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February 24, 2019

Showfields raises $9M for a more flexible approach to brick-and-mortar retail

Showfields, which helps online brands move into offline, brick-and-mortar retail, is announcing that it’s raised $9 million in seed funding.

“Our thesis was simple: Make the process of becoming physical as easy as becoming digital,” co-founder and CEO Tal Zvi Nathanel told me.

I’ve written about other companies, like Bulletin, promising a more flexible approach to real-world retail. But one of the things that’s impressive about Showfields is the sheer size of its flagship space — Nathanel said the company has signed a lease for 14,000 square feet in New York City’s NoHo neighborhood.

When I visited the Showfields store last week, only the first floor was open, but it’s already home to a number of brands, ranging from mattress company Boll & Branch, to fitness company Cityrow, to toothbrush company Quip.

Each brand gets their own separate, dedicated space. For example, in the Cityrow space, I got to sit down and try out the rowing machine, while the Quip area had a mock-up bathroom sink to display the toothbrushes.

“This space is about [the brand], not about Showfields,” Nathanel said. “We really look at ourselves as a stage.”

He added that brands can sign-up online to create a pop-up store, providing input while Showfields designs and builds the space. The brand also decides which goods to sell in the store, and which ones to highlight via a touchscreen display. And they can choose whether to have a dedicated staff member, or to share staff with neighboring brands.

Nathanel said the spaces can be designed around different goals — one brand might focus on driving sales, while another might simply want to grow consumer awareness. In each case, Showfields will also provide data sow they can see how the space is performing.

The brands pay Showfields a monthly fee, with a minimum four-month commitment. Nathanel emphasized that Showfields doesn’t make any money on the product sales, which he said allows the company to offer a more “curated” and “customer-centric experience.”

Ultimately, Nathanel said the Showfields approach can also result in a more varied and dynamic retail environment (after all, Showfields bills itself as “the most interesting store in the world.”) And naturally, he’s hoping to bring this to additional cities, though he declined to offer specifics, beyond saying, “Before the end of the year, we’re hoping to have more Showfields.”

Showfields

The seed funding was led by Hanaco Ventures, with participation from SWaN & Legend Venture Partners, Rainfall Ventures, Communitas Capital and IMAX CEO Richard Gelfond.

In a statement, Hanaco General Partner Lior Prosor predicted the rise of “experiential retail,” which will be “focused on doing everything that e-commerce cannot do well – enabling discovery, trial, and the use of all five senses to come to a purchasing decision.”

“We truly believe that by being consumer-centric at their core, [Showfields’] founding team and product will make them a category leader in this space,” Prosor said.

News Source = techcrunch.com

Apple is offering interest-free financing to boost iPhone sales in China

Apple is looking to get over its sales woes in China but offering prospective customers interest-free financing with a little help from Alibaba.

Apple’s China website now offers financing packages for iPhones that include zero percent interest packages provided in association with several banks and Huabei, a consumer credit company operated by Alibaba’s Ant Financial unit, as first noted by Reuters.

The Reuters report further explains the packages on offer:

On its China website, Apple is promoting the new scheme, under which customers can pay 271 yuan ($40.31) each month to purchase an iPhone XR, and 362 yuan each month for an iPhone XS. Customers trading in old models can get cheaper installments.

Users buying products worth a minimum of 4,000 yuan worth from Apple would qualify for interest-free financing that can be paid over three, six, nine, 12 or 24 months, the website shows.

Apple is also offering discounts for customers who trade in devices from the likes of Huawei, Xiaomi and others.

The deals are an interesting development that comes just weeks after Apple cut revenue guidance for its upcoming Q1 earnings. The firm trimmed its revenue from the $89 billion-$93 billion range to $84 billion on account of unexpected “economic deceleration, particularly in Greater China.”

Offering attractive packages may convince some consumers to buy an iPhone, but there’s a lingering sense that Apple’s current design isn’t sparking interest from Chinese consumers. Traditionally, it has seen a sales uptick around the launch of iPhones that offer a fresh design and the current iPhone XR, XS and XS Max line-up bears a strong resemblance to the one-year-old iPhone X.

The first quarter of a new product launch results in a sales spike in China, but Q2 sales — the quarter after the launch — are where devices can underwhelm.

It’ll be interesting to see if Apple offers similar financing in India, where it saw sales drop by 40 percent in 2018 according to The Wall Street Journal. Apple’s market share, which has never been significant, is said to have halved from two percent to one percent over the year.

Finance is a huge issue for consumers in India, where aggressively priced by capable phones from Chinese companies like Xiaomi or OnePlus dominate the market in terms of sales volume. With the iPhone costing multiples more than top Android phones, flexible financing could help unlock more sales in India.

China, however, has long been a key revenue market for Apple so it figures that this strategy is happening there first.

News Source = techcrunch.com

Rakuten’s Viber chat app plans to charge to operate chatbots in controversial move

Viber, the messaging app down by Japanese e-commerce firm Rakuten, is poised to implement a controversial new strategy that will see it charge companies that run chatbots on its platform.

The conventional wisdom is to work with content companies to help bring users to messaging platforms and keep them engaged but Viber, which has struggled to keep up with rivals like WhatsApp and Line, is turning that on its head.

Starting April 1, Viber will charge chatbot operators $4,500 per month for the ability to send up to 500,000 messages to users. Those who exceed that range will be eligible to send up to one million messages per month for $6,500. The new fees are being communicated to companies that operate Viber chatbots, but Viber hinted at its new monetization plans in an email to TechCrunch.

“Bots can be published for free; however, to ensure the highest discoverability and quality of content for bots, we will be introducing a commercial commitment in the coming months. A key aim with this move is to ensure that users are presented with a steady stream of highly relevant and relatable content and a commercial commitment is one key tool for ensuring a quality experience for users,” Debbi Dougherty, head of B2B Marketing & Communications for Viber, explained.

This is a risky strategy that is likely alienate companies that operate chatbots on Viber as well a brands who bought into a bot strategy.

These costs have come out of the blue, much to the surprise of startups that spent time developing chatbots for the Viber platform.

“For an early stage startup, this isn’t going to work,” Edmundas Balčikonis, co-founder of Eddy Travels — a travel concierge service that took part in Techstars’ Toronto program — told TechCrunch by phone.

Balčikonis said his startup was attracted to the Viber platform because it provided all the necessary documentation and APIs to build a chatbot up front and in public. Having spent eight months developing its Viber bot, Eddy Travels plans to double down on its efforts with Facebook Messenger and Telegram where its bot-based service runs without charge and has seen multiples more users and engagement.

“Viber encouraged us to built the bot, but never discussed the price and there’s no price in the website documentation,” he said. “Messenger is showing way more traction for us… we didn’t get any significant engagement on Viber.”

Indeed, the strategy seems to be quite the opposite that Viber needs to take if it is to gain marketshare from the chat app leaders. WhatsApp — the world’s largest messaging service with over 1.6 billion monthly active users — doesn’t currently support chatbots, but instead of playing to its strengths, Viber is trying to squeeze additional revenue here under the cloak of “a quality user experience.”

Times are already hard though at Viber. TechCrunch spoke to six chatbot startups who develop a range of services for customers, including banks, insurance companies and media, but we found that none run any projects on Viber. Each said their desire to work on the Viber platform would diminish further if they were forced to pay for the privilege.

The Viber service is popular in pockets of the world, including the Philippines, Myanmar and some Eastern European markets. Current CEO Djamel Agaoua, a seasoned advertising executive, promised to work on the revenue and business model when he took the helm in 2017. Under his leadership, Viber has pushed its communities chat feature for brands and tried to tap into e-commerce, but little is known of how that has progressed.

Rakuten’s recent 2018 financial report was released this month and it made scant reference to Viber, other than to note that the service and Rakuten Mobile, the company’s MVNO offering in Japan, had “substantially increased revenue thanks to their full-scale aggressive sales activities.”

No raw figures were provided but Rakuten’s ‘Internet Services’ division, which houses Viber and Rakuten Mobile, saw its annual revenue increase by 15.9 percent to 788.4 billion JPY. That’s around $7.1 billion and it sounds impressive, but the bulk of that revenue is from Rakuten Mobile, which has teamed up with traditional operator KDDI to take a crack at Japan’s mobile market.

What we know about Viber is that it has increased its content monetization — which included advertising, sponsored stickers and more — and that now accounts for the bulk of its revenue having surpassing income from Viber VoIP calling packages.

But, again, there’s no raw revenue data here. Rakuten also no longer provides active user information for Viber, which it said said has registered over one billion users since its creation in 2011. That’s not an informative statistic.

Things seem to be so bad that Viber doesn’t even provide an active user number to advertisers, according to a pitch deck seen by TechCrunch. The data shown includes a selection of actions that Viber claims happen per minute, including 1.2 million logins, but there’s no headline monthly active user statistic. Barcelona, which counts Rakuten as a sponsor, and Coke are among the brands that use Viber.

Now the service’s content monetization push has extended into chatbots, but the obvious risk is that companies and brands will simply go elsewhere where, frankly, they already have a larger and more captive audience.

Rakuten bought Viber for $900 million in January 2014, just one month before Facebook forked out $19 billion to acquire WhatsApp. The Viber deal seemed prescient. Sure it didn’t have the same scale as WhatsApp but it was comparable — 300 million registered compared to WhatsApp’s 450 million active — and teaming with a major internet company would bring a larger budget and opportunities.

The sad reality of today, however, is WhatsApp has grown into one of the world’s most important social services but Viber has floundered. Policies that are as short-sighted as monetizing chatbots will ensure Viber continues to be an also-ran. That surely wasn’t how Rakuten envisaged its acquisition progressing.

News Source = techcrunch.com

Facebook removes its Onavo surveillance VPN app from Google Play

Delhi/India/Politics/TC by

Facebook will end its unpaid market research programs and proactively take its Onavo VPN app off the Google Play store in the wake of backlash following TechCrunch’s investigation about Onavo code being used in a Facebook Research app the sucked up data about teens. The Onavo Protect app will eventually shut down, and will immediately cease pulling in data from users for market research though it will continue operating as a Virtual Private Network in the short-term to allow users to find a replacement.

Facebook has also ceased to recruit new users for the Facebook Research app that still runs on Android but was forced off of iOS by Apple after we reported on how it violated Apple’s Enterprise Certificate program for employee-only apps. Existing Facebook Research app studies will continue to run, though.

A Facebook spokesperson confirmed the change and provided this statement “Market research helps companies build better products for people. We are shifting our focus to reward-based market research which means we’re going to end the Onavo program.”

With the suspicions about big tech giants and looming regulation leading to more intense scrutiny of privacy practices, Facebook has decided that giving users a utility like a VPN in exchange for quietly examining their usage of other apps and mobile browsing data isn’t a wise strategy. Instead, it will focus on paid programs where users explicitly understand what privacy they’re giving up for direct financial compensation.

Facebok acquired Onavo in 2013 for a reported $200 million to use its VPN app the gather data about what people were doing on their phones. That data revealed WhatsApp was sending far more messages per day than Messenger, convincing Facebook to pay a steep sum of $19 billion to buy WhatsApp. Facebook went on to frame Onavo as a way for users to reduce their data usage, block dangerous websites, keep their traffic safe from snooping — while Facebook itself was analyzing that traffic. The insights helped it discover new trends in mobile usage, keep an eye on competitors, and figure out what features or apps to copy. Cloning became core to Facebook’s product strategy over the past years, with Instagram’s versions of Snapchat Stories growing larger than the original.

But last year, privacy concerns led Apple to push Facebook to remove the Onavo VPN app from the App Store, though it continued running on Google Play. But Facebook quietly repurposed Onavo code for use in its Facebook Research app that TechCrunch found was paying users in the U.S. and India ages 13 to 35 up to $20 in gift cards per month to give it VPN and root network access to spy on all their mobile data.

Facebook ran the program in secret, obscured by intermediary beta testing services like Betabound and Applause. It only informed users it recruited with ads on Instagram, Snapchat and elsewhere that they were joining a Facebook Research program after they’d begun signup and signed non-disclosure agreements. A Facebook claimed in a statement that “there was nothing ‘secret’ about this”, but it had threatened legal action if users publicly discussed the Research program.

But the biggest problem for Facebook was that its Research app abused Apple’s Enterprise Certificate program meant for employee-only apps to distribute the app outside the company. That led Apple to ban the Research app from iOS and invalidate Facebook’s certificate. This shut down Facebook’s internal iOS collaboration tools, pre-launch test versions of its popular apps, and even its lunch menu and shuttle schedule to break for 30 hours, causing chaos at the company’s offices.

In an attempt to preempt any more scandals around Onavo and the Facebook Research app or Google stepping in to block the apps, Facebook is now taking Onavo off the Play Store and stopping recruitment of Research testers.

News Source = techcrunch.com

California to close data breach notification loopholes under new law

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California, which has some of the strongest data breach notification laws in the U.S., thinks it can do even better.

The golden state’s attorney general Xavier Becerra announced a new bill Thursday that aims to close loopholes in its existing data breach notification laws by expanding the requirements for companies to notify users or customers if their passport and government ID numbers, along with biometric data, such as fingerprints, and iris and facial recognition scans, have been stolen.

The updated draft legislation lands a few months after the Starwood hack, which Becerra and Democratic state assembly member Marc Levine, who introduced the bill, said prompted the law change.

Marriott-owned hotel chain Starwood said data on fewer than 383 million unique guests was stolen in the data breach, revealed in September, including guest names, postal addresses, phone numbers, dates of birth, genders, email addresses, some encrypted payment card data and other reservation information. Starwood also disclosed that five million passport numbers were stolen.

Although Starwood came clean and revealed the data breach, companies are not currently legally obligated to disclose that passport numbers or biometric data have been stolen. Under California state law, only Social Security numbers, driver’s license numbers, banking information, passwords, medical and health insurance information and data collected through automatic license plate recognition systems must be reported.

That’s set to change, under the new California assembly bill 1130, the state attorney general said.

“We have an opportunity today to make our data breach law stronger and that’s why we’re moving today to make it more difficult for hackers and cybercriminals to get your private information,” said Becerra at a press conference in San Francisco. “AB 1130 closes a gap in California law and ensures that our state remains the nation’s leader in data privacy and protection,” he said.

Several other states, like Alabama, Florida and Oregon, already require data breach notifications in the event of passport number breaches, and also biometric data in the case of Iowa and Nebraska, among others.

California remains, however, one of only a handful of states that require the provision of credit monitoring or identity theft protection after certain kinds of breaches.

Thursday’s bill comes less than a year after state lawmakers passed the California Privacy Act into law, greatly expanding privacy rights for consumers — similar to provisions provided to Europeans under the newly instituted General Data Protection Regulation. The state privacy law, passed in June and set to go into effect in 2020, was met with hostility by tech companies headquartered in the state, prompting a lobbying effort to push for a superseding but weaker federal privacy law.

News Source = techcrunch.com

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