🌀 State of Ecommerce and Marketplace valuations 🎢

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Sellside Partners recently updated its multiples assessment in the e-commerce space for Amazon-native and D2C brands. They analyzed the latest trends, outlook, and M&A activities for the rest of 2024.

📉 Amazon Brand Multiples

• Well-managed Amazon brands (>50% Amazon sales) with stable finances are valued at 2.0x–3.0x EBITDA.

• Multiples can vary from 1x to 4.5x, depending on risk and growth.

• Brands with over 10-15% EBITDA margins and stable sales tend to fare better.

• Smaller, less differentiated brands struggle to find buyers, as investors become more selective.

📈 D2C Brand Valuations

• D2C brands sell directly to customers via their own websites.

• Direct control over branding, pricing, and customer relationships drives up value.

• D2C brands enjoy higher multiples, ranging from 2.5x to 7.5x EBITDA.

• Despite post-COVID setbacks, D2C continues to see growth.

📊 Classifieds & Inventory E-commerce

• Classifieds lead with an EV/Revenue median multiple of 2.8x.

• Inventory-based e-commerce has one of the lowest, with a median of 0.7x.

• Price comparison platforms top the chart with a 4.4x multiple at the upper quartile.

🛍️ Marketplace Trends

• Marketplaces are valued with revenue multiples between 0.7x and 3.4x.

• Established marketplaces with slow growth receive lower valuations (0.7x).

• High-growth or strong market position marketplaces reach up to 3.4x multiples.

• The "Rule of 40" (sum of profit margin and growth over 40%) helps assess marketplace potential.

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ZigZag’s latest report uncovers how UK retailers are shifting towards paid returns. Their 2024 study shows how returns policies are evolving and highlights what retailers and consumers can expect moving forward.

📈 Rise of Paid Returns

• 33% of UK retailers now charge for returns, up 17% year-on-year.

• 61% of shoppers are open to paying return fees.

• "Retailers must balance cost and convenience," says Al Gerrie, CEO of ZigZag.

🏪 Flexibility and Convenience

• 68% of retailers offer 28-to-30-day return windows, the industry standard.

• 82% of large retailers provide in-store return options, reducing costs.

• 57% of shoppers prefer gift card refunds, but only 22% of retailers offer it.

New research by DesignRush (B2B marketplaces to find agencies) published by ChannelX reveals a 23% increase in B2B weekend traffic, signaling a shift in when decision-makers engage online, and highlighting opportunities for brands to adapt their strategies.

📊 Weekend Traffic Surge

• DesignRush analyzed 950K U.S. search queries, finding a 23% rise in weekend traffic.

• Key decision-makers like CEOs and VPs are now researching on weekends.

• Weekend content engagement is higher, with longer sessions and more conversions.

🚀 B2B Marketing Shift

• B2B brands must extend their campaigns beyond weekdays to capture weekend prospects.

• Robin Fishley, SEO Director, stated, "Weekends are a powerful window of opportunity for marketers."

• Summer 2024 had the highest weekend traffic growth in the study.

▶🇺🇸 Temu growth slows in U.S., market share at 3.4%. Temu's U.S. sales growth decelerated to 37% in August, down from 45% in July. Despite a slight market share gain to 3.4% (calculated as Temu sales vs Amazon), DAUs (Daily Average Users) fell 17%. Bank of America cites plateauing sales and tough comparisons, along with challenges from parent Pinduoduo.

▶🇨🇳 Temu overtakes eBay with 700M monthly visits. Temu saw $20B in sales in the first half of 2023 and covers 79 countries. It holds a 45% market share (in terms of traffic) in the U.S., trailing only Amazon.

▶🇺🇸 Biden targets Shein, Temu with import rule change. The Biden administration plans to change the "de minimis" import rule, affecting Shein and Temu. The new proposal will add tariffs and more inspections to their shipments, aiming to protect US workers and businesses.

▶🇮🇳 Amazon, Flipkart violated competition laws. India's Competition Commission (CCI) found Amazon and Flipkart guilty of violating competition laws by favoring specific sellers. This investigation comes as quick commerce challenges their dominance in India's $50B e-commerce market.

▶🇺🇸 Amazon launches Export Central, boosting sales. Amazon’s new Export Central tool simplifies cross-border selling, allowing merchants from six European stores to sell in 39 countries. This program boosts traffic and sales, with FBA sellers automatically enrolled and MFN sellers required to set shipping rates.

▶🇺🇸 Amazon offers refunds without returns for FBA. Amazon launches a new “Refund Without Return” solution for U.S. FBA sellers, allowing refunds without the need to return items. Sellers can enable this, with restrictions on item eligibility and customer abuse safeguards in place.

▶🇨🇳 Alibaba.com launches US credit card for businesses. Alibaba.com introduces its first US credit card with Mastercard, offering 3% cashback or 60-day interest-free terms for purchases. Small businesses can benefit from these rewards, while Alibaba expands its global reach.

▶🇩🇪 Amazon tests tram deliveries in Frankfurt pilot. Amazon launches a pilot project in Frankfurt, Germany, using trams to transport packages across the city. The goods are carried by electric vans to a tram, then moved to cargo bikes for final delivery. This fits Amazon's green logistics push.

▶🇩🇪 Zalando unveils new brand positioning for 2024 alongside its Fall/Winter 2024 campaign. The new positioning enhances its role in fashion e-commerce with a focus on style, quality, and inspiration. A vibrant orange color scheme, improved accessibility, and new storytelling features aim to engage customers across all touchpoints.

▶🇩🇪 Zalando rolls out free loyalty programme with perks. Zalando evolves its Plus programme, now free to join, with a points-based system. It rewards purchases and other actions, unlocking benefits like birthday vouchers. After a successful test in Spain, it expands to France and Austria.

▶🇬🇧 Asos rejected Shein’s £215M Topshop offer, favoring a £135M joint venture with Heartland. This gives Asos distribution rights and future royalties for the Topshop brand, boosting long-term growth.

▶🇺🇸 Zara to launch secondhand service by October. Zara will launch its ‘Pre-Owned’ platform in the US by October 2024, offering secondhand sales, repairs, and donations. The service already operates in 16 European countries. Inditex, Zara’s parent, sees this as part of its sustainability push.

▶🇬🇧 Boohoo halts US local supply after costly misstep. Boohoo will stop fulfilling U.S. orders locally by Nov. 11, closing its Pennsylvania warehouse just over a year after opening it. The change could cost Boohoo $44.5M in write-offs. The company will now fulfill U.S. orders from the UK.

▶🇬🇧 Depop taps AI for listings with just one photo. The new feature adds item details like brand and color automatically. Depop's AI integration aims to boost second-hand shopping efficiency.

▶🇹🇷 Trendyol to build $10B logistics hub in Romania by 2025, employing 250 people. Having already sold 3M items and gained 500K customers, the company will also integrate local sellers. The expansion aims to triple its product offerings in 2024.

▶🇸🇪 H&M unveils second-hand and store makeovers. H&M is launching its ‘Pre-Loved’ concept in France and Belgium, featuring second-hand pieces in its Antwerp and Paris flagship stores starting September 12. In parallel, H&M is modernizing 18 stores and improving its website for a seamless shopping experience.

▶🇺🇸 Amazon launches Saver brand, undercuts competitors, with most items under $5. Prime members receive up to 50% off rotating weekly groceries. This move aims to beat Walmart and Target’s price cuts as the grocery battle intensifies.

▶🇬🇧 Uber Eats partners with Simon Rogan for $100 menu. Uber Eats partners with Michelin-star chef Simon Rogan for a $100 (or £80) five-course delivery menu. Ingredients come from Rogan's Cumbrian farm, with local meat, electric vehicles, and seaweed packaging enhancing sustainability.

▶🇮🇳 Swiggy ups IPO by $150M, aiming for $1.4B total. It seeks shareholder approval to raise $600M from fresh shares. Backed by Prosus and SoftBank, Swiggy eyes a $15B valuation for its public listing.

▶🇬🇧 DELLI secures $6M to expand its independent food platform. UK-based online food marketplace has seen 16X growth in sales, with users doubling their basket size. Founded by Marie Petrovicka and Simon Beckerman, DELLI is now expanding regionally and enhancing its tools for sellers.

▶🇦🇪 Deliveroo launches ‘Now Just Got Even Better’ platform, showcasing its expanded services in the UAE. The campaign highlights how Deliveroo now delivers more than food – from groceries to pet items – transforming any moment.

▶🇧🇪 Deliveroo starts delivering pet food in Belgium. Deliveroo launches a pet food delivery service in partnership with Tom&Co. 262 pet products will be available in Brussels, Antwerp, Ghent, Bruges, and Kortrijk. Wallonia is currently excluded, but expansion plans are in place.

▶🇺🇸 Instacart expands tech, brand deals for faster growth. Instacart is growing by adding emerging brands to its ad base and expanding retail partnerships. CEO Fidji Simo said these moves, announced Sept. 12, could double the growth rate of retailers launching new services with Instacart.

▶🇺🇸 Instacart targets 25M users, boosts order frequency. Instacart aims to convert 25M annual users into monthly shoppers, driving up order frequency. CEO Fidji Simo sees a chance to increase average purchases from 11 to monthly. The company leads in large basket share at 70% of the market.

▶🇬🇧 Google faces UK charges for abusing ad market power. The CMA provisionally ruled that Google abused its dominant ad market position since 2015. This could lead to fines up to 10% of Google’s global turnover. Google disagrees, saying the claims misinterpret the ad tech sector.

▶🇦🇺 Australia plans social media age restriction at 14-16, aiming to reduce social harm. This could make it one of the first countries to enforce such a rule. Critics argue it may drive youth into riskier, unregulated platforms.

▶🇨🇭 Galaxus secures budget for European expansion. Migros approves a multi-year budget for Galaxus to expand its European operations until 2029. With a focus on Germany, Galaxus plans to build on its success, already serving 2.5M customers and generating $286M in sales.

▶🇺🇸 EPA allows lawsuits over warehouse air pollution. The EPA has approved rules in Southern California allowing communities to sue warehouses for truck emissions. These warehouses are linked to a 20% rise in nitrogen dioxide levels. Non-compliance rates are high, with 1,400 out of 2,000 warehouses failing to meet standards.

▶🇩🇪 GLS partners with hey circle for green shipping. GLS Germany partners with hey circle to offer reusable shipping options. By using hey circle’s durable packaging, companies reduce up to 76% CO2 emissions and 94% waste. Costs are comparable to single-use boxes, making it an eco-friendly switch.

▶🇬🇧 Amazon launches AI assistant Rufus in UK, offering customers a new way to shop. Initially rolled out to select users, Rufus answers questions, compares products, and enhances shopping experiences.

▶🇺🇸 Walmart partners with Parafin for seller financing. Parafin, a US fintech, to provide sellers with easy access to capital through its Marketplace Capital program. Parafin has already extended over $8B in financing across platforms.

▶🇨🇳 AliExpress targets 50% of South Korea’s e-shoppers. AliExpress, currently 3rd in South Korea's e-commerce race, aims to capture over 50% of the market within 3-5 years. Through new marketing, a logistics center, and a no-commission policy, they hope to attract 17M users by 2028.

▶🇸🇬 Taobao tops Singapore App Store with AI upgrade. Taobao’s AI-powered English version hit Singapore on Sept. 10, boosting it to the top of Apple’s App Store. The app caters to non-Chinese users, with AI translations improving access, despite some flaws in currency display.

▶🇨🇳 Alibaba invests $20M in Greek startup Connectly.ai. The startup uses AI assistants to enhance communication between retailers and customers on platforms like WhatsApp and Messenger. With this funding, Connectly.ai plans to expand globally.

▶🇺🇸 Innovative Food sells igourmet.com for $700K. Innovative Food Holdings is selling igourmet.com for $700K plus $350K in liabilities. After years of losses, the company is refocusing on its retail cheese business to improve profits.

▶🇺🇸 Simon expands marketplace to 360+ retailers. Simon has expanded and rebranded its online outlet marketplace as ShopSimon, featuring sale and discounted items from over 360 retailers like Adidas and Hugo Boss. The platform allows customers to shop by image, color, and access same-day pickups.

▶🇺🇸 Shopsense AI partners with Paramount at 2024 VMAs to let viewers shop for affordable dupes of their favorite artists' outfits. The AI can identify similar items from over 1,000 retailers, offering both style and budget options.

▶🇺🇸 Ecomtent raises $850K to redefine AI search SEO. Ecomtent, an AI-driven startup, raised $850K to help retailers optimize for AI-based search. Its technology enables faster content generation, increasing conversions by 30%. Founders Max Sinclair and Timur Luguev plan to expand operations after this funding.

▶🇺🇸 Cavela raises $2M to reshape product sourcing with AI. Cavela's AI marketplace simplifies product sourcing for brands. With $2M funding from XYZ Venture Capital, the platform reduces supplier engagement from 1,000 to just 10 touchpoints and lowers sourcing costs by 40% on average.

▶🇺🇸 Nostra AI raises $8.9M to enhance e-commerce speed. Nostra AI raises $8.9M, led by High Alpha, bringing total funding to $20M. With enterprise clients like Forever 21, the new funding will expand their technology into Shopify and Salesforce, improving website performance.

That’s all. See you next week in the 🌀Maze!

Your guide through the maze

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