No. 385: The Deal Worth A Billion People

Shopify expands payment options for US merchants through partnership with Alipay

eCommerce / Betakit. Shopify has partnered with major Chinese digital wallet platform Alipay to expand its payment options for merchants based in the United States. The new partnership is aimed to allow Shopify merchants to accept payments through Alipay from its more than one billion annual active users in China.

2PM Analysis: For US retailers, China is greener grass. After sales plummeted globally over the course of the coronavirus pandemic, China saw the earliest rebound. Online sales increased 15% in the first three quarters of the year as sales recouped in the third, according to the National Bureau of Statistics, and high-end brands are benefitting the most. Retailers with strong established presences in China are reaping the rewards. The Singles’ Day holiday on November 11 proved how valuable an active customer base can be for multiple American brands, as Estée Lauder, L’Oréal, Nike, Adidas, Ugg, Coach and Michael Kors were top performers on a day that saw $74 billion in total sales.

China requires a different playbook: Where DTC brands might avoid Amazon, eCommerce partnerships in China play a massive role, with brands needing the entry points of an Alibaba or JD.com and WeChat strategy to get on the radar of Chinese customers. As some DTC brands, including Rothy’s and Allbirds, have expanded to China, they’ve partnered with Tmall and WeChat, and needed the support of a local team to navigate marketing and logistics locally. “It’s not like launching in the U.K. or Canada, where you can replicate your strategy,” former Rothy’s president and COO told me last year at the time of Rothy’s China launch.

2PM has also reported on the China opportunity, and how young direct-to-consumer brands would be well-advised to not wait to break into the market. The numbers speak for themselves, and it’s gotten progressively easier to sell in China. Shopify’s Alipay partnership is the latest move to make it even easier. With the integration, purchases will be easier, and Shopify brands can also partake in sales holidays, like the massive Singles’ Day and the Lunar New Year.

2PM Data: Leading apps by monthly active user number in China 

'The Crown' dives into the powerful mediocrity of royal style

Fashion / GQ: The clothes have done much to prime the pump for Crownmania. The style of the royal family has put a surprising imprint on fashion over the past five or so years, considering that they all practice a kind of intentional anti-fashion. We’ve seen tributes to Princess Diana — at Off-White and Rowing Blazers, most notably.

Rowing Blazers founder Jack Carlson is the subject on Practical No. 2. Here, he explains the three beliefs that influence the creative partnership strategy that helped his brand record DTC sales in the months of September and October. Like Kith and Madhappy, Carlson’s Rowing Blazers brand outsmarted the COVID downturn with a strategy that I call backdated heritage. As an early investor in the brand, 2PM gained an inside perspective on the strategy and its implementation.

Pandemic speeds Americans' embrace of digital commerce

eCommerce / Wall Street Journal: From streaming to curbside pickup, the pandemic has acted as an accelerator for our adoption of, and reliance on, various forms of digital commerce. It’s totally changed how companies are operating and strategizing, and most expansionary efforts will reflect this, over the coming year.

Read: When The Dust Settles (2PM) 

Dakota Johnson is here to remind you that sexual wellness is self-care

DTC Health / Vogue: I had heard whispers of Maude through some mutual friends that Eva and I have, and was always intrigued and impressed by the company. When the idea of a formal partnership was brought to me, Eva and I met over FaceTime because she was in NY and I was in LA, and even through a little screen it was immediately a no brainer. Our synergy was instantaneous, our core beliefs around the brand mission aligned, our dreams are mighty, and we just really like each other.

K-shaped aspiration

Deep Generalism / The Sociology of Business: K-shaped aspiration reflects the inverse relationship between consumption and wealth. A friend who works as a senior executive at a global beauty company spends her money on facials and other forms of wellness. She occasionally buys a Uniqlo collaboration, if it is Jil Sander or JW Anderson. In contrast, the less affluent buy products to make them more socially visible, and devote a bigger fraction of their total spending on things they perceive as status-augmenting. They buy their status in Zara.

Five DTC brands to watch

DTC Brands / Retail Dive: The DTC space has become saturated with a plethora of brands which range greatly in utility, originality, and ultimately effectiveness. As a result of the energy, many traditional retailers are now making a push in the name of DTC. As the marketplace grows, a few digitally native brands seem to have it mastered. They’re important to watch.

Will ‘Wonder Woman 1984’ be the biggest movie to stream yet?

Streaming Economy / Bloomberg: Releasing the movie on HBO Max around the holidays would entice millions of people to sign up for the service. Once they get inside the app, they are going to like what they see. It has a deep and diverse library of movies and TV shows – the best programming of all the services (at least for a U.S. viewer). Warner Bros. could still give the movie a proper theatrical run in territories that have a better handle on the virus, many of which don't have access to HBO Max yet.

In DTC world, the line between inspiration & copycatting blurs

DTC Brands / Modern Retail: When one DTC brand proves a concept has traction, others flock to it like sharks in blood-tinged water. A little over a year ago, Modern Retail reported about the growing issue of branding copycats. Healthcare company Ro’s co-founder Zachariah Reitano wrote a Medium post noticing that a new feature from competitor Hims looked a good deal like something Ro had pioneered. A number of other brands — from beverages to cookware — also began seeing an influx of similarly branded products. As one VC told Modern Retail at the time, “It’s pretty lazy.”

Shopping malls hope to find new life fueling eCommerce

Retail Real Estate / Wall Street Journal: The outfitting of failing mails into fulfillment centers is perhaps a viable path that many are seriously considering acting upon. The next piece of the puzzle will be perfecting the calculus of costs. This will help further important logistical conversations, such as the manual-versus-automation dynamic.

Read: The Connected Mall Thesis (2PM Members)

Why media companies should be direct to consumer

New Media / Dave Nemetz: Distribution is sexy. There are few feelings better than filling the top of your funnel with eager new users. Feeling the dopamine hit of your Google Analytics or Chartbeat dashboard popping off. But distribution without conversion is just a growth hack. You must have a strategy to convert the audience from the on-ramp into an owned audience on your platform. And that strategy must place conversion as the highest priority metric for your business.

Amazon starts selling prescription drugs, with two-day delivery for Prime members

DTC Health / Recode: Prescription drugs are a $500 billion market in the US, with patients spending $67 billion out of pocket at US retail pharmacies in 2019, according to IQVIA, a health data provider. Amazon’s brick-and-mortar retail competitors like Walmart, Target, and Costco all have significant pharmacy presences across their chains of stores, and Amazon wants a piece of that, too.

Note: Thoughts and prayers to traditional pharmacy retailers (Giphy).

With countless independent, traditional, and direct-to-consumer brands on its roster, Verishop is focused on delivering what is missing from today’s social media. Millennials and Gen Z want to shop online; they want to window shop. And most importantly, they prefer their ideas shared with their audiences. So imagine a platform with personalized shopping content and a machine-learned curation driven by photos, videos, and social sharing. It’s the most powerful marketplace for modern and traditional brands alike.

Read your unlocked member brief here.