Good afternoon,

Here’s the headlines for this week: 6 December 2024

ECOMMERCE

🗓️ Black Friday Spending Approaches $11 Billion Fuelled by eCommerce

• Black Friday online spending in the U.S. neared $11 billion, driven by the growing dominance of eCommerce platforms, reflecting a 7.5% year-over-year increase.
• Over 50% of online transactions occurred via mobile devices, showcasing the increasing reliance on smartphones for holiday shopping.
• Retailers strategically used early promotions and flexible payment options, such as Buy Now, Pay Later (BNPL), to attract budget-conscious shoppers, contributing to the overall sales boost.

📈 Cyber Weekend ecommerce sales grow 5.8% year over year

• Cyber 5 (Thanksgiving through Cyber Monday) online sales hit $41.1 billion, a new high, with Cyber Monday alone contributing $13.3 billion, up 7.3% from 2023. Mobile shopping accounted for a significant share, with $7.6 billion in transactions on Cyber Monday
• Consumers increasingly used mobile and "buy now, pay later" options, with nearly 75% of BNPL purchases done via mobile. Discount rates averaged 26% globally, but strategic early discounts led some consumers to shop before Cyber Monday
• Electronics and big-ticket items drove sales, particularly on Cyber Monday, with competitive promotions from major retailers like Amazon, Walmart and Target pushing up online traffic and conversions

📱 E-commerce dominates US Black Friday

• Online sales surged by 14.6% in the US for Black Friday 2024, overshadowing the modest 0.7% growth in in-store sales, as value-conscious shoppers prioritized convenience and strategic promotions.
• Black Friday has transformed into a prolonged shopping period, with consumers strategically planning purchases to maximize deals across categories like apparel, electronics and winter essentials.
• Retailers catered to consumer preferences with competitive discounts, driving spending on both gifts and essentials, including groceries, while regions like Massachusetts and Colorado saw notable growth in holiday spending.

🇨🇳 Chinese e-commerce platforms are taking away holiday market share from major U.S. retailers

• Temu, Shein and TikTok Shop are capturing significant holiday market share in the U.S., with sales growing rapidly compared to traditional retailers. For example, TikTok Shop's sales more than tripled in early November, while Shein and Temu saw 16% and 18% growth, respectively.
• U.S. retailers such as Amazon and Target are struggling to compete, with Amazon launching Haul to challenge Temu and Target seeing a 4% decline in sales. Chinese platforms thrive due to their low prices, despite issues like long delivery times and quality concerns.
• Discounting is increasing among U.S. retailers to compete with the price pressure from Chinese e-commerce, but Temu's steep discounts (up to 90%) remain tough to beat.

🥪 CPG food & beverage volumes up for first time in 3 years, growing 1.1% YTD

• Consumer packaged goods (CPG) volumes rose for the first time in three years, driven by increased value-channel and e-commerce shopping amidst high food prices.
• Shoppers favoured private labels, in-home dining and just-in-time grocery shopping, while convenience store and out-of-home spending declined.
• Online grocery orders contributed significantly to growth, with delivery and pickup becoming popular shopping methods.

🛒 Just 10% of top online retailers abstain from Cyber Monday promotions

• 90% of top online retailers offered Cyber Monday promotions in 2024, slightly down from 92% in 2023.
• Discounts ranged widely, with median largest discounts increasing to 50% (up from 40% in a prior period).
• Free shipping was emphasized by 72% of participating retailers, an increase from 67% in 2023.

✈️ Air freight tonnage soars with ecommerce growth

• Currently accounting for 20% of global air cargo, e-commerce is projected to represent 30% by 2027, indicating its rapidly increasing influence in the logistics sector.
• Global carriers shipped 170 billion parcels in 2022, with this number expected to grow by 50% over five years, reaching 256 billion parcels annually by 2027.
• The global logistics market, driven significantly by e-commerce, is forecasted to grow from $386 billion in 2022 to $2.4 trillion by 2032, reflecting its critical economic role.

📉 Shopify Stock Falls As Black Friday E-Commerce Volume Jumps 22% To $5 Billion

• Shopify merchants reported a record $9.3 billion in sales during the Black Friday-Cyber Monday (BFCM) period, reflecting a 24% increase compared to last year. This growth significantly outpaced overall e-commerce market trends, showcasing Shopify’s increasing market share and dominance
• Over 61 million consumers made purchases through Shopify merchants, with $4.2 million in peak sales per minute on Black Friday. Additionally, 17,500 entrepreneurs made their first sale and more than 55,000 merchants achieved their highest single-day sales
• Increased adoption of Shopify’s payment solutions (Shop Pay), expanding cross-border sales (15% of orders) and operational scalability underpinned this performance. Analysts highlight Shopify's robust infrastructure and competitive edge as key to sustaining its growth trajectory.

TECH

👨👩👦 Australian Parliament bans social media for under-16s with world-first law

• Australia has passed a law banning children under 16 from using certain social media platforms like TikTok, Facebook and Instagram.
• Social media companies must verify users' ages by 2025 and could face fines if they fail to comply.
• The law aims to protect children from harmful content and cyberbullying, though some critics argue it could drive children to less regulated corners of the internet.

🇮🇪🇪🇸 TikTok Shop expands to Spain and Ireland amid global e-commerce push

• TikTok is expanding its e-commerce platform into Europe, with Spain set to launch in December and Ireland also being targeted, marking its first European expansion in three years.
• The platform is introducing features like a "yellow shopping cart" in short videos and live streams to promote products from TikTok stores, aiming to enhance its shopping experience.
• This move comes as TikTok faces pressure to find new revenue sources due to slowing growth and challenges in its core markets, with previous expansion plans delayed and its e-commerce performance falling short of targets.

🎼 US TikTok Ban decision coming soon as 19 Jan divestment deadline looms

• A U.S. federal appeals court is set to rule by 6 December on whether to uphold a law requiring TikTok's Chinese owner, ByteDance, to divest TikTok's U.S. assets by 19 January or face a ban.
• The court may uphold the law, potentially giving TikTok grounds to appeal to the Supreme Court or seek a delay if the law is deemed unfair to the company.
• Alternatively, the court could rule the law unconstitutional, challenging its implications on free speech, which would likely lead to an appeal by the U.S. government.

RETAILERS

🍾 Amazon experiencing bottlenecks in logistics in Europe

• Amazon is facing significant logistics bottlenecks in Europe, with its fulfilment centres unable to handle all incoming shipments, causing disruptions for sellers trying to stock inventory ahead of the holiday season.
• This issue may lead to delays or difficulties for merchants in ensuring their products are available on the Amazon marketplace at a critical sales period.

☁️ Amazon’s new AI cloud strategy is ripped straight from the e-commerce playbook that built a $2 trillion juggernaut

• Amazon's AI approach via AWS mirrors its retail success, emphasizing low prices, broad selection and user convenience. This includes the launch of Nova foundation models and the Bedrock Marketplace offering diverse AI tools.
• Bedrock Marketplace introduces 100 AI models, offering businesses flexibility and ease of integration through a unified interface, akin to Amazon's retail Marketplace.
• Amazon's AI services are aggressively cost-effective, positioning them to compete with top-tier providers like Google and Meta while aligning with its hallmark strategy of affordability.

See you next week,

The ChannelSight Team

‍

‍

Sign up below to get Coffee & Commerce delivered to your inbox each week.