Results from Shopify, Visa/MC, Amazon, etc. indicate Great Normalisation & digital cooldown 📉; Crypto.com does Elon Musk move 👀; Global VC funding drops to lowest levels in past 12 months 😬
Good Morning FinTech, 9 May
Good day Everyone,
And happy Monday! I hope you managed to relax over the weekend and recharge your batteries🔋 Today’s issue is one of the most important ones this year as it uncovers some global trends & lessons that are important for startups and businesses of all sizes. Beyond just FinTech. So without further ado, let’s jump straight to the good stuff:
Results from Shopify, Visa/MasterCard, Amazon, among others, indicate the Great Normalisation & digital cooldown 📉
Trend spotting 🔍 I’ve earlier covered Meta, Visa/Mastercard, among others. Given that we now have the latest results from Shopify (which is also a FinTech), Amazon, etc., we can see some very clear trends emerging. And they might not be very good…
More on this 👉 In the past two (pandemic) years, nearly 1/5 of every dollar spent in the US came from online orders. It seems that now consumers are returning to their 2019 spending habits and the boom in e-buying is losing momentum. As an effect:
E-commerce & FinTech giant Shopify’s sales rose 22%, to $1.2B. But that was a fraction of its 110% gain from the same quarter last year. Hence, shares of $SHOP sank 15% after the popular e-commerce platform saw sales slow for the fourth straight quarter. That’s already a trend.
If blaming inflation, labor shortages, and a return to real-life shopping wasn’t enough, Shopify execs said the rest of the year doesn’t look much better. The trend continues.
Amazon joined the stage too, reporting a 3% drop in online sales in the first three months of 2022, and forecasting a meager 3% sales growth for the current quarter. Its shares plunged for their biggest one-day drop since 2006. Ouch!
Amazon’s results were basically a warning sign that shoppers are logging off as virtually every major online retailer’s earnings since then have shown continuous signals of a clicking cooldown.
For example, both Etsy and eBay lowered their sales forecasts for the year and didn't say when (or if) they’d return to pandemic-era profits.
As a cherry on top 🍒, we can look at the latest results (and data) from both Visa & Mastercard. In short, it shows that people aren’t spending less — they’re spending differently. The money is now hence moving from digital and e-commerce to the real world - into restaurants, travels, and delayed vacations.
When you zoom out, it’s clear that we’re already seeing the Great Normalisation and that e-buying is losing momentum. This means that some of the biggest pandemic winners (including FinTehs) will inevitably experience a cooldown. Here’s the takeaway: