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Chinese E-Commerce Vendors Struggle
Amazon Launches AI Shopping Assistant Rufus
AI-Enhanced Smartphones Revolutionize Mobile Commerce
TikTok Shop: Gen Z Drives Rapid E-commerce Growth
U.S. Firms Invest Heavily in Paris Olympics for Competitive Edge
ECOMMERCE WORLDWIDE TRENDS
Chinese E-Commerce Vendors Struggle Amid Economic Slowdown
BEIJING, July 12 (Reuters) – Chinese e-commerce vendors are grappling with slowing sales growth, increasing price pressure, and competitive policies from shopping platforms targeting cost-conscious consumers.
Once characterized by lavish shopping events, the e-commerce industry is now struggling due to a sputtering economy that has consumers tightening their purse strings. Extreme discounting, influencer-led sales campaigns, and generous return policies, once the industry’s strengths, are now burdens for vendors.
“The good times for e-commerce are over,” said Lu Zhenwang, a Shanghai-based e-commerce operator. “This year there is fierce competition, and I don’t think a lot of sellers will survive another three years.”
Profit margins are being squeezed at major platforms like Alibaba and JD.com, as well as thousands of small businesses. E-commerce now accounts for 27% of retail, with 12 trillion yuan ($1.65 trillion) of goods sold annually. However, as the economy slows, e-commerce growth is expected to drop to single digits from the double-digit growth of recent years.
Sales festivals like Singles Day are becoming risky propositions, with uncertain sales and high inventory costs. Vendors are also raising concerns about purchase return protection policies, which have driven return rates from 30% to 60%, adding to their financial burden.
“The operating environment is poor,” Lu said, describing the situation as the “neijuan” effect—working harder for smaller returns. “This is the new normal for the e-commerce industry in China.”
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ECOMMERCE AI
Amazon Launches AI Shopping Assistant Rufus Nationwide
Amazon’s AI-powered shopping assistant, Rufus, is now available to all U.S. customers via the Amazon Shopping app.
Introduced in February, Rufus answers a range of shopping questions and offers product recommendations, Amazon announced in a Friday (July 12) press release.
“Since introducing Rufus, we’ve been thrilled to hear directly from customers how Rufus has helped them with broad-range and specific shopping questions,” said Rajiv Mehta, vice president of search and conversational shopping at Amazon. “Customers have already asked Rufus tens of millions of questions, and we’ve appreciated their feedback so far.”
Initially launched to a small subset of users, Rufus is trained on Amazon’s product catalog, customer reviews, and web data. Customers use Rufus to ask specific product questions, receive detailed answers, explore related queries, and get product recommendations.
Additionally, Rufus helps with comparisons, updates on trends, and order information. It even assists with tangential shopping-related queries, such as necessary cookware for a soufflé.
“While it’s still early days for both generative AI and Rufus, we’re excited to hear customers are using Rufus to help them make more informed shopping decisions,” Mehta said. “We look forward to seeing how customers continue to use it to find exactly what they need or want in our store.”
ECOMMERCE AI
AI-Enhanced Smartphones by Samsung and Apple Revolutionize Mobile Commerce
Samsung and Apple’s new smartphones with AI features are set to reshape user interactions and mobile commerce.
At Galaxy Unpacked, Samsung introduced AI capabilities in the Galaxy Z Fold 6 and Z Flip 6, enhancing productivity and creativity. The Galaxy Z Fold 6’s Note Assist translates, summarizes, and auto-formats notes. Its Composer feature generates suggested text for emails and social media.
Samsung’s upgraded Interpreter feature offers real-time translations on both screens of the Galaxy Z Fold 6. The AI ProVisual Engine optimizes photos, with the Galaxy Z Fold 6 offering Portrait Studio and the Z Flip 6 introducing auto zoom for FlexCam.
Apple’s new AI system, Apple Intelligence, integrates into iOS 18, iPadOS 18, and macOS Sequoia, combining generative AI with personal context for tailored intelligence. It includes tools to rewrite, proofread, and summarize text, and features like Image Playground and Genmoji for creating custom images and characters.
Both companies enhance the notification experience with AI. Samsung offers smarter notification organization, while Apple’s system includes Priority Notifications and summaries.
Despite potential, Tyler Rice notes high costs. “They are currently expensive to run for search experiences or customer support,” he said. Security is also a concern, with Chris Roeckl urging mobile brands to enhance their security as AI is exploited for attacks.
As smartphone manufacturers embrace AI, privacy concerns and the learning curve could pose challenges. Apple’s Private Cloud Compute technology and Samsung’s on-device AI features aim to address these concerns.
ECOMMERCE SOCIAL MEDIA
TikTok Shop: Gen Z Drives Rapid E-commerce Growth
Since launching in the U.S. less than a year ago, TikTok Shop, the e-commerce extension of the popular social media platform TikTok, has quickly gained traction.
According to Omnisend, 33% of Americans have already made purchases on the platform, with Gen Z leading the charge. A staggering 56% of Gen Z respondents have shopped on TikTok Shop in the past year, significantly outpacing other demographics. Monthly, 36% of Gen Z consumers engage with the platform.
Greg Zakowicz, senior e-commerce expert at Omnisend, highlighted the impact of Gen Z on reshaping online retail: “Their unique preferences and digital fluency are reshaping the online retail landscape.” Popular items on TikTok Shop include beauty products (31%) and clothing (29%), praised for their pricing (36%) and quality (35%).
Despite positive reception, TikTok Shop averages a seven out of ten rating, with concerns over delivery times (25%) and advertising (20%).
Zakowicz advised brands to diversify their sales channels despite TikTok Shop’s appeal, suggesting platforms like Amazon and Walmart for newcomers due to their broader logistics and customer base.
ECOMMERCE ADS
U.S. Firms Invest Heavily in Paris Olympics for Competitive Edge
U.S. companies are leveraging this summer’s Paris Olympics to outpace competitors, with sponsor spending up 18% from the 2021 Summer Olympics, according to NBCUniversal via Reuters.
Peacock, NBCUniversal’s streaming service, will raise its premium plans by $2 monthly. Nike is investing more in this year’s games than ever before, while Hoka has opened a store in Paris. Coca-Cola will host events in over 70 markets.
Uber will offer Seine cruises during the games, and Levi Strauss is reopening its Champs-Élysées store. On will connect customers with sponsored athletes in its stores.
Airbnb increased Paris vacation rentals by 40%, and Warner Bros Discovery will expand its Max streaming service to 25 more European markets. Visa aims to issue over 5 million Olympic-branded credentials in Europe.
Luxury fashion brands are also capitalizing on the event. Ralph Lauren designed uniforms for the U.S. team, Giorgio Armani for Italy, and LVMH and Berluti for France. The IOC partnered with Lacoste for a co-branded fashion line.
Sportsbooks and daily fantasy operators anticipate a boost in games-related betting, marking the first Olympics since widespread U.S. gambling legalization.
Signing off,
The Merchant @CartHustle