On Friday, the US Commerce Department released its Quarterly E-Commerce Report. And while we’re not seeing 45 – 50% jumps like at the start of the pandemic, eCommerce growth is still trending upward. The year-over-year increase is now outpacing brick-and-mortar — a first since early 2021 — and over 20% of total retail spending happened on the web.
Overall, it’s excellent news for anyone in the web retail space. Even after the post-pandemic drops, the broad shift to online purchasing from consumers is still growing.
And in looking at the subtle growth in Q2, it’s important to note that the numbers don’t include Prime Day. Amazon moved the event from June to July, which means we won’t see the number spike until the Commerce Department releases the Q3 reports.
The key number to note is the total share of retail spending. That 20% figure means that one out of every five dollars is being spent online. Before 2020, digital spending for retail only hit the mid-teens, so the shift we saw is not only here to stay but will continue to grow.
Wayfair laying off 5% of its staff
Yes, the eCommerce market is growing. But unfortunately, some online companies are still suffering from supply chain issues and inflation and now must make cuts.
This week, the Boston Globe obtained an internal memo from Wayfair CEO Niraj Shah that stated the company will cut 870 jobs — or almost 5% of their total workforce. This round of layoffs piles on top of reported losses this quarter and a hiring freeze back in May.
Four hundred of the layoffs are for jobs in Boston, and corporate layoffs are roughly ten percent of the grand total.
In the memo, Shah stated, “We are actively navigating Wayfair towards a level of profitability that will allow us to control our own destiny, while still investing aggressively in the future.”
MercadoLibre launches bitcoin rewards program
One of South America’s top eCommerce retailers is taking a novel approach to its loyalty program. MercadoLibre launched a new cryptocurrency called MercadoCoin that will have multiple functions to draw customers back to the page.
Backed by Ethereum’s ERC-20 token standard, MercadoLibre customers can use MercadoCoin to purchase products on their platform or trade through MercadoPago — MercadoLibre’s financial division.
The company is receiving pressure from companies like Sea Ltd and AliExpress for their piece of the Brazilian eCommerce market share. So it looks like their board is thinking outside of the box to keep their base interested. We’ll monitor things to see how this plays out through the holiday season.
As of now, the coin is available for 500,000 customers, but it’s expected to roll out to the other 80 million by the end of the month.
The Gap opens an eCommerce fulfillment center in Longview, Texas
After over a year of planning and construction, Gap Inc. opened its new eCommerce fulfillment center in Longview, Texas. The $140 million, 850,000-square-foot facility on 142 acres is working full speed to put out orders. And the company also built another pad on the site for the construction of another fulfillment warehouse when the time is right.
The center is processing 50k articles of clothing every day, and the company intends to ramp up production even more as they finish the rest of the interior. Their target is one million pieces of clothing every day.
Overall, it’s great news for both the Gap and the people of Longview who will have access to 1,200 full-time jobs and 1,000 seasonal part-time jobs.
Namshi to sell to Noon
Famed Emaar Properties, builder of the Burj Khalifa, announced yesterday that it’s selling its eCommerce fashion venture Namshi to Noon. But it’s not exactly offloading the business.
If you’re not familiar, Emaar Properties founder Mohamed Alabbar also financially backs Noon — along with the Saudi Public Investment Fund (PIF). So the purchase is more of divestment to another company the billionaire has a large stake in.
The billionaire made a nice profit as Emaar originally purchased Namshi for $281 million in two payments and is now selling it for $335.2 million. It looks like eCommerce markets are becoming a solid investment in the Middle East.
The first annual Thailand Metaverse Expo 2022 kicked off today with some of the leading voices of the country’s eCommerce industry making bold predictions about where things will go. But one thing is for sure, they’re sold on the metaverse.
Multiple CEOs stated that in order for the government’s eCommerce development plans to raise e-commerce revenue from 5.35 trillion baht to 7.1 trillion baht by 2027, they’ll need to adapt to new technology.
CEO of business-scaling solution provider Thailand e-Business Centre, Kulthirath Pakawachkrilers, stated it would take three years for Thailand to catch up to China at the rate it’s going. And because of the large gaming base in Thailand, the country is ready to immerse in the metaverse. She thinks the market will rise on higher-end metaverse purchases over cheap items on a larger marketplace.
She said, “Thailand must see the metaverse as a new norm, and be ready to embrace what will happen next.”
Regardless, many citizens received stimulus funds during the pandemic. We’ll wait for the final numbers over the next year to see if these metaverse predictions come to fruition.
All three CEOs on the panel advised SMEs not to integrate the metaverse into their current operations just yet. They started the technology and the user base just aren’t there yet.
Thanawat Malabuppha, CEO and co-founder of shopping search engine Priceza, stated, “Marketing in the metaverse will begin bustling once technologies are ready and big players arrive.” He added he doesn’t expect the technology to go into full effect for another three years.