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#77 – TikTok bails on e-commerce, brands pivot to Amazon & EU’s Digital Services Act

by | Jul 11, 2022 | Recent Newsletters

Have you been patiently waiting for livestream commerce to become mainstream in your market? Silently logging onto social media every day hoping to see your favorite influencers pushing products in your face through live video?

Well if so, I've got some disappointing news for you. And if not, you're apparently not alone if you're living in the West, where livestream commerce hasn't caught on culturally as fast as TikTok was hoping. Or is their execution to blame?

In this week's 77th edition of Shopifreaks, I report on TikTok's change of plans to enter the EU and US markets with e-commerce this year, Pinterest's new e-commerce features, and EU's new Digital Services Act. 

I also share stories and insight into outdated e-commerce funnels, DTC brands migrating to Amazon, and new food delivery partnerships between giants. 

All this and more in this week's edition of Shopifreaks. Thanks for being a subscriber!

PS: Thank you everyone who introduced themselves last week. If you haven't already done so, hit reply to this e-mail and introduce yourself. I love to know who's on the other side of this e-mail so that I can better serve you with this newsletter.

Stat of the Week

90% of consumers feel that a product with a large number of low ratings and negative reviews should NOT be allowed to re-list on platforms under a new product listing (according to Local Circles). I feel like the other 10% either didn't understand the question or couldn't believe platforms allow that! It's definitely a problem I've seen in action on platforms.

Share this week's stat on Twitter & LinkedIn

1. TikTok drops its immediate e-commerce plans for US and EU

TikTok had been planning to roll out its new e-commerce Shop marketplace in Germany, France, Italy, and Spain by now, and was hoping to launch in US later this year, but those plans have been put on hold. The company will instead solely focus on making the product a success in the UK for now. 

TikTok has been testing live shopping in the UK since late last year, starting with a multi-brand event called “On Trend” last December, but the streams have not drawn big audiences or sparked many sales, and some of the early creators involved in the projects have since dropped out. 

Aside from UK, the Shop feature is currently being tested in Indonesia, Vietnam, and Singapore, and last week I reported that TikTok is testing a Shop Feed tab exclusively in Indonesia. 

In the last edition of Shopifreaks, I also shared some insight into how wildly successful livestream commerce is in China on the Douyin platform, which is the Chinese version of TikTok, also owned by ByteDance. The company has been actively trying to bring the livestream shopping model to the west, but acceptance has been slower than anticipated. 

While cultural acceptance is one obstacle, internal issues at the company also seem to be playing their part in the success of the program's expansion. 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. 

In my opinion, it's short sighted to point to cultural acceptance as the reason for an executional failure. It's hard to be a pioneer in a new industry — no-one said it'd be easy — but the rewards can be huge.

TikTok dropping livestream commerce in US & EU would be a mistake, same as Twitter shutting down their e-commerce features in 2017 was a mistake. Being early to market takes work and patience. Imagine if Netflix hadn't taken the risk on streaming and was still delivering DVDs by mail.

If TikTok completely pulls out of e-commerce, they'll be playing catch up later. I hope for their sake, this is just a delay and not a cancellation.

2. Your product pages don't convert!

I have a rule when it comes to developing e-commerce websites which is, “Every product page has to provide ALL the information a customer needs to make a purchase including your brand story, differentiators, reasons to shop with you, shipping / refund / return policies, etc.”

The reason for that rule is that we can't take for granted that shoppers will visit multiple pages on your website to learn about your company before making a purchase. (Because spoiler alert: they won't!)

Venture Beat published an interesting piece about “plugging the 14% of revenue leaking from every ecommerce site”, and their focus was on how product pages weren't originally designed to be the entry point for shopping, but now 25% of traffic is landing directly on them.

They wrote, “For every, say, 100,000 visitors, 3% convert, spending on average $100, resulting in $300,000 of revenue… Today, 25% of traffic lands directly on the product detail page, something that it was never designed for. As a result, traffic bounces off 79% more and converts at only 1.5%, half the rate of every other page.”

Shoppers are changing the way they buy, but traditional e-commerce funnels haven't been updated in years, and these outdated funnels are leaving money on the table for retailers and brands. Here's what Venture Beat recommends. I've also added some input. 

1) Change the product detail page – Lengthen it significantly with other products and categories that may tempt the visitor not to bounce. Have your product pages reflect the context that got the visitor to click on the social post that got them there, which requires dynamic, personalized, visitor-specific content rather than general “You might also like” recommendations.

I would also add to that advice above two suggestions. The first being to add compelling narrative copy about the brand so that visitors don't have to click your About page to learn who you are or why they should shop with you.

The second advice is to split test moving the Add To Cart button much further down the page. Instead of following the traditional e-commerce product template of product image, title, price, description, add to cart — build each product page as if it's an individual one-page website and put the CTA (ie: Add To Cart or Buy Now buttons) at the bottom of the page AFTER they visitor has been sold the product, not BEFORE, like traditional e-commerce sites. 

Trust me, if visitors want to buy your product, they'll scroll down! Don't be one of those website owners that think EVERYTHING has to be above the fold. 

2. Send social traffic to a different destination – If you don't want to change your product detail pages, send social traffic to a different page. While building a dedicated landing page for each social post or ad isn't practical, you can create alternative versions of your product pages specifically for landing social traffic.

Essentially they're recommending similar to what I said above, except on separate pages. I find it easier to simply trigger dynamic elements of an existing product page based on traffic source, but either would work.

3. Test social checkout – Most social platforms offer the ability for customers to buy without leaving the platform. There are pros and cons to offering this type of checkout channel, but it's worth experimenting with. Just because Facebook Shop offered pitiful results in 2019, doesn't mean that you'd get the same results today. Don't fall into the “we tried that” trap. 

4. Fix inventory frustrations – Monitor stock levels of products on promotion so that you can pause ads for those campaigns and divert the budget to products that are in stock.

Seems obvious, right? You'd be surprised though how big of a disconnect there often is between logistics and marketing for most big brands, and how much money they throw down the table promoting out-of-stock products, or advertising products to regions with expensive shipping options (or non-existent shipping options). 

Alternatively, if you don't want to pause the campaigns all together (so that you don't lose momentum), make sure you're converting your Add to Cart button into a Pre-Order button, or allowing customers to sign up for notifications about when the product will be back in stock (possibly with a discount incentive). Whatever you do, don't completely miss out on sales or customer connections when your product goes out of stock. 

What other tips do you have for “plugging revenue leaks” on e-commerce sites? Hit reply and let me know. 

3. DTC brands pivot from Facebook to Amazon

Many brands, such as Nike and Birkenstock have previously abandoned their Amazon storefronts to focus on direct sales, but as traditional customer-acquisition avenues like Facebook, Instagram, and Google become more costly, some are giving Amazon a fresh look.

Two reasons why DTC has become more difficult in 2022:

  • Apple's App Tracking Transparency feature has made it harder for brands to target customers via social media ads.
  • Shipping price hikes at FedEx, UPS, and USPS have made it more expensive to operate a DTC brand.

A great example of this in action is Harry's — a brand that had no intention of ever selling on Amazon — opened up a branded Amazon storefront last year. Other brands, such as Caraway, Your Super, Fly by Jing, and Bite have also launched or devoted more resources to Amazon in 2022.

Jordan Nathan, Caraway's founder and CEO, said that the ability to design a branded storefront page on Amazon is what swayed them to join the platform. He had planned to launch Caraway on Amazon in 2023, but with customer-acquisition costs on the rise, he pushed the launch up.

DTC brands like Warby Parker, Allbirds, and Casper going public exposed their lack of profitability, and more brands started realizing that retail partnerships are an unavoidable part of the path to developing a large and profitable business.

Katharine McKee, the founder of Morphology, a digital commerce consultancy, said that DTC brands have taken a “wild turn” in their perspective of Amazon in the past year, but that “it feels a little bit like a last-ditch effort.”

McKee said the biggest problem she saw brands encounter when launching on Amazon was an expectation that Amazon would be as supportive as a traditional retail partners like Target and Nordstrom, who have a vested interest in them succeeding, however, that's not the case with Amazon. (Obviously, LOL. Where have those brands been living for the past two decades?)

Business Insider also reported that in addition to moving to Amazon, brands are forfeiting their DTC roots and gravitating towards other retailers like Target and Walmart as well, and that Shopify merchants have doubled ad spend on TikTok after privacy changes made Facebook difficult for customer acquisition.  

4. Pinterest adds four new e-commerce features

Last week I reported that Pinterest’s co-founder, Ben Silbermann, is stepping down from his role as CEO, and the company is replacing him with Bill Ready, a former Google commerce executive. The news left the expectation that Pinterest will be making some moves in the e-commerce market to monetize its 400M+ monthly users. And they are!

Since the news broke about the new CEO, Pinterest has launched four new e-commerce features. Granted, those features have been in development for quite some time and aren't a direct result of the new CEO, however, it further demonstrates how much e-commerce is on the radar for Pinterest. 

Here are the new features: 

  1. Pinterest API for Shopping – including catalog and product metadata management
  2. Product Tagging on Pins – allows retailers to make their pins shoppable
  3. Video in Catalog – to give users a view of the product from multiple angles when making a purchase decision
  4. Shop Tab on Business Profile – a feed of shoppable pins based on the in-stock products Pinterest identifies in an image

Dan Berthiaume also recapped recent digital shopping features that Pinterest has rolled out over the past couple years including:

  • June 2022 – Pinterest signed an agreement to acquire The Yes, an AI shopping platform for fashion
  • August 2021 – released several new offerings aimed at brands and retailers looking to advertise
  • July 2021 – launched shoppable video pins called “Idea Pins”
  • January 2021 – Pinterest launched Try On for Home Decor to enable customers to shop for products using AR

5. EU’s Digital Services Act

On July 5th, the European Parliament approved the new Digital Services Act (DSA), aimed at fighting online hate and misinformation and providing a framework for e-commerce retailers to counter the circulation of counterfeit and dangerous goods. The final step will be for the European Council of Ministers to sign off on the text in September, which it is expected to do.

The legislation includes some of the most extensive transparency and platform accountability obligations to date and will give users control over the content they engage with, as well as offer new consumer protections.

European commerce associations are mostly in favor of DSA, but are concerned about the tight deadline for its implementation, which dictates that very large online platforms (VLOPs) have seven months to implement the new rules, and online commercial intermediaries have 15 months.

The new rules introduce obligations for online marketplaces in regards to identification and traceability of vendors and products, and require pre-contractual and product safety information, traceability of third-party vendors, and random checks to be carried out to ensure product compliance with EU rules — obligations that involve major changes to systems and processes that could reasonably take more than seven months for a platform to develop.

France's national e-commerce federation (FEVAD) welcomed the adoption of DSA, but highlighted the deadline issue, stressing the need for a concerted and uniform deployment across the EU.

Even if companies can hit the deadline, or if the European Parliament issues implementation extensions in the future, another challenge will be enforcement. Creating processes of enforcement that adhere to cross-border rules across various jurisdictions will be a challenge in itself, even if the DSA's rules are clear.

Whether or not you're in the EU market, the Digital Services Act is something to follow, because it could potentially become the gold standard of how other regions create their own rules. 

6. Amazon partners up with Grubhub

Amazon and Grubhub are partnering up to offer food delivery as a perk for millions of Amazon Prime members in the US. Prime customers will be entitled to online food takeout with no delivery fees through a one-year Grubhub+ membership.

Per the terms of the deal, Amazon will get an initial option to take a 2% stake in Grubhub, and an additional 13% stake if the partnership goes well.

The deal comes at a good time for Grubhub, which hasn't done as well as its rivals during the pandemic. Just Eat Takeaway, which acquired Grubhub in June 2021, saw its stock price plummet almost 80% since then. The deal with Amazon will ideally create brand loyalty to Grubhub amongst Amazon customers.

The benefit to Amazon is that the deal offers a new reason for its customers not to cancel their Prime memberships, which has been happening more often since Amazon raised the price of the program by $20 to $139 for annual subscriptions.

Amazon briefly dabbled in the food delivery space in 2015 with a service called Amazon Restaurants that launched in Seattle, but the program was killed in 2019 after not getting the rapid expansion that Amazon execs were hoping for. This deal with Grubhub gives them a non-committal way to re-enter the food delivery space in a way that only offers upside, as Grubhub will continue to take all operational risk. 

7. WeShop launches user-owned e-commerce platform

WeShop has launched what it calls the world’s first community-owned e-commerce platform. The UK-based marketplace has pledged to give away shares in the company every time a customer purchases goods through any of the retailers on its platform.

For every purchase, 20% of the price is given back to customers in shares of WeShop. (But at what valuation? No clue…) It is also offering 10% commissions in the form of shares for purchases made through recommendations on the platform, with 1% of the value spent by the new member given in stock. The company aims to list on the NASDAQ within the next 12 months. 

WeShop chairman, Richard Griffiths, said, “Imagine if Amazon had done this when they started, the wealth created by Amazon would have been shared amongst the people who made it successful, its users. Indeed, the world might look very different now, and that’s what we’re trying to achieve, a better, fairer and more democratised shopping experience for everyone.”

It also could've meant, however, that Amazon wouldn't have had the capital to grow as large as they have or serve their customers in the way that they do. Amazon's market cap is $1.15T. Would they have been able to get there if they had given away 90% of their most valuable asset from day one — their equity?

And what happens when WeShop runs out of equity to give away? Is the goal to have earned enough market share through the gimmick that they can remove the incentive?

Either way, I like social and economic experiments, so I look forward to seeing where WeShop takes this model. It could work, as long as they can be competitive on pricing and selection while still offering the equity kickbacks. For example, I wouldn't pay 20% more for a product on WeShop than I would on Amazon merely for the gift of equity — that may be worth nothing in the future or get diluted to oblivion. 

Retailers and brands on the platform currently include Asos, Net-A-Porter, Etsy, The Body Shop, Holland and Barrett, B&Q,, PC World, Carphone Warehouse, Nike and New Balance.

WeShop has been running a trial with 4,000 shoppers on the app since earlier this year and aims to sign up about 100k members within three months after launch.

8. Other e-commerce news of interest this week

  • Amazon and Etsy issued late shipment warnings to sellers for not shipping items on Juneteeth, which is now recognized as a Federal Holiday (ie: post offices are closed and the sellers couldn't ship). Amazon told a seller that Juneteeth won't be on their holiday schedule for 2023, but may be in 2024. 
  • BigCommerce has entered Austria, Denmark, Norway, Sweden, and Peru with fully localized tech and shopping experiences. Most recently, in January, the company entered into Germany, Mexico and Spain.
  • Andy Jassy celebrated his one-year anniversary as Amazon CEO last Tuesday. Critics point to Amazon's 40% decline in stock price since last July and the company's recent troubles with oversubscribed warehouse space and labor boards as outcomes of Jassy's management, but I disagree. I think Bezos got out at the right time, just as the company was about to face the aftermath of a post-COVID economy, and that we've yet to see Jassy's potential.
  • Teller, a DeFi lender, introduced a BNPL service for NFTs like Bored Ape. Now you can pay for your NFT in installments as the value plummets.
  • Onur “Ron” Aksoy, founder of Pro Network, was arrested for allegedly importing $1B worth of counterfeit Cisco equipment from China and selling it on Amazon and eBay. The Cisco equipment sold was usually older, lower-end models that were previous bought or discarded, and then modified in China, making the devices appear as if they were newer or more expansive models. 
  • Walmart is making its InHome delivery service available to Walmart Plus subscribers for an extra $7/mo or $40/yr (previously available as a separate subscription costing $19.95/mo or $148/yr). The service enables delivery drivers to go inside your home or garage to drop off deliveries and requires the purchase of a smart lock or garage door opener.
  • Authentic Brands Group (ABG) has settled its lawsuit with Bolt out of court, with Forever 21 and Reebok emerging as new shareholders. The parties will continue to partner up to offer one-click checkout capabilities to ABG's Forever 21 and Lucky Brand labels. I first reported on the $150M lawsuit in May, which was a result of Bolt allegedly failing to adequately deliver a new online checkout and customer loyalty solution to ABG brands. 
  • DHL eCommerce Solutions announced plans to invest £560M across its U.K. e-commerce operation, DHL Parcel U.K. The investment follows a 40% volume uplift since the start of 2020 and increased demand for its e-commerce and B2B services. 

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

  • Geodis, a transportation and logistics company, completed its acquisition of Keppel Logistics, a Singapore-based storage and fulfillment company. The acquisition consolidates Geodis' footprint and e-commerce operations in the Asia-Pacific region.
  • DEUNA, a commerce operating system that gives local merchants in LATAM a payments infrastructure that integrates into every major payments provider, raised $30M in a Series A round led by Activant Capital, bringing their total amount raised to $37M. The new funding will help DEUNA consolidate its presence in Mexico, Colombia, Ecuador, and Chile, hire new talent, and invest further in its products.
  • Shopify completed its $2.1B acquisition of Deliverr. With the acquisition, Shopify is now able to offer merchants a one-stop shop for their logistics needs, from receipt of inventory to distribution and delivery to returns. I first reported on the acquisition in April.
  • ArK Kapital, a Stockholm-based data-driven finance company, raised €150M in funding to invest in European technology founders, bringing their capital pool to €300M. The company offers loans that last up to seven years, with repayments not starting for two to three years, which gives founders time to build their companies.
  • Shopify committed $1M in funding to Ruby Central over four years with “no strings attached” to invest in improving Ruby's supply chain including operations and security engineering work. The two companies will periodically publish a report about the work being done to make Ruby better and more secure.
  • Flexe, a Seattle-based logistics startup that helps retailers optimize their supply chains, raised $119M in funding from BlackRock and returning investors at a $1B valuation. The company will use the new funding to make investments in scalable growth and hire more employees.
  • Logiwa, a cloud fulfillment platform, raised $16.4M in a Series B round led by NewRoad Capital Partners, bringing its total amount raised to $28.9M since it was founded in 2004. The company will use the funds to continue building out its technology solution powering the shipping operations for D2C businesses.
  • XY Retail, an Italy-based platform that helps retailers streamline their omnichannel operations, raised an undisclosed amount in seed funding in a round led by Monta Vista Capital. The company will use the funds to accelerate the global rollout of their platform to luxury brands.

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: Where do lizards go to fix their fallen tails? The retail store.

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