E-commerce is growing

Daily Data: In some corners of the ecommerce sphere, it feels like ZIRP is back..?

There’s a lot of cheap stuff on the internet again. Hooray! But, how does anyone make money?

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Everything reads better in your browser or in the app. The footnotes especially, and Random Walk is really leaning into the footnotes. Plus, if you have the app, you can set delivery to “app only” and then my daily barrage will feel less like a barrage. Unfortunately, substack does not yet have a “Weekly Digest” option, but I’m hectoring them aplenty.

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Daily Data

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E-commerce is growing

But can it last?

It’s peak e-commerce season, which is I suppose, a good time to notice that e-commerce continues to grow, grow, grow:

Growth is decelerating for sure, but even with the pandemic “pull forward” in 2020-21, no gains have been given back.

Also Stripe is making some cool promotional scoreboards so that you can follow along at home:

Very nice.¹

The old playbook is dead. Long live the old playbook.

It’s also peak discount season, and in a post-ZIRP world, Random Walk is curious how some of these online-only sellers (or marketplaces) can compete with

• (a) suddenly bounded marketing spend; and

• (b) killer discount consumer apps from China (Temu, Shein and all the stuff on Amazon).

In other words, the era of selling a lot of stuff, while losing money on every sale. and calling it a business, is over. You either have to raise prices, or cut marketing spend (or both).

The old playbook is dead and gone.²

Unfortunately for you, however, Chinese retailers have decided that, in fact, the old playbook is *not* dead and gone, and actually they *can* spend a ton on marketing, and offer super-discounted prices.³

So how do you compete with that? And how sustainable is it all?

Random Walk doesn’t have the answers, but it’s why comments like the following, regarding the unit economics for Amazon merchants, and the advertising spending habits of Temu, Shein, et al. catch my eye.

Is this growth, or a mad dash to the bottom?

You be the judge: