PhonePe vs. Play Store
Also in today’s edition: China’s Europe gaffe; Blinkit partners leave the building; Copper is hot; Remittance rigmarole
Good morning! Video gaming is no more child's play. About 45% of Americans over 50—52.4 million in total—are gamers, according to a report by the American Association of Retired Persons. Around 84% of those surveyed prefer twiddling their thumbs on smartphones and 58% prefer word games. Looking at you, Wordle. But 70% believe they are overlooked by the gaming industry. There's serious money to be made from this cohort, which spent $2.6 billion on games in the first six months of 2022. Who's listening?
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The Market Signal*
Stocks & economy: Indian equities could continue to be fuelled by robust corporate earnings reported over the weekend. Asian and US indices did not provide any definite direction. US traders were pulling their hair out after a new volatility index, popularly known as the daily fear index, swung wildly.
Nifty’s rise may be staggered as the nearly 120-point rise on Monday may tempt investors to cash some gains. Analysts say that a further rise led by the Nifty Bank index is imminent.
The week may be volatile as a batch of crucial US data and corporate earnings (US and India) take center stage. Futures and options also expire on Thursday.
Investors moved to safer assets such as US treasuries and gold. Yield on US treasuries fell on worries of a possible default due to the disagreement on the debt ceiling.
In India, Walmart vs Google via PhonePe
After India’s antitrust regulator fined Google and ordered it to unbundle its operating system Android, Indian fintech giant PhonePe is gearing up to challenge its dominant Play Store. The Walmart-backed firm is preparing to launch an Android-based app store of its own, according to TechCrunch.
Long time coming: PhonePe’s May 2021 acquisition of app store-maker IndusOS, which was consummated in July 2022, first revealed its grand ambitions for the space. Prior to that, in 2019, PhonePe launched Switch, a web-based mini app store for popular digital services, such as Swiggy and OYO, to drive transactions on its payments app (and other products).
How?: TechCrunch, citing unnamed sources, said that PhonePe was working to “strengthen its engagement with smartphone vendors” to pre-install the app, giving it an initial delta of users.
A MESSAGE FROM OUR PARTNER
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No Chips To Cash Here
China set the cat among the pigeons when its ambassador to France, Lu Shaye, told a French television network that former Soviet Union countries do not have independent, sovereign status. It backtracked later.
It’s a political setback for French President Emmanuel Macron, who tried to get China to mediate a Russia-Ukraine truce, an initiative that has not gone down well with allies, especially the United States.
Trade war: There’s no sign of the war ending, but superpower rivalry is intensifying. The US does not want South Korean chipmakers to fill supply gaps in China should it ban American company Micron from its market. Korea is one of Chip 4, the alliance the US created with Japan and Taiwan to prevent China’s access to high-end semiconductor tech. But it's tough for Korean chipmakers to toe the US line because China is a major manufacturing base and market for them.
Temporary Gain, Permanent Pain
The protests against quick-commerce platform Blinkit over its revised pay structure are working in its competitors’ favour. Around 1,000 Blinkit delivery partners reportedly joined BigBasket, Swiggy Instamart, and Zepto.
These platforms witnessed a 25-50% surge in order volumes ever since Blinkit was forced to close some dark stores in the National Capital Region (NCR) due to lack of delivery personnel. Zepto roped in 500-plus delivery personnel in the region to keep up with demand.
A delivery partner in NCR who requested anonymity informed The Signal Daily podcast that Zepto pays a minimum of ₹25 ($0.3) per order, alongside weekly incentives. Instamart pays ₹20, with value-based incentives (₹100 on a minimum order of ₹300, ₹175 for a ₹600 order, and so on).
Caveat: these are Noida rates. This may explain the exodus from Blinkit, which had slashed base pay from ₹25 to ₹15 per delivery and upped the variable distance-based component. According to The Morning Context, the Zomato-owned company* has since increased payout rates to ₹30 and ₹31 for weekdays and weekends, respectively. But partners feel this is a temporary carrot to get them to return to work.
Regardless of who partners work for, quick commerce is a sunken ship. Blinkit, Zepto, and Swiggy are already redlining and being forced to prioritise cash flows over growth—meaning they can only absorb so many partners, or stick to pay structures for so long. Meanwhile, VCs have moved on to startups offering 90-minute delivery in Tier-II and Tier-III India. In sum:
🎧 Nuclear fusion may be the NBT according to tech moguls. Also in today's edition: we dissect quick commerce's delivery dilemma. Listen to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.
Glencore’s Copper Bet
Glencore is slowly pumping the bellows to forge a deal that will give it control of the best copper mines on the planet.
The world’s largest trading company has offered $23 billion for the Canadian copper miner Teck Resources, which also has a thriving coal business. The deal, pushed by Glencore CEO Gary Nagle, was first proposed by his predecessor Ivan Glasenberg, the legendary trader who turned Glencore from a closely held firm into a listed entity of billionaire traders.
Hard nut to crack: Teck’s reluctant. It rejected Glasenberg’s offer and is now pushing back Nagle. Glencore cannot crack the deal without the Keevil family, a super shareholder with veto powers over major decisions.
Copper is billed as the metal of the future because of surging applications in batteries and gadgets. If Glencore controls Teck, it can influence global copper prices and reap billions in profit.
Bamboozled By Rules
Rich Indians are struggling to simplify their foreign investments after the Reserve Bank of India’s new rule that prevents them from keeping money in offshore accounts beyond six months. They must now invest the money in permitted assets such as mutual funds and foreign securities.
Nest egg: High net-worth individuals use the RBI’s Liberalised Remittance Scheme (LRS) to park a maximum of $250,000 a year abroad in, say, a bank deposit. But without a complete list of permitted investments, they’re unsure how to legally protect their offshore savings. Is a foreign fixed deposit permitted? What about paying a foreign real estate developer in instalments? It’s unclear. India is also mulling a 20% tax on LRS remittances to preserve its foreign exchange reserves.
Big bucks: Indian tourists spending abroad made up about 52% of total outward remittances via LRS from April 2022 to February 2023—a total of $6.13 billion.
In the dust: A South African cheetah who was translocated to India in February died at the Kuno National Park, Madhya Pradesh. Less than a month ago, another female cheetah who was translocated from Namibia also lost her life.
Deja vu: An Indian passenger travelling on an American Airlines flight from New York to New Delhi was detained for allegedly urinating on his co-passenger under the influence of alcohol.
Pink slips: Disney is laying off several thousand employees this week, with a majority coming from ESPN and its parks division.
Exit: Less than a week after Fox Corp settled a lawsuit with Dominion Systems over 2020 election misinformation, it parted ways with popular anchor Tucker Carlson. CNN also fired its longtime anchor Don Lemon.
Doubling down: Netflix will invest $2.5 billion in South Korea over the next four years to produce more shows and movies from the country.
Consider this: India’s startup sector is seeking more exemptions from the central government. It wants the finance ministry to “scrap or increase the ₹25 crore threshold below which it is exempted” from angel tax, per The Economic Times.
Take two: Apple’s App Store policies were upheld by a US appeals court, rejecting Epic Games’ challenge on antitrust grounds. In doing so, the court reaffirmed 9 out of 10 claims in Apple’s favour.
THE DAILY DIGIT
The current market value of French luxury giant LVMH. It’s the first European company to cross the milestone. (Bloomberg)
Voice of reason: For a generation that hates phone calls, voice notes are the new text message. Long-winded thoughts can be voiced at one's pace, without suffering through the much-dreaded phone call. In fact, seven billion voice messages are exchanged on WhatsApp every day. Being cooped up during lockdowns may also have had something to do with the audio message gaining popularity. On Hinge, the usage of voice notes jumped 37% year-on-year between January and February 2023. We get the whys: a well-intentioned text cannot replace the drama and nuance that the voice note can convey.
Algo-fail: Remember when people had to approach each other in person to score a date? Eventually, dating apps came along and made it easier for us to take charge of our love lives with just a swipe. Now, AI wants to be a digital wingman. AI-powered dating tools such as Rizz (short for charisma 🙄), Keys, and Your Move are stepping in to impress prospective dates with conversation starters. Somebody remind them that AI-powered verbal catfishing ain't gonna save users from the first-date awkwardness. Deceptive, if you ask us.
Rewind: What's old is new again. With more content than ever to consume, nostalgia programming is finding some takers, and channel surfing is increasingly becoming popular again. Americans are finding solace in free ad-supported streaming television (FAST) services such as Pluto TV, Tubi, and Xumo Play, after suffering from decision fatigue while watching content from regular OTTs. Reruns of shows such as Baywatch on FAST channels are comfort food. According to Nielsen, Tubi and Pluto TV are toe to toe with HBO Max and Disney+ with respect to the total time Americans spent watching TV in March. We’re not surprised: TV plotlines these days aren’t easy-breezy and hardly make for background entertainment.
* Deepinder Goyal is an investor in Frontpage Media Technologies Pvt Ltd, which publishes this newsletter, in his personal capacity. Our full list of investors is here.
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