Tag Archives: ecommerce

Temu UK Doubles Revenue and Pre-Tax Profits in E-Commerce

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The UK branch of Chinese online marketplace Temu saw its revenue and pre-tax profits double last year, as UK shoppers increasingly turned to products from ultra-budget retailers.

Temu UK’s revenue reached $63.3 million (£46.4 million) last year, nearly doubling the $32 million from 2023, with pre-tax profits climbing from $2 million to $3.9 million.

Nonetheless, on the operating front, the company—registered as Whaleco UK with Companies House—reported an increase in losses from $7.9 million to $8.7 million compared to the prior year. The majority of its operating loss was attributed to “exchange losses.”

Given Temu’s modest pre-tax profit, the company contributed just $985,000 in UK corporate tax, a rise from $517,000 in 2023.

Similar to Amazon UK and Google UK, Temu’s UK operations report revenues as “service fees,” indicating that it generates revenue “through the provision of corporate support services to affiliated entities.”

While Temu experiences rapid growth in the UK, the company, alongside others like cheap fast-fashion rivals and e-commerce giant Amazon, may have to raise prices following the government’s review of tax regulations in April, which would allow small parcels to qualify for UK tax exemptions.

Current laws permit international retailers to ship parcels to the UK valued under £135 without incurring import taxes. UK retailers argue that these regulations provide unfair advantages to businesses like Temu and Shein.

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Earlier this year, Theo Paphitis indicated that retail groups—including Ryman and Robert Dyas—were contravening the measure, suggesting that the retail group would encompass Ryman and Robert Dyas.

As of August 29th, the US has already initiated steps to remove the “minimum” exemption for parcels valued under $800.

On Wednesday, the head of luxury retailer Fortnum & Mason stated that this situation would significantly elevate the costs of goods, such as high-end teas, purchased by US consumers.

In July, European Union Attorney General Michael McGrath expressed dismay at the hazardous nature of some products offered by companies like Shein and Temu.

With 12 million low-value parcels being shipped daily within the EU from online retailers outside the bloc, McGrath has committed to tightening restrictions on the sale of products that blatantly violate the law.

The EU is also contemplating the elimination of the €150 (£130) tax-free threshold and the introduction of handling fees for each parcel.

Source: www.theguardian.com

Returning to cash: Living without money in your pocket is not the utopia Sweden envisioned

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Back in 2018, the former lieutenant governor of Sweden’s central bank made a prediction that by 2025, Sweden would likely become a cashless society.

Fast forward seven years later, and that prediction has largely come true. Cash transactions have significantly decreased, with cards being the most popular form of payment followed closely by Swish, a mobile payment system introduced in 2012. Other mobile phone payment services are also gaining popularity.

A recent report from the Central Bank indicates that Sweden and Norway have the lowest cash circulation as a percentage of GDP globally.

However, given the current geopolitical tensions and security concerns, the idea of a completely cashless society in Sweden may not be as appealing as it once seemed.

Authorities are now urging citizens to keep and use cash for civil defense purposes. The Ministry of Defense has distributed pamphlets to households, advising people to maintain a supply of cash in various denominations for emergency situations.

The Central Bank emphasized the importance of ensuring everyone can access money in times of crisis, shifting the focus from efficiency to safety and accessibility.

Recently, the government recommended that both public and private entities continue to accept cash, a suggestion that should be implemented by central banks.

As cash usage declines, central banks have been exploring their own digital currencies. However, the focus has now shifted to monitoring the global development of digital currency.

Norway, a neighboring Scandinavian country, has also been moving towards a cashless society, introducing mobile payment systems and imposing fines on retailers who do not accept cash. The government advises citizens to keep some cash on hand due to the vulnerability of digital payment solutions to cyberattacks.

Ultimately, in terms of emergency planning, having a balanced approach between digital and cash payments seems to be the way forward.

Miranda Bryant is the Guardian’s Scandinavian correspondent

Source: www.theguardian.com

Temu, China’s affordable shopping app, faces challenges in Southeast Asia despite initial success

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CTemu, the Chinese online marketplace that has seen rapid international growth with its attractive and often incredibly affordable range of products, is facing increasing challenges with its price-cutting strategies.

In October, Indonesia ordered the removal of Temu from its app stores, citing the need to protect small local sellers. Recently, the Vietnamese government also threatened to ban Temu and another Chinese-owned retailer, Shein, for operating without authorization in the country.

Simon Tolling, co-founder of market insight firm Cube, explains that the influx of cheap Chinese products, often with minimal import taxes, cannot compete with the quality, speed, and pricing offered by local retailers online. This has led to disruptions for businesses and manufacturers.

“Tem has become a focal point for regulators, prompting concerns about potential changes to cross-border import regulations,” he remarked.

Poom Chotikavan, operations director at Taxa Toys in Thailand, is struggling to find local manufacturers for children’s toys as many suppliers have gone out of business. The closure of approximately 2,000 Thai factories and the loss of over 50,000 jobs last fiscal year, partly due to heightened competition and rising costs in China, have had a significant impact, according to Reuters.

“Sourcing products from China has become more challenging. Their sales have plummeted,” Chotikavan noted. “How can they survive when clients can directly contact a Chinese factory?”

Pinduoduo, the Chinese equivalent of Temu, has been in operation since 2015 and is set to launch globally in 2022. Temu is also expanding in Southeast Asia, starting in the Philippines and Malaysia in 2023 and expanding further into Thailand, Brunei, and Vietnam this year.

The growing consumerism among Southeast Asia’s middle class has made the region an attractive market, with online shopping sales projected to reach $160 billion in 2024, as per a Bain & Company analysis released in November.

Jiangang Li, CEO of venture firm Momentum Works, believes that TM’s international growth is timely as Chinese domestic customers reduce purchases from Pinduoduo due to the country’s economic slowdown.

However, Temu’s entry has provided a boost to the market, given the surplus capacity in Chinese factories resulting from the economic slowdown, forcing Temu’s main suppliers to sell larger quantities at lower costs.

“Surprisingly cheap”

Similar to Western markets, Temu combines affordably produced items with deep discounts and aggressive advertising, attracting shoppers with gamified experiences. This has appealed to hundreds of thousands of customers like Chotikavan, who purchased a MagSafe iPhone holder for $3, significantly cheaper than the market price.

While consumers benefit from access to cheaper goods, local businesses are calling for government intervention. Indonesia has implemented tax hikes and banned e-commerce on social media platforms to support struggling local sellers. Despite these measures, Temu continues to push for entry into the market.

“Their goal is to dominate the global market,” says Tolling.

Source: www.theguardian.com

Africa’s Biggest B2B e-commerce Platform MaxAB in Discussion to Merge with Wasoko

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Egyptian B2B e-commerce startup MaxAB and Wasoko, a Kenya-based e-commerce company with operations in Tanzania, Rwanda, Uganda and Zambia, are in talks to merge, TechCrunch exclusively learns from multiple sources. I got it. They said negotiations are still ongoing and the agreement has not yet been finalized.

The merger talks come as African B2B e-commerce companies continue to downsize due to lack of funding. Wasoko is no exception. The company recently carried out its largest ever layoffs, affecting most of its employees in Kenya, including some executives. Earlier this year, the company exited the Senegal and Ivory Coast markets and closed locations, including one in Mombasa, Kenya, as it sought profitability.

Additionally, our sources say Wasoko closed a $125 million round last year, with the funds scheduled to be released upon reaching set milestones. TechCrunch has learned that the company received just $30 million when merger talks, said to be investor-led, began. Wasoko has raised a Series B round from institutional investors including Tiger Global and Avenir at a post-money valuation of $625 million.

Like Wasoko, MaxABa food and grocery B2B e-commerce and distribution platform serving a network of traditional retailers in Egypt and Morocco, has raised over $100 million in funding, including DisruptAD, BII, Sources said the company is in talks with existing investors to raise a bridge round this year, including $55 million in Series A and $40 million in pre-Series B from Silverlake.

MaxAB is the largest player in the B2B retail and e-commerce market in Egypt and North Africa. The company acquired YC-backed Waystocap to expand in Morocco, and the supposed threat Capiter shut down amid a conflict between its founders and investors.

Last year, a merger between MaxAB and Wasoko, both asset-heavy B2B e-commerce startups, seemed unlikely. In discussions last year with MaxAB CEO Belal El Meghaber and Wasoko CEO Daniel Yu, there was no indication that they were considering any form of merger. MaxAB’s post-pre-Series B plans are focused on leveraging its network and relationships with local and multinational suppliers, with the aim of full distribution in Morocco and expansion into Saudi Arabia by the end of the year. Meanwhile, Wasoko was looking to expand in West Africa, aiming to expand its product offering to include point-of-sale systems, bill payments, and social commerce.

MaxAB does not have a presence in Saudi Arabia, at least according to its website, while Wasoko has expanded into two West African markets, Ivory Coast and Senegal, to complement its operations in East Africa’s core markets of Kenya, Tanzania and Uganda. Not doing business. And Rwanda. His eight-year-old B2B e-commerce company has since expanded to Zambia and the Democratic Republic of Congo.

Continues further

Source: techcrunch.com

Kenyan E-commerce Firm Secures $20 Million Investment to Drive Growth, Former Metaswitch CEO John Lazar Joins Copia’s Board

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Kenyan e-commerce and fintech platform for mass market consumers copia global appointed John Lazarthe former CEO of Microsoft subsidiary Metaswitch, has joined the company’s board of directors on the back of $20 million in new funding.

Enza Capital, the pan-African venture capital firm co-founded by Lazar in 2019, is one of the larger participants in the Series C extension round, including global private bank LGT, investment firm Goodwell Investments, Also included is the U.S. International Development Finance Corporation (DFC). ), German financial services provider DEG, Swiss impact fund Elea, Perivoli Foundation and Sorenson Foundation.

Lazar has extensive experience building and managing businesses. He joined Metaswitch Networks in 1987 as a software engineer and later became Chairman and CEO as the company established its leadership in cloud communications software with investment support from Francisco Partners and Sequoia Capital. I was appointed CEO. Lazar, who resigned from both roles in 2016, four years before Microsoft acquired the company, is also chairman of the UK-based charity Raspberry Pi Foundation, and is an angel investor and investor in the UK and Africa. He is also a mentor to over 40 pre-seed and seed investors. investment.

In a conversation with TechCrunch, Lazar said he has a long-standing professional relationship with the Copia team that has impressed Enza Capital with its fulfillment network over the years and increased digital adoption from consumers. , admitted that this is one of the reasons to support e-commerce in Kenya. Clothes.

According to the International Monetary Fund (IMF), personal consumption in Africa is expected to exceed $2 trillion Over the next three years, the continent’s burgeoning middle class will drive this growth. Copia, which has been around for 10 years, targets rural, middle- and low-income African consumers. These consumers enjoy more choice, price, and access to goods and services compared to urban and high-income consumers who use Western-style or African-focused platforms such as Jumia and Takealot. , faces challenges in terms of reliability. Therefore, although this target market may be difficult to find and its wallet size may be small, Copia is approaching it with a hyper-local strategy, reaching a significant number of approximately 750 million people across Africa. We believe there is an opportunity given the collective purchasing power of

Copia leverages its local agent and logistics network to tap into this market. The company boasts a strong network of over 50,000 agents who are small business owners in towns and villages across Kenya and has served over 2 million consumers. Most of these orders executed through Copia’s distributor network are made offline, with customers ordering household goods, electronics, or food products in person at the distributor’s store, via USSD, or by phone. Ta.

However, driven by falling data costs and increasing smartphone penetration and ownership in Kenya (73% of low- and middle-income Kenyan consumers now own a smartphone, down from 10% a decade ago), A 10-year-old e-commerce company recently ran a campaign to digitize its agent network, increasing app usage from 5% to 80% in one year. Copia said in a statement that digitized agents can double their revenue, and by exploring smartphone financing models, they can focus their subsequent digitization efforts on millions of consumers. This will allow companies like M-KOPA to enter a thriving market.

“I have respected this company for a long time and think the conditions are right. E-commerce companies are facing some difficulties at the moment, but a kind of push towards digitalization is a good thing for us. It feels like a tipping point and just changes the game in unit economics and efficiency,” said Mr Lazar, who was awarded a CBE for services. “So when Tracy called us and told us they had this internal round and wanted to bring on additional partners, we were very excited to participate.”

Copia has recorded 100% annual growth over the past few years, with founder and chairman highlighting scale and rapid expansion as key objectives for profitability. tracy turner explained on the same call with TechCrunch. However, as global capital markets have experienced a downturn and investor focus has shifted from models that rely on scale for profitability, to now emphasize the importance of demonstrating sound unit economics. In response, Copia underwent fundamental changes last year.

The e-commerce company has secured more than $120 million in funding since its inception, including a $50 million Series C round in January, but this year it scaled back its expansion plans and implemented significant layoffs. . At least 700 roles will be eliminated. Reduce number of Kenyan employees by 25% July and Closed Uganda operations Similar to three months ago, this move is in line with broader trends seen across industries this year, with many companies considering reducing labor costs as their first strategy when adopting cost-cutting measures. are doing.

“We recognized in the capital markets environment that we did not want to continue operating in Uganda, which is a great market and opportunity. We did not have the funds to make it profitable, so it made sense to hold off there. Then we looked at our Kenyan operations and realized we needed to streamline there as well,” Turner said. “And the fact that our customers have become digital so rapidly, our current shift to a digital focus means we need to change the way we operate in Kenya. So we did this to focus our business on digital relationships with our customers, which is completely different than it was just a year ago.”

Copia’s shift in focus from simply growing sales to achieving profitability in Kenya has helped it minimize losses since new management took over in Q4 2022. It reflects a strategy similar to Jumia’s approach of slowing growth. Both companies face headwinds that call into question the sustainability of B2C electronic services. Commerce takes place in Africa, albeit with different e-commerce models operating. It is worth noting that B2B e-commerce platforms are also grappling with a series of challenges in the market.

Despite the challenges, executives from both e-commerce companies, which have been in business for 10 years, said in separate conversations with TechCrunch that the companies, which now offer financial services alongside e-commerce, are stable. We have unwavering confidence in our ability to achieve the same profitability. They argue that it is only a matter of time before these challenges are overcome and are optimistic about the future profitability of the business. However, both platforms face distinct goals. While Copia strives to achieve profitability in a single market, Kenya, Jumia has to compete across 11 markets.

But Turner said Copia, which will have annual revenue of more than $60 million by the end of 2023, maintains pan-African ambitions despite its focus on making money in Kenya. Point out. The founder and chairman said that once the e-commerce company achieves profitability in the East African market, it plans to expand to 14 other strategically planned countries. “We are keeping our heads down right now and focusing on Kenya and will not look up until we achieve that milestone. We have done a lot of scouting work and are planning where to go next. However, our international expansion plans will take place once we achieve profitability in Kenya,” she said.

As for John, as he said in the interview, three things remain of paramount importance to him now that he has joined the company’s board of directors. These include leveraging the experience and network of technical operators to support talent, providing sales and revenue generation strategies, and acting as a sounding board. To management.

Source: techcrunch.com

TUNL, a South African e-commerce startup, secures funding to boost expansion of export platform

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tunnelSouth African parcel delivery platform has secured $1 million in pre-seed funding from investors including Founders Factory Africa, Digital Africa Ventures, E4E Africa and Jozi Angels.

The platform claims that e-commerce merchants can save between 50% and 80% on international shipping costs, and the funding will fuel expansion in its key market South Africa, as well as launches in other key African countries. He said that he would lay the foundation for the Emerging markets.

CEO Matthew Davey cum COO craig lowman Mr Davey founded the company in 2022 after seeking a solution to the challenges he faced as managing director of a Dutch company importing South African engineering materials into Europe. In his interview with TechCrunch, Davey said the process of moving these materials is cumbersome and expensive, and his experience shows that transportation costs are widespread, especially for small and medium-sized businesses in emerging markets like South Africa. I’ve come to recognize the problem.

Current challenges in cross-border transportation are costing African businesses an estimated $50 billion a year in missed opportunities. The founders of TUNL identified a recurring problem among small and medium-sized traders in South Africa during the pandemic. That meant that shipping costs could exceed the value of the item. This also applies to high-quality goods such as textiles, clothing, footwear, camera accessories, and specialty components, despite the presence of major courier services such as DHL, UPS, and FedEx.

Typically, Cape Town sellers offer only one shipping option, such as DHL, to customers looking to purchase goods abroad. For example, a backpack might cost $60, and shipping from South Africa to the US could be about the same, $50-60, which could negatively impact your conversion rate. What TUNL has done is partner with delivery services like UPS and FedEx to ensure reasonable rates and subsidize shipping costs for small and medium-sized businesses by 50% to 75%.

“Our pricing is fully transparent and democratized. We want every business, large or small, to be able to transform their international sales by reducing shipping costs as much as possible. We want to make sure they have an equal opportunity to do the same,” Lowman said in a statement.

On the TUNL platform, sellers offer a variety of shipping options to their customers at checkout. This includes an “economy” option that incorporates shipping costs into the product price, allowing free shipping via TUNL’s courier service and slightly longer delivery times (approximately 10-14 days). Reduce cart abandonment at checkout. Alternatively, customers can choose expedited shipping options (within a week) via FedEx or UPS for a more reasonable price, such as $10 for the same backpack, allowing for more flexibility and potentially higher exchange rates. (The exact price may vary depending on destination and weight, but Davey says this is a consistent approximate number).

“It’s all about helping sellers succeed,” said the CEO. “Because if there’s only one expensive shipping option at checkout and the customer has two choices, they’re not going to buy it. “They can decide to abandon their cart or pay up.” “But when you introduce two shipping options, especially a free shipping option, human psychology forces the customer to choose one of the two, rather than abandoning the cart. .”

Primarily, South African e-commerce merchants using TUNL tend to ship most of their goods to the US, UK, Europe and Australia. Two-thirds of the shipments end up in the United States, Davey said. TUNL, which competes with Ivorian startups and platforms such as DHL partner ANKA, has grown 35% month-on-month since its launch and now has more than 700 merchants in its “delivery club.” TUNL’s merchants shipped more than 8,000 international parcels in 2023, representing R19.5 million worth of exports from South Africa, the company said in a statement.

The two-year-old e-commerce platform makes money by taking a margin from orders placed on its platform. The products we handle are wide-ranging, including backpacks, fashion shoes, arts and crafts, books, nanofiber materials, high-performance springs, various furniture, musical instruments, cosmetics, and other preserved foods. South Africa is known for its wine industry, with exports reaching 368.5 million liters last year. And although the transport of wine (alcohol) is not yet included in TUNL’s export items due to existing restrictions, Davey said the startup is now one of South Africa’s largest wine subscription businesses and its business He said he is in discussions about the possibility of participating. .

“We are getting a message from our merchants that we have transformed their business. They are adding new employees and growing because of us. So if our merchants are only serving the South African market, “It’s a win-win for the ecosystem to make people feel like they can look at the world as a market, rather than the only market they can serve,” he said. “We help merchants grow internationally just as we help them succeed, because the overseas consumer market is much larger than the domestic market for these types of products. ”

Davey said TUNL, which makes about $60,000 a month, will now focus on using the seed funding to improve sales and the onboarding process for new franchisees. In particular, the onboarding experience has been streamlined, relying primarily on customer support assistance and taking a more self-service approach.

Source: techcrunch.com

Stealth Mode Omniful Raises $5.85 million in Funding for Supply Chain and E-commerce Startup

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A startup that realizes supply chain and e-commerce, omnifulltoday announced a $5.85 million venture led by VentureSouq with participation from 500 Global, DASH Ventures, Jahez Group, SEEDRA Ventures, Bunat Ventures, Hala Ventures, RZM Investments, and several family offices including Al Rasheed, Siraj Holding, Al It emerged from stealth with seed funding. Bawardi, Al Nafea.

The UAE and Kingdom of Saudi Arabia (KSA)-based startup builds systems for ordering, warehousing, and transportation management to help sellers leverage hyperlocal and omnichannel commerce to efficiently manage orders, allowing you to manage your inventory in real time. It also allows third-party logistics providers (3PLs) to efficiently manage workflows.

Mostafa Abolnasr, co-founder and CEO of Omniful, told TechCrunch that most retail companies are faced with the challenges of coordinating different sales channels, managing inventory flow, inventory accuracy, and picking and fulfillment times. He said the pain points for traders inspired him and Alankrit Nishad. If you have experience in e-commerce, get started. In addition, market research has shown that traditional software does not meet customer needs, is difficult to scale, is expensive, and takes time to implement, Abornsah said.

“We started with a vision to reimagine the technologies used today and in the future to operate supply chains, hyperlocal omnichannel retail, and e-commerce. We basically had to rethink every feature based on first principles and focused absolutely on four pillars: speed, accuracy, scale, and efficiency,” said Abornasr, adding that small sellers He added that he was also keen to reach out to the public.

“We’re looking at it from an impact and issue release perspective.”

Omniful emerges from stealth with a $5.85 million seed to give merchants and third-party logistics providers the tools to scale e-commerce

Omniful provides merchants and third-party logistics providers with solutions that include tools for insight. image credits: Omniful

Large enterprises and small merchants using the technology will be able to leverage a variety of sales channels, reduce labor costs per store, and reduce fulfillment times by up to 40% and 70%, respectively.

Initial customers for Omniful’s globalized products include major retailers and third-party logistics providers in several markets, including Saudi Arabia and the United Arab Emirates.

Abornasr said the company’s technology can process a minimum of 3 million orders per day per customer, making it suitable for customers seeking growth. This also sets the stage for growth plans that include expanding the customer base in other parts of the world, including Africa and India, where R&D centers are located.

“We believe Omniful has its own wide range of applications and offers a lot of space to run. Here in MENA [Middle East and North Africa], the concept of trading is embedded in our history. There is a well-established tradition of excellent retail franchises in the region and Omniful will strengthen that and give us a competitive edge in an increasingly dynamic environment,” said Tammer Qaddumi, General Partner of VentureSouq. says Mr.

“Omniful is universal, adaptable, and global, and has already found use in several large markets. We truly believe that it is a borderless solution that can also serve as an integrator.”

Source: techcrunch.com