Clogged supply chains 🚚

TikTok knighted, Power issues, and Amazon teams with ICICI.

Market summary: 📊

India rolled all over but finally managed to hold 60K for Monday, ending slightly in the green. US ha a down day as global supply chain issues begin hurting holiday spending.

US:

  • S&P 500 - down 0.28%

  • Nasdaq - down 0.81%

India:

  • Nifty 50 - up 0.01% 

  • Sensex -  up 0.05%


Quick shot of espresso ☕

Clean your mess — a production facility in Goa run by pharma giant Lupin, which primarily makes generic drugs to sell in the US, is under the scanner after the US FDA discovered some quality, operational, and safety lapses in how the plant is run — during a regular annual inspection. Lupin stock took a mid-day dump, but was quick to recover.

Self sufficient —  India and Taiwan are cozying up over a $7.5 billion trade agreement that includes setting up a semiconductor chip manufacturing facility in India along with concessions on tariffs on imports and exports supporting the plant. Exact deets of the arrangement aren’t known yet (which BTW is sure to irk China) but GOI is actively scouting for land, power, and other basics to help set up shop.

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Supply issues are eating consumer giants 🚚

Nike’s stock was hammered after the company told investors it is facing some serious supply issues — with several of its factories in Asia halting production because it can’t get raw materials in time.

Nearly 80% of Nike’s factories are in Vietnam, and management says majority of its production is already 10 weeks behind.

Otherwise, Nike’s quarterly earnings report wasn’t too bad:

  • Made $12.2 billion in sales last quarter, up 16% YoY - not bad for a mature consumer company

  • Profits of $2 billion, up 23% YoY

  • Ecommerce revenues were up ~29% YoY, omnichannel FTW

Bottomline — with the holiday quarter coming up, losing out on all the gift orders could mean giving up serious market share in an already extremely competitive athletic wear market.

Meanwhile, bigger problems are brewing with global trade: ☝️

  • Ports across the world are seriously backed up — the Los Angeles port is becoming a poster child for the congestion — where a record breaking 70+ ships are backed up for clearance for weeks.

  • People don’t want to work — the US and EU are facing EPIC long haul truck driver shortages — hard to find people to clear all the cargo coming in

All of this is driving shipping costs up, further fueling inflation, and investors forced to cut back on their hope of imminent recovery.

Big picture — global corporations are going to seriously have to rethink the “savings” derived from outsourcing manufacturing to remote parts of the world. If you can’t get it when you need it, well…


Hottest from Venture Street 💸 

Fintech continues to pull $$ Akudo, a neobank for teenagers, closed a $4.2 million seed round from JAFCO Asia, YC, Tribe Capital and others. 

Akudo provides teenagers with a parent-supervised debit card, along with features within the app to promote financial discipline and money management skills — such as auto savings + financial content. 100,000 users have registered to use the product, with 25K+ cards issued. 👏

While we’re on raises, ☝️

Delhivery raised another $125 million from Addition Capital, topping off the $76 million the company raised from the same investors about a month ago.

Addition Cap is run by Lee Fixel, a former Tiger Global rainmaker, who led Tiger’s rounds in Flipkart, Ola and other internet-1.0 companies in India, is now pushing his own firm, Addition.

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Chinese factories are out of power 🔌

What happened — China is forced to halt electronics production in some parts of the nation over shortages in power supply — adding fire to fuel in the global trade problems.

Even the leading technology giants are suffering — Apple’s iPhone manufacturers have had to shut plants, which will further choke supply chains. So did Tesla’s suppliers, including a few making power electronic components.

With peak holiday season looming for electronic manufacturers, there couldn’t have been a worse time to put a dent in profits.

What’s causing this — authorities blame surging coal and natural gas prices for the shortages, along with tightening energy-policy, that is forcing a nationwide transition away from coal-fired plants to cleaner alternatives.

Big picture — power problems add to an already strained relationship of manufacturers with China, offering some tailwinds to ambitions of India, and other South Asian countries.

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Closing out — TikTok joins the Elites 📈

When you’ve reached a billion monthly active users, it’s hard to dethrone you — TikTok finally made the feat, joining Facebook, Whatsapp, YouTube, WeChat, and a few other elite tech platforms.

The fact that the platform got there in under 5 years since its founding, despite an active ban in India (easily 200-300 million actives), is even more admirable. Engagement has grown 45% YoY over the last 12 months!

What now — perfect backdrop for Bytedance to come out with what could be the tech world’s biggest IPO ever (~$300-$400 billion).


What else are we snackin’ 🍿

Embedded fintech - Amazon will work with ICICI Bank to offer an overdraft facilities of upto ₹25 lakh to some of Amazon’s sellers and small businesses. Pretty cool!

💳 Health IDs are live - GOI launches Ayushman Bharat Digital Mission to provide digital health IDs to citizens, making health records portable.


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