COVID-19 Adds $105B to US Ecommerce in 2020, Alibaba Victim of Huge Data Leak and Out-of-Stocks Cost Chewy Approximately $40M in Sales
COVID-19 Adds $105B to US Ecommerce in 2020
Ecommerce was growing fast before COVID-19 hit. However, the pandemic pushed even more U.S. consumers online, contributing an additional $105 billion in U.S. online revenue in 2020 and accelerating ecommerce by two years, Digital Commerce 360 estimates. Online sales hit $791.70 billion in 2020, up 32.4% from $598.02 billion in the prior year, according to Commerce Department figures. That’s the highest annual online sales growth of any year for which data is available. Ecommerce thrived in 2020 because of store closures and shoppers’ fear of contracting the coronavirus in public. Figures from Q1 2021 show that the coronavirus is still making an impact on retail spending. Online sales increased 39% year over year in Q1 2021, nearly triple the 14% increase in Q1 2020, and faster than Q3 2020 and Q4 2020.
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Alibaba Victim of Huge Data Leak
Alibaba Group Holding Ltd. was the victim of a months-long web-scraping operation by a marketing consultant that siphoned up sensitive data including usernames and phone numbers, according to a court case that wrapped in June. A central Chinese court ruled that an employee of a consultant that helps merchants on Alibaba’s Taobao online mall was guilty of dredging up more than a billion data items on Taobao users since 2019, using that to serve clients. The court imposed jail terms of more than three years on the staffer and his employer, alongside fines totaling $70,260. None of the customer data was sold and Alibaba’s users didn’t incur financial losses from the episode, the company said in a statement. The incident, however, coincides with Beijing’s widening effort to tighten the ownership and handling of troves of information that internet giants from Alibaba to Tencent Holdings Ltd. and Meituan hoover up daily from hundreds of millions of users. “Taobao devotes substantial resources to combat unauthorized scraping on our platform, as data privacy and security is of utmost importance. We have proactively discovered and addressed this unauthorized scraping,” a Taobao spokesperson said in a statement. “We will continue to work with law enforcement to defend and protect the interests of our users and partners.”
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Out-of-Stocks Cost Chewy Approximately $40M in Sales
Out-of-stock issues resulted in Chewy experiencing an estimated $40 million in missed sales in the most recent quarter, CEO Sumit Singh said on an earnings call last week. Chewy's inventories were down almost 5% from the beginning of 2021 to reach nearly $490.9 million, which is a 9% increase year over year, according to the company's financial filings. Net sales for the company were up nearly 32% in the same time period. Singh said the company doesn't have perfect visibility into the situation, but it has heard from suppliers that extra capacity should come online in the second half of the year to help mitigate the inventory issues. "Since the end of the second storm in mid-February, we've seen ... strong bounce back and shipments consumption, retail availability and our production levels," Freshpet CEO Billy Cyr said.
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