TRD Issue 60 - Briefing: Apple Prioritizes AI, Google Gemini's Diversity Issue, Shein UK IPO?

Hello Subscribers,

As we wrapped up this edition, Bloomberg led with a scoop on internal messages from Apple employees about the termination of all projects related to the development of electric vehicles, redirecting those involved to AI projects. Following this, at Apple's Q1 shareholder meeting, Tim Cook confirmed the discontinuation of EV development, stating that they will ‘break new ground’ in the GenAI domain this year, including upgrading Siri and the built-in iOS search feature, Spotlight, with GenAI models.

In other news, Google just renamed Google Bard to Gemini and launched a standalone app for Android phones. However, users discovered last week that Gemini's generated images prioritized racial diversity over historical accuracy, sparking controversy. I believe Google must address the accuracy and historical truth in its AI development.

Shein, the affordable fast-fashion e-commerce platform, is expanding globally and investing in physical retail brands. It faces regulatory obstacles and scrutiny in the US and China while applying for a US listing. Reports suggest that the UK government has persuaded Shein to list in London due to the recently beleaguered London stock market.

Turning our focus to Asia. Japan's two largest drugstores, Welcia and Tsuruha, may merge due to AEON's investment in Tsuruha. If successful, the new entity will leverage operational synergies, including joint development of private brands, e-commerce business, and global expansion, and could become the world's fifth-largest drugstore chain by revenue.

For more news highlights, see the full article, and we'll see you in the next issue. Happy reading!

The Retail Direct

About 91APP

Founded in 2013, 91APP is the premier OMO (online-merge-offline) SaaS company, providing one-stop omnichannel retail solutions in Taiwan, Hong Kong, and Malaysia. It offers advanced Commerce Solutions and Marketing Solutions that enable retail brands to penetrate the D2C (Direct-to-Consumer) e-commerce market and drive operational benefits to their full potential. In 2021, 91APP became the first SaaS company to be listed in Taiwan and has been named one of Taiwan's "NEXT BIG" companies by Startup Island TAIWAN.

For more information about 91APP (TWO: 6741), visit www.91app.com.

AI

Tim Cook Says Apple Will ‘Break New Ground’ in GenAI This Year

Why it is important

• Apple's venture into GenAI signifies a strategic shift, highlighting Apple's commitment to innovating in AI.

What happened

• Apple CEO Tim Cook announced plans to innovate in GenAI, reallocating resources from their EV project to GenAI initiatives, aiming to enhance products like Siri, iOS features, and developer tools.
• Many of the Apple engineers developing EVs will instead be reassigned to focus on generative AI projects under the company's artificial intelligence division.

Source: TechCrunch

‘Embarrassing and Wrong’: Google Admits It Lost Control of Image-Generating AI

Why it is important

• Google has been criticized for being too conservative in the AI race. However, the recent event revealed a lack of internal testing for their product launch.
• AI industry leaders believe their models will keep improving in handling ethically and socially challenging questions.

What happened

• Google's AI, Gemini, incorrectly depicted diverse historical figures, admitting a lack of control over AI's interpretation of diversity, raising concerns about AI ethics and the need for careful model training.

Source: TechCrunch

Glean Wants to Beat ChatGPT at Its Own Game — in the Enterprise

Why it is important

• Glean, targeting the enterprise sector, aims to outdo ChatGPT by efficiently handling internal data queries.
• Glean's financials and strong customer base, including Duolingo, Grammarly, and Sony, have won over investors, with annual recurring revenue almost quadrupling in the last year despite competition from Microsoft and OpenAI.

What happened

• Founded by Rubrik co-founder Arvind Jain, Glean raised $200M at a $2.2 billion valuation to expand its AI-powered search tool for enterprises, promising secure, personalized, and effective data access.

Source: TechCrunch

e-Commerce

Shein Considers London IPO After US Resistance to Listing

Why it is important

• Shein's IPO reflects the global financial complexities, showcasing how geopolitical tensions and regulatory challenges influence corporate strategies.
• It highlights London's potential resurgence as an IPO destination amid US market resistance.

What happened

• Shein is considering a London IPO over New York due to US listing hurdles, exploring other venues like Hong Kong and Singapore, amid scrutiny over its operations and US-China tensions.
• Shein, the pioneer of ultra-fast fashion, filed for a US IPO last year with a target valuation of $80-90 billion. However, private trades in late 2023 valued the company at around $50 billion.

Source: Bloomberg

Amazon Fresh Launches Recurring Reservations Feature for Online Shopping

Why it is important

• The new feature enhances convenience for grocery shoppers, reflecting Amazon's push into omnichannel grocery services.

What happened

• Amazon Fresh introduced Recurring Reservations, allowing customers to set up weekly grocery deliveries or pickups in advance, complemented by a Repeat Items feature for automating regular purchases.
• Amazon is also testing a $9.99 monthly grocery subscription for Prime members in select markets, offering unlimited free delivery on orders over $35 from Amazon Fresh and Whole Foods, and unlimited 30-minute pickup.

Source: Retail Dive

Farfetch CEO José Neves Departs After Coupang Acquisition

Why it is important

• The departure marks a significant leadership transition for Farfetch, reflecting challenges and strategic shifts post-acquisition.

What happened

• Farfetch CEO José Neves, who launched Farfetch in 2008, resigned following Coupang's acquisition amid corporate reshuffles and a series of executive exits.
• In December 2023, Korean tech giant Coupang acquired the business and assets of Farfetch following a USD 500 million investment.

Source: Retail in Asia

Social

Instagram Launches Its Marketplace to Connect Brands and Creators in 8 New Countries

Why it is important

• Expanding IG’s Creator Marketplace into new countries facilitates brand-creator collaborations and opens up new revenue streams.
• IG's competitors all have similar features, and startups are also addressing the challenge of linking creators with brands.

What happened

• Instagram expands its Creator Marketplace to eight new countries - Canada, Australia, New Zealand, the UK, Japan, India, and Brazil - to connect brands with creators for paid partnerships, using machine learning for optimal matches.
• The Creator Marketplace helps brands find relevant creators for partnership ads, the most effective and transparent way to advertise with creators.

Source: TechCrunch

Asia

Rakuten Marketplace Increases Merchant Fees by 30% from June, After 16 Years

Why it is important

• Rakuten fee increases due to inflation may challenge smaller merchants but enhance sustainability and service quality.

What happened

• Rakuten will raise its merchant fees by 30% in June, the first time in 16 years, citing higher labor and utility costs, affecting SMBs and sparking diverse reactions.
• Other e-commerce sites like Yahoo! Shopping and Amazon Japan offer lower store opening fees than Rakuten Market. If Rakuten Market's opening fee increases, it will become more expensive.

Source: NIKKEI

ZOZO Uses PayPay App as Entry Point, Leveraging 60 Million Customer Base

Why it is important

• Yahoo! Japan and PayPay, both part of Z Holdings, may revitalize the struggling e-commerce sector within their group with this integration, which is expected to increase app usage.

What happened

• PayPay aims to increase transaction volumes by leveraging its vast user base and enhancing convenience, making Yahoo! Shopping available as a mini-app through PayPay.
• ZOZOTOWN, the fashion and apparel e-commerce business also part of Z Holdings, launched its mini-app on PayPay in October 2023 and successfully reached new customers.

Source: NIKKEI

Tsuruha HD Shares Temporarily Up 14% Due to Integration Consideration with Welcia HD

Why it is important

• The merger of the top two drugstores in Japan will establish a dominant market player with significant operational efficiencies, potentially ranking fifth globally by revenue.

What happened

• Welcia and Tsuruha agreed to discuss integration, led by AEON's acquisition of the latter’s shares, aiming to form a major drugstore entity by the end of 2027.
• AEON will acquire 13% of Tsuruha HD shares from an investment fund for about 100B JPY and increase its stake to lead the integration with Welcia HD.
• The new entity will cooperate on private brand development and e-commerce, expanding pharmacy stores in Japan, China, and SEA while reducing operational costs.

Source: NIKKEI