Tragedy strikes 🤕
Mass upskilling, DTC movements, and Vodafone's lackluster performance.
Hi 👋, Tanvi here.
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Stock summary: 📊
US:
S&P 500 - up 0.063%
Nasdaq - down 0.87%
India:
Nifty 50 - up 0.12%
Sensex - up 0.040%
Tragic day 😓
Just when you thought 2020 couldn’t get any weirder. Air India’s flight from Dubai overshot the runway at the Calicut Airport literally breaking into two pieces, causing the death of 19 passengers (latest updated) and injuring hundreds more.
Skidding off the table-top runway, the flight landed in a 35-ft valley. The pilot and the co-pilot are among those dead. The flight was bringing back stranded passengers home from the middle east.
The government has launched investigations promptly and rescue efforts are on in full swing. Our prayers are with those who went through this harrowing ordeal. Read on.
Moving on to the not-so important updates of the day real quickly…
Upskilling for the future 👏
Capgemini is planning to reskill about 50,000 employees in India over the next 6 months in a bid to adapt to the cloud and other emerging tech service needs of its clients.
The company which recently went through a leadership change had announced plans of hiring 25,000+ employees in India and a range of capability building initiatives, which is laudable considering the unemployment plague we’re facing today.
In similar events,
The Federation of Indian Chambers of Commerce & Industry and OYO have collaborated to design and provide an online course for the hospitality industry.
The courses to be included are:
Redesigning sanitization protocols
Minimizing person-to-person contacts
The mass upskilling effort will target unorganized and unskilled workers and the company hopes that it will help reduce consumer anxiety, helping the industry get back to normalcy as soon as possible.
Finally,
Google and the Maharashtra Government will provide digital learning to over 23 million students and teachers, free of cost. The sudden shift to e-learning while seems rosy in urban areas, has jolted the system in rural regions where digital literacy as well as connectivity are lacking.
This tops Google’s partnership with CBSE to provide education offerings in more than 22,000 schools in India and also giving a $1 million grant to the KEF foundation for underprivileged children. Kudos! 🙌
What is India spending on? 💰
Lockdowns have altered consumer habits like never before. What do you think people in India have been hoarding on during these times? Here’s a list.
Immunity boosters - Chyawanprash sales up 700% between April and June, Honey sales up 40% in June alone. Companies like Dabur, Patanjali are making bank. Other ayurvedic product sales are through the roof.
Snacking - consumers are crazily stockpiling goods that won’t go stale. Nestle’s Maggie and Parle’s Parle-G biscuits are vanishing off the shelves quicker than the companies can make them. Britannia sales up 30%, Nestle up 10% in March, and Parle expanded market share by 5% since lockdowns began.
Digital services - Streaming, eCommerce, Social media consumption is only ticking upward. Gaming, e-learning are other explosive arenas. Leading platforms are reporting breakout revenue growths since lockdowns began.
Gold loans- perhaps an early sign of a brewing economic slowdown, as people liquidate the precious metal to get by? Lending companies are experiencing steady 4-5% growth rates each month. Shares of Muthoot finance, Mannapuram etc. are up nearly 50% however on demand spike anticipations.
Appliances - more time spent at homes is driving consumers to consider upgrading and improving their living spaces. In addition to work from home gadget upgrades, everything from grooming kits to refrigerators are growing. Read on.
Vodafone-Idea disappoint 👎
Vodafone’s second quarter performance fell below expectations thanks to the lockdowns. The company claimed its 3G and 2G user base which usually recharges phones not online but at brick and mortar stores couldn’t do so and hence revenues came short.
Average revenue per user (ARPU) for the second quarter was ₹114 when investors were eyeing some ₹5 more. Revenue for the second quarter was down 9% sequentially, to ₹ 10,659 crores. The company however said that towards the end of the second quarter, demand was coming back strongly.
Compare that to how Reliance’s Jio is consistently growing - thanks to its diverse portfolio of digital services and you’ll get a better sense of what the RIL rage is all about. Read more.
Direct to consumer movements 📈
Consumer beauty brand MyGlamm, has acquired a women-centric blog service called POPxo to strengthen its digital footing. POPXo’s investors Chiratae Ventures, Kalaari Capital and Neoplux Venture Capital will receive stock in MyGlamm. Little detail on the transaction was divulged.
One of the D2C upstarts in India, MyGlamm sells a range of self-branded beauty and make-up products. Pre-pandemic, the company had about 40% of their sales coming from offline channels. But that has mostly been declining now and with the acquisition they hope to beef up their content game to scale digital operations more aggressively.
The acquisition gives MyGlamm access to a community of over 50 million women reading content on the platform.
Takeaway: D2C brands in India are just getting started and cosmetics has been a fertile ground so far. The $6 billion annual space as of now is largely dominated by old school companies (HUL, CavinKare etc.) but the upstarts are putting up a strong fight, armed with tech and more inclusive and accepting principles. Read more.
Tech war escalated 👊
Trump signed two executive orders yesterday taking on Chinese tech. The first, bans US companies from transacting with ByteDance (TikTok parent). The order goes into effect 45 days, giving TikTok a chance to explore a sale meanwhile.
The second order bans transactions with an app called WeChat (owned by Tencent), which is basically like Whatsapp in China. The app is quite popular in China but mostly used by people in the US to stay in contact with families back in China. Read more.
What does this mean - the Chinese have historically stopped US companies from competing freely in their country and as geo-political tensions grow, the US is merely reciprocating. But also appearing tough to his voter base in an election year may have moved Trump. Regardless, the actions are increasingly isolating the two powers and pulling the world in a direction counter to globalization. Tech cold wars are ON!
What’s next - these happenings further complicate TikTok’s sale to Microsoft. But the company is losing out of options fast. As far as WeChat goes, that order may likely never be reversed unless China softens its stand on US tech. But will China cave in? Odds are very low.
What else are we Snackin’ 🍿
🤑 ICE to buy Ellie Mae - ICE, the company that owns the New York Stock Exchange is planning to buy Ellie Mae, a software company that processes mortgages in the US, as the buyer looks to expand deeply into the financial infrastructure market. The deal will be valued at $11 billion.
💪 MSFT wants more of social media - ShareChat is in talks with Microsoft Corp. for an investment of around $100 million in the Indian content sharing platform. MSFT investment could form about a third of what ShareChat is looking to raise in the latest funding round.
😎 Zuck in elite club - Mark Zuckerberg’s net worth passed $100 billion for the first time after Facebook Inc. hit a record on optimism about the release of its TikTok competitor Reels. Zuck joins other tech titans Jeff Bezos and Bill Gates in the elite 100+ club.
🧂 Beyond pizza - Jubilant FoodWorks, the owner of Domino's Pizza in India, has stepped into the Rs 500 Cr. ready-to-cook condiments space, entering the arena of packaged foods makers like Nestle, HUL etc. JFL’s will bypass brick and mortar stores and sell its first line-up, ready-to-cook sauces franchise called ChefBoss, on e-commerce platforms. Welcome to the future.
🖥️ FB’s generous WFH policy - Facebook will allow employees to work from home until July 2021 and will give a $1,000 stipend for home office needs. The company will continue reopening offices in a restricted capacity where government guidance permits and where virus mitigation has taken place for about two months.
👋 Vivo stages walkouts - the Chinese phone maker will walk out on two more major title sponsorship deals —the Pro Kabaddi league (PKL) and the ‘Bigg Boss’ reality show — after parting ways with the cricket board for the 2020 edition of the Indian Premier League. Vivo’s deal for PKL was worth Rs 60 crore per year, while it paid the Viacom18 owned Colors channel Rs 30 crore for Big Boss a season.
😷 India’s COVID state- the nation’s COVID-19 tally reached 20 Lakhs today, with 62,538 cases being reported in a day. Recoveries rose to 13.7 Lakhs including 49,769 in the past 24 hours. Active cases stood at 6 Lakh while the recovery rates have gone up to 67.6%.
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