Tidbits #47 – Didi Gets Pulled Over, Tech vs Govts, But All We Want to Do is…Shop!

Hello, hello! 👋🏻👋🏻 Welcome back to another edition of Tidbits covering all the recent things worth talking about in business, media, and technology.

This is a double issue due to the July 4th holiday last weekend.

🗺 Geopolitics

#1 130 countries sign on to global minimum tax plan, creating momentum for Biden push

The Biden administration claimed an important victory on Thursday in its drive for a global minimum corporate tax with an announcement from Paris that 130 countries had signed on to the plan.
The Organization for Economic Co-operation and Development (OECD) made the announcement, which includes an agreement on taxing the American giants of the Internet economy, such as Google, Facebook and Amazon.
Potentially the most significant change in global tax rules in 100 years, the new blueprint is designed to stop countries from competing to lure corporations by offering lower tax rates and to help governments fund their operations.
“Multinational corporations will no longer be able to pit countries against one another in a bid to push tax rates down and protect their profits at the expense of public revenue,” President Biden said. “They will no longer be able to avoid paying their fair share by hiding profits generated in the United States, or any other country, in lower-tax jurisdictions. This will level the playing field and make America more competitive.”
Source: Washington Post

We started discussing the potential and implications for higher global taxes as early as April back in Tidbits #38. While this obviously has implications for many companies, especially highly profitable mega-tech companies that have shielded profits abroad where tax rates are lower, this has many geopolitical implications as well.

American international power is increasingly exerted through the Capital / business channel. But it turns out the more and more American Capital and businesses become intertwined with foreign economies, the greater the potential that loyalties can shift. And this is a particular problem when foreign nations collectively lower their taxes in order to make their jurisdictions more attractive for American businesses to operate. Not only has this encouraged the outflow of capital to other countries, it has also encourage the outflow of jobs, IP, technology, as well as fostering business elites that resist important domestic policies that may damage economic interests abroad.

Changing the global tax regime is an important step to remediating this.

But how will the US get other countries onboard when it works pretty well for most other countries?

Looks like the strategy is to offer up a potentially better deal for most countries – a chance to tax American tech profits generated abroad, especially the portions that have been shielded through complex tax management strategies that have denied both American and foreign governments taxes.

#2 Chinese Regulators Suggested Didi Delay Its U.S. IPO

Weeks before Didi Global Inc. DIDI 7.31% went public in the U.S., China’s cybersecurity watchdog suggested the Chinese ride-hailing giant delay its initial public offering and urged it to conduct a thorough self-examination of its network security, according to people with knowledge of the matter.
But for Didi, waiting would be problematic. In the absence of an outright order to halt the IPO, it went ahead.
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Though companies like Didi store their data on users and traffic flows on servers that are housed within China’s borders, officials at the Cyberspace Administration worry that equipment for those servers, if procured from abroad, could be vulnerable to security breaches upon the company’s disclosure, potentially putting the caches of data in danger, the people said.
Source: WSJ

If you haven’t heard yet, Didi, China’s leading ride hailing company, went public in late June through a very rushed IPO process. And within a few days, the Chinese government took serious actions against the company including banning Didi app downloads.

It doesn’t seem exactly clear, yet, what the issue is. Some reports claim Didi listed despite the Chinese government asking them to delay the IPO. Some reports claim Didi’s trove of location data is potentially problematic from a national security perspective. And many more.

Most of these arguments do not seem to make much sense. Given the evolving political situation in China, it seems very unlikely that Didi would go ahead and do an IPO without government approval, much less do an IPO if the government explicitly asked them to delay it. The location data arguments also seem quite weak to me. Didi may have a lot of location data, but many, many apps today have this data, too. Didi’s possession of such data does not seem particularly unique or any more problematic than the location data that perhaps social networks or food delivery companies or smartphones or telecoms have.

The WSJ articled quoted above, though, includes an oddly specific but highly interesting angle: The government may be concerned about US listing requirements that may (now or in the future) require Didi to reveal the location of the servers that house their data. Even if Didi itself does not hand over any sensitive data, revealing the locations of the server could make those servers vulnerable to foreign (e.g. American) intelligence operations.

Furthermore, the WSJ piece highlights how the setup is particularly problematic if the server equipment involves foreign technology. Unfortunately, a lot of tech equipment continues to involve foreign technology, including many from American sources. In essence, China has the same problem that the US faces with Huawei equipment: No known issues, but its presence in sensitive infrastructure could make the entire chain vulnerable in the future.

#3 China Tightens Rules on Foreign IPOs in New Blow to Tech Firms

China proposed new rules that would require nearly all companies seeking to list in foreign countries to undergo a cybersecurity review, a move that would significantly tighten oversight over its internet giants.
Companies holding data on more than 1 million users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments,” the Cyberspace Administration of China said in a statement on Saturday. The cybersecurity review will also look into the potential national security risks from overseas IPOs, it said.
The move announced on Saturday, which confirms a previous report by Bloomberg, is one of the most concrete steps taken yet to restrain the ability of technology firms to raise capital in the U.S. through a so-called Variable Interest Entity model that the likes of Alibaba Group Holding Ltd. to Baidu Inc. and Didi Global Inc. have adopted. Regulators are also considering requiring VIEs like Alibaba that have already gone public to seek approval for additional share offerings in the offshore market, people with knowledge of the matter have said.
Source: Bloomberg

BUT it looks like the solution China is taking is basically to shut down foreign IPOs unless the company in question truly is not important or worth losing sleep over.

🤑 Economics + Markets

#4 China proposes rules to punish illegal e-commerce pricing

China’s market regulator issued draft rules on Friday to punish illegal pricing activities, including heavy subsidies and the practice by online platforms of charging different prices based on customers’ purchasing behaviour.
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“The pricing practices have been widespread among online platforms and it is a hidden problem to ordinary consumers because it’s not very easy to notice,” said Lu Zhenwang, chief executive officer of Shanghai-based Wanqing Consultancy.
Consumers over the years have complained on social media that e-commerce platforms don’t charge the same price for the same offerings.
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In March, state news agency Xinhua reported that Alibaba’s online travel agency Fliggy offered different ticket prices for the same flight, with more loyal users getting a higher price. In the same article, Xinhua said Meituan charged different prices for the same pet care product.
Source: Reuters

There’s a geopolitical angle here, and there is an economics angle.

The geopolitical angle:

Tech globally is truly in an odd place right now, and these dynamics are especially obvious in China. Chinese tech companies have played an extremely important role in helping China modernize as well as empower China on the global stage.

However, China tech also has the potential to threaten its own government.

Seems like the government is trying to walk the fine line between making the “tool” more capable while also making sure the “tool” does not outgrow the master’s ability to use and control it.

The economics angle:

Markets and pricing are determined by supply and demand. In the past, supply and demand are determined in the aggregate and in the open. You can glimpse what other like-minded consumers are willing to pay, and what prices goods are transacting at. But with big data and the funneling of markets into personalized apps, the historical model for markets as we know it is breaking down. The supply of things is becoming ever more fluid, especially when it relates to digital goods (like ads sold to advertisers or digital items sold to consumers in games). And the demand side is no longer visible in the open. What I pay for something on MY Amazon app is not visible to you anymore. You can only merely assume that I am paying the same price as what you see in YOUR Amazon app. There is no longer a single open market but rather billions of personalized, individual markets that each one of us access within our own personalized apps. This gives platform companies immense power to choose individualized prices for each of us. Because these prices are no longer determined by an open market but rather just between each one of us as an individual and extremely powerful platforms on the other side.

China is taking the first steps to ban this power. The question is will it work? And how will it be enforced? It’s trickier than you think because prices are easily gamed. You could theoretically charge everyone the same very high listing price but then offer individualized discounts. Customized discounts are very common practices (e.g. giving new users a discount to get them started is common). Would individualized discounts need to be banned, too?

#5 NFT mania hits Hollywood: ‘It’s found money’

In intellectual-property-hungry Hollywood, NFTs have fast become the new frontier, and their popularity has set off a gold rush mentality as studios, producers, and even talent agencies scour for new revenue streams in the wake of COVID-19’s crushing effects. This enthusiasm hasn’t waned even as the NFT market has lost some heat from those heady days of . . . well, just a few weeks ago. According to a recent sales study by Protos, on May 3 there were $100 million in “crypto-collectible” sales on that day alone. But during the first week of June there were just $19.4 million in NFT sales. The number of active NFT wallets, or the accounts used to purchase the tokens, fell from more than 12,000 to 3,900 between those two periods.
The opportunity, though, is simply too great for anyone in Hollywood to be too worried about this pesky dip. Beyond seeing NFTs as a way to generate new characters and stories to blow up into multimedia franchises (video games, graphic novels, and so forth) NFTs are also viewed as a way to reconfigure existing properties for legions of fans, as the NFT market did with the NBA Top Shot. Seeing as the latter approach is essentially dusting off content that in some cases is decades old, the model represents the kind of jackpot that hasn’t been witnessed in Hollywood since the DVD market sent studio revenues soaring back in the 1990s.
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What the “right way” is, however, is up for debate as players double down in experimentation mode. NFT as a movie? TV show? Collectible? Thorny issues like how to divvy up rights among artists and IP holders are still being worked out, as are questions of how an NFT property coexists with offshoots on other platforms, seeing as an NFT can itself continue to grow. (Johnson’s Aku NFT, for example, is evolving in new chapters that he’s releasing). For the moment, these questions are being pushed aside, or at least put on hold, as Hollywood gears up to ride what it believes is its next big wave, a wave that is, some believe, bigger than anyone yet comprehends.
Source: Fast Company

Okay, okay. This I also get. If you like something like a Marvel character and you want to own some collectibles, you can own the toy, the comic, etc. Owning an NFT of the character could make sense. It’s just another way to own something you wanted anyway.

But I still think this is different from the NFT mania that prevailed a few months ago. This is about owning something that people want anyway that just happens to be an NFT. In contrast, the NFTs minted a few months ago seemed to be more like “I want to own an NFT just because, but let me find something that doesn’t look like it is totally worthless so that I may eventually flip it”.

#6 Marvel and VeVe Collaborate to Offer Digital Collectibles Experience for Marvel Fans Worldwide

Marvel Entertainment and Orbis Blockchain Technologies Limited, a digital collectibles company operating the VeVe Digital Collectibles App, announced today a new collaboration to launch a global digital collectibles experience for millions of Marvel fans and collectors around the world in the coming months. For the first time, fans will be able to purchase and interact with official Marvel NFT digital collectibles, 3D statues, and digital comic books through mixed reality on VeVe’s groundbreaking app platform.
Available on iOS and Android, the VeVe Digital Collectibles App brings fandom directly to fans wherever they are by offering a rich collecting experience. Through the VeVe Digital Collectibles App, fans can buy and collect a variety of Marvel NFTs; trade and hunt for rare (and even secret-rare) NFT comic books and collectibles; and display their hard-earned collection through fully customizable virtual showrooms.
Source: Marvel

There you go.

BUT if you are truly a Marvel fan and you want to own the concept of whatever character, is there is a difference between owning the NFT, the limited edition toy, comic, etc? At the end of the day, the concept is the concept is the concept. And a limited item is a limited item is a limited item no matter what form it is in. Arguably real-world items become more valuable over time because there is natural decay in the supply as some people accidentally damage their items over time. Kind of like how bitcoin supply effectively shrinks over time because some people lose their passwords and can never use their bitcoins.

🎭 Society

#7 TikTok tests letting US users to apply for jobs with video resumes

TikTok is expanding into job recruitment. As of today, the company has launched a pilot program that allows people in the US to apply for entry, associate and senior level positions by tagging videos they upload to the platform using the #TikTokResumes hashtag. You can see a list of the approximately three dozen companies that are taking part in the pilot, as well as the jobs they’re hiring for, by visiting TikTok’s dedicated resumes website. Some of the more notable brands taking part include Shopify, Target and the Detroit Pistons. Applicants have until July 31st to apply for the first set of jobs posted on the platform.
Source: Engadget

I hope this takes off!

The time and effort cost of changing jobs has become quite high in western society. This is fine for high-value, knowledge-based jobs, but there is no reason all jobs need to require written resumes, especially when the job might not involve much written skill anyway. I like how Target is one of the first experimenters with video resumes. At the end of the day, Target jobs are people-based service and sales jobs. A video probably gives much better signal on whether someone could be a good fit for a store environment than a paper resume.

#8 Looking for a Friend Without Benefits? Try Match, Bumble and Tinder.

When Jessica Johnson opened new Tinder, Bumble and Hinge accounts at the same time last year, she wasn’t looking for romance. She’s made it clear on the sites that she is happily married.
She just wanted to find some new friends.
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She had met her husband on Tinder, making her familiar with the app. Despite some online conversations that went nowhere, and at least one woman who tried to flirt with her, “the results were actually really good,” says Ms. Johnson, 24. “I made two friends who are now actually my best friends.”
Dating apps are getting friendlier. More younger people see no problem swiping left or right to find friend matches rather than dates or hookup partners. Millennials and members of Generation Z have been comfortable using dating apps to meet platonic friends for a few years now, especially when moving to a new city. During the pandemic, the practice boomed.
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People looking for platonic pals on dating apps typically state they are looking for friends and list a range of interests from fashion to bowling to museums. Though the qualities and interests are in some ways similar to what people look for in romantic partners, they don’t get hung up on physical appearance or existential questions like wanting kids. They make it clear they are looking for people to hang with. Sometimes they’ll announce they just moved to a new city and are looking for new friends.
Source: WSJ

The power of dating apps to rejigger our world is something that gets less attention than I think it deserves.

Dating apps control one of the most dynamic social networks out there. Years ago, when it looked clear that Facebook had “won” the social networking war, I hypothesized that one of the key ways to attack Facebook is to look for networks that have high relationship / pairing turnover. Facebook is based on family and friends. The nodes in this network hardly ever change. But dating networks are highly dynamic because it is fundamentally about matching you with people you do not know. And these nodes change all the time.

This network is also great for helping people discover new platonic relationships. I think Match and Bumble will continue to reshape how the world works because its one of the key networks that are both dynamic and interest-based.

Games are another key interest-based network that has the potential to reshape our world (as are networks like Twitter). But many of these other interest-based networks lack real-world identities and location data, both of which dating apps have. You may make friends in games or on Twitter, but the potential to transform that into a real offline relationship is lower because identities and locations are not key filters.

As Match and Bumble expands the purview into platonic relationships, not only will it transform our world, it will create new opportunities for monetization as well.

#9 First Bumble Brew Cafe Opens in NYC for In-Person Dating on July 24

Bumble Brew is a new all-day cafe and wine bar from the folks who brought you the first feminist dating app. A collaboration with Delicious Hospitality Group, Brew is set to open on July 24 in Manhattan’s Nolita neighborhood for breakfast Wednesday to Sunday (8 a.m. to noon). Hours will later expand to include lunch (from July 31) and dinner (from Aug. 7).
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The 3,760-square-foot restaurant boasts an 80-seat dining room, cocktail bar, patio, and private dining, according to Good Morning America, which tipped an Italian-inspired menu from chef Ryan Hardy, who’s going hard on vegetables, handmade pasta, and, of course, shareable plates. And, in line with the app’s female-first formula, Brew’s ambient music playlists will comprise mostly women.
“At Bumble, we’re fueled by bringing people together to build genuine connections—both on and off the app,” Julia Smith, head of brand partnerships, said in a statement, published by GMA. “We hope that people can gather at Bumble Brew and connect over an espresso or delicious meal, whether it’s with friends, a potential partner, or a new business connection.”
Source: PC Mag

There you go. New opportunities for monetization!

#10 Twitter has lost legal immunity for users’ posts in India, government argues

Twitter is now legally liable for content posted by its users in India after failing to comply with the country’s new IT rules, the government said in a legal filing. As reported by both Reuters and TechCrunch, India’s IT ministry argues in a filing with New Delhi’s High Court that the social media firm has lost its legal immunity after failing to comply with new requirements imposed in May. These include appointing a chief compliance officer, a grievance officer, and a contact person to respond to requests from law enforcement 24 hours a day.
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In the US, social media companies are generally not held liable for their users’ posts thanks to Section 230 of the Communications Decency Act. But India’s IT Minister Ravi Shankar Prasad has argued it’s wrong for companies to expect exactly the same protection under Indian law. “The issue is of misuse of social media,” TechCrunch reports the minister said in a press conference last week. “Some of them say we are bound by American laws. You operate in India, make good money, but you will take the position that you’ll be governed by American laws. This is plainly not acceptable.” Prasad denied that the move was aimed at silencing criticism of the country’s government.
Source: The Verge

The internet is starting to get tied down to the laws and realities of the physical world. The physical world can no longer tolerate a digital world that imagines itself as free from the laws and realities of the physical world.

💬 Media + Games

#11 Long-time players are making money building for ‘Minecraft’

Since the early days of the “Minecraft” scene, game modification has been a core element of the popular sandbox title. Distributed by modders via free “modpacks,” “Minecraft” mods give players access to in-game enhancements such as more efficient items and extra block types, as well as performance-boosting tools like FastCraft and OptiFine. With the tacit approval of the game’s developers at Mojang, these mods are firmly embedded in the culture and gameplay of Minecraft. What’s more, some of them are demonstrating a viable path to monetizing their work, suggesting modding could become a new sector of the creator economy.
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At Feed the Beast, Moloney and his colleagues hope to transform game modification from a pastime into a bona fide career path. Thanks to support from modding platform Overwolf, Feed the Beast has added advertisements to its “Minecraft” launcher, monetizing its modpacks for the first time. With millions of regular users, that revenue has gone a long way — and in only a few months, this small adjustment has helped Feed the Beast move into a physical office in London and hire nine employees, including several mod developers.
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Both Moloney and Marchand envision a future in which modders are seen as content creators in the same mold as YouTubers and streamers, generating income via ad revenue, subscriptions and donations from fans of their work. Much like YouTube, Overwolf provides its creators with services like ad integration, marketing and distribution, and the company has a revenue sharing program that disbursed over $10 million to users in 2020.
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“The long-term goal is to build a new profession in the world,” Marchand said.
Source: Washington Post

Recently, I argued that tech is becoming too big. In order to grow, it can no longer continue to just focus on how to squeeze more and more money out of all of us. It needs to figure out how to help us make money first so that we can pay them more.

This is one example. But we need more!

#12 Roblox Partners with Sony Music Entertainment to Bring their Artists into the Metaverse

Roblox (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, and Sony Music Entertainment, today announced a strategic partnership that will bring more Sony Music recording artists into the Roblox metaverse.
Under the agreement, Roblox and Sony Music will work together to develop innovative music experiences for the Roblox community that offer a range of new commercial opportunities for Sony Music artists to reach new audiences and generate new revenue streams around virtual entertainment.
The agreement builds on an existing relationship between the two companies that includes previous collaborations such as Lil Nas X’s hit virtual performance on Roblox in November 2020 and more recently the Zara Larsson Launch Party on Roblox in May 2021.
Over 36 million people watched Lil Nas X perform the first ever live virtual concert on Roblox, which included the debut of his hit song, Holiday. In addition the concert venue included virtual merchandise sales, mini-games, a scavenger hunt, an exclusive behind the scenes interview with Lil Nas X, and other interactive activities. Zara Larsson’s launch party broke records as well, attracting over four million visits, the highest recorded visits for a launch party on Roblox to date. The Dance Party took place in and around a virtual rendering of Zara’s Swedish lake house and featured mini games, interactive challenges, and exclusive virtual merchandise sales.
Source: Roblox

This is another example. But we need more!

This allows artists to make money in the digital world without ever needing to figure out how to code. But need more and for more professions!

And on the other side of the equation, Roblox continues to differentiate itself as a unique platform that allows people to turn the real world into a game.

#13 Ubisoft Plans Assassin’s Creed Live Online Game Service

Assassin’s Creed, a video game franchise set in huge worlds where each one can take hundreds of hours to complete, is getting even bigger. A new project, which is known inside Ubisoft Entertainment SA by the code name Assassin’s Creed Infinity, sets out to create a massive online platform that evolves over time, according to people familiar with its development.
Whereas previous Assassin’s Creed games each unfolded in specific historical settings such as ancient Greece or Ptolemaic Egypt, Infinity will contain multiple settings with room to expand to others in the months and years following its debut, said the people, who asked not to be identified discussing a project under development. Individual games on the platform might look and feel different, but they will all be connected.
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Inspired by smash hits like Fortnite and Grand Theft Auto V, these living online platforms can keep players engaged for years by frequently adding new content or changing the experience in dramatic ways. The fifth Grand Theft Auto game, which has sold more than 140 million copies largely thanks to its constantly updated multiplayer mode, is approaching its eighth birthday with versions planned for a third generation of game consoles.
Source: Bloomberg

Assassin’s Creed is a pretty differentiated and unique universe. It’s going to go down the same path as others including Fornite, GTA, and SE’s Free Fire in digital world building.

#14 Netflix, Shonda Rhimes Extend Deal to Include Feature Films, Gaming and Virtual Reality Content

Under the terms of the expanded deal, which encompasses Rhimes’ Shondaland Media and her longtime producing partner Betsy Beers, Netflix and Shondaland will exclusively produce, stream and distribute feature films in addition to potential gaming and virtual reality content.
Source: Variety

Even Netflix is looking into making games and VR experiences.

#15 Roku launches its new originals with a Demi Lovato talk show

The first of a dozen-plus Roku Originals to premiere on the Roku Channel will kick off July 30th with The Demi Lovato Show, a series that had originally been slated for a debut on Quibi.
The show will now launch as Roku’s first “original” to land on the Roku Channel, the platform’s free and ad-supported streaming offering. While originally intended for Quibi, the show will be brand new to audiences when it arrives on the Roku Channel this week. Each episode will be 10 minutes long, feature a celebrity guest, and will cover topics as wide-ranging as UFOs, activism, mental health, gender identity, and police reform.
Source: The Verge

Changing the subject a bit from our games and digital world focus – Roku is somewhat turning into Netflix. This is interesting! Roku was spun out of Netflix in order to focus on set-top boxes. Now Roku is turning into Netflix by launching original content, while Netflix is turning into “Disney” by focusing on monetizing content every way it can (streaming, games, toys, maybe theme parks one day?).

#16 Spotify is reportedly thinking about expanding into ticketed events

Spotify is reportedly “considering” expanding into events, according to The Information. The outlet reports the company could sell tickets for both virtual and live concerts as it looks to diversify its business. However, making money off of ticketed events isn’t necessarily Spotify’s short-term goal. Its more immediate plan is to use them as a way to improve its relationship with artists.
The Information suggests Spotify thinks there’s an opportunity to leverage the data it has to help musicians plan successful concerts in places most promoters avoid. In this way, the company is said to believe it can better show those artists it’s invested in their careers. It would also be a way for it to differentiate its platform from Apple Music.
Source: Engadget

Spotify should have bought Live Nation (the largest concert ticketing company) years ago in my opinion.

🛍 Commerce

#17 [Translated] Mercado Livre distributes R$ 3 million in coupons and gives up to 80% discount

For eleven days, the platform will reveal new coupons, which will be hidden in both the virtual and physical worlds. In addition, it will be possible to buy selected products with up to 80% discount.
“The campaign has a structured gamification strategy with the aim of generating high engagement of users across the country, through the search for discount coupons hidden in places ranging from the brand’s website and application to the plane,” says Thais Souza Nicolau, regional director of branding at Mercado Livre.
According to the executive, the strategy allows [Mercadolibre] consumers to be surprised by the brand’s coupons scattered around. It is possible for the consumer to find a coupon when walking on the street, browsing the social networks of a brand partner and also on traditional OOH (Out Of Home) media channels.
Source: Exame

Gamified coupons both online AND offline. A bit of AR and VR flavor there.

#18 [Translated] Mercadolibre will have live [streaming] with discounts of up to 80%

The categories that will participate in the promotion are technology, fashion, home and furniture and beauty and personal care. The video will be streamed by the company through YouTube. Products from brands such as Motorola, Google, Madesa, Maybelline and Casa das Serras will be part of the promotion called “Live Discount”.
The initiative is part of a global trend called live commerce. Retailers and brands use the temporary scarcity of promotions in live videos with influencers as a marketing strategy to sell discounted products.
Source: Exame

I think Brazilians are culturally very well suited for live-streaming. If this takes off, could be a major inflection in Brazilian e-commerce.

#19 Walmart-owned Flipkart enters social commerce space with Shopsy

The Bengaluru-based firm has rolled out a separate platform for social commerce called Shopsy, which will compete with startups like SoftBank-backed Meesho, InMobi-owned Shop101, Korea Investment Partners-backed GlowRoad, and CityMall, which recently raised funding from General Catalyst and Jungle Ventures, among others.
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Users of Shopsy will be able to share catalogs of 150 million products offered by Flipkart sellers, ranging across fashion, beauty, mobile, electronics, and home, with potential customers through social media and messaging apps such as WhatsApp, placing orders on their behalf and earning commissions on the transactions, it added. Once the user gets an order and places it on Shopsy, it will be delivered by Flipkart.
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“India’s e-commerce sector has traditionally been dominated by a few large players, but social commerce is paving the way for a more distributed model that’s built on community, connection, and trust,” the report noted. “While traditional e-commerce will continue to grow, social-led models will help redefine the landscape over the next five to ten years.”
Source: KrAsia

Indians and Brazilians share a lot of similar cultural traits. I think social e-commerce will be very popular in India, too.

#20 Livestreaming and the Future of Shopping

Social / live-streaming e-commerce has been a fixture of the Chinese e-commerce landscape for a few years already. This Bloomberg video provides a good overview / look into how China’s live-streaming e-commerce industry works.

#21 Shopify Unite

Internet, Everywhere–(Newsfile Corp. – June 29, 2021) – Shopify (NYSE: SHOP) (TSX: SHOP) already powers commerce on the internet; in 2020, more than 450 million people checked out on Shopify, and we processed nearly $120 billion in Gross Merchandise Volume (GMV). As the world’s commerce platform, we keep innovating to give entrepreneurs endless possibilities to creatively present their brands and grow their businesses.
Today at Shopify Unite 2021, we announced our largest set of platform investments to date. With a lens into the future where every merchant can tell their unique story, we are reinventing the internet’s commerce infrastructure like never before and calling on developers to help us build that future together.
Source: Shopify

The event probably ended up being a bit of a disappointment for investors, but the company continues to lay the groundwork for the future.

A couple of things stood out:

The biggest upgrade to Shopify’s Liquid platform ever. It features greater levels of flexibility and customization so merchants can better showcase their brands, create unique online experiences, and integrate apps-all without touching code. We are also launching a new set of developer features including sections on all pages to personalize every aspect of a store, a new editor experience, and theme app extensions.

The platform continues to become more flexible and easy-to-use, especially for people that do not know how to code. We need more of this!

Introducing Checkout Extensions, allowing developers to securely build apps into Shopify Checkout. These checkout customizations will also work in Shop Pay, making the fastest way to pay on the internet another creative brand surface for merchants.
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Introducing Payments Platform, a way to integrate third-party payment gateways into Shopify Checkout, unlocking new sales growth opportunities for merchants.

The changes to checkout and payments are also interesting since it lays down important groundwork to turn checkout and payments into platforms in the future. Not only does it make it more powerful and flexible for merchants, it also turns this part of the service into platforms that developers can build on top of.

Developers who build for the Shopify App Store will now pay 0% revenue share for the first $1M they earn annually on the platform starting on August 1. That’s down from 20%. The $1M benchmark resets annually.

And Shopify continues to take steps to ensure developer economics are attractive. Not only is Shopify one of the best platforms to help merchants and aspiring entrepreneurs make a living online, it is also increasingly an attractive platform for developers to develop on.

#22 Marriott is preparing for the return of travel with a new Pinterest partnership

Marriott Bonvoy and Pinterest worked together to created out-of-home digital billboards highlighting Pinterest’s travel data in two Soho storefronts, as well as a four-question in-app quiz that guides would-be travelers to their dream trip. The billboards display real-time travel data from the social media hub highlighting what travel terms people are searching for, as well as a QR code that leads consumers to the quiz on Pinterest’s mobile app. This partnership was the first to use Pinterest’s technology in an out-of-home placement.
“Seventy-nine percent of people are using Pinterest when actively considering their travel decisions, but they’re undecided,” said Ashish Arya, Pinterest’s global head of strategy and marketing for travel. “People on Pinterest are in this travel planning mindset, [but] they haven’t yet decided on the exact choices — the destination, the brand, or the experience — and they’re still open-minded to be introduced to those offerings. This makes the perfect spot for brands like Marriott to be presented to pinners.”
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These platforms are also particularly useful for tapping younger consumers. Pinterest, for example, reaches 50% of Gen Z, according to Arya. Gen Z and Millennials also have the largest number of TV streaming subscriptions and make up the biggest audience on Twitch.
Source: Modern Retail

E-commerce is shifting in interesting ways, and they all benefit Pinterest more than they get credit for.

People want less products and more experiences.

And people want less quantity and more quality.

All of these things benefit Pinterest. Pinterest is a fantastic platform for helping people plan, which is important as people shift consumption towards experiences, especially higher-end more meaningful / expensive experiences. And to the extent people still want to buy products, people want to own less but better, and Pinterest skews towards better given its aspiring content skew.

The Gen Z reach is also highly impressive.

#23 China retail sales get 3 trillion yuan boost as personalised marketing grows via ‘private traffic’ in chat groups

Across China, such WeChat groups have become increasingly important channels for retailers – both Chinese and foreign brands – to gain access to new customers and to help maintain brand loyalty, according to a June report by Azoya, a provider of e-commerce solutions that helps brands grow in China.
Defined as “private traffic”, the marketing tool refers to building and maintaining a customer database that retailers can access for free or at little cost.
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The private-traffic concept is nothing new. Its Western equivalent could be a customer email list. But Chinese people are not as reliant on email as their Western counterparts. In China, WeChat is king. With 1.2 billion monthly active users, it is far and away China’s most ubiquitous mobile app, and it is where most of this private traffic takes place.
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In these groups, most marketers use discounts and coupons to entice users. The strategy has proved effective in cultivating brand loyalty, according to a survey conducted by iiMedia Research – a third-party data mining and marketing agency that the report also cited. The survey found that 40.8 per cent of customers joined these groups for the perks.
“Consumers have a better shopping experience in the private domain,” Chu said. “They can enjoy real-time promotions and exclusive activities.”
Source: SCMP

Another interesting look into how e-commerce is evolving in China. This might be a bit more unique to China, though, since Chinese consumers do not really use open channels like email. But this article does further highlight how powerful of a utility WeChat is.

#24 BigCommerce Teams with Amazon Multi-Channel Fulfillment To Help Merchants Process Orders Faster

BigCommerce (Nasdaq: BIGC), a leading Open SaaS ecommerce platform for fast-growing and established brands, today announced a new integration with Amazon Multi-Channel Fulfillment (MCF) that allows BigCommerce U.S. merchants to more easily fulfill their ecommerce orders using Amazon’s order fulfillment services whether they sell on Amazon or not.
Source: Businesswire

This is interesting. Amazon fulfillment has always been an open platform that is available to non-Amazon sellers, but it’s not widely used by non-Amazon sellers either for competitive reasons or complexity reasons.

But with integration into commerce management platforms like BigCommerce, this could make Amazon fulfillment a more attractive / viable option.

This also helps negate some of the threat that Shopify fulfillment poses to BigCommerce as well as potentially Amazon in the long-run.

#25 Etsy to acquire Elo7, Brazil-based marketplace for unique, handmade items

Etsy, Inc. (NASDAQ: ETSY), which operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world, has signed a definitive agreement to acquire Elo7, a privately held marketplace for unique, handmade items, ranked as a top 10 ecommerce site in Brazil.
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Considered a leader in ‘custom and made-to-order’ merchandise in Brazil with strong local brand awareness, the Elo7 marketplace connects approximately 1.9 million active buyers with approximately 56,000 active sellers and currently has approximately 8 million items for sale, the majority of which are made to order. Elo7’s marketplace includes items from over 40 retail categories, with more than 50% of gross merchandise sales (GMS) from “special event and life moment” categories such as wedding, baby, home decor, and children’s parties.
Josh Silverman, Etsy, Inc. CEO, commented, “Elo7 is the ‘Etsy of Brazil,’ with a purpose and business model similar to our own. Following our recent agreement to purchase Depop, we’re excited to bring another unique marketplace into the Etsy family. This transaction will establish a foothold for us in Latin America, an underpenetrated ecommerce region where Etsy currently does not have a meaningful customer base. We look forward to welcoming Elo7’s talented leadership team and employees to the Etsy family.”
Source: PR Newswire

Etsy has always seemed a bit niche to me. But it’s successfully acquiring its way into an e-commerce conglomerate / app family as well as successfully acquiring their way into new geographies.

👨‍💻 Technology

#26 Apple and Intel become first to adopt TSMC’s latest chip tech

Apple and Intel have emerged as the first adopters of Taiwan Semiconductor Manufacturing Co.’s next-generation chip production technology ahead of its deployment as early as next year, Nikkei Asia has learned.
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Apple’s iPad will likely be the first devices powered by processors made using 3-nm technology, sources said. The next generation of iPhones, which are to roll out next year, are expected to make use of the intermediate 4-nm tech for scheduling reasons.
Intel, America’s biggest chipmaker, is working with TSMC on at least two 3-nm projects to design central processing units for notebooks and data center servers in an attempt to regain market share it has lost to Advanced Micro Devices and Nvidia over the past few years. Mass production of these chips is expected to begin by the end of 2022 at the earliest.
“Currently the chip volume planned for Intel is more than that for Apple’s iPad using the 3-nanometer process,” one of the sources said.
Source: Nikkei Asia

Not surprised Apple continues to be the first adopter of leading edge nodes. Intel is a surprise though. There’s been a lot of discussions around Intel finally outsourcing some manufacturing after spending almost all of its history as an integrated manufacturer with its own internal manufacturing capabilities. However, it’s fallen behind, and its roadmap continues to face delays. What’s more interesting, though, is that Intel is joining Apple as the first ones to get access to 3nm ahead of TSMC’s long-time customer AMD. AMD caught up to and has now surpassed Intel largely because of its decision to outsource manufacturing to TSMC more than half a decade ago.

#27 Qualcomm’s new CEO eyes dominance in the laptop markets

Qualcomm Inc’s (QCOM.O) new chief thinks that by next year his company will have just the chip for laptop makers wondering how they can compete with Apple Inc (AAPL.O), which last year introduced laptops using a custom-designed central processor chip that boasts longer battery life.
Longtime processor suppliers Intel Corp (INTC.O) and Advanced Micro Devices (AMD.O) have no chips as energy efficient as Apple’s. Qualcomm Chief Executive Cristiano Amon told Reuters on Thursday he believes his company can have the best chip on the market, with help from a team of chip architects who formerly worked on the Apple chip but now work at Qualcomm.
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Now, as Qualcomm looks to push 5G connectivity into laptops, it is pairing modems with a powerful central processor unit, or CPU, Amon said. Instead of using computing core blueprints from longtime partner Arm Ltd, as it now does for smartphones, Qualcomm concluded it needed custom-designed chips if its customers were to rival new laptops from Apple.
As head of Qualcomm’s chip division, Amon this year led the $1.4 billion acquisition of startup Nuvia, whose ex-Apple founders help design some those Apple laptop chips before leaving to form the startup. Qualcom will start selling Nuvia-based laptop chips next year.
Source: Reuters

Hmmm…probably not good news for Intel, either.

#28 ByteDance starts selling AI that powers TikTok to other companies

ByteDance is selling some of the artificial-intelligence technology that powers its viral video app TikTok to websites and apps outside China, as it broadens its revenue streams ahead of a long-anticipated initial public offering.
A new division called BytePlus quietly launched in June and already lists customers all over the world, including in the US.
According to its website, early customers include Goat, the US-based fashion app; WeGo, a travel booking site in Singapore; and Chilibeli, an Indonesian online shopping start-up. TikTok is also listed among its customers.
BytePlus offers businesses the chance to tap some of TikTok’s secret ingredient: the algorithm that keeps users scrolling by recommending them videos that it thinks they will like. They can use this technology to personalise their apps and services for their customers.
Other software on offer includes automated translation of text and speech, real-time video effects and a suite of data analysis and management tools.
Its computer vision technology can detect and track 18 points around the body from head to feet as users dance or gesture in front of the camera, which BytePlus suggests could be used for beauty or fashion apps.
Source: FT

These capabilities are being sold as SaaS offerings. And my guess is these capabilities are pretty unique and quite attractive to many potential customers.

#29 TikTok maker ByteDance finds new success in US with CapCut, a hit video editing app

The app, combined with its Chinese version Jianying, saw downloads reach 140 million globally in the first half of the year, up 272 per cent year on year, making it the world’s ninth-most downloaded mobile app, according to app tracking firm Sensor Tower. It has been one of the most-downloaded free iPhone apps in the US for the last couple months, temporarily topping the charts at the end of May, Sensor Tower data show.
CapCut launched globally in April 2020, nearly 11 months after Jianying launched in China. The app was designed to make video editing more accessible to beginners, including a trove of stickers, soundtracks and special effects that users can easily insert into their videos.
“Jianying has democratised video editing,” said Ye Jiatang, a short-film producer in Guangdong. “The app is really catching on among young people, many of whom now want to make vlogs and videos for a living.”
Source: SCMP

Another winner. Bytedance is clearly doing something right.

Also interesting to remind ourselves that Instagram started out as a tool for processing photos that turned into a social network.

CapCut is currently a tool for processing videos, but perhaps it can eventually be turned into a social network for videos like how Instagram became a social network for photos.

#30 The Tech Cold War’s ‘Most Complicated Machine’ That’s Out of China’s Reach

The machine requires 40 shipping containers, 20 trucks and three Boeing 747s to be shipped.

The machine is made by ASML Holding, based in Veldhoven. Its system uses a different kind of light to define ultrasmall circuitry on chips, packing more performance into the small slices of silicon. The tool, which took decades to develop and was introduced for high-volume manufacturing in 2017, costs more than $150 million. Shipping it to customers requires 40 shipping containers, 20 trucks and three Boeing 747s.
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Manufacturers can’t produce leading-edge chips without the system, and “it is only made by the Dutch firm ASML,” said Will Hunt, a research analyst at Georgetown University’s Center for Security and Emerging Technology, which has concluded that it would take China at least a decade to build its own similar equipment. “From China’s perspective, that is a frustrating thing.”
…
“It’s definitely the most complicated machine humans have built,” said Darío Gil, a senior vice president at IBM.
Source: NYT

ASML is by far one of the most important companies in the world right now. Despite how important this company is, I continue to be surprised by how few people know anything about it or have heard of them.

I continue to believe China would pay more than a trillion dollars for ASML if they could.

As a reminder, ASML used to be in the Paper Portfolio until we rotated out of it and into Nvidia as part of the March 2020 Update almost near the bottom of the COVID-19 correction. That decision looked like the wrong one for a while, but it has worked out quite well.

🚘 Mobility

#31 Grubhub and Yandex SDG Partner for Robot Delivery on College Campuses

Grubhub, the leading online and mobile food-ordering and delivery platform on college campuses, and Yandex Self-Driving Group (SDG), a leading autonomous vehicles developer inside Yandex, one of Europe’s largest internet companies, announced today a multi-year partnership where Yandex will be Grubhub’s robot delivery provider. Grubhub will now provide campus partners the ability to deploy Yandex robots on-site for faster, more cost-effective deliveries to complement its existing capabilities tailored for colleges and universities.
Marking its break into the U.S. market, Yandex’s delivery robots use the company’s proprietary self-driving technologies, including autonomous navigation of pavements, pedestrian areas, and crosswalks, making it possible to reach areas on campus not accessible by cars. Such functionality enables the robots to handle delivery tasks without human guidance, providing efficient automation for last mile logistics scenarios.
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Yandex robots, called rovers, are able to perform last-mile deliveries on pre-mapped areas; operate during daylight, night, average snow and rain; navigate autonomously between pick up and drop off points; and use regulated and unregulated crosswalks. As the delivery robot approaches its final destination, the diner receives a push notification with the status update, and when it arrives, they open the hatch of the rover via the Grubhub app. The diner then takes the food out of the opened rover, closes the hatch and lets it proceed to the next delivery.
Source: Grubhub

#32 Shopee makes further expansion in Southeast Asia’s food delivery sector, disturbing the market landscape

Sea Group’s Shopee is expanding its food delivery businesses in Southeast Asia (SEA) by ramping up hiring in Malaysia.
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While service platform like Foodpanda offers pure food delivery service with its standalone app, Shoppee and Grab’s food delivery services are part of many broader service offerings under their respective super apps. Shopee has a competitive advantage over pure food delivery service platforms because the company can convert existing customers from e-commerce, digital payments, and thus more cost-effective marketing and branding.
Source: PingWest

🚀 Enterprise Software

#33 Zoom acquires AI translation startup Kites

Videoconferencing company Zoom today announced that it acquired Kites GmbH (Karlsruhe Information Technology Solutions), a startup developer of AI-powered real-time language translation technologies. Terms of the deal weren’t made public. Zoom said that Kites’ team of 12 research scientists will remain in Karlsruhe, Germany, helping the Zoom’s engineering team build translation capabilities for Zoom users.
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A number of third-party tools already allow Zoom users to engage in multilingual conversations. There’s Ligmo, which supports around 80 languages and 100 language pairs in real time. Another popular plugin, Wordly, can understand and translate between 16 different languages.
But Kites claims to leverage “state of the art” technology and predictive AI — built in-house and running on the cloud or on-premises — to deliver leading translation accuracy with low latency. Transcripts and translated text appear in real time, before speakers complete their sentences, and it self-corrects if it identifies a better interpretation after additional context.
Source: Venturebeat

Prior to COVID-19, I used to travel quite a bit in search of attractive investments around the world. One thing I do wonder about is whether I will ever go back, especially when it involves going to a country that does not speak English. Having real-time translation on a Zoom call is more effective than having a translator translating for an in-person meeting. For in-person meetings, companies speak in local language. Then we both need to wait as translators turn it into English for me. Then I respond in English. And then we both need to wait, again, as the translators turn it into local language. On Zoom, it’s in near real-time.

🤔 Hmm…

#34 AR Cat

This actually amazing bit of VR is currently in Shinjuku, Tokyo. According to Japanese culture site, Sora News 24, the cat apparently will just randomly appear in-between ads. If you want to check it out, there’s a livestream.
Source: Garbage Day

Our AR future. Our world could be so much more fun when AR rolls around.