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Google Invests $350 Million in Flipkart
David Beckham joins AliExpress as global brand ambassador
Balancing short-term gains and long-term growth
Salesforce introduces Einstein Copilot enhancements
Amazon marketplace opportunities and challenges
ECOMMERCE TECH
Google invests $350 million in Flipkart
Google is investing nearly $350 million in Flipkart, joining Walmart in supporting the Indian e-commerce giant. As part of the deal, Google will provide Flipkart with cloud services, the Bengaluru-based startup announced on Friday.
The Google investment is part of a nearly $1 billion funding round that Flipkart started in 2023. Walmart has led the round, investing $600 million last year. Microsoft is also an investor in Flipkart.
Flipkart, now valued at $36 billion, leads India’s e-commerce market, serving millions in smaller cities and towns. The company owns fashion e-commerce startup Myntra and holds about 48% of the market, according to Bernstein.
Flipkart faces competition from Reliance Retail, Amazon, SoftBank-backed Meesho, and several quick-commerce apps. Reliance Retail, run by Asia’s richest man Mukesh Ambani, operates India’s largest retail chain and is expanding into e-commerce. Last year, it was valued at $100 billion following a $2 billion investment from QIA, ADIA, and KKR.
India’s e-commerce market is projected to reach $133 billion by next year. Bernstein analysts note that Indian e-commerce is seeing the rise of challengers across quick, social, and vertical commerce. While Amazon and Flipkart dominate in mobiles, electronics, and appliances, category-specific winners like Blinkit, Meesho, and Nykaa are emerging.
Google, which reaches over half a billion people in India, views the country as a key market, having announced plans to invest $10 billion in Indian businesses in 2020.
ECOMMERCE ADVERTISING
David Beckham Joins AliExpress as Global Brand Ambassador
Soccer star David Beckham has signed on as the global brand ambassador for Alibaba’s international e-commerce platform, AliExpress, the company announced Monday.
The partnership comes as China-based rivals PDD Holdings’ Temu and fashion startup Shein expand globally. Temu recently advertised during the Super Bowl to gain traction with U.S. customers.
AliExpress has joined several Chinese companies in sponsoring the UEFA European soccer championship, starting mid-June. “AliExpress is helping fans get even closer to UEFA EURO 2024™ this summer, by offering them great prizes as the action takes place on the pitch,” Beckham said.
AliExpress is investing millions of Euros in discounts and deals during the games, including chances for app users to win tickets.
Beckham’s company, DRJB Holdings, reported £72.6 million ($92.5 million) in revenue in 2022.
Alibaba’s international e-commerce unit, which includes AliExpress, saw sales surge by 45% in early 2024 to 27.45 billion yuan ($3.79 billion). However, the international business reported increased losses of 4.1 billion yuan, up from 2.2 billion yuan a year earlier.
AliExpress previously spent $7 million in South Korea to attract local consumers and signed actor Don Lee as a brand ambassador. Other Chinese sponsors of UEFA Euro 2024 include Alipay, BYD, Hisense, and Vivo.
ECOMMERCE TRENDS
Balancing short-term gains and long-term growth
Jack Welch famously said, “You can’t grow long-term if you can’t eat short-term.” The FinTech sector illustrates this lesson well. Justin Grooms, the new CEO of Bolt, is proving adept at balancing short-term customer focus with long-term eCommerce strategies.
Grooms, who spent five years as Bolt’s general manager for global sales, emphasizes the importance of a frictionless shopping experience. “The better shopping experience is the edge retailers are searching for,” he told PYMNTS CEO Karen Webster. Bolt’s one-click checkout process integrates smoothly with retailers’ systems, boosting conversion rates. For instance, Revolve, an online fashion retailer, saw a 3.2% lift in checkout conversions and a 4% revenue increase after adopting Bolt’s technology.
Grooms aims to meet “retailers where they are” in terms of their tech stack. Bolt’s technology works behind the scenes, enhancing the retailers’ brand. Grooms believes vertically focused retailers, like Casper, excel at customer retention due to superior checkout experiences.
Looking ahead, Grooms envisions an invisible and seamless checkout process. “Shopper identity goes beyond just a name and shipping address,” he said, stressing personalized experiences. For the 2024 holiday season, he predicts merchants will encounter new shoppers, emphasizing that a smooth checkout experience is crucial for fostering long-term relationships.
ECOMMERCE TECH
Salesforce introduces Einstein Copilot enhancements
Salesforce introduces Einstein Copilot upgrades, enhancing marketing and e-commerce capabilities. New features like Einstein Copilots for Shoppers and Buyers leverage generative AI to personalize shopping experiences and streamline checkout. The software assistants engage in chat conversations, answering queries, and suggesting up-sells.
Einstein Copilot for Merchants automates web store setup and product descriptions, currently in beta. Meanwhile, Einstein Copilot for Marketing enhances campaign personalization and audience targeting, slated for June release.
Constellation Research analyst Liz Miller hails the move as significant, empowering marketers to analyze performance without fear. Michael Affronti, SVP of Salesforce Commerce Cloud, underscores the scalability and efficiency gains through GenAI tools.
However, effective implementation requires robust data infrastructure, available through Salesforce’s Data Cloud accelerators, albeit at a considerable cost. The announcement coincides with Salesforce’s Connections conference, marking a commitment to advancing marketing and commerce solutions.
MARKETPLACES
Amazon marketplace opportunities and challenges
The Amazon marketplace is a jungle. Savvy merchants can reach a massive audience and sell a lot of merchandise, but like a real jungle, there are reasons to be afraid.
Contributing to sellers’ fear are Amazon’s dominance in the U.S. market, advertising challenges, and Google’s generative search results.
In 2023, Amazon Logistics transported more packages than UPS and FedEx for the first time. Amazon transported 5.9 billion parcels in the U.S., surpassing UPS’s 4.6 billion and FedEx’s 3.9 billion. Only the United States Postal Service had more volume with 6.6 billion parcels. Amazon Logistics and Fulfillment by Amazon (FBA) streamline storage, packing, shipping, customer service, and returns, benefiting small and mid-sized businesses (SMBs).
However, Amazon’s dominance also creates dependency. Jon Elder, founder of Black Label Advisor, notes, “Amazon is nearing 50% of all ecommerce revenue in America, so it’s almost a monopoly now.” This allows Amazon to raise selling fees significantly, squeezing margins for SMBs. New logistics-related fees introduced in February 2024 add about 15 cents to each item sold via FBA.
Many sellers also rely on Amazon Ads, which boasts several advantages over Meta and Google Ads: a large, high-intent audience, seamless shopping integration, and first-party data. However, increasing costs and potential disruptions pose risks.
Google’s AI Overviews could drive some ecommerce companies to Amazon by reducing organic search traffic to their own sites. Gartner predicts AI will cut overall organic search traffic by about 25% by 2026. Ecommerce stores facing reduced traffic may turn to Amazon’s marketplace, intensifying competition.
Signing off,
The Merchant @CartHustle