Writing from the coldest place in China | 80/20 of Ecom [1/2/26]

Greetings and Ni Hao from Harbin, China!

I'm taking a week off with family traveling to the coldest place in China—Harbin, located in the Northeast. The temperature in the daytime is about 20 degrees below Celsius. My son wanted to play in the snow and my family wanted to see a winter wonderland.

Interestingly enough, more Soviet style than Western. Located in the Northeast, Harbin is near the border and I've actually seen a lot more Russian restaurants and food than Western American and European.

In any case, I loaded up all of my laptop and computer gear and trusty VPN that worked fine last summer in Shanghai. I was in for a rude awakening yesterday as the VPN could not connect at all. And I tried different servers, different protocols. I tried hotspotting to my phone but no luck. Fortunately I have a friend in Beijing in the know. He was able to hook me up with a lesser-known VPN that has been pretty reliable these days.

As some of you who travel to China know, this is literally a cat-and-mouse game with services working and not working and the rules changing seemingly every month or even week. My wife was shocked when I said the VPN that worked last summer isn't working at all. She's like "so fast?" And I thought 5 months is actually a long time, especially in the e-commerce world.

The takeaway for e-commerce sellers: The game is changing fast whether it's ecom or finding the best way to do things in 2026.

I will use this to create the most valuable content for you.

Now on to the weekly update.

(By the way, if you want to check out the VPN that works now in China, see the link at the bottom of the newsletter.)

Rufus Usage Surge and Strategic Implications

Rufus engaged approximately 250 million users in 2025. Monthly active users rose 140% year-over-year. Shoppers using Rufus were 60% more likely to complete purchases within 7 days.

Black Friday interactions surged 210% year-over-year.

Amazon attributes $10+ billion in incremental annual revenue to Rufus interactions. Sponsored Brands in Rufus environment get 18% higher click-through rates. Video creatives in Rufus get 12% higher add-to-cart actions.

Here's the shift: Discovery is moving from keyword-based search to AI-curated recommendations. Traditional SEO is declining in importance. Product data quality and machine-readability are becoming critical.

Takeaway for Amazon Sellers:

Audit all product data for completeness and accuracy. Ensure attributes are fully populated. Focus on clear differentiation and use case descriptions.

Invest in Sponsored Brands and video content to maximize Rufus visibility. AI systems filter out weak catalogs faster than traditional search—data quality is now a competitive advantage.

CPC Inflation and Buy Box Dynamics

Average CPC hit $1.12 in 2025—up $0.15 from 2024. That's a 13% increase.

Lowest CPC was $0.96 in January 2025. Highest CPC was $1.19 in July-August 2025. Peak CPCs happen during Q3-Q4.

Buy Box algorithm breakdown: Price is ~30%, seller feedback is 23%, shipping time is 18%. Performance metrics give you pricing flexibility.

75% of Amazon sellers use repricing software. 60% of Buy Box winners use automated repricing. Algorithmic repricing generates 15-25% more revenue versus static pricing.

Takeaway for Amazon Sellers:

Budget 10-15% higher ad spend for 2026 to account for CPC inflation.

Invest in repricing software if not already using—60% of Buy Box winners use automation. Superior seller metrics (feedback, shipping time) allow higher pricing while maintaining Buy Box share.

TikTok Shop Ranked #3 Fastest-Growing U.S. Brand

TikTok Shop was ranked #3 fastest-growing brand in the U.S. for 2025. They generated $500+ million in U.S. sales during Black Friday through Cyber Monday. Global GMV hit ~$19 billion from July to September 2025.

Disney, Samsung, Ralph Lauren joined TikTok Shop in recent months. Harry's is paying up to $150,000 annually for a dedicated "TikTok Shop manager." Major brands are committing real resources after years of hesitation.

The shift reflects reduced regulatory uncertainty. TikTok agreed to sell portions of U.S. business in a joint venture with Oracle. Deal closes January 22, 2026.

Creator-driven commerce is the model here. Creators earn commissions for promoting products. Authentic product endorsements convert at higher rates than traditional ads.

Takeaway for Amazon Sellers:

TikTok Shop is now a credible mainstream commerce platform, not an experimental channel. Consider it as an additional sales channel, especially for products targeting Gen Z and younger millennials.

Creator-driven commerce requires a different approach than Amazon—focus on authentic partnerships rather than traditional advertising. Multi-channel presence is increasingly necessary for growth.

Container Ships Tentatively Returning to Suez Canal

CMA CGM is making route changes. Their INDAMEX service is returning to Suez Canal for both fronthaul and backhaul. Transit time reduction: 2 weeks.

Maersk Sebarok completed the first transit in nearly 2 years on the Middle East to U.S. East Coast route. It was not announced in advance—they're testing waters before large-scale commitment.

November 2025 saw 120 container transits through Suez. Compare that to October 2023 (pre-crisis) with 583 transits. It's primarily smaller regional carriers, not major international operators.

European fronthaul: 46 announced days, 52 actual days (versus 38-40 pre-crisis). Schedule reliability is 27.5% versus 48.8% pre-crisis. Port congestion is offsetting voyage time benefits.

If there's a large-scale return to Suez, container ship demand could drop ~10%. Shorter voyages free up capacity, exacerbating overcapacity. Optimal timing for service changes is post-Lunar New Year (mid-February 2026).

Takeaway for Amazon Sellers:

Red Sea normalization is beginning but it's cautious and limited. If it accelerates in 2026, could reduce ocean freight rates as capacity is freed up.

Port congestion may offset voyage time benefits—total door-to-door lead times remain unpredictable. Plan for 50-70 day total transit times for Asia-Europe shipments.

🎁 80/20 Link of the Week

The VPN that actually works in China right now (as of January 2026).   Download link

Enter my ID: 443058316 after the installation to get an extra 3-day membership for free.

Gary

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