🌀 Tech giants play with Dragon's fire 🐲

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Amazon, Google, and Meta Ads play with Dragon's fire 🐲

Beneath the gleaming surface of Big Tech's ad revenue reports, a potent force lurks, reshaping the digital ad landscape with the intensity of a hidden dragon. This force, China, with its fiery breath, is igniting the ad sales of tech giants like Amazon, Google, and Meta. As tech giants unveil their Q4 earnings, it's time to peer into the dragon's den and uncover the mystique of the Middle Kingdom's towering influence!

1️⃣ Google's Eastern Gale 🌬️
Alphabet, the #1 colossus of digital advertising, reported an 11% revenue surge to $53.5B in Q4, narrowly missing projections. Yet, the whispers from the dragon's cave hint at China's stealthy $12B annual input, over 5% of Google's vast ad kingdom.

2️⃣ Amazon's Scales of Prosperity 🐉
Amazon's ad revenues ascended to $14.65B in Q4 2023, marking a 26% climb, crowning it the empire's jewel. Focused on streaming and connected realms, Amazon has attracted a hoard of ad spend. The dragon's pact with Chinese firms, adding $9.4B or 20% to its ad coffers in 2023, highlights China's crucial role in Amazon's ad realm expansion.

3️⃣ Meta's Eastern Elixir 🍵
Meta's ad revenue soared by 24% to $38.7B in last quarter, outstripping forecasts, partly fueled by China's influence. With 10% of Facebook/Instagram ads rooted in China, amounting to $13B in 2023, the reliance on Eastern alchemy is manifest. Meta's growth now dances on the strings of Chinese advertisers' global ambitions.

4️⃣ China's Global Dominion 🌏
The formidable wave of Chinese online titans like Temu and Shein is transforming the ad terrain, escalating costs and rivalry. As Chinese commerce and gaming ventures extend their reach question remains what will happen if they stop advertising and fail? Last week I wrote about unsustainable growth of Temu and potential for them to flop. In a quick LinkedIn poll with 53 answers, 60% of you agrees… So in the next months I would not invest in Google or Meta as they will be hit hard if Temu stops spending like crazy.

Germany says „NO” to the ecommerce buffet and chooses a digital diet! 🍽️

“Interactive Commerce in Germany” study by bevh and the report based on 40K private individuals shows insights to what is happening in the country and the results are astonishing. We already have seen German slowdown but now with real data it is clear…. German ecommerce hits historic downturn, plunging by 11.8% to €79.7B. This decline marks a significant shift in consumer behavior, with decreased expenditures.

1️⃣ Unprecedented slump 📉
2023 saw German e-commerce endure its first double-digit decrease, dropping to €79.7B from €90.4B in 2022. This decline, attributed to reduced consumer spending, poses challenges and opportunities for online retailers aiming to navigate and adapt to shifting market dynamics.

2️⃣ Consumer caution 🛍️
Germans showed heightened thriftiness, particularly in sectors like clothing and electronics, contributing to a reduced online revenue share from 11.8% to 10.2%. This trend reflects a broader consumer shift towards cautious spending amid economic uncertainties.

3️⃣ Sectoral shifts 🔄
While product sales faltered, service-oriented e-commerce sectors, including travel and entertainment ticketing, experienced 12.7% growth, indicating changing consumer priorities and the potential for market adaptation and innovation.

4️⃣ Marketplace resilience 💪
Marketplaces between 2022-2023 gained market share in overall ecommerce sales. Despite the downturn, the German e-commerce sector shows signs of resilience. A gradual improvement in online turnover throughout 2023 suggests the potential for stabilization and future growth, with bevh forecasting a nominal increase of 2.0% in 2024.

🛒 Mass merchant

▶ 🇺🇸 Amazon unleashes Rufus AI, your next shopping BFF. Amazon dropped Rufus AI into the shopping battlefield, armed with the entire Amazon catalog and some serious AI smarts. This time the AI knows everything from the fluffiness of your future towels to the zing in your future toothpaste. 👉 Deep dive

▶ 🇺🇸 Amazon’s iRobot deal collapses, sparks layoffs. After a turbulent journey, Amazon's acquisition of iRobot is off, facing hefty EU competition concerns. This setback prompts iRobot to cut one-third of its workforce and sees CEO Colin Angle stepping down amidst a strategic pivot towards innovation and market resilience. 👉 Deep dive

▶ 🇺🇸 eBay fined $59M over illegal pill gear sales. eBay is slapped with a $59M fine by the DOJ for selling pill-counterfeiting equipment, a blow amidst broader cuts. This legal debacle underscores the fine line between e-commerce freedom and the responsibility to curb illegal sales, challenging eBay's compliance efforts and highlighting the dark underbelly of online marketplaces. 👉 Deep dive

▶ 🇨🇦 Shopify launches AI to beautify your product snaps. Shopify unveils its Magic Media Editor, an AI tool transforming average product photos into professional-grade images. Glen Coates emphasizes its ease, aiming to level the playing field for all merchants. 👉 Deep dive

▶ 🇨🇳 Alibaba shifts focus to e-commerce. Alibaba eyes core e-commerce, tech ventures, offloading Intime and Freshippo amid a strategic overhaul. The pivot aligns with tightened IPO scrutiny in China.  👉 Deep dive

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👗 Fashion & Beauty

▶ 🇸🇪 H&M swaps captains as sales ship hits iceberg. Amid icy sales and shareholder squalls, Daniel Ervér takes the helm at H&M. With a 4% dip in sales and a 12% stock plunge, it’s more SOS than SEO. Ervér aims for a 10% profit margin, navigating choppy waters as Shein and Zara speed ahead. Can he right the ship, or is it time to man the lifeboats? 👉 Deep dive

▶ 🇬🇧 Superdry eyes store closures in major cost-cut plan. Superdry mulls over drastic measures amid falling sales, eyeing store closures and job cuts. With the brand's value plummeting and leadership in flux, these steps aim to secure its future. 👉 Deep dive

▶ 🇬🇧 Boohoo bids adieu to UK supplier over overtime uproar. After a BBC exposé, Boohoo cuts ties with a UK supplier, facing a 4.6% stock dip. CEO Lyttle aims for ethical supply chains amidst a labor scandal shadow. Efforts to negotiate lower prices and a warehouse closure reflect on strategic shifts and challenges. 👉 Deep dive

▶ 🇬🇧 Shein to outpace Zara in UK market share, GlobalData forecasts. GlobalData's latest analysis predicts Shein will eclipse Zara in the UK within 2-3 years, with the online giant's sales hitting over £1.3B in 2023. Despite controversies, Shein's affordable, trend-led model is winning over consumers, propelling it towards becoming the UK's sixth-largest apparel retailer by 2027. 👉 Deep dive

▶ 🇺🇸 StockX reshuffles deck with layoffs and a CMO exit. StockX, the sneaker resale giant, trims its team by 40, including its CMO, aiming for a sleeker, faster-moving organization amid a strategic pivot. Despite the layoffs, StockX marches on with global hires and remains bullish on its "trade what you love" mission, boasting 27 open roles. 👉 Deep dive

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🍔 Food & Grocery

▶ 🇩🇪 Delivery Hero sells stake in Deliveroo, hits a low. After selling its minority stake in Deliveroo for a hefty loss, Delivery Hero's shares plummeted to an all-time low. The stake, sold for €88M, was a significant markdown from its original investment in 2021, reflecting less than a third of the purchase price. Deliveroo's shares also took a hit, dropping by 7%. This sale is part of Delivery Hero's strategy to reallocate its cash more efficiently, amidst a backdrop of tech share recovery and Deliveroo's optimistic earnings forecast for 2023. 👉 Deep dive

▶ 🇸🇬 Grab captures 55% of SEA's food market in 2023. Grab experienced modest 6.8% increase in GMV, its rivals, Foodpanda and Gojek, are declines of 12.9% and 10% respectively. Yet, with only 5% of SEA's 600M folks as customers, the food delivery pie looks as my waistline after xmas dinner. 👉 Deep dive

▶ 🇺🇸 Instacart purges bizarre AI food images. After raising eyebrows with AI-generated food images that bordered on culinary horror, Instacart is now pulling these pics from its platform. The grocery delivery giant faced ridicule for images where chickens had extra limbs and hot dogs morphed into tomatoes, sparking a wave of disbelief and laughter across the internet. 👉 Deep dive

▶ 🇩🇪 Uber Eats merges with Getir & Flink for seamless delivery. Uber Eats now showcases Getir and Flink in its app, marking a German first. This integration, wrapped into the Uber One subscription at 4.99€/month, promises unlimited deliveries. But there's a twist: each service's fee structure varies within Uber Eats, differing from their standalone offerings. For instance, Getir's minimum order has shifted to 20€ with a 2.49€ delivery fee, and Flink introduces a dynamic service fee based on distance. 👉 Deep dive

▶ 🇺🇸 7-eleven boosts its meal game with 7NOW app. After crushing its Q3 earnings, 7-Eleven's 7NOW app is set to transform from a $590M venture in 2023 into a whopping $1B powerhouse by 2025, thanks to its drool-worthy pizzas and wings. With a daily sales average of €225 per store, it's clear that 7-Eleven isn't just about slurpees anymore. 👉 Deep dive

📦Other

▶ 🇺🇸 Newegg reboots with 'Refreshed' refurb program. Newegg launches 'Refreshed', embracing the refurb wave with Apple to gaming PCs. Starting January, it pledges a 90-day return guarantee, ensuring top-notch quality. This move targets eco-conscious techies, offering deals and a GPU trade-in program. 👉 Deep dive

▶ 🇺🇸 Etsy welcomes Elliott with a new board member. Elliott Investment Management now holds a 13% stake in Etsy, marking a significant move as Marc Steinberg joins the board. Their involvement signals potential major shifts for the e-commerce giant. 👉 Deep dive

▶ 🇺🇸 Fiverr unveils game-changing Winter Release. Fiverr's Winter Product Release is here, brimming with features set to redefine the gig economy. Launched on January 30, 2024, it introduces Fiverr Agencies, a revamped homepage, a consulting category, and a fresh review system. 👉 Deep dive

▶ 🇺🇸 FTC probes Big Tech's AI investments. The FTC's dive into AI deals by Microsoft, OpenAI, Google, and Amazon could redefine the competitive landscape. By examining these investments, the FTC, led by Chair Lina Khan, aims to unveil how such partnerships might curb innovation or monopolize the AI sector. This inquiry not only scrutinizes Microsoft's $10bn investment in OpenAI but also puts Google and Amazon's dealings with AI startups in the spotlight. 👉 Deep dive

▶ 🌍 Refurbed unveils vibrant new identity. Unveiling a striking new look on Jan 23, 2024, Refurbed embarks on a mission to redefine "new" in our consumer minds. With mint green and purple hues, the rebrand under CMO Jonny Ng and Studio Sonntag symbolizes a sustainable, stylish future. Their ethos? A product can be like-new without the environmental cost, promoting a circular economy where refurbished is not just an option, but a preference. 👉 Deep dive

▶ 🇳🇴 Schibsted Ventures jumps on the Tings train. Schibsted Ventures, along with Spintop, FJ Labs, and Arkwright X, bets on Tings, aiming to revolutionize circular marketplaces. Tings' app simplifies storing digital receipts, aiding in second-hand sales and repairs, leveraging AI for a sustainable trade future. Partners like IKEA and Fjällräven are on board, with over 17K users already benefiting. 👉 Deep dive

▶ 🇸🇦 Ejaro secures €3M in fresh funds. Ejaro, hitting a major milestone with a €3M Pre-Series A, signals a strategic shift and innovation in the peer-to-peer car rental space in Saudi Arabia. This investment is set to propel Ejaro's growth across MENA. 👉 Deep dive

▶ 🇵🇱 edrone secures almost €5M for LatAm expansion. Krakow's edrone, having nabbed €4.6M, gears up to scale in Brazil, fueled by its stellar ARR of $7M and a $30M valuation. With INventures leading the charge and allies like Mueller Medien, the plan's set: double down in Brazil, enrich the Krakow base, and bet big on AI-enhanced marketing automation. 👉 Deep dive

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