TRD Issue 62 - Briefing: Anthropic Claude 3, Meta’s Plan on Llama 3, Coupang Net Profit

Hello Subscribers,

Last week, Anthropic, founded by former OpenAI employees, unveiled Claude 3. This new iteration boasts enhanced multimodal capabilities for text and image analysis, promising improved performance and significant future updates.

The open-source Large Language Model (LLM) - LLama 2, launched by Meta last year, has sparked a wave of innovation among startups. According to people who worked at Meta, its next-generation Llama 3 aimed to bolster its ability to handle sensitive issues, addressing widespread criticism that Llama 2 was overly cautious.

In the US, investment firm Arkhouse Management's end-of-year bid to acquire traditional retail giant Macy's for $5.8B was initially rejected. Recently, Arkhouse raised its offer to $6.6B, a 33% premium over the closing price. Facing financial difficulties, Macy's, without accepting the merger, is left with the option to aggressively restructure, announcing the closure of 150 stores nationwide by 2026.

Shifting the focus to Asia, South Korean e-commerce giant Coupang has finally achieved profitability. After recording its first quarterly profit in Q3 2022, it has maintained this positive trajectory for six consecutive quarters. In terms of customer growth, Coupang's active users (customers who make at least one purchase per quarter) grew 16% year-over-year to 21 million by the end of last year, while its paid membership increased by 27% to 14 million.

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

Anthropic Claims Its New AI Chatbot Models Beat OpenAI’s GPT-4

Why it is important

• Claude 3 outperforms GPT-4 in analysis, forecasting, and specific benchmarks.

What happened

• Anthropic launched Claude 3, a GenAI surpassing GPT-4 with enhanced multimodal capabilities for analyzing text and images, improved performance, and plans for significant future updates and expanded context support.

Source: TechCrunch

Meta Wants Llama 3 to Handle Contentious Questions as Google Grapples With Gemini Backlash

Why it is important

• Meta is working on improving Llama 3's ability to answer complex questions regarding AI safety and content accuracy. 

What happened

• Meta aims to make Llama 3, its AI model, more adept at handling sensitive topics, responding to criticism that Llama 2's overly cautious approach limited its utility.
• This effort reflects broader industry challenges around AI content generation and safety.

Source: The Information

Prompt: Hands-On with Amazon's Rufus AI Assistant

Why it is important

• Amazon’s Rufus is showcasing the potential of purpose-built chatbots to enhance online retail experiences.
• It is possible that Rufus will expand to other platforms, such as the Web and possibly Alexa devices.

What happened

• Rufus, an AI chatbot by Amazon, aims to personalize online shopping, available in beta for select customers.
• It's integrated into the Amazon app, offering gift suggestions and product insights, illustrating a focused move towards AI-driven retail assistance.

Source: Axios

e-Commerce

Amazon Briefing: Despite hiccups, Shopify brands are warming up to Buy With Prime

Why it is important

• Despite initial challenges, the integration between Shopify and Amazon’s BwP is gaining traction and becoming a popular choice for businesses looking to enhance their online sales and customer experience.

What happened

• After overcoming initial hurdles and integration challenges, Shopify brands are adopting Amazon's Buy With Prime, reporting increased conversions and customer reach.
• The feature allows Prime users to shop on DTC sites with benefits like free two-day shipping.

Source: Modern Retail

TikTok Shop listings are surfacing on Google Shopping

Why it is important

• The move represents TikTok's deliberate expansion into content-driven and search-based e-commerce to attract more external traffic.

What happened

• Sponsored TikTok Shop listings have begun appearing on Google Shopping, aiming to direct external traffic to TikTok's e-commerce platform.
• However, we believe their ads on Google Shopping will not be key drivers.

Source: Modern Retail

Retail

Macy's to Close Around 150 Locations Over the Next Three Years

Why it is important

• Macy's strategy is to optimize high-performing locations, expand into the luxury market, and close some stores amidst private equity buyout interests.
• Macy's can leverage its real estate value for a premium sale or invest in a new turnaround, but it requires strong evidence of execution.

What happened

• Macy's announced plans to shutter 150 stores by 2026, starting with 50 this year, aiming to reinvest in about 350 remaining stores.
• This move coincides with a $6.6 billion buyout proposal from private equity investors, indicating a critical restructuring phase for the retailer.

Source: Business Insider

Ikea’s Future-Proofing Strategy Depends On Understanding Consumers’ Emotional Needs

Why it is important

• Ikea's approach underscores the significance of connecting with customers on a deeper level for long-term business sustainability.

What happened

• Celebrating its 80th anniversary, Ikea, now the world's largest furniture retailer, focuses on future-proofing by addressing consumers' emotional needs through its Life At Home project, aiming to innovate beyond traditional product offerings.

Source: Forbes

Payment

Klarna IPO Now Makes Less Sense than One Later

Why it is important

• Klarna's recovery and strategic positioning signal a hopeful future for the BNPL sector, highlighting the potential for significant valuation in a public offering despite current shareholder disputes.

What happened

• Klarna reports strong growth and reduced losses in 2023, suggesting a $20 billion IPO valuation.
• However, internal tensions with top shareholder Sequoia Capital might delay the IPO, advocating for a later listing.

Source: Reuters

Asia

Coupang Soars After Loyalty Perks Lift Sales Above Estimates

Why it is important

• Coupang's significant revenue growth and net income in Q4 highlight the efficacy of loyalty programs in online retail, indicating the potential for further market penetration and profitability.

What happened

• Coupang experienced a 23% revenue increase to $6.6 billion in Q4, surpassing estimates due to its loyalty perks, marking its first net profit since its founding in 2010.

Anthropic Claude 3, Meta’s Plan on Llama 3, Coupang Net Profit

Source: Bloomberg

Nitori to Open First Store in the Philippines in April, Aiming for 50 Stores by 2032

Why it is important

• Nitori's Philippines expansion strengthens its global presence and manufacturing capabilities in Southeast Asia, allowing it to gain a competitive edge in the home goods market.

What happened

• Nitori will launch its first store in the Philippines market in April at Manila’s shopping center MITSUKOSHI BGC.
• As a part of its expansion strategy in Asia to benefit from regional manufacturing, the company, which currently has 979 stores, plans to open 50 more stores by 2032.

Source: NIKKEI