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#110 – Twitter Coin, Chinese Price Wars, & Meta’s ChatGPT rival

by | Feb 27, 2023 | Recent Newsletters

Before we get started this week, I'd like to introduce you to Sean Goh, co-founder of Bot Assembly – our newest Shopifreaks Rewards Partner. Sean and his partner Tyler help 6-8 figure e-commerce brands drive more sales and create lifetime customers via chat bots and conversational marketing.

Share your Shopifreaks referral link at the bottom of this e-mail and you'll earn $10 per subscriber you send our way, which you can redeem with Bot Assembly or any of our other Rewards Partners

Speaking of rewards, how would you like to earn coins for your most valuable tweets? This week I've got stories for you about the stealthy debut of Twitter Coin, price wars in China, and delivery wars in the US.

I also cover Meta's new ChatGPT competitor, ByteDance's latest social commerce app, and the e-commerce winners of 2022.

All this and more in this week's 110th Edition of Shopifreaks. Thanks for subscribing and sharing!

PS: During an interview with David Rastatter at Jitterbit last week, I shared my thoughts on what the #1 breakout marketing channel will be in 2023 and what companies can do to not miss out.

Poll of the Week 🗳️

🪙 Will you buy Twitter Coins to reward your favorite creators for their valuable tweets?

🗳️ Take the Twitter poll.


Last Weeks Poll Results: I asked if you were going to get Meta Verified. A whopping 72.4% of you said “No, never”, 15.3% said “Yes, definitely”, and 12.2% indicated that they hadn't decided yet. If those percentages scale across Facebook and Instagram's more than 2B users, that's all it'll take for Meta Verified to be a phenomenal success in terms of revenue for the company. [View Poll]

Stat of the Week 📈

TikTok outpaced Instagram and Facebook to become the UK’s most shopped social channel.

The average consumer now makes 10 purchases on TikTok each year, versus 9 purchases on both IG and FB combined. Gen Z users bring that number upwards with an average of 19 purchases on TikTok each year. – According to Retail Technology Show

Share this week's stat on Twitter & LinkedIn.

1. Twitter Coins for sale

Several Twitter users reported that they were able to buy Twitter Coins, which allow users to reward valuable tweets — kind of like Reddit Gold or Facebook Stars. 

And also similar to Reddit, the coins can come paired with Twitter Awards that will include reactions like “Bullseye” “Bravo” “Crown” “Mind Blown” “Gem” and others.

Twitter describes the coins as “virtual goods that can be received on eligible Tweets” which can then “accumulate into Diamonds, which can be cashed out.”

(Although if you have true diamond hands, you'll never cash out!)

Twitter said that its tokens will allow content creators to be rewarded by their fans and audience, and create a channel of passive income. Rumors of the coins existence first began circulating in Dec. 

Some users were able to buy 150 Twitter coins for $1.99 via Stripe. Those who receive Twitter Awards will have to wait until they’ve earned at least $50 worth to redeem, which is the same as the minimum payout amount for those monetizing Twitter’s existing “Super Follows” feature.

There's debate about whether or not the coins will exist on a blockchain, or on a closed ledger like Facebook Stars. Some have reported that crypto will not be involved, however, I don't see it as being completely off the table. 

In December, I reported that Stripe launched a fiat-to-crypto onramp service, which makes it easier to make purchases on a blockchain without signing up to an exchange. Twitter could very well leverage this service for its Coin if it decides to use a blockchain.

Some Twitter users were claiming that that the discovery of these Coins in action was a big hoax. Twitter has not commented in either direction.

Will you buy Twitter Coins to reward your favorite creators for their valuable tweets? Take the Twitter poll and let me know.

2. JD.com starts a price war

JD.com is launching a $1.5B subsidy campaign in March to lower the prices of certain products and compete against budget-friendly competitors in China.

The company will soon launch a price comparison tool on its site that displays the price of similar products from Pinduoduo, Taobao, Kuaishou, and Douyin. And if the price on JD.com is higher than other platforms, shoppers will be given a rebate of double the price of the item.

JD.com founder Richard Liu stressed that low prices are the core competitiveness of e-commerce and wrote in an internal e-mail, “Low prices were the most important weapons responsible for our past success, and they will be essential in the future.”

Pinduoduo is known for catering to consumers who are more price-sensitive, and while it managed to squeeze out a profit of $1.5B in Q3 2022, the company admits that some factors behind its recent growth weren’t sustainable.

In comparison, JD.com has a stronger foothold in first-tier cities and offers a wide array of luxury goods with brands like Louis Vuitton, Dior, and Fendi. However with the world facing a recession, the company is looking to be known for its great prices too.

News of the price war spooked investors, who became fearful of thinning profit margins. Pinduoduo's founder Colin Zheng Huang reportedly lost more than $3B in one day, while JD.com's stock price slumped 11%.

3. WPP and BigCommerce partner up (Sponsored)

WPP and BigCommerce announced a new partnership that will give WPP priority access to new product tools on BigCommerce and Feedonomics.

Additionally, the partnership will provide WPP agencies with APIs and data sets to develop unique insights for clients across product, trend and purchasing data.

As BigCommerce’s inaugural data partner, WPP will receive priority access to alpha and beta products as well as platform integrations including Amazon, Meta, Google and TikTok. These tools will allow teams to maximize omnichannel sales and optimize spend for both B2C and B2B clients.

WPP will help shape product development and innovation at BigCommerce with commerce specialists joining product and partner councils, in addition to receiving access to a custom training program and certification pathways. As part of the partnership, WPP will commit to upskilling 150 commerce specialists within the first year of working with BigCommerce.

The partnership announcement aligns with WPP’s  accelerated growth strategy to strengthen technology and commerce offerings, and follows the news of the company’s ranking as a Leader in Forrester’s latest global Commerce Services Wave.

4. Your mama is a LLaMA

Meta introduced its own generative AI called LLaMA — which stands for Large Language Model Meta AI — that may one day compete with ChatGPT and Google Bard.

However for now, the tech is being released under a noncommercial license focused on research use cases, and access will be granted on a case-by-case basis to organizations in government, civil society, and academia.

Meta described its AI as a “smaller foundation model” that “requires far less computing power and resources” than other large language models.

Meta acknowledged some of the pitfalls of existing AI-text generators in its blogpost, noting that “there is still more research that needs to be done to address the risks of bias, toxic comments, and hallucinations in large language models. Like other models, LLaMA shares these challenges.”

Meta believes its open, research-oriented approach is a step forward towards resolving AI’s numerous, ongoing issues.

LLaMA has not been integrated into any of Meta’s products or platforms (including Instagram and Facebook), and the company noted that they have nothing to share at this time about a public preview or public access.

5. Shopify updates partner program

Shopify is making changes to its partner program, as part of a multi-year initiative to expand the program. At this stage, Shopify said that partners will be able to earn more rewards, gain new skills, and experience more ways to engage with the platform.

Some of the changes include: 

  • Partners will be able to earn more money for working with Shopify Plus merchants, strategic accounts, and enterprise clients.
  • Shopify is adding product referral incentives, including bonuses for every merchant referred to POS Pro.
  • Shopify is launching a certification program with business foundation and technical certifications.
  • Shopify is expanding virtual and in-person events, starting with Partner Education Day on April 4th, as well as an event to recognize top-performing commercial partners.

It's smart for Shopify to focus on improving relations with its partners and improving incentives. Two weeks ago I reported on Shopify's Winter '23 Edition and joked that these editions have become a day when app developers frantically check to see if Shopify turned their app's functionality into a native feature. In addition to their merchants and investors, it's important that Shopify continue to make partners feel valued too.

6. ByteDance launches Lemon8 in US & UK

ByteDance launched a new social commerce app called Lemon8 in the US and UK. The app encourages users to post photos of products and share where they bought them, as well as tag each product in the photo with a brand and a price.

Lemon8, which was originally known as Sharee, is ByteDance’s response to the popularity of Xiaohongshu (which means Little Red Book) — an app that captured an estimated 15% of China’s online e-commerce market. Xiaohongshu started in 2013 as a way to connect Chinese users to international brands and discover new products.

Vice describes the app as “if Pinterest were all ads” and a “shameless aggregation of the e-commerce aspects of our popular social media platforms.”

But I disagree. I think that no American social network has been able to truly capitalize on social commerce because they haven't executed it right. And their failed history doesn't mean that ByteDance won't get it right.

One thing I've always respected about ByteDance is that they aren't afraid to buy market share — as proven by the insane number of ads they used to run for TikTok on Facebook and YouTube. And their strategy is no different with Lemon8. The company has been reportedly paying creators in the US and UK markets to post up to seven vertical pictures and a 100-300 word caption, as well as running a ton of ads.

In our Predictions 2023 post, I said that many folks underestimate Chinese companies, and that's a mistake. With Lemon8, we'll find out if social commerce's slow start in the West has been due to lack of demand or poor execution by American social media companies.

7. The battle of fast delivery heats up

Amazon and Target are betting big on consumer demand for faster delivery. 

Amazon is reportedly planning to expand its same-day delivery service offering by opening more facilities, particularly smaller facilities called same-day sites, which are located near large cities and deliver Amazon's most popular items.

Amazon is currently mulling over whether to charge extra for the same-day service or include it with Prime, which costs $139 annually.

Meanwhile Target announced that it will spend $100M to build a larger network of sortation centers across the US that speed up and lower the cost of delivering online orders.

The company plans to have at least 15 new sortation centers operational by the end of January 2026, with nine already opened.

Gretchen McCarthy, Target’s chief global supply chain & logistics officer, said that up to 40% of packages that go through sortation centers and get delivered by Shipt arrive to customers’ doors next day — and Target aims to get that number higher.

Historically Target has used its 1,950 stores as delivery hubs, having employees pick and pack online orders from the shelves or backrooms. However when stores became crowded with packages, Target began testing sortation centers, where packages arrive from 30-40 nearby stores, get grouped into more efficient delivery routes, and get picked up by carriers.

By switching to this consolidated sortation center model, Target has cleared space in its backrooms and freed up employee time.

8. E-commerce Winners & Losers 2022

US e-commerce grew 8% in 2022 — the slowest growth in over a decade — which when adjusted for inflation, was no growth at all. However e-commerce is still up 81% from 2019.

Rather than look at YoY growth, Marketplace Pulse compared pre-pandemic 2019 to 2022 growth of major e-commerce companies to determine the winners and losers of 2022

I'll share that list below because it's interesting to see a recap of these companies growth, however, I don't see any losers. It looks to me like a big list of winners of varying degree.

  • Shein – global GMV grew 50% in 2022 to reach $30B and is now 10x larger than its 2019 sales.
  • Shopify – global GMV grew 12% in 2022 and 229% since 2019.
  • Etsy – global GMV shrank by 3% to $11.8B in 2022, but is still up 151% from 2019.
  • Walmart – e-commerce sales in the US grew by 12% in 2022, and now its e-commerce business is $80B globally, more than double its size in 2019.
  • Amazon – global first-party sales were flat in 2022, but up 56% from 2019. The company does not report total GMV.
  • eBay – GMV in the US decreased 11% in 2022, down to $35.9B from $40.1B in 2021, but was still up 17% from 2019.

Amazon, Walmart, and The Home Depot have given conservative outlooks for revenue gains in 2023. Survey data shows that 96% of consumers intend to adopt cost-saving behaviors over the next six months, with 42% expecting to decrease their spending across all retail categories significantly.

9. Other e-commerce news of interest

eBay will begin disclosing the name and physical address of sellers beginning in June, due to requirements of the INFORM Consumers Act that became a law in December. For any seller who reaches an annual total revenue of $20k, eBay will include their name (or company name) and full physical address in purchase confirmation e-mails and order details.


DoorDash struck an agreement with Aldi to provider delivery service from its 38 locations in the US. Shoppers who belong to DoorDash's DashPash membership program will receive free delivery on orders over $35. Aldi also provides delivery and pickup service through Instacart, its longtime partner.


Meta is overhauling its Community Standards with a new set of rules designed to lessen inflammatory content, but is willing to give persistent offenders up to seven opportunities before banning their accounts. The new policy is supposed to prevent over-penalizing users who don't understand why Facebook removed their content and focus on providing users with context and transparency about why a piece of content violates its rules. 


The US Center for Contemporary Equine Studies is suing Amazon for selling products that contain eliao, a gelatin made from the skin of donkeys that's used in products like health supplements, despite efforts from advocacy groups to halt the practice. The lawsuit claims that Amazon is breaching the 1998 Prohibition of Horse Slaughter and Sale of Horsemeat for Human Consumption Act. Donkeys and horses are two different species (as you learned in 2nd grade), but part of the same family Equidae.


GoDaddy unveiled a new solution called Payable Domains, which allow users to accept payments online without having an e-commerce platform or website. The service is kind of like having a Venmo link, but hosted on your own domain. 


BigCommerce unveiled new pricing for their Standard (from $29/mo to $39/mo), Plus (from $79mo to $105/mo), and Pro (from $299/mo to $399/mo) plans. Merchants can retain their old pricing by switching to an annual plan. The price increase for non-enterprise merchants comes one month after Shopify's price hike.


Netflix will be cutting its prices from 13% to 60% in over 100 countries in a move to increase its subscriber base and compete with other streaming services in developing markets. Netflix currently has over 230M subscribers worldwide, but has been struggling to gain a foothold in some markets, particularly in Asia and Africa.


The FTC will not pursue its antitrust case to reverse Meta's acquisition of the virtual reality startup Within, makers of the popular game Supernatural, which lets user take VR fitness classes.


Stripe merchants can now accept Tap to Pay transactions on Android devices for in-person transactions. Last year Stripe became Apple's first payment partner for Tap to Pay on iOS, and now it is the first to partner with Google to offer the payment method on Android. Tap to Pay is currently live in six markets — US, Canada, U.K., New Zealand, Australia and Singapore.


The steep decline in Amazon's stock price over the past year resulted in corporate employee pay coming in 15% to 50% below projected pay targets. Amazon pays its corporate employees a large chunk of their annual salaries in restricted stock units.


There were over 200 e-books in Amazon’s Kindle store as of mid-February listing ChatGPT as an author or co-author, and the number is rising daily. There is even a new sub-genre on Amazon: Books about using ChatGPT, written entirely by ChatGPT.


Meta will most likely have to pay $175M for illegally copying Voxer's technology and using it to launch Facebook Live and Instagram Live. Meta tried to avoid paying up by requesting that a judge either reject the jury's September verdict or give Meta a new trial, but this week a federal judge denied their request.

10. Seed rounds, IPOs, & acquisitions

Walmart is selling Moosejaw, an e-commerce outdoor retailer, to Dick's Sporting Goods for an undisclosed amount after purchasing it six years ago for $51M to bolster its e-commerce offerings. Moosejaw is not the first e-commerce brand that Walmart has purchased and sold. Others include ModCloth, Bare Necessities, and ShoeBuy.


Amazon completed its $3.9B acquisition of One Medical after the FTC's objection to the merger timed out. The FTC is still continuing its investigation, citing “possible harms to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical” as a core reason for continuing their investigation.


Rebuy, a startup that combines AI with no-code technology to allow merchants to create personalized shopping experiences for their customers through upsells, cross-sells, and post-purchase follow-ups, raised $17M in a Series A round led by M13. The company will use deploy the new funds into technology development, investing in the Shopify ecosystem, and additional hiring to add to its 70-employee workforce.


Tracksuit, a New Zealand-based brand tracking startup that tracks brand awareness, consideration, preference and usage, and measures them against a company's competitive set, raised $5M in a round led by Blackbird. The company will use the funds to expand further into the US market.


FreshToHome, an India-based startup that empowers fishers and farmers to electronically auction their produce for sale, raised $104M in a round led by Amazon Smbhav. The company has plans to enter Malaysia, Singapore, and Indonesia in the next two years.


Vitally, a customer success platform that combines productivity and collaboration tools in a single workspace, raised $30M in a Series B round led by Next 47, bringing its total amount raised to $40.6M. The company will put the funds towards hiring and product development.


Slync, a supply chain management software whose founder and former CEO was charged by the Justice Department and SEC for misappropriating $20M from the company to fund a lavish lifestyle, raised $24M in a combination of equity and debt in a round led by Goldman Sachs. The company has hired a new CEO and plans to use the new funds to grow their team and expand their technological scope beyond freight. 


Spreetail, an e-commerce accelerator that partners with manufacturers to grow their online sales reach, raised $208M in a round led by McCarthy Capital. The company currently works with over 500 brands, helping them accelerate their sales on Amazon, Target, Wayfair, Walmart, eBay, and other online marketplaces.

What'd I miss?

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See you next Monday,

PAUL

Paul E. Drecksler
www.shopifreaks.com
[email protected]

PS: How do mathematicians scold their children? “If I've told you n times, I've told you n+1 times…” (Joke courtesy of reader Jacob Davidson)

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