Home » Latest News » E-commerce & AI News Flash Collection (Mar 10): Temu’s Advertising Blitz, Amazon’s New Fees Stir Controversy

E-commerce & AI News Flash Collection (Mar 10): Temu’s Advertising Blitz, Amazon’s New Fees Stir Controversy

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US News

Temu’s Strategic Expansion

In a bold move to penetrate the US market, Temu, a cross-border e-commerce platform under Pinduoduo, invested heavily in advertising on Meta and Google last year. Sources reveal that Temu spent over $2 billion on Meta ads and ranked as Google’s fifth-largest advertiser by expenditure. Despite the refusal to disclose specific figures, Temu’s spokesperson contested these numbers. This aggressive advertising strategy not only surprised Meta and Google executives but also contributed to Meta’s strongest financial report in history, leading to a record $200 billion market value surge overnight. Goldman Sachs estimates that Temu’s massive ad spend could lead to an average loss of 7 yuan per order in 2023.

Amazon’s Inventory Management Dilemma

Amazon’s new warehouse configuration fee, aimed at optimizing inventory management, has inadvertently increased costs for sellers regardless of the chosen storage option. Following the policy’s implementation, sellers have been exploring ways to circumvent these fees, leading to performance notifications from Amazon for improper practices. The controversy has sparked widespread debate among sellers, with some questioning the effectiveness of ERP systems in avoiding these fees. Amidst the confusion, Amazon’s coupon pricing requirements, set to take effect on March 12, 2024, have also raised concerns among sellers about the impact on new product promotions and market stability. These new policies reflect Amazon’s ongoing efforts to refine its operational efficiency and cost structure, even as they pose new challenges for sellers.

Easter and Spring Products Surge on Amazon

Jungle Scout’s report highlights a significant increase in sales for Easter and spring-related products on Amazon in March. Products like Easter wreaths and bunny decorations have seen substantial revenue growth, alongside silicone straw covers and St. Patrick’s Day decor, indicating a seasonal shift in consumer interest. LEGO’s lotus flower set also experienced a notable increase in sales, reflecting the diverse range of popular products during this period. The surge in search volume for these seasonal items underscores the importance of timely product offerings in capturing consumer interest.

Global News

Amazon’s Trademark Battle Over Cross-Border Sales

Amazon faced a legal setback in its cross-border sales practices, losing an appeal over trademark infringement in the UK. The case centered around the promotion of “Beverly Hills Polo Club” branded products to British consumers on Amazon’s US website, which infringed on the British and EU trademark rights held by Lifestyle Equities. The Supreme Court ruled that Amazon’s website targeted UK consumers by suggesting delivery to the United Kingdom, thereby infringing on Lifestyle Equities’ trademarks. This decision overturns a previous ruling in favor of Amazon and signals a significant impact on online retailers, emphasizing the need for platform checks to avoid automatic targeting of consumers in regions where they do not hold trademark rights.

Amazon Germany Adjusts Return Policy

Starting March 25, 2024, Amazon Germany will shorten the return window for most electronics from 30 days to 14 days, a policy soon to be adopted across other EU sites. This change aims to standardize the shopping experience for consumers, although it will continue to honor the 30-day return policy until April 25, 2024, during the transition period. The adjustment is part of Amazon’s broader strategy to align its return policies with consumer expectations and operational efficiencies, especially in the competitive European market.

UAE’s E-commerce Market to Hit New Heights

According to a report by YallaHub, the UAE’s e-commerce market is projected to reach $17 billion by 2025, with a significant growth rate attributed to increased internet usage, smartphone penetration, and improved online shopping experiences. The report also forecasts a surge in the adoption of “buy now, pay later” options and a potential expansion in the metaverse e-commerce sector, highlighting the dynamic nature of the region’s digital marketplace. The anticipated growth in the quick commerce sector and the rising popularity of online shopping for toys, DIY, and fashion products further illustrate the evolving consumer preferences in the UAE.

South Korea Investigates AliExpress

South Korea’s antitrust agency has launched an investigation into AliExpress for potential consumer protection violations amid the platform’s rapid expansion and its impact on local e-commerce giants like Coupang and Naver. The probe follows a significant increase in consumer complaints regarding counterfeit products and shipping disputes, underscoring the challenges of regulating international e-commerce platforms. This investigation reflects growing concerns over the practices of global online marketplaces and their effects on local economies and consumer rights.

Flipkart Eyes Quick Commerce and Dunzo Acquisition

Indian e-commerce giant Flipkart is reportedly planning to launch instant delivery services in select locations by May and is in talks to acquire the delivery platform Dunzo. This move aligns with Flipkart’s strategy to expand its offline delivery capabilities and compete with rapid delivery services like Swiggy, Zepto, and Zomato’s BlinkIt, highlighting the intensifying competition in India’s fast-growing e-commerce sector. The potential acquisition of Dunzo, following Reliance Industries’ investment, signifies Flipkart’s ambition to dominate the quick commerce space and enhance its supply chain efficiency.

AI News

Nvidia’s Power-Hungry AI Chip Raises Eyebrows

Nvidia is reportedly developing a GPU, the B100 chip, expected to consume a whopping 1000 watts of power without requiring liquid cooling. This next-gen AI accelerator, utilizing TSMC’s 3-nanometer process for improved performance and power efficiency, is set to outperform its predecessor, the H100, by consuming 42% more power. The development has sparked discussions about the sustainability and energy consumption of AI hardware, highlighting the industry’s ongoing challenge to balance performance with environmental considerations.

Musk Sued By Former Twitter Executives

Elon Musk is being sued by former Twitter executives, including ex-CEO Parag Agrawal, for not paying millions in severance. The case alleges Musk sought “revenge” by fabricating reasons to dismiss the executives without due compensation, marking another chapter in the tumultuous acquisition of Twitter by Musk and highlighting the legal and ethical challenges in the tech industry’s corporate governance.

AI Partnerships Enhance Enterprise Solutions

AI startup Mistral and language model provider Cohere have announced significant partnerships with Snowflake and Accenture, respectively. Mistral’s models will be integrated into Snowflake’s Data Cloud platform, while Cohere’s language and search technologies will be available to Accenture’s clients, offering customized AI solutions. These collaborations signify the growing importance of AI in enhancing business operations and decision-making processes, demonstrating the potential for AI to transform various industry sectors.

DARPA Invests in AI Chip Research

The U.S. Defense Department’s DARPA is funding $78 million in research projects aimed at developing AI chips that consume less energy. Among the recipients is a project led by Princeton University, focusing on creating compact and power-efficient AI computing hardware. This investment underscores the government’s commitment to advancing AI technology while addressing the critical need for sustainability and efficiency in AI hardware development.

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