Weekly reading – 24th September 2022

Business

The small town that saved its only grocery store — by buying it. A fascinating look into grocery stores in rural areas and the monumental challenges that these stores have to face.

Why Toyota – the world’s largest automaker – isn’t all-in on electric vehicles. In my opinion, given the lack of infrastructure and adoption of electric vehicles at the moment, prudence by Toyota totally makes sense. Their conservative stance doesn’t necessarily mean that they won’t invest when the right time comes. Of course, Toyota’s bet could put them on the back foot, but who is to say that aggressive investments by Toyota’s competitors are without risks and totally justified? Some other manufacturers vowed to have all EVs in 10 years, but these vows aren’t binding in any sense. As a result, what matters to shareholders is what is best for the business, not meaningless promises. If being prudent benefits shareholders, Toyota’s management should stick to their guns.

Siting bank branches. An interesting post on bank branches. To be honest, as someone who works in the banking industry, I learned something new.

($) Professor Behind $12 Billion Empire Fuels China’s Tech Rise. “Li was among the first Chinese to study in the US before returning to teach in Hong Kong’s pre-eminent technology university. From there, he’s groomed a generation of entrepreneurs and set up an incubation academy, funding or nurturing promising players in robotics and artificial intelligence valued at almost $12 billion.

Made on YouTube: supporting the next wave of creative entrepreneurs. YouTube attracts digital creators with new initiatives, including a revenue-share scheme and more access to a music catalog to create long-form videos.

dunnhumby Retailer Preference Index: Special Inflation Edition 2022. This RPI score measures how well retailers meet consumer needs and strengthen the emotional bond with shoppers. My favorite place to shop, Aldi, is the 2nd best retailer (I wrote about Aldi before), while Trader’s Joe and Lidl follow closely behind. If I were among the executives at Walmart, I would not be pleased when reading this report. Walmart prides itself at a low price retailer, but it came in at 16th and 17th place in this ranking. It’s worth noting that the bond forged during a difficult time like right now should last for a long time.

($) The Sneaky Genius of Apple’s AirPods Empire. “Apple doesn’t disclose sales of its headphones—its quarterly filings lump AirPods in with its watches, home speakers, and other accessories—but outside analysts say it sold 120 million or so pairs in 2021. IDC and Bloomberg Intelligence estimates suggest that AirPods account for roughly half of sales of what Apple calls “Wearables, Home and Accessories,” its fastest- growing line of business. From 2016 to 2021, sales in this category rose by 245%, to $38 billion. Piper Sandler Cos., the investment bank, estimates that 3 in 4 US teens own AirPods. Apple has set the standard for wireless headphones and turned a free pack-in accessory into a $200 must-buy. Of course, AirPods aren’t really a standalone product. They’re an extension of Cook’s larger project: a mutually dependent ecosystem of hardware, software, and services that keeps customers spending more all the time“.

Other stuff I found interesting

Guide to F1. A cool website that will ease beginners into the world of F1 with an overview of the sport’s history, cheat sheet and explanations on key terminologies.

We Spoke With the Last Person Standing in the Floppy Disk Business. The world is such a fascination because of people like him.

I enjoy John Gruber’s writing, especially when it comes to Apple. His latest review on iPhone 14 and iPhone 14 Pro is masterful.

How Europe Stumbled Into an Energy Catastrophe. “They’re burning coal like they never have in Germany. So — climate what? I mean, does Germany actually care about climate change? If it cared about climate change, I guess Germans would all shiver instead of burning coal. Climate change is going to happen over multiple decades in a century. The war is here. The war is before us. There’s no such thing as the unicorn buffet where we have no trade-offs and every decision is a good one. It’s unthinkable that Germany would still be debating whether they should keep the nuclear power plants on. It’s unthinkable that Germany would be debating whether or not to go turn back on the ones they just turned off. And we keep saying, How much pain do you need to suffer before you reacquaint yourself with reality?

Stats

U.S. retail sales expected to grow 7.1%* this holiday season

Transactions on Zelle exceeded the 5-billion mark

Visa Tap-to-Pay Hits 1 Billion Transit Transactions

Amazon Prime averaged 13 million viewers for its debut live stream of “Thursday Night Football,” 

Source: Bloomberg

Weekly reading – 23rd April 2022

Business

The Pandemic Was Supposed to Push All Shopping Online. It Didn’t. A great business should pass a macroeconomic test, even one as challenging as the pandemic, without losing its competitive advantages. Take Apple for example. The pandemic gave the company a boost as consumers were more interested in Macs and iPads. But the stay-at-home restrictions also limited traffic to its stores and affected adversely how employees interacted. Nonetheless, Apple’s business grew from strength to strength in the past two years. On the other hand, firms with unclear competitive advantages may have received a boost from Covid-19 but came back down to Earth when things gradually returned to normal. We see that trend in Zoom, Peloton or companies mentioned in the article. Businesses shouldn’t think about it as online vs offline. It’s about how to stay agile to the unexpected challenges and deliver values to customers no matter what.

Amazon’s 2021 shareholder letter. If you think Andy’s writing style is different from Jeff’s, well, it’s because they are two different people and it’s not a surprise. Andy’s primary message in the letter is that Amazon remains a Day 1 company that stays Day 1 by investing in the future and being willing to experiment, fail and iterate. I love the Minimum Lovable Product instead of Minimum Viable Product.

Quartz Drops Its Website Paywall in an Unorthodox About-Face. Quartz specifically said that the decision to go paywall-free results from the analysis of internal data. They found out that readers were more engaged if they could access the content through newsletters and appreciate the value that the publisher brought. They could be wrong about this, but there is nothing wrong with making an informed decision

Charlie Rose’s interview with Warren Buffett. There are always nuggets of wisdom whenever Warren speaks. There are two I specifically love from the interview: 1/ whenever he makes an investment, it’s about the business, not the stock. 2/ Even though Rockefeller was immeasurably richer than most people on this planet, we have a much higher quality of life than he ever did. Would you trade that off?

Kroger Is Building a Grocery Ecosystem for the Future

China’s Covid-19 Restrictions Threaten Economic Recovery. If China continues their insane and stubborn Zero Covid policy, does that mean a recession for the US economy is on the horizon?

An interesting write-up on Divvy

EU approves groundbreaking rules to police Big Tech platforms. It’s great to ban targeted ads on minors or manipulative practice to increase engagement. It’s also really important to police content and fight disinformation. However, a million dollar question remains: how? The devil is in the details. Which information should be policed and removed? Would over-reaction from platforms curb the freedom and diversity on the Internet?

Other stuff I find interesting

Tokyo’s Manuscript Writing Cafe only allows writers on a deadline, and won’t let them leave until finished

TurboTax’s Fight Against Free Tax Filing. Because I was in Vietnam for two months up till the deadline to file tax returns, I had no choice but to use TurboTax to fulfill my obligation. I ended up paying $134 for the service. It’s just plainly ridiculous that some private companies can successfully do this to thousands of consumers and the US government hasn’t been able to do anything about it

Web scraping is legal

Inside the fierce, messy fight over “healthy” sugar tech. A fascinating story of a talented and ambitious Chinese American making great discoveries on sugar tech and getting arrested for defrauding the US government

Stats

Food-at-home CPI jumps 10% year over year in March

According to Bank of America, Zelle transaction volume reached $65 billion in Q1 FY2022

Grocery store sales up over 9% for March

According to PYMNTS.com, Fifteen percent ($91 billion) of all the money U.S. consumers spent on clothing and accessories went to Amazon in 2021

U.S. retail sales of dog and cat treats were expected to reach $9.87 billion by the end of 2021

Weekly reading – 9th April 2022

Business

From Belonging to Burnout, Five Years at Airbnb. An interesting story from a former employee at Airbnb on the culture and how full-time staff and contractors are treated differently.

Instacart Faces Turbulence After Pandemic Boom in Grocery Delivery. Covid-19 might be a great business boost initially, but for some companies, the pandemic may expose their flimsiness and fragility. Fast is shutting down after raising millions of dollars and riding the wave of Covid. Instacart is another firm whose future looks bleak. Merger talks went fruitless. IPO plan was put on hold. Valuation plummeted. The market that Instacart is in is tough, not only because of the competition, but also because of the unit economics. The $24 billion valuation as of now may likely be looked back as a fond memory in a few months’ time.

Amazon to Spend Billions on Space Launches as SpaceX Ramps Up Satellite-Internet Service. Amazon is authorized to launch more than 3,200 satellites into orbit by 2026, but it must have at least half to be operational by then. The thing is that it hasn’t sent anything up yet.

Banks Weigh Using Zelle to Challenge Visa, Mastercard. Some banks are in favor of curing the fraud issue first while others want to expand the current scope of Zelle beyond P2P payments. I am firmly in the first camp. Fraud is rampant on Zelle and a real serious threat to the service. Why enlarging the scope when such a threat hasn’t been properly addressed?

Octahedron Capital compiles quarterly reports of trends and interesting observations. Here is the latest report.

Other stuff I found interesting

Earth is a desert planet compared to these ocean worlds in the solar system. “Our home planet is a desert compared to some places the solar system, both in terms of its total water volume and the amount of liquid on Earth relative to its size. Consider Jupiter’s ice-encrusted moon Europa, which is smaller than Earth’s moon. Scientists recently used 20-year-old Voyager data to find even more evidence that Europa has twice as much water as our planet. Even tiny Pluto may have an ocean nearly as large as Earth’s.”

Deep Roots. “When you realize you can’t connect one dot without a million other dots entering the picture, you realize how impractical it is to predict what the world will look like in the future. The craziest events – good and bad – happened because little events, each of which was easy to ignore, compounded. Innovation in particular is hard to envision if you think of it happening all at once. When you think of it as tiny increments, where current innovations have roots planted decades ago, it’s more believable – and the range of possible outcomes of what we might be achievable explodes.”

Shanghai’s stunning fall from grace. I am very glad my country didn’t follow what is going on in Shanghai. Am I nervous that we live with Covid nowadays? Yes. But what is happening in Shanghai is just awful. Folks are forced to shelter at home and take rations from the government for an extended period of time. Yes, we had stay-at-home orders in the US but we still could go out and buy groceries. The draconian measures from the government just doesn’t seem to make sense. I get it. They do not want to lose face and admit mistakes, but it’s just horrible to sacrifice others’ lives just for that

Stats

Credit card late fees in the US hit $14 billion in 2019

March Madness Final drew 18.1 million viewers

US teens spend 30% of their daily video consumption on Netflix and YouTube each

Advertising employment gained 3,200 jobs in March 2022

On average, US households spend $148 on groceries in 2022, up from $142 in 2021, due to inflation

16.6% of all US retail sales in 2021 were returned by consumers. The rate of returns of online sales was 20.8%

Weekly reading – 12th March 2022

What I wrote last week

Cuisine in Saigon (Ho Chi Minh), Vietnam

Business

‘Batman’ and the Movie Pricing Predicament. A good article on AMC’s move to charge one more dollar to every ticket for the upcoming Batman movie. Yield management by theaters often involves higher ticket prices in the evening or on Fridays and weekends. Charging more for a specific movie is rare. I look forward to seeing how this will benefit or harm the theaters.

Metaverse is all…hype? Google introduced Google Glass years ago. Today, you’ll have the same odds of seeing that Glass on the streets as finding Nokia’s iconic flip phones. I don’t know what these tech visionaries see, but I won’t bet my money on seeing metaverse or whatever the hell it is in the next 10 years.

Moving money internationally. A fantastic read on SWIFT.

Visa, Mastercard Prepare to Raise Credit-Card Fees. Visa and Mastercard are going to charge higher interchange fees to big merchants while lowering the fees for small merchants whose annual revenue is less than $250,000. Visa said merchants could avoid paying more by offering more transaction data and using its tokenization services. I look forward to seeing how this increase will harm consumers as merchants are likely to pass on the higher expense. It’s no wonder why lawmakers want to look into this sort of duopoly enjoyed by Visa and Mastercard. They simply have too much power

The Three Sides of Risk. “You realize that the tail-end consequences – the low-probability, high-impact events – are all that matter. In investing, the average consequences of risk make up most of the daily news headlines. But the tail-end consequences of risk – like pandemics, and depressions – are what make the pages of history books. They’re all that matter. They’re all you should focus on. Once you experience it, you’ll never think otherwise.”

Fraud Is Flourishing on Zelle. The Banks Say It’s Not Their Problem. “Nearly 18 million Americans were defrauded through scams involving digital wallets and person-to-person payment apps in 2020, according to Javelin Strategy & Research, an industry consultant. When swindled customers, already upset to find themselves on the hook, search for other means of redress, many are enraged to find out that Zelle is owned and operated by banks. Banks say they take fraud seriously and are constantly making adjustments to improve security. But police reports and dispatches from industry analysts make it clear that the network has become a preferred tool for grifters like romance scammers, cryptocurrency con artists and those who prowl social media sites advertising concert tickets and purebred puppies — only to disappear with buyers’ cash after they pay.”

Why Commercials Are Coming to the Biggest Streamers. A good piece on streamers weighing on offering ads.

Other stuff I find interesting

Unleash collaboration with new experiences in Google Workspace. The new features look very sweet. If you are a Google Drive/Docs/Workspace user, check this out!

How U.S. Visa Delays Are Taking a Costly Toll on Frustrated Workers. I can tell you from personal experience that these delays add unnecessary stress to immigrants’ life. My colleague’s PERM application in 2019 took 52 days to get adjudicated. Mine is expected to take 6-8 months.

The story of how Swahili became Africa’s most spoken language. “During the decades leading up to the independence of Kenya, Uganda and Tanzania in the early 1960s, Swahili functioned as an international means of political collaboration. It enabled freedom fighters throughout the region to communicate their common aspirations even though their native languages varied widely. Swahili lacks the numbers of speakers, the wealth, and the political power associated with global languages such as Mandarin, English or Spanish. But Swahili appears to be the only language boasting more than 200 million speakers that has more second-language speakers than native ones.”

The Magic of the Japanese Convenience Store Sandwich

Stats

Hertz had more than 3,300 cars stolen each year

“Just one pint of beer or average glass of wine a day may begin to shrink the overall volume of the brain”

Solar power and batteries account for 60% of planned new U.S. electric generation capacity

US merchants paid more than $55 billion in interchange fees to Visa and Mastercard in 2021

Tap-to-pay penetration in the US as of March 2022 is 20%, according to Visa (from KBW Fintech Payments Conference)