Hey there, great people of the D2C community who are building fantastic things! This is your host Berkay writing.
Take a 5-minute break and dive into D2C Digest for a quick overview of what’s happening in the D2C market worldwide!
🤑 Temu has broken the market
Many D2C experts have been talking about how Temu has been causing abnormal price inflation in the Meta Ads (we also covered how they spent around $2B last year only on Meta Ads in our newsletter a couple of weeks ago, here).
But apparently, they have no intention of stopping. Mike Ryan, who regularly shares on his Twitter about D2C reported that Temu added over 8,000 campaigns to circulation only in a week!
This is pretty wild! But a lot of experts are saying we might not see the effects until a couple of weeks later.
What's your take on it?
😬 House passes legislation requiring TikTok to be sold or face a ban
Over the past few years, TikTok has become a key player for American direct-to-consumer brands, but it's now under serious threat from the US government. And recently, there have been new developments regarding the TikTok case.
The House of Representatives has passed legislation potentially leading to a nationwide ban unless TikTok's Chinese owner, ByteDance, sells the app. And it seems this move has President Biden's support!
TikTok faces accusations of potentially being used by the Chinese government for propaganda and surveillance, though these concerns are speculative as there is no public evidence of such activities. Nevertheless, the possibility of Chinese access to U.S. user data has led to significant governmental scrutiny.
The new legislation gives TikTok up to a year to find a buyer, extending the original six-month deadline.
However, challenges persist, notably that ByteDance owns TikTok's algorithm, which is critical to its operations and now subject to China's export controls, complicating any sale. Moreover, the high valuation of ByteDance suggests that only major tech firms could afford to buy TikTok, which could then trigger antitrust concerns in the U.S.
However, experts say, the legislation could delay any immediate measures until after the forthcoming presidential election, meaning we'll have to wait to see how the situation unfolds.
🛒 Almost 40% of Millennials use retail subscriptions
Retail subscriptions are gaining popularity, offering significant growth opportunities for eCommerce businesses, according to a report from PYMNTS Intelligence.
The report reveals that 42% of subscribers shop less frequently in physical stores due to their subscriptions, with services like Stitch Fix and Chewy’s Goody Box showing even higher rates of in-store avoidance. ,
Millennials and bridge millennials (people who were born between 1980 and 1989) are particularly reliant on subscriptions for daily needs, more so than older generations.
While only a small fraction of consumers have completely replaced store visits with subscriptions, 26% foresee a future dominated by subscription-based shopping. Despite this trend, most still shop in stores, presenting a challenge for online merchants to innovate and convert these shoppers to subscribers.
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