?? Temu next ad spend shift to impact Meta?? Plus: In Q2 2024, Amazon outpaced the Digital Ad Market ??

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??This week maze:

1. The Big Story ???

Temu next ad spend shift to impact Meta??

2. Data ???

In Q2 2024, Amazon outpaced the Digital Ad Market ??

3. News ??

?? Amazon, Qoo10, Alibaba, Carousell, Walmart

?? Shein, John, Rossmann, Vinted, Temu, Asos, Prada, Adidas

?? Just Eat, Grubhub, Delivery Hero, Uber Eats, Swiggy

?? Etsy, Douyin, Booking.com, Wayfair, Avito Auto

4. Deals ???

Cartona, ThePlatformGroup, Stripe, Trivago

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1. The Big Story ??

Dolphin Research analyzed Temu (and Shein’s) global digital ad spend since August 2022, aiming to understand their marketing strategies.

?? Temu's Growing Investment in Meta

• Since August 2022, Temu has increased its investment in Meta's platforms.
• Growth in ad spend on Meta is slowing down but still present.
• Temu and Shein spend almost $150M monthly on Meta.

?? Decline in YouTube Spending

• Temu's investment in YouTube has decreased year-on-year
• Temu spend on YouTube now around $7.5M vs $20M monthly in Q3 2023.

?? Strategic Marketing Changes

• Temu's focus is now on increasing existing user activity in the US
• This shift aligns with Temu's strategy to move from broad user acquisition to enhancing existing user engagement.
• The change follows Pinduoduo's brand-building approach in China.

?? Future Projections for Meta and YouTube

• Platforms aligning with Temu's current strategy, like Meta, benefit more now.
• Dolphin predicts a future shift to internal cash incentives and shopping subsidies.
• As Temu shifts to internal cash subsidies, Meta might face reduced ad spend similar to YouTube in Q2.

2. Data ???

Russ Dierenger and Stratably analyzed Amazon's Q2 2024 results, providing interesting insights on the Amazon's performance and future outlook.

?? Retail Growth

• Amazon’s GMV grew by 8% year-over-year.
• Beauty & Personal Care and Home & Kitchen saw the fastest growth.
• Slower growth in Books and Video Games.
• U.S. GMV growth outpaced the market at 8.7% vs. 2.6% of US Retail.

?? International Expansion

• International GMV outpaced North America for the first time since 3Q21.
• Growth in existing markets and increased Prime membership penetration.
• Revised 2024 GMV growth forecast to 10%, down from 12%.

?? Profitability and Ads

• Operating margins up by 230 basis points compared to 2Q23.
• Ad revenue grew by 20% year-over-year.
• Amazon outperformed the broader digital ad market by 2.8 percentage points.
• Advertisers increased their spend on Amazon ads by 60 basis points.

?? Prime Program Stability

• Prime membership growth stabilized at 11% year-over-year.
• Balance between improving Prime features and increasing prices.
• Introduction of ads into Prime Video.
• Continued prioritization of Amazon by brands to drive growth.

4.?News ??

?? Mass merchant

????? Amazon recalls 400K faulty products. In a significant ruling, the U.S. Consumer Product Safety Commission determined Amazon responsible for 400K faulty products sold by third-party merchants. The decision, following a lawsuit from 2021, mandates Amazon to notify and incentivize customers to return or destroy these products.

????? Amazon to Acquire Axio for $150-175 Million. This move aims to enhance its BNPL service for Amazon Pay. Amazon already owns 8% of Axio. The e-commerce giant plans to boost its financial services in India.

????? Amazon opens Berlin hub for e-cargo deliveries. Amazon's new Berlin micromobility hub will use e-cargo bikes to deliver 1.5M parcels annually, part of a $437M investment to decarbonize their German transport network. This initiative, starting July 2024, aims to reduce emissions and traffic in Berlin.

????? Qoo10 CEO pledges $58M to help Korean merchants?from his personal assets. The South Korean government will provide an additional $400M in financial support to the affected vendors.

????? Alibaba switches to 0.6% merchant service fee. Alibaba is changing its fee structure, charging a 0.6% service fee from September. This shift aligns with rivals like PDD Holdings and JD.com. Alibaba’s shares rose 2.4% in the U.S. and 5% in Hong Kong after the news.

????? Alibaba launches AI tool for global B2B sourcing. The tool, debuting in September, aims to help SMBs by providing faster and easier searches for business partners and products. The AI will enhance business deals by leveraging 25 years of expertise.

????? Carousell and Lazada launch trade-in feature for iPhones. Customers can trade in their old phones for discounts on new purchases at LazMall. The service uses Carousell's technology to provide an easy, eco-friendly way to upgrade devices.

????? Walmart drone delivery gets FAA approval. Walmart's drone delivery service cleared a major hurdle as the FAA approved flights without visual observers in Dallas. The retailer, partnering with Zipline and Wing, aims to cover 75% of the Dallas-Fort Worth area by the end of the year.

?? Fashion & Beauty

????? Shein seeks ￡50B IPO amid forced labor scrutiny. US concerns about forced labor halted its NY listing. LSEG denies lowering standards to attract Shein. Critics worry about transparency. Labour Party supports the UK listing.

????? John Lewis launches retail media platform in partnership with Epsilon, letting brands manage ads on johnlewis.com. The platform provides real-time data, campaign control, and performance metrics, enhancing customer-brand connections.

????? Rossmann tests pick-up points in Germany. Rossmann introduces contactless pick-up stations for online orders, trialing in 10 stores starting in Munich on July 27. Customers receive QR codes for easy collection, enhancing shopping convenience and efficiency.

????? Vinted fashions $500M secondary share sale, aiming for a $5B valuation. The sale is managed by Morgan Stanley and involves existing shareholders. This comes after Vinted reported its first annual profit and secured new financing.

????? Asos CTO Clifford Cohen exits after 9 years. He joins the renewable energy sector in August. Hugh Williams steps in as interim EVP for technology. Cohen thanks the team and leaders for their support over the years. Williams has advised Asos for 18 months.

????? Prada Group sales up 17% in H1 2024, reaching €2.55B in H1 2024. Miu Miu sales soared by 93%, while Prada's sales grew by 6%. The group saw growth in all major markets, with Japan leading at 55%. ESG initiatives also progressed.

????? Adidas ups marketing spend by 15% in Q2 to $781M in Q2 2024. This boosted brand momentum and improved sales. Footwear revenue rose 17%, and overall revenues for the first half of 2024 increased 6% to $12.5B.

?? Food & Grocery

????? Just Eat Takeaway launches €150M share buyback starting 31 July 2024, ending by 31 March 2025. H1 2024 shows a 3% GTV growth, €2.6B revenue, and €301M net loss. Adjusted EBITDA rose 42% to €203M.

????? Grubhub enhances app to boost consumer experience, including customized offer carousels, a centralized wallet, order suggestions at checkout, and a $2.49 priority delivery option.

????? Delivery Hero merges foodora, Yemeksepeti, foodpanda, forming its second-largest organization. This merger, led by Tareq Barto, aims to enhance operational excellence and expand market leadership. The merger ensures customer service continuity and support for affected employees.

????? Morrisons, Just Eat Expand UK Partnership to 380 Stores. Customers can get groceries delivered through the Just Eat app. The partnership began in 2022, expanded in 2023, and offers free delivery for orders over ￡15 until the end of 2024.

????? B&Q partners with Deliveroo for on-demand DIY delivery to provide over 600 DIY products for delivery from nine B&Q Local stores in London within 25 minutes. This partnership aims to meet the growing demand for convenience and speed in home improvement shopping.

????? Uber Eats Expands Beach Delivery Service in Spain. Last summer, over 1,000 orders were placed at Playa de las Canteras. Now, with pick-up points along the coast, deliveries are more efficient. Enjoy a wide range of products without leaving your towel!

????? Albertsons and Instacart expand partnership?to offer nationwide pickup and 30-minute delivery through Albertsons Rapid. The service is available across Albertsons' banner stores. Same-day delivery for Haggen Food & Pharmacy in Washington is also introduced. By August, more than 2,000 locations will support pickup for Instacart orders.

????? Swiggy unveils marketing tools for restaurants. Swiggy launched new marketing tools for restaurants, helping them leverage influencers and social media. This follows the release of a data tool for marketing performance. The IPO is valued at $1.2B, including $799M in share sales.

??General

????? Etsy launches paid Insider membership program. Etsy is set to launch a paid membership program called Etsy Insider in September. This program will offer perks like free shipping and exclusive discounts to boost customer loyalty amidst competition and declining sales.

????? Douyin misses first-half GMV target by $13B. Douyin E-commerce's GMV reached $193B in H1 2024, missing the $206.7B target. Growth rate dipped below 30% due to low-price strategies. Merchant retention fell to 59%, impacting advertising growth. White-label products now 40% of GMV, aiming for 46% by year-end.

??????Booking.com fined $447M by Spain’s watchdog. Spain’s CNMC fined Booking.com $447M for unfair terms and restricting competition. The company imposed unfair price clauses on hotels and only offered legal terms in English. Booking.com plans to appeal the decision, stating the EU’s Digital Market Act should address these issues. The company must comply with new regulations by November or face further penalties.

????? Wayfair to Open Outlet Store in Naperville. Wayfair is opening an outlet store in Naperville, IL, this fall. The store will sell returned and discounted items. It joins Wayfair's first physical store in Wilmette and Joss & Main in Oakbrook. The Naperville outlet is the fifth Wayfair outlet in the U.S.

????? Avito Auto launches Garage Service in Russia. Avito Auto's new Garage service helps Russian car owners find spare parts and services using intelligent search. Users enter their car's VIN or registration number to find compatible parts and services. The service is available on both mobile and PC.

????? Too Good To Go expands with delivery service. Too Good To Go, known for saving food from waste, now offers delivery in Germany. New surprise boxes from brands like Marabu, Neoh, and Toblerone feature items with minor packaging defects or near best-before dates.

5. Deals??

????? Cartona raises $8.1M despite market downturn. Cartona, an Egyptian B2B e-commerce platform, raised $8.1M in a Series A extension led by Algebra Ventures. Despite investor concerns, Cartona's asset-light model and near profitability attracted new funding. The funds will enhance its FMCG and HORECA operations and explore expansion to Saudi Arabia.

????? The Platform Group acquires Dutch luxury platform Winkelstraat. This move aims to expand TPG's luxury segment and international presence. Winkelstraat, with over 350 luxury retailers and 600 brands, will benefit from TPG's software solutions and market expertise.

????? Stripe acquires Lemon Squeezy. Stripe has acquired Lemon Squeezy, a four-year-old payment processing startup. Lemon Squeezy specializes in calculating and paying global sales tax for digital products. Stripe's CEO Patrick Collison announced the acquisition on X. Terms of the deal were not disclosed.

????? Trivago acquires 30% stake in Holisto for $10M. Holisto uses AI to create hotel deals. Trivago can buy the remaining 70% within 15 months for up to $60M. Holisto, based in Israel, provides value to hotels by offering deals not available elsewhere.

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

Your guide through the maze

Artur Stańczuk Chief Strategy Officer at Packhelp, the leading European packaging marketplace. Previously worked ~8 yrs at Bain & Co. In the past, Digital Transformation Director at the leading Polish convenience chain ?abka and Entrepreneur that co-launched 3 startups