#193 – TikTok Search Ads, OpenAI restructuring, & DoorDash Commerce

by Shopifreaks | Sep 30, 2024 | Recent Newsletters

Hi Shopifreaks

As many of you know, I'm from Asheville, NC. You probably saw what's been happening in the area as a result of Hurricane Helene. It's been absolutely devastating — over 100 deaths (and more bodies being discovered each day), countless homes and businesses destroyed, roads in and out of the city inaccessible, and resources running low.

My parents and I were very lucky in that our homes were spared, however unfortunately I can count way too many friends in the area who have lost their businesses and houses as a result of the hurricane and flood.

We're in Cuenca, Ecuador right now, so I'm not there to personally offer aid to folks in need, however NC Governor Roy Cooper is encouraging donations to the North Carolina Disaster Relief Fund to help communities recover from the damages. If you had any capacity to donate, I know that my community back home would greatly appreciate the help. FEMA, WRAL, and Blue Ridge Public Radio have also published guides on other ways to donate.

Thank you for anything you can do to help families in WNC and the surrounding areas who have been impacted by Helene.

And now onto less sad news…

In this week's edition of Shopifreaks, I cover:

Starlink's customer milestone
TikTok's new Search Ads Campaign
OpenAI is turning for-profit
DoorDash launches branded commerce solutions
Amazon sellers are suing Walmart
FedEx opens fdx to customers in the US
Meta's new Orion AR Glasses (and more)
Who participated in the EU's AI Pact
An update on the WordPress vs WPEngine beef
Amazon employees are rage applying for new jobs
X is losing users in the US and EU

All this and more in this week's 193rd Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week

Starlink surpassed 4M customers after having amassed 1M new subscribers since May. The constellation now comprises nearly 6,000 satellites and is on track to generate $6.6B in revenue this year. — According to TechCrunch

1. TikTok introduces Search Ads Campaign

TikTok rolled out its long anticipated Search Ads Campaign tool, giving advertisers the ability to target ads based on what users are actively searching for. The new search ads are currently only available in the US, but TikTok is eyeing a wider rollout in early 2025.

Since Search Ads initially launched in October 2023, advertisers haven't been able to hand pick specific keywords on TikTok like they could on other platforms. Instead, TikTok's algorithm did the heavy lifting of pairing relevant ads with individual searches based on a mix of relevance, user search behavior, and other data.

Letting TikTok run ads on auto-pilot (like before) is still an option, but now advertisers can optionally take more control over how their ads show up in search results, as well as target traffic and web conversions.

Reasons why TikTok says to use Search Ads Campaign:

Convert customers when they're most curious – which TikTok says will maximize your ad's impact.
Capture diverse user intent across search queries – enables advertisers to target high-intent users with precision.
Unlock incremental value – TikTok says that advertisers that run Search Ads in addition to In-Feed Ads see a 20% increase in conversions at a similar or better CPA.

TikTok claims that 57% of users utilize its search functionality and 23% search for something within 30 seconds of opening the app, indicating that they are opening TikTok for the purpose of using it as a search engine.

Ivy Lui, author at DigiDay, questions how giving advertisers the ability to target keywords will impact user experience:

“What’s made TikTok so unique among social media platforms is its culture-led content and an algorithm that delivers exactly what users want to see. The big question now is how search ads will impact that experience. If promoted posts or ads start to appear in searches, TikTok risks disrupting its organic feel that users love. But if TikTok strikes the right balance, search ads could help it carve out a bigger slice of the ad market — not just from big brands but also from smaller advertisers who’ve yet to make TikTok a key part of their strategies.”

In the article, Eric Seufert, an independent analyst, commented to DigiDay on the future of branded search ads. “What’s potentially more valuable to TikTok for search ads is branded search, which requires brands to bid defensively on terms that are relevant to them and could bring more advertisers to the platform.”

Will TikTok's enhanced keyword targeting tap into Google's $238B search advertising business?

Probably a little. Every search that takes place on TikTok is likely one less search that would've taken place on Google.

However a big difference to point out is that TikTok isn't searching the web — it's only searching videos on its platform. So for advertisers to take advantage of TikTok Search Ads, they are required to create video content, as opposed to linking directly to pages that already exist on their website. In other words, the barrier of entry into advertising on TikTok Search is greater, so it won't be able to cannibalize web search that quickly (unless of course it introduces text results within search).

In other TikTok news… the company confirmed the launch of its new and improved subscription monetization feature for creators. The new Subscription feature allows creators to offer followers special access to exclusive perks, unique experiences, and a members-only community for a monthly fee. Creators can customize their packages to offer three different tiers, selecting benefits such as private communication channels, exclusive videos, live streams, and notes, unique stickers and badges for use during live streams, and customized perks such as performance requests and shoutouts.

2. OpenAI to restructure into a for-profit business

OpenAI's board is considering plans to restructure the company into a for-profit business, according to a source who asked to remain anonymous because the talks are ongoing. The source said that the company would retain its non-profit segment as a separate entity.

OpenAI is currently structured as a nonprofit that is controlled not by its CEO or by its shareholders, but by a board with a single mission to “keep humanity safe.” (Which has a little bit of a “Don't Be Evil” vibe to it, and we all know how that turned out.) However OpenAI began to slide away from that vision years ago in 2019 when it created a for-profit arm (with capped returns) so that it could take in huge investments from Microsoft.

The restructuring aims to make the company more attractive to investors by removing the cap on returns, according to the same source, who also mentioned that the plan is still being hashed out with lawyers and shareholders and that the timeline for completing the restructuring remains uncertain.

Bloomberg reported that OpenAI's board was discussing giving CEO Sam Altman a 7% stake in the company that would be worth billions, as part of the company's pivot to a for-profit entity, however, Altman immediately denied the report and called it “ludicrous.”

An OpenAI spokesperson told Reuters, “We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist.”

Jeffrey Wu, who joined the company in 2018 and worked on early models like GPT-2 and GPT-3, told Sigal Samuel at Vox, “We can say goodbye to the original version of OpenAI that wanted to be unconstrained by financial obligations.”

You can turn for-profit?

To be honest, I didn't even know that a nonprofit organization could restructure into a for-profit entity — so that's news to me as well — but apparently it's happened many times in the past, particularly across healthcare, health insurance, and the nonprofit education sectors. It seems fair to me that a company would have to “cash out” their existing nonprofit shares into for-profit shares, and thus incur a tax liability on the value of the company that they previously avoided as a nonprofit… but that's a conversation for another day.

Massive leadership departures at OpenAI

News of the discussions came after OpenAI's CTO Mira Murati said that she is leaving the company after six and a half years, and subsequently and after research chief Bob McGrew and research VP Barret Zoph also announced their departures the same day.

CEO Sam Altman later shared that the decisions for everyone to depart were independent of each other, but that “the timing of Mira’s decision was such that it made sense to now do this all at once, so that we can work together for a smooth handover to the next generation of leadership.”

These aren't the only executives to depart the company this year.

OpenAI co-founder Ilya Sutskever and former safety leader Jan Leike announced their departures in May, followed by co-founder John Schulman last month who said he was leaving to join rival Anthropic.

OpenAI is currently pursuing a $6.5B funding round that would value the company at more than $150B, with rumors that Thrive Capital, Tiger Global, Microsoft, Nvidia, and Apple are in talks to participate in the round. (However the Wall Street Journal has since reported that Apple is no longer in talks to invest in OpenAI.)

In other OpenAI news… the company launched Advanced Voice Mode (AVM) to its Plus and Team customers on Tuesday, which makes ChatGPT more natural to speak with. ChatGPT is also getting five new voices that users can try out — Arbor, Maple, Sol, Spruce, and Vale — which brings its total number of voices to nine. Lastly, OpenAI expanded some of ChatGPT's customization features to AVM including custom instructions, which allows users to personalize how ChatGPT responds to them, and Memory, which allows ChatGPT to remember conversations to reference later on.

If you're ready for a good laugh, watch this TikTok Video where @hoffdigital trains his ChatGPT to speak to him in ebonics!

3. DoorDash unveils new commerce products for merchants

DoorDash introduced a suite of products designed to empower merchants to manage and expand their businesses on their own channels, whether in-store or online. New products include Commerce Platform, Online Ordering Mobile Apps, and a Business Manager App, which I'll share more info about below.

The DoorDash Commerce Platform consists of five core products:

Drive On-Demand – The ability to offer delivery through a restaurant's own app or website. (Previously known as Drive.)
Online Ordering – A way to provide commission-free, digital sales and branding on their website or own branded app. (Previously called “Storefront,” which only worked on websites, not within apps.)
Phone Ordering – An AI-powered voice ordering system that offers menu recommendations.
Tableside Order & Pay – An option for customers to scan a QR code with their phone to place orders. (Previously known as Bbot.)
Customer Support Solutions – A dedicated delivery support platform for customer inquiries.

DoorDash's new Online Ordering Mobile Apps is an especially impressive tool that allows restaurants to create their own branded native mobile apps for placing orders on iOS and Android, instead of having to send customers to the DoorDash app. I'm curious if it will allow restaurants to integrate their existing loyalty and rewards programs into the app.

Lastly, the company launched a Business Manager App, which restaurant and store owners can use to manager their DoorDash business from their mobile phones, as opposed to just from their computer.

DoorDash's goal is to provide a seamless experience between a restaurant's marketing and ordering platforms and its fulfillment and delivery services, supporting merchants in driving more sales through their own channels instead of pushing their customers to a third party app.

Prabir Adarkar, DoorDash President and COO, said, “At our core, DoorDash is a merchant-focused company. Our mission has always been to develop products and services that empower local merchants to succeed.”

I love the direction. While competitors are battling it out for market share, DoorDash is embedding itself into merchant operations as a retail and fulfillment operating system, as opposed to a third-party platform. Very Amazon-esque.

4. Amazon Sellers vs Walmart Marketplace

A group of Amazon sellers filed a class action lawsuit against Walmart and fraudulent sellers on its platform, alleging that Walmart profited from and failed to prevent organized retail crime on the Walmart Marketplace.

The lawsuit alleges that fraudulent sellers participated in a scheme known as “triangulation fraud.”

Here's how it works:

A buyer makes a purchase on a third-party marketplace (like Walmart).
The seller fraudulently purchases the product from another merchant (like Amazon) using a stolen credit card and has the item shipped to the buyer on the other platform.
The legitimate seller (from Amazon) receives a chargeback after the item has been shipped, leaving them out of both the item and the money.

That's how it typically works. However in the scheme happening between Amazon and Walmart, the fraudsters weren't even using stolen credit cards. They were simply taking advantage of Amazon's customer-friendly policies to obtain refunds by falsely claiming that the items were never received. It's honestly a pretty smart scheme, and one that folks could probably get away with easily on a small scale, if they don't fly too close to the sun.

The 290 page complaint argues that Walmart is not properly vetting and verifying sellers, which the plaintiffs call the “Bogus Qualification Process.”

The lawsuit argues that the acts violate the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (ie: the INFORM Act) — which imposes requirements for online marketplaces to know their sellers, as well as penalties for failure to do so.

The complaint also suggests that Walmart, in its desperation to catch up to Amazon, has a financial incentive to look the other way because it benefits from the fraud.

The plaintiffs are seeking to build a class action suit that includes “All Amazon Merchants domiciled in the United States who fulfilled an order placed by a Fraudulent Seller that originated on Walmart Marketplace between January 1, 2021 to the present” with injunctive relief, restitution, and damages to be determined at trial.

Four thoughts come to mind:

The lawsuit feels like a stretch. It's no secret that triangulation fraud is rampant in online commerce, however, I can't imagine that a company as big as Walmart would let it prevail for the sake of boosting its e-commerce revenue, or that the fraud was happening on such a large scale that it would tip the needle on Walmart's revenue metrics.
I think the reality is that this type of fraud is extremely difficult to catch. After all, unless Amazon contacts the delivery recipient to inquire about whether the purchase arrived, the recipient would be none the wiser that the fraud took place because Amazon is only communicating with the fraudulent buyer about the “undelivered” package. The actual end recipient of the package has no reason to contact Walmart about the matter because they received the product as intended.
Amazon can probably go tit for tat with Walmart on triangulation fraud — meaning it's likely rampant on Amazon's platform as well. (ie: Fraudulent Amazon Sellers listing items on its marketplace, ordering them from other retailers, and subsequently filing claims with those retailers.)
Is Amazon's seller qualification process any better or worse? How much farther is Amazon going than Walmart to “know its sellers?”
This doesn't feel like a “Walmart Taking Advantage of Amazon” issue, as much as it feels like a “General E-Commerce Fraud” issue that would benefit all marketplaces if properly addressed across the industry. However perhaps this lawsuit, and others like it, will be the catalyst that the industry needs to collectively address the issue.

5. FedEx opens fdx to all US customers

Remember fdx — FedEx's end-to-end online shopping hub that the company says aims to provide sellers with solutions for everything from reaching potential customers to order fulfillment and returns? I first covered fdx in January 2024 (story #6) when the e-commerce platform was announced, but there wasn't much information about it made public at the time.

The only things FedEx said about fdx in January was that:

It was being built as a “data-driven” platform that will use the company's insights to optimize the buying and selling process.
Sellers will have access to the existing network of customers on ShopRunner, which FedEx owns.
Customers will be able to see delivery estimates on products as they browse and add things to their carts, even before checkout.
Sellers will be provided with carbon emissions reports relating to their supply chain decisions, as well as optimal shipping routes and other data.

Flash forward nine months… fdx.com is now live and available to all US customers!

fdx describes itself as “a data-driven commerce platform that leverages powerful FedEx insights to connect the entire customer journey, making it easier for brands to grow demand, increase conversion, optimize fulfillment and streamline returns.”

According to its website, the platform offers integrations with Shopify, Etsy, Salesforce and other e-commerce platforms, and supports major carriers outside of FedEx, including UPS, USPS, and DHL.

President and CEO Raj Subramaniam said in the announcement, “The FedEx physical and digital network moves over 15 million packages per day globally. With this scale of insight and intelligence, we have a deep understanding of our customers and the needs of their consumers. The fdx platform is the next step in our connected commerce journey as we make supply chains smarter for everyone.”

I understand how FedEx can help with logistics, but how will it help with product discovery and demand?

fdx's website says that customers will be able to discover brands by being featured on the company's websites, mobile apps, e-mail marketing campaigns, and social media across ShopRunner and FedEx channels, which the company says it's actively growing through partnerships with Mastercard and PayPal and via social media campaigns.

Probably not much of an emphasis on SEO though, given that fdx's homepage meta title reads “Homepage.”

6. Updates from Meta Connect 2024

At its recent Meta Connect 2024 conference last week, Meta unveiled a new budget VR headset and teased its augmented reality “magic glasses.” Engadget put together a list of everything the company announced at the event:

Orion AR Glasses – these augmented reality glasses, which aren't set to debut for several years, were the highlight of the event for many journalists who have since raved about their capabilities. The glasses include tiny projectors that display holograms onto the lenses, and sensors that can track voice, eye gaze, hand movements, and wristband input to control the device. Unfortunately though, Orion glasses won't be available anytime soon because Meta needs to work on bringing their cost down (which is reportedly over $10k to manufacture).
Meta Quest 3S – a new entry-level VR headset priced at $300, which offers lower resolution and smaller storage in exchange for a smaller price tag over last year's Quest 3. The headset includes Fresnel lenses instead of the higher-end pancake ones in Quest 3, with a smaller field of view. However one perk to a lower tier machine is higher battery life. Meta estimates the battery will last 2.5 hours.
Quest 2 and Quest Pro – both older headsets will be discontinued by the end of the year to make room for the Quest 3S in the heart's and wallet's of consumers.
Meta Ray-Ban smart glasses updates – Meta added an AI Assistant to its smart glasses which let you set reminders based on objects you see. The glasses can also scan QR codes and dial phone numbers from text it recognizes. The assistant can also now respond to more natural commands such as “What am I look at?,” as well as handle complex follow-up questions.
Meta AI Updates – Meta AI now supports voice chats across all devices, a feature that was previously limited to the Ray-Ban glasses. Meta also partnered with celebrities to voice its AI including John Cena, Dame Judi Dench, and Kristen Bell.

Check out photos and videos of Meta's Orion AR Glasses here. Would you wear these bulky devices in order to tap into all those AR features? I certainly would!

7. The EU's artificial intelligence pact

The EU announced that over a hundred companies made voluntary pledges and were first to sign its new AI Pact — which calls for AI companies to commit to at least three core actions:

AI governance strategy to foster the uptake of AI in the organization and work towards future compliance with the AI Act.
High-risk AI systems mapping to identify AI systems likely to be categorized as high-risk under the AI Act.
Promoting AI literacy and awareness among staff, ensuring ethical and responsible AI development.

In addition to these core commitments, more than half of the signatories committed to additional pledges including human oversight, mitigating risks, and transparently labelling certain types of AI-generated content such as deepfakes.

Okay, so what?

The thing that always gets me about these corporate / government pacts and pledges is that they mean absolutely nothing. They're glorified pinky promises designed to tickle bureaucracy and feign progress.

Does anyone really think that these companies go back to their AI laboratories, pin these pledges to their bulletin boards, and change absolutely anything about their current trajectory — no matter how unethical or irresponsible it is?

Companies that participated in the pledge include: Adobe, Google, IBM, HP, Qualcomm, Microsoft, and OpenAI

Apple, Meta, Mistral, TikTok, and Anthropic were criticized for not joining the pact, but Meta said that it won't “rule out our joining the AI Pact at a later stage.”

But really, who cares? Signing or not signing the scout's honor pact has the same outcome for both sets of companies. Just look at OpenAI, who signed the pact and then went home to discuss its world domination plans that involve restructuring into a for-profit!

Remember, this isn't the only AI pact getting spit handshakes.

Last year the Biden-Harris Administration secured voluntary commitments from leading AI companies — including Meta and Anthropic — to move toward safe, secure, and transparent development of AI technology.

In December 2023, Meta and IBM also spearheaded the launch of the AI Alliance in collaboration with over 50 founding members, which was tasked with bringing together leading developers to address safety concerns, identify AI risks, and mitigate risks before putting products into the world. Of course, that was just a month after Meta disbanded its Responsible AI team.

In the past decade, there have been dozens of AI pacts and ethical initiatives, yet we've landed where we are in 2024. I'll trade all those “cross my hearts” for decent regulation, but maybe I wish for too much.

8. An update on the WordPress vs WP Engine beef

Last week I reported (story #1) on the WordPress vs WP Engine beef. Here's a quick recap:

Matt Mullenweg, CEO / founder of Automattic (the makers of WordPress), called out WP Engine at the recent WordCamp US event for not contributing enough, in his opinion, to the WordPress open source project.

He went on to say that Silver Lake, the parent company of WP Engine, doesn't care about the WordPress ecosystem and only cares about making money. He encouraged WordPress users to switch hosts and get off WP Engine. Then he oddly praised Google and gave them a shout out right afterwards.

Here's what has happened since:

On September 23rd, WP Engine sent a “cease and desist” letter to Automattic demanding that the company and its CEO Matt Mullenweg stop making and retract false, harmful and disparaging statements against WP Engine.
A few hours later, Automattic responded with a “cease and desist” letter to WPEngine, demanding that the host stop “improperly using” the trademarked terms ‘WordPress' and ‘WooCommerce,' which it says causes confusion amongst consumers.
Mullenweg wrote, “Automattic has tried for years to get WP Engine to obtain a commercial license for trademark use and contribute to the core software they rely on, but WP Engine has repeatedly declined to partner or contribute. If you gave $1 to the WordPress Foundation, you’d be a bigger donor than WP Engine.”
It became public that Mullenweg demanded either 8% of WPEngine's $400M annual revenue to license the trademarks, or an equivalent amount of developer hours donated to The WordPress Foundation.
On Sep 26th, in retaliation of the cease and desist letter, Mullenweg blocked access to the WordPress.org Plugin Repository, making it impossible for 1M+ WP Engine customers to update their websites.
WP Engine subsequently found a workaround to enable customers to update plugins on their WordPress websites, and Automattic later temporarily lifted the block.
The WordPress Foundation updated their trademark policy to include instructions on proper use of “WP” and specifically called out WP Engine on the page.
On the evening of Sep 26th, Matt Mullenweg joined Michael (aka: theprimeagen) for a live video chat to answer questions about what's been going on. You can read transcripts from the videos in the comments section of that Reddit link, where I highlighted how hard Michael had to pull teeth to get Matt to answer the question — is any other company paying trademark licensing fees? Eventually it was revealed that Newfound Digital, which owns EIN hosts like Bluehost and HostGator, is the only other company to pay trademark licensing fees, but no-one knows how much.
Joost de Valk, creator of Yoast SEO, published a blog post addressing inequality in compensation within the WordPress community and calling for transparency and governance.

The ongoing legal battle between WordPress and WP Engine has brought to light many things about how WordPress is governed. Many folks didn't realize how much control one person, Matt Mullenweg, has over The WordPress Foundation, Automattic, WordPress trademarks, and the development decisions of the WordPress the open source platform — as well as the inherent conflict of interest of having one person in charge of all four.

Things have since calmed down for the time being, but I'll keep you posted on future drama updates and how these actions affect the WordPress community.

9. Other e-commerce news of interest

Amazon employees are ‘rage applying' for new jobs after CEO Andy Jassy's mandate to return to office five days a week, according to Fortune, who spoke with several workers, some of who have already started taking interviews. Many workers who were hired virtually during the pandemic are finding themselves in impossible scenarios to return to offices that they've never worked at before, and that are nowhere near where they live, so they are opting to move on from Amazon altogether, which might have been Jassy's true intention with the mandate.

After getting permission from Amazon to be jerks, Dell told their global sales team last week that they are now required to work from the company offices five days a week, starting Sep 30th. The team was previously only required to work from the office three days a week, as a result of a mandate issued in February this year — which, if you recall, around half of employees ignored entirely.

During the first two weeks of Google's antitrust trial, the DOJ argued that the decisions Google made in growing its massive ad business were cold-blooded and carefully crafted to primarily benefit itself. The government argues that Google monopolized three markets: 1) publisher-side tools, 2) advertiser-side tools, and 3) ad exchanges where auctions take place.

The judge in Apple's Epic lawsuit said September 30th (today) is the company's legal deadline to produce 1.3M documents related to App Store changes it made in January to comply with a 2021 court order. Apple asked for more time to review the documents on Thursday, but Judge Hixson called the last minute request “bad behavior” and denied it.

Mercado Libre outperformed Amazon this year. The stock is up 34% in 2024, compared to a 27% rise for Amazon and 20% for the S&P 500. Roughly 90% of Wall Street analysts who cover the stock rate it a “buy.”

X has lost nearly one-fifth of its daily active users in the US and one-third in the UK, according to data collected by SimilarWeb, which compared daily active user numbers from May 2023 to Sep 2024. Although the data only accounts for web traffic and not for activity within X's iOS or Android apps, it aligns with information reported by X in the EU under the Digital Markets Act, which requires the company to provide regular updates on its EU user base. In its most recent report, covering the first six months of 2024, X reported a 5% decline in EU users. The report also showed that X is removing more content and actioning more legal requests than Twitter did in its final report.

Google filed an antitrust complaint against Microsoft in the EU, accusing the company of using its dominance in business software to lock clients into its Azure cloud services. Google argues that Microsoft is violating EU competition laws by charging punitive fees for its customers to transfer projects running on Microsoft Azure to competing cloud services, which Google claims is costing European businesses at least $1.1B per year and stifling competition in the lucrative cloud services industry.

PayPal launched its PayPal Complete Payments platform in China, which the company says will bridge Chinese businesses with consumers around the world in a more efficient and transparent way. PayPal is the first foreign platform to enter China's online third-party payments market and the first foreign payment company with a wholly-owned subsidiary in the country.

Meta acquired the Threads.com domain name for its social network, which originally launched on Threads.net because the dot-com was taken by a Sequoia-backed Slack alternative startup. In June 2024, Shopify acquired Threads (the company and team), but it wasn't clear at the time if the startup sold the domain to Shopify, Meta, or anyone else. However either directly or in a roundabout way, the domain has made it into Meta's hands. At the time of writing, it currently leads to nowhere.

Pitney Bowes, which is still trucking along, launched ShipAccel, a digital platform designed to simplify and enhance shipping operations by offering automated rate comparisons, real-time analytics, and branded tracking and return capabilities, as part of the company's aim to equip shippers with technology that addresses their needs. The software is available to SMBs as a SaaS product or through a set of APIs for higher volume shippers with more complex workflows.

Shopee and Tokopedia raised merchant fees this month as part of their efforts to improve ‘take rates' – the levels of fees collected from sellers and orders. Tokopedia raised its merchant commission fees to as much as 10% of the sales price, depending on the category, up from a previous maximum of 6.5%. Shopee raised its commissions to a range of 4.25% to 8%, up from 3.5% to 6.5%.

reCAPTCHAv2, the version that makes you select images for verification, can now be beaten with a 100% success rate by current Gen AI models, according to a research paper titled “Breaking reCAPTCHAv2”. The study, which trained the existing You Only Look Once (YOLO) object recognition model with 14,000 labeled traffic images and subsequently defeated reCAPTCHAv2, asserts that “we are now officially in the age beyond captchas” and confirms the “necessity for captcha technologies to evolve proactively, staying ahead of AI's rapid enhancements.”

The FTC is cracking down on companies making deceptive AI claims and schemes, including robot lawyer DoNotPay Inc, which the FTC alleges does not live up to its claims of being able to serve as a substitute for the expertise of a human lawyer. The complaint alleges that DoNotPay could not deliver on those promises, did not conduct proper testing to determine whether its AI chatbot's output was equivalent to that of a human lawyer, and that the company did not hire or retain any actual attorneys to back its claims.

The DOJ filed a lawsuit against Visa, accusing it of violating antitrust law by suppressing competition by threatening merchants with high fees and paying off potential rivals. Visa processes more than 60% of debit transactions in the US, bringing it $7B in fees each year. Attorney General Merrick Garland said, “Visa's unlawful conduct affects not just the price of one thing, but the price of nearly everything,” noting merchants and banks pass payment network costs to consumers. Visa said, “nah uh,” and that competition is thriving in the debit market.

Amazon UK Services paid corporation tax in the country for the first time since 2020 after the end of a “super-deduction” tax break introduced by Rishi Sunak. The company said it paid £18.7M in “current tax” last year, which is understood to have been mostly corporation tax. Amazon, which has more than 25 warehouses in the UK and corporate offices in six cities, has previously faced criticism over the amount of tax it pays in the UK relative to the size of its operations, which other retail chains have claimed gives it an unfair advantage, as they pay high business rates on their physical stores.

Paul Goldston, a Shopify veteran who previously held roles such as Engagement / Delivery / Partner Manager at the company, joined Order Editing, a Shopify app that lets customers make changes to their orders without having to contact support. Paul marks the startup's first full time hire.

Shopify appointed Mikhail Parakhin as its new CTO, who will now be responsible for the engineering and data organizations at the company. Parakhin is a seasoned expert in AI and has previously served as CTO of Yandex and headed Microsoft's AI advancements.

One of OpenAI's official X accounts was taken over by crypto scammers last week, who used the opportunity to hawk a fake token called $OPENAI. The post included a link to a phishing site designed to look like OpenAI's website, which prompted unsuspecting users to connect a crypto wallet. The posts were deleted after an hour, and it's unclear how many people were duped by the scam. This is the fourth hack of an OpenAI-affiliated X account since January 2023, which makes you wonder — why are they still on X?

Stripe launched its new flagship office in Toronto as part of its expansion efforts in Canada, which is a growing market for the payments provider. Between 2021 and 2023, payment volume on Stripe from Canadian companies increased by over 50%.

Salesforce is closing its office in Hillsboro, Oregon and asking its employees in the city to either relocate or accept a severance package. Customer success employees, who account for much of the office's staff, were given until Nov 26th to decide whether to take a severance package or relocate to Indianapolis, Atlanta, or Seattle, where Salesforce also has offices. Other employees were told they could continue to work for the company remotely. It kind of feels like everyone on the customer success team could work remotely…

PayPal notified users that it will be sharing information collected about its customers with certain retailers for the purpose of powering its recommendation engine. Merchants can opt-out of the changes, which will otherwise go into effect in November.

Six countries in the EU, including the Netherlands, Germany, France, Austria, Denmark, and Poland, are calling for stricter supervision and regulation on Temu and Shein, which are suspected of selling products that are sometimes dangerous to consumers. The countries are calling on the European Commission to “take all necessary measures” to “rigorously implement” the EU's new Digital Services Act, citing the risks of consumer harm and unfair competition. Other requests concern the platforms' use of dark patterns, the protection of minors, the transparency of product recommendation systems, and the traceability of sellers.

Meanwhile in the US… House Republicans are requesting a briefing from the FBI and the SEC on national security and data privacy concerns surrounding Temu and its Chinese parent company Pinduoduo, which is listed on the NASDAQ. The letter states that they are concerned about the protection of Americans' data and that the relationship between Chinese national security laws and Americans' data must be understood. The request follows a similar line of congressional inquiry to that of TikTok and ByteDance.

UK antitrust officials said Amazon's multi-billion dollar investment in Anthropic did not qualify for a formal investigation, as it did not fall under its jurisdiction. The regulator also cleared a similar collaboration between Microsoft and Inflection AI, however, Alphabet's partnership with Anthropic is still under scrutiny.

Google is testing a new top card format for shopping and e-commerce queries, which shows product results with pricing on the left, popular stores to purchase the item from in the middle, and review content from websites and videos on the right. Brodie Clark, an independent SEO consultant, shared screenshots and wrote on X, “This is the first time Google has brought this rich card treatment to the eCommerce segment, first starting to show in 2022 for celebrity names and since expanding to other query segments.”

The Irish Data Protection Commission fined Meta €91M over improper password storage. Back in 2019, Meta discovered that some user passwords were being stored in a readable format within its internal data storage systems. Even though an internal investigation determined that the passwords were not internally abused or improperly accessed, the DPC decided to reprimand and fine Meta.

Meta split its developer resources into three categories. 1) Meta Horizon – for those building for Meta Quest and Horizon OS. 2) Social Technologies – for Facebook, Messenger, Instagram, WhatsApp, and Threads. 3) AI – which offers insights into Meta's AI platforms and how external developers can utilize its tools. As Meta continues to develop its various platforms, each will have its own focus so that developers can better understand how they can access and utilize Meta's systems.

ByteDance is shutting down its music streaming service, TikTok Music, globally on November 28th. The service was available in Indonesia, Brazil, Australia, Singapore, and Mexico. TikTok said it will continue partnering with other music streaming services rather than competing with them.

YouTube Premium is increasing its subscription prices outside the US for both individual and family plans, with some regions seeing as high as a 30% to 50% hike, which makes the service more expensive than Spotify Premium and Apple Music in those areas. The last major price hike in the US happened in July 2023, followed by an international price hike in November 2023, which indicates that a US bump may soon follow suit.

eBay is seeking to force the publishers of EcommerceBytes to disclose the identities of their news sources as part of their defense in a cyberstalking civil suit that could potentially cost the company over $100M in damages. eBay previously admitted to six felony offenses in the matter and were required to pay a $3M fine and undergo 3 years of enhanced compliance monitoring, but the fine was paid to the US Treasury, not the victims, leaving Ina and David Steiner to pursue compensation through the civil court system. The Steiners claim their business was harmed by the harassment due to some sources now being afraid to speak with them, which negatively impacted their ability to produce content, but have refused to provide any information that would identify those sources, citing “reporter's privilege.”

Klarna is launching QR payment solutions on Adyen terminals across Europe, North America, and Australia. To make a payment, customers scan a QR code displayed on an Adyen terminal, which enables them to complete the transaction on their mobile device using one of Klarna's BNPL payment methods, which they can then track through their Klarna app.

Flipkart introduced “Flipkart Reset for Business,” a mobile app designed to help sellers of refurbished products across the country connect with last-mile customers. The app helps alleviate skepticism about the quality of refurbished products by offering a 74-point quality check and backing every product with a warranty to instill confidence in customers.

Amazon began offering FBA Sellers in the US a new option for managing product returns called “Grade and Resell,” which provides a resell channel to helps sellers recover value on returned inventory and gives customers a great selection of pre-owned and open-box products. The program, which was previously available only to retail brands, inspects items that are returned to Amazon before being offered for resale — something most buyers would've assumed has been happening anyway when they buy returned items, but apparently not.

Ireland's media regulator is concerned that people are having difficult reporting illegal content to online platforms under the Digital Services Act and named Etsy, Dropbox, LinkedIn, Meta, Pinterest, Shein, Temu, TikTok, Tumblr, YouTube, and X in a review of DSA compliance. The agency issued formal requests to these companies for further comprehensive detail on their approach to complying with Article 16, which states that platforms must have easy ways for users to report illegal content, and Article 12, which states they must provide an accessible point of contact for users to raise concerns.

Consumers suing Shopify in a data privacy suit are urging the Ninth Circuit to revive the lawsuit, insisting that California has personal jurisdiction over the suit despite Shopify being a Canadian company. A federal judge originally dismissed the suit for lack of jurisdiction, a decision which was affirmed by a Ninth Circuit panel last November, but the plaintiffs then filed a petition to rehear the case in banc, which began last week.

Bonanza launched a pay-per-click advertising program called Bonanza Ads, which will display ads on the marketplace's homepage, search results, and post-sale confirmation pages. Sellers are required to make a non-refundable $15.00 deposit to get started with ads. Bonanza has historically “Featured” items within its search results, which may or may not be disappearing upon launch of its Sponsored results.

Amazon Business unveiled new features and capabilities at its Reshape event including procurement management, inventory restocking applications, digital vouchers for business gift-giving, and an easier way to log into accounts for both business and personal Amazon accounts. The platform also announced new integrations with SAP Ariba, Coupa Advantage, and Oracle NetSuite SuiteProcurement.

The average discount offered by online retailers in the US averages 36% this year, down from 38% last year and 42% in 2019, according to data from Centric Market Intelligence. The report also shows that the proportion of products on sale online has dropped to 28% so far this year from 42% in 2019, although that number should rise after the holiday season. Many shoppers are also noticing “saleflation” happening more often, which is when an item appears to be on sale, but is actually the same price it was a year ago.

90% of ecommerce businesses that replatformed experienced sales and revenue improvements, according to a new report by commercetools entitled “State of eCommerce: Replatforming and Migration Trends for 2024.” 30% of respondents reported that their sales increased by 30% or more, and 42% reported revenue growth of 10% or more. Instinctively those results feel a bit skewed, as replatforms are often accompanied with re-envisioned marketing strategies that could have taken place on the existing platform as well, but it made the most sense to tackle both projects at once. 77% of respondents said they feel a sense of urgency to migrate to a new e-commerce platform within the next year, citing limited scalability and poor user experiences on their existing platforms. The grass is always greener!

10. Seed rounds, IPOs, & acquisitions

Swiggy, an Indian food ordering and delivery platform that operates in more than 500 cities, filed papers for an IPO, with plans to sell shares worth $576.16M, while existing shareholders including Prosus, Accel India, and Tencent Europe will sell around 185.3M shares, according to its draft prospectus. The company is targeting a valuation of $150B, a substantial increase from its $10.7B valuation during its last funding round in 2022. The capital Swiggy raises from its IPO is expected to be deployed towards the expansion of Instamart's dark store footprint.

Qist Bazaar, a Pakistan-based BNPL startup, raised $3.2M in a Series A round led by Indus Valley Capital. The company will use the funds to improve its products and technology infrastructure, as well as scale operations to additional cities in the country.

Ovoko, a Vilnius-based e-commerce marketplace and warehouse management system for used car parts, raised €20M in a Series B round led by Smash Capital, marking the largest investment in a Lithuanian startup this year. The company will use the funds to scale its operations and product offerings, aiming to become Europe's leading used auto parts platform.

Whatfix, a digital adoption platform and analytics provider that helps companies improve software adoption and user productivity, raised $125M in a Series E round led by Warburg Pincus. The 10 year old company will use the funds to enhance its product suite and expand its market presence through strategic acquisitions.

Apron, an England-based payments and payroll platform that lets businesses sort, pay, and reconcile invoices, raised $30M in a Series B round led by Zinal Growth, one year after raising $15M in a Series A round. The company will use the funds to expand its engineering and product teams, which will help launch a new product aimed at larger suppliers.

Crisp, a platform that connects data between retailers, distributors, and brands to power real-time insights across the supply chain, raised $72M in a Series B round, bringing its total amount raised to $97M. The funding will be used to expand its reach into CPG and retail channels, enter into new data partnerships, and hiring.

Senvo, a Berlin-based provider of automated freight auditing software that audits the invoices that U.S. carriers like FedEx and UPS send to companies for accuracy, raised €2.5M in a round co-led by Defy.vc and Two Ravens. The company will use the funds as runway for the next two years and to invest into further developing its technology.

ShipTop, a Vancouver-based omnichannel fulfillment provider, raised $500k in a round led by Dino Verbrugge and Jared Vegosen. The company will use the funds to enhance its technology platform, expand its service offerings, and expand its client base of e-commerce merchants.