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#42 – Q3 Results, Google Deals, & Singles Day

by | Nov 8, 2021 | Recent Newsletters

Holiday shopping is already kicking off around the world this year. Consumers are getting an early start to avoid the digital crowds and purchase their gifts before supply chain issues deplete shelves and fulfillment centers. This year the early birds will truly get the worm, and the rest of us — well… we'll be celebrating Christmas in early 2022.

My travel community and I just launched a hardcover coffee table book a few days ago called Capital Cities: A Journey Around The World Through 118 Capital Cities. The book is a collaboration between myself and 68 professional travel bloggers and photographers around the world that showcases 118 capital cities from every continent, including Antarctica!

The book is truly a work of art, and we're excited to bring it to print. However, as much as we would have loved to have this book available for sale and in Amazon's warehouses for the holiday season, we also ran into some of the same supply chain issues that small business owners around the country are facing this year. We decided that rather than over promise and under deliver in regards to a delivery date, that we'd offer a discounted pre-sale for the holiday season and ship the books in April 2022. Like many small businesses and independent publishers this year, we're making due with what's available to us right now. 

If you love to travel, please check out our book below, and use promo code SHOPIFREAKS for 10% off if you'd like to pick up a copy. 

Check it out:

And now, it's my pleasure to bring you this week's 42nd edition of Shopifreaks. Thanks for your support with this newsletter. 

Stat of the Week

E-commerce Platform Market Share as of Oct 2021: Shopify 27%, WooCommerce 24%, Wix 12%, Squarespace 8%, Ecwid 6%, OpenCart 3%, Other 20% – Retweet It

1. Google is promoting Deals in a new Shopping tab

Google is now showing a new set of search results when people search for deals and discounts. Search queries that include words like “deals” “discounts” and “Black Friday” will trigger a dedicated feed of discounted products in Google Shopping.

 The new feed can also be accessed anytime from the Shopping tab without a specific query. Meaning you could just type in “sweaters” and then navigate to the Deals tab from there.

Now before you get excited and start marking all your products down by 3%, Google says that the deals need to be “substantial” in order to get featured. And remember, Google has one of the world's largest database of SKUs, and they know what the market price is of products — so you can't artificially double your retail price and then offer a faux-50% discount and expect to get featured either. 

Merchants can find out which of their products qualify for a deals badge within Google Merchant Center. 

2. Q3 results are in for most of the big e-commerce platforms

Here's a quick recap of Q3 results for Shopify, BigCommerce, Square, and Wix. 

  • Shopify (SHOP)
    -Cumulative GMV hits $400B
    -Total revenue $1,123.7M, up 46% YoY
    -Gross profit grew 50% to $608.9M, compared with $405.1M last year
    -Adjusted net income of $102.8M, or $0.81 per diluted share, compared with $140.8M, or $1.13 per diluted share Q32020
  • BigCommerce (BIGC)
    -Total revenue $59.3M, up 49% YoY
    -Gross profit grew 50% to $46.8M, compared with $31.1M last year
    -Adjusted net loss of ($21.6M), or ($0.30) per diluted share, compared with ($10.8M), or ($0.16) per diluted share Q32020
  • Square (SQ)
    -Total revenue of $3,840M, up 27% YoY
    -Gross profit grew 43% to $1,130M, compared with $794M last year
    -Adjusted net income of $190M, or $0.37 per diluted share, compared with $0.33 per diluted share Q32020
  • Wix (WIX) – Coming Nov 11th
    -Revenues are expected to be $314.83M, up 23.9% YoY
    -Expected loss of $0.43 per share, a change of -207.1%

3. Singles Day in China is already popping off, and it hasn't even started yet!

Last week I reported that Alibaba was making a big push for market share in Europe during this year's Singles Day on Nov 11th — and it turns out that it's a two way street.

Singles Day is already a tremendous success in Europe and China this year and it hasn't even started yet. The shopping holiday's pre-sales events are already hinting that it's going to be a record setting year for live e-commerce. 

Mega brands including L’Oréal, Guerlain, Givenchy, Unilever, Procter & Gamble, Pandora, La Mar, Nestlé, and others have been running live shopping events in China for several years, hiring Chinese celebrities and influencers to host streaming events. And this year they're taking that model to Europe. 

A February 2021 study by Forrester and AliExpress found that 70% of 14,460 consumers surveyed in the UK, Spain, France, and Poland were interested in this new form of online shopping. And now we're going to find out just how ready Europeans are for live shopping events. 

4. The great online-offline department store split experiment

Earlier this year, Saks Fifth Avenue, owned by HBC, spun off into a separate business, splitting their online and offline sales into distinct companies. Kind of…

Even though Saks Fifth Avenue's 40 brick and mortar retail stores still carry the same name as the online retailer, and shoppers can buy online and pick up their purchases in stores, and make purchases using their Saks credit cards at both offline stores and the online store — they're technically separate companies?

The goal of the split was to position, which does more than $1B in annual sales, to be able to raise money to fuel its growth, without the brick and mortar side of the retail business holding back its valuation. Investors typically like to apply a discount to physical retailers in today's day and age, and HBC wanted them to look at as a tech company versus a traditional retailer. 

Flash forward six months, and despite insiders saying that the split hasn't been as seamless of a transition as they were hoping at Saks, other investors are looking to jump on the splitsville bandwagon. Companies like Macy's and Kohl's are being pressured to follow similar paths in the name of maximizing shareholder value. 

Meanwhile, the rest of retail is going omnichannel. Online-first companies like Amazon and Warby Parker have been busy expanding into brick and mortar sales channels during the past few years, while department stores, who are ahead of the game by leaps and bounds in the offline world, are looking to take a step backwards and split off from their online channels. 

One thing I always respected about Jeff Bezos when building Amazon is that he never gave much mind to his stock price or valuation, and he discouraged investors who focused on building those numbers over expansion and growth. Department stores should take a lesson from the Jeff Bezos Playbook and not concentrate on share price, but instead focus on leveraging their existing omnichannel presence to accelerate on course towards the future of commerce, and not try to take a step back two decades towards trying to be dot-com businesses. That's so 90s. 

At one point, Radio Shack had a retail location within 5 minutes of 95% of America — talk about distribution channels! But they completely missed the opportunity to create an omnichannel online / offline shopping experience for their customers, and look at them now.

Department stores have a choice right now. Will they be a Radio Shack or a Whole Foods?

What are your thoughts? Hit reply to this e-mail and let me now or tweet at me. 

5. TikTok and BigCommerce partner on advertising coupon program

Bigcommerce is encouraging merchants to explore TikTok's suite of ad solutions through a new collaborative advertising coupon program. Qualified merchants in the U.S., U.K., Australia and Canada that spend $300 on ads will receive $1,000 in advertising credits from TikTok and BigCommerce. That's a healthy bonus in ad spend! 

BigCommerce merchants can directly access the TikTok advertising via the BigCommerce Channel Manager, and then install their TikTok pixel, sync their product catalogs, and begin producing ad campaigns from within their BigCommerce dashboard. 

6. Indians are burning effigies of Jeff Bezos 

Last week, the Indian Sellers Collective carried out protests and burned effigies of Jeff Bezos, demanding a boycott on foreign e-commerce companies operating in the country.

The group said in a statement, “MNC e-commerce players track best-selling products on their platforms… copy their design to launch private brands with similar features and at a competitive price… run a systematic campaign to manipulate search results to divert sales of the bestselling products on its platform to its own product lines. As a result, no seller grows by doing business with the MNC e-commerce platforms.”

Last month I reported that thousands of pages of internal Amazon documents examined by Reuters revealed that Amazon India ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India — and now retailers and brands are fighting back.

Arvinder Khurana, National President, All India Mobile Retailers Association (AIMRA) said, “Once again, it's a Black Diwali for offline mobile retail. Chinese brands, especially Xiaomi, Realme, Oneplus and OPPO, in collaboration with Amazon and Flipkart, are killing the domestic market by deliberately diverting the offline customers to online platforms by supplying large stocks to online alpha sellers with exclusive 10 per cent instant cash-back for online customers.”

Will their efforts to boycott foreign e-commerce companies be enough to deter shoppers from supporting those platforms this holiday season? Or will Indian shoppers be too attracted to the discounted prices to stay away? We will know in a few short months how these foreign marketplaces fared in India's estimated $67-84 billion year in e-commerce sales. 

7. Is e-commerce going Web3 in the next 5 years?

Web 1.0 was the first iteration of the web. It lasted approximately from 1991 to 2004 and consisted of mostly text and images. 

Web 2.0 was the era of interactivity and connectivity. Social networks, apps, ads, and e-commerce became a part of our daily lives.

Web 3.0 is about decentralization. Get ready for a verifiable, trustless, and self-governing Internet. At least that's the goal. 

Joan Westenberg, CEO of Studio Self, predicts that NFTs and Web3 transactions will be commonplace in e-commerce in less than five years, This means that customers will be buying products from a web store through smart contracts over a blockchain, and that every product bought or trade online could be a unique NFT token, which could be easily used to buy other products from any company across the Internet. 

Westenberg predicts that using cryptocurrencies in e-commerce stores will become just as common as accepting Visa, Mastercard, and PayPal, especially for things like powering a customer loyalty or referral program. 

8. This week in seed rounds & acquisitions….

  • ShipHero, a shipping and logistics platform, acquired Golden Egg Solutions, an e-commerce fulfillment company that specializes in drop shipping and white label supplement procurement. This acquisition follows ShipHero's $50M funding round in June. 
  • Coinbase, a cryptocurrency exchange platform, acquired Agara, an Indian-based AI customer support startup, in a deal valued between $40M to $50M. Coinbase will use its newly-acquired technology to automate and improve its customer support experience.
  • SocialChat, a social commerce platform, raised $6.2M in a round led by Race Capital and Gradient Ventures. The company will use the funding to expand its product offerings.
  • Ultra Commerce, a Sydney-based e-commerce platform, acquired Slatwall Commerce, a US-based e-commerce platform as part of its global expansion plans. Ultra Commerce will integrate its newly acquired technology to deliver richer integrated capabilities into their platform.
  • Threedium, a 3D SaaS company that helps artists and developers create and distribute 3D & AR experiences, raised $2.1M in a Pre-Series A round led by EdenBase and Frederic Larmuseau. The company will use the funding to accelerate the development of its low code / no code 3D engine.
  • Udaan, a B2B e-commerce platform, raised $10M in debt from InnoVen Capital. The company will use this debt and future funding for expansion as their retailers and wholesalers continue to shift to e-commerce platforms.
  • Belfast, an Ireland-based e-commerce startup, raised £20M from Selazar, a logistics provider that helps online companies with orders and deliveries. The funding will be used to open new warehouses in Ireland, Netherlands, USA, Mexico, and Colombia.
  • Avalara, a Seattle-based provider of tax software, acquired 3CE Technologies, a Quebec-based company that provides commodity classification codes and verification systems to businesses and governments. Avalara also announced that it will be powering the duty and import tax features behind Shopify's global commerce hub, Shopify Markets.
  • Rally Commerce, a headless checkout product that unifies various merchant tools, raised $6M in a round led by Felix Capital, Rainfall Ventures, Long Journey Ventures, Afore Ventures, and Commerce Ventures. Rally has an element of cryptocurrency with a token it plans to issue to customers as a way to drive a network effect within the ecosystem.
  • VNTANA, a content management system that helps e-commerce retailers showcase their products in 3D and AR, raised $12.5M in a Series A round with backers including Mark Cuban, former Oculus CEO Brendan Iribe, and Flexport, and Anorak Ventures. The company has recently partnered with Joor, a wholesale management platform, and PTC, a software maker, to build out its reach.
  • Pitney Bowes, a logistics and e-commerce fulfillment company, acquired CrescoData, an e-commerce integrator that uses AI and machine learning to process and connect products to commerce. Pitney Bowes says its newly acquired technology is a perfect complement to its SendPro shipping portfolio.
  • Shopify acquired Donde Search, a consumer-facing app that helps users search and discover apparel items based on visual characteristics instead of text-based searches.

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: I heard a funny joke about peanut butter the other day. I'd tell you, but you'd spread it.

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