Home » Latest News » E-commerce & AI News Flash Collection (Feb 29): Thrasio’s Bankruptcy Filing and Otto Group’s Sales Decline

E-commerce & AI News Flash Collection (Feb 29): Thrasio’s Bankruptcy Filing and Otto Group’s Sales Decline

An empty wallet

US News

Amazon: A Rapid Ascent and Sudden Halt

On February 28, Thrasio, Amazon’s largest brand aggregator, filed for bankruptcy protection under Chapter 11 in a New Jersey court. The company, founded in 2018, saw its valuation skyrocket to $10 billion in October 2021 after a $1 billion Series D funding round, becoming the fastest startup in the US to reach a $10 billion valuation. However, since 2022, the brand aggregation sector has faced a sharp decline, leading Thrasio to cancel its public listing plans, lay off 20% of its staff, and see its valuation plummet to a fraction of its peak. Thrasio has reached an agreement with creditors for up to $90 million in emergency financing to maintain operations across its brand portfolio, listing assets estimated between $1 billion and $10 billion and liabilities between $500 million and $1 billion.

E-commerce Growth: Slowing Yet Resilient

The US Census Bureau’s Q4 2023 e-commerce sales report reveals a slight 0.8% quarter-over-quarter increase, reaching $285.2 billion, indicating a slowdown in the previously rapid growth of the US e-commerce sector. Despite this deceleration, e-commerce accounted for 15.6% of total US retail sales in Q4 2023, slightly up from 15.5% in the previous quarter, and saw a 7.5% year-over-year increase. The total retail sales in the US for the same quarter were approximately $1.8314 trillion, marking a 0.4% increase from the previous quarter. This data underscores the ongoing resilience of the US e-commerce market, which continues to achieve historical highs despite a slowing growth rate.

Global News

eBay UK: Overcoming Operational Hurdles

eBay UK announced on February 28 that it has resolved the recent issues with the Royal Mail Click & Drop service, which had prevented order imports, and is offering protective measures for affected sellers. The e-commerce platform will automatically protect sellers’ service metric ratings for orders between February 7 and 8, 2024, by removing late shipment rates and INR (Item Not Received) disputes from service metrics. eBay also plans to delete and delay any negative or neutral feedback related to undelivered orders, ensuring sellers are not unfairly penalized due to the service disruption.

Le Panier Bleu: A Shutdown in Quebec

Le Panier Bleu, an online shopping platform created by the Quebec government for local retailers, has ceased operations due to insufficient revenue to sustain the platform without additional investment. Launched in September 2020 with a $3.15 million investment from the Quebec government, the platform aimed to showcase Quebec businesses and boost the local economy. However, it struggled to attract the anticipated number of merchants, with only 600 businesses on board compared to the targeted 1,000 by the end of 2023. The shutdown follows concerns raised by merchants about the platform’s viability, especially after the announcement of Amazon’s partnership with Les Produits du Québec to feature Quebec-made products.

Otto Group: Navigating a Challenging Market

Germany’s second-largest e-commerce company, Otto Group, reported a 9% decline in global e-commerce revenue to €10.8 billion for the fiscal year 2023/24, attributing the drop to persistently low consumer demand. Despite the downturn, Otto Group’s performance outshone competitors, with its e-commerce platform otto.de showing strong growth in GMV and seller numbers. The company’s electronics and home appliances division maintained steady revenue, while slight declines were observed in the fashion and home furnishings sectors. Looking ahead, Otto Group anticipates a near 9% decline in international e-commerce sales and over 9% in the German market for the 2024/25 fiscal year but expects a return to growth by 2025. The group plans to continue strategic investments in digital transformation, logistics, and AI technology to capture a larger share of the e-commerce market.

European Parliament Bans Amazon Lobbyists

The European Parliament has revoked access for Amazon lobbyists due to concerns over transparency and working conditions, marking a significant move against the e-commerce giant. This decision comes as a consequence of Amazon’s repeated refusal to engage in dialogue regarding its labor practices. The ban signifies a notable setback for Amazon’s lobbying efforts in Europe, where it has been actively trying to influence policy making. With 14 individuals accredited in the European Parliament’s transparency register and millions of euros spent annually on lobbying, Amazon’s exclusion underscores the EU’s increasing scrutiny of large tech companies and emphasizes the importance of compliance with regulations and social responsibility.

Amazon Australia: A Surge in Advertising Revenue

Documents submitted to ASIC reveal that Amazon’s advertising revenue in Australia grew by 50% year-over-year to AUD 153.36 million in 2023, with a net revenue of AUD 3 billion in the Australian market. This growth exceeds Amazon’s global advertising revenue increase of 27% in Q4 2023, reaching USD 14.65 billion and positioning Amazon as the world’s third-largest advertiser behind Google and Meta. Amazon Prime Video in Australia is set to launch an ad-supported version later this year, following a partnership with beIN SPORTS for live sports broadcasting. Amazon has introduced generative AI solutions for brand advertising, sponsored TV ads, and enhanced advertising capabilities, including Amazon Publisher Cloud, to connect brands with customers more effectively, showcasing its strategic focus on expanding its market presence and advertising business in Australia.

Shopee Expands in Brazil: Strengthening Logistics

Shopee has inaugurated its tenth distribution center in Brazil, located in the city of Columbia, operating on a cross-docking model. This marks Shopee’s first distribution center in central Brazil, aimed at improving delivery services for high-demand products like fishing kits, ear protectors, drones, and radio communication devices. The expansion of Shopee’s logistics network in Brazil, where it has over 3 million local sellers accounting for over 90% of its sales, underscores the e-commerce giant’s commitment to enhancing delivery capabilities across the country. Shopee, part of Singapore’s largest internet group Sea, entered the Brazilian market in 2020, marking its first foray outside Asia. With additional distribution centers and over 100 first-mile and last-mile facilities, Shopee collaborates with over 20,000 logistics partners to cover the entire Brazilian territory, offering around 1,800 pickup and delivery points.

Romania’s E-commerce Outlook: Poised for Growth

According to PayU GPO’s forecast, Romania’s e-commerce market is expected to reach €11.5 billion in sales in 2024, a 16% year-over-year increase, potentially making it the second-largest e-commerce market in Central and Eastern Europe. MerchantPro’s “2024 E-commerce Insights” report highlights the continued growth trend in Romania’s online market, driven by high internet penetration, a young population, and rising incomes. The COVID-19 pandemic accelerated the development of Romania’s e-commerce sector, with over 10.2 million online shoppers in 2023, predominantly aged between 23 and 34.

The Romanian e-commerce market, which recorded sales of USD 9.8 billion in 2023, with products accounting for 65% and online services 35%, ranks third in the region, trailing Poland and the Czech Republic but significantly ahead of Hungary and Bulgaria. The sectors of hobbies and leisure, electronics, fashion, and home furnishings performed best in 2023, reflecting the diverse interests of Romanian online consumers.

AI News

OpenAI’s Sora: A Leap in Video Generation Technology

OpenAI’s Sora, a new video generation model, is creating waves on social media with its ability to produce cinematic-quality videos from text prompts. Movie mogul Tyler Perry praised Sora for its potential to revolutionize film production, highlighting its efficiency and versatility. Sora’s technology, which includes a time-space compressor, a Vision Transformer (ViT), and a CLIP-like conditioning mechanism, allows for the generation of high-quality videos up to a minute long, featuring detailed scenes and complex camera motion. This advancement represents a shift away from traditional diffusion model architectures, offering a more flexible and comprehensive approach to video generation.

Google DeepMind’s Genie: Transforming Images into Video Games

Google DeepMind’s Genie, a Generative Interactive Environments model, enables the conversion of images, videos, and sketches into playable video game scenes reminiscent of classic platformers like Super Mario. Genie’s ability to create game environments from a single image and its implications for generalist AI agents highlight its potential to revolutionize game development and beyond. Trained on internet videos, Genie has learned fine-grained controls and can infer actions, such as jumping, from visual inputs, showcasing the model’s understanding of complex dynamics. This innovation positions Genie as a foundational world model, contributing to the broader goal of achieving Artificial General Intelligence (AGI).

Google’s Gemini: Navigating AI’s Frontiers

Google introduces Gemini, its most advanced and general AI model, optimized for a range of tasks and designed to be multimodal. Sundar Pichai emphasizes the transformative potential of AI, with Gemini poised to unlock new opportunities in creativity, knowledge, and productivity. Gemini’s state-of-the-art performance across various benchmarks, including its ability to surpass human experts in multitask language understanding, marks a significant advancement in AI capabilities. Its flexible architecture enables operation on devices from data centers to mobile, highlighting Google’s commitment to making AI accessible and beneficial for a wide audience. With ongoing enhancements, Gemini represents a leap towards more sophisticated, efficient, and responsible AI development.

About The Author

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top