Hi 👋, Tanvi here.
Filter Coffee is a newsletter that hits your inbox every morning with notable tech and business news scoops to jump start your day. Sign up below for free 👇
Let’s go ahead and get started:
Stock market summary:
US - S&P 500 down 0.56%
India - Sensex up 1.12%
Adding color to ecommerce demand 🛒
ET claims that e-commerce and home delivery orders accounted for nearly 15-20% of all sales for the country’s top food and grocery retail chains for the quarter that ended in June, a solid jump from 3-5% digital penetration a year ago.
Also, average online billing size per delivery ticket is trending 20-30% higher than pre-COVID levels. Reopenings in some regions have brought people back into stores, but foot traffic is still down 30-40% from the pre-pandemic averages.
The numbers are particularly interesting because while by now it is common knowledge that the pandemic has led to a surge in online purchasing, experts are looking for cues to ascertain upto what levels will this shift remain elevated. So far it does look like the future holds some form of offline and online model coexisting.
As a result, a lot of businesses are forced to reevaluate their business models to fit the new normal, and some level of mass retail closures or limitations in expansions seem inevitable. Read more.
Flipkart invests in clothing brand 👚
E-commerce platform Flipkart has invested Rs 260 Crore to acquire a minority stake in Arvind Youth Brands (subsidiary of Arvind Fashion), which owns popular youth appealing brands like Flying Machine.
In the unique partnership, Flipkart and Arvind are setting ground for deeper collaboration and synergies to build products that further deepen catalogs in the apparels segment.
The timing and nature of the deal is unique because the apparel and fashion sector remains upended at a time when neither buyers are interested in shopping nor production and supply chains are able to function due to lockdowns. Apparel sales are down 35% since January.
But the bet is that once demand recovers in the post COVID world, online will take a much larger share of the pie. Tight integrations with popular vendors at such times could help Flipkart maximize on these opportunities.
Arvind Fashions runs the nation's largest fashion brands and manufactures apparels of international brands including Calvin Klein, GAP, Tommy Hilfiger among others. Read more.
Doubling down when the odds are favorable 🤑
Amazon is infusing Rs 2,310 Crores into the Indian arm of its “Seller Services” entity, which looks after the company’s third party marketplace services business here in India, doubling down right when ecommerce demand is at a peak.
The seller services entity manages Amazon’s third party vendor platform, that allows for independent sellers across the world to sell on Amazon. The company then provides logistics and other fulfillment services to these vendors and charges a hefty convenience fee. The business model has been quite a success so far, with thick margins that boost the company’s overall profitability.
The fresh infusion of funds comes on top of another Rs 2,500 Crore the parent company had invested into Amazon seller services and Amazon data services India earlier in January of this year.
As it appears, the company doing everything it can to compete in an increasingly hot market. They are also ramping up operational capabilities, with plans to hire 50,000 temporary workers to meet demand surge. Also, Jeff Bezos in January announced a $1 Billion investment to bring more than 10 Million small businesses online by 2025. The plans seem grand. Read more.
Closer to autonomy than we were yesterday 🚗
Tesla’s CEO believes the company can deliver on Level 5 autonomous vehicles by as fast as the end of this year.
Leveraging its distributed network of connected cars on the road with partial autonomy features, Tesla has been collecting data and training its intelligence models for more than a few years. Per the CEO this existing network is its biggest edge, which offers it a much better position than competitors.
Almost 17 years since the first DARPA challenge that put self driving cars under spotlight, we are still awaiting a commercial version of the technology. Fresh challenges continue to mount as the last bit of accuracy becomes harder to achieve.
It's hard to read further into the company’s comments, especially without any technical data offered to back the claims. However, it's irrefutable that a true self driving vehicle could drastically cut personal transportation costs, adding a ton of efficiency to logistics as well as human movement, and if delivered Tesla’s fortunes will know no bounds.
Most recently Amazon had acquired Zoox, a prominent self-driving startup for over $1.2 Billion, heating up the race even further. Google, GM, Ford, and countless other startups have thrown their hats in the ring. Read more.
Pulling plans on Insurance mergers ☝️
Retracting its plans mentioned in the FY19 budget by then finance minister Arun Jaitely on the merger of three public sector insurance companies, the government has now decided to plow some capital into these entities and leave them alone for now.
The move was originally planned to consolidate Oriental Insurance Company Limited (OlCL), National Insurance Company Limited (NICL) and United India Insurance Company Limited (UIICL) in a bid to strengthen their balance sheets and operations, and eventually list them publicly after the insurers had failed liquidity tests.
Now as part of the new mandate, the government will instead infuse Rs 12.5K crore into the 3 companies in parts, with 50% of the capital to be invested at a later time based on performance. Pandemic related weakness as well as focus on other pressing issues might have played a role in the decision.
Focus will now be exclusively on bringing the PSUs to solvency and then on a path toward profitable growth is what government guidelines mentioned. Read more.
Tweet of the day -
What does it take to build one of India’s most successful SaaS companies? 👏👏
What else are we snackin’ 🍿
📜 New guidelines on imports for digital sellers - The government has asked ecommerce platforms such as Amazon and Flipkart to display the country of origin on new products listed by sellers on their sites by August 1 and legacy items by October 1 without stipulating a deadline.
🎓 Harvard and MIT sue the US government- after new rules directed international students to leave the US if they are not attending in-person classes, Harvard University along with Massachusetts Institute of Technology (MIT) have filed a plea in the US District Court in Boston seeking a temporary restraining order prohibiting enforcement of the directive.
🎵 Gaana’s dance in TikTok’s wake- welcome HotShots, a Gaana app that allows users to create short videos and stories. The old app has over 150 Million users and it is not hard to imagine them making a huge success out of this too.
✈️ Saving an airline a day- Tata Sons is in talks to buy out AirAsia Group Berhad’s stake in their airline joint venture in India at a steep discount. Tata will likely tie up with other investors to acquire AirAsia’s 49% stake in the venture
🛁 Bed Bath and Beyond to close 200 stores - the famous retailer will be closing nearly 200 of its stores over the next 2 years, after its sales went down nearly 50% during the latest quarter, due to the coronavirus pandemic.
🧠 Scientists warn of brain damage linked to COVID-19- fresh warnings were issued by scientists of a potential wave of coronavirus related brain damage, after new evidence suggested severe neurological complications in certain patients in the UK.
🙁 United Airlines warns people of potential layoffs - United Airlines is warning nearly half of its staff, 36,000 workers, that they could be furloughed in October. The move is likely an alarm to the government to swoop in to help the airlines in times of crisis.
💰 ICICI to raise money via share sale - ICICI bank is set to raise over Rs. 15,000 crore through fresh issuance of shares. The bank had recently revealed its intentions of raising capital to strengthen its balance sheet.
Hope you took a thing or two away from today’s edition. 😀
If you like it, show us some love by clicking the heart icon below. And don’t forget to invite your friends.