What I wrote last week
How Amazon’s big private-label business is growing and leaving small brands to protect against knockoffs. It’s almost a given that Amazon strives to grow their private label business. Private label has been popular among retailers for a long time due to its attractive gross margin. Every business seeks to improve their margin and Amazon is no exception. Plus, activities that happen on these retailers’ property, whether it’s Costco stores or Amazon’s website, belong to them and they can do data analytics on them however they want. How do you think Costco knows what items to put their own private label brand Kirkland on? This is a risk that brands must be aware of when using Amazon as a channel. To lawmakers, it’s a common practice in the retail world. Not everything that the likes of Amazon do warrants an investigation. However, we do need to keep Amazon and other big retailers honest, and hold them accountable if they do something shady to benefit themselves at the expense of consumers.
The Super App Model May Not Be Suitable for the US Market. The fact that the Super App Model is popular in Asia, but not in the US is an interesting topic. I personally don’t think that under-powered smartphones drives much adoption in Vietnam. The likes of Grab operate only in big cities in Vietnam where most people use very good smartphones. If you go to rural areas, most likely you will find that consumers don’t know about these apps, let alone using them. I do think the lack of privacy concern in Asia, compared to the attitude in the US, is a boon to the Super App Model. Less regulatory scrutiny. Less resistance to sign up from consumers and hence, lower acquisition expenses.
The coming fight over the gig economy, explained. The federal government is attempting to classify gig workers as full-time employees, again. This is now at a proposal stage and will take some time before it can become an official rule. Even then, gig companies like DoorDash, Instacart or Uber, will challenge it to court. I am also unclear on how all the parties involved figure out a way to protect the freedom that gig workers enjoy while giving them benefits as full-time employees. Some drivers even prefer such freedom to a big higher pay. We are far from seeing the last chapter of this saga. Even then, I think the new proposal would likely benefit incumbents such as Uber or DoorDash. No other competitors have their scale to overcome higher operating expenses due to having to pay workers more.
($) Under Pressure, Goldman CEO Ditches Dream of Consumer Domination. While it’s positive that Goldman Sachs CEO wants his company to diversify and have a consumer-friendly image by offering consumer banking products, because it is a highly competitive and commoditized space, I am not really surprised that they have not got it off the ground. Scale matters. Because the bank is starting from scratch, they do not have the scale that other banks more established in the consumer space do. That necessitates high acquisition expenses; which won’t please investors. But how else would they go out and sign up people to open a checking account when the likes of Chase offer $300 bonus? Short-term pain is inevitable while long-term game is uncertain. That’s where the bank is at.
Inside the only lithium producer in the U.S., which provides the critical mineral used in batteries by Tesla, EV makers. Despite its importance, lithium is still very novel to most consumers. I hope this piece on a free yet popular site like CNBC will generate interest. I have mixed feelings towards this issue. On one hand, I hope that we will find more lithium because it will mean there are more chips which will result in more innovation. On the other hand, extracting lithium or other rare Earth minerals is very harmful to the environment. I hope somewhere somebody is working on a new technology that can power technological innovation without harming our environment
Other stuff I find interesting
($) How Finland Put Traffic Crashes on Ice. Slowing down vehicles instead of outright banning them, pouring resources into understanding why crashes happen and fining speedy drivers according to their income are some ingredients in the magical formula that helps Finland expand their road networks safely. “The Finnish transportation system is as impressive for its safety as it is for its multimodality. Only 219 people died on Finnish roads in 2021, or four per 100,000 residents — just one-third the US rate. And Finland’s roadways are growing steadily safer. Fatalities plunged 50% between 2001 and 2019, when Helsinki made international news for going an entire year without a single pedestrian or cyclist fatality. (Last year there were two, down from 22 in 1990.) Like its neighbors Norway and Sweden, birthplace of the Vision Zero traffic safety movement, Finland’s roads today are safer than they have been in decades.”
Major European airlines mislead customers with carbon offset credits, report says. It’s not a secret that companies buy carbon offset credits to be carbon-neutral. A recent report; however, found that major European airlines didn’t even do it right. They funnel money into projects that may not even reduce carbon omission in the first place.
($) You Don’t Have to Be Vegan to Help Save the Planet. My wife and I have not been eating beef for months and instead of animal-based milk, we drink soy and almond milk. We do not plan to change that any time soon. We make these choices because we believe they are good for our health and help us lose weight. But apparently, our diet also benefits the planet: “Beef’s climate footprint is almost 100 times greater than that of plant-based protein sources like beans and legumes. Brian Kateman, who co-founded the Reducetarian Foundation in 2015 to advocate for cutting back on meat-eating for environmental reasons, points out that eating meat also comes with sizable water consumption. One 6-oz. serving of beef has a staggering water footprint of 674 gallons, according to the Water Footprint Network, compared with 34 gallons for a cup of coffee and 21 gallons for a single serving of salad consisting of lettuce, cucumbers and a tomato.”
Andy Warhol’s portraits of Prince get their 15 minutes of fame in Supreme Court copyright showdown. When does art become stealing?
Wendy’s had the second-longest drive-through, the lowest customer satisfaction and the second-to-last order accuracy among fast-food chains. I would not be pleased if I were a Wendy’s executive