers an alternative to shopping on Amazon. The e-books can be purchased from local bookstores or from Bookshop, and the company promises that 100% of the profits from e-book sales will go back to indie sellers.

Amazon?is?being sued by consumers?who accuse the company of secretly tracking their movements through their cellphones and selling the data it collects. According to the lawsuit, Amazon obtained “backdoor access” to consumers' phones by providing tens of thousands of app developers with code known as Amazon Ads SDK to be embedded in their apps, which allowed Amazon to collect an enormous amount of timestamped geolocation data about where consumers live, work, shop, and visit, revealing sensitive information such as religious affiliations, sexual orientations, and health concerns. Ah yes, but TikTok is the problem…

Brands including?Instacart,?Taco Bell,?Stella Artois,?Uber,?Tubi, and?NerdWallet?released teasers for their Super Bowl 59 commercials, which?AdWeek?and YouTuber?Mining Asteroids?curated for your enjoyment. Or you can simply wait for the big game on Feb 9th like the rest of us!

Digital River, a Minnetonka-based e-commerce pioneer that build software used to make online purchases, is?shutting down?after more than 30 years in business, impacting 122 employees. In a message to employees, the company owner and CEO Barry Kasoff described mounting financial pressures including “the rapid contraction of key customers, combined with the headwinds presented by new deals with shorter payment terms and U.S. trade policies that impacted one of our largest customers. These challenges, coupled with rising operational costs and tax obligations, have impacted our ability to sustain operations.”

Walmart?expanded?its same-day pharmacy delivery service to customers across 49 states, allowing customers to purchase pharmacy, general merchandise, and grocery in a single online order. The service first launched in six states last October with plans to expand nationally at the end of January. Pharmacy Delivery will be offered free to Walmart+ members, while non-members will pay a fee, starting at $9.95 for standard delivery.

Meta?agreed to pay $25M?to settle a lawsuit with?Donald Trump, who sued the social media company in 2021 for suspending his accounts after the Jan 6th attack on the US Capitol. The majority of the settlement, $22M, will go towards a fund to pay for Trump's presidential library, and the remainder will pay for legal fees and go to other plaintiffs listed in the case. Funny how that lawsuit sat in limbo for 4 years until Trump won office again and then was settled within weeks of his inauguration.?

Amazon?appointed?Jason Buechel, CEO of Whole Foods, to oversee the company's global grocery business while retaining his leadership role at Whole Foods. Buechel, who has held the position at Whole Foods since 2022, will manage Amazon's grocery initiatives including its Fresh supermarket chain, Go cashierless stores, and online grocery services.

Amazon Prime Air?unveiled plans?to start initial flight tests from the company's fulfillment center in Darlington, a town with a population of just over 100k located in northeast England. Amazon first announced its plans to launch drone deliveries in the UK back in 2023. The company is now in the process of seeking permission with local authorities to build its flight operations at the site, as well as applying for authorization from the Civil Aviation Authority to fly drones in the airspace.?

TikTok?is?investing $3.76B?to launch a data center project in Thailand, according to the country's investment authorities. The move comes as several tech giants plan data centers in the country, including Google, Amazon, and Microsoft.

Google Gemini?is?being used by cybercriminal organizations?from all around the world in their attacks including attackers from Iran, North Korea, and Russia, the company has admitted. In an in-depth analysis discussing who the threat actors are, Google highlighted how the platform has not been used to discover new attack methods, but rather to fine-tune existing ones. Really? Catch up, Google! ChatGPT could probably discover new attack methods. LOL. The criminals are primarily using Gemini for research, troubleshooting code, and creating and localizing content.?

Flipkart?rebranded its grocery business?from “Grocery” to “Kilos,” aiming to provide everyday essentials at wholesale prices, according to the company. Unlike Flipkart's newer quick commerce offering called Minutes, the Kilo service has longer delivery times for purchases, similar to Amazon Fresh.

Shein?issued a press release?detailing the steps the company is taking to keep the items it sells safe. The announcement came a week after its first product safety recall in the US since 2021. Shein said it conducted more than 2M product safety tests last year using industry-leading labs and that its vendors are required to submit documentation for items like toys, baby products, medical devices, and electronics.

Macy's?is?ending a program?that provided college degree programs and other educational courses to its employees at no cost in partnership with Guild, a company that offers similar initiatives with Walmart, Chipotle, and Pepsi. A Guild spokesperson said the company is disappointed in Macy's decision and plans to offer financial assistance to Macy's employees who are near program completion to ensure that they can finish their education. Macy's said that the program didn't have a big impact on retention or internal promotions and that only a small number of employees used it since it began in February 2022.

CVS?launched a new mobile app?that can manage prescriptions and orders, provide options for immunization scheduling, and most notably, open locked display cabinets in stores — without having to summon an employee. In order to unlock the cabinets, app users need to be a member of CVS's loyalty program, logged into their account, connected to the store's WiFi, and have their device's Bluetooth enabled to de-activate the digital lock. Great, so now instead of opening the cabinet for you, CVS employees get to become your tech support!

YouTube?denied reports?that it's serving unskippable hour-long ads to some YouTube users who have ad blocks enabled and instead blamed the ad blockers themselves for any “suboptimal viewing experiences” — which might actually be true. A Redditor demonstrated that the ad blockers may be preventing the skip button from appearing while simultaneously failing to actually block the ad, and showed how refreshing the page would fix the problem. But then again, it could simply be Google messing with ad blockers…

Three guys in India?were arrested?for hacking into e-commerce websites, changing the prices of expensive items like mobile phones, drones, and laptops, and buying them for pennies. The trio would then sell the items for around 80% of their original price, which was practically all profit. Several bank employees were also summoned for questioning over their suspected involvement in the scam.

Plus 5 seed rounds, IPOs, and acquisitions of interest including OpenAI being in talks with SoftBank to invest up to $25B in the company, which could value it at around $300B, surpassing ByteDance and making OpenAI the second most valuable private company in the world after SpaceX.

I hope you found this recap helpful.

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See you next week!

Paul Drecksler