Summary of Global-E Online FY Conference Call Company Overview - **Company**: Global-E Online Ltd (NasdaqGS:GLBE) - **Industry**: Cross-border e-commerce Key Points Policy and Tariff Impact - The enforcement of tariffs has not significantly impacted Global-E's business, with the U.S. market representing only about 12% of the company's Gross Merchandise Value (GMV) [2][3][4] - Luxury and celebrity brands have shown resilience to price increases due to tariffs, as consumers are less sensitive to price changes [4][5] - Brands are adjusting prices globally rather than specifically for the U.S. market to avoid social media backlash over price differentiation [4][5] - The removal of the de minimis exemption for products from China and Hong Kong affected about 3% of Global-E's market, but overall impact was minimal [13][18][21] - The company does not anticipate major disruptions in trade patterns despite tariff changes, as the U.S. tariffs are comparable to those imposed by other countries [22][23] Growth Drivers - The introduction of the 3B2C model is seen as a significant growth driver, allowing brands to reduce duty burdens by setting up a local entity in the U.S. [27][28] - The onboarding process for brands to switch to the 3B2C model is quick, taking only days to weeks [31][36] - There is growing interest from both existing and new brands in the 3B2C model due to the desire to offload duty management [36][41] - The company has a positive outlook for the second half of the year, with strong trading patterns and successful onboarding of multiple brands [43][44] AI and Technology - Global-E views AI as an opportunity rather than a threat, leveraging AI to enhance operational efficiencies and customer service [48][52] - The company has automated over 50% of its customer service operations using AI and is working on extending AI support to merchants [51][52] - Proprietary data and a service layer are critical to Global-E's operations, making it difficult for AI to replicate their business model [49][50] Shopify Partnership - The new multi-year partnership with Shopify focuses on a white-label solution for small-sized merchants, which is expected to unlock significant growth potential [55][56] - The partnership has evolved from an exclusive agreement to a more open model, which Global-E believes will not negatively impact its market position [61][62] - The company anticipates maintaining high win rates on Shopify, similar to other platforms, despite the changes in partnership dynamics [62] Other Considerations - The company has not provided specific guidance for 2026 but maintains a positive multi-year outlook based on current trends and brand onboarding success [43][44] - The management expresses confidence in their ability to navigate the evolving market landscape and capitalize on growth opportunities [44][62]

Core Insights - The expiration of the de minimis rule has significantly impacted Temu's business model in the U.S., forcing the company to adapt to new tariffs and regulations [3][4][6]. Group 1: Business Model Changes - Temu has shifted its website and app to display only products shipped from U.S.-based warehouses, with items shipped directly from China now labeled as out of stock [3]. - The company has confirmed that all U.S. sales are now handled by local sellers and fulfilled domestically to improve service levels [4]. - Temu is actively recruiting U.S. sellers to join its platform, aiming to help local merchants reach more customers and grow their businesses [5]. Group 2: Pricing and Tariffs - The end of the de minimis rule and the introduction of 145% tariffs on China have forced Temu to raise prices and suspend aggressive online advertising [4]. - Customers previously faced import charges between 130% and 150% for items shipped from China, which often exceeded the cost of the items themselves [5]. - Temu now advertises that local products have "no import charges" and "no extra charges upon delivery" [6]. Group 3: Industry Context - Other companies, such as Shein, have also raised prices in response to the end of the de minimis rule, indicating a broader trend in the industry [7]. - Amazon considered showing tariff-related costs on its Haul products but scrapped those plans following discussions with the White House [8]. - The Biden administration had previously looked to curtail the de minimis provision, reflecting ongoing trade tensions and regulatory scrutiny [9].

Core Insights - US tariff changes have led to significant price increases for products from Chinese e-commerce platforms Temu and Shein, with some items seeing price hikes of up to 377% [1][4][5] - Temu is shifting its business model by no longer shipping products from China to the US, opting for local fulfillment to maintain pricing stability [2] - Shein has implemented notable price adjustments across various categories, with beauty and health products increasing by an average of 51%, home and kitchen goods by 30%, and women's clothing by 8% [4] Company Actions - Temu has announced that all sales to US customers will be managed by locally based sellers, aiming to keep prices unchanged during the transition to a local fulfillment model [2] - The company is actively recruiting US sellers to join its platform to facilitate this new model [2] Industry Trends - The elimination of the "de minimis" exemption and the imposition of higher tariffs have disrupted the business models of fast-fashion retailers, resulting in increased costs for US consumers [5] - The price adjustments reflect a broader trend of rising costs on imported goods faced by US shoppers [5]

Core Insights - Amazon is planning to expand its discount storefront, Haul, into Europe later this year, aiming to compete with platforms like Temu and Shein [1][3] - Job postings indicate a global rollout strategy, with positions for software development engineers and product managers to support launches in various regions, including Mexico [2][5] - Haul, launched in November, offers low-priced products primarily through Amazon's mobile app, with most items priced at $20 or less [3][4] Group 1: Competitive Landscape - The launch of Haul is a direct response to the growing popularity of Temu, Shein, and TikTok Shop, which have attracted U.S. consumers with low prices on various products [4][8] - Haul features ultra-low-priced items, such as $1 eyelash curlers and $2.99 rings, positioning itself similarly to its competitors [4][10] Group 2: Business Strategy - Amazon is enhancing Haul's monetization by introducing sponsored products in search results, contributing to its advertising revenue, which reached $56.2 billion in 2024 [7] - Curated storefronts from lifestyle influencers are being added to Haul, leveraging social media popularity to drive sales [8] Group 3: Operational Challenges - The expansion into Europe may face challenges related to sustainability, as Haul shipments are likely to use plastic packaging, conflicting with Amazon's sustainability goals in the region [6] - The scrutiny over the de minimis rule, which allows duty-free imports under $800, could impact Haul's operations, especially since it relies on goods from China-based sellers [9][10]