Select Page
You're reading a web archive of Shopifreaks - the Internet's #1 newsletter following the e-commerce industry.

Record breaking numbers… lawsuits… company rebrands and reorganizations. I get to the bottom of it all in this week’s 46th edition of Shopifreaks. Thanks for being a subscriber!


Stat of the Week

The market share of hyperlocal delivery services worldwide is estimated to reach $3.6 TRILLION by 2027! – Retweet It


1. Record breaking shopping holiday week… or not?

Shopify and BigCommerce have both reported record setting sales weeks on their platforms during Cyber Week (ie: Thanksgiving Day to Cyber Monday), but did everyone else fare as well? 

Shopify reported that merchants collectively generated $6.3B in sales worldwide during Black Friday and Cyber Monday weekend, an increase of 23% compared to last year’s $5.1B in sales. BigCommerce also reported a 15% increase in total GMV compared to last year. 

However that growth was not across the board, and for the first time ever, online sales dipped this year during the traditional shopping week. According to Adobe’s estimates, U.S. consumers spent $10.7B this year on Cyber Monday, down from $10.8B in 2020, and $8.9B this year on Black Friday, down from $9.0B in 2020.

However consumers aren’t spending less this year (in total). They’ve simply been spreading out their purchases. Between November 1 and November 29, U.S. consumers spent $109.8B online, which is an 11.9% increase over last year’s total for the same period.

From an anecdotal perspective it makes sense. How many e-mails did you receive this year along the lines of “We’re starting our Black Friday deals early!” and later “We’re extending our Black Friday deals!”

I’ll be curious to read the final numbers that come in for this year’s holiday season, and I will certainly report them to you at the time. 


2. Shopify sued by five textbook publishers

Five major publishers are suing Shopify for allowing the sale of pirated textbooks and test materials on their platform and failing to remove listings and stores that violate the publishers’ trademarks and copyrights. The publishers include Pearson Education Inc, Macmillan Learning, Cengage Learning Inc, Elsevier Inc, and McGraw Hill. 

The Textbook Mafia (coined it) claims that Shopify has received detailed notices almost every week for several years but failed to block sellers from using their platform, which furthered Shopify’s business model while hurting the publishers’ bottom line. 

Textbook Mafia asked the court for statutory damages of up to $150k per infringed copyright and $2M for each counterfeited trademark, and listed 3,400+ copyrights that users allegedly violated.

Rebecca Feigelsohn from Shopify made a statement, “We have multiple teams that handle potential Acceptable Use Policy violations, including copyright and trademark infringement, and we don’t hesitate to action stores when found in violation. To date in 2021, over 90% of copyright and trademark reports were reviewed within 1 business day.”

However those stats don’t mean anything to the Textbook Mafia who said in their complaint that Shopify gives “lip service” to IP protection while profiting from infringement.

Textbook publishers aren’t exactly the most popular group in the court of public opinion. It’d be hilarious if the case was dismissed and the judge said, “Well technically those textbooks were outdated editions being sold, and the latest edition is required for this lawsuit.” 

I’ll keep you in the loop about that case as I receive updates on it in the future. 


3. #SpotifyWrapped incorporates merch this year

As part of an annual tradition on Spotify, users will share their top songs and other stats under the hashtag #SpotifyWrapped. If you’re unfamiliar, Wrapped is a feature that shows you a slideshow of the top 100 songs and artists you’ve listened to the most over the past year, what new music you’ve discovered, and an exact count of how many minutes you spent listening to music. The Wrapped feature updates every December, just in time to share with your friends. 

Remember a few weeks ago when I reported that Shopify and Spotify linked up to to allow artists on their platform to list merchandise for sale directly on their profiles? Well, they did not waste any time at all leveraging that new integration. 

For the first time, merch opportunities are being incorporated into the Wrapped rollout. Spotify will be sending out emails to customers, listing their top artists of the year as well as links to the performers’ virtual merch tables.

Brendan Codey, associated director for creator growth and programs at Spotify told Newsweek, “Artists and fans take the opportunity to thank each other for the year, and they have these really beautiful interactions on social media. This is just a continuation of that… You’ll be able to support your favorite artists on Spotify, in a way that goes beyond simply listening to their music.”

Although I personally hate the idea of every streaming service and social network becoming QVC, I do support musicians and creators earning more from their work, and I hope that this merch initiative with Spotify helps accomplish that. 


4. Square renames itself Block

Jack Dorsey couldn’t let Mark Zuckerberg get all the rebrand attention this year! Effective December 10th, Square is renaming its company name to Block as it focuses on technologies such as blockchain and expands beyond its original credit card-reader business. It will still trade under SQ on the NYSE. 

Dorsey said in a statement, “We built the Square brand for our Seller business, which is where it belongs. Block is a new name, but our purpose of economic empowerment remains the same. No matter how we grow or change, we will continue to build tools to help increase access to the economy.”

As part of the Square rebrand, Square Crypto, a separate part of the company focused on Bitcoin projects, will change its name to Spiral. However Square, Cash App, TIDAL, and TBD54566975 will continue to maintain their respective brands.

The company divulged their reason for the name, “Block in a statement, “The name Block has many associated meanings for the company — building blocks, neighborhood blocks and their local businesses, communities coming together at block parties full of music, a blockchain, a section of code, and obstacles to overcome.”


5. Alibaba is reorganizing

Alibaba Holdings Group Ltd announced that it will be reorganizing its international domestic e-commerce businesses and appointing a new CFO. The company will form two units to house its main e-commerce businesses — an international digital commerce and China digital commerce.

The international division will house Alibaba’s overseas consumer-facing and wholesale businesses including AliExpress, Alibaba.com, and Lazada. The company’s CFO, Toby Xu, will succeedd Maggie Wu as CFO beginning in April 2022.

These changes are following the problems Alibaba has experienced with increased competition, a slowing economy, and regulatory crackdown in China.


6. Nestlé is doubling down on e-commerce

Nestlé’s e-commerce, which includes D2C and B2B2C online sales, represents about 13% (or $11.93B) of the company’s total annual sales. However in four years, Nestlé has ambitions for e-commerce to account for 25% of all its sales.

Their plans are to invest more in digital marketing and data analysis including increasing they amount they spend on digital marketing rom 47% of the marketing budget to 70% in four years. They will also increase consumer data records from 250M to 400M. 

This shift should have no effect on its standing as one of the most hated companies on Reddit. LOL.

It is interesting to learn how much emphasis and resources that an international company like Nestlé will be placing into e-commerce over the next few years. Sounds like it’s here to stay. Perhaps I should see what this whole “e-commerce” thing is all about… 


7. Other e-commerce news of interest this week

  • Engine Capital LP, a US hedge fund, is urging Kohl’s to consider a sale of the company or a separation of its e-commerce businesses for the purpose of improving its share price. This news comes after my reports on Saks Fifth Avenue splitting their online and offline businesses and investors pressuring Macy’s and Kohl’s to do the same, followed by Macy’s hiring AlixPartners, the firm behind the Saks spinoff. 
  • eBay fears that new tax reporting laws which require it to report all annual sales over $600 next year will curb casual selling and are bringing their concerns to Congress. The company believes that the new legislation will cause confusion and over-reporting of non-taxable income, as well as privacy concerns for Americans. 
  • Tencent is opening its WeChat groups and will soon allow Alibaba’s Tmall and Taobao to display their own external shopping site links, removing the obstacles between Tencent and its Chinese rivals.
  • PayPal’s Buy Now Pay Later service will now be available to Wix sellers. The option should automatically appear for merchants with existing PayPal integrations.

8. This week in seed rounds & acquisitions….

  • Pepper, an e-commerce platform for food distributors, raised $16M in a Series A round led by Index Ventures, bringing its total capital raised to $20M. The company will use the funding to accelerate product development within their digital payments and product recommendation engine. 
  • Smartling, a cloud translation management and automation platform, raised $160M from Battery Ventures. The funding will be used to expand their team and support their product development and marketing efforts.
  • Uniform, a headless composable digital experience platform (DXP), raised $28M in a Series A round led by Insight Partners. The company will use the new funds to grow its team and vendor list, and increase capabilities of its platform.
  • Central, a fashioned geared e-commerce platform, raised €10M from Verdane. The partnership will enable to company to power up its product development as well as accelerate its growth and international expansion. 
  • Bessemer Venture Partners closed $220M in new funding to back the next generation of innovators in India. The fund will focus primarily on early-stage investments, consistent with their approach of starting with seed and Series A investments and growing with companies.
  • OneGreen, an e-commerce marketplace for pure, safe, and natural products, raised an undisclosed amount in a Pre-Seed funding round from Rannviay, Vidya Malawade, and Nikhil Chinapa. OneGreen has over 8000 products across 40+ categories.
  • Markai, an e-commerce aggregator that focuses on Chinese brands in search of global customers, raised $4M from Pear VC.
  • mdf commerce Inc, a Canadian software company that develops e-procurement, marketplace, and supply chain SaaS products, acquired Periscope Holdings, a Texas-based provider of e-procurement services to the public sector, in a deal valued at more than $184M.
  • Telr, a Saudi Arabia and United Arab Emirates-based payment service provider, raised $15M from Cashfree Payments, a payments and API banking solutions company, making Cashfree Payments one of the largest investors in the company. The investment will allow Cashfree to launch in the MENA region via Telr’s strong presence and payment infrastructure. 
  • Convious, an AI-driven e-commerce platform, raised $12M in a Series A round led by Begin Capital. The company will use the funding for their expansion plans, including opening new offices in the US, France, UK, Germany, and other locations.
  • Anchor (not the podcasting platform now owned by Spotify), a US startup aimed at solving problems in billing, collections, and payments by automating invoicing and remittance tasks, raised $15M in a round co-led by Rapyd Ventures and Tal Ventures. The company will use the funding to expand its team, partner with more clients, and launch new marketing efforts. 
  • WPP, a British advertising conglomerate, acquired Cloud Commerce Group, a UK-based technology company that helps brands take their products to market. The company will join the Wunderman Thompson global network.

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 paul@shopifreaks.com 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. 


💖 Thanks for being a Shopifreak!

If you found this newsletter valuable, please share it with your friends and help us grow.

See you next Monday!

PAUL

Paul E. Drecksler
www.shopifreaks.com
paul@shopifreaks.com

PS: Did you hear about the house that went on a diet? … It’s now a lighthouse. 

PPS: Don’t forget to leave me a Google Review. Thanks!

Loading...