TRD Issue 59 - Briefing: OpenAI's Sora, JD Eyes Currys, Wish Sale to Qoo10

Hello Subscribers,

Happy Lunar New Year! After a break of almost three weeks, TRD is returning to our weekly schedule post-holiday.

Last week's headlines brought us OpenAI's unveiling of Sora, a new model capable of generating complex, high-quality videos from textual prompts. This breakthrough places OpenAI in direct competition with other tech giants like Meta, Google, and Runway in the text-to-video domain, offering creators and brands without video production capabilities the chance to craft high-quality content easily.

In other news, Chinese e-commerce behemoth JD.com is reported to be considering a bid for UK electronics retailer Currys, following Currys' rejection of an offer from hedge fund Elliot Management. With approximately 300 stores and 10,000 employees in the UK, JD.com's interest marks a strategic shift for the retailer, aiming to expand into the UK and potentially European markets amid slowing domestic demand and intensifying competition.

Another significant acquisition sees the once $14 billion-valued e-commerce platform Wish selling to Singapore's Qoo10 for $173 million in cash, a steep fall from its peak valuation. Founded in San Francisco, Wish was known for its affordable Chinese-made goods and aggressive marketing strategies, including Super Bowl ads and sponsoring the LA Lakers, despite continuous losses prompting a reevaluation of its business model.

Turning our attention to the aggressive expansion of Chinese retail in Japan, reports indicate that Temu's user base has surpassed 15.5 million within just over half a year of its launch, challenging the dominance of Japan's top e-commerce platforms like Amazon, Rakuten, and Yahoo. Similarly, SHEIN's user count reached 8.39 million in January 2024, overtaking domestic fashion retailer ZOZOTOWN and highlighting the increasing investment and competition by Chinese e-commerce in Japan.

Learn more about the news from this issue and stay tuned for more sharing and insights. See you next week.

The Retail Direct

About 91APP

Founded in 2013, 91APP is the premier OMO (online-merge-offline) SaaS company, providing one-stop omnichannel retail solutions in Taiwan, Hong Kong, and Malaysia. It offers advanced Commerce Solutions and Marketing Solutions that enable retail brands to penetrate the D2C (Direct-to-Consumer) e-commerce market and drive operational benefits to their full potential. In 2021, 91APP became the first SaaS company to be listed in Taiwan and has been named one of Taiwan's "NEXT BIG" companies by Startup Island TAIWAN.

For more information about 91APP (TWO: 6741), visit www.91app.com.

AI

OpenAI’s Newest Model Sora Can Generate Videos — and They Look Decent

Why it is important

• OpenAI's Sora represents a significant advancement in AI video generation, offering the potential for creative and educational applications.
• Others, including Meta, Google, and Runway, have announced or released their text-to-video engines.

What happened

• OpenAI unveiled Sora, a diffusion model that can "generate complex scenes with multiple characters, specific types of motion, and accurate details of the subject and background."
• OpenAI stated that Sora is still in the research stage and not being added to any of their products yet.

Source: TechCrunch

Google Gemini: Everything You Need to Know About the New Generative AI Platform

Why it is important

• Google's Gemini introduces advanced generative AI models, enhancing multimodal interactions.
• It underscores the evolving AI landscape and the competitive drive among tech giants.

What happened

• Google launched Gemini, a suite of AI models for diverse applications, from mobile to high-end tasks.
• Despite its potential, it faces challenges in delivery and clarity of capabilities.

Source: TechCrunch

e-Commerce

Amazon Briefing: Why Amazon is Turning to Resale to Build Its Luxury Business

Why it is important

• Amazon embraces luxury resale, diversifying its platform and tapping into the growing €30 billion market.
• It aligns with consumer trends towards sustainability and accessible luxury.

What happened

• Amazon partnered with Hardly Ever Worn It (HEWI) for luxury resale in Europe, expanding its luxury segment.
• This strategy gains insight into luxury demand and competes in the expanding resale market.

Source: Modern Retail

Chinese Ecommerce Group JD.com Considers Offer for Currys

Why it is important

• JD.com's interest in Currys signifies potential cross-market expansion, highlighting global retail dynamics.
• It reflects investor interest in the undervalued UK retail sector amid economic challenges.

What happened

• JD.com considered bidding for Currys after Elliott Management's offer was rejected, causing a surge in Currys' share price. This interest marks a strategic shift for JD.com.

Source: FT

Wish’s Deep Discount Sale to Singapore’s Qoo10 Ramps Up Competition for Temu and Shein

Why it is important

• Wish's sale to Qoo10 at a deep discount highlights intense competition in e-commerce, especially among discount retailers targeting the US market, and the challenges of sustaining growth.

What happened

• Wish, once valued at $14 billion, was sold to Qoo10 for $173 million.
• This acquisition occurs amidst fierce advertising and expansion efforts by Temu and Shein in the US.

Source: CNBC, Bloomberg

Retail

4 Ways Walmart is Working to Enhance Its Growth Momentum

Why it is important

• Walmart's initiatives to boost growth focus on compensation, technology, and store improvements, addressing industry shifts and consumer demands for a better shopping experience.

What happened

• Walmart announced salary increases, stock splits, store remodels, and new tech initiatives to maintain momentum amid economic pressures and shifting shopping habits.

Source: Retail Dive

How The Body Shop Unravelled in 3 Months

Why it is important

• The Body Shop's rapid unraveling post-Aurelius acquisition highlights private equity's risky high-street ventures.?
• This raises concerns over due diligence and strategic management in distressed investments.

What happened

• Three months post-acquisition, The Body Shop faces administration, shedding over 2,000 UK jobs.?
• Aurelius's strategy led to financial entanglements, questioning the effectiveness of their turnaround plan.

Source: FT

Crocs Reaches ‘Record’ Annual Revenue of Nearly $4B

Why it is important

• Crocs' record revenue underscores robust brand growth and strategic expansions, reflecting strong consumer engagement and successful product innovations.

What happened

• Crocs reported record revenue of nearly $4B, with significant growth in DTC sales and plans for Heydude brand expansion through new outlet stores and partnerships.

Source: Retail Dive

D2C

DTC Brands Look Abroad for Further Growth

Why it is important

• DTC brands exploring international markets aim to tap into global demand driven by social media visibility.

What happened

• Brands like Manscaped and Pepper Bras are expanding internationally, leveraging online sales and retail partnerships.
• However, challenges like cross-border tariffs and marketing adjustments persist.

Source: Modern Retail

Asia

Chinese E-commerce Sweeps Japan: Temu Hits 15.5 Million Users, SHEIN Surpasses ZOZO

Why it is important

• Temu and SHEIN challenge Japanese e-commerce with affordable, quality goods.
• Their marketing strategies and discounts attract price-sensitive consumers.

What happened

• Temu has gained over 15 million users in just six months in Japan, adding 2.2 million users monthly since July 2023, and reached 52% of the average users of the top 3 e-commerce platforms in the country.
• SHEIN doubled its user base in Japan within a year, around 8.39 million in Jan 2024, overtaking ZOZOTOWN’s 2.42 million users.
• These platforms use direct deals with manufacturers and promotions to expand rapidly.

Source: NIKKEI