The last winter month of 2024 is coming to its end, so the Track Me Fast team takes a look back at some of the biggest news on the e-commerce market from this season.

While 2023 has been a turbulent year for the entire digital ecosystem, most e-commerce businesses have shared their rather positive expectations for the year ahead. 

Well, now that the first two months of 2024 are almost over, it’s already clear that these 12 months aren’t going to be “all pink ponies”. 

Let’s take a closer look at some of the biggest e-commerce news that made headlines in January – February 2024, and the market trends to read behind them.

Labor Force Cuts despite E-commerce Sales & Revenue Growth

Quite predictably, from what it seems from major e-commerce businesses’ Q4 2023 earnings reports, released at the beginning of February 2024, things are looking up in the sector. 

Namely, Shopify, for instance, registered 24% growth in revenue in Q4 2023, with a 26% YoY revenue increase through 2023, while Amazon has reported an impressive 14% growth YoY in NET sales, reaching $170,000,000,000 in Q4 2023, and the overall YoY increase in NET sales by 12% compared to 2022 results.

The January 2024 online retail sales data also seems optimistic, at least in the U.S., where it demonstrated a 25%+ YoY increase (per CNBC & the National Retail Federation’s Retail Monitor).

At the same time, the positive market dynamics doesn’t necessarily mean all of the past year’s negative trends remain in the past. In fact, one of them, i.e. the continuous waves of layoffs are still on track, proving many e-commerce businesses prefer reducing their operational costs to ensure continuous revenue growth in 2024 regardless of the possible economic turmoils.

In particular, the latest rounds included UPScutting 12,000 jobs, reportedly aiming to save the company over $1,000,000,000 in view of the “softened demand”, Instacart’s laying off 200+ employees, and, non-surprisingly, Amazon continued its staff reduction spree this winter, too, particularly in One Medical & Pharmacy and Buy with Prime units. 

Chinese E-commerce Winners vs. Losers in Q1 2024

In the loser’s corner… 

The complexity of the economic environment in China, in many ways caused by the weaker consumer spending in spite of the lifted post-Covid era restrictions, couldn’t but take a toll on the 2023 Alibaba results. Even in spite of the huge stock buyout plans, announced by the company’s management at the end of 2023 didn’t overturn the news negativity, related to its disappointing e-commerce divisions’ (i.e. Taobao & Tmall) 2023 results, which demonstrated only 2% revenue growth YoY, as well as the low sales increase of 3% YoY, reported by the conglomerate’s cloud computing division.

And on the winning side…

Temu, the U.S e-commerce company, owned by Alibaba rival Pinduoduo, continues its sharp growth and expansion, reporting a stunning 700%+ increase of its website traffic in 2023, with its iPhone app becoming the top-2 most downloaded app in the free niche on the App Store, according to the February 2024 rankings

Non-surprisingly, having made history with its aggressive digital advertising tactics across social media since its founding in 2022, Temu started the new year in a similarly assertive fashion, running its ad during the Super Bowl LVIII.

In this respect, one of the keys to Temu’s success lies in combining the ubiquity of the company’s online presence with the focus on the maximum sales of the most discounted products, often at an unbelievably low price.

However, the company’s not-so-overt business strategy, as the industry experts admit, lies in its less ethical approach to e-commerce, which implies scooping up smaller suppliers from their rival Shein, damping the price rates to win over the largest market share, engaging forced labor in goods products and even taking advantage of the loopholes in the U.S. tax laws (i.e. the minimis threshold, established by the Trade Facilitation and Trade Enforcement Act).

More importantly, some of the other allegations, addressed to Temu, also concern the possible violation of customers’ personal data rights, with some of those reflected in the registered class action lawsuit in Illinois, alleging the company’s deceptive data practices within their mobile app.

The trick is, if such class actions take a larger scale and attract excessive media attention, this is what can harm the company’s ranking in the months to come (e.g. in case the app is blocked from the App Store). 

Well, let’s wait and see.