#178 – New e-commerce rules in China, India, & California

by Shopifreaks | Jun 17, 2024 | Recent Newsletters

Hi Shopifreaks!

To all the dads out there, I hope you had a great Father's Day yesterday. It's fun being a dad, isn't it? Yesterday when I walked out of the room, Baby Mia said, “Byeeee!” Usually I say it to her and she says it back like a child parrot, but this was the first time she ever said it unsolicited, leading me to believe that she actually knows what the word means instead of just mimicking the sound. Smart baby!

Before we get started today, I want to take a moment to appreciate our News Partners for helping fund our research and news production at Shopifreaks. A big shout out to Apptile, Getida, OpenStore, eStreamly, & Flowspace.

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And now onto your regularly scheduled programming.

I've got a great edition for you this week that covers:

TikTok breaking livestream records
Temu surpassing eBay in customer retention
TJ Maxx, eBay, and Etsy's denial of Chinese competition
The old eBay and PayPal team getting back together
TikTok entering the visual search space
China's new rules on cross-border e-commerce
India's new DMA-like law to prevent anti-competitive practices
Amazon Fresh's plan to get you to shop there
Shopify's latest controversial statistic
California's proposed seller verification law
Lina Khan's fight against ‘mob bosses' in BigTech.

All this and more in this week's 178th Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week

TikTok hosted its first $1,000,000 shopping livestream event. Canvas Beauty set a TikTok U.S. record on June 8th with a 6-hour livestream that achieved $1M in sales.

1. Temu & Shein are absolutely crushing it against US competitors who don't yet see it happening

Temu has swiftly outpaced eBay in terms of attracting repeat U.S. customers, despite eBay's nearly three decades of operation. A recent survey by Omnisend revealed that 34% of consumers shop on Temu monthly, surpassing eBay's 29%.

Omnisend surveyed 4,000 people across the US, UK, Australia, and Canada to learn more about how they shop online and what they think about major US and Chinese marketplaces. Here are some more highlights of their findings:

63% have shopped at Temu, Shein, or other Chinese marketplaces in the past year.
1 in 10 consumers shop on Chinese marketplaces at least once a week.
49% shop on more than one Chinese platform.
People shop at Temu for great prices (53%), ease of use (31%), and special deals & discounts (29%) — which kind of falls under the umbrella of great prices.
Only 6.4% of shoppers trust Temu over Amazon, but 48% shopped there in the past year.
17% surveyed think Temu will eventually overtake Amazon — that's wild!
Women shop on Chinese marketplaces more frequently and rate them higher than men.
100% of Shopifreaks readers love this newsletter and get tremendous value from their subscription. (Okay, that wasn't part of the survey — but if you've been enjoying this newsletter, please leave me a review on Google. Thank you!)

Due to how fast and furious Temu and Shein are coming at American competitors, Modern Retail reports that US retailers are “getting explicit” about how they're staying (or not staying) competitive:

TJ Maxx CEO Ernie Herrman said Shein and Temu weren't a threat to the company because the customer base is too different. “We see very little issue with them taking market share from us. They're so commodity-driven, and so not the brands that we would carry. Very much not the good, better, best type of branded mix that we would go after.” — He might be in for a rude awakening about how little deal-shopping consumers prioritize brand loyalty over prices.
Etsy's CEO Josh Silverman told analysts, “If I had to pick the polar opposite of Etsy, it would probably be Temu. I can't think of a brand more different than ours.” He emphasized the site’s network of 7M artisanal sellers as its key differentiator. — These statements might have been true before Etsy became flooded with cheap Chinese products, a problem that it's currently working on solving.
eBay CEO Jamie Iannone wasn't concerned with Chinese marketplaces, despite a disappointing revenue forecast in the most recent quarter. He said, “It hasn't impacted our business to see some of the Chinese competitors. When another big paid player comes into the market, it just impacts us less.” Iannone said that regardless, the company is working to move away from the lower-priced inventory on sites like Shein and Temu. — He's got his head in the sand if he actually believes that the ability for consumers to buy cheap new products won't impact the sale of used items on his platform!

Silverman added: “When you’re buying a gift for someone, you don’t want to say, ‘Where’d you buy it? Oh, I bought it on Temu’ or ‘I bought it on Walmart.' All due respect to those brands, it’s probably not how you want to present yourself.”

Literally no-one cares where their gift came from! Perhaps with an estimated net worth of $268M, Etsy's CEO has become out of touch with his own customers. And aside from that, since when has buying something on Etsy become a status symbol?

Iannone also mentioned: “One of our sellers was doing a live commerce, who sells handbags in fashion, and she had 2,700 people on that live stream. It shows you the appeal of giving sellers a new tool that they can use to market what they’re doing on the platform.”

Well guess what Iannone… TikTok just did a $1,000,000 livestream! But you keep pulling audiences of 2,700 and tell us how that goes for you.

I'll be the one to say it: American retail is in for some serious trouble if these are the characters we have running the show. It's time to be upfront with investors and say, “We recognize that Chinese marketplaces are a threat to our business, and we're working on ways to differentiate.”

To say anything other than that makes myself and other investors question your ability to lead your companies into the next decade.

What are your thoughts on the matter? Hit reply and let me know or drop a comment on my LinkedIn post.

2. eBay adds Venmo as a payment option

Last week eBay added Venmo as a payment method on its platform in an attempt to attract Gen Z and younger Millennials to its aging platform. Buyers can now pay for eBay purchases with either their Venmo balance or connected bank account, debit card, or credit card.

“Well, well, well” says PayPal to eBay. “How the turntables.”

The two companies have had a tumultuous relationship for the past couple decades, which in hindsight, might have set PayPal back a decade in terms of innovation. (However I must say, they are quickly catching up.)

Here's a brief history of the love affair between eBay + PayPal:

The PayPal company we're familiar with today launched in Dec 1998 by Max Levchin, Peter Thiel, and Luke Nosek as Fieldlink and was later renamed to Confinity, a company that developed security software for mobile devices.
After having no success with that model, it switched to focus on digital wallets, launching the first version of a payments system in 1999.
In March 2000, Confinity merged with X.com, an online financial services company founded a year earlier by Elon Musk, Harris Fricker, Christopher Payne, and Ed Ho.
The combined teams argued over names (it's a wild story) until eventually moving forward as PayPal, much to Elon Musk's dismay.
PayPal went public in 2002 under the ticker PYPL at $13/share and generated over $61M.
Shortly after its IPO, eBay acquired PayPal in Oct 2002 for $1.5B in eBay stock.
PayPal became the default payment method used by eBay users, competing with eBay's subsidiary Billpoint, Citibank's c2it, Yahoo!'s PayDirect, and Google Checkout.
In 2014, eBay began to spin-off PayPal into a separate publicly traded company, a move demanded by investor activist Carl Icahn. The spin-off was completed in July 2015.
In Jan 2018, eBay announced, “After the existing eBay-PayPal agreement ends in 2020, PayPal will remain a payment option for shoppers on eBay, but it won't be prominently featured ahead of debit and credit card options as it is today. PayPal will cease to process card payments for eBay at that time.”
eBay instead began working with Amsterdam-based Adyen for credit card processing.

How does Venmo fit into all this?

Venmo launched in 2010 by Andrew Kortina and Iqram Magdon-Ismail.
It was acquired two years later by Braintree for $26.2M.
In Dec 2013, PayPal acquired Braintree for $800M, which included Venmo.

So now the old teams (eBay and PayPal) are back together again to bring Venmo's 90M users, who are mostly 18-29 years old, to the almost 29 year old auction platform (which is like 100 in Internet years). The ability to pay with Venmo will be available to U.S. buyers on eBay.com and the eBay app this week.

Last week I reported (story #4) that eBay would stop accepting AMEX as a payment option on its platform because of “unacceptably high fees”. So there seems to be a bit of a payments shakeup at the company this month.

🔥 Partner News

Apptile launched a new live selling solution, enabling brands to host interactive shopping experiences directly within their Apptile-powered mobile apps. The new feature enables brands to showcase products in real-time, answer customer questions live, and offer a more engaging shopping experience that can drive increased sales and foster stronger customer relationships. The solution also allows brands to transform live videos into shoppable replays so that customers can browse and purchase products after the initial event. Learn more about the feature on Apptile's blog post.

3. TikTok is coming for visual search and publishers

Speaking this week about Chinese marketplace domination, here is some TikTok news of interest.

TikTok Visual Search

TikTok confirmed with TechCrunch that it's testing the ability for users to take or upload a photo to find similar products on TikTok Shop. The feature is available to all users in the US and Southeast Asia in the form of a camera icon in the search bar above TikTok Shop.

Users have always been able to search for specific items on TikTok Shop, but never before via an image search, which is something that Google has offered for years with its Google Lens visual search tool. Image search is also currently offered by Amazon, eBay, Pinterest, Poshmark, Depop, and other marketplaces and discovery platforms.

TikTok is Courting Publishers

Digiday reports that TikTok is showing its intention toward publishers by making them more of a priority and increasing monetization opportunities. The company recently created a new team called “Publisher Monetization Operations” which is tasked with focusing on sustainable revenue opportunities across “user-paid, e-commerce, and global business solutions” or TikTok ads, according to a memo seen by The Information.

Digiday contacted 14 publishers, and two confirmed that they have seen new leadership overseeing publishers. Nat Poulter, VP of Digital Commercials at BBC Studios told Digiday, “It does feel like things have shifted at TikTok, the big change being that media owners and publishers are now being managed by a standalone team.”

TikTok sees publisher traffic as a huge opportunity for the platform since Meta, X, and Google have taken active stances to distance themselves from news publishers in certain regions. To help incentivize publishers to advertise on the platform, TikTok rewards them with ad credits the more they spend.

Siobhan McDade of Jungle Creations said, “It has been difficult to monetise on TikTok as a publisher, but with the creator rewards program and Pulse [Premiere] program (although only available for select publishers) it shows TikTok is trying to understand how to monetise effectively so that it can compete with other platforms.”

TikTok is the 9th Biggest US Beauty & Wellness Retailer

According to a report by Dash Hudson and NielsenIQ, TikTok Shop is now the ninth-largest online beauty and wellness retailer in the US and the second-largest in the UK. TikTok Shop has quickly blown past competitors like major department stores, small beauty specialty stores, and D2C brands in both countries since its launch less than a year ago.

Beauty content is one of the most popular types of video on TikTok, with some creators making a living by sharing tips or testing out products. By driving traffic from those videos to TikTok Shop while offering creators a commission on sales, TikTok can also squeeze out a cut of revenue from purchases — a strategy that is apparently working well and growing the marketplace at an unprecedented rate.

4. China issues draft rules to expand cross-border commerce

Last week China issued draft rules to promote construction of overseas warehouses and expand cross-border e-commerce businesses.

The rules would affect Shein, Temu, AliExpress, and other Chinese retailers who have plans to ship made-in-China products to overseas warehouses around the world as a means of offering faster shipping to compete with Amazon, Walmart, and other domestic retailers.

The policy document (requires translation) labels cross-border e-commerce as an important contributor to the development of China's economy and therefore worthy of support to ensure its expansion.

The commerce ministry's announcement said it would also seek to improve cross-border data management. China has historically been careful not to let customer data about its citizens leave its shores, and the policy calls for careful observation of relevant laws.

The Universal Postal Union was also mentioned in the draft rules, with China recognizing that it needs to review the payment arrangements for parcels sent across borders. Past rules made it very cheap for exporters from developing countries to ship goods to wealthier jurisdictions, but that dynamic has changed in recent years and China must prepare as well for foreign policy changes.

Beijing's goal is for local foreign governments to cooperate with Chinese e-commerce platforms and develop zones dedicated to helping businesses develop and thrive in their marketplaces.

5. India drafts a DMA-like law to avoid anti-competitive practices

China isn't the only country working on new rules that impact digital commerce. India proposed a Digital Markets Act-like law called the Digital Competition Bill, which aims to prevent companies like Google, Meta, and Amazon from dominating the market through anti-competitive practices.

The bill aims to promote fair competition practices for large tech companies including social media sites and search engines, which will be designated Systematically Significant Digital Enterprises (SSDE) based on their user base, market influence, and revenue. This is in similar practice to how the EU labels companies as “Very Large Online Platforms” or VLOPs for having more than 45M monthly users in the EU.

To qualify as an SSDE, companies must have:

Turnover in India of more than Rs 4,000 crore (around $478,000) in the last three financial years, or global turnover of more than $30B.
GMV in India of more than Rs 16,000 crore ($1.9M)
Global market capitalization of more than $75B
Core digital services with at least 1 crore end users or 10,000 business users.

The bill, which has yet to be put into motion, also seeks to impose heavy penalties of up to 10% of a company's global turnover for violations, an amount that could add up to billions of dollars for violations and one that I don't imagine any of these companies would voluntarily pay.

While India has other digital policies in place designed to intervene anti-competitive practices after the fact, this new bill aims to prevent anti-competitive practices even before they happen.

The Indian government says these new regulations are needed as the digital market is “increasingly becoming concentrated” with a handful of large companies having “immense control over the market.”

The Indian Ministry of Electronics and Information Technology is set to hold two meetings with different tech companies to address concerns and consider the interests of all parties involved before going ahead with the bill.

6. Amazon Fresh really wants you to shop there

Amazon Fresh is offering grocery discounts to customers who return Amazon.com purchases at the stores, in an attempt to get customers to shop at the grocery chain instead of just using the locations as a returns drop-off.

Signs at Amazon Fresh stores read “Package return customers save big” and include QR codes that customers can scan to claim coupons for things like $2 off a $10 purchase, $10 off a $40 purchase, and a slice of pizza with a soda for $3. (Have they not seen Costco's $1.50 hot dog / soda combo?)

The discounts are likely supposed to accomplish two things, according to Phil Lempert, a food industry analyst and editor of the website Supermarket Guru:

Get customers making returns to stick around and buy groceries
Encourage customers to make in-person returns, which are less expensive for Amazon than having customers ship the items back

So does that mean customers should buy and return an item from Amazon marketplace before they go grocery shopping each week in order to get a discount? That doesn't sound good for their return rate.

It's highly unlikely though that customers will abuse the promotion — or at least successfully abuse the promotion — because the coupons are in limited supply and the promotion is only running for a limited time.

Will the promotion work to drive more sales at Amazon Fresh stores? Given Amazon's historic secretiveness around the success of its promotions and shopping events, we'll probably never know.

7. Shopify releases another controversial statistic

Shopify stores are up to 2.4x faster than stores on other platforms, making Shopify stores the fastest in the world — says Shopify, throwing shots again at BigCommerce, Salesforce, Adobe, and WooCommerce.

Shopify's new report claims that its stores are:

1.4x faster than BigCommerce
1.5x faster than Salesforce
2.0x faster than Adobe
2.4x faster than WooCommerce

Shopify used 200k publicly available data points from Google's Core Web Vitals to conclude that:

Shopify’s site speed is 1.2 seconds on average, while competitors average 2.17 seconds.
Shopify has the fastest server speed in commerce, up to 3.9x faster and on average 2.8x faster.
93% of businesses on Shopify have a fast store, more than any other major commerce platform.

The comments on Harley Finkelstein's LinkedIn post were of course all over the place, with some agreeing and praising Shopify, and others disagreeing, asking for more info about the data, and citing anecdotal incidents where stores on other platforms were just as fast or faster.

Lucas Barnes of PNW Web Marketing wrote, “I am a huge Shopify fan and a bull on your success but… This is so clearly not true it undermines your other marketing efforts. Shopify speed is just not one of its advantages. 200K data points is laughable for what you are measuring, and if you just spot-check the largest Shopify sites, you can see they are slower than non-Shopify sites of a similar size.”

Mark Adams at BigCommerce wrote, “627 likes, 29 comments, 60 reposts and counting. Much like their other marketing claims full of tosh and totally unverifiable but many will believe it because it’s delivered with passion and a great smile.”

Erwin Hoffman's LinkedIn post got more into the details around Core Web Vitals and summarized his post with, “Yes, Shopify is leading the pack when it comes to TTFB, but don't be fooled by this metric alone as other platforms are outperforming Shopify when it comes to each individual metric that is part of Core Web Vitals.”

8. California's proposed law requiring seller verification

California lawmakers fast-tracked a bill that would require marketplaces like eBay, Meta, and Nextdoor to start collecting bank account and tax ID numbers from high-volume sellers who advertise online but collect payments offline. The idea being that thieves will be less likely to resell stolen merchandise if authorities can track them down.

The rules would apply to sellers who make at least $5,000 profit (which would be tough to estimate) and engage in at least 200 transactions in a year.

The measure is part of a legislative package of 14 bills aimed at combating retail theft in the state, which the California Retailers Association says has reached crisis levels.

☑️ Proponents of the bill predict that the data collection proposal would shut down organized theft rings seeking to resell stolen goods and would close a loophole in existing laws that don’t require platforms to track offline transactions.

❌ Opponents say the new requirements are so broad and vague that platforms would have to start collecting sensitive information from all users, which would in turn harm California’s e-commerce businesses.

Nathan Garnett of OfferUp said the proposal would significantly benefit big box retailers and cripple classified ad sites' ability to do business in the state.

David Edmonson of TechNet said, “This is basically going to force businesses out of California. I imagine most sellers will have to think long and hard about whether they want to provide that information to the online marketplace just to be able to sell, you know, household products.”

It's a bit of an exaggeration I think to say that businesses are going to be forced out of California, however, I say that as a proponent of seller verification rules in general (not just in California). I was a big proponent of the federal INFORM Act that passed last year.

However I take it a step further in advocating that ALL online sellers should have to verify their identities before they can sell anything on a marketplace — without minimum revenue amounts. Everyone should have to verify their identity before they list their first item. There are numerous secure ID verification services out there to help facilitate this process.

In addition to helping to curb the sale of stolen items, it would help cut down on the sale of counterfeit items and fake goods (where the box comes empty or with a different product), fake reviews, and all sorts of scams and thefts that happen on these marketplaces. This is like Consumer Protection 101 and marketplaces should have been adopting these practices years ago.

When I walk into a brick-and-mortar store, I know who I'm buying from. That store had to get a business license as well as go through a verification process by their merchant processor in order to accept credit card payments. A basic level of verification should be the case online as well, including with small sellers, and marketplaces should be required to do their part to facilitate this basic level of buyer / seller transparency.

9. Other e-commerce news of interest

ByteDance is cutting 450 jobs at its Indonesian e-commerce arm, or about 9% of the division's staff, marking its first round of cuts since combining its TikTok Shop with Tokopedia. ByteDance bought a 75% stake in Tokopedia in January and committed to invest over $1.5B in the combined entity over time, but first a few job cuts I guess. A spokesperson told the WSJ that the company “identified areas to strengthen our organization and better align our teams with company goals.”

DHL eCommerce opened its first operationally carbon-neutral UK site in Camberley, England. The company invested £7M in the facility, which is powered almost entirely by solar energy and has achieved the highest Energy Performance Certificate rating due to its on-site renewable energy generation and technology to minimize energy use.

A federal judge ruled that Alphabet Inc. must go to trial against the US Justice Department over its claims of a Google monopoly in online advertising technology. Google had argued for a win without a trial, saying that antitrust laws do not block companies from refusing to deal with rivals and that regulators had not accurately defined the ad tech market, but District Judge Leonie M. Brinkema said at a hearing on Friday that there are “way too many facts in dispute.” Brinkema is scheduled to preside over trial on Sep 9th.

FTC Chair Lina Khan told TechCrunch that the agency is pursuing the ‘mob bosses' in BigTech, including leaders from Microsoft, OpenAI, Nvidia. Khan said that the agency is focused on pursuing the players that are doing the biggest harm, as opposed to just increasing the number of cases that it brings forward. The comments came a few days after opening an antitrust probe of Microsoft over its partnership with Inflection AI.

Mercari, the Japanese marketplace that allows users to buy and sell new and used items, has laid off a whopping 45% of its full time staff at its US division, after months of backlash caused by its controversial fee structure changes (story #1). An ex-Mercari employee confirmed the 45% figure to Value Added Resource, saying that it represents around 100 roles that were eliminated cross the US this week.

Speaking of controversial fee structure changes… eBay is changing its fees for getting Express Payouts, which allows sellers to receive their funds almost instantly. The new flat fee of $2 means that eBay is effectively raising the cost of getting quicker payouts for amounts up to $132.99, while lowering the cost for amounts over $133, according to EcommerceBytes. The Express Payout fee used to be 1.5% of the payout amount with a minimum fee of $0.25 and a maximum fee of $15.

Loop, a post-purchase platform for optimizing returns and exchanges, made Happy Returns, a UPS-owned in-person network of return locations for e-commerce brands, its preferred returns portal partner for Shopify brands, as well as their recommended partner for in-person, box-free, label-free returns. The two companies have been working together for more than two years and are now making additional investments to provide a more seamless experience for shared customers. So is UPS eyeing Loop for its next acquisition? That would go against my 2024 Prediction that Shopify acquires Loop, but either is certainly a possibility.

A survey of 2,000 consumers from UK and US found that 70% are likely to buy fashion from abroad, with lower prices (41%) and a desire for unique or unusual items (33%) among the biggest triggers. The survey by Nosto also revealed that 52% of consumers had purchased at least one item from an international e-commerce store in the last 12 months.

Meta said it won't launch its AI assistant in Europe because of the EU's stringent privacy regulations, which the company says would make its AI product a “second-rate experience.” Meta said in a press release that it was disappointed by the Irish DPC's request to “delay training our large language models using public content shared by adults on Facebook and Instagram,” calling it a “step backward for European innovation.” So I guess that's one small step backward for AI innovation, and one giant leap forward for data privacy.

X accidentally overpaid former Australian employees up to $70k each due to an incorrect currency conversion that reported 2.5x the actual value, and now Elon wants his money back! The payments were part of the employees' severance package when Elon Musk took over the company and subsequently let go of 80% of its staff. So far, none of the affected former employees have returned the money.

Shein is expanding its resale program to Europe, beginning with France, after debuting the peer-to-peer exchange in the US in October 2022. In 2023, more than 4.2M new U.S. users signed up to join Shein Exchange, with more than 115k pre-owned items listed for sale by more than 95k unique sellers, according to the company. The program is part of Shein's larger initiative to address criticism surrounding its environmentally unfriendly manufacturing and fulfillment processes.

Walmart has begun its plans of rolling out digital shelf labels to 2,300 of its stores by 2026, following a successful test at its locations in Grapevine, TX. The digital tags replace paper price tags on shelves and allow employees to update prices with a few clicks on a mobile app, reducing the need for employees to change paper tags by hand and taking price changes from two days to several minutes. The tags also speed up the picking process and improve order accuracy by guiding employees to the items needed for online orders. Of course, on the flip side of the coin, digital price tags could also allow Walmart to do in-store A/B price testing, and dare I say, surge pricing?

CFPB director Rohit Chopra defended the bureau in front of the Senate Banking Committee from an attack about its funding structure and its new rulemakings. The CFPB recently proposed to remove medical debt from credit reports, as well as finalized part of its open banking rule, which will set up a new registry to track corporate repeat offenders of consumer laws. The most tense moments of the hearing centered around the funding structure of the CFPB, with critics arguing that the agency cannot draw funding from the Federal Reserve System if it doesn't turn a profit, which it hasn't since 2022.

Indonesia's Minister of Communications and Informatics, Budi Arie Setiadi, threatened to shut down access to X in the country if it doesn't comply with the country's established laws that prohibit the distribution of adult content, following X's new policy of permitting adult content, as long as the user display content warnings. I'm confused why this is suddenly an issue now. Has he been on Twitter since 2006?

Sendbird, a communications API platform, launched a new AI chatbot for Shopify that's powered by OpenAI's ChatGPT-4o model. The chatbot, which is now available in the Shopify App Store, connects to merchant store data via Shopify's API and automatically adds its knowledge base for answering frequently asked questions, making product recommendations, and providing contact info for support. As a result, the chatbot can answer most customer FAQs and increase conversions through personalized product recommendations.

Mastercard unveiled its vision to achieve 100% e-commerce tokenization by 2030, an initiative aimed at streamlining the checkout process, enhance security, and create more convenient experiences for consumers and merchants. Tokenization replaces a card's 16-19 digital number with a unique digital token, which reduces the risk of fraud if a data breach occurs. Additionally, Mastercard is looking towards payment passkeys, which leverage the biometric authentication capabilities of most mobile phones to eliminate the need for passwords and one-time codes.

Poshmark announced the launch of Posh Party LIVE, a real-time virtual event centered on a given theme such as “Summer Neutrals” or “Luxury Goods” that aims to make the shopping experience more social. The events are designed to create a sense of community among sellers, with event hosts able to use them to sell their own items and other products. They should ask comedian Daniel Tosh to host an event selling children's clothing so that they can have a Tosh Posh OshKosh B'gosh Party.

Meta is looking to cut down on the number of VPs at the company, as part of Mark Zuckerberg's year of efficiency that turned into a permanent mantra at the company. The number of vice presidents peaked at 300 last year, growing from about 180 individuals in previous years, which means that 0.5% of all employees at the company are a VP. That means you should apply for a job at Meta instead of buying lottery tickets, because you've got a better chance at becoming a VP than winning the lottery.

Stripe announced a new series of products and partnership updates for businesses in France including an integration with Alma, a popular BNPL provider in the country, the introduction of a smart reader device, and a new pre-built integration with Cegid, a retail POS solution. Later this year Stripe will add support for CB, France's primary payment system, to its Terminal, enabling seamless transactions via Visa, Mastercard, and CB, whether customers use Apple Pay, credit cards, or other payment methods.

Apple and Meta will likely face charges for failing to comply with the EU's Digital Markets Act, according to Reuters sources. The investigation targets Apple's steering rules, which regulators say impose limitations that hinder app developers from informing users about offers outside its App Store free of charge, as well as its new fees levied on app developers. The investigation into Meta focuses on its recently introduced pay or consent model, where users have to pay a subscription fee for an ad-free Facebook and Instagram.

OpenAI hired Sarah Friar, former CEO of Nextdoor, former CFO at Square, and current board member of Walmart, as its first CFO, and Kevin Weil, a former member of Facebook, Twitter, and Instagram, as its CPO. Josh Baskin, founding partner at SB Search Partners, predicts that OpenAI's pick of a CFO suggest that it may be planning an IPO.

Five sisters from Washington are facing federal charges for allegedly defrauding a clothing retailer's return program and stealing over a million dollars from the company. The sisters exploited the company's “Fast-Track Returns” policy where they scanned a return label at a post office to get a gift card with the refund amount via e-mail, but never actually mailed the merchandise back to the retailer. Instead they traveled to a brick-and-mortar store and returned the products for a second, duplicate refund. Stealing is wrong, but that company needs to take some accountability for both having the world's worst return policy and having no-one pay attention to their customer return rates. I vote we just charge those sisters with stealing the first $200k — the other $800k is on the company for letting it go on that long!

Have you ever seen Meta's interactive billboards, which they call Thrillboards? The company won the Experience Gold award at The Drum Awards for its walk-in billboard where viewers stepped into a haunted walk through tunnels. Watch the video — it's really cool!

10. Seed rounds, IPOs, & acquisitions

RetailReady, a tablet app that replaces paper warehouse manuals that document packing instructions, raised $3.3M in a round led by Wischoff Ventures. The platform targets the $40B compliance market to help reduce the number of losses that shippers incur due to incorrectly shipped packages by using AI to ingest shipping requirements manuals and computer vision to validate compliance.

Constructor, a startup that develops AI-powered search and product discovery technology for enterprise merchants like Bonobos and Sephora, raised $25M in a Series B round led by Sapphire Ventures. CEO Eli Finkelshteyn said he wasn't looking to raise new funding for his startup but keeps up regular conversations with investors, which led to an offer and a term sheet.

Platma, a no-code platform that works with small businesses to create tailored software that helps them automate back-office processes, raised $1.85M in a round led by Almaz Capital, with plans to raise a $10M round later this year. The company has reached $1.5M in annual recurring revenue and projects to grow by 700% over the next six months.

Floatic, a Korea-based warehouse robotic solutions provider that builds robotic systems for e-commerce picking and deployment, raised $3.8M in a pre-Series A bridge round led by Capstone Partners, bringing its total amount raised to $8M since it was founded in 2021. The company will use the funds for research and development to enhance its product as it prepares for commercialization this year.

Bosso, a Zambian startup that offers e-commerce solutions for the building and construction industry in Africa, raised $400k in a pre-seed funding round led by Launch Africa Ventures and others. Bosso is currently the largest online marketplace for building materials in Zambia, catering to hardware retailers and contractors, with integrations with over 1,000 hardware stores across the country.

Epicor, a provider of enterprise software for the manufacturing, distribution, retail, and services industries, acquired KYKLO, a provider of Product Information Management and lead generation solutions for manufacturers and distributors, for an undisclosed amount. Through the deal, KYKLO's software will be integrated with Epicor's product offering, allowing customers to more easily create and manage product info across multiple channels, as well as collaborate with suppliers for real-time product content.

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Paul E. Drecksler
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PS: What shoes don't go on your feet? … Tissues.