Latin American Ecommerce | Digital Commerce 360

Mexican antitrust commission: Amazon, Mercado Libre hinder effective competition

Abbas Haleem — Thu, 15 Feb 2024 21:48:25 +0000

Amazon and Mercardo Libre both face regulatory scrutiny, following the release of new findings in Mexico.

A report from the Federal Economic Competition Commission (COFECE) — an agency in the Mexican government responsible for regulating anti-competitive behavior — found that Amazon and Mercado Libre control too much of the ecommerce market’s sales and transactions in the country, impeding new merchants from successfully entering the market.

Amazon and Mercado Libre are the largest online marketplaces in Mexico. Together, the report says, they control more than 85% of online marketplace sales and transactions in the country.

“We are aware of this preliminary report and are closely collaborating with COFECE,” Amazon said in a statement.

Mercado Libre issued a statement saying it was analyzing COFECE’s preliminary report, which the marketplace described as the start of the process. It also pledged its cooperation.

Amazon.com Inc. is No. 3 in the Global Marketplaces Database. MercadoLibre Inc. is No. 8. The Digital Commerce 360’s database ranks the largest online marketplaces around the world based on third-party gross merchandise value (GMV).

Amazon, Mercado Libre investigated in antitrust report

“There are no conditions of effective competition in the marketplace service market for sellers,” according to a translation of the preliminary opinion in the COFECE antitrust report. The report cites an investigation the commission held from March 31, 2023, to Oct. 27, 2023.

The report found that in Mexico, Amazon and Mercado Libre also:

Have the ability to set prices
Create barriers to entry into the market
Exert significant competitive pressure over smaller competitors

It says although there are some competitors in the market, most of them are much smaller in size compared to Amazon and Mercado Libre. As such, the smaller competitors’ ability to exert competitive pressure is not significant, the regulator asserted. Additionally, it states that Amazon and Mercado Libre are the only competitors that have systems for collecting and processing large volumes of data. Those systems allow the companies to offer sellers various tools within their platforms. The tools then incentivize sellers to remain on the marketplaces. That ensures a sufficient number of users to generate and maintain industry effects, according to the report.

COFECE report proposes corrective measures

Among the barriers to competition cited, COFECE identified that Amazon and Mercado Libre artificially influence buyer behavior by offering streaming services in their loyalty programs. As a corrective measure, COFECE proposes the marketplaces dissociate streaming services from their memberships and loyalty programs.

Another barrier to competition is the lack of transparency in offer management. It asserts that Amazon and Mercado Libre’s marketplaces use algorithms to manage offers. The regulator is concerned that a lack of transparency in that process could undermine efficient market functioning.

“COFECE also orders Amazon and Mercado Libre to take all necessary and sufficient actions to ensure that sellers can find comprehensive information about the variables and weighting factors they consider in selecting the featured offer,” according to a Mexico Business News report on the COFECE findings and corrective measures.

Also at issue is the idea that a preference for proprietary logistics solutions creates a third obstacle for market competitors.

“Amazon and Mercado Libre give preferential treatment to products from sellers who use their fulfillment services,” the report said, according to Mexico Business News.

“A seller would be unable to hire a single company that offers fulfillment in a comprehensive manner, and from there participate in various sales channels,” the report said.

As a solution, COFECE proposes that the marketplaces modify the criteria for the “Prime” and “Full” labels on products eligible for delivery using the marketplaces’ fulfillment networks. It suggests modifying the criteria so the labels are not exclusively or preferentially assigned to sellers who use the marketplaces’ fulfillment services.

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3 ways AI transforms the ecommerce customs declaration process

Emily Newton — Mon, 12 Feb 2024 14:00:18 +0000

Emily Newton

A smooth customs process is essential for getting ecommerce goods to their destinations in the expected time frames. However, standard customs forms are extremely detailed, with dozens of fields to fill. People are increasingly interested in how artificial intelligence (AI) could streamline things.

1. Completing Customs Forms More Efficiently

Even conscientious people make errors when providing information on customs documents. That might mean they put details into the wrong fields, use the wrong tariff codes to classify ecommerce documents, or make other mistakes, ultimately extending the time frames for parcels reaching their destinations or resulting in the packages getting returned to the senders.

Many optical character recognition tools have AI features to improve their functionality. People can use these options to pull data from electronic paperwork automatically and use it for customs forms.

Phlo Systems is a digital forwarder based in the United Kingdom working on a chatbot to fill out customs forms. Training is underway and responses have about an 80% accuracy rate, showing the solution’s potential. As of November 2023, the company’s CEO and founder expected to complete customs forms with the tool in three to six months.

Although AI can shorten the time necessary to complete customs forms, humans should always supervise the process and double-check the results. Well-trained algorithms are not perfect, so computing power and human oversight are an excellent combination to assist those dealing with exported products.

2. Linking Customer Purchases to Customs Form Data

Businesses may also expand the functionality of existing ChatGPT tools that bring AI to ecommerce, making them improve customs documents, too. Technology ecommerce brand Newegg released a customer-facing ChatGPT tool in July 2023 that suggests products for people wanting to build computers based on details they input about budget, performance requirements and other specifics.

The tool compiles all the options into a list people can review before checking out at the site. It is easy to imagine an accompanying AI product Newegg team members could use to populate customs forms based on what a customer ultimately purchases from the suggested list. Then, the items are more likely to be classified and described correctly on the customs forms. Tariff classifications determine duty rates and taxes on imports, making their accuracy critical.

Ecommerce leaders could also use AI to track trends that enable more accurate customs data. Perhaps a large percentage of overseas shoppers purchase a specific in-demand item and nothing else. AI might accelerate the process by automatically populating the product-specific customs form fields in such cases. Then, there is less to do because people only need to check the information that varies with each customer.

3. Stopping False Declarations and Counterfeit Goods

Possibilities also exist for customs agents to use AI tools to highlight abnormalities associated with illegal goods or items declared incorrectly. Artificial intelligence excels at processing large quantities of information and catching things humans would miss. Many banks use it to monitor for fraudulent transactions because it can detect those instances more accurately than people

If people make false declarations on customs documents, they typically do that to reduce their import tax and duty-related obligations. Many border patrol agents use artificial intelligence to assess which shipping containers to open for further inspection.

Some ships reach ports bearing 24,000 containers, making it impossible to inspect them all. However, the customs officials working at a Belgian port rely on predictive AI models to flag which ones to check. The algorithms make decisions based on customs declarations and data from goods previously requiring inspections.

Even so, illegal goods can slip past border agents, which may result in counterfeit products reaching ecommerce sites. More companies are responding by using or offering AI tools to combat these emerging circumstances.

One enterprise specializing in the luxury goods and sneaker markets built an artificial intelligence-driven product to compare photographs of legitimate items with those sold online. The software compares approximately 2,000 to 4,000 characteristics so consumers or retailers can feel more confident about authenticity.

Some ecommerce marketplaces could use counterfeit protection as a selling point to attract new customers. Suppose first-time visitors to a shopping website sees a banner informing them that all products above a specific monetary value receive anti-counterfeit screenings before getting shipped to recipients. Such a claim gives consumers peace of mind, particularly before buying high-value, unique or collector’s items.

Will Artificial Intelligence Improve Customs Processes?

AI for customs declarations and processing is still in the early stages, with decision-makers from many businesses still in the planning process. However, as more of them try real-world applications, artificial intelligence should make a bigger and lasting impact on paperwork and goods movement. The results could assist ecommerce companies with administrative tasks associated with import and export paperwork, plus support border patrol officials with spotting suspicious cargo or incorrectly declared products.

About the author:

Emily Newton reports on how technology disrupts industrial sectors. She’s also the editor-in-chief of Revolutionized, covering innovations in industry, construction, and more.

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Under Armour ecommerce increases 2% in Q3

Abbas Haleem — Fri, 09 Feb 2024 20:01:52 +0000

Echoing comparable results from its fiscal second quarter, Under Armour Inc. reported 2% growth in ecommerce revenue during its fiscal 2024 third quarter, which ended Dec. 31, 2023.

Under Armour ecommerce represented 45% of total direct-to-consumer revenue in the quarter, the company announced Feb. 8. As a whole, Under Armour DTC sales increased 4% to $741 million. Part of that increase came from 5% growth of in-store revenue.

Meanwhile, Under Armour wholesale revenue decreased 13% to $712 million.

Total third-quarter Under Armour revenue decreased 6% to $1.5 billion, in line with the company’s outlook. Operating income was $70 million, and net income was $114 million. Meanwhile, Under Armour inventory decreased 9% to $1.1 billion.

Under Armour is No. 97 in the Top 1000. The Digital Commerce 360 database ranks North America’s leading online retailers by their web sales.

Under Armour ecommerce sales

President and CEO Stephanie Linnartz said in a call with investors that the retailer is working to improve mobile speed, search algorithms and product description pages, among other functionality fixes. She said the retailer’s ecommerce division has done “great work” to improve conversion and have a more functional website and Shop App.

“We need for ua.com and our Shop App to be the most premium expression of our company,” Linnartz said. “It’s our largest storefront when you think about it. So we are going to reduce our dependency on promotions.”

That could reduce the brand’s revenue, she added, saying it will drive profitability.

“Simply put, ua.com will become a showcase for our brand,” Linnartz said.

Under Armour revenue by region

In North America, Under Armour revenue declined 12% year over year to $915 million in Q3. Under Armour revenue in Europe, the Middle East and Africa (EMEA) grew 7% to $284 million. Asia-Pacific revenue grew as well, up 7% to $212 million. In Latin America, Under Armour revenue grew 9% to $70 million.

UA Rewards program continues to grow

Nearly 3 million members have enrolled in Under Armour’s loyalty program, UA Rewards, “which is well ahead of the target” for fiscal 2024, Linnartz said.

Members have purchased premium products more frequently than non-members program’s first few months, she said.

Under Armour earnings

For the fiscal third quarter ended Dec. 31, Under Armour reported:

Under Armour revenue decreased 6% to $1.49 billion.
Net income decreased to $114.1 million from $121.6 million in the year-ago quarter.
Under Armour ecommerce revenue grew 2%. The retailer did not attach a dollar amount to the growth.

For the nine months ended Dec. 31, Under Armour reported:

Revenue decreased to $4.37 billion from $4.50 billion in the year-ago period.
Net income grew to $232.3 million from $216.2 million in the prior-year’s period.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Under Armour ecommerce update.

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Nike Digital sales grow slightly in Q2 despite declining traffic

Mary Meisenzahl — Fri, 22 Dec 2023 14:00:14 +0000

Nike Inc. reported both digital sales and total revenue grew in its second fiscal quarter of 2024 ended Nov. 30. Revenue grew 1% year over year to $13.4 billion, Nike said. The athletic apparel retailer did not disclose revenue from digital sales.

Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by online sales.

Nike Digital sales grow despite challenges

Online sales grew in most regions but faced challenges from price-conscious consumers this quarter, the retailer said. Nike Digital, encompassing global sales through the retailer’s website and mobile app, grew 4% in Q2. Digital sales grew 2% in North America, Donahoe said. That’s on top of 31% digital growth in Q2 of fiscal 2023. Meanwhile, online sales grew more than three times as quickly in Europe, the Middle East and Africa, increasing 7% year over year. Digital sales grew 14% in Asia Pacific and Latin America.

Sales were bolstered by the retailer’s strongest Black Friday week ever, CEO John Donahoe told investors. Holiday sales in both digital and brick-and-mortar channels grew 10%. However, outside of major shopping events like Black Friday, consumer demand was down online, even as in-store traffic grew over the quarter.

“While Nike’s store traffic continued to grow, we saw softness in digital traffic and higher levels of promotional activity across the marketplace,” chief financial officer Matthew Friend said. “We are seeing indications of more cautious consumer behavior around the world in an uneven macroenvironment.”

The retailer is planning to keep a tight leash on promotions going forward. “We’re not going to race to the bottom on digital. We’re going to focus on prioritizing brand health and brand strength,” Friend said.

Nike Digital sales in China

Nike Digital revenue declined 22% year over year in the Greater China region, the retailer said. At the same time, total revenue in China grew 8%. The retailer faced the same problems in China as in the rest of the world, with high promotions eating into margins as consumer demand online dwindled. However, in-store traffic remained strong enough to offset some digital losses.

Double 11 Day, also known as Singles Day, was a bright spot for digital sales in the otherwise disappointing quarter. Nike was the top sports brand on Tmall for the shopping holiday.

Tmall is an Alibaba-owned marketplace, along with Taobao. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by gross merchandise value. Tmall ranks No. 2.

Female Nike members drive sales

Nike members remain a key sales group, the retailer says of its loyalty program. Women now make up 40% of members and are poised to become a more significant portion of the total as they sign up in greater numbers.

Female Nike members are exhibiting greater demand than members as a whole, presenting an opportunity to sell more performance and lifestyle products, Donahoe says. Nike added new lines of leggings and bras, with pieces priced above $100, a higher price point than the retailer’s regular offerings.

“More and more women are joining our brand by purchasing these leggings. In fact, statement leggings fueled our fitness apparel growth in women’s for the quarter,” Donahoe said. He noted similar results from appealing to women in footwear through both new brands and established franchises like Air Force 1s and Dunks.

Average order value grew among members in the quarter, although Nike did not specify by how much.

For the fiscal second quarter ended Nov. 30, 2023, Nike reported:

Revenue grew 1% to $13.4 billion, from $13.3 billion.
Nike Digital sales grew 4% year over year.
Gross profit grew 5% to $6.0 billion from $5.7 billion.

For six months ended Nov. 30, 2023, Nike reported:

Revenue grew 1% to $26.3 billion.
Gross profit increased 3% to $11.7 billion.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Nike report.

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Nike Digital sales grow modestly in fiscal first quarter

Abbas Haleem — Fri, 29 Sep 2023 16:26:29 +0000

Nike Inc. started its fiscal 2024 with digital sales growing in its first quarter ended Aug. 31, 2023. The athletic apparel and footwear retailer did not share a dollar amount for digital sales but reported $12.9 billion in revenue for the quarter. That’s up 2% versus Q1 of its fiscal 2023.

Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

Nike Digital sales

Chief financial officer Matt Friend said Nike consumers spent more time in brick-and-mortar locations in the quarter.

“But 90% of their shopping journeys are starting with digital,” Friend said. “And so we continue to believe that our digital and physical strategies of serving consumers are the right strategy to serve demand as we look forward.”

In North America, Nike Digital sales grew 4% in the retailer’s first quarter. Nike Digital refers to sales made through the retailer’s websites and apps.

At the same time, Nike Digital sales in Europe, the Middle East and Africa decreased 2%. And they decreased 3% in Asia Pacific and Latin America. In Mexico specifically, though, Nike’s “digital business delivered double-digit growth,” Friend said, without revealing more.

“We’ve increased the size of our supply chain in the last few years to be able to address the growth that we’ve seen in our business, both overall and in digital,” Friend said.

To improve that efficiency, he said, Nike has reduces digital split shipments so consumers don’t get two deliveries for the same order. It has also invested in “regional service centers that are closer to where consumer demand is.” In other words, it has improved its fulfillment by opening distribution centers in strategic areas.

Digital boost in China

In the Greater China region, Nike Digital sales grew 6% in Q1. The footwear brand held a three-day sport festival called Sportchella in China.

“The team amplified the impact of the festival by partnering with Tmall to create the first Nike Super Brand Week, which drove more than 2 billion impressions,” Friend said. “And this partnership seamlessly integrated the events with a digital shopping journey that generated very strong consumer response and engagement.”

Nike mobile app

The Nike mobile app had “strong growth,” Friend said. Nike mobile app traffic had high single-digit growth in the quarter, he said.

“We saw member activity continue to increase both in terms of engagement and buying behavior and a higher basket size, a higher AOV,” Friend said.

That drove “sustained momentum on the Nike mobile app” as loyalty members increased their buying frequency in the quarter, he said.

“We continue to see a growing structural advantage as more consumers start their shopping journeys with us on mobile,” Friend said.

Nike Direct

Friend said member engagement through Nike Direct grew double digits in its Q1 compared with the year-ago period. Average order value through Nike Direct sales increased, but he did not specify how much.

Nike Direct refers to the retailer’s direct-to-consumer sales (online and offline). It grew 6% year over year in the first quarter.

In North America, Nike Direct grew 7%, led by 11% growth in physical store sales. Nike Direct sales grew 10% in China. They grew 6% in Europe, the Middle East and Africa, and 3% in Asia Pacific and Latin America.

Nike earnings

For the fiscal first quarter ended Aug. 31, 2023, Nike reported:

Revenue grew 2% to $12.94 billion, from $12.69 billion in the year-ago period.
Profit also grew 2%, to $5.72 billion from $5.62 billion the year before.
Similarly, Nike Digital sales grew 2% year over year in the quarter.
Nike Direct, or the retailer’s direct-to-consumer sales (online and offline), grew to $5.4 billion. That’s a 6% year-over-year increase.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Nike report.

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Nike Digital sales continue growth trend through fiscal 2023

Abbas Haleem — Mon, 10 Jul 2023 13:00:06 +0000

Nike Inc. finished its fiscal 2023 fourth quarter (which ended May 31) with digital sales growing once again.

The apparel/accessories retailer grew its digital sales 14% in Q4 and 24% in the fiscal year. Nike Digital sales accounted for 26% of total sales in fiscal 2023.

In pre-pandemic 2019, Nike Digital sales accounted for 10% of total sales. Nike Digital refers to sales made through the retailer’s websites and apps.

Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

Fourth-quarter Nike revenue increased 5% compared with the prior year, to $12.8 billion. Full year revenue increased 10% compared with fiscal 2022, to $51.2 billion.

John Donahoe, president and CEO, said consumers want digital and physical access to the brand.

“They use different shopping occasions to use different channels,” Donahoe said. “Consumers expect us to know who they are, and consumers have said to us they want a consistent and seamless experience. And so that is what has driven our marketplace strategy.”

Nike Digital sales

In North America, Nike Digital sales grew 17%. And in Europe, the Middle East and Africa (EMEA), Nike Digital sales grew 24%.

In China, Nike Digital sales declined 12% “as consumer buying continues to over index in brick-and-mortar versus the prior year,” said Matthew Friend, executive vice president and chief financial officer, in the retailer’s Q4 2023 earnings call.

Meanwhile, Nike Digital sales in Asia Pacific and Latin America (APLA) grew 9%.

Based on Nike Digital sales accounting for 26% of total sales, Digital Commerce 360 estimates Nike ecommerce sales to have reached about $13.3 billion in fiscal 2023.

“We continue to invest to grow based on the fact that the consumer continues to choose to shop in our stores and in our digital channels — or at least to engage in our digital channels — before they go try to find the product that they want in the wholesale marketplace,” Friend said.

Traffic analysis

Nike’s digital conversion traffic decreased 5.8% in the Q4 FY 2023 compared with Q4 FY 2022, according to a Similarweb analysis. Similarweb monitors website traffic.

In May 2023, while Nike held 42.5% digital market share, the largest among the top 10 sports apparel brands, its share declined 6.2% compared to the previous year, according to Similarweb. Nike traffic to the Dick’s Sporting Goods website decreased 3.4% year over year in Q4 2023.

“With the COVID-19 pandemic functioning as a catalyst, Nike’s shift to DTC sales accelerated, and the company began employing a combination of scaling back wholesale partnerships while expanding direct channels like the Nike website and Nike app,” wrote Sneha Pandey, insights manager at Similarweb. “However, with pandemic ecommerce tailwinds slowing down and market dynamics changing, Nike has had to re-evaluate its distribution strategy and move toward a better balance between DTC and wholesale.”

Source: Similarweb

Direct-to-consumer sales

Sales through Nike Direct, which refers to the retailer’s direct-to-consumer sales (online and offline), grew 15% year over year in the fourth quarter. Nike Direct grew 18% year over year in the fourth quarter; Nike Direct revenue reached $5.5 billion in fiscal Q4 2023. For the full fiscal year, Nike Direct revenue increased 14% to $21.3 billion.

Nike DTC sales in its physical stores increased 24% in Q4.

In North America, Nike Direct sales revenue grew 15% in Q4. Nike Direct sales grew 28% in EMEA. In China, Nike Direct sales grew 19%. Meanwhile, Nike Direct sales in APLA grew 9%.

Nike Q4 2023 earnings summary

For the fiscal fourth quarter ended May 31, Nike Inc. reported:

Fourth-quarter revenue increased to $12.83 billion. That’s up 5% from $12.23 billion in the previous fiscal fourth quarter.
Nike Direct revenue was $5.5 billion, up 15% from the year-ago period.
Nike-owned stores grew 24%, and Nike Digital sales increased 14%.

For the full fiscal year ended May 31, Nike reported:

Total revenue was $51.22 billion. That’s up 10% from $46.71 billion in the previous fiscal year.
Nike Direct revenue was $21.3 billion, up 14% from the previous year.
Nike Digital sales grew 24%, and Nike-owned store sales grew 14%.

Percentage changes may not align exactly with dollar figures due to rounding.

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Nike Digital sales account for 27% of total revenue in Q3

Abbas Haleem — Wed, 22 Mar 2023 14:00:18 +0000

Nike Inc. ecommerce sales now represent 27% of total sales. That’s triple the share of total sales since the retailer’s fiscal 2019, according to chief financial officer Matthew Friend.

Friend said on the retailer’s earnings call March 21 for the fiscal third quarter ended Feb. 28, 2023, that Nike Digital sales grew 24%. That, plus 19% growth at Nike physical stores, led to 22% Nike Direct growth.

Nike Digital refers to sales through the retailer’s websites and apps. Nike Direct refers to its direct-to-consumer sales.

Third-quarter total revenue grew to $12.39 billion. That’s up 14% compared with the prior year’s third quarter. Nike Direct sales in the quarter reached $5.3 billion. That’s up 17% year over year.

Digital sales for the retailer’s namesake brand increased 20% year over year. Nike-brand revenue totaled $11.766 billion, with Converse-brand sales accounting for the remaining $612 million.

Nike ranks No. 10 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

Nike Digital sales breakout by region

North America

Nike Digital sales in North America grew 25%, though the retailer did not provide a dollar amount. That fueled 23% Nike Direct growth as the retailer’s total revenue in the region grew 27% to $4.913 billion. Friend attributed the growth to holiday sales.

Footwear accounted for $3.322 billion in the quarter. That’s up 31% from $2.532 billion in the year-ago quarter.

For the nine months ended Feb. 28, total sales in the region reached $16.253 billion. That’s up 23% from $13.238 billion in the year-ago period.

Europe, Middle East and Africa (EMEA)

Nike Digital sales in the EMEA region grew 42%. Friend attributed that growth to Western European markets, specifically citing the United Kingdom. Nike Direct sales grew 29% in EMEA as the retailer’s total revenue grew 26% in the region to $3.246 billion. That’s up 17% year over year from $2.779 billion.

For the nine months ended Feb. 28, total sales in the region were $10.068 billion. That’s up 9% from $9.228 billion in the same period the year before.

The retailer has lowered fulfillment costs in the region by reducing split shipments and adding pickup points, Friend said.

When it comes to membership and marketing, Friend said, “if we’ve got more members coming in through the top of the funnel who are more engaged and buying more frequently, we should start to see an improvement in our ROAS or return on ad spend from a digital perspective and give us a lot of confidence that we’re building a moat to be able to continue to serve and grow our digital business.”

Greater China

Nike Digital sales declined 11% in the quarter, though Nike Direct grew 3%. Friend attributed this to consumers shifting back to physical stores as China lifted COVID-19 restrictions. Revenue from the region was $1.994 billion. That’s down 8% from $2.160 billion in the year-ago quarter.

For the nine months ended Feb. 28, total sales in the region were $5.438 billion. That’s down 9% from $5.986 billion in the same period the year before.

This was the market in which Nike sales declined across the board in the third quarter, as well as year to date.

Asia Pacific & Latin America (APLA)

Nike Digital sales grew 23% and Nike Direct 22% as the retailer’s revenue increased 15% in the quarter in APLA.

The retailer’s equipment sales declined to $53 million. That’s down 15% from 63 million in the year-ago quarter. It’s also the only revenue decline in the quarter outside the retailer’s Greater China market.

Revenue in the region totaled $1.601 billion in the retailer’s fiscal third quarter. That’s up 10% from $1.461 billion.

For the nine months ended Feb. 28, total sales in the region were $4.735 billion. That’s up 11% from $4.273 billion in the year-ago period.

Nike Q3 2023 earnings summary

For the fiscal third quarter ended Feb. 28, Nike Inc. reported:

Third-quarter revenue increased to $12.39 billion. That’s up 14% from $10.87 billion in the previous fiscal third quarter.
Revenue in North America was $4.91 billion. That’s up 27% from $3.88 billion in the year-ago quarter.
Nike Direct sales increased 17% to $5.3 billion.
Nike Digital sales increased 20% and represent 27% of total sales.

For the nine months ended Feb. 28, Nike Inc. reported:

Total revenue was $38.392 billion. That’s up 11% from $34.476 billion in the year-ago period.
Total revenue in North America was $16.253 billion. That’s up 23% from $13.238 billion in the year-ago period. It’s also more than 50% greater than the revenue from the retailer’s next-largest market: Europe, Middle East & Africa.
In EMEA, total revenue grew 9% to $10.068 billion. It was $9.228 billion in the year-ago period.

Percentage changes may not align exactly with dollar figures due to rounding.

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Global online sales reach nearly $4.29 trillion in 2020

Jessica Young — Mon, 26 Apr 2021 15:50:14 +0000

Consumers worldwide spent nearly $4.29 trillion online in a pandemic-fueled 2020, up from almost $3.46 trillion the prior year, according to Digital Commerce 360 estimates. The 24.1% year-over-year jump in global web sales was an increase from 17.9% growth in 2019. The acceleration after years of slowdowns was driven by unprecedented online growth in the United States ecommerce market, but tempered by a less robust performance in China.

Global retail sales through all channels hit $21.21 trillion last year, just a 1.0% uptick from $21.00 trillion in 2019, Digital Commerce 360 estimates. That means online’s share of total retail sales crossed 20.0%, with ecommerce accounting for all retail growth and gains in the online sector more than offsetting declines in store sales.

Historically, digital penetration rises each year as consumers get increasingly comfortable shopping online and retailers fine-tune ecommerce operations to deliver orders more quickly and efficiently. But COVID-19 magnified trend lines in a big way in 2020.

Globally, more than $1 in every $5 that went toward the purchase of consumer goods last year was spent on the web, Digital Commerce 360 estimates. Online penetration hit 20.2%, up from 16.4% in 2019 and 14.4% in 2018. The nearly four percentage-point gain in ecommerce penetration is a major headline, as anything around a two percentage-point bump in digital share over the preceding year is typically noteworthy.

Big markets’ share of global retail e-commerce sales

The world’s two largest economies—the United States and China—dominate global online retailing. Together, these two powerhouses have accounted for more than half of the worldwide digital sales of physical goods for years. In 2020, the pair amassed nearly $2.29 trillion in web sales, representing 53.3% of the global ecommerce market. But that was down from 55.1% in 2019 after years of growing market share, signifying that other countries gained ground on the largest players in an unusual year.

A number of markets outpaced both the U.S. and China with higher online growth: In North America, Canadian ecommerce skyrocketed by 71.2% last year after rising just 22.1% in 2019, according to data from Statistics Canada, a government-run agency. And in Mexico—a very low-penetrated country—online sales swelled an incredible 81.0% in 2020, according to the Mexican Association of Online Sales, or AMVO.

In Europe, the United Kingdom grew ecommerce by 36.0% last year, according to IMRG, the country’s online retail association. And online product sales in France climbed 32.0%, according to FEVAD, the country’s ecommerce federation. Additionally, Russia boosted digital sales by 45.0% in 2020 while Brazil’s ecommerce market saw even higher growth at 66%, Euromonitor reports to Bloomberg.

The U.S.’s banner year in ecommerce

Despite major surges in smaller markets, just the year-over-year gain in online revenue dollars alone for the U.S. during 2020 was larger than all but a few total ecommerce markets across the world. And as usual, the country had an outsized impact on the overall landscape in global online retail.

The U.S. is second among the biggest markets for ecommerce—behind only China—and comprised 18.5% of global digital sales. As shoppers turned to the web in wildly inflated numbers as the pandemic raged, consumers spent an astounding 32.4% more online with U.S. merchants than in 2019, according to U.S. Department of Commerce retail data. Ecommerce hit $791.70 billion in 2020, up from $598.02 billion the prior year.

That’s the highest annual U.S. ecommerce growth of any year for which data is available and also more than double the 15.1% year-over-year jump reported by the Commerce Department in 2019.

Ecommerce penetration hit 19.6% last year in the U.S., Digital Commerce 360 estimates. That’s up from 15.8% in 2019 and 14.3% in 2018. The nearly four percentage-point gain in online’s share of total retail sales during 2020 is by far the largest year-over-year uptick in penetration ever recorded. No other year has registered even a two percentage-point bump in digital share over the preceding year.

Sales through all channels reached $4.04 trillion last year in the U.S., up from $3.78 trillion in 2019, according to a Digital Commerce 360 analysis of Commerce Department data. The sizable 6.9% lift—the highest annual growth since 1999—was surprising after a year marked by store closures, lingering consumer anxiety over being in public spaces and the enormous boost to ecommerce. After all, total retail increased just 4.0% in 2019.

Digital Commerce 360 studies non-seasonally adjusted Commerce Department data and excludes spending in segments that don’t typically sell online, such as restaurants, bars, automobile dealers, gas stations and fuel dealers.

But online sales drove nearly three-quarters—or 74.6%—of the gains in total retail in 2020, and that’s the highest share of overall annual growth ecommerce has ever represented. It’s also nearly 11 percentage points higher than the 2008 share, which came in second place, and substantially higher than online’s 54.0% share of spending gains in 2019. But interestingly, the fact that ecommerce didn’t account for all gains means that offline—or primarily in-store—sales grew 2.1%, which is the same rate as pandemic-free prior 2019.

The U.S.’s record-breaking online performance was a major contributor to the health of the global ecommerce market in 2020. In fact, excluding the U.S., global web sales increased by 22.4% year over year in 2020—lower than the 24.1% with the U.S. That’s because the growth in China’s ecommerce market slowed last year.

China’s web sales growth slows in 2020

China’s numbers typically overshadow the U.S., as online sales in the country have been more than double domestic ecommerce revenue for years. But the U.S. made a little headway in 2020, closing the gap a bit after increasing web sales by $193.68 billion to China’s $189.18 billion gain, according to currency-converted data from the National Bureau of Statistics of China, a government agency. Still, China accounted for more than a third—34.9%—of all ecommerce across the world in 2020.

The online sales of physical goods reached nearly 9.76 trillion yuan, or roughly $1.49 trillion, in China last year, up from more than 8.52 trillion yuan, or roughly $1.31 trillion, in 2019. But the 14.5% rise in digital revenue was a deceleration from 21.4% year-over-year growth in 2019. While percentage changes often taper off over time as figures get larger and growth is harder to achieve, pandemic-related shifts in consumer behavior led to many markets bucking that trend in 2020. So it’s notable that China didn’t see the same rise in ecommerce growth. Especially in light of the online sales jump in the U.S. of 32.4%—more than double that of its Asian counterpart.

While China’s ecommerce gains gave a boost to the country’s floundering overall retail performance in 2020, it wasn’t enough to offset an 11.2% decline in the offline sales of goods.

Total retail sales of consumer goods excluding automobiles hit nearly 35.26 trillion yuan, or roughly $5.40 trillion, in 2020, according to the National Bureau of Statistics of China. That’s a 5.3% decline from almost 37.23 trillion yuan, or roughly $5.70 trillion, the year before. The dropoff in sales through all channels is a big swing from 2019, when retail climbed 8.8%. Here, again, the retail landscape in China proved to be quite different from the U.S., where overall retail had a banner year.

China’s ecommerce penetration continued to lead all countries with more than a quarter of the sales of goods—27.7%—occurring online in 2020. That’s up from 22.9% in 2019 and 20.5% in 2018. The country’s 2020 online gains paired with a decline in overall retail meant digital share surged 4.8 percentage points in a 12-month period—double the year-over-year lift in 2019 and higher than the U.S.’s 3.8 percentage-point increase last year. With more than $1 in every $4 now spent online in China, the ecommerce penetration gap between both countries widened in 2020, with an 8.1 percentage-point difference between the two.

Marketplaces account for nearly two-thirds of global ecommerce

Much of the story in ecommerce continues to center on the world’s biggest online marketplaces, including Amazon.com Inc. in the U.S. and Alibaba Group Holding Ltd.’s Tmall and Taobao, both dominant forces in China. All of the third-party selling platforms ranked in the 2021 Digital Commerce 360 Top 100 Online Marketplaces sold nearly $2.68 trillion in 2020. That’s up 29.0% from nearly $2.08 trillion the prior year. This means online marketplaces accounted for nearly two-thirds—62.5%—of global ecommerce in 2020, up from 60.1% the year before.

But the rankings are quite top heavy. Taobao, Tmall and Amazon (Nos. 1-3) represented 62.6% of the Top 100’s collective total gross merchandise value, or GMV, in 2020 and an incredible 39.1% of global ecommerce for the year.

Amazon runs a hybrid marketplace, meaning it both lists its own inventory and operates a platform through which other retailers sell their products. In 2020, the web giant’s global first-party revenue surpassed $302.99 billion, up 41.4% from nearly $214.22 billion the year before. Figures capture the sales of the company’s own products plus the commissions and fees the company received from its marketplace sellers, Amazon Prime memberships and other subscription services.

Including purchases made through third-party sellers, the value of goods sold on Amazon reached a Digital Commerce 360-estimated $475.00 billion in 2020, a 40.1% jump from $339.00 billion the year before. As consumers leaned heavily on Amazon during the pandemic, the company accelerated both first-party revenue and total GMV growth to roughly double its 2019 upticks.

It’s worth noting that Amazon grew far faster than the overall global market last year and accounted for 16.3% of all worldwide ecommerce gains. It also increased total GMV at roughly double the rate of Alibaba’s pure-play marketplace competitors.

Taobao grew its total GMV by a Digital Commerce 360-estimated 17.5% in 2020, to $609.58 billion from $518.79 billion in 2019. Tmall saw an estimated 21.0% jump over the prior year, with total GMV reaching $593.45 billion last year after hitting nearly $490.46 billion in 2019. An astonishing 80.5% of online sales in China flowed through these two marketplaces last year, and collectively, they represented 23.3% of global gains in ecommerce.

A look at the top 10 global marketplaces further reveals China’s staggering power over worldwide online retail. The country holds three spots on the list—with hybrid marketplace JD.com Inc. joining Alibaba’s biggest names—and yet, this trio brought in more than two-thirds of the total GMV of the top 10.

Percentage changes may not align exactly with dollar figures due to rounding.

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Special Topic Edition: Predictions for 2020

Internet Retailer — Tue, 17 Dec 2019 17:12:04 +0000

2019 was a big year for ecommerce. Amazon drove consumers to expect their online orders faster than ever after remaking Prime into a 1-day delivery program. Urban Outfitters, Banana Republic and others helped rental clothing services go mainstream. Happy Returns and Narvar made it easier than ever for shoppers to return items they bought from online-only retailers. And a number of major retailers embarked on strategic shifts.

So what will developments will lie in the year ahead? The December issue of Internet Retailer examines how ecommerce may evolve next year.

Inside the December issue

“Retailers adapt to rising fraud rates” looks at how merchants are working to ensure they have safeguards in place to combat fraud.
“What California’s new privacy law means for retailers” explains the potential impact of the new data privacy standard.
“Retailers adapt to the evolving marketing landscape” examines how online merchants plan to spend their digital marketing budgets next year.
“How the new North American free trade agreement will impact ecommerce” looks at how the U.S.-Mexico-Canada Agreement may drive more retailers to sell across borders.

Compliments of our sponsors: ACI Worldwide, Lucidworks, Melissa, Monetate, Radial, Top Ten Wholesale.

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Global ecommerce sales to reach nearly $3.46 trillion in 2019

Jessica Young — Wed, 13 Nov 2019 15:53:14 +0000

Consumers worldwide will spend nearly $3.46 trillion online in 2019, up from $2.93 trillion in 2018, according to the forecast from Internet Retailer, a Digital Commerce 360 brand. The expected 17.9% year-over-year growth in global web sales would be a slowdown from the 20.7% jump last year. However, global web sales are still growing faster […]

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