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#73 – Goliath just entered BNPL + Linktree Marketplace & Twitter Product Drops

by | Jun 14, 2022 | Recent Newsletters

I think that this is the most I've laughed while putting together a Shopifreaks newsletter. 

This week in the 73rd Edition of Shopifreaks, I've got news for you about inflation, BNPL, marketplaces, and… buttholes? LOL, yeah for real…

I've actually got a really jampacked edition for you this week with big news across the board, so I'll keep this intro short so that you can dive in. 

After you finish reading this week's newsletter, also check out John Oliver's piece that aired last night about tech monopolies and the hidden harm they can do. I regularly write about some of the issues he addressed in this newsletter.

And now, onto this week's edition of Shopifreaks. Thanks for being a subscriber. 

PS: Are you on Twitter or LinkedIn? If so, add me.

Stat of the Week

29% of businesses expect to increase the prices of goods or services sold in June 2022, with energy prices being the main reason why. — According to the Office for National Statistics (ONS). Share it on Twitter & LinkedIn

1. Buy Now, Pay Apple

Apple is officially launching its BNPL offering in the U.S. later this year, which will allow customers to shop with Apple Pay and split purchases into four payments every two weeks. The service will work on iPhone models 8 and newer. 

Rather than work with a bank, lending partner, or 3rd party BNPL firm like Affirm or Klarna, Apple is convinced that it has the data and technology needed to underwrite, approve, and fund the loans in-house without risking big losses. And they're probably right! I can't imagine that any startup BNPL firm has anywhere near the amount of data that Apple has on its customers. 

They've certainly got the money to fund the loans too. Apple's cash on hand for the quarter ending March 31, 2022 was $51.5B.

Like a bank, Apple will use credit reports and FICO scores to check consumers' financial standing, however, it will also use its Apple ID data for identify verification and fraud prevention — which is something that no other BNPL service can come close to offering. 

Payment plans per transaction will max out at $1,000, which means customers will still have to put down a hefty deposit if, for example, purchasing the iPhone 13 Pro Max, which can reach $1600 for the 1TB edition. The specific amount that each customer is approved for will depend on their credit reports and scores.

I was using an Apple product as in the example above, however, Apple Pay Later can be used not only at Apple stores, but everywhere Apple Pay is accepted online and in-store, using the Mastercard network.

Apple said it would require consumers to link their debit card to its BNPL service, and payments will be automatically deducted from their accounts every two weeks unless the customer opts out.

This is big news! It comes at a questionable time when governments and regulatory agencies in U.S. and Europe are looking to crack down on BNPL. However, we all know how slow governments are to act sometimes, so in the meantime, there may be a lot of BNPL on the horizon — at least enough for Apple to take a calculated risk.

Plus there's no telling what the regulation might be if/when it's enacted. Whatever it is probably won't be designed to cripple the industry, which means BNPL is likely here to stay. 

The CEO of Affirm praised the move as a way of bringing the practice into the mainstream. Klarna CEO said Apple’s entry into the BNPL space is “amazing” and a validation of the sector’s business model. Of course, what else are they supposed to say when a competitor as large as Apple enters the scene? In reality, Apple's entry into BNPL could really hurt existing BNPL services, as Apple Pay is currently already offered alongside BNPL payment options in most stores. Whereas most stores have typically only offered one form of BNPL payment, now they will have two — one of them being Apple.

Nadine Chabrier, a senior counsel at the Center for Responsible Lending, among other experts in the industry, has concerns, particularly about the huge amount of data Apple holds — from where you shop to your resting heart rate –which Apple could use to engage in microtargeted advertising for BNPL.

Chabrier warned, “Apple has a tremendous amount of data on every person who has an iPhone, and they could leverage that to increase spending through Buy Now, Pay Later. And we found through the research that people aren't really aware of that, and it can be a really insidious way of increasing spending.”

To my iPhone readers out there, let me know the first time you use Apple Pay Later and what you think of it. 

2. SHOP Split + Tobias Lütke’s 40% Voting Stake

At the Annual and Special Meeting of shareholders held on June 7, shareholders approved Shopify's 10-for-1 split to take place later this month on June 22nd.

Shareholders also voted in favor of protecting CEO Tobias Lütke’s 40% voting stake by issuing a new type of founders share. The move is designed to ensure that Lütke maintains control of the company even as it grows and his shares become diluted. Check out story number three from my 65th Edition for more information about how that deal was structured. 

The news caused $SHOP to rise by a few points, but the stock still remains down by almost 80% from its 52-week-high of $1,762.92. When the stock split was first proposed in April, the price was still hovering around $600 a share. As of writing this, the stock sits at $312 a share. Seeking Alpha thinks it can go even lower and that we should all get a head start on tax loss booking.

In other SHOP stock news, it was reported that Shopify's President Harley Finkelstein sold 228 shares on June 2nd , leaving him 3,516 shares of the company, after previously selling 356 shares on May 24th. 

Bloomberg also reported that Mawer Investment Management has left its investment in Shopify, citing concerns about rising competition in the space and its recent acquisition of Deliverr.

Not a good year so far for Shopify's stock! Personally, I'm a long term holder of SHOP, so while their stock price drop certainly stings my portfolio at the moment, I have confidence in the company for the long haul. But hey, I'm no financial adviser. I just report the news.

3. Linktree launches a marketplace

Linktree has revealed its new Linktree Marketplace, allowing its 25M users to add Link Apps and integrations on their mini-landing pages, so that visitors can watch, listen, shop, and donate in one place without leaving the Linktree page.

Creators can now add Link Apps and integrations from 30+ partners including PayPal, Square, Shopify, GoFundMe, YouTube, Spotify, SoundCloud, Reddit, TikTok, Twitch, and more.

In November, I reported on Linktree's partnership with Shopify, which introduced the ability for Linktree users to display up to 6 of their Shopify products within their bio. A few months before that, Linktree partnered with PayPal to offer direct payments without users having to open a new tab.

Those integrations were the precursors to the new Linktree Marketplace, which currently connects users to over 40 services and is also open to other developers to develop their own Link Apps and integrations. 

In other Linktree news, the company rebranded last week in preparation for the launch of their marketplace. Alex Zaccaria, CEO and co-founder of Linktree, told SmartCompany, “The rebrand marks our evolution from being seen as just a ‘link in bio’ tool to a platform that encompasses many facets of an individual’s digital universe ⁠— a home where creators can truly link to everything they are.”

The only problem with the rebrand is — some people think their new logo looks like a butthole

I'm not joking. I literally LOLed when I read that, and then I had to immediately go look at the new logo, which was designed by the same agency who designed Spotify's logo.

I'll admit — it does look a little butthole-esque. Once you see it… it's hard to un-see it. 

Mitch King, head of talent acquisition at Linktree, took the feedback in stride and comically responded on his LinkedIn, “Our logo is not a butthole, you are. I’m rubber, your glue, whatever you say bounces off me and sticks to you.”

What do you think? Tree or Butthole? Take the Twitter Poll

All I'll say is good job Linktree on your new marketplace. Smart move. And way to go with your positive response to the hilarious feedback about your logo. It's good attention either way!

4. Twitter's New Product Drop Shopping Feature

Twitter announced a new shopping feature called Product Drops, which will allow merchants to tease their upcoming product launches. 

The company says that people already come to Twitter to discuss product releases — both before and after the drops — and that this new feature will allow merchants to be a part of that conversation.

The new Product Drops will enable merchants to create a special kind of tweet that showcases the item using text and images. From there, they can craft their promotional tweet and indicate when the product will become available for purchase.

Users who click on the tweets are taken to a product details page where they can get more info and also read what others are saying about the product via hashtags. Lastly they can click a Remind Me button, which sends them a notification 15 minutes before the drop and again at the time of the drop.

Since the new feature is contained within a tweet, users can interact with it as they would any other Twitter post such as liking, retweeting, quote tweeting, sharing via DM, or bookmarking.

Dropped products are purchased directly on the merchant’s website. In other words, Twitter is not processing the transaction themselves, so they do not earn a piece of the transaction. 

The new feature is currently in testing with shoppers in the U.S. using Twitter in English for iOS devices.

I'm impressed with their execution. It's definitely true that people head to Twitter to talk about products, so it makes sense to offer a dedicated type of tweet. I also see other applications for the Remind Me button such as for events, live streams, etc, so it'd be great to see that feature integrated into their regular tweets as well. 

5. Online inflation easing in some categories and growing in others

Several categories of e-commerce are seeing price decreases, according to Adobe, which analyzes more than 1 trillion visits to retail websites in the U.S., as well as over 100M product SKUs in 18 product categories. 

Adobe CEO, Shantanu Narayen, told CNBC's Jim Cramer on Thursday that these price decreases support their expectation that digital shopping will hold strong among consumers.

Narayen said, “When you look at the total expense, in addition to the macroeconomic, where there may be a little bit more concern, what’s happening is actually you’re seeing some price decreases in elements like electronics or things that are happening with games.”

Here are some category data reported by the Adobe Digital Price Index

  • Consumers spent $78.8B online in May, over $1B more than April
  • Groceries rose 11.7% in May YoY (a record rise) and 1.3% MoM
  • Electronics prices were down 6.5% YoY and 1.4% MoM
  • Apparel prices were up 9% YoY and down 1.5% MoM
  • Toys were down 6.5% YoY and down 1.3% MoM

It's as if each category existed in its own online ecosystem. I've definitely noticed the change at the grocery store since the start of 2022.

6. Wix Hotels is relaunching in partnership with HotelRunner

Wix announced the launch of its new solution for the hotel industry. The platform has partnered with HotelRunner to redevelop Wix Hotels. The new platform is a big improvement over its previous attempt and includes HotelRunner's full suite of tools for hotels to launch, manage, and grow their hospitality business.

The one thing I couldn't figure out through researching this new partnership is what's the difference for a customer to go through Wix Hotels versus Hotel Runner directly? The latter seems to offer a full suite of hospitality tools on its own, including DIY websites.

Perhaps as the new Wix Hotels by Hotel Runner rolls out, it'll integrate with the rest of Wix's tools including their e-commerce and events, allowing a hospitality business to take advantage of the additional features and integrations that Wix offers in-house. For example, they could use their Wix website to power their hotel business and also offer an online gift shop through Wix e-commerce. However that's just a guess based on how they've handled their previous partnerships and integrations. 

The service is currently in beta with a gradual rollout in English first and then to other languages. Existing users of Wix Hotels (old) will move to the new solution after the beta.

7. AI is real! And sometimes it isn't…

Nate app, which calls itself an “artificial intelligence startup”, is a service that supposedly uses AI to auto-fill customer information for $1 per transaction to save shoppers a few minutes when completing purchases through their app. (More like 4 seconds…)

However it was revealed by The Information that instead of using high-tech methods to complete purchases, Nate transactions were often handled manually by workers in the Philippines. 

The article wrote that “the share of transactions Nate handled manually rather than automatically ranged between 60 percent and 100 percent” throughout 2021. An insider told the outlet that Nate didn't share its manual process with some potential investors while the company was trying to raise money. 

That didn't stop the company from raising $50M from venture capital firms Coatue Management and Forerunner Ventures over the past two years, despite having only around 100 transactions a day! Wow, does that mean Travel is Life could raise $50M??

Meanwhile in the real world of A.I…. a Google software engineer named Blake Lemoine was put on paid leave after Google dismissed his claim that its A.I. is sentient, citing that he had violated their confidentiality policy.

In April, Lemoine had shared a document with Google execs titled “Is LaMDA Sentient?” containing a transcript of his conversations with the AI, which he said “is sentient because it has feelings, emotions and subjective experience.”

You can read the full transcript of his conversation with the AI bot and decide for yourself.

8. Other e-commerce news of interest this week

  • Spotify revealed at their Investor Day 2022 that it's intending to re-enter the audiobooks business later this year. Several months ago, Spotify entered into an agreement to acquire Findaway, an audiobook distribution platform, which hasn't closed yet.
  • WooCommerce introduced a physical card reader for in-person payments. The reader works with WooCommerce Payments and the WooCommerce Mobile App, and can sync with online store inventory, or optionally not sync in certain situations such as when processing transactions at trade shows or craft fairs for future fulfillment.
  • Former Shopify exec, Erin Zipes, joined 1Password as chief legal officer, a newly created role. Zipes joins the company six months after leaving Shopify and a few months after 1Password's $620M Series C round earlier this year, the largest in Canadian history.
  • Yotpo, an Israeli-based software company that offers Shopify merchants various apps to power their review systems, SMS marketing, loyalty programs, referral programs, and visual marketing strategies, launched a subscriptions app to their lineup of Shopify apps. Merchants who use the app don't pay anything until they exceed $500 in monthly subscription sales, and after that, pay 1% per additional transaction. In September, I reported on Shopify's investment and multi-year strategic partnership with Yotpo. 
  • Amazon announced a new featured called Virtual Try-On for Shoes that allows customers to visualize how a pair of new shoes will look on themselves from multiple angles using their mobile phone's camera. The launch follows the rollout of other virtual try-on technology for athletic shirts this past April.
  • Three top Chinese livestreaming influencers on the Taobao platform, each who had millions of followers, suddenly went dark and haven't returned to the streaming platforms since, in what appears to be a government crackdown extending back to late 2021. Along with tax responsibilities and content censorship in China, livestreaming e-commerce influencers are also dealing with increasing regulations that hold them accountable for things like product quality control, proper reporting sales numbers, and the’ participation of minors in their livestreams.
  • Meanwhile in the West, while China is shutting down top influencers, Amazon is flying them out to luxurious resorts in a bid for social media clout. Last month, Amazon hosted more than a dozen Instagram, TikTok, and YouTube stars at resort in Todos Santos, Mexico where they could visit a curated pop-up shop of “internet famous” items for sale on Amazon, hang out on the “Kindle Beach Oasis”, and attend a Prime Video movie night.
  • Salesforce announced the launch of NFT Cloud, a service that lets brands create and sell NFTs. Using the service, Salesforce customers can mint, manage, and sell NFTs directly on the Salesforce Customer 360 Platform. Who's launching an NFT marketplace next?? Place your bets…
  • Joshua Ma, a senior exec at ByteDance (owner of TikTok), is voluntarily taking some time off during an internal investigation that began after telling employees at TikTok's London offices that as a capitalist, he didn't believe companies should offer paid maternity and paternity leave. Since TikTok opened its corporate office in London in October, at least 20 staff from the e-commerce team have left, citing a toxic work environment as their reason for departure.
  • Two weeks ago, I reported on the opening of Amazon's new Style store in Glendale, CA, which uses QR codes and apps to make trying on clothes easier. If you're curious to learn more about that store, freelance writer Fortesa Latifi takes you inside the store in a recent Business Insider article, an experience which prompted her to say, “I never want to shop normally again.”
  • Uber Eats is launching a new product that will allow customers across the U.S. to have specialty food delivered from select merchants in New York City, Miami, and Los Angeles. Customers can place a shipping order through the Uber Eats app, where nationwide shipping will be featured on the home screen via a partnership with FedEx. After receiving the order, merchants package and ship the items themselves.
  • Meta was hit with eight different lawsuits accusing its social media algorithm of causing real harm to young users across the U.S. The complaints claim that Facebook and Instagram have been designed to be dangerously addictive, driving children and teenagers to view content that increases the risk of eating disorders, suicide, depression, and sleep disorders. The lawsuits have been filed in federal courts in Texas, Tennessee, Colorado, Delaware, Florida, Georgia, Illinois and Missouri.
  • Amazon is also being sued, this time by Whole Foods shoppers who say the company misled them and violated sate law when it ended free delivery from Whole Foods Markets for Prime members. Amazon ended the benefit after it increased the price of Prime but without offering members a refund or an easy way to cancel their subscription, the plaintiffs argue.

9. This week in seed rounds, IPOs, & acquisitions….

  • nfinite, a Paris-based e-commerce and visualization company that allows retailers to create and display 3D product visuals through CGI technology, raised $100M in a Series B round led by Insight Partners. In February, I reported on their $15M Series A round. 
  • Codat, a universal API for small business data, raised $100M in a Series C round led by JP Morgan Growth Equity Partners with participation by Canapi Ventures, Plaid, and Shopify. The company will use the funds to build out their infrastructure.
  • Elementor, a website builder for WordPress that powers 7.4% of all global websites, acquired Strattic, a Jamstack hosting platform. Elementor plans to leverage Strattic's static rendering technology to expand its hosting capabilities and focus on offering solutions to challenges faced by WordPress users. It makes sense for big theme / plugin builders to merge with hosting companies. WPEngine acquired StudioPress back in 2018. The two types of services go hand in hand together and the upsells are complementary. Strattic offers relatively expensive hosting packages, starting at $45/mo, compared to WPEngine's $30/mo and Kinsta's $35/mo. That price point feels out of the range of most bloggers. I'm curious if they'll put out a cheaper plan geared at bloggers in the future now that Elementor has acquired them.
  • Instant Commerce, an Amsterdam-based headless commerce platform launched in 2022, raised €2M in a pre-seed funding round led by Firstminute capital. The startup will use the funding to double its team, further develop its platform, and build brand awareness throughout Europe.
  • Tencent, a Chinese technology conglomerate that owns video game, music streaming services, and online retail, among other brands, bought stake worth $264M in Flipkart, a Walmart-owned online retail marketplace that operates in India. Tencent now holds 0.72% stake in Flipkart, which is valued at $37.6B. I regularly report on the rivalry between Amazon and Flipkart in India, as well as both companies' conflicts with the Indian government over their strict commerce laws. Flipkart informed Indian authorities that the transaction, which took place in Singapore, does not fall under the purview of ‘Press Note 3' which calls for scrutiny of investment that any Indian company gets from countries sharing a land border with India.
  • Onfleet, a last-mile logistics and delivery platform, raised $23M in a Series B round led by Kanye Partners, bringing its total amount raised to $40M. The new capital will be put toward product and engineering development and enhancing their enterprise offering.
  • Gander, a platform that collects and embeds user-generated video content into retail sites so shoppers can see what a product looks like in real life, raised $4.2M in a seed round co-led by Harlem Capital and Crossbeam Venture Partners. The company will use the fresh capital to increase hiring for sales and engineering positions and focus on further scaling the company. 
  • Zippi, a Brazil-based fintech that allows micro-entrepreneurs to access working capital to pay suppliers via PIX, Brazil's real-time payment system, raised $16M in a Series A round. By being integrated with the Central Bank API, Zippi can perform PIX for any bank. 
  • Juni, a Swedish integrated payments solution platform, raised $100M in equity in a Series B round led by Mubadala Capital, and $106M in debt funding from TriplePoint Capital. The new capital will be used to drive Juni's credit card offering to enable e-commerce merchants to scale through media buying, as well as expand globally.
  • Klar, a Mexico-based digital bank that describes itself as a “100% digital, transparent, free, and secure alternative to traditional credit and debit services”, raised $70M in equity funding in a Series B at a $500M valuation, bringing its total amount raised to $150M. The company plans to use the funds to build more products to complement their current offerings.
  • Mobikwik, an Indian digital wallet and payments startup, is in talks to raise up to $100M in equity to help it expand after postponing its IPO. The company wants to use the money to invest in marketing, hire staff and make acquisitions.
  • NymCard, an Abu Dhabi-based card issuer and banking-as-a-service provider, raised $22.5M in a round led by DisruptAD, Reciprocal Ventures, and Shorooq Partners, bringing its total amount raised to $35M. The company will use the funds to grow its teams, strengthen its service in core markets, and form local partnerships.
  • Take Blip, an online messaging platform that offers tools to automate conversations with chatbots that can hand off complex issues to customer service reps, raised $70M in a Series B round led by Warburg Pincus, bringing its total amount raised to $170M. The funds will be put towards product development, mergers and acquisitions, and customer acquisition, of which they currently have around 3,000 paying customers.

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 [email protected] or hit reply to any of my newsletters.

You can also mention @shopifreaks on Twitter or submit posts to r/Shopifreaks on Reddit, and I'll curate the best submissions each week for inclusion in the newsletter. 

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See you next Monday!


Paul E. Drecksler
[email protected]

PS: What's the difference between a hippo and a zippo? … One is really heavy, and the other is a little lighter.

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