E-commerce Industry News Recap 🔥 Week of Jan 8th, 2024

Hope your year is off to a great start! 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 155th Edition published 01-08-2024. Check out the full edition for links and sources and subscribe here.

1. TikTok aims to grow its TikTok Shop platform tenfold in the US this year to $17.5B in gross merchandise value, according to a report by Bloomberg . The report, which cited inside sources, said the 2024 merchandise volume target was discussed recently in internal meetings. Sources also said that TikTok hopes to expand in Latin America this year, where it plans to bring its e-commerce shop in the months to come.
2. The news comes a day after The Information reported that TikTok will raise commissions on most items from 2% plus 30 cents up to 8% per transaction, which is still considerably lower than Amazon seller fees, which are about 15% for most categories. TikTok also announced that it will be reducing subsidies for merchants in the coming months.
3. Douyin, Pinduoduo, Taobao, and JD.com's refund policies have sparked a wave of concern among Chinese sellers. Folks in the US better take note as well. Douyin (China's TikTok) made its “express refund” policy mandatory, requiring merchants to instantly refund purchases up to $211 before actually receiving the returned goods. This “feature” used to be optional for merchants. Alibaba’s Taobao and JD.com recently started offering refunds without having to return the items to entice customers away from Pinduoduo, which started the trend. Pinduoduo (which owns Temu) was the first major player to introduce this type of refunds policy in 2021, allowing customers to get their money back without returning goods that didn't match the product descriptions. This was seen as a major trust-building factor in helping Pinduoduo woo Chinese consumers away from competing platforms.
4. At one point during the pandemic, Etsy was killing it. Share prices hit $296.91 and the biggest concern for investors was that employee perks were too good. Flash forward a few years, and ETSY sits below $80/share, leaving people asking, “What happened?” Jason Lalljee of Spy.com says that Etsy “kind of sucks” now and no longer feels like a differentiated and buyer-friendly environment. He spells out several reasons for the change including dropshippers, counterfeit goods, sellers leaving due to Etsy policies, and Etsy no longer being unique. See my LinkedIn post to join in on the convo.
5. 2023 saw a range of logo trends, from wide wordmarks to flowing psychedelia to clever use of negative space, but what should we expect in 2024? Wix predicted nine logo trends to look out for in the year ahead, which include art deco from the 1920s making a rival, organic and sustainable logos, nostalgia with a twist, bright / bold logos that contrast against both dark and light backgrounds, hybrid logos that combine diverse fonts and bold color combos, lowercase typography, illustrative typography involving letters to make more complex shapes, and logos that are intentionally flawed. They also said minimalistic logos will stick around this year.
6. Internet-based businesses have grown strongly for most of the past two decades, with some sectors experiencing double-digit growth year after year. But now Bernstein Research Group Inc says we may be entering a new lower-growth phase. Analysts looked at growth rates for four of the largest Internet sectors including: 1) digital advertising, 2) e-commerce, 3) cloud computing, and 4) ridesharing and delivery. The expected growth rates for these sectors in 2024 are roughly half the pace of 2019.
7. Flipkart co-founder Binny Bansal launched a new B2B startup called OppDoor to help emerging e-commerce brands expand globally. Bansal parted ways with Flipkart following its acquisition by Walmart in 2018, personally walking away with over $1B, and this is his first venture since leaving the company. According to the website of OppDoor, it is a “managed services platform for global expansion” designed to help e-commerce brands by offering them end-to-end services on global markets, customer behavior, taxation and compliance, partnerships and third-party vendors.
8. Merchants who have been suspended from selling goods on Amazon are turning to specialty lawyers to regain access to their accounts and money, spawning a new niche in the legal industry that caters exclusively to Amazon sellers. Four e-commerce-focused law firms told the Financial Times that the majority of the cases they took on were complaints brought by aggrieved US Amazon sellers, with each handling hundreds or thousands of cases every year. Critics have said that the existence of a growing army of lawyers and consultants to deal with the fallout from Amazon’s actions point to a problem with the way the company treats its sellers. I'd agree with that critique.
9. Mobile Virtual Network Operators, or MVNOs, are on the rise. Brands are becoming MVNOs to build direct relationships with their customers and create recurring revenue streams. Two recent examples: Four recent examples: 1) Mint Mobile , the budget wireless service backed by Ryan Reynolds, built an entire mobile service on top of T-Mobile's network, and later sold to T-Mobile for $1.35B. 2) Humane , the AI wearable pin backed by Sam Altman, launched a device with a $24/month subscription also on T-Mobile's network.
10. A limited edition pink Stanley tumbler has got customers lining up outside Target and spending the night like it's a new iPhone release. The Cosmo Pink stainless steel tumbler was released on Dec 31st as part of Target 's “Galentine's Collection”, and quickly sold out in stores and online, as did their Starbucks collaboration cup. The Stanley brand has been around for over 100 years but recently popped off after finding success with viral TikTok videos.
11. PYMNTS predicts that 2024 may be the year that third-party aggregators like Instacart , DoorDash , and UberEats take over the grocery industry. For grocers that do not have the resources to build out their own e-grocery infrastructures, aggregators present a path to meet the rising digital demand.
12. CARiD , an e-commerce retailer that sells automotive parts through various websites, filed for Chapter 11 bankruptcy and is moving forward with plans to restructure and reduce debt. The company went public in 2020 through a SPAC, but says that recent economic conditions have impacted spending on automotive parts and accessories. I call BS on that one! If anything, people have been spending more money on car parts in recent years, repairing instead of replacing their vehicles, as the price of new and used cars skyrocketed since the pandemic. This bankruptcy screams mismanagement.
13. Amazon is recruiting 50 full-time employees and one seasonal recruit in South Africa (that poor solo seasonal worker), ahead of its e-commerce launch this year. Positions advertised include service lead, a B-BBEE senior program manager, a transportation and fulfillment manager, and various roles within vendor and supply chain management.
14. Faire updated its 0% commission policy to be more clear on how relationships qualify for the zero commission status when a seller brings their existing clients onto the platform. Among other changes, they extended the time frame for ordering customers to qualify for a commission change from two to four years, and created new tools for vendors to capture retailers in person at 0% commission.
15. The IRS is rolling out a free option for filing federal tax returns this year to some low and moderate-income taxpayers with simple returns.The new direct file service will initially be available in Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington State, and Wyoming.
16. Puck , a US digital media company founded in 2021 that covers Silicon Valley, Hollywood, Washington, and Wall Street, hired Sarah Personette, who quit as Twitter's head of ad sales after Elon Musk bought the company, as their new CEO. The role has been vacant since the exit of Puck co-founder Joe Purzycki in May 2023.
17. American consumers spent $222.1B online between Nov 1 and Dec 31st last year, a 4.9% increase over 2022, according to new data from Adobe. More than half of that spending happened in November, thanks to a strong Cyber Week, during which shoppers spent $38B. BNPL contributed $16.6B to online spending (up 14%), and mobile shopping outpaced desktop sales for the first year, accounting for 51.1% of sales.
18. Amazon played a huge role in those online sales numbers this year. In the two weeks leading up to the holidays, Amazon garnered 29% of global volume of online orders, up from 21% during Thanksgiving week.
19. X rolled out a new $200/month Basic plan for organizations interested in verifying their account with the gold checkmark badge, but who aren't looking to spend $1,000/month for the Full Access plan. In addition to the gold checkmark, the Basic plan includes ad credits, priority support, access to X's hiring platform to post job openings, as well as all the benefits of X Premium+, which is the $8/month subscription for non-organization users. I'll take neither for $0, Elon.
20. To the surprise of local officials, Walmart decided to put a stop to its plan to open a $100M distribution center in Vaudreuil-Dorion, Canada, which was supposed to be a state of the art delivery hub for online orders in Quebec and Atlantic Canada. Walmart said that instead of moving forward with the center, it has decided to accelerate upgrades to their existing network to unlock more omni capabilities to better serve the needs of Quebec customers.
21. The volume of people in the US cancelling their subscriptions to streaming services including Netflix, Hulu, Disney+, HBO Max, Apple TV+, Discovery+, Paramount+, Peacock, and Starz rose to 6.3% in November 2023 from 5.1% a year earlier. 24% of US subscribers canceled at least three of those subscriptions over the past two years, as of November, up 15% from Nov 2021.
22. Ulta Beauty is refreshing its loyalty program, which has over 42M active members. Its expanded program will launch in January with a new name, Ulta Beauty Rewards, new look and feel, and enhanced birthday gift experience. It also plans to raise loyalty program awareness and engagement through in-store and online initiatives.
23. Roku is launching a new series of TVs in the US this spring, as well as a new set of AI powered features to all of its TVs. The feature will use AI and machine learning to analyze data from content partners to identify what kind of content is on screen and then automatically adjust the picture for an optimized viewing experience. Will that optimized viewing experience include click-to-purchase ads? LOL.
24. A senior developer at AWS disclosed in a blog post that he's been “silently sacked” from Amazon, which means stripped of duties and put into a position without defined tasks, with the hopes that the he'll eventually quit so that the company doesn't have to pay severance. (I swear there was an episode of Silicon Valley about that.) Justin Garrison said that AWS teams were lean before 2023, but now they’re emaciated, and to expect a major AWS outage in 2024.
25. New domain name registrations plummeted by almost 25% since Squarespace acquired Google Domains last September. In August, Google Domains and Squarespace registered a combined 250,324 domains, but in September, they registered just 189,713 new .com domains. Squarespace raising the price of registration from $12 to $20 probably didn't help.
26. 22% of BNPL users in the UK have missed one or more repayments in the past six months, facing late fees and negatively impacting their credit scores, according to a study by the Centre for Financial Capability. A fifth of those users admitted that they were uncertain about the late policies of the lender or the impact on their credit score for falling behind on payments.
27. UPDATE: Last week I reported that Shopify is rolling out a personal news feed feature that enables users to follow authors and topics they're interested in, as well as tools to encourage users to subscribe to newsletters and monitor and track stocks. However I noted that I could not find any additional sources on that story and asked if you had any insights. I also later reached out to a contact at Shopify who informed me that the story was FALSE. The products that are referenced in the BNN article – personal news reader and financial tracker tool – are not products offered by Shopify. So that ends that rumor.
28. Plus 7 seed rounds, IPOs, and acquisitions of interest including Perplexity Meet , a San Francisco-based AI search engine with 10M active users that describes itself as “part chatbot and part search engine, offering real-time information and footnotes showing the sources of its answers,” raising $73.6M in a round led by IVP with participation from Jeff Bezos, Nvidia, and Tobias Lütke at a $520M valuation. Perplexity CEO Avarind Srinivas, a former OpenAI researcher, told Reuters, “Google is going to be viewed as something that's legacy and old. Perplexity will be viewed as something that's the next generation and future.”

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See you next week!

PAUL

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