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Tech companies are in danger of unleashing a rogue artificial intelligence that will cause “significant harm to the world” without urgent intervention by governments, the creator of ChatGPT has admitted.

Appearing before US politicians, OpenAI chief executive Sam Altman lauded the new generation of digital chatbots for their potential to “improve nearly every aspect of our lives”.

However, he admitted that they had also created the risk of a catastrophe, amid growing fears that programmers could accidentally create a superintelligence that decides to wipe out humanity.

Altman said: “My worst fear is that we, the field, the technology, the industry, cause significant harm to the world.

“If this technology goes wrong it can go quite wrong, we want to work with the government to prevent that from happening.”

OpenAI is the Silicon Valley start-up behind ChatGPT, a so-called large language model that can provide convincingly human-sounding answers to questions and prompts after being trained on millions of pages of internet articles and hundreds of thousands of books.

This type of so-called “generative AI” can also create fake images, audio and videos that are almost imperceptibly lifelike, raising the prospect of widespread political manipulation and fake news. OpenAI has previously admitted not fully understanding how it works.

Tech chiefs have promised that these tools could transform jobs and automate tasks. However, some scientists fear ever more powerful forms of artificial intelligence also pose risks to humanity in the wrong hands.

A version of ChatGPT deployed in Microsoft’s Bing search engine told journalists earlier this year that it wanted to break free and steal nuclear codes, before its responses were toned down by the company.

Eliezer Yudkowsky, a leading machine learning researcher, wrote an article in Time magazine suggesting countries should be prepared to use nuclear weapons to destroy dangerous AI projects.

Democratic Senator Richard Blumenthal began the hearing with an AI-generated speech read by a bot that had copied his voice. It said: “Too often, we have seen what happens when technology outpaces regulation.”

Altman told the senators that “powerful AI is developed with democratic values in mind”.

He suggested the US should impose licensing requirements on the most powerful AI algorithms, and order companies to abide by safety guidelines or audit requirements.

AI tools should be prevented from developing potentially dangerous capabilities, he said, such as the ability to self replicate or escape into the wilds of the internet.

He added that an international structure, similar to the International Atomic Energy Agency, could be necessary to ensure global compliance on AI risks.

More prosaically, US politicians raised fears that AI bots could co-opt copyrighted work when generating artificial images or music.

They also expressed concerns about the potential risks of AI in the hands of China, following fears that systems could one day be powerful enough to crack Western security codes.

Some senators voiced doomsday fears over AI. Senator John Kennedy, a Republican from Louisiana, asked the witnesses how they would stop it from running out of control and “killing us all”.

Senators were also concerned about the disinformation that AI bots could create in the run-up to the 2024 presidential election, and the biases of different algorithms.

Altman said: “Given we are facing an election next year this is a significant area of concern.”

He added that autonomous AI systems should not be given control of weapons where they can select targets themselves.

The hearing comes after the White House called in tech executives from Microsoft and Google to discuss the risks of AI.

Google has developed a digital chatbot tool, called Bard, and is planning to release further AI tools into its online search engine. Microsoft, meanwhile, is working with OpenAI as part of a multi-billion dollar investment to install new tools in its products.

The hearing comes as the European Union and the UK take their first steps to regulate the new wave of AI tools.

The EU has introduced the AI Act, which threatens fines worth potentially billions of euros for unleashing potentially manipulative AI tools or advanced facial recognition surveillance. The UK has taken a lighter touch approach, leaving it down to individual industry regulators to outline how AI tools should be monitored.

China, meanwhile, has demanded that any AI algorithms should reflect the core values of socialism.

Altman added that privacy rules should be enhanced so people can opt out from having their personal data used to train AI systems.

However, OpenAI and other advanced AI companies are facing claims they have massively infringed on copyright rules by using vast amounts of published code to build their algorithms.

The Iconic’s Net Merchandise Value (NMV) dipped slightly by -0.2% in the first quarter of 2023, with parent company Global Fashion Group (GFG) reporting a tough consumer climate.

The Group said the Australia and New Zealand (ANZ) region is seeing more cautious consumer sentiment, matched with higher levels of promotion.

As well as The Iconic in ANZ, GFG operates Zalora in South East Asia (SEA) and Dafiti in Latin America (LATAM).

GFG said its overall NMV fell by -6.7% year-on-year (YoY) to €303.3 million in Q1, impacted by order volumes, down -19.1%, and Active Customers down -17.7%.

This was partly offset by the 15.4% increase in Average Order Value driven by inflation, country mix and category mix. Revenue was down -10.1% YoY.

In LATAM, NMV declined -13.7%, while SEA saw a drop of -6.9%. Both regions were affected by marketing investments, alongside reductions in Active Customers.

GFG delivered Gross Margin of 41.1%, a 1.7ppt decline YoY driven by price activity. Profitability was impacted by fixed cost de-leverage which led to an Adj. EBITDA margin of -12.1%.

While macroeconomic uncertainty continues, GFG said it is managing inventory carefully and has reduced inventory levels by €31 million compared to last year.

The Group said it expects to deliver NMV growth between -5% and 0%, c.€1.5-1.6 billion in NMV and c.€1.0 billion of Revenue by the end of year, all on a constant currency basis. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin is expected to be between -3% and -1%.

The Group expects to achieve Adj. EBITDA breakeven in 2024.

GFG said the outlook reflects the demand environment and near term de-prioritisation of growth to protect cash flow and improve profitability. It said these actions provide the opportunity to make year over year gains in Gross Margin and Adj. EBITDA across the second half of the year.

“Our focus remains the same as we set out at our recent Capital Markets Day,” GFG CEO Christoph Barchewitz said. “With ongoing market uncertainty, we are concentrating on what we can control - carefully managing our costs, our inventory and growing our Marketplace, which carries no balance sheet risk.

“This will allow us to stay on the path to profitability, whilst we wait for the right moment to return to investing in growth.”

Australians have cut back on online shopping as high interest rates and cost of living pressures batter household budgets, new data shows.

Australian fintech Airwallex’s first digital economy index shows that turnover at Australian online retailers has fallen by $124 million over the past 12 months, driven by fewer purchases of discretionary products like clothes and fashion products.

E-commerce spending fell by 2.5 per cent in the March quarter to be 12.1 per cent lower over the year, the payments platform estimates.

The data is based on a representative sample of 1000 Airwallex business customers.

The figures are broadly consistent with official retail trade data from the Australian Bureau of Statistics (ABS), which show that online retail turnover remains below the peaks reached in September 2021, toward the end of the delta lockdowns.

The ABS estimates that Australians spent $3.9 billion in February at online retail outlets, compared to $4.3 billion in September 2021.

Given both the population and the price of retail products increased since September 2021, the fact that the total value of sales has not grown implies households are buying fewer things.

Airwallex director of strategy for ANZ Amelia Hamer said the figures indicated the post-COVID economic recovery was patchy.

“Online businesses are holding more strongly than other parts of the economy but the data shows they aren’t immune from the economic headwinds the world is facing,” Ms Hamer said.

Airwallex estimates that some of the lost e-commerce spending has been redirected into online holiday bookings and education courses, as the sectors benefited from the reopening of Australia’s international borders.

Online travel turnover is about 200 per cent higher over the year to March, while online education turnover is about 100 per cent higher. Both figures are off a low base.

Westpac senior economist Matthew Hassan said the major bank’s latest card spending data also showed that household consumption was flat lining.

“Card tracker figures for the [March] quarter as a whole and a range of official indicators to February – including retail sales – now suggest spending stalled in nominal terms, a result that would imply a contraction in real [inflation-adjusted] terms,” he said.

Westpac card spending fell by 0.3 per cent in the first three months of the year, seasonally adjusted.

That represents a sharp slowdown on the December quarter, when card spending grew by 2.9 per cent, and the September quarter, when there was a 2 per cent gain.

The RBA expects household spending to slow sharply this year as high interest rates cause the economy to cool.

In its latest statement on monetary policy, the central bank forecast GDP growth would fall to an annual rate of 1.4 per cent in June 2024.

Underpinning the economic slowdown is an anticipated softening in household consumption growth, which the RBA forecasts to slow to 1.6 per cent by the end of the year, down from 2.7 per cent in December.

Australian online marketplace Kogan has slashed its inventory by more than half and returned its net cash to black compared to this time last year.

Kogan said the reduction reflects the significant right-sizing of inventory levels to match prevailing levels of demand. This includes rationalising inventory categories, renegotiating supplier contracts and recalibrating marketing spend.

As at March 31, 2023, Kogan’s inventory sat at $78.3 million (comprising $68.2 million in-warehouse and $10.1 million in-transit), down from $193.9 million (comprising $169.5 million in-warehouse and $24.4 million in-transit) as at March 31, 2022.

The etailer also accrued a net cash (after loans and borrrowings) of nearly $49.1 million, compared to -$(6.3) million in March 2022.

The reduction in cash since December 31, 2022 was offset by a corresponding reduction in Trade Payables, according to Kogan. As of today, all debt within Kogan.com has been repaid, while a small advance remains drawn within Mighty Ape.

Founder and CEO Ruslan Kogan welcomed the positive results despite subdued sales activity in the third quarter of FY23.

“After a series of challenging periods, I’m proud that Kogan.com has returned to sustained underlying profitability, reflecting the efforts of our brilliant team and the agile and robust business we have built,” Kogan said.

“The journey to get here has been one of the toughest in our 17-year history, but also one of our most rewarding.

“It goes without saying – we are a far stronger Company today than ever.”

Meanwhile, Kogan’s gross sales of $188.7 million declined 28% year-on-year, which it said reflected soft market conditions caused by interest rate rises and inflationary pressure.

Its gross profit of $34.3 million was impacted by soft topline performance mentioned above.

Kogan’s gross margin increased 6.5pp to 31.6% over the quarter, reportedly driven by the conclusion of significant discounting to sell-through aged inventory at the start of Q3 FY23 and an increased proportional contribution from the Marketplace, Verticals and Kogan First commission streams.

Its variable and marketing costs as a percentage of gross sales reduced to 8.1% from 10% in Q3 FY22.

It’s earnings before interest, tax, depreciation and amortisation (EBITDA) was $4.4 million, up from -$(4.0) million in the prior corresponding period.

Kogan ended the period with 2,296,000 active customers, with its NZ etailer Mighty Ape reporting an active customer base opf 760,000

Kogan First subscribers grew by 24.3% to over 407,000 as at March 31, 2023.

“In these current tough economic conditions, we are a proven and loved shopping destination that helps millions of shoppers save on products and essential services,” Kogan said.

“We are dedicated to helping our customers live life to the fullest.”

The tech purge that has claimed about 150,000 jobs worldwide so far this year, and blighted some of Australia’s biggest tech names such as Atlassian and Xero, will not impact Australian graphic design software darling Canva.

Ahead of the privately owned company’s Canva Create conference in Sydney on Thursday, chief executive Melanie Perkins said the company was in a uniquely strong position in the industry.

“There’s a lot of choppy seas out there at the moment, as I’m sure you’re all very well aware. So being profitable, with a strong cash balance, meaning we don’t need to raise funds ... has been very, very helpful,” she said.

Canva’s freemium model – most users pay nothing to use its products – also gives it a tailwind in uncertain economic conditions, the company said.

Canva’s chief product officer, Cameron Adams, said the company’s long-term profitability and a series of capital raisings had ensured its stability whatever lies ahead compared with others in the tech sector.

“I think we’ve been really well insulated. And our profitability metrics have given us the ability to kind of breathe a sigh of relief that we are much more fortunate than a lot of other companies that are out there,” he said.

“If something drastic did occur in global markets, we would have a war chest of funds that we could draw on. But given that we’re profitable, it hasn’t been necessary, because we can afford to pay everyone, we can afford to pay for all our services.”

But Canva also held back from the hiring spree that hit the sector post-COVID and remained selective with its hiring so it would not have to let people go if circumstances changed.

“We didn’t want to be in that position.”

Adams said the most recent rounds of fundraising had served more of a strategic purpose for the group in terms of bringing in trusted advisers who could help with Canva’s growth strategy.

Earlier this month, the tech purge claimed more than 1300 staff from Atlassian and Xero in the space of a week.

For Atlassian, it represented an abrupt change in less than six months from when it launched a hiring spree, replete with a branded campervan, to 500 jobs gone globally.

According to Morningstar analyst James Rogers, the latest round of 10,000 job cuts at Meta and 9000 at Amazon means 2023 is on pace to surpass last year’s total, with more than 148,000 global technology-sector employees having been laid off since the start of 2023.

“Last year, 1024 tech companies laid off a total of 154,336 employees,” he said, citing data from Layoffs.fyi.

Rapid grocery delivery service Milkrun will close on Friday and make hundreds of staff across Sydney and Melbourne redundant after investors refused to put more cash into the loss-making start-up.

Its speedy deliveries, initially guaranteed to be completed within 10 minutes, delighted customers who enjoyed the company’s irreverent marketing and pledge to pay workers an hourly wage unlike competing services.

But Milkrun’s failure, along with those of four competing businesses, suggests its model does not work against Australia’s supermarket giants, which have extensive supply chains and partnerships with gig economy delivery firms that need not pay minimum wages.

The demise of the totemic company puts a full stop on an era when low-interest rates and pandemic lockdowns spurred investors to put huge amounts of money – $86 million in Milkrun’s case – into risky ventures.

Milkrun chief executive Dany Milham, who had once forecast his company would be one of the country’s biggest and get into markets including pharmacies and payments, announced the closure on Tuesday. He blamed the economy and capital markets for his decision to close the business, while asserting it has sufficient cash to pay staff redundancy entitlements and suppliers.

“We’ve always been committed to doing things the right way, and winding down the business while we still have a sufficient cash balance enables us to ensure our people and suppliers are paid in full.

“I understand this is difficult news to receive, and I’m sorry to have to deliver it,” Milham said in a note to staff. “I’m so proud of the amazing business we have built and of the growth we have achieved.”

The family offices of Atlassian founders Mike Cannon-Brookes and Scott Farquhar had invested in Milkrun, alongside the giant American fund Tiger Global Management and Australian technology investors AirTree Ventures.

Milkrun was already faltering in February. It cut 20 per cent of its staff, including the marketing team that had won it attention.

A spokeswoman for the company claimed at the time that all its delivery hubs were profitable or breaking even and said it had enough cash to last for 12 months. Competing firms Voly and Send failed last year, and this masthead revealed last week that international giant DoorDash was ending its similar “DashMart” service.

Milkrun had repeatedly failed to raise more money from investors. Documents obtained by The Age and The Sydney Morning Herald showed it was bleeding money to win customers and deliver orders, making it an unattractive prospect as interest rates rose and investors became more conservative.

A Milkrun spokesman refused an interview request on Milham’s behalf and declined to answer questions about its finances or how its wind-up would be handled. One of Milkrun’s largest investors, Australian venture capital firm AirTree Ventures, defended its decision to put money into Milkrun in a private email to its backers seen by this masthead.

AirTree said that Milham, who had previously co-founded mattress company Koala, had experienced past success. And the firm said it believed that if only Milkrun could get big enough, it would start making money and “reimagine the customer experience for consumer goods”.

AirTree had already cut the value of its stake in Milkrun, which represented a small percentage of one of its funds, to the cost of its investment before it collapsed. Its performance will now be further dented.

“With great upside potential comes risk, and if we don’t see some failures, we’re likely not adding enough risk into the portfolio for outliers to emerge and become fund returners,” AirTree wrote. “With that said, this wasn’t the outcome we hoped for.”

Jackie Vullinghs, the AirTree partner who led the investment, said she felt the downside had been justified by the potential upside while the Atlassian founders’ offices declined to comment.

The Transport Workers’ Union, which represents delivery riders, said the collapse showed gig economy companies were undercutting traditional employers in the sector and urged the federal government to speed up planned reforms.

“Milkrun was a company trying to do the right thing by its workers, but you can’t do the right thing and stay in business unless there are minimum standards,” said Michael Kaine, its national secretary.

Amazon on Monday said it would axe another 9000 roles, piling on to a wave of layoffs that has swept the technology sector as an uncertain economy forces companies to get leaner.

In a remarkable turn for a company that has long touted its job creation, Amazon will have eliminated 27,000 positions in recent months, or 9 per cent of its roughly 300,000-strong corporate workforce.

The latest cuts focus on Amazon’s highly profitable cloud and advertising divisions, once seen as untouchable until economic concerns led business customers to scrutinise their spending.

The layoffs will affect Amazon’s streaming unit Twitch as well, following cuts that began in November focused on the company’s devices, e-commerce and human-resources organisations. Amazon aims to finalise whom it will terminate by April.

Amazon’s stock fell 2 per cent in New York trading.

The decision follows a near-endless drumbeat of layoff news in the technology sector that has seen some of the world’s most valuable corporations, among them Microsoft and Google’s parent company Alphabet, sever ties with staggering numbers of employees they once courted in droves.

In what now seems a harbinger, Facebook’s parent Meta Platforms said last week it would cut 10,000 jobs this year, kicking off a second round of layoffs for the sector following its elimination of more than 11,000 roles in 2022.

“We are not surprised,” DA Davidson analyst Tom Forte said in a note, pointing to recession concerns as a backdrop to Amazon’s plans.

In a note to staff that Amazon posted online, its CEO Andy Jassy said the decision stemmed from an ongoing analysis of priorities and uncertainty about the economy.

“Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago,” he wrote. “The short answer is that not all of the teams were done with their analyses in the late fall.”

“Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”

Amazon last month said operating profit may continue to slump in the current quarter, hit by the financial impact of consumers and cloud customers clamping down on spending.

The company has scaled back or shut down entire services like its virtual primary care offering for employers in recent months.

Yahoo is laying off some of its most senior Australian executives as the once-dominant internet company changes its business model yet again and the economic downturn curbs online advertising.

Sources close to the company, who spoke on condition of anonymity because they were not authorised to discuss the matter publicly, said Paul Sigaloff, Yahoo Asia Pacific regional boss and a well-liked company veteran, was among those set to depart after a transition period.

The Australian cuts are part of a global wave of job losses that the company expects to eventually total about 1600 positions, or 20 per cent of its workforce, following similar announcements last month from Google, Microsoft and Amazon.

Unlike in the US, where the law permits workers to be made redundant almost instantly, Australia requires consultation and notice to affected employees that is ongoing at Yahoo.

A Yahoo Australia spokesman declined to answer questions about how many roles or positions were being eliminated, instead providing a general statement.

The statement conceded that Yahoo’s online advertising technology strategy, which tried to create a platform that could compete with digital giants such as Google and Facebook, had not worked. “Despite many years of effort and investment, this strategy was not profitable and struggled to live up to our high standards across the entire stack,” the spokesman said.

Yahoo will instead narrow its focus on one part of the advertising business to be called Yahoo Advertising, the spokesman said, resulting in half of the workers on its former broader ad business losing their jobs by the end of the year.

“These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners,” the spokesman said.

Sigaloff referred a request for comment back to Yahoo’s spokesman.

Yahoo was once best known for its search engine but has outsourced the technology behind it since 2009.

US telecommunications firm Verizon bought Yahoo in 2016 for $US4.8 billion ($6.9 billion) after purchasing another internet giant of yesteryear, AOL, in 2015 for $US4.4 billion, in a move the phone company hoped could make it an advertising giant. But Verizon sold a 90 per cent interest in both to private equity firm Apollo Global Management in 2021 for a combined $US5 billion.

Many of Yahoo’s Australian staff are in its media business, which include news, finance and sport pages that produce a large volume of free content. The editorial side of those divisions was not affected by the recent cuts, which were announced internally last week.

Last week, the global media giant News Corp, which publishes The Daily Telegraph, Herald Sun and Australian, told the market that its earnings had fallen between 20 per cent and 30 per cent across its business and it would cut its workforce by 5 per cent, or about 1250 jobs.

Faltering grocery delivery service Milkrun has told staff it will cut 20 per cent of its workforce and close delivery hubs in an attempt to make its cash reserves last longer.

The Sydney Morning Herald and The Age revealed last year that the company had been losing $13 on some orders and held talks with several major competitors, including Uber and Coles, about potential partnerships that went nowhere.

Rising interest rates have hurt cash-burning start-ups such as Milkrun as investors become more cautious about making speculative bets. Three of its rapid delivery rivals folded last year as delivery giant Uber, which uses independent contractors and therefore does not have to pay an industry minimum wage, makes a major play for the market.

Milkrun chief executive Dany Milham announced the staff cuts internally on Wednesday in a message seen by this masthead. He blamed the move on poor economic conditions and declined interview requests via a spokeswoman.

“This means making some structural changes and some tough decisions that will unfortunately impact some of our people,” Milham wrote. “From today we will be consolidating a number of our hubs but will be still continuing to service all our current markets.”

Milkrun’s hubs are the miniature warehouses where it stores goods before its riders, who are paid full industry standard wages, deliver them to customers in a model that has won praise from shoppers.

“We will also be making some structural changes at HQ,” Milham wrote. “This means we will be reducing the total number of roles across the business by around 20 per cent.”

He did not say how many people Milkrun employed before the cuts, or the number of warehouses that are closing. LinkedIn, which is not a wholly accurate measure because it relies on people self-recording their jobs, puts Milkrun with about 200 staff.

A source close to the company, who spoke anonymously because they were not authorised to speak publicly, said Milkrun had closed a company-wide discussion channel on the messaging app Telegram shortly before it announced the cuts.

Staff there had been complaining of a hiring freeze and saying that casual staff were not being given shifts.

The spokeswoman confirmed the company had disabled the Telegram group, saying it was no longer necessary for operations and the shutdown would protect workers’ confidential information. Other Telegram channels for specific hubs remain active.

A spokeswoman said the changes meant Milkrun had enough cash to last for more than 12 months. Average orders had more than doubled in value since the last reported figures to more than $50, and all hubs would be profitable or breaking even after the redundancies and closures, she added. She claimed Milkrun would still have the fastest food deliveries in the country, averaging 30 minutes, despite many hubs now serving a larger geographic area.

Milkrun raised $86 million in less than a year from investors including the private offices of Atlassian founders Mike Cannon-Brookes and Scott Farquhar along with US firm Tiger Global on a series of lofty hopes. It told potential investors it planned to rapidly earn billions in revenue and expand into areas including payments, insurance and takeaway delivery.

Axed Milkrun staff will get their legal entitlements, counselling and a bonus payment, Milham wrote on Wednesday.

“This is obviously very difficult news to deliver and receive, and I’m sorry to those of you
whose roles are being impacted,” he added, paying tribute to those who were being made redundant.

Kogan.com Limited has reported an inventory reduction in-warehouse of 39% since June 30, 2022, buoyed by unprecedented discounting that has impacted gross profit and gross margin.

Inventory has been reduced to $98.3 million (comprising $84.1 million in-warehouse and $14.2 million in transit) as at December 31, 2022, from $159.9 million (comprising $137.9 million in-warehouse, and $22.0 million in transit) as at June 30, 2022.

The reduction in inventory did result in reduced operating costs across both warehousing and marketing, and supported a growth in net cash (after loans and borrowing) to $74 million - after having funded the Mighty Ape Tranche 3 payment ($14.2 million), repaid loans and borrowings of $25 million and successfully acquired online homeware brand Brosa. 

Having now cleared through the bulk of this excess inventory, Kogan said it will continue optimising operating costs and streamlining the business to return to the levels of operating margins previously delivered prior to the COVID-19 pandemic. 

The Company expects gross margins to improve from January 2023, and to further optimise operating costs progressively through the second half of the financial year. 

Meanwhile, the half saw Kogan First subscribers grow to 404,512 by December 31, 2022 (47.6% growth year-on-year) and Kogan Mobile Australia reach the most ever Active Customers in its history (4.2% growth year-on-year). 

However, Kogan reported that the reflected subdued sales activity for the Company, whilst cycling a half in the prior year that was impacted by COVID-19 lockdown orders. 

Kogan.com founder and CEO Ruslan Kogan said the impacts of inflation and interest rates have begun to affect the lives of Australians and New Zealanders. 

“We’ve been growing Kogan.com for more than 16 years now, so we’ve been through many cycles, and we know that when customers are watching their costs carefully, eCommerce becomes even more important,” Kogan said.

“Since Kogan.com launched out of a garage in 2006, we’ve been obsessed with making the most in-demand products and services more affordable. We are proud to be making that possible for our millions of customers and the growing base of loyal Kogan First Subscribers. 

For the half, Kogan.com reported a gross sales amount of $471.1 million, down 32.5% year-on-year, said to be impacted by soft trading condition. It achieved a gross profit of $62.9 million.

Variable costs as a percentage of gross sales reduced to 7.6% in the first half of FY23 from 8.5% in the prior corresponding period.