Thank you to those of who left me some love on my new Product Hunt listing. If you haven’t yet, I’d appreciate if you did now.
I’ve never launched anything on Product Hunt before, but when I saw that there were other newsletters on the platform, I figured it was worth a shot. I hope that it becomes one more channel for new readers to discover Shopifreaks.
As usual, I’ve got a lot of news for you in this week’s 63rd edition of the Shopifreaks E-commerce Newsletter. I report on Visa’s new NFT creator program, Wix’s new partnership with DoorDash, and the NYSE’s investigation into Shopify’s recent stock price jump.
I also share news about Etsy sellers going on strike next week and Amazon attempting to illegally enter India’s physical retail market, as well as the company’s new plastic-free packaging in the UK. (Good job Amazon!)
Lastly, I share a few really interesting feature stories and exposés that profile a fintech entrepreneur, BigTech giants, and a small last mile delivery service in French Polynesia.
All this and more in this week’s edition of Shopifreaks. Thanks for being a subscriber!
PS: Apologies to Playter for incorrectly calling them Playtar in the 60th edition a couple weeks ago.
Stat of the Week
Amazon will account for 39.5% of all US retail ecommerce sales in 2022, or nearly $2 in $5 spent online. — According to eMarketer.
Retweet It <– Check out my new #StatoftheWeek graphic format!
1. Visa launches an NFT creator program
Visa has launched a new NFT creator program called Visa Creator Program, which will bring together artists, musicians, fashion designers and filmmakers and help them build their businesses with NFTs.
The company feels that NFTs lower the barrier to entry for people to build a business and sell online, and is actively looking for ways to further enter the market. In December 2021, Visa launched a crypto advisory practice to help clients and partners deep dive into the space, and prior to that in August 2021, they made headlines for buying a popular CryptoPunk NFT.
Cuy Sheffield, head of crypto at Visa, told TechCrunch:
- “We’ve seen rapid growth in the NFT ecosystem over the past year. We think NFTs represent a new form of e-commerce.”
- “But there’s still a ton of questions around how does it evolve? Which blockchains to use? How do you stand out? How do you reach customers? And so we want to learn as much from the creators as we think they can learn from us.”
- “We want every marketplace to be able to accept Visa cards because we think NFT’s will exist across many different networks.”
Visa is looking into other ways to make NFTs more accessible for consumers to purchase and access, but did not disclose a timeline for future NFT-focused product launches or services with the company.
I’ve had mixed emotions (and still do) about NFTs, but a few months ago, a buddy of mine, Jared Paul who runs Capable Wealth, helped educate me about some of the use cases surrounding NFTs, other than as novelty digital collectibles. Some of the use cases he explained to me, such as using NFTs as digital tickets or memberships, felt like a fancy way of doing things we already have solutions for. (Not everything has to be on a blockchain.)
Other use cases, such as ensuring product authenticity, identity verification, and supply chain logistics felt more cutting edge.
However in the end, he swayed me towards believing that NFTs offer at least some value, and that we will see more developments in the space in the coming years, as it’s still an emerging technology and budding industry.
After all, Amazon started out just selling books. So it’s not unreasonable to think that NFTs will graduate past pixel art JPGs.
I’m currently involved in two NFT projects and will keep you in the loop about those projects this year.
2. Wix partners with DoorDash
Wix Restaurants, the company’s all-in-one system for restaurants to create websites and menus, take online orders and reservations, and receive payments, is integrating with DoorDash’s white-label fulfillment platform, DoorDash Drive, to provide restaurant owners access to their large delivery fleet.
Restaurant owners will be able to incorporate DoorDash delivery into their direct ordering channel with a flat-rate delivery fee, as well as allow customers to track their delivery status in real time.
Wix Restaurants users will be able to fulfill delivery orders made on their website, through Wix Dine App, and through their own branded apps via the new integration.
Very cool, Wix! This is a great integration for restaurant owners and probably the fastest way I can think of for a small restaurant to offer this type of delivery service to their customers — as long as DoorDash has a presence in their area.
Sometimes Wix gets grief for trying to be the jack-of-all-trades and serving too many demographics of clients (ie: restaurant owners, e-commerce merchants, codeless app builders, bloggers, fitness companies, etc), but on the flip side of the coin, Wix offers a very streamlined solution for their users.
I jokingly refer to them as the Trader Joe’s of e-commerce and web development platforms. Meaning, they don’t have thousands of app options for their merchants to choose form, but the ones they do offer work well, integrate easily with their platform, and are for the most part supported directly by Wix. This is a big value proposition to merchants who lack development teams.
I’ll be curious to hear feedback from restaurant owners who test the new integration.
3. NYSE Investigates Citadel & Citigroup over $SHOP spike
On March 18, one minute before the closing bell had rung at the NYSE, the price of Shopify’s stock shot up $100 per share to $780 before immediately crashing down again in post-market trading. Everyone was confused as to why, and NYSE management has launched an investigation to find out.
Ken Griffin’s firm, Citadel Securities, sold the shares at the close, which isn’t against any rules, but the exchange is trying to understand how the huge spike and subsequent drop happened. Here’s what they know so far:
- On Mar 18, Citigroup had an order from its Wall Street clients to buy 600k shares of $SHOP
- Citigroup split up the order, which is standard for large trades
- The first trade was put in before 3pm
- The second half was put in ten minutes before close
- The price of $SHOP skyrocketed up about 15% in the final minute of trading
- Then they tumbled back down in after-hours trading
- The estimated losses are around $18M in the immediate aftermath of the spike
- The SEC has yet to take any action
The speed and scale of the move in stock price was unusual because there was no news or announcement that promoted a market reaction, but it’s not unheard of.
At the moment, I have no update to this investigation, and given how these stories often go, this might be the last we ever hear about it.
4. Three feature stories of interest
Usually I focus on time sensitive news, but this week, there are a few stories and entrepreneur profiles that I thought were particularly interesting that I want to share with you.
Meet Gen Z Billionaire Ryan Breslow – Last month I reported on Bolt CEO Ryan Breslow blasting Shopify on Twitter for (in his eyes) using app developers as free R&D and then throwing them to the curb by taking partner-provided features in-house. He’s put other big tech companies like Stripe and Y Combinator on blast too. Breslow lives a self-described “monk lifestyle” in Miami, working from home, doing yoga, and eating most meals alone to avoid distractions. He disdains the Silicon Valley scene and isn’t afraid to speak up about the darkness he sees in the tech and finance industries. He’s an eccentric guy, and I enjoyed reading the exposé on him by Steven Bertoni at Forbes.
Online Shopping in the Middle of the Ocean – This is the ultimate story of creative last mile delivery! Since e-commerce giants don’t reliably deliver to the 118 remote islands of French Polynesia, locals made their own online shopping service that delivers to residents by boat. Customers use Facebook Messenger to tell HM Coursier Express what they’d like and then pay a deposit usually by bank transfer. Orders are organized by destination and passed onto “drivers” via the iPhone Notes app. It’s an objectively piecemeal way of offering their services, but it works for their local residents who don’t all have access to credit and debit cards. I absolutely loved this story of French Polynesian islanders making freely available technology and determination work for their delivery needs.
Amazon & Facebook Fleeces Communities Out Of Billions – Did you know that corporations use NDAs to secure billions of dollars in tax incentives and subsidies while completely hiding their identities from the public? In this article by Fast Company, the author Nate Berg shares some recent examples of how companies like Amazon and Facebook get bills signed into law that benefit their corporations, all while being referred to as “the firm”. Elected officials have to decide what to do with public money without knowing the company they’re inviting into their towns. Nondisclosure agreements have become a common part of the way economic development happens in communities across the country, and some advocacy groups are calling for an end to the practice.
I hope you enjoy these great reads. If you ever have articles of interest to share, shoot me an e-mail at email@example.com (or hit reply to any of my e-mails) or tag me on Twitter.
5. Amazon is trying to illegally enter India’s physical retail market
The Confederation of All India Traders (CAIT), an organization that aims to create a business friendly environment in the country, alleged that Amazon is trying to illegally enter India’s physical retail market via its deal with the Future Group, an Indian conglomerate that has a significant prominence in Indian retail and fashion sectors.
CAIT believes that, “Amazon’s entire transaction with the Future Group companies is based on the intention to illegally enter the physical retail market, take over retail stores owned by Future Retail, and cut out the micro, small and medium enterprises and retail traders, a majority of which is represented by CAIT.”
Foreign direct investment in India requires government approval, but Amazon feels that since it was investing in Future Coupons and not Future Retail, no approvals were required from the government.
Quick Backstory: In August 2019, Amazon agreed to purchase 49% of one of Future Group’s unlisted firms, Future Coupons, so that it could buy into Future Retail after a period of 3-10 years. Future Coupons owns a 9.82% stake in Future Retail. This deal has been in and out of court since then.
Basically CAIT thinks that Amazon is using a backdoor to enter India’s retail market and circumventing rules that have been established to protect Indian SMBs.
I’m no expert on India’s government structure or laws, but I enjoy following their retail and e-commerce developments as the country attempts to keep foreign owned conglomerates from having disproportionate ownership and too much influence on their economy, to the detriment of local merchants.
6. Amazon UK no longer packs in single-use plastic bags
Amazon UK announced that it no longer packs products in single-use plastic delivery bags and instead has switched to recyclable paper delivery bags and cardboard envelopes for orders shipped from its own fulfillment centers. Great job Amazon!
Since 2015, Amazon has been making changes to reduce packaging waste, reducing the weight of packaging per shipment by 36%, which they say eliminated one million tonnes of packaging material.
Amazon chose this market to test its plastic free delivery because recyclable paper delivery bags and envelopes are more easily recycled across the UK.
Amazon UK also recently unveiled its first electric trucks, in an effort to lower carbon emissions.
John Boumphrey, UK country manager at Amazon, said, “We’re committed to becoming net-zero carbon by 2040, and this is a milestone as we continue to decarbonize our transportation network so we can deliver more customer orders using zero emissions vehicles.”
I’ve had an idea for several years that I feel only Amazon is big enough to pull off — and that is to standardize home shipping containers the way that cargo shipping containers were standardized decades ago.
Amazon should develop standard sized shipping envelopes, boxes, mailing tubes, and oversized boxes and start manufacturing long-term use versions. Customers would receive them at their house for delivery and have X amount of days to leave them outside for pickup before being charged a fee. Amazon drivers can pickup these boxes during their route and bring them back to fulfillment centers for redeployment.
If Amazon spearheaded this endeavor, all other delivery companies would follow suit. It would pay for itself in a matter of years and the environmental impact would be huge.
Do you think a system like that could work? Hit reply and let me know.
7. PayPal urges industry to boost authorizations
Merchants don’t typically manage their own back-end processing, outsourcing it instead to merchant processors like PayPal or Stripe, who play a critical role in the final leg of a customer journey. A small increase in approvals can translate into big amounts of unrealized revenue.
PayPal believes that a failed charge is a failed customer experience for merchants. Authorization rate determines whether a sale happens or not, and PayPal stats found that 44% of falsely declined shoppers stopped or reduced shopping with a retailer.
Sandipan Chatterjee, Head of Enterprise Payments Optimization and Growth at PayPal, told PYMNTS, “Businesses today lose up to 75 times more revenue to false declines than to card-not-present fraud, and it is increasing every year.”
Historically, merchants and platforms have been very conservative about authorization rate optimization because of risk. There’s a fine line between too much risk and too many authorizations, and the job of a merchant processor is to calculate and assess that risk to create a safe transaction environment for their merchants.
PayPal computes hundreds of fraud and risk models when adjudicating a payment transaction, and the company plans to extend those capability onto its Braintree merchant platform, and not just on its own wallet.
While the article I linked to above feels a bit advertisey for PayPal, I wanted to include it as a reminder to all my merchant readers to take their authorization rate into consideration when evaluating their merchant processor. It’s a metric that often gets overlooked because it doesn’t usually make it into frontend or conversion analytics, however it can have a meaningful impact on revenue.
8. Etsy sellers will go on strike April 11th – 18th
Thousands of Etsy sellers have committed to going on vacation mode, suspending sales for a little over a week, in protest of recent fee increases on the platform. They are also asking shoppers to refrain from buying on Etsy during the strike.
More than 5,000 sellers have signed on to strike, and the campaign has received over 28,000 signatures.
Why so serious? The news about transaction fees going up from 5% to 6.5%, a 30% increase, came in February at the same time Etsy CEO Josh Silverman shared with investors that sales and revenue were at an all-time high, which sent Etsy stock soaring.
Kristi Cassidy, an active seller on Etsy since 2007 who started the movement, said, “The strike is just action number one. What we want to really do for the future is form a solidarity support movement — peer support, artisans supporting each other.”
So an Etsy Sellers Union?
The fee increase didn’t cause this movement in isolation. This was merely the straw that broke the camel’s back for Cassidy and other sellers. In recent years, Etsy has caused issue with its sellers by:
- In 2020, Etsy informed sellers that it’s going to advertise their goods and take a big cut of the sale, while not allowing major sellers to opt out.
- In 2013, the platform changed its rule to allow sellers to outsource production, and some have complained that the site is now filled with mass-produced print-on-demand products.
- Last year Etsy introduced a Star Seller program where sellers receive a badge if they maintain certain customer metrics like 24 hour response time, fast shipping, and consistent 5 star ratings, but some sellers say it puts undue pressure on their small businesses to offer Amazon-level service when they don’t have the manpower to make that happen. And that these metrics aren’t in the spirit of how Etsy got started.
Etsy defended the most recent fee increase and said that it’s a good thing for their 5.3 million sellers because it’ll allow the company to expand marketing services and customer support and to remove listings that violate Etsy policy. However given their record sales and revenue, it sounds like they already had enough money to make that happen.
Prior to going public in April 2015, Etsy had B Corp certification, a designation for companies that meet high social and environmental standards that sellers could reference, but the company gave up its B Corp status after its IPO.
9. Other e-commerce news of interest this week
- Amazon is renewing a deal with JPMorgan Chase to issue their rewards credit card after flirting with American Express and Synchrony for several months. While the specific terms of the deal are unknown, insiders shared that Amazon pushed their terms hard, including maintaining their 5% rewards, receiving a revenue share from loans, and rebate on interchange fees that normally banks keep. JPMorgan Chase did NOT want to lose that account!
- The EU has voted to mandate that everything from cellphones to e-bikes must have easily replaceable batteries. By January 1, 2024, these devices must be designed such that batteries can be safely removed and replaced using “basic and commonly available tools” and “without causing damage to the appliance or batteries.” Manufacturers must also provide documentation for the removal and replacement procedure.
- Shopify announced plans to invest in nine climate tech startups, who will receive funding through its Sustainability Fund. The goal of the Fund is to assist companies that are providing, scaling, and commercializing climate technologies for massive impact in the long term.
- BigCommerce partnered with SellersFunding, which offers a suite of financial solutions including working capital for advertising, inventory management, research and development of new products, hiring new talent, etc. The two companies will develop custom extended payment terms that allow sellers to pursue a platform transition to a D2C model with BigCommerce.
- Macy’s is investing over $584M to open a 1.4M sq.ft. fulfillment center in China Grove, NC (near Charlotte) that will employ over 2,800 workers. It’s the largest job creation announcement in the county’s history.
- USPS raised shipping fees on mailing tubes, effectively making them unprofitable for many shippers. Sellers of golf clubs, posters, plants, fishing poles, and other oversized products have had to reevaluate whether they will continue to sell their products or use other couriers.
- Amazon workers at a warehouse in Staten Island, NY have voted to form a union. It is the first Amazon warehouse to successfully unionize. An Alabama warehouse is currently awaiting results of their recent vote as well.
- GameStop will split its stock, pending approval by shareholders, increasing its total number of shares from 300M to 1B. The split, if executed today, would price GME at about $57 per share (which is probably where it should be pre-split).
- Google is releasing a new conversion measurement tool, a new price insights tool, and new shipping and return overview pages, as well a new Shopping Experience Scorecard program which gives brands who meet certain criteria a “Trusted Store” badge. These new tools are part of Google’s goal to make Google Shopping a more favorable destination for merchants.
10. This week in seed rounds, IPOs, & acquisitions….
- Tushop, a social commerce platform in Kenya that enables group buying of consumer goods, raised $3M in pre-seed funding in a round led by 4DX Ventures. The company will use the funding to expand across Nairobi before expanding to the rest of the country.
- Airhouse, a startup that helps SMBs access leverage multiple 3PLs via a single dashboard and obtain volume rates on fulfillment services, raised $11M in a Series A round led by DNX Ventures. The company has expanded by 600% since it launched publicly and its partner network footprint rose by 500%, but it has not released data about revenue.
- Fuel, a Berlin startup that helps creators and musicians setup their own branded online stores to sell NFTs, raised €1.5M in a pre-seed funding round. The company will use the funding to build its platform and has signed up German duo Mat.Joe as one of its first artist clients.
- Revvable, an inventory management and operations platform for Powersports dealerships, raised $5M in a seed round led by Tiger Global. The company’s mission is to simplify the complex process of purchasing a vehicle, bundling financing, warranties, and paperwork into an easy e-commerce checkout experience.
- ravaani LLC, a payables and receivables automation company, acquired Exportly, an app that allows users to export Shopify orders and refunds into popular bookkeeping software. Exportly has cash flow and growth opportunities and will be added to ravaani’s suite of products.
- Black Crow AI, a platform that predicts which products e-commerce customers will buy via an API that integrates with existing workflows, raised $25M in a Series A round led by Imaginary Ventures. The company will use the capital to accelerate development of new and accessible machine learning use cases and expand their teams across product, client service, and commercial.
- BeepBeep!, a quick commerce startup serving Southeast Asia that focuses on fresh produce and daily essentials, raised $6M in a seed round led by Genesia Ventures. The company will use the funding to broaden its regional footprint by increasing its number of warehouses across three countries by the end of 2022.
- FinAccel, a consumer credit risk, scoring, and lending platform, acquired a majority stake in Bank Bisnis International, a private commercial financial institution, for $200M as part of its growth strategy in the financial services sector. The acquisition gives FinAccel future inroads into online banking, digital credit, BNPL, and bigger-ticket loans.
- Klarna, a Sweden-based BNPL firm (that wants to ditch its BNPL association), completed its acquisition of PriceRunner, a comparison-shopping service in Europe. The acquisition will provide Klarna will additional features including product discovery, price comparisons, and product reviews to help their shoppers save money.
- Khazna, an Egyptian super app that services consumers and micro-businesses, raised $38M in a Series A equity and debt round led by Quona Capital with debt financing provided by Lendable, bringing its total raised to $47M. The company’s vision is to digitize cash transactions across Egypt, including to the 50% of Egyptians who own a smartphone but lack access to formal financial services.
- GEODIS, a global transport and logistics services provider, signed a binding agreement to acquire Keppel Logistics, a contract logistics specialist with over 500 employees. The acquisition will increase GEODIS’ contract logistics footprint and e-commerce fulfillment services in Singapore and Southeast Asia.
- Anyday, a Danish financial software company that provides interest-free financing for customers, raised €4M in a recent seed round. The company will use the funding to expand its services across the Nordic region and add more payment options for in-store companies including BNPL.
- Lucky, an Egyptian fintech that claims to have the largest merchant network in Egypt, raised $25M in a Series A funding round co-led by Nclude and several Egyptian banks. The company will use the funding to further cement their position in the market and build out its credit offering.
- Pace Enterprises, a Singapore-based fintech company that operates a BNPL platform, signed an agreement to acquire Rely, a rival Singapore startup offering the same services. The acquisition will let customers make use of Pace’s alternate payment plans on more brands in Singapore and Malaysia.
- Arena, a startup that provides tools to embed Discord-like online discussions into websites, raised $14M in a Series A round led by CRV. The company currently has 25k customers across 50 countries.
- Yami, a Los Angeles-based startup that offers Asian snacks & food, beauty & health products, home appliances and books to Asian Americans, raised $50M in a Series B co-led by Altos Ventures and Balsam Bay Partners, bringing its total amount raised to $60M. The company will use the funding to further its U.S. expansion by opening up another warehouse in New Jersey to speed up delivery times.
- Bonsai, an embedded commerce solution that allows publishers and merchants to sell to consumers at point of discovery, raised $21M CAD in a Series A round led by Framework Venture Partners. The company will use the financing to build existing product capabilities and explore new product verticals.
- Akulaku, an Indonesia-based digital banking and financing platform that services Southeast Asia, raised $10M in debt funding from Lend East, just two months after their $100M Series E round. The company will use the funds to continue building its lending portfolio in Indonesia, Philippines, and Thailand.
- Pine Labs, an India-based digital payments startup, raised $50M from Vitruvian Partners, shortly after raising $150M from Alpha Wave Global. In January, the company filed for IPO to raise $500M an at estimated valuation between $5.5B – $7B.
- CredPal, an Nigeria-based BNPL firm, raised $15M in an equity and debt bridge round. The company will use the funds to broaden its consumer credit offerings in Nigeria and scale across Africa.
- Yokoy, a Switzerland-based startup that helps large companies manage their expenses, raised $80M in a round led by Sequoia Capital. The company will use the funding to continue its expansion in Europe, following the opening of an office in the Netherlands and potentially U.S.
- Kaiyo, formerly Furnishare, an online marketplace for pre-owned furniture, raised $36M in equity and debt in a Series B round led by Edison Partners, bringing its total amount raised to $50M. Kaiyo currently has hundreds of thousands of registered customers and more than 160 employees.
- GrowSari, a Manila-based platform for digitizing small businesses in the Philippines, raised $77.5M in a Series C round, bringing its total amount raised to $110M. The company will use the funding for expansion into new store formats, building a logistics and fulfillment network, and hiring for operations, technology and data science teams.
- Sourceful, a supply chain transparency startup that works with brands to shrink the environmental damage associated with their product sourcing choices, raised $20M in a Series A round led by Index Ventures, just half a year after its $12.2M seed round. The company will use the funding to fuel its expansion into international markets, growing its presence in Europe, Asia, and the U.S.
What’d I miss?
Shopifreaks is a community effort and I appreciate your contributions to help keep the rest of our readers in the know with the latest happenings in e-commerce. Whenever you have news to share, you can e-mail firstname.lastname@example.org or hit reply to any of my newsletters.
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Paul E. Drecksler
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