Amazon Faces Pricing Lawsuit, Pinterest Partners With Google Ads, and More News
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One of the major talking points after the Super Bowl is the fact that the 49ers didn’t know the new OT rules, and they lost with 3 seconds on the clock. To avoid the same fate, you should always stay informed and be familiar with the latest news from the eCommerce world. Last week, we covered Amazon’s rise in Australia. Today, we bring some not-so-good news for the platform. Let’s dive in.
Today’s news is 1,501 words.
Amazon Faces Lawsuit for Inflating Prices
Facing a lawsuit is nothing new for Amazon. Usually, legal action revolves around the treatment of its employees or charging customers unbeknownst to them. This time, the popular marketplace has been accused of artificially inflating prices and hiding cheaper listings with faster delivery.
When you visit an Amazon listing for any product, the platform will suggest similar, better-deal products on the right side of the product detail page. This section is commonly known as the Buy Box and is the focus of the lawsuit.
Two customers filed a lawsuit in Washington against Amazon, claiming that it only features Amazon’s products or third-party sellers that use the Fulfillment by Amazon (FBA) program. This means that cheaper alternatives with independent delivery services get overshadowed, making customers unknowingly pay more.
If the accusation proves to be true, this would signal that Amazon prioritizes its profits over consumer savings and shopping experiences, raising further concerns about the platform’s pricing mechanisms.
What does it mean for eCommerce sellers?
Any future implications of the lawsuit depend on its outcome. It could be just water under the bridge or have important effects on the future of Amazon listing. As of now, retailers not enrolled in the FBA program experience lower visibility on products, which may change if the current state of the Buy Box is deemed as a violation of the Consumer Protection Act.
Let’s check out how (if at all) the consequences of the lawsuit unfold. In the meantime, you can learn how to sell on Amazon successfully and optimize listing variations.
Big Retailer News
Pinterest to Expand Its Ad Integrations With New Google Ads Partnership
This week, the popular image-sharing social media network announced its partnership with Google Ads with a view to boost its ad revenue and increase businesses’ marketing exposure on the platform.
This is (only) a second such partnership, following a multi-year deal with Amazon, which was announced last year. According to Insider Intelligence, Pinterest reported an increase of $17.5 million in net income for Q4 2023. A significant impact on that number came from the Amazon partnership, with around 30% of all Pinterest search term ads featuring the popular marketplace.
The network now plans to achieve the same with Google. The integration will allow marketers to choose Pinterest via Google Ads Manager, and Pinterest users can be directed to the advertiser’s website to make a purchase.
One of the reasons Pinterest is partnering with Google is to capitalize on its international users. Despite 80% of its user base being outside of the U.S., international users bring only about 20$ of the network’s revenue.
What does it mean for eCommerce sellers?
This partnership brings a new venue for running ad campaigns and broadens your reach. Pinterest brings an active, high-value customer base you can with the potential for increased conversions and higher ROI.
Since it’s an image-sharing platform, the visual quality of your ads will be crucial. Make sure to use high-quality photos and present your product in an engaging way.
MORE: eCommerce product photography guide
XGen AI Launches New Tools to Revolutionize eCommerce
We’ve arrived at a point where AI is still a new thing but nothing out of the ordinary. All the big (and smaller) companies are trying to implement artificial intelligence into their operations and platforms, from generative AI to optimization models.
Companies like Amazon and Walmart are the frontrunners in bringing AI to eCommerce. But, they’re not the only ones, and startups specializing in AI are trying to implement their solutions in the industry.
XGen AI is one such startup. The company has developed various AI-powered features to enhance the shopping experience. One of the standout products is the search function.
Thanks to this tool, customers won’t have to do keyword-based searches. Instead, we’ll be able to type in questions into the search bar and get more intuitive and personalized answers to our queries.
XGen AI also offers dynamic product recommendation that adapts based on customer input and preset goals retailers can set. These goals include promoting slow-moving inventory, increasing the sales of high-margin products, or improving average cart value.
XGen AI aims at smaller eCommerce brands who want to compete with the big guns. According to the founder, the company will soon release a toolset that will allow eCommerce websites to create their own XGen-powered shopping assistants and chatbots.
What does it mean for eCommerce sellers?
One of the goals of XGen AI is to “democratize AI” by allowing brands to compete for customers’ attention without hiring AI experts that can rival the likes of Amazon. If you run an eCommerce website, you can benefit from XGen AI (or similar companies) by implementing their AI solutions to develop an enhanced shopping experience.
One challenge you’ll face is the uniqueness of the solution, i.e., the willingness of customers to adapt to a shopping experience they’re not completely familiar with. Keep an eye out for the development of XGen AI (and similar) products to find the perfect solution for your platform.
MORE: Top AI in retail tools
Also in the News
- New Shopify app launch from accessiBe enhances eCommerce accessibility. MarTech Series.
- Nvidia flips Amazon in market cap riding high on AI. Decrypt.
International Retailer News
Alibaba Market Share Drops as Rivals Grow
For decades, Alibaba has been the major eCommerce platform in China and Asia overall. Its influence on the Chinese market cannot be overstated, especially in some areas of the country like Shaji, where streets are named after the company and its owner (e.g., Ali Road and Jack Ma Boulevard).
Shaji was once a farming town that has since evolved into a community of web retailers who only sell on Alibaba. There are just under 7,800 such places in China (called Taobao villages).
While Alibaba still has the largest market share in the eCommerce space, it’s starting to shrink due to a lack of guaranteed sales. Online sellers (including the people from Taobao villages) are starting to promote their products on rival platforms, such as JD, Pinduoduo, Douyin, and Kuaishou.
According to an Alibaba report, the company’s market share went from 68% in 2019 to 42% in 2023. Many Chinese-based retailers find that competing platforms make it easier to sell higher-margin products. Pinduoduo is especially aggressive with its cut-rate prices and huge traffic that lets sellers find their customers without running ads.
What does it mean for eCommerce sellers?
The rise of competing platforms allows Chinese eCommerce sellers to diversify their profit streams and not count on a single platform. As a retailer looking to expand into the Chinese and Asian markets, you should greet this news with optimism. The drop in Alibaba’s market share means that customers are turning to other platforms, and you can use this to expand your customer reach.
MORE: Online marketplaces in China
Alibaba to Partner With Saudi and UAE Companies
As perhaps a response to the news above, Alibaba has decided not to strengthen its hold on the Chinese market but to explore other venues and expand internationally. This time, the focus is on the regional union called the Cooperation Council for the Arab States of the Gulf (GCC).
In a strategic move that’s not common for a Chinese company, Alibaba will go down the route of partnering with local businesses to keep rightly integrated in the local market movements. Aside from Saudi and UAE companies, Alibaba plans to offer partnerships to businesses from all members of the GCC (Bahrain, Kuwait, Oman, and Qatar).
The move shows that Alibaba is willing to change its practices and expand its global influence. This comes after years of struggles with the Chinese government and various strategic missteps.
The choice of the Gulf region (aside from potentially more significant political implications) is a result of the growth of eCommerce revenue in the region, especially in Saudi Arabia. Experts believe that the eCommerce revenue in the country will have an annual growth of 13.5% through 2027, which is a higher rate than the average growth worldwide.
What does it mean for eCommerce sellers?
The news of Alibaba’s expansion in the GCC shows the Gulf countries’ willingness to open to international marketplaces and retailers. As an eCommerce seller, you can benefit from expanding your international operations to this affluent region of the world.
MORE: Online marketplaces in the Middle East
Also in the News
- 70% of European online shoppers active on C2C platforms. eCommerce News.
- Publicis Commerce India and Amazon Ads unveil the first Digital Growth Marketing Playbook. Marketing Mind.
Webinars
For everyone
Various dates: Amazon advertising’s global webinar program continues with 20+ webinars scheduled, covering Amazon Prime Day preparation, sponsored products, sponsored brands, reporting, optimization, and other tips.
Learn more: Amazon.
For US sellers
February 27: The 15 Minute Breakdown.
Learn more: Tinuiti.
For UK sellers
Various dates: Amazon advertising’s global webinar program continues with 20+ webinars scheduled, covering Amazon Prime Day preparation, sponsored products, sponsored brands, reporting, optimization, and other tips.
Learn more: Amazon.
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