Shopifreaks E-commerce Industry News Recap 🔥 Week of Nov 25th, 2024

Hi LinkedIn - 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 201st Edition published Nov 25th, 2024. Check out the full edition for links and sources and subscribe here.

STAT OF THE WEEK: ChatGPT, Meta AI, and Google Gemini lead the way when it comes to AI usage in 2024 with 22.3%, 22.3% and 19.4% market share respectively. Initially I was surprised that OpenAI‘s market share wasn't MUCH higher! However then I realized that Microsoft, Snap Inc., and GetGenie‘s AI products are all powered by ChatGPT. So if you include those, that would bump up ChatGPT's market share to 54.6% — which is closer to where I would've guessed. Meta‘s rapid ascent to second place makes sense given that it integrated its AI front and center into its apps. Meanwhile, Google is feeling what it's like to have a bronze medal for the first time.

Perplexity, the AI-powered search engine backed by Jeff Bezos, Tobi Lütke, and other notable investors, debuted a new shopping feature for its paid customers in the US that offers shopping recommendations as well as the ability to place an order without going to a retailer's website. “Buy with Pro” enables users to make requests like “Find the best hiking shoes for a long uphill hike” or upload a photo to begin their shopping journey. From there, the tool searches the web and presents the user with visual cards that have details of the product, pricing, seller info, a short description, and the pros and cons of the item. The user can then purchase the item with one click using their saved payment info and shipping address, which Perplexity uses to calculate taxes, a one-click-checkout feature that is powered by integrations with Shopify, Amazon, Best Buy, and other major retailers.

Temu has now opened its marketplace for all US sellers to apply. For the past six months, Temu has been recruiting US sellers to join its site, but merchants could only join if they had a unique invite code. Now any seller can apply on their site, which takes about 10 minutes to complete. US merchants currently represent less than 1% of Temu's estimated 300,000 total sellers, according to Marketplace pulse, but I imagine that will change soon as merchants further seek to diversify their operations across additional marketplaces and sales channels.

Is Amazon worried? Amazon announced last week that it doesn't intend to raise its merchant fulfillment and referral fees next year. The company said that despite inflation and greater investment in employee pay and benefits, it had managed to reduce costs through innovation, greater efficiency, and reducing defects, so therefore it will not raise fees or introduce new ones. However you have to wonder if Amazon's announcement is related to Temu opening up its marketplace to US sellers. Suddenly Amazon, after years of squeezing its third-party sellers, has to deal with the fact that there's somewhere else big to go.

Revolut, the London-based fintech that offers banking, crypto, stock trading, insurance, and personal budgeting tools, shared upcoming features on its 2025 roadmap at a corporate event last week. Next year the company hopes to launch an AI-powered assistant to help customers navigate the app, branded ATMs that dispsense not only cash, but also cards, which could make the signup process easier for new customers, facial recognition on its ATMs, mortgages with instant approval options, embedded BNPL for business customers, and kiosks with biometric payment capabilities for restaurants and stores. Revolut's leadership team laid out aggressive plans that include doubling their customer base to 100M and generating annual revenues of $100B.

The US-China Economic and Security Review Commission, which is tasked with investigating and assessing China’s trade behaviors and reporting on inherent risks to American interests, is urging lawmakers to eliminate the de minimis trade provision for imports sold through online marketplaces originating from China. The commission released its annual findings and recommendations on Tuesday, sharing its deepening anxieties about China's influence on the US consumer and manufacturing markets. The commission also wants Congress to remove China's permanent normal trade relations status, which has been in place since the country joined the World Trade Organization in 2001 and has afforded the country the same benefits and trade terms as US allies for more than two decades, as well as dig into the operation of the US – Mexico – Canada Trade Agreement to determine whether it has inadvertently facilitated the transportation of Chinese products over the border via these countries acting as intermediaries.

X signed up as an authorized seller of PubMatic ads, as it looks to outside companies to help boost ad revenue. PubMatic is a supply-side platform that helps website, apps, and streaming-TV providers manage, sell, and optimize their advertising inventory. PubMatic joins Google and InMobi, which each previously made deals with the company to sell ads on its platform. However, Business Insider sources say that although InMobi is listed as a seller of X ads on its Ads.txt file, the company hasn't offered ads on X for more than a year. Before Elon Musk's takeover of Twitter, the social media company did not open up its ad inventory to outside vendors, and instead exclusively brokered deals with advertisers directly.

ByteDance will begin publishing print books in February, initially focusing on genres that are popular on BookTok — the area of its platform where TikTok users share book recommendations — such as romance, contemporary fiction, young adult, and “romantasy” (a blend of romance and fantasy). The company already publishes e-books through its imprint 8th Note Press, but now it will begin selling physical copies as well. 8th Note Press will work in partnership with Zando to publish print editions and sell copies in physical bookstores starting early 2025.

Alibaba's e-commerce platforms, including Taobao, Tmall Group, and Alibaba International Digital Commerce, are integrating under a single business unit to be called Alibaba Ecommerce Business Group. Alibaba International runs Alibaba.com, AliExpress, Lazada, Trendyol (its Turkish e-commerce platform), and Cainiao Group (its logistics division). The merger marks the first time that the group's domestic Chinese e-commerce group and its international e-commerce platforms will be integrated. Alibaba International Digital Commerce chief Jiang Fan has been appointed to lead the new unit, reporting to Alibaba Group Chief Executive Eddie Wu.

PayPal is relaunching a feature that lets users pool money with friends and family to collectively pay for trips, travel, restaurants, and anything else. The feature, called “Money Pools,” first made its debut on the platform in 2017, but was shuttered in 2021. Now Money Pools are back in time for the holiday season in the US, UK, Germany, Italy, and Spain with new and improved features. Unlike the old version, people can now contribute to the pools even if they don't have a PayPal account.

Google introduced in-store product insights and price comparisons to its Google Lens feature, along with local product inventory searches on Google Maps. The new features allow you to snap a picture of an item in a store to read reviews, while also seeing if the toy is cheaper at a different retailer. Google says that 20B visual searches happen via Lens every month and that 72% of shoppers use smartphones while in-store.

Google also added Afterpay and Klarna to its Google Pay checkout flow, complementing its existing partnerships with Affirm and Zip. By expanding its roster of BNPL options, Google Pay strengthens its competitive edge against Amazon Pay, which currently limits its BNPL offerings to Affirm, and Apple Pay, which integrates with Affirm and Klarna. Although Amazon and Affirm's exclusivity agreement ended last year, Amazon has yet to collaborate with additional BNPL providers.

Outlandish, an experiential store in Los Angeles that blends livestreaming with in-person retail, opened for business last week. The store features a first floor of branded stalls where a lineup of hosts sit in front of bright lights and livestream sell their wares to TikTok audiences, while on the second floor, visitors can shop for goods from those sellers, which include brands like Goli Nutrition and Anker. Outlandish makes money from the space by charging management fees for its live-shopping segments, as well as a percentage of online sales.

Toys R Us and the United States Postal Service are partnering up for this year's Operation Santa program, which for the past 112 years has allowed the public to “adopt” letters to Santa written by children to help make their holiday wishes come true. The new platform, called Santa's Gift Shoppe, makes it easier for adopters to shop for gifts online this year and ship them to children's homes, without ever having to handle the gifts. The USPS hopes that this partnership with Toys R Us is just the beginning, and has plans to expand its collaborations to include other items like clothing, shoes, and books into its online catalogue. 

At least 50 of the largest US retailers, including Big Lots, Gap, Petco, Macy's, and Nordstrom, jacked up interest rates on their store credit cards in the months prior to the Federal Reserve cutting rates, in moves to protect or increase their profit margins. On average, companies raised their APRs between 2.5 to 6 percentage points, bringing some retailers as high as 35.99%! The APRs on retail credit cards rose on average by 1.52 percentage points between September 2023 and September 2024, while the average traditional credit card rate increased by only .08 percentage points. 

Wix launched an AI-powered visual sitemap and wireframe generator tool for its Wix Studio platform. The new feature allows agencies to input project details, including business type, site description, goals, target audience, and tone of voice, and then creates a tailored sitemap structure and wireframe to kick off the creation process.

Many US airports are approaching peak capacity due to the influx of e-commerce cargo. For example, Miami International Airport told The Loadster that its capacity is three million tons based on its warehousing space, but during the past few years it's been close to 2.8 million tons, which is pushing it very close to capacity. MIA doesn't have plans to stop accepting e-commerce cargo anytime soon even as it nears capacity, and instead is exploring creative ways to become more efficient and increase cargo storage. 

Coca-Cola is facing backlash online over its AI-generated Christmas promotional video that users are calling “soulless” and “devoid of any actual creativity.” The video, which features everything from big red Coca-Cola trucks driving through snowy streets to people smiling in knitted scarves and hats holding Coca-Cola bottles, was was meant to pay homage to a classic 1995 Coca-Cola commercial, but ended up drawing criticism from creatives who argued that it was distasteful for the company to use AI technology to create the video instead of work with artists. Well, sorry to tell you creatives, but get ready to feel a lot of distaste in the near future towards AI-generated commercials…

Starting this Friday, Whatnot, a livestreaming real-time auction website, will drop its commission fee to 0% on all auction and marketplace sales for 24 hours in the US, Canada, UK, France, Germany, Belgium, and the Netherlands, as part of a Black Friday promotion to kick off the holiday season. The platform will also be choosing special shows to feature during the Black Friday event of sellers offering significant deals and/or planning a particularly fun or entertaining show. 

USPS is raising the cost of Priority Mail and Ground Advantage services by 3.2% and 3.9% respectively, beginning January 19, 2025, the day after its peak season rate hike ends. The Postal Service will not be raising the price of its Mailing Services, which means the cost of a First Class stamp will remain unchanged at $0.73.

Shopify is facing criticism for hosting an online store that promotes antisemitic merchandise like apparel with Holocaust-denial designs. The store is marketed via an anti-Jewish account on X called TheOfficial1984 that has more than 220,000 followers. While previous versions of Shopify's Acceptable Use Policy banned “hateful content,” according to archives on the Wayback Machine, the clause appears to have been removed in July 2024, according to Bloomberg. At the time of writing this, the Shopify store is still online.

63% of millennials said they plan to spend the same or more on holiday shopping as they did last year, the highest share of any generation, according to a report by TransUnion. Millennials were also more likely to say their income went up over the last few months and that they expect their earnings potential to increase again in the years ahead. A different report by NerdWallet revealed that 28% of shoppers surveyed in September had still not paid off the gifts they purchased last year.

Shopify added David Heinemeier Hansson, the founder and steward of Ruby on Rails, to its board of directors. Ruby on Rails has a long history with Shopify and is still a part of the company's technology stack. In October, Hansson criticized Automattic CEO Matt Mullenweg's actions towards WPEngine, causing Mullenweg to respond with a scathing reply that criticized Hannson for not making enough money on his projects. The post has since been removed from Mullenweg's blog, but you can read an archived version online. 

Meta hired Clara Shih, who previously served as Salesforce's CEO of AI, to launch a new product group focused on developing AI-powered tools for businesses. Shih will be responsible for developing and monetizing AI tools such as business AI chatbots and other B2B products, such as automated ad tools.

The US Supreme Court is allowing a multibillion dollar class action investors' lawsuit to proceed against Meta, stemming from the privacy scandal involving Cambridge Analytica several years ago. Investors allege that Meta did not fully disclose the risks that Facebook users' personal information would be misused by Cambridge Analytica, a firm that supported Donald Trump's first successful presidential campaign in 2016. The lack of disclosures led to two significant price drops of the company's shares in 2018, after the public learned about the extent of the privacy scandal. Meta already has paid a $5.1B fine and reached a $725M privacy settlement with users.

GrubHub has been hit with a class-action lawsuit accusing the company of funneling consumer data to TikTok and contributing to a national security threat from China. According to the complaint, GrubHub embedded software created by TikTok on its website to identify and track visitors by siphoning their data and pairing it with stored data that TikTok has collected from hundreds of millions of Americans in a process called “fingerprinting.” The complaint notes that GrubHub's privacy policy explicitly states it does not “sell communications content to third parties or share it with third parties for cross-context behavioral advertising” or “for business or commercial purposes.” Meanwhile Marc Lore and the team at Wonder Group are like, “Damnit! We just acquired this company!”

In response to Bluesky's recent growth and due to user demand, Threads “rebalanced” its platform to show less recommended content from accounts you don't follow and more posts from the accounts you do — which is how Bluesky and the old Twitter worked. Adam Mosseri, who oversees both Threads and Instagram, said, “For you creators out there, you should see unconnected reach go down and connected reach go up.” Since launch, Threads has focused on being a “discovery” platform, connecting users with content creators and influencers they don't follow, but whose content they may be interested in. However users want more control of their feeds, including the ability to better connect with folks they follow, so Threads is making the pivot. 

YouTube released a feature called the “Dream Screen” for Shorts that displays a live animation background behind creators, instead of a static image that sometimes glitches as people move. Instead of having YouTube generate AI images to create a scene, users can now create AI-generated video backgrounds that offer animations and more interactive displays.

Meanwhile TikTok is developing an AI Avatar feature that allows creators to generate a virtual avatar that resembles their personality and thinking, enabling continuous interaction with users 24/7. This is similar to Meta's virtual avatar model, which it showcased at its recent Connect event. Virtual avatars have been available on Douyin, TikTok's sister app in China, for some time, with many hosting continuous shopping livestreams in the app.

WhatsApp is rolling out a voice message transcript feature that transcribes your audio messages into text for when you are unable (or unwilling) to listen to the voice message. The transcripts are generated on your device and no one else can read them. Supported languages include English, Spanish, French, German, Italian, Japanese, and 14 others. Do they have any idea how much processing power that will take in Latin America? LOL. When I first started traveling in Central and South America, I couldn't believe how long of voice messages people would send each other! Folks down here love the voice message. The ability to read them (instead of listen) will be super helpful for gringos like me because I'll be able to copy / paste and translate the message when I don't understand. 

In other WhatsApp news, the platform is testing ways for users to provide feedback to businesses about what kind of messages they want to receive (or not receive). The feature involves buttons like “interested / not interested” and “stop / resume” for specific categories of messages. Businesses can send messages through WhatsApp's API based on one of four categories including marketing, utility, authentication, and service, and now customers can opt-out of each category individually.

Amazon informed staff in Germany that they can apply to work from home for up to two days a week when the company's global return to office mandate takes effect, according to a leaked internal document seen by Business Insider. The leaked document noted that work from home arrangements could only be made for 1-2 days every week and are limited to a one-year time frame. The notice impacts all Amazon workers in Germany except for Twitch and Audible employees. 

Meta confirmed the removal of over 2M accounts linked to scam centers in Myanmar, Laos, Cambodia, the United Arab Emirates, and the Philippines. The company said that it's going after the criminal organizations behind “pig butchering” and other scams, which target people globally through messaging, dating, and other apps to convince them to invest under false pretenses. Meta has partnered with law enforcement and other organizations in the private sector to share insights and work together to disrupt the operations.

Amazon launched a holiday campaign featuring actor Adam Driver reading real-life reviews left by actual customers. Driver turns the “deeply personal” reviews into theatrical monologues in ten different 30-60 second ads running across social media and Amazon's owned channels. You can currently check out Driver's monologue of a banana slicer, seal plush, and Dutch oven. 

Plus 13 seed rounds, IPOs, and acquisitions of interest including Levanta, an affiliate network that runs on top of Amazon, raising $20M, and xAI, Elon Musks artificial intelligence startup, raising $5B, bringing its total amount raised to $11B this year and valuing the company at $50B.

I hope you found this recap helpful.

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See you next week!

Paul Drecksler