Pizza wins the pandemic
Also in this edition: Visa gets into NFTs, India announces a sale, Ethiopia builds its own Facebook.
Good morning! To all those who said, stop reading comics, it isn’t serious. A Tencent-backed Chinese comics app raised $240 million to make it a unicorn. Kuaikan has 50 million monthly active users who turn on the app to lose themselves in a world that doesn’t exist outside the small screen. Is that serious enough for you?
On to the day’s stories:
The CEO of Milkbasket stepped down. There’s more to it.
China’s down to zero Covid cases. But at what cost?
Roblox builds up to be the Parler of the metaverse.
The Market Signal
Stocks: Indian benchmark indices closed a volatile day’s trading in the green, while broader markets continued their decline. The midcap and smallcap indices slid 0.9% and 1.5% respectively, while Auto and IT were respectively the worst and best performers among sectoral indices.
Cryptocurrencies: The price of Bitcoin crossed $50,000-a-token for the first time in three months, marking a rapid ~70% jump from the sub-$30,000 price of July 21.
The Curious Case Of Milkbasket
...may finally have settled with the exit of Founder-CEO Anant Goel from the board, as per the latest filings. The addition of two senior Reliance (RIL) executives to it indicates, as claimed earlier, that the conglomerate’s acquisition of the hyperlocal grocery startup was completed in May.
How did it start: The ordeal began with Kalaari Capital — then the largest stakeholder in Milkbasket with ~15.3% — exiting via a sale to Mahendra Nahata-led MN Televentures last August. This was following Milkbasket reportedly failing to secure a buyout from Reliance or BigBasket at its expected valuation.
As per an Economic Times report, the startup’s board did not approve of the deal as it believed the company’s potential to raise further capital would be weakened by Nahata’s closeness to Reliance.
Then it got messy: Finally, MN Televentures filed an appeal with the NCLT for non-delivery of the shares that were owed to it. This put Milkbasket on the weaker foot, and seems to have resulted in a distress sale to Reliance. Now signed, sealed, and delivered.
A Slice To Fight The Pandemic
Pizza has been the answer to everything. A broken heart, a drunk night in, and now the pandemic blues. According to an Economic Times report. Pizza chains were the first to bounce back once lockdowns were lifted. Yes, 20-30% more than in the pre-pandemic era.
But why pizza: Easy answer, it is comfort food. Bread, cheese, meat, what's not to like. But there's more than it being everyone's junk food of choice. Speed and cost. Domino's has perfected the art of delivering a pie in less than 30 minutes. It has done it so well that its stock has gone up 99% in the past three years.
But it's not always about time. Price also plays a major role. Pizza was considered an occasional treat, but because there are so many companies in the mix, to compete with one another, the prices have dropped. Chains are offering pizza by the slice or just half the pie, if you're not that hungry.
Not just India: Even in the US, people couldn't stop ordering pizza when they were locked at home.
Chinese Method Is Not For Everyone
China played a fast game of whack-a-mole with Covid-19 Delta and appears to have won. At least for now. So draconian were the measures that new infections dropped to zero in 33 days.
Nipping the bud: From one asymptomatic case at Nanjing airport, daily infections rose to 100 in three weeks and were spread across half of the mainland. Within days, China put entire cities to the test. Not once but several times. In Yangzhou, citizens were tested a dozen times. Nanjing residents went through seven tests.
Shutters down: China shut down sea, air, road, and rail travel, completely cutting off entire cities from hotspots even if they had just one case. As a result, economic activity slowed in July and August. Shutdowns and delays at ports increased freight costs. The lockdown had a cascading effect on India too. Consumer electronic goods makers had to cut production as they could not get parts, which are sourced mainly from China. It makes about 60-70% of components used in consumer electronic goods in India.
The Chinese model of fighting the pandemic is effective but difficult to copy. Despite testing and quarantine breaks the massive supply chains extending to all corners of the globe, China knows that the world will pause for it. It is also rich enough to absorb the costs. Indian electronics manufacturers, for instance, can do nothing but wait until the next shipment of components arrives from that country. It is difficult to find alternative suppliers and it will take months, if not years, to set up factories at home. In 2020, the country was the first one to bounce back while the rest of the world struggled. It is likely to repeat the feat again.
Roblox's Reality Check (Not What You Think)
For Roblox, the Metaverse might well be the future of the reimagined internet. But IRL, the company is fast becoming a center of controversies — ranging from exploitation of its young developer base, to becoming a safe haven for virtual fascists, and its struggles with content moderation issues.
What's brewing? A recent investigation revealed how Roblox' business model was inherently flawed. Younger developers were routinely exploited. How? One, through the revenue split, which is less than industry standards. And two, through a convoluted withdrawal process that involves Roblox' in-game currency, Robux.
Moderation issues: Roblox, a recent Wired report detailed, has become a content moderation nightmare. Particularly with groups having overarching political themes. One such group, Senate and the People of Rome, turned out to be a "true fascist state, complete with shock troops, slavery, and degeneracy laws." It doesn't end there. Roblox, The Verge reported, also struggled to remove recreations of mass shootings like the one in Christchurch.
WFH Is Working But Not For The Bosses
Recruiters are back on campuses cutting fat paychecks to rookie engineers. Startup Dyte hired two students from Vellore Institute of Technology at a starting annual pay of INR 7.5 million. More than 25 students from the institute have landed jobs that pay INR 2.5 million annually, the highest number since its inception.
Dream jobs: Companies are scouting for engineering talent and trying to prevent attrition, resulting in more ‘dream’ and ‘super dream’ job offers. New recruits, however, will be walking into very different workplaces, if they do any time soon.
Not soon: Globally, some companies do not expect offices to open for the next two years. Senior executives fear that employees may no longer be as connected or committed to their workplace. The new norm is hard on new employees trying to learn an organization’s culture.
Home’s better: Meanwhile, those already working from home would likely find returning to workplaces disruptive. Many of them have developed new routines during the pandemic, including exercising when they might have been commuting, or blocking hours for uninterrupted work. They may not be thrilled to go back to the office.
What Else Made The Signal?
Something smells: China is investigating Zhou Jiangyong, the highest party authority of Hangzhou city, home to the Ant group, on suspicions that he may have tried to front-run a fintech company IPO. Separately, it has also halted 42 IPOs.
Money, money, money: Finance minister Nirmala Sitharaman has revealed plans to sell highways worth INR 1.6 trillion, 400 railway stations, and 150 trains under a National Monetization Pipeline.
Sounds familiar? Ethiopia wants to build its own Facebook, Twitter, and WhatsApp because the government says they do not show a true picture of the country.
Obey: The Russian communications watchdog has demanded that Google and Apple remove an app associated with jailed Kremlin-critic, Alexei Navalny, from their platforms.
Return to sender: General Motors said it would expand its recall of Chevrolet Bolt electric cars for fear of overheating and catching fire to a total of 141,000 units and would cost $1.8 billion.
Discounts allowed: The Competition Commission of India has imposed an INR 2 billion penalty on Maruti Suzuki for restricting discounts by dealers.
Punked: Visa has purchased a ‘CryptoPunk’ for around $150,000 as its first step into the world of ‘NFT commerce’.
Surfing microwaves: You cannot imagine rockets without fire and fury, right? Japanese researchers may have found a way to propel rockets with microwaves. It’s early days and they have so far only been able to fly experimental drones. But the technology can potentially fly rockets.
Two to tango: Lockdowns everywhere helped create new audiences. Black Box Live, a digital platform built for the pandemic is now helping performers to be at different stages at the same time, sometimes appearing for two audiences at two festivals without ever leaving base.
Treasure sale: Would you like to buy a jersey that Cristiano Ronaldo wore? Or Kylian Mbappe? Football legend Pele has set up an auction where 229 sporting stars are coming together to help raise funds for underprivileged children affected by the Covid-19 pandemic.
Write to us here for feedback on The Signal.