Dear Readers,

Amazon's being seen as a distributor will greatly impact the categories in which products interact with humans. Yes, they likely will challenge this in court but that latest ruling is yet another case of horizontal marketplaces being impacted by regulators. I do not believe we have seen the last of this.

What are the three questions on my mind?

1. Are we seeing cracks in the Temu model? Someone has to be squeezed to offer low pricing. Why would factories and sellers remain on Temu?
2. Qoo10 is another private equity mess. Roll-ups do not scale, but rather place demands on under-resourced businesses. PE, we need to have a talk.
3. TikTok Shop continues to help brands experience success in the UK but is raising fees. Can this become a sustainable business.

​Onwards, Hendrik

Marketplaces

We might have seen the end of Qoo10 in South Korea. How did this all start? When Qoo10 acquired Wish, it took capital ($29M) from these companies. The companies could then not pay sellers, partners, and affiliates, which led to regulators raiding offices and homes and investigating capital inflows. The companies filed for receivership but are headed to restructuring and were frozen by regulators. This lack of liquidity has also impacted other Qoo10 companies that have not been paid. Interpark Shopping, Interpark Book, and AK Mall cannot pay sellers. The government has set up a $445M fund to help those affected. TMON, WeMakePrice, and Qoo10 executives were charged with fraud and embezzlement. Regulators failed to block the reallocation of assets between the companies and Qoo10. QXpress will likely not go public soon and will be controlled by its PE investors.

US agency puts the onus on Amazon for the sale of hazardous third-party products. - Reuters​

Amazon.com is responsible for selling hazardous third-party products on its platform, a U.S. government agency said, ordering the e-commerce giant to propose steps to inform consumers and encourage them to return or destroy the products. The directive from the Consumer Product Safety Commission (CPSC) covers more than 400,000 products, including faulty carbon monoxide detectors, hairdryers without electrocution protection and children's sleepwear that violated flammability standards.

Temu Merchants Stage Protest at Temu’s Guangzhou Office. - Pandaily​

200 small and medium-sized merchants protested at Temu's Guangzhou office, voicing grievances over substantial penalties and withheld payments. They claimed Temu imposed fines and deducted after-sales reserve funds, affecting 407 merchants. The protest drew widespread public attention, resulting in approximately 138 million yuan in penalties and reserve funds.

Is Amazon Turning into Temu? - NY Mag​

The battle between Amazon and Temu concerns Chinese sellers competing on global marketplaces. Amazon has significant advantages in the US, such as profitability, popularity, and trust. Millions of Americans use it for mainstream products, batteries, detergent, and its Prime shipping infrastructure.

Amazon VC Accounts: The Secret Weapon for Chinese Sellers - Brands Factory​

Chinese cross-border sellers increasingly use VC accounts as a badge of success, with many top sellers relying on them for income. Some have even transitioned to VC models, increasing revenue by billions.

Everyone wants a piece, but rapid delivery is still a small pie - The Times

William Woods, at Bernstein, said that in other countries, such as the United States, immediate grocery comprised “a much bigger proportion of the market, so I think it is right that these players understand what’s going on, understand the model, have a bit of a service, try to meet some of those consumer needs and offer a decent proposition. Is it ever going to be massive? Probably not. But it’s a test-and-learn process.”

Brazilian Superior Court issues ruling on marketplace liability with impact on IP violations. - World Trademark Review​

The Brazilian Superior Court of Justice has confirmed that marketplaces and other online content providers cannot be held accountable for companies' and individuals' violations of terms of use, including IP rights violations.

Reimagining sustainable online grocery with Picnic's Cristina Berta Jones [Podcast] - the best online grocery discussion I have heard from an operator.

Thumbtack Announces $75M. Knowde raises $60M. Series CEgypt’s Cartona raises $8.1M. Kogan’s revenue falls amid lower gross sales. Reason Automation Receives Investment From Verify Ventures. Fiverr Deepens eCommerce Solutions with Acquisition of AutoDS. Delivery Hero merges its foodora, Yemeksepeti, and foodpanda business teams. Yogiyo drops its commission fee to 9.7 percent, undercutting Baemin and Coupang Eats. Alibaba unveils the world's first AI-powered conversational sourcing engine. Mercari Connects U.S. Marketplace to Sellers in Japan, Opens First Store in LA

MercadoLibre's profit more than doubled in the second quarter, beating estimates. DoorDash loses more than expected in Q2. Amazon shares slide on revenue miss, disappointing guidance for third quarter. Just Eat: Shares spike, but is there trouble ahead?

Food Delivery Riders in Addis Ababa Earn Over 30,000 Birr ($375) Monthly. The Takealot platform allegedly exploited to sell counterfeit goods, and a secret war happening on Takealot.

Amazon wants seller holiday inventory now. DoorDash Introduces New Products to Drive Off-Peak Demand. B2B distributor e-commerce sales are inconsistent so far in 2024. Spain’s antitrust watchdog fines Booking.com nearly $450M for unfair terms and restricting rivals. NFLPA’s Early Exit From Panini Deal Could Fuel Fanatics Legal Battle. Meet Etsy Insider: Etsy’s new buyer membership beta program. TikTok Shop to raise UK seller fees in bid to build ‘marketplace of the future’. What is behind the alliances of traditional retail with e-commerce platforms?

Probe ordered into Temu Launch in Thailand. Indonesia's Bukalapak revenue up 6 percent quarter on quarter..

Tmall opens a pop-up store on the Champs-Elysees. Alibaba’s Taobao to Give Top Sellers More Power to Reject ‘Refund Only’ Requests. Chinese e-commerce giants Taobao, Douyin shift focus away from aggressive pricing. JD.com’s founder ‘still running’ e-commerce group from overseas. The Dutch government wants to tax cheap imports from non-EU countries. Alibaba wants to increase fees for sellers [In German]. JD Plans to Open & Upgrade 2,000+ 'JD Home Appliances and Home Furnishings' Shops. Temu and the Hoops They Make You Jump Through for Those ‘Free’ Gifts. Customs data showed Tuesday that the trade volume of China's cross-border e-commerce totaled 1.22 trillion yuan (about 170.95 billion U.S. dollars) in the first half of 2024, up 10.5 percent year over year.

Luxury Commerce insights sponsored by Luxlock​

Big Luxury Frets That China Is Turning Japanese. - Bloomberg ($)

The Paris-headquartered owner of Louis Vuitton and Dior reported a 1% increase in sales in the second quarter, which, except for the early days of the pandemic, is the lowest level of growth since the depths of the Global Financial Crisis in 2009. Its operating margin fell.

Miu Miu Revenues Double In First Half, Bucking Luxury Slowdown. Business of Fashion ($)

The company reported Tuesday that Prada’s red-hot Miu Miu label continues to buck slowing demand for luxury goods, with retail sales nearly doubling in the first half. The brand’s first-half retail sales jumped by 93 percent year-on-year, accelerating slightly from 89 percent growth in the first quarter. Flagship Prada brand’s retail sales rose 6 percent, slowing slightly compared to the year's start.

Luxury’s Latest Foe: 40% Discounts on Chinese Resale Sites. - Business of Fashion ($)

Luxury powerhouses like LVMH and Kering SA are facing a fast-growing foe in China: a grey market that sells brand-new, authenticated goods procured in other countries for discounts of up to 40 percent on the mainland. Currency exchange fluctuations and Chinese shoppers’ growing price-consciousness has given new life to arbitrage in luxury goods, dominated by an e-commerce platform called Dewu.

Inside Chanel’s e-commerce launch in India. Tmall opens a pop-up store on the Champs-Elysees. Central Group secures the future of iconic Berlin property. Results from Adidas, Prada, Armani, and Hugo Boss show the state of fashion’s finances [podcast]. The luxury bubble is bursting and not even Cettire is safe. Coupang marks Rocket Luxury’s 1st year with a special event. Canada Goose boosts sales on Asia strength, lightweight apparel.

Two high-end, made-in-America furniture manufacturers merge in North Carolina. L’Oreal Earnings Rise on Growth Outside of China. Are European brands still attractive to Chinese consumers? For consumers, quality Is synonymous with luxury. Brunello Cucinelli’s new AI site amasses over 10,000 daily queries. Running a Fine Dining Restaurant in a Recession.

Fashion e-commerce

How Amazon India is Bringing International Beauty Brands to Every Pin Code. - Indian Retailer​

Amazon India’s vision for the future of beauty shopping is clear: to provide an unparalleled selection of products, ensure authenticity, and offer a seamless and informative shopping experience. With initiatives like the Global Beauty Store, Derma Store, and exclusive collaborations, Amazon is well on its way to transforming the beauty landscape in India.

Winky Lux Receives Majority Growth Investment From Core Industrial Partners. Paris Olympic champion’s hairpin has become a trending item on Chinese e-commerce platforms. ‘The Dyson effect’ defined hair care at CosmoProf Las Vegas. Deleting social media broke my fast-fashion addiction​

Shein opens its marketplace to Spanish retailers and brands - Ecommerce News Spain [in Spanish]

Christina Fontana , senior director for brand operations EMEA at Shein , highlights that “ the priority is to offer the best shopping experience to customers and, at the same time, empower the communities in which they operate, as is the case in Spain .” “ We are very happy to open our doors to Spanish brands to offer greater added value to our customers while making it easier for local businesses to grow with us,” Fontana stresses.

American Circular Textiles (ACT) voices support for 'transformational' Americas Trade Act. Ted Baker ‘to close stores within weeks.’ More than a third of fashion and footwear products get returned in online shopping. South Africans skip Woolworths clothes for “disruptive” Shein. Vinted targets $5bn valuation with latest share sale. Flipkart launches FlipInTrends to drive growth for Made-in-India fashion brands. Nike and JD Sports expand connected loyalty program to the US. P.Louise breaks records by selling $2M in 12-hour LIVE on TikTok Shop.

Advertising

The $600 Billion Digital Ad Business Is Hanging on a Few Words From Google. - WSJ ($)

The ad industry is concerned that the Alphabet unit will adopt a sternly worded prompt similar to the “Ask App Not to Track” language Apple rolled out in 2021 as part of its privacy push, which hurt many in the digital ad business. Apple’s prompt asks if the user will allow the app owner to track their activity across other companies’ apps and websites. According to mobile analytics firm Adjust, U.S. users opt out of tracking about 74% of the time they encounter the language.

The Cookie Conundrum Proves Google Couldn’t Collaborate In The Sandbox. - AdExchanger​

With no clear direction on where to go after the death of the cookie, this new proposal at least gives some runway to continue preparing for the inevitable change to consumer privacy regulations that will affect the use of third-party data. More lead time is beneficial, but frequent changes remain difficult to navigate. This is just one more adjustment to Google’s plans that significantly alters business conditions for all publishers.

Inside Google, Amazon And The Trade Desk’s DSP Battle - AdAge ($)

Google and Amazon have been promoting their DSPs in sales presentations . Amazon aims to break out of e-commerce and see its DSP as an alternative for programmatic advertising, despite being viewed as lagging behind rivals.

Third-party cookies have got to go. Amazon Prime Video undercuts rival Netflix on advertising prices. Amazon Advertising Earned $50B Over The Past 12 Months, And It’s Just Getting Started. Instagram ban in Turkey costs $57.4M daily. Instacart Unveils New Ad Solutions to Spark Out-of-Aisle Inspiration.

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

Amazon Pushes Fast Delivery Into Rural Areas in Challenge to Post Office - WSJ ($)

As Amazon has encroached further into rural territory, the USPS has extended mail delivery times in its current restructuring program. In places where there is less mail, the agency has tested a program in which trucks collect mail only in the morning rather than twice a day, which has worried some rural residents.

Amazon is delivering at its fastest speeds ever for Prime members in the U.S. and globally. - Amazon​

Amazon hit its fastest Prime delivery speeds ever so far this year in the U.S. and around the world, with more than 5 billion items arriving the same or next day globally—an increase of more than 30% year-over-year.

Altana closes $200M Series C funding, Lineaje Raises $20M in Series A, Onepak Raises $20M, Indonesia's Kargo pockets fresh funding, and parcel delivery provider Maergo shuts down. C.H. Robinson to Sell Its European Brokerage Business. Blue Yonder Acquires One Network EnterprisesAmazon opens a new micromobility hub in Berlin. Indonesia's J&T Express launches parcel delivery service in Saudi Arabia. Azul Cargo Express Celebrates its Relationship with SmartKargo. Pitney Bowes reworks its biggest unit by revenue: Global E-commerce. Yodel Announces New Ownership Structure. Delhivery To Launch Dark Stores For E-commerce Players. 2024 Top 100 3PLs.

European exemption on import duties to end in 2028. Ocean shippers need contingency plans now, experts say. Tax-hungry states eye e-commerce delivery fees to fund road repair. Carbon emissions from urban takeaway delivery in China. Maritime disruption and surging e-commerce lifts airfreight to a record H1. DHL air volumes went up in the second quarter, but profits slid. China-Brazil cross-border e-commerce airline exports over 10M packages in 2024. DHL Group experiences another profit drop and plans price increase [in German]. UPS's plans to sweeten holiday profits could turn off shoppers. Maersk Lifts Guidance as Red Sea Disruption and Strong Demand Continue.DoorDash is delivering for Lowe's, Ulta, and other retailers, making UPS and FedEx nervous.

Consumer

The European Parliament has produced a briefing on the European Commission's proposals for e-commerce import VAT reforms. This includes:

• Removal of IOSS €150 threshold reporting limit
• Extend deemed supplier obligations for marketplaces facilitating consignments exceeding €150
• Removal of €150 for Special Arrangements options

Siddhi Capital grabs $135M for Fund II to invest in consumer packaged goods startups. Holisto raises $10M from travel giant Trivago. UAE-based F&B e-commerce platform Watermelon Ecosystem has closed a $4M Series A. Cerealto Siro Foods snaps up UK’s Hill Biscuits.

Former Foxtrot employees vow to bring back 'old concept' of store. KiwiCo is launching in Barnes & Noble and Target. With high ocean shipping costs, the value of domestic furniture is increasing, says exec

Instacart's Electronic Shelf Label Software Launches at Schnuck Markets. South African grocery retailer Shoprite's annual sales jump 12%..Ken Forrester and Makro launched Trillenium, a private wine brand. China’s Mega-Grocers Turn to an Upstart to Win Back Shoppers. Meituan Takeaway takes another step forward in Hong Kong: KeeTa to open convenience stores [in Mandarin]. Albertsons expands online grocery pickup, delivery options via partnership. How IHOP is finding retail success with the help of PepsiCo, General Mills, and Kraft Heinz.

Beyond ‘remains in the red’ as it prepares to relaunch Zulily. Chinese low-tech manufacturers are hanging on by ‘their fingernails.’ Can adding salt to cheap beer make it taste better? FirstCry set to file final papers for $3-3.5 billion IPO.

Payments

Financial authorities mull separating payment gateway services from e-commerce firms In South Korea. - The Korea Times​

The envisioned measure aims to prevent e-commerce firms operating as payment gateway service providers—like the two Korean affiliates of Singapore-based e-commerce platform Qoo10—from dipping into payment gateway funds when they face financial pressure.

PayPal CEO leans on big-name clients for growth. - Payments Dive​

PayPal is leaning on the likes of Facebook parent Meta for collaboration in a variety of ways, and working with major retailers such as Nordstrom to drive more purchasing, CEO Alex Chriss said during a call with analysts to discuss PayPal’s second quarter results issued Tuesday.

Rillet Raises $13.5M in funding. Salesforce signs a definitive agreement to acquire PredictSpring. Xoom’s role in PayPal’s transformation: Insights six months in. Flipkart consolidates fintech offerings into a single vertical ahead of festive sales.PayPal lifts 2024 profit forecast for the second time. Amazon’s Just Walk Out technology just got even more accurate. AlipayHK repositions itself as a super app with a brand refresh. GoTo launches ‘buy now, pay later’ service on TikTok’s ShopTokopedia.

Is Visa readying for an expiration of cards? LemFi expands its services to Mexico and Brazil. Mastercard refocuses on tech in international markets. Why MercadoLibre is ‘excited’ about payments in Mexico and Argentina.

How rising chargeback costs can be a sign of underlying customer service issues..

Stats and Other Interesting News

Amazon paid almost $1 Billion for Twitch in 2014. it’s still losing money. TikTok is throwing $20M a month at OpenAI via Microsoft. How Google uses AI to reduce stop-and-go traffic on your route and fight fuel emissions. South Korea's online shopping rises in June. Branded US food volume share still losing ground to private label.

2024 email marketing benchmarks. Vietnamese shoppers spend nearly $32M a day online. Ola Electric India’s biggest e-scooter maker, is seeking as much as 61.46 billion rupees ($734M) via an IPO. ONDC launches interoperable QR Code to empower local sellers and artisans.

Vietnam emerges as Southeast Asia's fastest-growing e-commerce market. Monsha’at launches E-commerce Week to support entrepreneurs in Saudi Arabia. European e-commerce sector shows strong growth. The Rise of ByteDance’s Capcut Threatens Adobe and Canva.

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. 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 303, sent on 5 Aug 2024