Amazon and Google’s Formal Complaints, Uber’s Latest Innovation and More News
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Get ready for some important eCommerce news this Friday. But first, have you read what happened last week in the eCommerce world? If not, make sure to catch up ASAP. This week though, we have complaints, we have innovations, and we have some intriguing international news too. Let’s dive right in!
Today’s news is 1998 words.
Amazon and Google’s Formal Complaints
This week in the eCommerce space, Amazon has lodged a formal complaint with the UK’s Competition and Markets Authority (CMA) against Microsoft, mirroring a recent Google initiative. This action brings to light Amazon’s concerns over what it perceives as anti-competitive behavior in Microsoft’s cloud licensing practices.
According to Amazon, Microsoft’s approach to licensing, particularly in how it structures licenses for its software when used on alternative cloud platforms, unfairly penalizes customers who choose non-Microsoft cloud services.
Amazon’s argument centers on the financial burden these policies place on users who opt for other cloud providers. It’s a tactic they believe stifles fair competition in the market.
Amazon argues that these alterations were strategically designed to hinder customers from easily using Microsoft’s popular software on competing platforms like Google Cloud, AWS, and Alibaba.
The main point of Amazon’s complaint targets Microsoft’s attempts to make it more difficult for customers to migrate away from its Azure cloud service. This move, according to Amazon, exemplifies Microsoft’s effort to maintain dominance in the cloud market by limiting customer choices.
Microsoft, however, isn’t taking these accusations lying down. The company counters with a narrative of vibrant, innovation-driven competition in the cloud services sector, dismissing any suggestions of foul play.
The accusations highlight the intense rivalry in the UK’s cloud arena, bolstered by hefty investments from other tech companies like Google, Oracle, and IBM.
In the end, Microsoft has extended an olive branch to work alongside the CMA during the investigation, aiming to iron out any potential market disparities.
What does it mean for eCommerce sellers?
This situation could impact the flexibility and cost-effectiveness of eCommerce operations, central to sellers who rely on diverse cloud services for their businesses. The outcome of this dispute could reshape the cloud service landscape, influencing how eCommerce sellers leverage technology for growth and innovation.
MORE: Amazon tools and services for a better Amazon seller experience.
Big Retailer News
Uber’s Latest Innovation
Uber’s latest innovation, “Store Pickup via Uber Connect,” is transforming the shopping experience for consumers and offers a new opportunity for eCommerce sellers to consider.
The new service allows customers to bypass the trip to the store entirely. By utilizing Uber Connect, customers can have their pre-purchased items picked up from local stores and delivered directly to them.
The approach caters to the growing consumer demand for same-day shipping, with a significant 80% of consumers expressing a desire for it, and 61% wanting their items within just 1-3 hours of ordering.
In a recent announcement, Uber highlighted the potential of this service for the holiday season, showcasing its ability to act as a ‘Secret Santa’ for time-pressed shoppers. The Store Pickup feature is not limited to Uber’s marketplace stores; it extends to a variety of retail partners.
How does it work?
Customers simply upload their purchase receipt to the Uber app, enabling couriers to verify the purchase with the retailer. With a cap of $200 and a weight limit of 30 pounds, the service will meet most standard shopping needs.
Although it’s currently operational in 1,700 cities and towns, it still has some time to impact online-only retailers entirely. However, eCommerce sellers should take note of this evolving landscape where immediate gratification in shopping is becoming increasingly widespread.
What does it mean for eCommerce sellers?
For eCommerce sellers, this signals a shift in consumer expectations towards even faster delivery times, challenging the traditional waiting period associated with online order shipments.
On one hand, it raises the bar for delivery speeds and customer convenience; on the other, it opens up potential collaborations and new strategies for reaching customers more effectively.
eCommerce businesses will need to adapt to these changing dynamics, potentially rethinking their logistics and customer service approaches to stay competitive in this rapidly evolving market.
MORE: What is domestic shipping?
Tarte’s Innovative Leap into TikTok Shop
Having established a strong presence on TikTok since the platform’s days as Musical.ly, Tarte boasts over 1 million followers and engages them with product swatches, new launches, and glimpses into the brand’s operations.
This strategy has contributed to the significant growth in sales reported by parent company Kosé, with a notable 13.7% increase in cosmetic net sales.
The decision to leverage TikTok Shop reflects Tarte’s recognition of the platform’s potential for combining branding and direct revenue generation, as noted by CMO Sam Kitain.
Tarte’s approach to TikTok Shop centers around livestream shopping, a concept they’re familiar with through their experience with QVC. Hosting several live sessions weekly, the brand has managed to attract considerable viewership without any additional investment.
One of their major events, a 12-hour livestream, drew an average of 25,000 viewers and resulted in substantial sales, with 70% of purchases made by non-followers.
This interactive format, featuring giveaways, Q&A sessions, and tutorials, not only boosts sales but also influences Tarte’s online strategies, leading to enhancements such as more detailed product display pages.
Tarte’s open affiliate strategy for TikTok Shop, where anyone can earn commissions by linking to products, stands out against the more restrictive approaches of other brands. This tactic has proven effective, with Tarte outperforming TikTok’s sales benchmarks by about 50%.
The brand has also observed a ‘halo effect’ on its wholesale retail, experiencing a significant uplift in sales of products featured on TikTok Shop. With exclusive product sets on TikTok Shop, Tarte aims to attract new customers and showcase its hero products.
CEO Maureen Kelly highlights the transformation of social media from a mere awareness tool to a potent platform for social commerce, collapsing the traditional marketing funnel and allowing instant product discovery and purchase.
What does it mean for eCommerce sellers?
For eCommerce sellers, the success of Tarte Cosmetics with TikTok Shop portrays perfectly how social media works as a direct sales channel.
This development highlights the immense potential of integrating live-streaming and interactive content into marketing strategies.
It provides an engaging platform to showcase products and instantly convert viewership into sales.
As consumers increasingly seek instantaneous and interactive shopping experiences, eCommerce businesses can leverage platforms like TikTok to enhance brand visibility, engage with a broader audience, and drive sales, ultimately redefining the traditional eCommerce model.
Also in the News
- Last minute Christmas eCommerce investment ideas. BuzzFeed.
- Ikea’s 2023 sales. Digital Commerce 360.
International Retailer News
Alibaba’s New Chapter
In a move that’s buzzing through the tech world, Alibaba has decided to close the book on its quantum computing chapter. This isn’t just any corporate shuffle; it’s a bold change towards a future rich with possibilities in generative artificial intelligence (AI).
The announcements revealed that Alibaba’s vast quantum labs and all that cutting-edge equipment will find a new home at Zhejiang University. This move represents not merely a strategic withdrawal by Alibaba, but rather a proactive shift towards the innovative realm of artificial intelligence.
Why this sudden switch from quantum computing? Alibaba’s not sharing too much information, but we can speculate that this tech landscape isn’t just about algorithms and codes; it’s an entanglement of global politics and economic issues.
It’s not the first time Alibaba’s announcing major changes. 2022 was also a rollercoaster for the company, after it split into six independent boroughs, and laid off 30,000 employees as a result.
Additionally, there was the abandonment of a planned new cloud business initiative earlier this year. The action sent shockwaves through the stock market.
Amidst these tides of change, Alibaba’s turn towards AI isn’t just a new chapter; it’s a whole new narrative. Launching an open-source AI model, Alibaba is throwing its hat in the ring with global tech giants, ready to spar with the likes of Meta. We wonder what’s next in this technological evolution?
What does it mean for eCommerce sellers?
For eCommerce sellers, Alibaba’s move from quantum computing to AI signifies a major shift in the technological landscape that could have far-reaching implications.
This transition towards AI, particularly in open-source models, suggests that eCommerce businesses may soon have access to more advanced, AI-driven tools and platforms for enhancing their operations.
These tools could offer improved data analysis, customer behavior prediction, personalization, and automation, enabling sellers to offer more tailored and efficient services to their customers.
MORE: AI in eCommerce.
Hong Kong’s Retail Sector
Hong Kong’s commercial property industry is witnessing increasing divergences, particularly between its office and retail sectors, since mainland China’s economy reopened.
The office market continues to struggle, with grade A building rents falling for the 18th consecutive quarter, dropping 1.4% last quarter.
This decline comes with a 7.4% fall in capital values in the first three quarters of the year, largely influenced by rising interest rates. On a different note, the retail market is showing signs of recovery, with high street shop rents in core districts increasing by 2.4% in the third quarter.
This growth is due to a resurgence in visitor arrivals from mainland China, revitalizing tourist-related trades and leading to a 4.5% rise in high street shop capital values.
Morgan Stanley’s report highlights a preference for Hong Kong retail landlord stocks over office sector stocks, due to the growing rent divergence between the two sectors.
However, we shouldn’t judge the retail sector’s performance solely against the office market’s struggles. Its adaptability to global retail industry shifts, particularly those from mainland China, is crucial.
There are three main retail sector challenges that we should note:
- Persistently high rents despite a decline since their 2014 peak,
- Hong Kong remaining the most expensive retail market in Asia,
- and the increasing outbound travel of Hong Kong citizens to places like Shenzhen, lured by better retail offerings and favorable currency exchange rates.
Moreover, Hong Kong’s retail sector is not responding quickly enough to changes in consumer preferences driven by a younger, social media-savvy generation, which is increasingly interested in experiential retail.
A need for retail sector revitalization
To ensure a meaningful and lasting recovery, Hong Kong’s retail sector needs to elevate its game. The sector’s current monotonous brand mix in shopping malls, resulting from high rents lacks the creativity and diversity needed to attract domestic and tourist consumers.
In comparison, experiential tenants are making up a significant portion of new lettings in mainland China’s shopping centers. Leveraging Hong Kong’s unique strengths, like its vibrant arts and cultural scene, could revitalize the retail industry.
Despite challenges like rising mortgage rates and global economic slowdowns, more creative collaboration between landlords, tenants, and other stakeholders, along with government support for tourism, could enhance the sector’s appeal and competitiveness.
What does it mean for eCommerce sellers?
For eCommerce sellers, the diverging trends in Hong Kong’s commercial property market, particularly the resilience of the retail sector amid challenges, highlight the importance of adaptability and innovation in staying competitive.
The retail sector’s struggle with high rents and changing consumer preferences could mean that eCommerce businesses should focus on unique and engaging online experiences to attract their customers there.
Also in the News
- China’s new beauty trend (hop on the eCommerce train!). Jing Daily.
- Alibaba’s upcoming online events. KrAsia.
Webinars
For everyone
Various dates: Amazon advertising’s global webinar program continues with 20+ webinars scheduled, covering Amazon Prime Day preparation, sponsored products, sponsored brands, reporting, optimization, and other tips. Learn more: Amazon.
For US sellers
December 13: Digital Marketing Panel. Learn more: Tinuiti.
For UK sellers
Various dates: Amazon advertising’s global webinar program continues with 20+ webinars scheduled, covering Amazon Prime Day preparation, sponsored products, sponsored brands, reporting, optimization, and other tips. Learn more: Amazon.
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