An election decided by Gen Z
Also in today’s edition: Private jets at bargain prices?; Bharti puts this biz on the block; Samsung’s health tech ambitions; China rethinks gaming policy
Good morning! Gen Z is inheriting the world. Naturally, businesses are pivoting to understand this gen with a $450 billion wallet size. That’s the thing though. The price tag doesn’t always define luxury for them. Experiences do. They aren’t swayed by brands but are suckers for comfort. Hospitality maven Sam Nazarian is taking a bet on this psyche. The Wall Street Journal reports that the former SBE chair is launching hotels for Gen Z. Food and drink will matter more than remote-controlled blinds. By his side are Michelin-starred chef Dani Garcia and YouTuber Matt Stonie. Appreciate their derring-do.
🎧 Zee-Sony: from merger maze to the legal haze. Also in today’s edition: it’s Samsung vs. Apple in health tech. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, or wherever you listen to podcasts.
Dinesh Narayanan and Venkat Ananth also contributed to today’s edition.
The Market Signal
Stocks & Economy: Wall Street does not have much love lost for Donald Trump but it appears it will have to live with the former President running for the top office again. Trump easily won the New Hampshire Republican primary, trouncing rival Nikki Haley by a 9% margin.
US stocks, meanwhile, extended Monday’s gains. Netflix beat Street expectations by adding 13 million subscribers in the December quarter even as operating income rose to $1.5 billion from $550 million in the previous comparable quarter.
Indian benchmarks fell sharply on Tuesday, unable to recover from pessimistic thoughts about the banking sector. Banks’ December quarter earnings revealed pressure on their core lending business. The GIFT Nifty’s movement in the morning indicates a flat opening.
Want To Buy A Private Jet? Wait
There may be used planes available for a bargain soon. Weighed down by its debt-heavy business model, Malta-based private plane renter VistaJet is on the verge of a nosedive.
Jet glut: If VistaJet, which owns 270 aircraft, is unable to refinance its debt, including bonds worth $150 million maturing in June, as losses mount, it’ll have to sell planes. Some of founder Thomas Flohr’s financial transactions are also reportedly dubious.
Used-plane prices are high now but if VistaJet’s planes join the 1,700 already on the market in December 2023, they could crash. That will also impact aircraft makers such as Bombardier.
Sunny spot: Perhaps VistaJet should look at India, where its rental model might fly. India has the second-largest private fleet (147 planes) in Asia after China. Usage is soaring as the country’s wealthy splurge on private charters to watch cricket matches and temple consecrations.
Bharti’s Life Is Comms
The Bharti Group has put its life insurance business on the block. The Economic Times reports that it is talking to multiple suitors, including SBI Life, for a potential acquisition of Bharti Axa Life Insurance. It’s also buying out its French partner Axa from the 51:49 joint venture.
Full exit: Bharti Axa non-life insurance had merged with ICICI Lombard in 2020 at a reported valuation of ~₹2,500 crore (~$300 million) in an all-stock deal. Bharti Axa Life has a 2% market share in the life business. The group will focus on telecom, where its satcom venture OneWeb, which will compete with the likes of Elon Musk’s Starlink and Tatas’ Nelco, will need capex.
Reinsurer Swiss Re expects India’s insurance industry to grow at 7.1% between 2024 and 2028. It pegs life insurance penetration in 2023-24 at 2.9%.
Old Battle, New Approach
This year’s US presidential race is like no other. Both leading candidates (one from the Silent Generation, the other a Boomer) are courting Gen Z creators to amplify campaign messages. President Joe Biden’s team is hiring a “director of digital partnerships” and scouting for nano- and micro-influencers in *every state*. Former Prez Donald Trump isn’t far behind; he has a posse of creator-loyalists rallying online support.
Changing times, change in tactics: Young voters are more likely to chance upon and engage with campaigns on social media than tune in to prime-time TV debates. And Biden must win them over at a time when his approval ratings are tanking. According to one poll, the cohort that helped him clinch 2020 is reportedly less likely to vote this year and even believe Trump is the better choice to address the Gaza crisis.
Approximately 41 million Gen Z folks in the US are eligible to vote in 2024. And while many are critical of Biden’s policies, advocacy groups such as Voters Of Tomorrow are resorting to domain trolling to trounce Republican policies. Nobody is safe.
Biden and Trump have challengers in their parties (Phillips, Williamson, Haley, Binkley) but since a 2020 2.0 is likely, world leaders are already prepping for Trump’s return. If that happens, Biden’s policies (both economic and geopolitical) will be overturned. Taiwan and Ukraine will be wary; Israel, Russia, and India, not so much. Gen Z, over to you.
A Race To Measure
Samsung is looking to topple Apple from its dominance in the health tech business. The company’s reportedly looking to add health features like noninvasive glucose monitoring and continuous blood pressure measurement to its current stable of devices.
Ring-fencing Apple: In its recently-concluded Samsung Unpacked event, the company had teased the launch of a new smart ring. As per The Verge, the ring could herald a new era for non-obtrusive wearable devices. The underside of a finger is much more suitable for acutely tracking blood oxygen and heart rate. However, Samsung would have to contend with entrenched players like Oura, which pioneered the idea of a smart ring.
Apple’s move: Apple has had a pretty rough start to the year. The company lost its long-standing battle with Masimo and has now removed blood oxygen sensors from its watches. The iPhone-maker will reportedly introduce hypertension detection features for this year’s edition of watches.
PS: We covered this race to dominate health tech in an episode of our podcast, TechTonic Shift.
A U-Turn And A Gamble
Beijing has done what it rarely does: reconsider draft rules meant to rein in an industry.
Reuters reports that China’s gaming regulator removed the link to proposed rules from the National Press and Publication Administration website. These sought to ban games from “forcing” players into combat and established a spending limit for players. The measures were so contentious, they resulted in a ~$80 billion market value wipeout for Tencent and NetEase, China’s largest gaming companies.
China, whose slowing economy can’t afford another crisis of confidence, may now adopt a more moderate stance on gaming.
Closer home: Dream11, Games24x7, and Mobile Premier League are going all out to lure users with credits, cashbacks, and other incentives to soften the 28% GST blow on player deposits. That this is an unsustainable model for real money gaming companies whose bottom lines are already bleeding is another matter altogether.
Freefall: Byju’s, which is seeking to raise $100 million to $200 million at a below-$2 billion valuation, a 90% discount to its peak of $22 billion, has reported a loss of ₹8,245 crore (~$1 billion) for FY22.
Slam!: Netflix will shell out $5 billion for 10-year exclusive rights to World Wrestling Entertainment’s Raw and other franchises such as Smackdown and NXT. This is Netflix’s first major foray into live sports-like events.
Highest honour: Former Bihar chief minister Karpoori Thakur, a socialist icon who introduced the current design of the quota system, has been conferred the Bharat Ratna.
Pay up: France’s data protection agency CNIL has imposed a €32 million ($34.9 million) fine on Amazon for allegedly surveilling and monitoring employees through an “excessively intrusive” system. Apple paid a $13.65 million (1.2 billion roubles) fine in Russia, per its antitrust agency.
Hard stop: Online stock brokerage Groww will stop its US stocks investment offering next month. The move, Mint reported, was likely triggered by the 20% tax collected at source (TCS) besides higher international remittance costs.
Red signal: Oxford University ended its partnership with Tata Consultancy Services (TCS) as its admissions test provider over “technical problems,” Mint reported. TCS was onboarded as Oxford’s partner to provide technical services last year.
THE DAILY DIGIT
BYD’s car insurance registrations for 2023 in China, making it the country’s top car brand. BYD, with a 11% market share, overtook Volkswagen (10.1%)—China’s best-selling carmaker since 2008—for the first time on a full-year basis. (Bloomberg)
History lesson: This one’s for the history nerds. The ‘middle finger’ is perhaps the most recognisable gesture in the world and it traces its roots back to the ancient Greeks. They developed this signage as a phallic gesture in order to offend and literally poke their fellow citizens. Unlike today though, they pointed it horizontally. From the Greeks, the signage shifted to the Romans who called it “digitus impudicus'' (the indecent digit). Desmond Morris, the world’s leading middle-finger historian (we’re not making up any of this), recounts how the Roman emperor Caligula forced his subjects to kiss his middle finger. Subsequently, it lost its relevance due to Christanirtiy’s rise and only found acceptance in 20th century USA where it was brought by Italian immigrants. A lesson for the ages! ✨
Personalisation: Tech companies providing personalisation features for their users isn’t something new. But this one… just feels strange. Kayak, a meta-search engine for all things travel, has added a new feature to filter out flights by the aeroplane models. Meaning, if you’re scared of flying in a Boeing 737 Max 9 (totally understandable btw) you can simply exclude them from search results. A major win for customers but not so sure how airlines and Boeing will feel about that one.
Wait for it: Japanese love their food but this might be taking things too far. A box of frozen Kobe beef croquettes from Asahiya, a family-run shop, has a wait time of 43 years! These croquettes were initially made to promote Asahiya’s expensive but exquisite local meat offerings like Kobe beef, Kobe pork or Tajima chicken. Sold for cheap, the croquettes are a loss-making venture but the owners have continued making them due to the enormous demand. As of January 2024, there are currently 63,000 people in ‘line’ for the croquettes. What a world!