Invasive Species
We journey to remote places, trying to understand what is happening in the ecommerce landscape due to invasive species.
I'm writing this edition of the EcommLetter while gazing at one of the most beautiful landscapes I've seen in recent years: I'm sailing on a giant freshwater mirror, adorned with hundreds of square kilometers of reeds, grass, and wild nature;
It's called the "River of Grass," in the Everglades region, Florida, USA.
Here beside me is Captain Mike, a resident here for five decades, and today our guide and pilot: Mike knows many stories. He told me one particularly interesting one about this place, which holds a valuable lesson for online business.
If you'll allow me, I'll share it with you…
The Everglades have a special tourist attraction: apart from enjoying these unreal landscapes I'm witnessing, one of the most exciting things you can do as a tourist is hop on an airboat and zip through the area at high speed, floating above the vegetation and water, drifting, accelerating, turning wildly, cutting through reeds, and feeling the wind on your face in a highly recommended experience.
And you can also see alligators. Lots of alligators, literally within arm's reach, on both sides of the boat. They stare at you motionless, semi-submerged, deciding whether you are friend or foe; predator or lunch. Have you ever seen alligators up close?
Yes, those “small” cousins of crocodiles can reach "only" three meters in length and weigh hundreds of kilos. No joke. Alligators are the alpha predators of this place.
It’s crystal clear after Mike explained in detail how they hunt and how well they are adapted to this semi-aquatic environment. They have so many ways to kill their prey, so well equipped with arms and defense (they remind me of a knight in medieval armor armed with two saw-toothed swords), that they don't care what their prey tries to do to defend itself; nothing will work. Usually, they catch it with their jaws, drag it to the bottom of the swamp, and wait there calmly, half an hour if they want, until the prey drowns. They can hold their breath effortlessly. And so the food gets marinated and softened before they can eat it leisurely.
Thanks for the explanation, Mike. NO, I do not want to get off the airboat for a swim. Maybe another time.
The thing is, in the last few decades, something has happened. Just a small thing, a consequence of the expansion of the city of Miami and other surrounding population centers: the humans around here have been encroaching on the Everglades to build more suburbs, malls, and golf courses. For this, they have set up dikes, canals, roads, pumps, and a thousand more modern engineering inventions. All to gain land from the Everglades’ natural environment.
But of course, nature continues year after year with its plans and pours the water it has to pour into this place during the rainy season. Same rain (a lot), but less space to pour it, equals more water levels, for more time.
Now, this area of the Everglades is flooded 11 months a year with twice as much water as it used to have. Instead of half a meter of water half the year and the other half dry land, now we have here about a meter of depth almost all year round.
How happy the alligators must be now that they have much more water to swim in and "fish" all year round.
Spoiler: NO. Pay attention to the plot twist.
Let's go back three decades. On August 16, 1992, Hurricane Andrew made landfall. With winds of 280 km/h, it literally destroyed everything that humans had built around here in South Florida. One of the three most devastating hurricanes of the century. Tragedy. And a "black swan" type event. You'll see why.
As it passed by the Florida reptile research center, the hurricane completely dismantled the facilities and threw more than 700 specimens of exotic reptiles that were being studied there into the air. They fell into the waters of the Everglades. They escaped from the aquarium. They were free. End of story. Or not?
Burmese pythons adore deep swamps and permanently flooded areas. They can swim freely, hide until they grow large, and hunt calmly all kinds of animals in these ecosystems. They are very aggressive; you must be in the jungles over there. And coincidentally: there were many of them in those research facilities that were blown away.
Suddenly, the snakes were loose in a new habitat in Florida, modified by man and now resembling the Burmese jungles where they had evolved to be the top predator. And they thrived.
They had two significant advantages over the native species:
They handled deeper waters better, hunted more and better; hence, they grew faster.
They reproduced much faster than other reptiles in the area (alligators): 20x more offspring per female snake than the alligator. The result? Large confrontations between alligators and pythons, with specimens of both species exceeding three meters in size, but with the environment and evolution favoring the pythons. The alligators in retreat. Fighting fiercely but losing the war against the snakes, fully adapted to the new aquatic environment and growing larger due to better access to food. Evolution is quite ruthless.
It's possible that in a few years, there will be no more alligators around here. And tours will be organized to see snakes instead. And see what else is left in the area. All because of the expansion of a species (humans and their urbanization) and a black swan event (hurricane).
Let's teleport now to online business.
The attentive reader can draw an interesting analogy:
In many sectors of Ecommerce, we are seeing the emergence of "invasive species": surely you can think of Shein, Temu, Miravia, Aliexpress, and the rest of the Chinese ecommerce machinery that is invading the fashion, accessories, and home categories in Western countries.
These large Asian online sales machines reproduce extremely quickly because they appear to have two advantages that make them thrive very rapidly in the ecosystems they enter:
An enormous capacity for paid promotion, purchasing visibility, and acquiring new customers. They come funded by the results of the world's largest Ecommerce ecosystem: China. They come to devour this market.
A fascinating cost structure where - with more or less cleverness - they achieve highly competitive selling prices often unattainable for other species of Western Ecommerce. They are invasive brands, they have no history or hook in the minds of western consumers, but they come with overwhelming force and reproduce very quickly, especially in this changing business environment.
What consequences will this have for the Western Ecommerce ecosystem?
Can the native species of ecommerce face them? Under normal conditions, they should be able to, because Western brands have been around here forever and know the ecosystem and consumers. They have an advantage.
But the ecommerce ecosystem has changed. After more than a decade of constant growth, easy access to financing, and cheap and effective advertising, the environment has now changed and become more challenging for brands that need larger cost structures to operate.
And if the consumer adapts to current times and seeks access to a universe of low-priced products, they will look towards the exotic brands from the East, which will thrive in this ecosystem because they have spent 20 years evolving and adapting to a similar market, the Asian market.
Is everything lost?
Let's go back to Florida: the latest scientific studies in the Everglades, tagging invasive pythons with GPS trackers, show that alligators are organizing and fighting back against the snakes. A large percentage of python deaths are caused by alligators.
And humans are lending a hand, organizing search-and-destroy patrols for pythons, in a tremendously American gesture of mobilizing local hunters and rewarding them for bringing dead pythons in their trucks. Just like in Western movies.
Nature is a matter of large numbers but also of delicate small balances. Another day I'll tell you the story of the wolves in Yellowstone, which illustrates this matter very well.
For now, my advice is to sharpen your teeth and claws to fight the invasive species in online business.
Start by reviewing your cost structures. And continue by being as adaptable as possible to the changing situation of your ecosystem.
Best regards from the Everglades!