Tesla made money selling cars. Really.
Also in today's edition: Fundraise galore, Instacart changes guard, Yelo shuts down
Good morning! Amazon may start accepting crypto as payment. Alright, before you start rushing to the website to check how they’re offering exchange rates, this seems to be a hush-hush plan. Bloomberg noticed a job advert for a Digital Currency and Blockchain lead at Amazon. The retail behemoth rubbished the report. But there seems to be smoke around it.
Anyway, on to the day’s stories:
Your AC is making it hotter.
Green shoots in the Indian economy. Maybe. Probably.
Covid-19 left a lot of Indians broke and in debt.
Everyone Wants To Send You Groceries. Now.
Grofers announced that it can now deliver groceries to you in 15 minutes. With backing from the Tatas, BigBasket restarted its express delivery; within 30 minutes. Dunzo and Swiggy can deliver groceries between 15 and 30 minutes depending on the ask. Amazon and Flipkart want to do this too. In the US, Prime Now promises two-hour delivery.
More convenience: It isn’t about convenience at all. It is about market share and loyalty. Groceries are things people need often and once they get used to one service, they stick with it. It could be the only e-commerce service that builds loyalty. The differentiating factor is time and when you want something, you want it now.
This has happened before: It is a sure way of burning through loads of VC capital. Companies have tried this model and failed. Luckily, there is lots of cash to try something that has failed before.
All of this focus on ‘now’ reminds us of Ronny Chieng’s standup.
Out Of The Fire, Into Debt
The Covid-19 pandemic has been financially punishing for Indians, especially those with low incomes. Even before the pandemic, Indians paid about 63% of medical expenses from their own pockets. Now, millions are mired in massive debts.
The pandemic robbed many of their incomes, and to those infected by Covid-19, the costs of hospitalisation and medical care dealt a heavy blow. It drove 32 million Indians out of the middle class (earning $10-20 a day). The number of poor (earning $2 or less a day), meanwhile, jumped by 75 million.
The Centre's ‘Ayushman Bharat’ free health insurance that covers medical treatment worth INR 500,000 per year, was extended to migrant workers for Covid-19 treatment. However, an India Today inquiry last month found that not a single Covid-19 patient benefited from this scheme in some states like Punjab and Gujarat.
The Many ‘V’s Of Recovery
The Indian economy in 2021 appears to be closely tracking the ups and downs of the previous year.
2020: Fearing a fast-spreading contagion, the government had hurriedly shut down the country in March last year, ceasing economic activity. Although it succeeded in staving off infections initially, the virus began to spread as soon as the lockdown was lifted. The case graph rose and peaked in September. At the same time as last year’s lockdown, a second Covid-19 wave slammed the brakes on the economy.
2021: Although signs of a recovery flash occasionally, they indicate it is hesitant and faltering. Power generation and mobility slowed last week. Tax collections slidbelow the INR 1 trillion mark in June, a first in eight months. Job creation has also been uncertain with urban male unemployment rising but more rural women finding work. They might, however, be employed at rural job guarantee scheme sites. The job assurance programme, which spent over INR 1 trillion in FY21, has alreadyused up half of its budget for FY22.
Fear of a third wave of infections is keeping governments and companies on their toes and the tentative nature of recovery betrays the wariness. Last year, cases started rising after curbs were eased in June. Infections peaked in September. The festival season beginning October and election campaigns towards the end of the year fueled the second wave. The Indian economy shrank 7.3% in FY21. CARE Ratings estimates the economy could expand by 8.8-9% in FY22. The finance minister in her annual budget had projected GDP growth at 14.4%.
It’s Not Cool, It’s Hot
Summers without air conditioners are unthinkable. It has evolved from being a luxury to a necessity. But it’s bad for the planet.
Killing ‘em slowly: Eric Dean Wilson’s book After Cooling: on Freon, Global Warming, and the Terrible Cost of Comfort speaks of how the planet was, ironically, cooler before ACs. Modern refrigerants have replaced ozone-depleting chlorofluorocarbons with a milder compound called hydrochlorofluorocarbons. Yet, the collective contribution of millions of home and car ACs as well as gas leaks from ageing machines still cause harm. Heating, cooling and lighting in buildingscontribute to 28% of global greenhouse gas emissions.
Make the switch: More sustainable solutions are planting trees, ergonomic architecture that naturally cools buildings and retrofitting older construction with better ventilation.
Tesla Finally Makes A Profit Selling Cars
The EV-maker has managed to hug the road despite the pandemic, posting the company’s first quarterly net profit in excess of $1 billion. What’s more, it did so (mostly) through car sales and not Bitcoin gains or other tricks.
Hot wheels: Tesla has made a profit in each of the last eight quarters. But for the first time since 2019, the company made more from the sales of cars and energy products than from sales of environmental credits to other companies. A loss of $23 million on its Bitcoin investment and the global chip shortage only made a small dent in its performance.
The success of Model Y and Model 3 sedans also gave a boost to the company’s margins.
BTW, Musk may not do future earnings calls.
What Else Made The Signal?
Funding galore: Indian social media platform ShareChat’s parent company, Mohalla Tech, has raised $145 million while Indian beauty company MyGlamm has raised $47 million in a new funding round. SaaS company Wiliot has gotten $200 million while another software company, Pendo, has bagged $150 million.
Social media goss: Instagram is getting more teen-friendly with a new feature that will automatically make young people’s accounts private to avoid fishy contact. Meanwhile, you can now shop for real pins on Pinterest.
Fear takes over: An ongoing selloff of Chinese stocks spurred by Beijing’s sweeping crackdown extended to the bonds and currencies on speculation that the US may restrict investments in China and Hong Kong.
Give it to me: Jeff Bezos is tempting NASA with a discount ~$2 billion for a human lunar landing system contract that was originally awarded to Elon Musk’s SpaceX earlier.
Insta-change: Apoorva Mehta, the co-founder of Instacart, one of the largest grocery-delivery businesses, is stepping down as CEO ahead of its IPO. Instacart recently appointed former Facebook executive Fidji Simo as Mehta's to-be replacement.
Law of the land: China’s highest legislative body will decide on new laws for Hong Kong and Macau next month. Details are not known yet.
Pack up: Neo-banking platform Yelo has shut down. The pandemic broke the company’s business model which was struggling anyway.
Golden fries: There’s a place in New York that sells French fries sprinkled with edible gold dust. Priced at $200 a plate, it’s supposed to be so good that it helps you escape reality. Yumm.
Power couples: The 2020 Tokyo Olympics has 14 couples who are either dating, engaged, or married. From India’s Atanu Das and Deepika Kumari to USA’s Megan Rapinoe and Sue Bird, these Olympian couples are redefining the concept of friendly competition.
Golden Jubilee: Mattel’s Malibu Barbie, the one with a tan, shiny blonde hair, and a smile, turns 50! Feel old yet? The toy-maker is celebrating with a pop-up truck tour from San Diego to Seattle.