India needs chips. Bad.
Also in today’s edition: Festival face-off, Gig work pays but scares, Pet boost to the economy.
Good morning! Have you managed to watch Squid Game? It is this Korean thriller, which can be best described as Alice In Borderland meets Hunger Games. Let’s say it has become an overnight sensation. It does make Netflix happy but it has also tickled investors in South Korea. The shares of two companies indirectly related to the show are flying. Bull runs make people do strange things.
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The Market Signal
Stocks: Indian benchmark indices closed a volatile day’s trading with marginal gains to register their third straight session in the green. Among the sectoral indices, Auto (2.6%) and Realty (2.5%) outperformed, while IT (-2.3%) was the biggest drag. Concerns over Evergrande are still simmering, and have global markets on edge.
The Great Billion Dance
Interestingly, fight sequences in films are now considered choreography. There’s no way what John Wick does is anything but dance. The measured movement to be able to defeat your opponent is beautiful. What’s happening between Amazon and Flipkart is an art form in itself.
The beginning: We’ll let this tweet do the talking for us.
The stakes: Previously, both e-commerce companies would schedule their big sale days in close succession. The idea was to not cannibalise each other. But that’s not true anymore. One big reason is the pandemic. People want to shop but are waiting for the sales. But the slowdown brought on by the pandemic means consumers will probably splurge only once. Therefore, there can be just one winner.
The twist: The RSS-linked Hindi magazine, Panchjanya, which earlier called Infosys anti-national, has now termed Amazon, East India Company 2.0.
Gig Is Not For Long
The having-fun-at-work delivery boys and cab drivers you see in advertisements are few in real life, a recent multi-country survey shows. Gig work is often stressful and, in some places, scary.
Good pay: About 70% of gig workers in India said gig work paid them enough. The same percentage of workers also said they would leave the job within a year. Over 30% said they would quit within the month.
Delivery workers were the most stressed, the Rest of World survey found. Most gig workers are tied to platforms and although they help source work, financial gains seldom make up for the long hours and high stress levels.
Short term: Frustrations varied from country to country — workers in some countries even feared getting killed or mugged — but almost none saw it as a long-term gig. Despite heavy lobbying by platforms in many countries to prevent workers from unionising, about half had participated in strikes.
India’s Chip Obsession Is Real
India really wants the chips. Its auto production is cut, appliance makers are stuck, and phone launches are delayed due to a semiconductor chip crunch. During his US visit, PM Narendra Modi met the CEO of chip giant Qualcomm to discuss local production. Now, talks are on between India and Taiwan for a $7.5 billion chip plant.
Chip import woes: India imported semiconductors worth $21 billion from China and Taiwan in 2019 to meet local needs. But setting up a chip factory here isn’t easy. The average cost is $1 billion (roughly ₹7,400 crore). In addition, each chip-making unit requires over four million gallons of ultra pure water for production every single day.
Make ‘Local’ push: Though a new semiconductor policy was formulated in 2020, none of the global majors have shown real interest. India is struggling with its manufacturing output in 2021 because it has to fully rely on imported chips. Getting Taiwanese players could be a boon considering the biggest of them, TSMC, is planning a $100 billion investment in expanding capacity.
For ‘Aatmanirbhar Bharat’ to be successful, India needs local chip manufacturing. Global players don’t want to enter yet due to high investment costs, infrastructure bottlenecks, and lack of an ecosystem to source inputs and services. The India chief of a European chip-maker told The Signal that there is suddenly a dire situation in the country because China and the US have captured the bulk of the chipsets. This has caused production delays just when the festival season, which gives consumption a boost, is round the corner. Foreign companies such as LG, Samsung, Lenovo, and Xiaomi that now have manufacturing plants in India are also running short of chips.
The Unicorns Of Unicorns
Women-led unicorns are the rarest of the rare. This year, out of 27 companies that became unicorns in India, just one, OfBusiness, has a female co-founder. Before you peg it down to a pandemic occurrence, here’s another statistic to consider – out of 136 unicorns in the country, only five or 3.68% are founded by women.
Boys’ club: The number one reason why female-led startups struggle to make it is a lack of funding. In 2020, only 2.3% of all VC funding globally went to women-helmed startups. Venture capital (VC) firms are boys’ clubs and men tend to invest in men.
Another is a tendency to invest in areas they’re familiar with – tech companies run by men. This is despite the fact that women-founded businesses deliver more than two times per dollar invested compared to businesses founded by men.
Silver lining: Things could be looking up though. A number of female-led startups like Zilingo, Mamaearth, and Zivame are on their way to becoming unicorns over the next 2-4 years.
The Power Of Puppies
If you graduated from watching #dogsofinstagram reels to bringing one into your home this pandemic, you aren’t an anomaly. Covid-19 boosted the number of pet parents worldwide. The consequence? A boom in the pet care industry.
Animal tales: Parents of ~29 million pets in India are eager to give them the best. The country’s pet care industry is now valued at ~₹3,702 crores and is the world’s fastest-growing at 17%. Companies like Heads Up For Tails (HUFT) and Wiggles.in that sell pet food, toys, and offer grooming services are seeing money pour in. HUFT, for instance, has raised $40 million thus far.
Why now? Loneliness combined with work-from-home benefits has led to a surge in pet adoptions. The growing humanisation of pets means the industry has a lot of room to boom.
What Else Made The Signal?
Hitting pause: After pushback from users and critics, Facebook is putting Instagram Kids on hold while it collects feedback from stakeholders.
Adam Mosseri 😷 @mosseriWe’re pausing “Instagram Kids”, although we believe building it is the right thing to do. More here: https://t.co/bwCyUn97So
Kustomer support: In good news for Facebook, its acquisition of New York-based customer-service software company, Kustomer, for $1 billion has been greenlit by the UK’s competition watchdog.
Yes minister: Amidst crackdowns, a slew of Chinese tech entrepreneurs have backed President Xi Jinping’s ‘common prosperity’ drive to reduce the wealth gap.
Mobile money: Reliance Industries is reportedly very close to investing $300 million in Alphabet-backed Glance InMobi, a mobile content creator.
Power shift: European politics will likely see a readjustment with Social Democrats led by Olaf Scholz narrowly winning elections in Germany, the continent’s most stable economy during the 16 years Angela Merkel led it as chancellor.
Topper Shang-Chi: Marvel’s Shang-Chi and the Legend of the Ten Rings has overtaken Black Widow as the highest grosser of 2021, with collections of $196.5 million thus far.
Hamster investor: Mr. Goxx is a hamster that invests in cryptocurrencies. Based on his running on his hamster wheel and which tunnel he chooses, an anonymous investor invests in cryptocurrencies. For real...and his picks have outperformed Warren Buffet and the S&P 500 since his investment journey began in June.
What time is it? Broadway time! The 74th Tony Awards that credits Broadway performances, made a comeback after a 27-month pause. While the awards honoured pre-pandemic shows, it was a subtle move to pull audiences back to theatre performances.
Runaway hit: A Danish museum gave Jens Haaning, an artist, 534,000 kroner ($84,000) to replicate an artwork. Instead, Haaning swindled the money, returned empty boxes to the museum, and titled them “Take the Money And Run.” He claims that taking the money is his work of art. Hmm.
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