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Last week, we reported a relatively "slow" Q1 for Temu, anticipating turbulence in Q2. However, the latest figures are unexpected... Fresh insights from Edgewater Research and Mike Ryan reveal startling developments

Since April 1st, Temu has launched an aggressive campaign on Meta, rolling out over 12,000 campaigns in just two weeks!

If anyone was hoping for another "slow" quarter, think again. Prepare for a major shake-up. Brace for impact

While it's commonly understood that inexpensive products often use lower-quality materials, the chart from Johannes Stefan using EDITED data offers a revealing perspective. Still material cost is not the only point of differentiation between typical brand sourcing from Bangladesh and Shein

If we assume average price for a branded t-shirt is EUR 29 (In line with CleanClothes study) then Retail cost take EUR 17, brand profit EUR 3. Real production cost is only EUR 5!

Shein can have that delivered to your doorstep for EUR 8-9. How?

🛒No stores: No expensive store and staff. Only taxes and marketing spend. Shein does not spend like Temu (who apparently spent $3B while targeting $13B GMV… 23% of GMV!). Let’s assume its 5% of GMV (e.g. Allegro spend 1M out of 58, 2%). Here you can find old study comparing retail vs ecommerce

🔄 Different commercial model: Shein take rate expected to be somewhere between 5-10% vs 12% in the typical “brand” as calculated by Clean Clothes Campaign

🛬Transportation and tariffs: Typical brand spends 8% but this do not account for last mile (just transport to store). Some report suggest, Shein transportation cost (including duties) is below 20% of GMV. Temu, Shein are using “The de minimis loophole” meaning cheap staff can be transported into the U.S. tax free. The dollar amount of tax-free stuff you could ship was raised from $200 to $800 in 2015, and then online retail kind of exploded

🤝 Intermediaries: None. Shein works directly with factories

🏭Factories: For simplicity we can assume it is same as in branded. In reality I can imagine Shein with its scale gets better conditions than “typical” brand

🧵Cheap materials: 85% of Shein products have polyester (Almost double vs Zara and H&M) which is way cheaper than natural materials. Leading apparel brands use it to drive cost down

The Digital Services Act (DSA) requires providers of online platforms and online search engines to report their monthly active users within the European Union.

📋DSA rules: Platforms and search engines that have 45+ million active monthly users are classified by the EU as very large online platforms/search engines (VLOPs / VLOSE) and are therefore subject to the legal regulations of the DSA to protect users

🌍Current VLOPS: The latest user numbers show that in addition to typical suspects (Amazon, Zalando, Google Shopping) also AliExpress, Temu and SHEIN are classified as VLOPs

🚀Temu: Over the last six months, Temu reached an average of 75 million monthly active users in the EU! 

💹TOP5: Top5 marketplaces attract almost 550M monthly active users (MUA. Out of this 290M (~50% of top5) comes from 3 Asian marketplaces. Zalando is the only representative from Europe with 75M in the Top5

🔮Future VLOPs: Notable candidates for future VLOPS are: Ebay (MUA: 39M), Kaufland (32), Asos (31), Vinted (29) and Allegro (26)

▶🇺🇸 Amazon pushes live shopping on Prime Video. The new Amazon Live channel brings 24/7 shopping to Prime Video and Freevee, featuring stars like Lala Kent and Paige DeSorbo.

▶🇮🇹 Amazon Italy kicks off new rail routes. Amazon and Italian state railways launch rail service between Italy and Germany, aiming to cut 9,000 tons of CO2 annually

▶🇺🇸 Walmart launches massive auto service, leting customers order 40K types of tires online for installation at 2.3K Auto Care Centers nationwide

▶🇨🇳 JD's AI clone hosts shopping livestream. AI clone of CEO Liu Qiangdong to be powered by ChatRhino (large language model developed by JD)

▶🇦🇷 MercadoLibre to boost staff by 30% in 2024, adding 18,000 jobs to reach 76K employees, with significant hiring in Mexico and Brazil

▶🇩🇪 Otto tackles AI amid sales dip. Amid decline in own revenue, Otto's resilience shines with aggressive AI strategy. With 65 AI tools now operational, Otto is redefining e-commerce efficiency in Germany, setting a benchmark for the industry despite a broader market downturn

▶🇺🇸 eBay shakes up collectibles with dual deals. eBay acquires Goldin, a premier auction house, and sells the eBay Vault to PSA. This strategic move aims to streamline the collector experience and boost confidence in trading card commerce

▶🇬🇧 Shein bids again for Asos's Topshop, highlighting its aggressive strategy. Asos, grappling with losses, considers the sale vital for financial recovery

▶🇩🇪 Zalando questions EU fee calculation method. Zalando has challenged the EU supervisory fee's calculation (0.05% of global net income), seeking clarity on the methodology

▶🇺🇸 Shein teams up with Flexport for logistics and ShipStation, enhancing logistics for U.S. sellers and boosting efficiency

▶🇬🇧 Superdry plans to leave stock market soon. Amid survival struggles, Superdry announces a delisting plan from the stock market, focusing on restructuring without closing stores

▶🇬🇧 Dr Martens’ lawsuit tests Temu’s strategy. Dr Martens is taking legal action against Temu for allegedly misusing its trademarks in keyword advertising

▶🇯🇵 Asics launches $180 recyclable running shoe. Asics' new Nimbus Marai, a fully recyclable running shoe, hit stores on April 12, aiming for a sustainable future. Retailing at $180, the initiative includes a returns program in several countries.

▶🇺🇸 Allbirds warned by Nasdaq, stock under $1. Allbirds has time until Sept. 30 to boost its share price to regain compliance with Nasdaq or it will be delisted.

▶🇬🇧 Getir considers exiting Germany amid restructure. Urgent restructuring talks in Istanbul could lead to major market exits by May 2024, affecting jobs and operations

▶🇩🇪 Flink secures $106.7M, eyes merger with competitors. Funds will allow to extend its market stay amidst a sector slowdown

▶🇺🇸 Gopuff and Grubhub dive into grocery biz. Gopuff's new venture with Misfits Market shows 25% of orders have fresh items, while Grubhub partners with local grocers for expanded service

▶🇩🇪 Kaufland to hike fees in some categories. Kaufland adjusts marketplace fees effective April 30, with a notable rise in small household appliances category. Other categories see minor changes

▶🇬🇧 Deliveroo sees 2% growth in orders to 73.5M in Q1, with a notable performance in international markets. Meanwhile, Just Eat reports a dip in orders, reflecting ongoing challenges in the sector

▶🇺🇸 Aldi and Grabango roll out Aldigo tech. Following Amazon's step back from "Just Walk Out" tech, Aldi and Grabango test the Aldigo system in Aurora, IL. Cameras and AI monitor shopping without changing store layout

▶🇺🇸 Amazon amps up grocer tech with Dash Carts. Amazon's Dash Carts now serve third-party grocers, with Kansas City's Price Chopper and McKeever’s Market testing them since early this year, boosting checkout tech after pulling Just Walk Out.

▶🇵🇱 Carrefour partners with Wolt for quick deliveries. Carrefour's partnership with Wolt promises a swift 35-minute delivery in 14 major Polish cities.

▶🇺🇸 Morgan Stanley flips eBay, trims Etsy. Morgan Stanley adjusted their stance in the US e-commerce sector, upgrading eBay while downgrading Etsy.

▶🇺🇸 Decathlon shifts to e-commerce in the USA. Decathlon USA, responding to market changes, closes its last physical stores. The retailer to expand its online presence and partner with giants like Walmart and Target.

▶🇺🇸 OpenAI boosts team with Shopify veteran. OpenAI has appointed Glenn Worthington, ex-Shopify VP, as its new head of support. This move underlines the tightening links between AI and ecommerce.

▶🇺🇸 Wayfair opens physical store in Illinois. As Wayfair opens its first physical store in Wilmette, IL, it seeks to enhance its market presence and revive sales amidst a challenging retail environment.

▶🇪🇺 Ikea commits $3.5M to employee AI training. Ikea's training initiative for 3,500 employees in AI literacy aims to embed technology understanding deeply within its culture.

▶🇪🇺 Alibaba Europe program empowers women. Alibaba.com aims to boost gender equality in business with a new academy. Starting this fall, 40 women will gain vital skills and networking opportunities.

▶🇬🇧 Fy! acquires Trouva in major deal, marking its third change of hands in two years. The deal comes as both companies aim for profitability in a tough economic climate.

▶🇺🇸 Serve Robotics secures $40M via IPO. Planning major expansions in new cities.

▶🇩🇪 Finmid secures $24.7M to expand SMB lending directly through digital marketplaces. Recently, they raised $24.7M in Series A funding, with a valuation reaching $107M.

▶🌍 The Folklore raises $3.4M to expand globally. Amira Rasool's The Folklore, a B2B marketplace, has raised seed funding led by Benchstrength to help brands from emerging markets scale up and access new resources.

▶🇦🇹 Truckoo gains €1.5M, adds WaVe-X investor. With new funding the commercial vehicle platform, now includes Austria's WaVe-X, led by the Walter Group, alongside other major German investors.

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

Your guide through the maze

Artur Stańczuk Chief Strategy Officer at Packhelp, the leading European packaging marketplace. Previously worked ~8 yrs at Bain & Co. In the past, Digital Transformation Director at the leading Polish convenience chain Żabka and Entrepreneur that co-launched 3 startups