Dear Readers,

I have been quiet and have not written a newsletter in 2.5 years. Multiple readers, investors, and executives have emailed me and asked for the newsletter to be restarted. Well, here we are. I will write to you weekly as I have not seen the content I want to read from others. No offense, but we need context and opinions to help the sector make sense.

What happened to me? Honestly, I think I was grieving my dad's loss for the entire time without admitting it. I spent hours reading and writing on Sundays and getting cups of tea and dinner that he made, but suddenly, he was not there. Loss never gets easier and remains a place in your life you look back at. In March, I did all the woodwork at home (bruised hands and all) and suddenly had a jolt of energy. I also have had the help of two mentors, Rick Watson and George Westcott, who have listened to me and my theories, and both helped me feel the need to go back to writing.

What has changed? I am selling advertising for the various sectors in the newsletter but retain editorial independence. I will be starting a podcast to drive this newsletter's adoption, as it feels like media is required to help time-starved e-commerce executives. The newsletter goes back to when I started, with opinions and context in your inbox every Sunday/Monday. I am trying to write a daily post on LinkedIn with a story about what is on my mind. Feel free to connect with me.

What can you do for me? Reply to the emails—I read and responded to all of them. Also, help me grow this list.

​Onwards, Hendrik

Marketplaces

Amazon CEO Jassy answered a quarterly call question that caught my attention. What cycle is the company in—investment or profits? Jassy answered both. That reader should scare competitors like NVIDIA, Google, and more. Why? Amazon can and will go after margins to grow its revenues. Amazon, due to regulation, can not purchase startups or incumbents, Investment into technology (AWS) and advertising which directly proportional is going to happen - I am thinking $55 - $60 billion in FY2024. This is the Amazon everyone should have feared. - Yahoo! Finance / Fortune​

Amazon is playing offense right in front of us. They are opening local stores in markets with large audiences of cross-border customers. That is why South Africa opened this week, and Ireland will open in 2025. We are moving away from marketplaces and cross-border marketplaces being separate, but rather, they are now competing.

I have a theory I want to share. Amazon does a horrific job communicating cost changes every year. Should Amazon offer all of these services to sellers for free? No. This change will have two impacts: low-priced goods will vanish from Amazon as it makes no sense for sellers. Secondly, sellers selling non-standard-size items need to investigate those Amazon Accelerators who offer Fulfillment by Merchant to their partners. Amazon’s New Fees on Sellers Likened to 'Kick in the Gut' - Bloomberg ($)​

MercadoLibre saw its profit surge in the first quarter, with strong growth in Brazil and Mexico helping offset the hit from Argentina’s currency devaluation. It also reclassified its fintech division Mercado Pago’s interest income. It altered how it books some expenses in its logistics arm Mercado Envios — which positively impacted net revenues. MercadoLibre weathers Argentina tumult with Mexico, Brazil gains. - Buenos Aires Times​

Temu and SHEIN seem to be adding new business models targeting different sellers/brands while trying to remain fully focused on the customer-to-manufacturer (C2M) model. It's getting harder and more complicated to understand Temu. Temu Opens OBM Settlement Channel Mainly Targeting Chinese Clothing Brand Merchants - Pandaily​

Food delivery is difficult but even harder in developing economies such as Kenya and Nigeria. While the blame is shifted around, drivers claim to be still waiting for payments. Jumia Food delivery staff have not been paid their final payments in markets since the company ceased operations. - Rest of the World​

Brands should check their entire supply chain and ensure channel control, making counterfeits almost impossible to find on marketplaces. Register your IP before sending it to manufacturers in China, making it impossible for them to sell extras, etc. More importantly, create a channel-specific inventory to ensure you know where the leak is - otherwise, it's whack-a-mole. After a Taylor Swift viral lift, Popflex faces off against AI-enabled counterfeits on Amazon & TikTok. - Modern Retail ($)

Why are Walmart and Amazon asked to explain how they determine pricing for their goods? What about the other retailers and cross-border platforms?​ Is it the platform's problem that the global cost of living has increased, or is it still the narrative that these platforms force higher pricing due to them collecting pricing data? US Senator Sherrod Brown asks Walmart and Amazon to explain dynamic pricing. - US Senator Sherrod Brown​

Has Gopuff publicly announced its finances? Secondly, is the comparison to DoorDash not an apples-and-oranges comparison? Fast Delivery Survivor Gopuff burned $400M last year - The Information ($)​

Chinese Shopping Platforms Phase Out Unpopular Presale Schemes. - Sixth Tone​

Online marketplace Fruugo explores sale of business - Retail Gazette​

Alibaba Overhauls Taobao Website Ahead of Revamped 6.18 Sale. - Alizila​

Alibaba’s Hema inks salmon supply deal with Norwegian Salmon suppliers - Undercurrent News.

CFO says Kuaishou will replicate China business model in MENA, Brazil growth plans. - SCMP​

South African marketplace Takealot has started a Prime competitor. - TechCentral​

Flipkart Modifies Rate Card For Sellers To Boost Clarity On Settlement. - Inc42​

Rakuten’s Japanese App Rakuma to Sell on eBay.com. - Ecommercebytes​

MercadoLibre Accused By Argentine Banks of ‘Abusive Conduct’ - Bloomberg ($)

Mercado Libre and Amazon Brazil asked to remove cell phones that have not been inspected by national regulators. - Showmetech Brazil​

Meituan’s KeeTa app leads Hong Kong’s food delivery market by order volume in March quarter, surpassing rival Foodpanda. - SCMP ($)

One big thought

What did I learn over the last 30 months?

Amazon is misunderstood even after it was launched 30 years ago. Shockingly -consumer package goods companies feel they are between a rock and a hard place - yet they do not mind dealing with retailers such as Walmart.

Amazon brand aggregators and software roll-up companies make no sense, and I wonder what is accelerated by Amazon accelerators. If it makes sense in a spreadsheet, it is a business model worth trying, no one ever said.

I also left the cult of Shopify, which seemingly can do no wrong in the eyes of a generation of entrepreneurs who have no real understanding of e-commerce. Sorry, Tobi and Harley; it's you, not me.

I also believe that digital marketing is broken, and we need a rethink to grow businesses without wasting millions of Dollars on funnels that create the innovator's dilemma.

It's a fun read that starts my new newsletter.

Luxury Commerce insights sponsored by Luxlock​

What happens when luxury meets storytelling combined with an exclusive retail experience? Affluent customers feel special, and purchases occur. Amid the current struggles of luxury marketplaces, it's noteworthy that a licensed owner is creating a unique experience. Just look at what can be bought, and what product pages look like. Holy Ecommerce! WB Invites Shoppers into the Luxurious World of Bruce Wayne with New ‘Retail Storytelling’ Experience. - Retail Touchpoints​

DTC sales fell 7.5% in Q1 at constant rates, with particularly weak performances in China and Korea throughout January. Wholesale dropped 38.6% in the first quarter, which the company blamed on the weak economic environment in Europe and the US, and its exposure to travel retail — which is yet to recover significantly, according to the company. - Ferragamo sales drop 16.6% in Q1 as wholesale, Europe revenue drops - Vogue Business​

Sources told WWD that Mytheresa is working with investment bankers on two fronts: pitching investors on a buyout that would take the company private and considering acquiring Net-a-porter. Mytheresa Is Considering Going Private, Sources Said. - WWD​

Luxury retail is considerably harder than most forms of retail. Is this confirmation that Saks.com went nowhere or that Neiman Marcus and Saks are struggling? I can't decide which is reality. Neiman Marcus and Saks are closer to a deal. - Axios​

Prada heir says Italian group is open to M&A opportunities - Bloomberg / Fashion Network​

eBay is the most popular site for secondhand luxury fashion and accessories. - EMARKETER​​

How luxury interior retailer ABASK is democratizing design. - Boat International​

Now You Too Can Sling Valentino’s Latest Bag, Thanks to Virtual Try-on. - WWD​

Tod's will be delisted after the successful takeover bid by a fund associated with LVMH. - Fashion United​

Chinese Shoppers Drive Luxury Sales in Japan Despite Macro Concerns - WWD​

Fashion e-commerce

Do you remember Marc Andreesen, with his famous "Software is eating the world", and how doomed retail is? He had no idea that consumers still want stores and that the affluent US consumer uses a combination of stores and online.​2024 US Clothing & Accessories Ecommerce Market Research Report - 2 Visions​

Yikes! Consumers have been encouraged to be vigilant when shopping online after research showed fraud was rife on secondhand marketplaces, with Depop, Shpock and Preloved named the worst sites, and problems also discovered with industry giants Amazon and eBay..Fraud rife on secondhand marketplaces Depop, Preloved, and Shpock - The Guardian​

A sign of the times: Is live shopping the future of retail? - The Industry Fashion​

Add Revolve to the long list of fast fashion businesses SHEIN and TikTok Shop impacted. It's going to be brutal in 2024 for these companies. Revolve Q1 sales are down 3% despite a lift in active customer numbers. - Fashion Network US​

Advertising

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Why would merchants opt-in and give Google Shopping purchase history data to showcase purchase numbers? How many times has Google tried to get this information? Why would merchants be willing to risk the conversion data to be used to increase advertising costs? Google's reasoning "to be more creative and innovative to help merchants stand out" is not good enough here. Google Shopping Ads get conversion annotations - Search Engine Land​

Name a market in which Chinese cross-border marketplaces are competing, and the biggest winners in the sector are local online advertising solutions. Kakao joins Meta and Google generating revenues from advertising investment never seen before. I would love to know Temu, SHEIN, TikTok Shop, and AliExpress advertising budgets. Kakao attributes solid Q1 earnings to advertising fees from AliExpress, Temu. - Korea Times​

How TikTok Shop ads turned an obscure, inaccurate book into a bestseller - Vox​

Social video ad spend increases, but growth rates stall - EMARKETER

Amazon Prime Video continues to add new advertising formats and will only show ads when consumers pause their shows,

Logistics is sponsored by Third Person - a new way for brands to discover 3PLs

The Suez Canal and the Red Sea both add complications for ocean carriers. Trips take 30 days longer as rerouting via the Cape of Good Hope takes time. Do we have enough ships to move goods worldwide with longer trips? No, the likely outcome is that brands will have supply chain struggles in Q4 and higher costs due to the need to use air carriers. Who is the biggest loser here? Consumers will pay more for presents. Shipping lines prepare surcharges in response to Red Sea crisis - Trans.info​

I am seeing and hearing about a trend in 2024: Marketplaces opening or forwarding merchandise from areas close to a core market. Mercado Libre's warehouse opening in Texas makes sense to Mexican consumers. How long will it be before this serves more Latin American markets? I never thought I would see this. MercadoLibre operates its first distribution center in the US to strengthen its offer to Mexican buyers. - BN Americas​

Many logistics/supply chain companies have benefitted from the second-order impacts of Chinese Cross-border marketplaces. According to its electronic disclosure on Friday, CJ Logistics recorded a 10.4 percent increase in operating profit in the first quarter to reach 109.4 billion won ($800 million), owing to the rising volume of overseas e-commerce parcels. CJ Logistics' operating profit rose 10 percent as AliExpress orders poured in. - Korea Joong Ang daily​

Amazon has been investing in its decarbonizing efforts, whether it's by adding electric trucks or adding hydrogen power to warehouses. It is a trend I am seeing more. Amazon is rolling out a fleet of heavy-duty electric trucks to decarbonize more of its transportation network. - GeekWire​

Contract logistics is the star performer for DHL, but weak rates take a toll. - The Loadstar​

U.K.-based footwear brand FitFlop selects Ryder as U.S. supply chain and logistics provider. - AJOT

Chinese couriers rapidly expanding global reach. - China Daily​

Pinduoduo to Enter Express Delivery Stations, Has Obtained Operating Permits. - Pandaily​

How retailers like Best Buy, T.J. Maxx, and Home Depot quietly target 'problem' returners. - CNBC​

Consumer

Starbucks and its digital platform have ruined the experience it once had. Sit and watch the collection for mobile orders / grab and go, and you realize the company has lost its soul and is no longer a hub to sit and enjoy the company of others. Starbucks' Digital Dilemma - Trung Phan​

BigCommerce has lost 90% of its value since its IPO and is seeking an acquirer. This rumor has been making the rounds for a while and likely requires $1.5b for an acquisition. Likely purchased by Private Equity and then taken private and optimized. Software company BigCommerce explores sale, sources say - Reuters​

Avatar influencer commerce is currently only happening in China. Artificial intelligence will make it harder and harder for customers to anticipate if this is a recording or a chatbot. Virtual humans helping spur e-commerce. - China Daily​

Premier League and Fanatics Collectibles Announce Landmark Multi-Year Trading Card, Trading Card Games, and Stickers Partnership. - Fanatics​

Uber Co-founder Travis Kalanick Envisions ‘Internet Food Court’ Future. - Food On Demand​

Decoding Swiggy’s Roadmap To A Blockbuster $1.2 Bn Public Listing. - Startup News​

Uber Eats to Power Restaurant Delivery on Instacart. - Uber​

​Payments​

Walmart is leveraging its fintech arm One to offer BNPL options to its customers, competing with existing players like Affirm, which already offers pay-in four options in Walmart stores. What will Walmart’s launch of BNPL through One mean for the industry? - Tearsheet​

13 Asia Pacific Firms Make Top 100 Cross-Border Payment Companies List for 2024 - Fintech News Singapore​

Stripe announced a milestone in its 2023 annual letter: surpassing $1 trillion in total payment volume.- Benzinga/YahooI Finance​

The importance of cross-border payments in Latin America. - IBS Intelligence​

Fintech Firm Airwallex Engages Middle Eastern Wealth Funds for Expansion - Crowdfund Insider​

It must be noted that Google Wallet is a separate product from Google Pay in India, whereas it’s offered with payment features in other markets. Google Wallet Launches In India With Flipkart, Pine Labs Among Partners - Inc42​

Stats or other interesting news

Over 50% of German online sales via marketplaces - EcommerceNews EU​

​Dollar Store Entry Affects Rural Grocery Stores More Than Urban - US Agriculture Department​

Fake ‘Monet’ and ‘Renoir’ on eBay Among 40 Supposedly Counterfeit Paintings Identified Using AI. - Art News​

E-commerce Spend Grows to $331.6 billion, as Consumers Trade Down to Cheaper Goods Online - Adobe​

​Amazon's warehouse robot army keeps getting bigger and bigger - Business Insider ($)

​Market Map: E-commerce plots a comeback with ‘prepurchase’ startups - Pitchbook​

South African online retail passes 6% of total retail. - Mastercard​

​E-commerce deal at the WTO is suddenly back in play - Hinrich Foundation​

​Behind the Boom in Celebrity Brands - HBR (podcast)​

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment.

This was edition number 292, sent on 12 May 2024.