Commerce

Quantifying the global e-commerce slowdown • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in alibaba, Amazon, Commerce, EC Ecommerce and D2C, EC Newsletter, eCommerce, jumia, Shopify, The ExchangeNo Comments

The COVID-19 pandemic was many things. Global contagion. Health catastrophe. Herald of new geopolitical tensions and a long-running commentary on how far we’re willing to go to protect — or not — our fellow humans. It was also a business earthquake that shook up most industries around the world. But as quickly as COVID came on the scene, breaking supply lines and business models, it also faded. In the wake of most of the world learning to live with — or merely deciding to endure — the health impacts of the pandemic, many industries snapped back to their prior form. Airlines went from trash to first class; in contrast, tech companies flipped from darlings to disparaged. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. Some tech concerns picked up tailwinds during COVID, in that a newly reformed business climate helped them grow for a time. You can cast a wide net here: Robinhood exploding in part thanks to consumers stuck at home with more cash than usual, Instacart seeing explosive demand for its grocery delivery service. Some tech companies went the other way, as was the case with Airbnb’s business cratering during the early COVID months as going places went from aspirational to insane overnight. Since the return to what passes as normalcy, the businesses impacted initially by COVID have charted diverging courses. Robinhood lost some of its shine as its user base, per the usually chatted narrative, went back outside. Instacart saw its growth slow but managed to hold onto its pandemic-era gains. Airbnb, an early example of the layoffs that COVID could induce at erstwhile healthy companies, recovered, and has retained much of its value since going public, a rare feat for its IPO cohort.

Jumia to cut products and overheads as new management chase profits • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in africa, Apps, Commerce, jumiaNo Comments

Last Monday, Jumia co-founders Sacha Poignonnec and Jeremy Hodara resigned from their roles as co-CEOs, just ten days before the company’s third-quarter 2022 financial report. The end of their tenure, therefore, marked the first time a new face — Francis Dufay, the ex-chief at Jumia Ivory Coast and now acting CEO of Jumia — took charge of the investor briefing. On the call, Dufay was quick to emphasize why the e-commerce giant’s supervisory board decided to install new management, stressing that Jumia’s approach to turning a profit after half a decade of successive losses on the NYSE (as Africa’s first publicly traded company) required more deliberate execution and a return to basic e-commerce fundamentals. Jumia’s third-quarter report showed a glimpse into what this new approach could offer. For instance, the company’s operating loss and adjusted EBITDA loss fell double-digits year-over-year. Its operating loss declined 33% from $64 million to $43.2 million, while adjusted EBITDA losses were trimmed 13% from $52.5 million to $45.5 million; their lowest level in six quarters. This reduction in losses is driven by a material decline in marketing costs in the form of sales and advertising expenses, which decreased 31.5% from $24 million to $16.4 million year-over-year, and an improved monetization plan that saw gross profit increase of 29.2% within the same period. “We want to significantly improve our unit economics and create the right fundamentals for long-term growth. In the past, we’ve seen a lot of growth as a function of marketing, and promotional events, which then, as a consequence, lead to the alteration of our economics,” Dufay told ZebethMedia in an interview discussing Jumia’s new strategy. “This is not the way we want to see the future. And we believe that we have lots of success cases across our countries that show that we can grow and improve economics simultaneously.” Dufay said he wants Jumia to become a more attractive platform for its third-party vendors to sell on. One way Jumia plans to achieve this is to move away from monetization shortcuts it took in the past where it increased commissions for sellers’ services (for instance, it charges 20-25% for fashion items and 5-10% for electronic items). Instead, the company intends to generate new revenues through value-add such as advertising solutions and building a stronger local supply of goods. The latter, Dufay adds, is particularly important as Jumia battles local currency depreciation from its main markets: Nigeria, Egypt and Ivory Coast), which impacts its e-commerce business. According to the Q3 2022 report, the Nigerian Naira, Egyptian Pound and West African CFA depreciated by 5%, 14% and 13% respectively against the dollar during the nine-month period ending September 30, 2022, compared to the same period of 2021. Many companies around the world are dealing with the impacts of currency fluctuations. Jumia is a good example of the issue, with its revenues coming in at $50.5 million for Q3 2022, a figure that would have been $56.6 million if global currencies had held steady over the last year. “The volatility in foreign currencies has a big impact on us. Most importantly, it impacts the supply on the market and makes it harder for all retailers, including Jumia, to get the right supply at the right time to sell to customers,” said Dufay. “In several countries, for example, we have seen that governments have taken action to protect their currencies which often involves putting very big constraints on customs [which] inevitably impacts the kind of supply that we manage to bring to the website. But we believe that we are laying out the right plan to mitigate that, one of which is focusing a lot on capturing local supply from distributors and vendors, which is something very critical across all markets. Doing well on that part will help us mitigate the current macroeconomic situation.” As Jumia restructures its local supply chain, it’s scaling back some of its offerings that haven’t made a good return on investments across its eleven markets. Dufay added: “These are projects we don’t feel are adding the right value to our ecosystem, to our customers and vendors and the platform.” However, some of these product lines will continue to operate in a few markets. These include Jumia’s logistics-as-a-service platform, which launched some quarters back and at some point moved 3.5 million packages (still active in Nigeria, Ivory Coast and Morocco), and First Party grocery e-commerce (active in Nigeria and Ivory Coast). Jumia Prime, on the other hand, has been paused indefinitely. Launched in 2019, Jumia Prime was pitched as a subscription-based delivery service providing customers with free shipping on its marketplace. The product, modeled after Amazon Prime, was one of Jumia’s main user acquisition strategies, and while there are more than 3.1 million quarterly active customers on the platform (Q3 2022), it turns out this traction, and the volume of business Prime brought in compared to the level of investment it received, fell short of the company’s targets. According to Jumia, it’s discontinuing Jumia Prime because “it was too early in the adoption curve to push such a product” and it’s relieving the team in a broader effort to reduce the company’s General & Administrative (G&A) expense. Jumia’s G&A expenses, excluding share-based compensation, reached $28.3 million in Q3 2022, up 12% year-over-year. While the company implemented hiring freezes earlier this year, it intends to cut more staff costs and downsize in several areas, said Dufay. The number one corporate priority is to enact changes in the Dubai office, where most of the former management team was based, including the former co-CEOs. A handful of contracts have been terminated already (Dufay didn’t disclose how many) while those who still have roles at the company are relocating to various African offices as Jumia attempts to distribute its leadership across the continent. Jumia is also preparing to make significant changes and reduce staff size on a case-by-case basis in each of its markets by the end of the year. “We’re trying to be very clear

GoTo cuts 1,300 jobs as it anticipates ‘uncertainties’ to linger for long • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in Commerce, Fintech, GoTo, Goto GroupNo Comments

GoTo Group is cutting 1,300 jobs, or 12% of its workforce, it informed staff early Friday, as Indonesia’s largest internet company attempts to trim costs and improve finances. “Achieving financial independence more quickly has a profound cost for us, because when we take a hard look at how we fundamentally need to change (business focus and ways of working), it also includes you, the people who are the backbone of this company,” wrote GoTo Group chief executive Andre Soelistyo in an email to staff, seen by ZebethMedia. “It pains me to say that, as a result of our organizational review, we have to part ways with some of you,” he wrote. “I know you are filled with many emotions right now, pain, anger, sadness, and most of all, grief. I feel the same way.” GoTo joins scores of local and global peers in its decision to cut workforce to navigate economic slowdown, rising interest rates, or as what the Indonesian firm described in the email Friday, “uncertainties will linger for a while, and there is not much that we can do to change that.”

WhatsApp broadens in-app features to help users browse and find businesses • ZebethMedia

By zebethcontrolPosted on November 17, 2022Posted in Apps, Commerce, eCommerce, meta, Social, WhatsApp, whatsapp businessNo Comments

WhatsApp is introducing new Yellow Pages-like features to help users find businesses from within the instant messaging app, part of the Meta-owned platform’s growing attempts to make deeper inroads with e-commerce. The encrypted messaging service, used by over 2 billion users worldwide, said on Thursday that it’s expanding a feature called ‘Directory’ to all users in the key overseas market of Brazil to help them browse and discover local small businesses in their neighborhoods. The nationwide rollout follows WhatsApp testing the directory feature in Sao Paulo last year. WhatsApp is also introducing the ability to find larger businesses from within the app. The feature – rolling out in several markets (Brazil, Colombia, Indonesia, Mexico and the U.K.), a spokesperson told ZebethMedia – will allow users to browse businesses by category such as banking, food and drink and travel as well as by their names. The feature, called ‘Business Search,’ aims to help individuals avoid having to spend time looking for phone numbers of businesses from their websites and keying in and saving those details to their phone contacts, the company said at a WhatsApp-focused business summit in Brazil. The new features underscore WhatsApp’s growing attempts to turn the behemoth messaging app into a commerce engine, one of its largest bets to generate revenue from the otherwise free service. The company disclosed in the quarterly earnings last month that the click-to-WhatsApp ads business had grown 80% year-over-year and was on track to generate $1.5 billion in annual revenue. “We want to make it easier for people to get more done on WhatsApp,” Meta CEO Mark Zuckerberg said at the summit. “Part of that is building better ways to engage with businesses. And while millions of businesses in Brazil use it for chat, we haven’t made it easy to discover businesses or buy from them, so people end up having to use work-arounds. The ultimate goal here is to make it so you can find, message and buy from a business all in the same WhatsApp chat.” Brazil, the most populous nation in Latin America, is a key region for WhatsApp. The platform, which has amassed over 120 million users in Brazil, has chosen the South American market for testing several new business offerings. WhatsApp last year introduced a payments-to-merchant service in Brazil, in what was briefly a world-first feature for WhatsApp. It rolled back the functionality shortly afterwards following the local central bank stating that adequate risk and regulatory tests were needed to be undertaken first. Brazil’s monetary authority said at the time that its decision would “preserve an adequate competitive environment, that ensures the functioning of a payment system that’s interchangeable, fast, secure, transparent, open and cheap.” The encrypted messaging platform, which received the approval to operate peer-to-peer payments in the nation last year, said it’s still waiting for the regulatory clearance on merchant payments. But that’s not stopping it from continuing some development work. Payments giant Cielo, multinational Fiserv, merchants acquirer Getnet, payments platform Mercado Pago and credit and debit cards player Rede have built the technical integration with WhatsApp and many of them are participating in production testing, Meta-owned unit said. “If you run a business in Brazil, that means people will be able to find you, contact you and purchase from you all in one WhatsApp chat, and we’re working to bring this experience to more countries in the coming months too,” Zuckerberg said. “This is the next step for business messaging and I’m looking forward to hearing about the opportunities this unlocks for all of you.”

ReadySpaces, which offers co-warehousing spaces to corporate customers, secures $20M in debt • ZebethMedia

By zebethcontrolPosted on November 17, 2022Posted in Commerce, funding, startup, Startups, warehouseNo Comments

Jon Zimmerman — the co-founder of ReadySpaces, a warehouse storage provider for small businesses — was working in the self-storage market when he had the idea for a product with the flexibility of self-storage but the capabilities of a traditional warehouse, aimed primarily at enterprise customers. His partner, Kevin Petrovic, had a different company that was a customer of Jon’s at his first “beta” location, in the ’90s. The two started working together to grow ReadySpaces — formerly CustomSpace — into a nationwide business. Today, ReadySpaces operates 32 warehouses and services a customer base of over 2,000 businesses. That impressed investors, evidently, who pledged $20 million in the startup as a part of an all-debt funding round that closed today. Bringing ReadySpaces’ total raised to $40 million, the new funding will fuel expansion, Petrovic says, as ReadySpaces prepares to roll out new services. Why opt for debt as opposed to equity? Petrovic claims that it was “the most efficient capital structure for growth” given the current financial environment. It’s definitely true that equity is harder to come by these days, with valuations dropping and debt financing slowly gaining in popularity. “We have an ambitious growth plan for 2023 and this capital will allow us to remain the leader in the co-warehousing space,” Petrovic told ZebethMedia in an email interview. “Certain pandemic-related pressures, such as backups in major ports, have eased, but we see our business model continuing to resonate every day for both established businesses and small companies just starting off.” While ReadySpaces has been around in some form since 2013, it’s only in recent years that co-warehousing has become a hot trend. The pandemic supercharged co-warehousing, which allowed physical goods businesses (e.g., manufacturers of household products and construction materials) dealing with supply chain challenges to store inventory without having to purchase a facility. In a co-warehousing setup, multiple companies can use the same warehouse space — eliminating the need for the companies to invest in the infrastructure themselves. For example, ReadySpaces offers co-located units in sizes ranging from 200 to 5,000 square feet, each equipped with power units, loading docks and forklifts, Wi-Fi, industrial workspaces, and private offices and conference rooms. A view of a ReadySpaces facility in Tukwila, Washington, where the startup has a sizable hub. Image Credits: ReadySpaces Petrovic posits that co-warehousing lets businesses insure against economic uncertainty and busy periods, such as holidays, by providing affordable, scalable storage for reserve inventory. “The need for small warehouse space isn’t constrained to small businesses,” Petrovic said. “We’ve worked with numerous Fortune 500 companies to provide short-term overflow space. The key is that we take an asset class that moves slowly and is generally difficult to operate in and make it absolutely seamless.” Certainly, ReadySpaces’ competitors have demonstrated the demand for co-warehousing. Saltbox, a company providing co-working and warehousing space for up-and-coming e-commerce businesses, recently attracted a $128 million investment from real estate investment platform Fundrise to expand its footprint. And last year, private equity real estate firm Capstone Equities launched Portal Warehousing, a flexible warehouse solution offering smaller spaces and share amenities, which plans to expand to cities, including Los Angeles, Brooklyn and Las Vegas, in the coming months. As for ReadySpaces, Petrovic claims that the Los Angeles–based company — which employs around 50 people — is “comfortably profitable,” with revenue growing approximately 50% year over year. “Since our last announcement, we have opened numerous new locations and in a few new markets as well. For example, Queens, New York; Kearny, New Jersey; Saddle Brook, New Jersey; and Round Rock, Texas, are all recent new sites,” Petrovic said. “We don’t have a burn rate … Nationally, we’ve seen demand skyrocket by 375% over the last three years.” One point of concern is a slowdown in consumer spending related to inflation, which could depress sales in retail and, by extension, the demand for warehouse space. The warehouse industry is running the risk of oversupply, some experts say, as developers heavily invest in warehouse expansion. Q2 2022 saw a record 613 million square feet of warehouse space built in the U.S. — almost double the construction pipeline in 2019. Petrovic acknowledged the headwinds, but insisted that ReadySpaces is in a position to weather them. “There are numerous major shifts in the industrial real estate market happening now due to robust demand and high development costs,” he added. “Our focus is on navigating these market changes successfully so we can continue to provide the product that we know customers love.”

YouTube Shorts begins testing shopping features and affiliate marketing • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in Apps, Commerce, YouTube, YouTube ShortsNo Comments

YouTube is adding shopping features to Shorts, its TikTok-like short-form video product, the company confirmed to ZebethMedia on Tuesday. The new shopping features allow users to purchase products as they scroll through Shorts. The news was first reported by the Financial Times. The company is starting to introduce shopping features on YouTube Shorts with eligible creators in the United States who are currently piloting the ability to tag products from their own stores. Viewers in the United States, India, Brazil, Canada and Australia can see the tags and shop through the Shorts. YouTube says it plans to continue to bring tagging to more creators and countries in the future. YouTube is experimenting with an affiliate program in the United States that allows creators to earn commission through purchases of recommended products in their Shorts. The company says the test is still in its early days and that it plans to gradually expand the experiment to more creators next year. “We firmly believe YouTube is the best place for creators to build a business and shopping is a piece of that,” a spokesperson for YouTube told ZebethMedia in an email. The news comes a few weeks after YouTube announced that creators will take a 45 percent share of ad revenue starting next year. In early 2023, creators will be able to apply to the company’s Partner Program if they meet a new Shorts-specific threshold of 1,000 subscribers and 10 million Shorts views over 90 days, after which they will earn 45% of ad revenue from their videos. YouTube’s Shorts has topped 1.5 billion monthly users, but despite this success, YouTube’s quarterly ad revenue declined 1.9% year over year and missed expectations, per Alphabet’s quarterly earnings report released last month. YouTube likely sees the new shopping features as a way for it to broaden its revenue streams amid a slumping advertising market. Over the past few years, YouTube has been working to transform its platform into more of a shopping destination with product launches like shoppable ads and the ability to shop directly from livestreams hosted by creators. Given these moves, it makes sense for YouTube to bring shopping to Shorts too. YouTube isn’t the only digital giant to bet on the future of shopping, as TikTok and Meta have also invested in the space. Last week, TikTok quietly began testing TikTok Shop in the United States. TikTok Shop allows users to buy products directly through the app. Prior to this expansion, the feature was only available in the United Kingdom and parts of Southeast Asia. Earlier this year, the company also began piloting TikTok Shopping in the United States, United Kingdom and Canada in partnership with Shopify. Meta-owned Instagram allows creators to share products in livestreams and in its shopping tab, which lets users scroll through recommended products and make purchases. Brands are also able to make their profiles shoppable through product catalogs.

AI-driven fashion platform Shoptrue constantly learns its users shopping habits • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in Commerce, e-commerce, Fashion, online shopping, StartupsNo Comments

An A.I.-powered online fashion marketplace, Shoptrue, is launching its website into beta today with plans for a public release early next year. The site blends artificial intelligence and personalized recommendations with taste-driven shopping, the company says, which helps give users a source for style inspiration as well as the ability to create and share outfit ideas with others. Rather than the typical algorithmic approach such as Amazon, which ranks items based on a strong sales history, Shoptrue is A.I.-driven and continually improves its product recommendations based on purchase behaviors and user engagement. That way, users can have more say on what items they see on their curated feeds. The site offers a “One Stop Personal Shop” for the user, which gives fashion suggestions based on their style preferences. Users can eliminate the items they dislike and purchase items directly on Shoptrue through its unified checkout process. Romney Evans, the founder of Shoptrue, told ZebethMedia, “Instead of being a top-down recommendation system, where the user is passive, it’s putting the user in the driver’s seat, back into personalization, giving them the controls.” Image Credits:Shoptrue Shoptrue’s individualized shopping experience begins with an onboarding quiz, which includes questions about your style personality, favorite brands, and color preferences– similar to other personalized e-commerce sites, like Stitch Fix. Shoptrue users can then browse a large selection of merchandise from over 2,000 merchants that range from high-end brands like Alexander Wang, Christian Louboutin, Gucci, and Dolce & Gabbana, to affordable retailers like Ross, Kohls, Nordstrom Rack, H&M, and Forever 21. There are also “Shops,” or collections created by Shoptrue’s team of editors, that users can explore for inspiration. For instance, the “Girl’s Night Out” lookbook features trendy miniskirts, strappy heels, tanks, graphic pants, and handbags. Users will soon get to create and share their own Shops, Shoptrue says. Peer-generated Shops will also roll out when Shoptrue officially launches out of beta. Image Credits: Shoptrue Shoptrue will also soon launch the ability to pre-filter size and fit specifications, so shoppers only see the products in stock that are in their size. This is a natural step for the company as Evans is also the co-founder of True Fit, the personalization company that built a data platform to help online shoppers find the correct sizes for apparel and footwear. Within the next year or so, Shoptrue users will be able to create a True Fit profile that helps determine what size they are for specific items, Evans explained to ZebethMedia. As Shoptrue evolves, the company plans to add features based on customer feedback. “We invite shoppers everywhere to join us on this journey. It will take time, but today begins our rollout of an exciting stream of innovation and distinctive experiences that will make it easy to get only what you love. We aspire to delight shoppers and earn their trust as we improve their shopping experience every month and every quarter through innovation, trial and error, and by listening to their feedback,” Evans said. With the launch of Shoptrue, Evans has brought on a team of technology and fashion experts, including Brandon Holley, a Condé Nast veteran with over 25 years of experience in fashion, and former Netflix data scientist John Lashlee. Holley is also the founder and CEO of Everywear, a technology platform that’s now incorporated into Shoptrue and helps with custom recommendations and foreseeing purchase behaviors. The startup raised $6 million in seed funding in 2021 to help build, test, and launch its beta. Investors included Signal Peak Ventures, Pelion Venture Partners, and Peterson Ventures. The company expects to raise additional funding in 2023. Founder of Shoptrue Romney Evans (left), Chief Fashion Officer Brandon Holley (middle), VP of Data Science John Lashlee (right) Shoptrue’s business model is typical for online marketplaces. When a user completes a transaction with a merchant via Shoptrue, the company takes a commission on those sales. Shoptrue declined to share the commission range but said it was standard for most fashion marketplaces. (Note that Poshmark’s and ASOS Marketplace’s commission is 20%.) There is no fee for brands to participate on Shoptrue. Social media platforms like Instagram and TikTok are becoming increasingly responsible for influencing the shopping habits of young consumers—especially Gen Z. Shoptrue hopes that Gen Z and Millenials will feel empowered to share their Shops and fashion favorites on social media, get help from Shoptrue’s style experts and find other users and influencers that use the platform. Shoptrue’s launch is another example of how AI technology is transforming the e-commerce industry. In June, Pinterest acquired the AI-powered shopping platform The Yes, which builds a personalized fashion feed and continually learns about a user’s style as they shop. Pinterest said the deal would help the company become the home for taste-driven shopping. “We are making it easier for people to find only the things they’re going to love, and then give them the tools to organize and share their style POV with the world,” Shoptrue’s Chief Fashion Director Brandon Holley said in an announcement. “Anybody’s shop has the potential to set off a chain reaction of fashion inspiration that can surprise and delight you from any direction.”

Zest wants to make buying and sending gifts online ‘delightful’ • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in Apps, boxgroup, character, Commerce, eCommerce, funding, GV, operator partners, startup, StartupsNo Comments

While e-commerce was on the rise before the pandemic, the massive shift to digital supercharged the online shopping industry — bringing entirely new categories of products (and shoppers) to the web. According to Adobe, Americans have spent a record $1.7 trillion online over the last two years, a 55% uptick from two years before the pandemic. A fair number of those online purchases are gifts as revealed by search trends — from 2019 to 2020, there was an 80% increase in searches for “online gifting” on Google Search. But despite the fact that hundreds of billions of people now regularly turn to digital channels (e.g. Amazon) to gift, the gifting experience remains subpar. That’s the opinion of Alex Ingram, at least, who co-founded a startup — Zest — that’s focused on e-commerce gifting flows. Zest is Ingram’s second company after Sunlight Health, which sought to make brand-name and specialty prescription medications affordable for patients with chronic conditions. He met Zest’s second co-founder, Jeremy Feinstein, while working at Flatiron Health, where they helped to develop cancer center software. “After Flatiron’s sale to Roche, we both felt it was time for something new,” Ingram told ZebethMedia via email. “Obviously, e-commerce is worlds away from oncology. But we wanted to build something that could really help small- and medium-sized businesses to succeed in an increasingly challenging environment.” Image Credits: Zest With Zest, Ingram says that the goal was to make the experience of online gifting “delightful.” How? By allowing e-commerce brands to embed a “send as a gift” button on their product or cart pages and letting givers choose a digital greeting card, add their own message, pay through Shopify and deliver the gift to the recipient via text or email. With gifts gifted through Zest, recipients — who can opt into shipping notifications — can add their own mailing address or customize the gift’s attributes (like size or color) and optionally send a thank-you note to the sender. There’s certainly something to affording recipients some choice in their online gifts. While it might ruin the surprise, a 2015 survey from Loop Commerce (now GiftNow) found that buying the wrong size and the hassle of online returns were some of the top reasons people were reluctant to buy gifts online. Ingram is well aware that Zest isn’t the only online gifting tool out there. There’s Goody, which has raised millions in venture capital for its mobile app that lets users send gifts via text. Givingli, an online gifting service that lets users customize digital greetings and send gifts to anyone, recently closed a $10 million equity round. GiftNow is perhaps Zest’s closest competitor, offering a checkout technology that lets customers buy gifts without having to worry about product details like size, color and shipping addresses. But Ingram argues that Zest uniquely takes a “brand-first” approach, helping brands grow by building direct relationships with their customers. “With some of the other gifting tools out there, the brands are almost an afterthought,” Ingram said. “Zest makes sending a gift a convenient and easy experience for shoppers, who never have to leave their favorite brand’s website — it’s as intuitive as clicking ‘Add to Cart’ or ‘Buy It Now.’ There are lots of e-gift card apps too, but we don’t believe e-gift cards are the future of gifting. They feel transactional and impersonal. They’re so forgettable that billions of dollars of gift cards go unused every year in the U.S. And many brands don’t like to deal with the accounting headaches that come with the long-standing liabilities of unused gift cards.” Image Credits: Zest The future of e-gift cards aside — to Ingram’s point, consumers seem to prefer physical gift cards over digital — Zest is evidently beating back rivals to gain a toehold in the gifting space, with about 50 customers across categories like food and beverage, apparel and flowers. Ingram wouldn’t disclose revenue figures. But he revealed that Zest has raised $4 million in seed funding led by GV (formerly Google Ventures) with participation from BoxGroup, Character, Operator Partners, Bungalow Capital and Company Ventures. “E-commerce and gifting exploded during the pandemic,” Ingram said. “People wanted to send more gifts to friends and family to help bridge the literal gap between them and loved ones. And while that growth rate has slowed, it’s a behavior that’s here to stay. [But] it’s never been harder for direct-to-consumer brands to acquire and retain customers. That’s partly due to the sheer number of direct-to-consumer brands out there today … For brands, the value we’re providing is first and foremost an elevated gifting experience for their customers. When it’s so easy and natural to send a gift directly from a product or cart page, these brands will sell more gifts and reach more people.”

Germany widens antitrust probes of Amazon to loop in special abuse controls • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in Commerce, Government & PolicyNo Comments

Germany’s antitrust watchdog has moved to widen an existing investigation of Amazon’s business in the market in light of special abuse powers it confirmed are applicable to the ecommerce giant’s business in the country this summer. The Federal Cartel Office (FCO) said yesterday it is extending two ongoing “abuse control proceedings” against Amazon to include the application of “the new instrument for more effective oversight over large digital companies” (aka, Section 19a of the GWB; aka it’s rebooted competition law) — which is a reference to a 2021 reform of German competition law that targets digital giants found to have so-called “paramount significance for competition across markets” with a proactive antitrust regime that outlaws practices such as self-preferencing, denying interoperability and exclusively bundling their own services to the detriment of rival offerings, among other ex ante prohibitions listed in Section 19b of the law. The German law is similar to the pan-EU Digital Markets Act (DMA) which was recently adopted by the bloc — and will come into force next year — so the FCO is ahead of the curve here and its application of special abuse controls may offer a little taster of the extended scrutiny that’s coming down the pipe across the continent for Big Tech. The FCO has two open investigations of Amazon that are being extended to include scrutiny of whether they comply with the rebooted competition regime — one examining price control mechanisms it says are used by Amazon to algorithmically control price setting by third-party sellers on its marketplace; and another proceeding focused on what it dubs “brandgating”, aka “possible disadvantages” for marketplace sellers as a result of various instruments applied by Amazon, such as agreements with (brand) manufacturers on whether individual sellers can or cannot sell (brand) products on the Amazon marketplace. In a statement about the extension of the ongoing proceeding, Andreas Mundt, the FCO’s president, said: “We are examining in both proceedings whether and how Amazon impedes the business opportunities of sellers that are active on the Amazon marketplace and compete with Amazon’s own retail business. Amazon operates the most important marketplace in e-commerce and thus has a key position in that area, which allows the company to set far-reaching rules for competition on its platform. Our new competencies, which are precisely intended to restrict such power to set rules, allow us to intervene more efficiently against Amazon’s anti-competitive practices.” Reached for a response to the development, an Amazon spokesperson sent us this statement — which confirms that it is seeking to appeal the earlier FCO decision that its business falls under the special abuse controls regime (NB: the decision remains enforceable during appeal): “We disagree with the FCO’s interpretation of this complex new legislation, and have filed an appeal. The retail market that Amazon operates in is very large and extraordinarily competitive, online and offline. We continue to cooperate with the Federal Cartel Office in these proceedings.” On pricing, the ecommerce giant refutes it indulges in any abusive practices — arguing generally that its business succeeds when sellers succeed, and claiming third party sellers set their own product prices on its marketplace. As regards the FCO’s brandgating probe, Amazon claims it never makes changes to selling privileges without a good reason — further suggesting that any amendments it does make to how sellers can operate are intended to ensure a trusted shopping experience for customers, such as by protecting shoppers from illegitimate goods. While Amazon continues to come out fighting aggressively against multiplying accusations of antitrust abuse, competition scrutiny continues to pile up in Europe and beyond. A Europe Union competition investigation of the ecommerce giant’s use of third party seller data has been grinding on for years — and an attempt by Amazon to settle the probe this summer, by offering a set of commitments, was swiftly denounced by dozens of civil society and digital rights groups as weak sauce. A few days later Commission EVP and competition chief Margrethe Vestager warned the company its offer wasn’t good enough. The EU is still considering industry feedback on Amazon’s commitments so it remains to be seen where that pan-EU antitrust procedure will land. This summer the UK’s Competition and Markets Authority also announced its own investigation into Amazon’s marketplace — although it’s a few years behind so still has to do the work of determining whether Amazon has a dominant position in the market and, only if it confirms that’s the case, look at whether it’s abusing that position and distorting competition by giving an unfair advantage to its own retail business or sellers using its services vs third party sellers who aren’t. So the UK is lagging other European regulators in scrutiny of Amazon. Outside Europe, Amazon is fighting antitrust accusations — and lawsuits — on home soil too after years of increasing scrutiny by US lawmakers on Big Tech’s market power.

After mothballing Amazon Care, Amazon reenters tele-health with Amazon Clinic, a marketplace for third-party virtual consultants • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in Amazon, Biotech & Health, Commerce, telehealthNo Comments

The ink is not yet dry on Amazon’s $4 billion acquisition of OneMedical, but in the meantime, the online services giant is making one more move into telehealth, and into medical services overall, on its own steam. The company today is taking the wraps off of Amazon Clinic, which Amazon describes as a virtual health “storefront”: users will be able to search for, connect with, and pay for telehealth care, addressing variety of conditions that are some of the more popular for telehealth consultations today. Amazon’s launch — which appeared to leak out about a week ago when users spotted some quiet landing pages — is coming only a few months after it shut down Amazon Care, which had been a telehealth service that it initially created for its own employees before stepping up plans to launch it nationwide and to third-party companies. Amazon Clinic represents another pass at the market and problem, but one that is very much built in the Amazon mold: as a marketplace where third parties can leverage Amazon’s platform and reach to find customers, and Amazon can leverage third parties to quickly scale what offers to its consumers, as well as to extend the business funnel for other Amazon operations — in this case Amazon Pharmacy, which can fulfill any prescriptions that come out of Clinic consultations. (Users can fill the scripts in other pharmacies, too.) Amazon Clinic is initially launching in 32 states in the U.S.. It does not work with health insurance and this point, and overall pricing will vary depending on providers, conditions, and location. (One example, connecting with a clinic for acne treatment in Nevada will cost around $40, and you get a choice of two providers whose different offers are provided in a comparative table. Another example, for pink eye (conjunctivitis) in New Jersey, has a wider price gap of between $30 and $48 between the two providers listed.) Other conditions include asthma refills, birth control, cold sores, dandruff, eczema, erectile dysfunction, eyelash growth, genital herpes, gastroesophageal reflux disease (GERD), hayfever, hyperlipidemia refills, hypertension refills, hypothyroidism refills, men’s hair loss, migraines, sinusitis, smoking cessation, urinary tract infections (UTIs), yeast infections and so on. We’ve asked Amazon if it plans to provide its own in-house (private label, in e-commerce parlance) telehealth consultancy utalongside third parties, and what the plans are for further states, whether there are international ambitions, and if it will accept health insurance for Clinic in the future. It may well be that this is laying the groundwork for Amazon to link up what it is building here with OneMedical when that acquisition closes. The bigger picture for Amazon Clinic is that the service will sit within Amazon’s bigger ambitions in the healthcare market. The company already has an online chemists, Amazon Pharmacy, which fulfills subscriptions and lets users additional buy over-the-counter drugs via Prime memberships that ship the items within two days. Amazon also believes its new telehealth service addresses a gap in the market for providing users with health consultations for more minor ailments. Some situations need more direct physician involvement, which might be covered with One Medical or one’s existing healthcare coverage; some situations might be addressable by visiting a pharmacy on one’s own steam. “But we also know that sometimes you just need a quick interaction with a clinician for a common health concern that can be easily addressed virtually,” the company noted in its blog post announcing the service. Amazon has been making inroads, and laying out its ambitions, in healthcare for a number of years. Amazon Pharmacy was launched off the back of its acquisition of PillPack. And it’s been exploring healthcare as an enterprise opportunity, with integrations of Alexa into healthcare environments. But Amazon Care is not the only step back it’s taken in its longer journey. In 2018, it formed a JV with JP Morgan and Berkshire Hathaway to build an employee healthcare operation, appointing a high-profile doctor to lead it. That service never appeared to take shape as expected and shut up shop in 2021. We’ll update this piece as we learn more.