Shopifreaks E-commerce Industry News Recap ?? Week of Nov 18th, 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 200th Edition published Nov 18th, 2024. Check out the full edition for links and sources and subscribe here .

btw - I'm proud to share that today marks the 200th consecutive weekly edition of my newsletter! I've never missed a weekly edition through rain, shine, holidays, travel, COVID, electricity blackouts, and even the birth of my daughter -- who luckily wasn't born on a Monday, LOL. Thanks for your support during the past few years.

STAT OF THE WEEK: Only 4.2% of US households, or 5.6M, are unbanked, according to the FDIC's biennial National Survey of Unbanked and Underbanked Households. The percentage of unbanked households declined to a record low in 2023, down from 8.2% in 2011.

Amazon officially launched Amazon Haul, its low-cost marketplace that ships items directly from China, to compete with Shein, Temu, and other direct-from-China marketplaces that cater to US customers. The marketplace features items with a maximum price of $20 and shipping times of up to two weeks, which is contrary to Amazon's typical commitment of ultra-fast fulfillment times. Essentially the market decided that not all products need to be delivered same-day or next-day, and that customers are willing to wait a couple weeks to save money on non-essential items. Amazon Haul has its own search, cart, and checkout experience separate from Amazon's primary marketplace. The majority of products are priced at $10 or less, with some as low as $1. Customers that create larger "hauls" get additional discounts of up to 10%, plus free shipping over $25.

OpenAI is preparing to launch a new AI agent — codenamed “Operator” — that can take actions on a person's behalf such as writing code, making online purchases, or booking travel and restaurant reservations, according to Bloomberg sources. The company's leadership team announced plans in a staff meeting to release the tool in January as a research preview through its API for developers. OpenAI executives hinted at projects like Operator in a recent Ask Me Anything on Reddit. Srinivas Narayanan, VP of Engineering, said about his future hopes for ChatGPT, “I'd love for it to understand my personal information better and take actions on my behalf."

YouTube is launching a gifting feature for its vertical livestreams that allows users to purchase digital “Jewels” for streamers to show their support and make connections. The gifts will appear as an overlay on livestream videos, “enhancing the live experience and creating a new way for you and your viewers to interact and have fun,” according to Google. Jewels can be purchased in bundles that can then be dished out to eligible creators during their vertical live streams. Creators, in turn, receive Rubies for each gift, which are worth 1 cent each. YouTube will be rolling out the Jewels feature to eligible creators in the US over the next few weeks. Currently only US creators and users are eligible to purchase and receive Jewels. To help launch Jewels & gifts, YouTube is offering limited-time 50% bonus to creators on gift earnings (up to $1,000 per month).

Facebook is switching to “Views” as its primary metric, following Instagram's move in August to do the same. On reels and videos, Plays will now be called Views, and Facebook is removing the separate Replays metric. For Stories, photo or text posts, Views will replace Impressions. Views will also include repeat views. So for example, if the girl you met once at an airport who became obsessed with you on Facebook views your photo fifteen separate times in the same day, that would count as fifteen Views for that photo instead of one Impression. So maybe she's not so annoying after all. In addition to the new Views metric, Facebook is updating its video metrics. Minutes Viewed and Average Minutes Viewed will replace Watch Time and Average Watch Time. Other metrics like Reach, 3-second views, 1-minute views, Reactions, Comments, and Shares will remain unchanged.

Amazon was questioned by US Congress over its e-commerce deal with TikTok that enables users to directly buy Amazon goods through the app. Users can make Amazon purchases right from the ads they see in their TikTok feeds, and link their Amazon and TikTok accounts to expedite the process, which remain synced for future purchases. The House Select Committee on China, which seeks to address threats posed by China's government, was concerned that a leading American retailer central to the economy had partnered with a Chinese-owned company on the verge of being banned over national security concerns, and that the partnership would make it more difficult to ban the app. Amazon has similar integrations with other social media companies, including Meta and Pinterest, but Congress isn't too concerned with those.?TikTok also partners with other major American institutions including the NFL, NHL, UnitedMasters, LTK, Getty Images, Disney, Walmart, Oracle, Universal Music Group, and more.

Perplexity, the AI-powered search engine backed by Jeff Bezos, Tobi Lütke, and other notable investors, says it will begin experimenting with ads on its platform this week, starting with the US. The ads will be formatted as “sponsored follow-up questions” such as “How can I use LinkedIn to enhance my job search?” Brands participating in the ad program initially include Indeed, Whole Foods, Universal McCann, and PMG. Perplexity says that it needs to invest in building not just a “beloved product,” but a “robust and self-sustaining business” — which perhaps means that its Pro Subscription hasn't taken off as well as the company had hoped. Maybe users aren't quite ready to pay for web search yet? The company actually addressed this in their blog post, saying that "experience has taught us that subscriptions alone do not generate enough revenue to create a sustainable revenue-sharing program."

Amazon is shutting down Freevee, its free streaming service that it launched in January 2019 under the name IMDb Freedive and then later rebranded twice to IMDb TV and Amazon Freevee, as part of a broader effort to trim costs and streamline its video division. Freevee was Amazon’s take on what the industry calls a FAST service — free, ad-supported streaming TV. Amazon is moving much of Freevee's ad-supported, free streaming content to Prime Video, keeping many of the shows accessible for non-Prime members through the app. With the consolidation, Amazon is leaning into Prime Video serving as a hybrid destination for both Prime members and non-members, offering a mix of new and old movies to rent, buy, or watch for free — with various levels of “free” depending on your subscription level.

For the eighth consecutive year, Amazon had the lowest online prices across 15 categories against 22 leading US retailers, according to an annual Price Wars study by Profitero. The study revealed that Amazon had an average price advantage of 14% over its rivals, but that competitors closed the gap compared to last year when Amazon had a 16% price advantage. Walmart continues as Amazon's closest price competitor with only a 5% price difference on identical items, which is slightly less competitive than last year's 4% price gap.

Temu?started requiring?a minimum and maximum purchase amount between VND887,000 and VND1 million (US$35-40) in Vietnam, informing customers that went under to add more to their cart, and customers that went over to remove items. Temu said the minimum allows it to “continue offering more and lower-priced items,” while the cap is likely because there is no tax charged on e-commerce purchases in the country under this price. An estimated 4-5M items are shipped from China to Vietnam every day, and the government is considering scrapping the tax waiver.?

TikTok?filed US trademarks?for “TikTok Go,” which will promote “restaurants, retail businesses, the travel industry, and other online and offline businesses,” and “TikTok PayLater,” which is designed to allow customers using TikTok Shop to “split their payments into monthly installments.” Both trademark filings describe TikTok Go and TikTok PayLater as mobile apps separate from the main TikTok social app.

Some?TikTok creators?are?now able to add affiliate links?to their uploads, which then appear at the top of the comment stream. When the links are tapped, they take users directly to those product pages within the app. Currently only links from select partners can be included.

Chinese immigrants in America?are?running?“family warehouses” from their apartments, serving cross-border sellers on Temu, TikTok, and Amazon. The mini-fulfillment centers help deliver orders, examine returns, and sell excess inventory to local stores. The business model has been around since the early 2000s, when e-commerce entrepreneurs sold made-in-China goods directly to Americans by having them stored in the homes of Chinese students studying in the US, but now it's growing in popularity as the demand for warehouses soars.

Apple?is?developing?a wall-mounted home “command center” that will be able to control appliances, talk to Siri, access Apple Intelligence, and carry out video calls, according to Bloomberg sources who chose to remain anonymous. The product, internally known as J490, is set to be announced in March and will compete in the smart home market against Google Next and Amazon Echo.

TikTok's parent company ByteDance?is?valuing itself?around $300B, one of the highest valuations ever for a Chinese tech company, according to the Wall Street Journal. In comparison, Meta's market cap sits around $1.4 trillion, Amazon at $2.13 trillion, Microsoft at $3.09 trillion, and Elon Musk's X likely somewhere around $9.4 billion. The valuation came in a recent buyback offer by ByteDance, just a couple months before TikTok could be banned in the US unless it sells the app to an American owner.

Meta?quietly rolled?out “Meta Credits” for?Horizon Worlds?users in the US, UK, and Canada, which allow them to buy in-world digital goods from creators like avatar outfits or access keys to premium worlds.?Horizon Worlds?is a VR platform developed by Meta that allows users to socialize, create, and explore virtual environments using Meta's Oculus VR headsets.

Amazon's capex?jumped 81%?in Q3 from a year earlier, but CEO Andy Jassy reassured shareholders that the company expects to make money on the investments, which are primarily tied to generative AI. Amazon spent $22.6 billion on property and equipment during the quarter and plans to spend $75 billion in total this year, and even more in 2025. The company is rushing to invest in data centers, networking gear, and hardware to meet the demand for AI technology.?

TikTok?is?ramping up?its livestream efforts this season with celebrity-led shopping experiences, as well as exclusive sales and discounts from major brands, as it tries to grow its US Shop business to $17.5 billion by the end of the year. Something's got to justify that $300B valuation! Additionally, to help persuade customers who are new to live shopping, TikTok will be extending its return window for purchases made during its Brand Palooza event, which will run from Nov 13 to 28 and feature brands like Phillips, Maybelline NY, HeyDude, and more.?

Amazon?introduced?a low, upfront pricing model for a clinical visit, treatment plan, and fast, free medication delivery for Prime members for a range of common health and beauty problems such as anti-aging skincare treatment, men's hair loss, eyelash growth and more. Prime members can now see the total monthly cost or per use cost for the virtual visits and medications associated with the treatment prior to beginning care.

Shopify President Harley Finkelstein?confirmed?on the company's latest earnings call that Shopify has no plans to expand into the CRM market, following an analysts comments about how Shopify had an opportunity to compete with Salesforce in this space. The comments come less than two weeks after Shopify bragged about taking “hundreds” of commerce customers from Salesforce.

About 55,000 Canada Post workers?went on strike?for the second time in six years on Friday after their union said it had failed to reach a pay deal with the postal service. The union is demanding wage increases in line with inflation, cost of living adjustment payments to be rolled into the basic wage rate, and safe working conditions. Honestly, they shouldn't even have to go on strike for that bare minimum level of working conditions and pay increases! What are you doing Canada Post? Folks have Christmas gifts to deliver.

Qoo10, the Singapore-based e-commerce platform that faced significant financial challenges in recent months that led to its insolvency, was?ordered?by the Singapore High Court to be wound up, with liquidators appointed for the company. Merchants and other creditors must?file a proof of debt?with the liquidator to see how much they can recover, but many merchants aren't hopeful that'll they will see much in compensation.?

Amazon?told employees with disabilities?that it was implementing a more rigorous vetting process for new requests to work from home and applications to extend existing arrangements, requiring some affected workers to return to office for monthlong trials to determine if accommodations meet their needs. Some workers fear that the process was designed to make requests less likely to be approved, while others accused CEO Andy Jassy of hypocrisy for introducing a new bureaucratic process — something that he's publicly said he wants to end because it's slowing Amazon down. Amazon denied having an ulterior motive and said that the new disability policy reflects its broader return-to-office philosophy.

China's President Xi Jinping?unveiled a new mega port?in Peru located on the edge of the country's coastal dessert within a remote fishing town where a third of residents don't have running water. The location was transformed into a huge deep-water port to help China cash in on resource-rich South America. The $1.3B project that's majority owned by the Chinese shipping giant Cosco is supposed to bring “considerable income and enormous job opportunities” to Peru, but locals claim that it's depriving them of fishing waters and bringing no economic benefit to them.?

Meta?was hit with a €797.72M ($841M) fine?over breaches of antitrust rules related to the linking of Facebook Marketplace to Facebook, and the market advantage that it provides the company. The EU Commission determined that Facebook breached local antitrust regulations by “distorting competition in markets for online classified ads” and abusing its dominant position, using the scale of its social network to give Facebook Marketplace an unfair advantage over other online classifieds providers, because Facebook users were being given access to Marketplace whether they wanted it or not. So does that mean Facebook Dating (Tinder and Bumble competitor), Facebook Groups (competitor of Nextdoor, Reddit, online forums), and Facebook Video (TikTok and YouTube competitor) have an unfair advantage as well? Where is the line drawn between having an unfair advantage and offering new features to your existing users?

Meta?was also hit with a $25.4M fine?by India's competition watchdog for antitrust violations related to WhatsApp's controversial 2021 privacy policy. The Competition Commission of India found that WhatsApp's “take-it-or-leave-it” privacy update constituted an abuse of Meta's dominant position by forcing users to accept expanded data collection without an opt-out option. In addition to the monetary policy, the CCI mandated significant changes to WhatsApp's data practices in the country.

Amazon?is?ending?its Fresh grocery delivery service in Germany, its second biggest market, in the latest example of the company pulling back on its own grocery delivery services and relying more heavily on partnerships with other grocers. Amazon launched Fresh in Germany in 2017 in the country's three largest cities, but now the company will only offer deliveries from a local grocer, Tegut, and from a VC-backed startup called Rohlik Group. Amazon made similar moves in the UK in June.?

Visa's Flexible Credential Card, which allows users to pay from different account funding sources, is?now available?in the US and UAE. In the US, the card will roll out in partnership with Affirm to tap into their BNPL payment options, and in the UAE, the card will launch in partnership with digital banking platform Liv, which will enable cardholders to access multiple currency accounts from a single card.

Meta?is?reducing the price?of its Subscription ad-free experience in the EU from €9.99 to €5.99/month on the web, or from €12.99 to €7.99/month on iOS and Android, as well as introducing users in the region an additional new choice to use Facebook and Instagram for free with less personalized ads, in response to the demands from EU regulators. In the less personalized option, the company says it will use “significantly less data to show ads,” which means that the ads may be less relevant to a person's interest.

Amazon?discontinued?its secretive “Encore” project to develop an at-home fertility tracker, resulting in layoffs of around 100 employees. The project was part of Amazon's Grand Challenge division, which aimed to launch a device and app that would predict fertility through saliva testing, but it was ultimately terminated to control costs. The project was born out of the company's 2020 acquisition of blueDiagnostics, which had developed a thermometer-like device called FertilityFinder to help women track their fertility from home by testing their saliva and measuring two key hormones, estradiol and progesterone.?

A mechanic at an Amazon distribution center?in Florida named Andrew Tabannah?died last week?after a van he was working on fell on him when the jack stand propping it up failed. Tabannah's coworkers placed additional jacks under the van and were able to pull him out to attempt life saving measures until the ambulance arrived, but ultimately he did not survive the accident.

The FTC?is?taking action?against?Dave, an online cash app and neobank, for using “misleading marketing to deceive consumers,” particularly for marketing $500 cash advances to consumer that it rarely offered, and its charge of an “Express Fee” for customers who wanted their money immediately. The FTC claims that Dave's marketing implied that its cash advances would be “instant” without disclosing the fees involved until after the consumer gave the platform access to their bank account.

Amazon Web Services?is?offering researchers?who want to use its custom AI chip, Trainium, a competitor to Nvidia chips that is used for training AI models, free credits to use its cloud data centers as part of its Build on Trainium program. Amazon is making up to 40,000 first-generation Trainium chips available for the program, which is focused on university-led research in generative AI. The company is planning to publish Trainium's instruction set architecture to customers can program the chips directly, instead of with software, which is what Nvidia's chips need.?

Plus 15 seed rounds, IPOs, and acquisitions of interest including Klarna filing draft registration documents for its highly anticipated IPO in the US. The company expects its IPO to take place once the SEC has completed its review, while the timing, number of shares offered, and price range would be subject to market conditions. At one point Klarna was Europe's most valuable startup at a $45.6B valuation, but later saw its valuation fall to $6.7B. Bloomberg reports that the company would go public somewhere around the $20B mark.

I hope you found this recap helpful.

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See you next week!

Paul Drecksler