Weekly reading – 1st October 2022

What I wrote last week

The push to grow the complex Bundles by Disney

Decoupling – A great tool to analyze business strategies and disruption

Business

Instacart Offers Grocers the Future of Grocery in a Bundle. Instacart becomes a much more interesting company with these innovations. Pushing a heavy cart around and waiting in line forever just to check out is not a great customer experience. The Caper Cart sounds like a game changer for grocers, shoppers and Instacart. These products are so different economically than delivery services. This helps diversifying Instagram, adding revenue stream and reducing risks.

Why India’s small sellers still don’t trust Amazon. The relationship between Amazon and Indian sellers is so strained that I struggle to see how the company can succeed in this important market.

What Chinese media reveals about Shein’s secretive operations. “There are two main kinds of suppliers: “free on board,” those that make simple designs they haven’t devised themselves, and “original design manufacturers,” those that do both. They all feed into Shein’s sprawling manufacturing execution system (MES). The designer-suppliers will find pictures online and send a selection to Shein’s internal buyers for consideration; the buyer and their manager settle on a final pool. Once samples have been received, there might be two, or even three, rounds of changes before manufacturing can commence. (The entire time, everything needs to be recorded in the MES — materials, pricing, even chat logs — something suppliers balk at, because, if the deal falls through, all the information sits in Shein’s records, and there’s nothing to stop them from producing it elsewhere.). hein is ruthlessly efficient when it comes to evaluating its suppliers, according to analysis by Zhongtai Securities. A scoring system sorts the wheat from the chaff. Timeliness of procurement and delivery, stocking and delivery, rate of defects, and the success rate of new products make up 40% of a supplier’s score. The remaining 60% is based on order volume. They are then tiered into five levels, and the bottom 30% of the lowest tier are culled.”

The Ascendancy of Ahold Delhaize. “Ahold Delhaize USA has been strengthening its position as it looks to take its hyper-local value proposition national. After blockbuster revenue years in 2020 and 2021, Ahold Delhaize has demonstrated that it can keep growing by focusing on omnichannel innovation, prioritizing value and expanding its assortment of high-quality, low-cost private-brand products. “

($) The Unstoppable Rise of Aldi in Britain Shows No Sign of Slowing. “A recent visit to Purley, south London, found the parking lot outside Aldi boasting BMWs, Land Rovers and Porsches and shoppers choosing Aldi over nearby branches of Lidl and Sainsbury, as well as the upmarket Waitrose 10 minutes away. An extra 1.5 million customers have visited Aldi over the past three months. When sales were up by at most the low single digits at most UK supermarkets, they rose 19% at Aldi and 20.9% at Lidl. Part of the strategy is economy of scale. Aldi has about 2,000 key products in store, compared with as many as 30,000 in some large rival supermarkets. By stocking just one ketchup, for example, Aldi has a tight supply chain and can avoid pricing rows like Tesco’s recent spats with Kraft Heinz Co. and Mars Inc.

How Bryan Lourd became one of the most powerful people in the history of Hollywood. A phenomenal story. Bryan Lourd worked his way from a mail room to being one of the most powerful people in Hollywood.

How Arm conquered the chip market without making a single chip, with CEO Rene Haas. I am not a fan of Nilay or The Verge’s new website look, but this is a great interview on one of the most important players in the chip industry. Especially when Arm is not really a household consumer name

Amazon dominates the $113 billion smart home market — here’s how it uses the data it collects. Amazon has a major trust issue because no matter what the company says, I don’t think consumers trust Amazon to do the right things with their data.

Other stuff I find interesting

Why the Rush to Mine Lithium Could Dry Up the High Andes. “With the world’s car fleets transitioning to electric propulsion, Argentina, with reserves of up to 60 million metric tons, according to government estimates, is well-positioned to profit from the lithium rush. Lax regulation and low taxes make its part of the Lithium Triangle — in the northwestern provinces of Jujuy, Salta, and Catamarca — “especially attractive for foreign investors,” according to Lucas Gonzalez of the National Scientific and Technical Research Council (CONICET), a government agency in Buenos Aires. The country could soon become the world’s second-largest lithium producer, after Australia, and the largest producer from evaporative mining. But every ton of lithium carbonate extracted from underground using this cheap, low-tech method typically dissipates into the air about half a million gallons of water that is vital to the arid high Andes. The extraction lowers water tables, and because freshwater often sits on top of salty water, this has the potential to dry up the lakes, wetlands, springs, and rivers that flourish where the underground water reaches the surface.

Charging cars at home at night is not the way to go, Stanford study finds. “The move to electric vehicles will result in large costs for generating, transmitting, and storing more power. Shifting current EV charging from home to work and night to day could cut costs and help the grid

New ways to make more sustainable choices. I’d love to try out these new features, especially the updates on recipes

iPhone 14 Pro Review: No phone is an island. I like Jason’s review of iPhone 14 Pro. A few friends of mine belittled Apple for the lack of innovation. I mean, that criticism is fair when it comes to the lower lineup iPhone 14, but the Pro version is much further ahead with a lot of cool features and innovation. It’s also great financially for Apple, to sell more expensive and higher margin phones, especially when there is shortage of components.

How Apple Pay works under the hood? An example of how complex payments are under the hood and how far technology has come to enable such complexity in mere seconds

Stats

Biden’s plan to cancel student loans will cost taxpayers $400 billion, among the most expensive initiatives his administration puts forward

6000 children died on EU roads in ten years

Amazon commits to hiring 5,000 refugees by the end of 2024. A big YES to this!

Weekly reading – 28th May 2022

Business

Apple Looks to Boost Production Outside China. It’s good for Apple to at least consider operations in other countries to hedge risks. However, it’s not easy to move out of China completely. The book “After Steve” mentioned an episode in which Apple practically had to beg Foxconn to help stand up an assembly line for Apple Watch (I am not 100% about the product in question) overnight because the other chosen supplier screwed up. Foxconn had the resources to do wonders. Replicating such expertise and capabilities in other countries will be very time-consuming and difficult. Plus, doing business in China certainly helps Apple cultivate a relationship with the government. In such a regime, that’s critical.

Cannes: How Japanese Anime Became the World’s Most Bankable Genre. Japanese Anime has incredible IPs. Streaming introduces viewers to content that they had never seen before. Even in my 30s, I am still following some of the anime franchises that I read as a kid. I’d love to explore more if I had the time. It’s not just for kids. Adults love anime too

It’s TikTok’s World Now. Facebook Just Tries to Make People Care About It. The biggest takeaway I have from this piece is that Facebook seems to have trouble dethroning TikTok more than it did any challengers before. Creators still make money on Instagram, but that doesn’t seem to stop TikTok from growing. Interestingly, Facebook had a chance to buy TikTok years ago, but passed. Now, they must rue that decision every day.

Plant-Based Dairy Reinvigorates Milk Category. I do think the popularity of plant-based dairy results from the fact that consumers are more health-conscious. Have you looked at the difference in calorie per serving between meat-based and plant-based milk?

50 years in: Nike’s game plan for winning with women. For obvious reasons, I don’t know anything about women clothing, but it is interesting to read about Nike’s approach to winning this category. Unless there are specific reasons, I naturally support a simple product portfolio. Consumers don’t get confused. Brands can put more marketing dollars and focus behind each product.

Google Takes Yet Another Run at E-Commerce—and Amazon. A super interesting read on Google’s latest efforts into e-Commerce. Based on the article, this time, Google may be onto something. Consumers start to use Google to search for products more than previously, a territory that used to belong to Amazon. E-commerce was also a leading contributor to the bump in search revenue in 2021. With that being said, 2020 and 2021 were great for e-Commerce, but since the economy opened up and folks went back to stores and office, e-Commerce has seen its growth dampened. Whether this trend will affect Google’s effects in the future remains to be seen

Other stuff I find interesting

The Trouble With Lithium. This grim ripping read on Lithium is in line with what I read so far about the element. Demand far outweighs supply, pushing the price to unprecedented heights. The trend will persist for a few years to come. For good measure, even though extracting and producing Lithium have adverse impact on the environment, there doesn’t seem to be an alternative on the horizon.

The butterflies we may never see again in Britain. Super beautiful

The Science Is Clear: Gun Control Saves Lives. For the life of me, I don’t understand how an 18-year-old who cannot get a beer from a bar legally can buy an automatic weapon and shoot dead 19 people. It’s just insane. Take driving as an example. Try driving after either 3 beers or 2 Old Fashioneds and see if you get a DUI. We ban people who consume alcohol from driving, but we close our eyes at folks who may have malicious intent and try to get a weapon. How does that make sense? Look up how Japan regulates gun possession and usage. Then compare the deaths in mass shootings between the two countries. To be perfectly clear, nobody is arguing to take away the right to bear arms. Just like nobody wants to take away the right to drive. We just want access to fire arms to be regulated and controlled so that the tragedies stop. And I read the 2nd Amendment. I don’t think the proponents of the Amendment understand it well…

Stats

Domestic air fares in April 2022 were up 27% compared to April 2019 and 8% month over month

US online grocery sales in April 2022 declined by 4% year over year

45% of devs that earned more than $1 mil in 2021 were not on the App Store or had less than $10,000 in earnings five years before

US Hotel room rates in April and first two weeks of May 2022 were 10-14% higher than the same period in 2019

Source: STR

Weekly reading 6th November 2021

What I wrote last week

I gave two examples from Financial Times on why you should be vigilant about what’s on the Net

Uber’s Q3 FY2021 results

Good reads on Business

Why acquisitions lead DTC exits. “An acquisition, especially from a larger firm in the space, can provide brands with the resources needed for sustained growth, like marketing expertise, a stronger supply chain, access to new customers or a wider distribution network. At the same time, an acquisition — as opposed to alternative exit methods like a public listing — keeps many aspects of the business, namely its financial reports, private. Acquiring a brand gives larger companies access to the brand’s data, e-commerce expertise and its customers. Through an acquisition, a larger company may also be looking for expertise, resources and sometimes real estate it doesn’t have yet, in addition to talent and customers”

The Facebook name was such a drag that employees referred to it as a ‘brand tax’. What it’s interesting yet has been so obvious to me for a while is that while Facebook is supposed to be an entity making decisions based on mountains of data, the call to add “from Facebook” to Instagram and Whatsapp was made unilaterally by Mark Zuckerberg based solely on his preference and against studies with concrete data from his staff. I am sure this isn’t the only instance that this sort of things happen in Facebook or quite frankly any organization

The economics of pumpkin patches. If you haven’t subscribed to The Hustle, you may consider doing so as their weekend write-ups are usually a joy to read.

A New Market Emerges for Online Delivery: 10-Minute Groceries. The idea of 10-minute deliveries is straightforward, but requires gigantic investments and great execution. In other words, it’s exceedingly difficult. On top of the operational challenges, consumers can switch to another provider at any time, making the cost of acquisition and retention expensive. My guess is that these providers use initial investments to generate demand and popularize the concept of 10-minute deliveries. Once consumers are used to the concept and demand it from retailers, these retailers have no choice but to offer it, either by building the capacity themselves or working with the delivery services. The likelihood of retailers building the capacity themselves is low, especially for small and medium-sized retailers. Hence, these delivery services can improve economies of scale by signing up more and more retailers. Oh and don’t forget the ads dollars that will definitely grow once the delivery apps become popular enough.

Is Facebook Bad for You? 360 Million Users Say Yes, Company Documents Show. “Facebook researchers have found that 1 in 8 of its users report engaging in compulsive use of social media that impacts their sleep, work, parenting or relationships, according to documents reviewed by The Wall Street Journal. A Facebook team focused on user well-being suggested a range of fixes, and the company implemented some, building in optional features to encourage breaks from social media and to dial back the notifications that can serve as a lure to bring people back to the platform. Facebook shut down the team in late 2019.

Rene Ritchie talked to two Apple executives about Apple’s switch to their own chip M1. Two things stood out to me from this interview: 1/ the minimalistic style that Apple follows is reflected on the principle that no transistor is wasted on the chip. If a transistor is on the chip, then it has a job to do and it really needs to be there; 2/ the construction of the M1 chip is a collaborative effort between multiple different teams that starts from the vision for better customer experiences. Other chips are designed to maximize benchmarks and meaningless stats and then hardware and software follow to accommodate the chips.

Stuff I found interesting

The untold story of the world’s biggest nuclear bomb. The deaths that stem directly from these nuclear bombs are tragic. What’s even worse is the long-lasting radioactive effect that can linger for hundreds of years. The next generations didn’t do anything to deserve that

‘Father of tiramisu’ Ado Campeol dies aged 93. “Campeol was the owner of Le Beccherie, a restaurant in Treviso in northern Italy where the famous dessert was invented by his wife and a chef. The dish, featuring coffee-soaked biscuits and mascarpone, was added to their menu in 1972 but never patented by the family. According to the dessert’s co-inventor, Chef Roberto Linguanotto, the dish was the result of an accident while making vanilla ice cream. The pair then perfected the dessert by adding ladyfinger sponges soaked in coffee, and sprinkling it with cocoa – calling it “Tiramisù”, which translates into English as “pick me up”.

A very good M1 Max Macbook Pro by MKBHD

Stats

Chile, Australia and Argentina have 75% of the world’s Lithium reserve with Chile making up 45%, according to World Economic Forum

Source: World Economic Forum