🌀 Temu's Blitz Calms Before the Storm? 🌪️

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Temu, a Chinese marketplace, has made a dynamic & aggressive foray into Western markets, characterized by extremely low prices, an engaging app experience, and heavy investment in digital advertising

Smec has gathered data from 800+ Google Ads ecommerce accounts and, quarter by quarter, tracked the percentage of advertisers facing Temu as an account-wide competitor. Let's unpack the insights 

Amazon's Sustained Dominance

• 🌟Market Leader: Since Q4 2018, Amazon has been the top advertiser in Europe

• 🎯Consistent Competition: Competes with 70-80% of Google Ad Accounts

• 🚧Brief Hiccup: The only dip was a short advertising pause during the pandemic

Wish's Brief Challenge to Amazon

• 📅Initial Tests: Wish began testing Google Ads in 2019, then expanded massively in 2020

• 💥Rapid Decline: After reaching Amazon's competition level, Wish imploded in 2021

Temu's Rapid Rise

• ⚡Sudden Impact: Since Q2 2023, Temu has made a significant entrance without a visible testing period

• 🏁Quick Equalizer: Reached the same competitive level as Amazon within two quarters

Signs of a Potential Shift

• 📉 Early Indications: Like Wish, Temu has started to show signs of slipping in Q1

• 🔧 Strategic Adjustments: Even though it could look like Wish trajectory, as Temu model is different it is rather that Temu is testing higher marketing efficiency, operating with a modest budget, narrowing their product range, or pausing before a new push.

• 🛡️ Sturdy Model: Unlike Wish, Temu is supported by PDD Holdings, suggesting potential for sustained aggression due to large PDD coin coffins. Temu model comparing to Wish allows for more control in Pricing and control over inventory without risk of unsold items (as it is return to supplier)

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The era of marketplaces is upon us, with recent data from FoxiIntelligence and Emarketer illuminating the role these platforms play in the EU ecommerce. 

Let's dive in:

Overall Marketplace Share: A Rising Force

• 📈 Significant Growth: Marketplaces now account for over one-third of ecommerce turnover in Europe, similar level to the US

• 🚀 Accelerating Pace: In 2023, the marketplace model outpaced traditional sales, growing by an additional 3 percentage points in Europe.

• 🔍 Indicator of Change: This surge suggests a consumer shift towards marketplace platforms

Geographical Variations: A Diverse Map

• 🌍 Uneven Adoption: Marketplace penetration varies significantly, with France and the Netherlands at lower adoption rates of 29% and 28% respectively

• 🏆 Leaders of the Pack: Germany and Italy lead with robust marketplace shares of 42% and 43%

• ⚖️ Balanced UK: The UK stands at a 36% marketplace share, reflecting a balanced ecommerce environment

Fulfillment Business: The Expanding Frontier in EU

• 📦 Dominant Models: In Ireland, fulfillment operations represent 55% of Amazon’s model

• 📈 Growing Sector: Germany and the UK also see substantial Amazon fulfillment business at 39% and 49% share respectively

• 🌟 Emerging Players and Innovations: New entrants like TikTok and Zalando Zeos are reshaping the fulfillment landscape. TikTok’s services captured 4% of the UK market in late 2023

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▶🇺🇸 eBay boosts iOS app with AI fashion feature. eBay introduced a 'shop the look' feature in its iOS app, using AI to offer personalized fashion suggestions based on user shopping patterns

▶🇺🇸 Amazon cuts costs, plans more for 2024. Amazon CEO Andy Jassy commits to further reducing fulfillment costs in 2024, leveraging advanced robotics & optimized delivery networks

▶🇺🇸 YouTube launches Shopping Collections and Affiliate Hub among new Shopping features to increase creator earnings and enhance shopping experiences.

▶🇩🇪 OTTO GMV grows to $7.05B, opens to EU merchants. The online marketplace now hosts over 6,500 partners, expanding its EU network.

▶🇨🇳 AliExpress launches huge subsidy campaign. With a hefty 10 billion yuan ($1.44B USD) in subsidies for sellers, Alibaba's AliExpress aims to boost Chinese brand presence globally, countering rivals like Temu & Shein

▶🇺🇸 TikTok explores AI avatars for ads, potentially challenging the dominance of human influencers. This new feature will allow TikTok Shop sellers and advertisers to generate scripts for virtual influencers to deliver

▶🇷🇺 Wildberries and Ozon see seller surge by 50% by 2024, totaling 700K. The expansion comes as many international providers has withdraw from the market after the war in Ukraine started

▶🇵🇱 Empik grows 8 times faster than market. Empik marketplace thrived in 2023, growing eight times faster than the market, crossing 11 million orders from third-party sellers. Now, it drives over a third of Empik's total online sales

▶🇬🇧 eBay slashes fees, boosts pre-loved fashion following Depop steps. eBay's new policy removes final value fees for pre-loved clothes, aiming to simplify selling and boost the circular economy.

▶🇧🇷 Shein dives deep into Brazil's garment scene. Shein and MercadoLibre are actively recruiting vendors in Brás, São Paulo, enhancing their services to dominate the local $3B garment market.

▶🇪🇺 Temu under new EU rules spotlight. Temu, the Chinese e-commerce giant, now under closer scrutiny by the EU, could face stringent content-moderation rules after reaching 75 million European users. The EU's concerns include privacy and consumer misinformation.

▶🇩🇰 Trendsales fires all staff post Vinted acquisition. Following its acquisition by Vinted, Danish online marketplace Trendsales has laid off all 79 employees as of April 2024, amid uncertainties about its future.

▶🇬🇧 Shein pops up with Liverpool fashion bash. From April 19-21, Shein's Liverpool pop-up will offer fashion, beauty, and exclusive first looks at Musera label.

▶🇬🇧 Asos faces tough rivals, sales down 20%. Asos is grappling with fierce competition from Shein and Temu, and a changing business model.

▶🇺🇸 Rent the Runway boosts loyalty by 10% with AI search upgrades and enhanced digital experience. Their future plans include streamlining UX and adding educational content.

▶🇺🇸 Uber Eats spices up with video feed. Uber Eats introduces a short-form video feature in select cities, enhancing customer engagement and restaurant visibility. Planned for global expansion, the feature showcases dishes, influencing user choices.

▶🇩🇪 Kaufland marketplace enters Poland, Austria, leveraging local brand recognition and a lack of competitors in Austria.

▶🇫🇮 Wolt launches Wolt Ads in 27 markets. Wolt's new advertising venture, Wolt Ads, shows promising early results, enhancing partner engagement and sales.

▶🇺🇸 Kea redefines ordering with voice AI. Kea's AI technology allows customers to place food orders over the phone without the hassle of apps. Similar is already used by DoorDash and Uber Eats.

▶🇺🇸 Instacart revolutionizes grocery with AI. 'Ask Instacart' feature employs generative AI to personalize shopping experiences, answering customer queries and recommending products based on shopping history.

▶🌏 TikTok teases new photo-sharing app. TikTok's not just for videos anymore! With the new TikTok Notes app, users can soon share photos in a dedicated space, enhancing their creative expression.

▶🇺🇸 Cognizant teams up with Shopify, Google. Through their strategic alliance, they are set to transform commerce for retailers worldwide, focusing on AI-driven personalization and operational scalability.

▶🇺🇸 Google makes shopping for clothes smarter. Google introduces a new Tinder-like feature allowing users to swipe on clothing items to refine style recommendations.

▶🇺🇸 99 Cents Only stores close all shops. The mass closure of 99 Cents Only and Family Dollar locations does not signal the end of discount stores, despite a challenging economic landscape and operational issues.

▶🇪🇺 Chrono24 rolls out Certified program "Certified," for luxury watches over $1K, bolstering buyer confidence in the used watch market.

▶🇵🇱 Leroy Merlin launches marketplace in Poland. Leroy Merlin's Polish marketplace will not just mediate but showcase offers from external companies on its site, leveraging experiences from its global network.

▶🇨🇳 Suzhou targets $20.7B from e-commerce by 2026. Suzhou's new plan will ramp up its e-commerce, attracting global projects and building a robust digital infrastructure.

▶🇬🇧 Frasers, Next eye distressed Ted Baker. Frasers Group and Next, two major UK-based retailers known for acquiring distressed brands, are reportedly in talks to buy parts of Ted Baker's European operations from administrators at Teneo Advisory.

▶🇳🇱 Frasers Group buys Dutch retailer for $83M. The deal includes 17 stores and a strong online presence, totaling $83M in sales last year. Frasers Group also eyes bankrupt Sprinter’s locations in the Netherlands.

▶🇪🇸 Puig plans IPO aiming for over $2.7B. The family-owned Spanish conglomerate with a portfolio including Charlotte Tilbury, Paco Rabanne and Byredo, believes this move will enhance competitiveness in the global beauty market.

▶🇺🇸 Guesty nets $130M at $900M valuation. Guesty, a platform streamlining online property management eyes profitability in 2024

▶🇹🇷 ikas lands $20M to boost e-commerce. Ikas, the Turkish e-commerce platform aims to simplify online store management and expand further in Europe.

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