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#115 – Hexababa, Tax Evasion, & Anti-Checkers

by | Apr 3, 2023 | Recent Newsletters

Check it out – Shopifreaks is now Twitter Verified! A lot of people are saying that the $1000/month isn't a great investment, especially since my organization consists of just one person (me), but I disagree. I think that the ROI will start pouring in…

This week I've got stories for you about Alibaba doing what Amazon will likely never do, Wix's new integration with Meta, and Shopify's latest integration with Google (at least for enterprise merchants). 

I also share news about Apple finally launching its long-awaited BNPL solution, new and retired ad types at Meta, and a new movement of Twitter “Anti-Checkers” that's popping up around the globe.

All this and more in this week's 115th Edition of Shopifreaks. Thanks for subscribing and sharing!

PS: In case you didn't click on my Twitter Verified link above… APRIL FOOLS! I'd just as soon shut my Twitter account down than pay for verification. See story #7 from my 107th Edition to learn why paid verification is such a bad idea. 

Poll of the Week 🗳️

✂️ Should Amazon split up into multiple entities like Alibaba?

🗳️ Take the Twitter poll.

(If this poll is confusing to you, read story #1 below and then pop back and take the Twitter poll.)

Last Weeks Poll Results: I asked if ChatGPT was going to change the face of product search and discovery online. 43.1% voted “Yes, it'll takeover”, 23.5% voted “No, it won't live up”, and 33.3% voted “Other AI will compete too.” Who's right? We will probably find out sooner than later! [View Poll]

Stat of the Week 📈

UBS analysts estimate that Amazon's Buy with Prime poses an 8-18% risk to Shopify's revenue and a 6-12% risk to its gross profits. – According to Business Insider

That could mean an impact of about $810M in revenue and $260M in gross profits for 2023.

Share this week's stat on Twitter & LinkedIn.

1. Alibaba splits into 6 entities

Alibaba has decided to break itself into six smaller entities: 

  1. Cloud Intelligence Group – will include Alibaba's cloud, DingTalk, and AI efforts.
  2. Taobao Tmall Business Group – will include Taobao, Tmall, Taobao Deals, Taocaicai, and other e-commerce businesses.
  3. Local Services Group – will include navigation platform Amap, delivery service, and other businesses.
  4. Global Digital Business Group – incorporates, AliExpress, and other e-commerce brands.
  5. Cainiao Smart Logistics – will continue to handle its fulfillment and logistics divisions
  6. Digital Media and Entertainment Group – which will include Youku, Alibaba Pictures, and other businesses.

Alibaba's blog describes the plan as “the most significant governance overhaul in the platform company's 24-year history and positions Alibaba's businesses to become more agile so as to capture market opportunities better and stimulate growth.”

Daniel Zhang, current CEO of the Alibaba, will lead the Cloud Intelligence Group and keep his jobs as Alibaba Group's chairman and CEO.

All of the business units above will be free to appoint their own boards, raise their own funds, and go public, except for Taobao which Alibaba will keep itself as a wholly-owned entity.

Barrons describes the reorganization as a “shift from conglomerate to holding company, and Alibaba's stock listings in Hong Kong and U.S.–through American depositary receipts–won't be affected. The holding company will still exdist, wholly owning the core Chinese e-commerce businesses and more than likely retaining significant interests in any subsidiaries that go public.”

Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a Wednesday note, “Spinning off units may help conglomerates lower potential regulatory risk, unlock trapped values at the conglomerate level, and reduce the regulatory risk discount conglomerates have faced.”

Alibaba shares popped by more than 14% on news of the six-way split  to over $100/share, but still far below its record high of roughly $317 in October 2020.

2. Thanks for importing with SHEIN

SHEIN is under heat for designating its customers as “importers” of the product sold on its app or site, as opposed to “customers”, which some say means that it's exploiting a loophole to avoid paying taxes. 

Unless an order exceeds $800, SHEIN operates duty-free, not having to pay import tariffs on clothing it sells to American consumers. And given how cheap the clothing is on SHEIN, a customer would have to order clothing for their entire village to exceed the $800 threshold!

Chinese media reported a rumor last week that SHEIN was at risk of being shut down over the tax evasion at the urging of a campaign called Shut Down SHEIN, however the company denied the rumors that it would be shut down, or that it's operating illegally.

Aside from tax evasion, SHEIN has been recently hit with other allegations including:

  • Using anticompetitive business practices to sell at prices below market value.
  • Reading the contents of Android clipboards and sending it to a remote server.
  • Its parent company, Zoetop, failing to properly safeguard consumers' information prior to a recent data breach.
  • The company's use of virgin polyester and oil and high CO2 emissions.
  • Its products' concentrations of hazardous chemicals that breach EU regulatory limits.
  • The “horrific working conditions” that its clothes are made under including the use of forced labor and/or child labor.

Between “Shut Down SHEIN” and Congress's attack on TikTok, it hasn't been a great few weeks for Chinese companies within U.S. borders. Which might be part of the reason why Alibaba is preemptively splitting its operations into six entities — separating much of its U.S. facing businesses from its Chinese-market focused companies. 

3. BigCommerce News (Sponsored)

Did you happen to catch BigCommerce at Shoptalk last week? If you missed the Women in MACH panel with Sharon Gee (BigCommerce), Casey Gannon (Bold Commerce), and Virginie Cosset (Akeneo), you can watch a video recap here where they continue an ongoing series of panel discussions about equity in tech.

In other BigCommerce news this week: 

BigCommerce and Mira Commerce, a headless commerce development and systems integration solution known for its composable approach to building e-commerce sites, announced a strategic partnership to provide modern composable e-commerce solutions.

Through the partnership, Mira Commerce's headless commerce solutions services will be integrated with BigCommerce's platform to hep businesses streamline their e-commerce operations, increase their online sales, and provide a better customer experience.

Brent Bellm, CEO of BigCommerce, said, “Mira Commerce has been a leading BigCommerce partner for several years. Mira's decision to focus on BigCommerce and composability validates our aligned vision for open, composable commerce and demonstrates their faith in our continued innovation. We look forward to many more years of success together.”

4. Shopify + Google Cloud

Shopify and Google Cloud teamed up to offer a new integration for retailers using Commerce Components, Shopify's enterprise retail solution, to leverage Google search capabilities and AI innovations.

The integration can now be used by Shopify merchants globally and includes:

  • Google Cloud Retail Search – matches product attributes with website content
  • AI-Powered Browse – uses machine learning to select the optimal ordering of products after shoppers choose a category, and then learns the preferred product ordering for each page
  • AI-Driven Personalization – customizes the results customers get when they search and browse retailers websites based on their clicks, cart, and purchases to determine their tastes and preferences.
  • Cloud Recommendations AI – helps retailers deliver personalized recommendations at scale.
  • Advanced Security & Privacy – helps ensure retailer data is isolated with strong access controls and is only used on their own properties.

The integration is now available globally in most languages. You can see it in action on Rainbow Shops, who recently integrated Google Cloud’s Discovery AI solutions.

NEW: Weekly Recommendations

*This is a new section where each week I'll share another outstanding publication in our industry that can add value to your e-commerce business.*

Master your logistics game and get the inside perspective on how successful supply chain technology companies and e-commerce fulfillment providers win in today's competitive landscape.

eCom Logistics Podcast with Ninaad Acharya and Dan Coll gives you insights from the top leaders and experts to get you the answers to your most pressing supply chain issues.

Brought to you by Fulfillment IQ.

5. Wix + Meta Messages

Wix announced expanded integrations with WhatsApp, Instagram, and Facebook Messenger where users can now connect their business accounts directly to their Wix Inbox.

The new integration allows business owners to manage all communication across their Meta messages from one Inbox including Meta messages, SMS, e-mail, Wix Chat, and Wix Forms.

I thought we were all getting that at some point? I've been hearing about an integrated IG / FB / WA messaging platform since 2019 (before the company was even called Meta). 

Meta currently offers Inbox in Meta Business Suite which offers a combined FB and IG inbox, but still lacks WhatsApp. 

Wix's new integrated messaging experience allows business owners to reach out to customers on their contact list, reply to messages from new users, request payments, include product suggestions, send attachments, offer coupons, and create auto replies.

There are currently 3rd party SaaS products like Juphy, Kommo, Missive, and others that offer similar functionality to Wix Inbox by combining chats and messages from multiple platforms. These apps run $20-50/month, so Wix just made a great value proposition to merchants by including it in their existing suite of tools.

6. Apple launches BNPL to the public

Apple officially launched Apple Pay Later, its self-run BNPL payment solution, to the public last week, starting with select users before expanding in the coming months.

The new Apple-branded BNPL payment solution allows users to split purchases ranging from $50 to $1000 into four interest-free and fee-free installments over six weeks — for any merchant that accepts Apple Pay (not just when buying Apple products).

The service is integrated into the company's Apple Pay, which means merchants won't have to opt-in to provide Apple Pay Later to customers. It'll be automatically offered to customers when applicable.

The service is also integrated into Apple Wallet, allowing users to see the total amount due for all of their existing loans, as well as the total amount due in the next 30 days. 

Purchases using Apple Pay Later are authenticated using Face ID, Touch ID, or passcode, and users' transaction and loan history are never shared or sold with 3rd parties.

Jennifer Bailey, VP of Apple Pay and Apple Wallet, said in a press release, “Apple Pay Later was designed with our users' financial health in mind, so it has no fees and no interest, and can be used and managed within Wallet, making it easier for consumers to make informed and responsible borrowing decisions.”

However in small print at the bottom of the press release, Apple indicated that customer payment history may be reported to credit bureaus and impact their credit. Apple did not mention their interest rate (for when customers don't finish making payments in four installments), which I'd imagine will differ per user based on their credit store and internal payment history with the company.

I was unable to find out how much of a transaction fee merchants would be charged when customers choose Apple Pay Later. Do you know?

I first reported on Apple launching a BNPL solution in June 2022, which was supposed to launch by the end of the year, but experienced delays. Most recently in February, I shared that Apple was testing its BNPL payment option among corporate and retail employees.

Does Apple really want to be in the business of charging customers with outstanding debt high interest fees and sending customer debt to collections? That ugly side of consumer financing has historically been handled by banks and lenders. It's not a good look for the company, but it's certainly a way to monetize that huge cash reserve they're sitting on. 

7. Meta ad updates

Several advertising updates to report from Meta this week. Meta launched new ad options in Reels as the company looks to capitalize on the growling popularity of short-form video content.

  1. Reels Ads with Product Tags – allows brands to tag their products in Reels ads, streamlining the buying process and eliminating the need for users to leave Reels apps to make a purchase
  2. Reels Ad with Interactive Polls – allows brands to create polls within their ads, encouraging users to engage with the content and providing the brand with consumer insights
  3. Click-to-Messenger Ads – enable businesses to drive direct DM contact via Reels clips
  4. WhatsApp Conversion Optimization – businesses can allow users to start a conversation in WhatsApp from the ad.

In addition to the new ad types, Meta is sunsetting its In-Stream Reserve ads, a “premium” ad type for major brands that the company launched several years ago. 

Lastly for brands, Meta launched a new set of inventory filters for Facebook and Instagram feeds, which will allow a simple way for brands to avoid unwanted association with offensive or undesirable content.

Advertisers can now choose a setting that relates to their desired placement safety level including:

  1. Expanded inventory – the default setting will show ads next to all content that adheres to Meta’s Community Standards
  2. Moderate inventory –the next level of restriction excludes placement alongside risky content like posts with non-violent crime, foul language, and suggestive topics
  3. Limited inventory – this most restrictive tier ensures that promotions are not displayed beside any content that is considered high or medium risk

Meta will use its new AI tools to help classify content and offer the filters above to advertisers.

What about users? Do we get any positive updates?

Actually, yes! Meta is planning on launching new options in the EU that give users the chance to sidestep highly personalized ads, as part of its plans to limit the impact of a European Union privacy order.

Beginning Wednesday, Meta will allow EU users to choose a version of its services that would only target them with ads based on broad categories like their age and general location — versus all the other criteria they currently use to serve ads like Internet history and platform activity.

Users that want to opt out can simply fill out a form online and object to the clause of allowing Meta to use their activity on the platform for the sake of ads.

Earlier this year, Meta received a $414M fine for forcing its users to accept personalized ads across the platform, and regulators in the EU won't stand for the practices to continue.

As for Facebook users in the U.S. and the rest of the world… sorry! 

Keep on waiting for your politicians to enact similar rules in your country (but don't hold your breath). 

8. Twitter Anti-Checkers

Twitter released the source code for many areas of its platform including their recommendations algorithm, which controls the Tweets you see on the For You timeline. The company also shared more information about their recommendation algorithm on their Engineering Blog.

After pouring through the code, multiple developers found that Twitter is specifically tracking metrics for users into four different groups:

  1. power_user
  2. republican
  3. democrat
  4. elon

Twitter built special tracking for Elon Musk's tweets right into its algorithm! Makes sense. After all, he is the owner of the platform and now the most followed user on Twitter with 133.5M followers, passing Barack Obama (132.9M) and Justin Bieber (113.2M), and also beating Tom from MySpace during its peak, which boasted 115M users (of which Tom was a friend to all). 

Musk said that he was not aware of that, but admitted that “many embarrassing issues will be discovered” when you make your code open source. He added later, “Twitter will be updating its recommendation algorithm based on user suggestions every 24 to 48 hours.”

In other Twitter news, the company changed its stance (again) on who would be receiving a blue checkmark, and whether the public would see which users were verified because they subscribed to Twitter Blue and which users were legacy verified.

Twitter also announced that they'd be giving out the blue checkmark for free to 10,000 companies that have the most number of followers, as well as 500 advertisers that spend the most on Twitter.

Several celebrities, institutions, and journalists came out saying that they will NOT be paying for the checkmark including: 

  • LeBron James – highest paid NBA player
  • The White House – where the President lives
  • William Shatner – aka: James T. Kirk
  • Michael Thomas – NFL wide receiver
  • Patrick Mahomes II – Super Bowl MVP
  • Darius Slay – NFL cornerback
  • Monica Lewinsky – anti-bullying advocate
  • Jason Alexander – aka: George Costanza
  • Peter Hook – New Order bassist
  • The New York Times – which is always making me login

Mark Cuban is currently paying for Twitter Blue, but has complained to Elon that he's losing hundreds of Twitter followers a day despite paying for the service.

Meanwhile in India, Twitter rival Koo announced that it will offer lifetime free verification for all notable personalities who qualify to help avoid impersonation on its platform.

9. Other e-commerce news of interest

Amazon filed three lawsuits against sellers who abused its takedown system by filing thousands of illegitimate copyright complaints against other products. Amazon calls the lawsuit, “a new offensive against bad actors.”

Another “bad actor”, Ephraim Rosenberg, a consultant for Amazon sellers, admitted to bribing Amazon employees for information to help his clients. Rosenberg, along with five other individuals, was charged in 2020 with conspiracy to commit bribery, and wrote in a LinkedIn post on Monday that he will plead guilty in federal court. The response to his apology was overwhelmingly supportive, with dozens of sellers who he had helped reinstate their accounts in the past praising his career and dedication to the community.'s new president, Céline Dufétel, welcomed comparisons to Stripe in a recent interview with TechCrunch, but noted that they serve different businesses. While Stripe's roots, she said, are in serving small businesses, theirs are in the mid-market and global enterprise segment, targeting customers “that have grown in complexity and often [have a] global presence.”

Facebook's $725M class action settlement over the Cambridge Analytics scandal was granted preliminary approval on Wednesday. The judge found that concerns raised by the New Mexico Attorney General's Office didn't prevent the deal's approval.

Amazon Pharmacy is now automatically applying manufacturer coupons on brand name drugs to an eligible patient's order, working with GSK, Kaléo, Novo Nordisk and Dexcom. The company says the move aims to make it easier for patients to take advantage of coupons, citing a recent study that found that patients only used coupons 15% of the time they were available to them.

Panera Bread customers can now order takeout via voice commands through Amazon Alexa via its updated Food Skill APIs. Last week I reported that Panera partnered with Amazon One to use its palm swipe technology for buying food and earning rewards to its loyalty program. relaunched with an upgraded UI and eight new sponsors including Orium, commercetools, Vercel, Elastic Path, BigCommerce (who sponsors this newsletter), and Netlify, with featured contributions from Gluo and Hakkoda. The relaunched site features a more robust insights hub and focuses more directly on the vision of composable commerce. They will soon add master classes, a slack workspace, and an open source code and design pattern accelerator.

Coinbase named Lucas Matheson as its country director in Canada and signed an enhanced Pre-Registration Undertaking with the country's regulators. Matheson joins the crypto exchange after spending five years at Shopify leading operations and strategic expansions.

Squarespace launched a new ad encouraging sellers to think weird and “sell anything” on its platform. Well, “anything” might be a Pandora's box they don't want to open, but they exemplified their mission with examples like cryogenic chambers, space simulators, and elevated laugh therapy. I read an interesting piece from AdWeek about how Squarespace's in-house creative agency operates, which includes about 65 creatives, designers, photographers, editors, and producers. 

Lyft co-founders, CEO Logan Green and President John Zimmer, are stepping down from their roles this month to serve as chair and vice chair of Lyft's board. David Risher, a former retail executive at Amazon, will take over the CEO position at Lyft.

Intelligencer by New York Magazine did an in-depth report on the meltdown of Daylight, the first of its kind bank for the LGBTQ+ community. The company and CEO are under investigation for age and wage discrimination, whistleblower retaliation, and fraud. 

The Senate introduced a bill called the Advertising Middlemen Endangering Rigorous Internet Competition Accountability Act (AMERICA Act) that aims to break up the ad businesses of tech giants like Google and Meta. (That name is objectively ridiculous. Enough with the pretentious acronyms. Call it “Ad Breakup Act” or something.) If passed, large digital ad firms handling more than $20B in transactions wouldn't be allowed to own both an ad exchange and a demand- or supply-side platform.

A US District Judge threw out a lawsuit filed in 2021 by now-shuttered social app Phhhoto, alleging that Meta violated federal antitrust law by copying its core features with its Boomerang app. According to the lawsuit, Facebook began chatting up the team at Phhhoto, even dangling a partnership which never materialized, before copying them.

A survey by Forrester Consulting on behalf of Catchpoint found that 61% of merchant respondents say that “Internet disruptions” have resulted in lost revenue, and 64% report damage to their brand's reputation that led to lack of consumer confidence. The disruptions are estimated to cost brands up to $1M/month in revenue.

The richest person in the world, as of Dec 2022, is the French billionaire Bernard Arnault, who's net worth amounts to around $220B. Arnault is the CEO of LVMH, a luxury conglomerate that owns Louis Vuitton, Christian Dior, Tiffany, and 72 other brands. He surpassed Elon Musk for the top spot after his Twitter acquisition.

10. Seed rounds, IPOs, & acquisitions

Videowise, an e-commerce video platform that powers shoppable videos for D2C brands and online retailers, raised $3M in a round led by Slack Fund. The company will use the funds to further develop its tech stack for omnichannel video shopping experiences.

P97, a Houston startup that makes it easier to select and pay for gas or electric charge through an app or connected car, raised $40M in a Series C round led by Portage at an undisclosed valuation that the CEO said more than doubled its $95M valuation in 2019. (So $190.01M?) P97 has integrations with several major gasoline brands including Chevron, Exxon Obile, and Shell, covering 53% of the market and 60k gas stations in North America.

PhonePe, the Walmart-owned India-based fintech, halted its proposed acquisition of ZestMoney, an also India-based BNPL startup. The deal was supposed to close up to $300M, but hit a snag over lapses in due diligence, disagreements over valuation, sustainability of the business, and shareholder disagreements over business structure.

Effy, a France-based energy renovation company that offers consumer tools for energy projects and lead gen for contractors, raised €20 from Felix Capital, the first external funding round for the company since its launch 15 years ago. The platform currently works with 3,800 contractors and had 18M visitors to its websites last year, and wants to use the funds to switch to a first-party marketplace where clients interact and negotiate directly with their sales team.

Glopal, a Parisian startup that offers e-commerce international expansion tools for e-commerce merchants, raised €20M in a Series A round led by Hi Inov, Dentressangle, and Crédit Mutuel Innovation. The company will use the funds to further develop its cross-border e-commerce software solution and expand operations across Europe and the US.

du-it, a Malaysia-based fintech company serving SMEs and MSMEs with flexible payment options, launched a crowdfunding campaign with Ethis Malaysia to support the development of its B2B platform, which is set to become the first B2B BNPL platform in the country. The campaign aims to raise RM3 million (or about $680k) over 90 days.

Paytrix, a UK startup that built a single platform that lets customers manage all their different payment options in one place, raised $18.3M in a Series A round co-led by Unusual Ventures, Motive Partners, and Bain Capital Ventures, at an undisclosed valuation. The platform negotiates its own banking relationships in different countries, which lets it bypass the traditional payment rails used for card payments and other servies like Stripe.

Hygraph, a Berlin-based startup helping companies manage content such as product listings and marketing copy, raised $30M in a Series B round led by One Peak. The company will use the funds to speed up product development and grow its customer base in North America.

Acko, an Amazon-backed Indian insurtech that develops and sells bite-sized auto insurance products, healthcare protections to employers, and gadget protection, raised $120M in a round led by General Atlantic, valuing the company at $1.5B. Acko, which became a unicorn in Oct 2021, has been trying to raise new capital for the past eight months.

Birdseye, a Toronto-based AI startup that helps e-commerce businesses automate their marketing workflows, raised $500k in a pre-seed funding round from Drive Capital. The platform uses AI to automatically generate step-by-step marketing plans after identifying which specific products to advertise, the audience to advertise them to, and the channels to deploy the campaign.

Fez Delivery, a Lagos-based last-mile logistics startup with hubs across Nigeria, raised $1M in a round led by Ventures Platform. The company will use the funds to improve its tech and operation efficiency, deepen its network in Nigeria, and potentially expand into Ghana, Kenya, and South Africa.

Nimbbl, an India-based startup that offers a one-click payment checkout solution for merchants, raised $3.5M in a pre-Series A round led by Sequoia Capital India, Global Founders Capital, and Groww. The platform works with various payment methods, BNPL solutions, and India's Unified Payment Interface to personalize the experience for merchants' customers by showing them payment methods relevant to them instead of populating every solution.

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.

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See you next Monday,


Paul E. Drecksler
[email protected]

PS: Have you ever seen a picture of Mount Rushmore before it was carved? It's beauty was unpresidented.