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  • 🌀Another lawsuit for Amazon. Could it lead Amazon to separate its FBA business?

🌀Another lawsuit for Amazon. Could it lead Amazon to separate its FBA business?

Plus: Potential for conscious fashion in Mexico and the Emirates. Do UK & DE consumers have enough conscious products?

Author

Artur Stańczuk
July 02, 2023

Happy Sunday! Welcome to the MarketMaze newsletter, where we bring you the latest news, statistics, and analysis from the E-commerce & Marketplace space so you can stay ahead of the curve.

Today's write-up is 2,313 words, a 10-minute read. This week, I was particularly amazed at how much happened. In this edition, there are small improvements based on your feedback. I hope you will enjoy them!

This week’s TL;DR:

1. 📰News: Another lawsuit for Amazon from the FTC. Could it lead to Amazon breaking up the fulfillment business? What would that mean for FBA sellers?

2. 📊Stat: High potential for conscious fashion marketplaces and products in Mexico and the Emirates. What happened to UK and German consumers?

3. 📖Headlines: Amazon, Aliexpress, Shein, Ebay H&M, Zalando, Cos, Deliveroo, Doordash, Zomato, Geitr, AirBnB, TikTok and more!

4. 😲Mazes: Polish milk winning in China, Extreme dry gin sales on Wolt Hungary, Polish brands performance on Zalando

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1. 📰 News of the week

Another lawsuit for Amazon from the FTC. Could it lead Amazon to separate its fulfillment business? What would that mean for FBA sellers?

  • The Federal Trade Commission (FTC) is preparing to sue Amazon for antitrust violations, with the lawsuit expected to be filed in the coming weeks.

  • The allegations revolve around Amazon's alleged punishment of third-party sellers who don't use the company's logistics services. The FTC has gathered evidence of Amazon disadvantaging sellers who opt out of using its services, and the investigation also includes scrutiny of the algorithm that determines which sellers get priority in the "Buy Box" on Amazon's website.

  • This legal action would be considered the biggest challenge Amazon has faced from the regulatory agency so far. FTC investigators, led by Chair Lisa Khan, have been refining the lawsuit for several months. It is expected that Khan will push for a restructuring of Amazon's business model. 

  • The FTC has already filed three cases against the company this year, accusing it of various violations, such as mishandling voice recordings, privacy breaches, and deceptive practices related to Prime subscriptions.

📓Commentary:

If a breakup or significant restructuring were to occur, it could potentially create uncertainty among merchants who have built their businesses using Fulfillment by Amazon (FBA) model. Additionally with Walmart establishing its own fulfillment network, there is a question of whether the FTC might also focus on scrutinizing its strategy. Interestingly, Shopify sold its fulfillment business to Flexport in May 2023. Could it expect the future problem?

2. 📊 Stat of the week

High potential for conscious fashion marketplaces and products in Mexico and the Emirates. Do British and German consumers have enough conscious products?

  • According to Farfetch's Conscious Luxury Trends 2023 Report, consumers' growing interest in conscious fashion and beauty goods presents a significant opportunity for the luxury market,

    • 78% yoy increase in searches for conscious products

    • 16% to 27% grew the share of shoppers who purchase at least one conscious product

    • 16% growth of conscious products vs overall platform sales

  • Consumers actively search for and prefer products labeled as Conscious

    • 10% higher conversion rate for conscious products vs non-conscious

    • Top 3 conscious-related search terms on the Farfetch marketplace in 2022: Linen, Vegan, Organic

  • The opportunity for conscious products/ marketplaces differs by country

    • High potential in Mexico, Emirates and Japan (relatively low penetration of conscious product sales, at least on Farfetch platform, but high growth rates)

    • Low potential in countries like the UK, Germany, and Saudi Arabia that already have high penetration and low sales

    • China is experiencing lower growth in sales of Conscious products YoY, following the continued extended impact of COVI

  • Resale is also gaining traction among consumers. Pre-owned items are attracting high-value consumers, with authenticity being their top concern when buying pre-owned.

    • 22% to 46% grew share of Farfetch customers selling a fashion item in 2022

    • 16% increased the average selling price of pre-owned items (to $2,811)

    • 78% of shoppers consider certification of product authenticity as very or extremely important

📓Takeaway:
The demand for Conscious products is rising globally in 2022, creating opportunities for brands. Opportunity is different by each country. Consumers actively search for and prefer products labeled as Conscious. Pre-owned items attract high-value consumers, with authenticity being a top concern.

3. 📖 Headlines of the week

🛒 Mass merchant marketplaces

  • 🌎 AliExpress to offer 5-day delivery globally, which would be 30% faster than the industry standard. Cainiao (logistics arm of Alibaba) also unveiled a self-operated premium express service in China under the brand name Cainiao Express. Deep dive → Alizila

  • 🌎 Ebay launched a new platform for luxury resale 'Certified by Brand' in H2 2023. The program offers new, certified pre-owned, limited-edition, or exclusive “only on Ebay” inventory from top brands like Konstantin Chaykin, Zodiac Watches, and Le Vian. The program spans watches, handbags, and fine jewelry. Deep dive → Fashion network

  • 🇺🇸 Amazon made more products eligible for Outlet deals (new overstocks and closeouts with low prices). FBA sellers can now run Outlet deals on 60% more products with excess inventory, which, according to internal data saw 93% better sales in the following four weeks. Deep dive → Ecommerce Bytes

  • 🇺🇸 Amazon builds a creator platform “Inspire” (similar to Tiktok) by mixing commerce with content. Launched in May 2023, already attracted significant influencers’ attention. One agency manager says top talent is hitting $1 million in commissions. Deep dive → fortune | Amazon Inspire

  • 🇺🇸 Temu and SHEIN could be using shipping loopholes to avoid customs checks. A US Senate report warned that goods made using forced labor from China’s Xinjiang region may be entering US supply chains through the “de minimis provision”, which exempts goods shipped to the US that are valued below $800 from customs checks and shipping tax payments. Deep dive → Cips | Interim report

  • 🇩🇪 eBay in Germany partnered with Zoovu to launch an AI-powered discovery tool. The software offers personalized recommendations and tailored product advice, helping online shoppers find the ideal product through the implementation of digital assistants. Deep dive → Seller365

  • 🇬🇧 Fruugo (no sale, no fee UK marketplace) grew by 110% to $83M in 2022. The company cited growth in global cross-border e-commerce as the main reason for the successful year. 96% of all 2022 transactions crossed a border, and over 90% of its revenue was generated from shoppers outside of the UK in 42 different countries. Deep dive → TechBlast | Charged retail

  • 🇵🇱 Allegro to launch own banking account in partnership with Aion. The deal has been signed for 5 years, covering payment and savings accounts for customers making purchases on Allegro, and will provide technical functionalities of its platform via API, which will be operated by Vodeno (Aion Bank subsidiary). Deep dive → Wirtualne media

  • 🇵🇱 Erli.pl wants to grow customers by 50% by EOY. Customer base to increase from 2 to 3M and the merchant base from 16 to 20K. Erli carries currently 15M products, of which 50% are covered by promotions. Deep dive → Wiadomości handlowe

😲 Maze of the week

Congratz for the Polish milk… which seems to fit Asian taste
🐄 120K+ liters of polish 3.2% milk “Łaciate” were sold in just one day (18.06.2023) on the JD.com marketplace (2# best sold item!)

👗 Fashion marketplaces

  • 🌎H&M to sell more third-party brands online and in stores. Marketplace, launched last year, now has 70 external brands on its platform in six markets. Shoppers can buy sneakers (e.g., Adidas and New Balance), and clothes (Klättermusen, Cos). Deep dive → Reuters

  • 🇪🇺 Zalando partnered with lululemon to sell the brand on its platform across Europe. These products are already or will soon become available across Europe (AT, BE, CZ, DK, FI, FR, DE, IT, PL, ES, SE, NL) and will be fulfilled by Zalando Shipment Solutions. Deep dive → 365retail

  • 🇪🇺 Zalando filed suit against the Commission over the “Very large online platform (VLOP)” designation. Zalando is the only European VLOP as defined by the Digital Services Act (DSA). According to The DSA VLOPs are obliged to identify, analyze, and mitigate a wide array of systemic risks on their platforms (e.g., illegal content, disinformation). Deep dive → Just style

  • 🇬🇧 COS (fashion brand, part of H&M) launched COS Resell in partnership with Recurate. C2B2C Marketplace allows the COS community to sell used and unwanted items and buy new ones from other consumers. Deep dive → TrendHunter

  • 🇵🇱 SHEIN to launch a marketplace in Poland in Q3 with an extended portfolio of home appliances and DIY products. Deep dive → Wiadomości Handlowe

  • 🇰🇪 ShopZetu raises pre-seed funding to fuel fashion marketplace growth beyond Kenya. In the past 2 years, ShopZetu served 30K+ customers and sold 100K+ products. ShopZetu plans to grow its merchant base from 300 to 1000. Deep dive → TechCrunch

😲 Maze of the week

Zalando employee shared more fun facts about PL brands on the platform
👠 44% of all Kazar (leading PL brand on Zalando) orders come from Zalando platform in Germany
👗 VRG group brands (Wólczanka, Bytom and Vistula) are in the top5 most-bought Polish brands on Zalando
👔 Lancerto brand orders via Zalando increased by 900% yoy

🍔 Food marketplaces

  • 🌎Deliveroo “Snack to The Future” report predicts food reality in 2040. Key predictions include breath-tech, hyper-personalized diets, personal AI buddy, edible beauty products, 3D printed meal plans, VR dinner parties, no tech-allowed restaurants, and more. Deep dive → Deliveroo

  • 🇺🇸 DoorDash offers delivery workers an hourly rate based on the time spent on delivery (from the moment a worker accepts an offer until it’s dropped off ). On top of that, couriers earn 100% of post-checkout tips. The traditional option to earn per offer is still available. Deep dive → TechCrunch

  • 🇺🇸 Shipt launched a new Hosting Hub with pre-curated shopping lists for various occasions. The hub’s offerings will be updated seasonally to accommodate holidays and sporting events. Currently, the Shipt feature has lists for birthdays, baby showers, wedding showers, and dinner parties. Deep dive → GroceryDive

  • 🇮🇳 Zomato introduced an open data analysis platform for food trends to help restaurants make data-driven decisions on prices and dishes. The platform allows users to view demand and supply gaps at the local level, price distribution, and demand trends for different dishes or cuisines. Deep dive → Economic Times | Zomato

  • 🇮🇳 Zomato introduced a multi-restaurant cart. The feature allows users to add food to their cart from up to 4 different restaurants simultaneously. Deep dive → Business Today 

  • 🇪🇸 Getir prepares to exit Spain. 1,600 workers are set to lose their jobs. Getir makes a move to manage an oversized workforce after spending EUR 1B to buy Gorillas, one of his most direct competitors. Deep dive → Sifted | Elperiodico

  • 🇵🇱 Glovo, Bolt, Uber couriers in Poland demand pay changes. In the published manifesto, they mention that up to 41% of courier working time is unpaid, while 55% receive a salary lower than the national minimum. Deep dive → Portal Spożywczy

😲 Maze of the week

Wolt in Hungary shared some interesting statistics from the last 5 years…
🍕 2.9 M pizzas were ordered
🍸 EUR 6.9K was spend on dry gin by one of the users
🚚 2,823 orders in 263 different places were made by another user

📦Various marketplaces

  • 🇺🇸 Airbnb US revenues could be lower by approx. 3 or 50% yoy depending on the source. AirDNA and AlltheRooms cover statistics from AirBnb have completely different views on the performance. Airbnb stock has dropped 10% since February, and the company has projected one of the lowest growth rates. The whole situation is serious, given that a fall in Airbnb listing revenue could spark a housing market crash. Deep dive → Newsweek | Twitter post | VOX

  • 🇺🇸 Booking.com to launch a trip planner partially powered by the tech behind ChatGPT. The AI Trip Planner will be able to answer any travel-related queries and specific questions associated with any stage of the trip planning process, such as identifying the best accommodation options, or even helping to pick the right destination. Deep dive → Reuters | Travelweekly

  • 🇺🇸 Overstock to change its name to Bed Bath & Beyond. Overstock (furniture & home furnishings marketplace) completed its $21.5 million deal to acquire bankrupt Bed Bath & Beyond’s intellectual property and web domains. Deep dive → Retail wire

  • 🇺🇸 TikTok introduces zero seller fees ahead of the US Marketplace launch, offering free listings, shipping, and zero commissions. The effort could be to reposition the image as an e-commerce platform, as the US weighs a ban on its core social video platform ahead of the elections. Deep dive → Bloomberg | Bloomberg

  • 🇬🇧 OnBuy is ahead of its growth targets, revealing, just last month exceeded revenue target by 35%. Onbuy launched in 2016 was dubbed by The Financial Times as the “fastest growing e-commerce company in Europe”. The differentiator according to the CEO is a strict focus on the supply side, barcoded products, 3P sells (no 1P), and catalog for suppliers of products (rather than new listings). Deep dive → InternetRetailing | OnBuy

  • 🇪🇺 Refurbed hits €1bn sales milestone across 7 European markets (DE, SE, IT, DK, NL, AT, IE) it operates in. Launched in 2017, Refurbed provides access to sustainable, refurbished technology such as smartphones, laptops, games consoles, and home appliances. Refurbed has seen sales rise by 150% YTD , following similar growth last year and in 2021, indicating that more consumers are adopting refurbished technology. Deep dive → Irish Times

😲 Maze of the week

AirBnB has astonishing scale
🛌 1.07M nights and experiences were booked every day on AirBnB in 2022 (in total 394M = 5.5K per day per each country in the world!)

That’s all. See you next week!

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Author

Artur Stańczuk is a Chief Strategy Officer at Packhelp, the leading European packaging marketplace. Previously worked ~8 years at Bain & Co. In the past, Digital Transformation Director at the leading Polish convenience chain Żabka and Entrepreneur that co-launched 3 start-ups

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