Hey there, Happy New Year from everyone over here at the CartHustle!
Your first order of 2024 news:
What the F is Phygital?
eCommerce faces escalating threats
Alibaba’s Struggles: A Glimpse Inside the Chaos
Binny Bansal’s(Flipkart co-founder) launches OppDoor
Potential Merger Partners for Wayfair: Shein or Temu
E-Commerce 2024: AI, Shoppable Ads, and Composable Commerce Take Center Stage
In the coming year, marketers will reshape online shopping through AI innovations, expanding channels and ordering methods. AI-driven strategies will create a more robust e-commerce presence, seamlessly connecting digital and physical stores for a diverse shopping experience.
The ‘phygital‘ trend, blending physical and digital channels, gains permanence, with brands aiming to be omnipresent to cater to customer preferences. Improved AI and automation will bridge gaps for brick-and-mortar retailers, preventing ‘ghosting’ and enhancing overall digital performance.
Brand tone consistency becomes a priority, with AI models trained to codify communication nuances for an authentic and personalized customer experience. Shoppable ads, expected to surge in 2024, offer an omnichannel experience and quick product discovery, especially in streaming environments.
Gen Z’s influence on shoppable ads is evident, particularly on platforms like Roku, where beauty brands are anticipated to play a pivotal role in this trend. Marketers are adopting composable commerce systems for flexibility, agility, and enhanced customer journeys across various touchpoints.
E-Commerce Faces Escalating Threats: Fraud, Insider Misconduct, and Economic Strain
As the new year begins, e-commerce confronts challenges from customer dishonesty and insider misconduct, intensified by tightened cybersecurity budgets amid an economic downturn. Retailers, combating fraud scams, are shifting tactics. Instead of pursuing returns for disputed items, they now opt for hassle-free replacements or refunds to navigate the prohibitive costs of return processing.
‘Friendly fraud,’ where customers file chargebacks after receiving goods, has become an accepted cost of business. The Q4 2022 Digital Trust & Safety Index by Sift reveals 23% of consumers dispute purchases as fraud, even when satisfied. The Ponemon Institute’s study shows a 44% surge in cyberattacks involving insider threats.
Merchants face rising operational costs, implementing measures like delivery insurance and fraud controls. Rodrigo Figueroa, COO of Chargeback Gurus, decries ‘friendly fraud’ as consumer theft and advocates for strict measures against repeat offenders. In an interview, he emphasizes the industry’s need for collaboration to manage fraud effectively.
The evolving e-commerce fraud landscape prompts questions about industry resilience. Figueroa discusses the industry’s ongoing struggle, stressing the importance of understanding consumer behavior and continuous adaptation to combat fraud effectively. As retailers navigate this complex terrain, finding a balance between customer experience, revenue, and technology is crucial for sustainable solutions.
Alibaba’s Struggles: A Glimpse Inside the Chaos
Jack Ma’s rallying cry for Alibaba’s reform highlights the company’s turbulent state as it grapples with a series of challenges. Once Asia’s most valuable company, Alibaba’s shares have plummeted 75% from their peak three years ago, marking a stark contrast to rival PDD Holdings, which overtook Alibaba in market capitalization.
The company’s restructuring plan, initially well-received by investors, crumbled as fading optimism about China’s economy and regulatory hurdles took a toll.
Internal power struggles, confusion over business unit splits, and the abrupt departure of key figures, including former CEO Daniel Zhang, have contributed to Alibaba’s disarray. The scrapped plan to spin off its cloud business and uncertainties about other unit separations have added to the turmoil. Allegations of internal chaos, including a terminated IT team and disconnections from internal communications, underscore the challenges Alibaba faces.
Alibaba’s cloud business, once considered a growth driver, faces headwinds amid lacklustre demand and increasing competition. Chief Eddie Yongming Wu’s efforts to revive the cloud unit include the departure of key executives and promises of AI investment. However, skepticism lingers about Alibaba’s mixed signals, including dividends and share buybacks.
While Alibaba eyes an IPO for its logistics arm, Cainiao, doubts persist about the future of Ant, its fintech affiliate awaiting regulatory approval for a financial holding license.
Amid the chaos, Alibaba struggles to address its core problem: losing market share to competitors like PDD and ByteDance-owned Douyin.
Binny Bansal’s OppDoor: Aiding Global E-commerce Expansion
Flipkart co-founder Binny Bansal has introduced OppDoor, a B2B platform facilitating the global expansion of e-commerce companies. OppDoor provides end-to-end solutions, including market entry analysis, demand mapping, and inventory management. The platform, operational in multiple countries but notably absent in India, collaborates with private-label brands, offering services from advertising strategies to competitive intelligence.
Binny Bansal’s interest in a new e-commerce-related startup surfaced in 2023, emphasizing allied services for global firms. OppDoor’s global operations span the US, the UK, Canada, Mexico, Germany, Singapore, Japan, and Australia.
Bansal, who previously co-founded Flipkart, sold a portion of his stake to Tencent in 2022, later acquired by Walmart in 2023 for $3.5 billion. His latest venture follows reports of an upcoming AI-based startup.
Beyond entrepreneurship, Bansal remains an active investor, launching XTo10X Technologies to assist startups in achieving product-market fit and scaling into robust, world-class entities.
Potential Merger Partners for Wayfair: Shein or Temu
As Wayfair grapples with a decline in active customers and an 82% drop in share price over the past three years, speculation suggests that Chinese-founded eCommerce companies Shein or Temu could be potential merger partners.
The Information’s 2024 predictions list, cited by Seeking Alpha, outlines this potential scenario for Wayfair. A merger with Shein or Temu could help these Chinese companies move beyond their “bargain basement” reputation, enhance competition with Amazon, and improve their image in the face of regulatory scrutiny.
For Shein, a merger would offer access to Wayfair’s warehouses and fulfillment centers, supporting Shein’s distribution streamlining efforts in the United States.
Temu, part of PDD Holdings with a market cap of about $191 billion, and Shein, with a market cap of $66 billion, present substantial opportunities for Wayfair to revitalize its position in the home goods retail sector. Wayfair had previously undertaken cost-cutting measures and strategic initiatives to enhance its competitiveness.
Signing off,
The Merchant @CartHustle