Rishi Taparia - Issue #33
This week: Toys R Us shuts its doors, Stitch Fix brings the extras, Amazon goes even deeper into financial services, ride-hailing as lead gen for payments, Google goes deeper into the home and more. Enjoy!
Commerce
Toys R Us to close all 800 of its U.S. stores
The end of an era and a very slow burn. Toys R Us is set to completely shut its stores, leaving a massive hole in the market waiting for Amazon and Walmart to fill. A case of PE gone bad, the company was bought by Bain Capital and KKR for $6.6 billion, but left with $5.3 billion in debt secured by its assets that it didn’t recover from.
Stitch Fix posted a profitable second quarter, added an Extras feature
This week Stitch Fix posted solid earnings but the most interesting part of their strategy hasn’t had time to make a difference - the launch of Extras. Extras will allow customers to choose from an assortment of undergarments to add to each box of five items their stylist has chosen for them. It indicates a major move beyond traditional discovery of clothing and gives customers the ability to stay on SF. Expect to see positive growth here very soon.
FinTech
Ant Financial Consumer Lending Reaches $95 Billion
This is staggering growth by Ant Financial. In a short amount of time they have built a massive business, indicative of the ability to dominate a space (they’re outstanding consumer loans are almost 4x the size of China Construction Bank Corp.’s!) There’s an entire post (or book) to be written talking about how the lack of existing infrastructure, the rapid growth of internet enabled services and mobile have combined to create potentially once in a lifetime conditions in China for financial services. The crazy part - it’s only just getting started.
Amazon Launches Debit Card in Mexico
Amazon launched a debit card in Mexico with the aims of giving more people the opportunity to go online and shop. Called Amazon Rechargeable, the card can be loaded with cash at convenient stores around the country (not unlike what PayNearMe does here in the US). An interesting strategy signaling further moves into financial services for Amazon, particularly in light of the small business card that is on the horizon.
Ride hailing app Grab launches financial services unit
The South East Asian ride-hailing battle is heating up, only not in ride-hailing. Grab has moved deeper into financial services with the launch of a dedicated unit and the introduction of micro-loans, competing even further with Go-Jek and their payment method, Go-Pay. A tremendous amount of money is being spent on marketing / subsidizing rides, making profitability challenging. Ride-hailing is likely going to end up being a lead gen mechanism for financial services.
Technology
Nest Hello video doorbell and Nest-Yale smart lock now available
The battle for the home continues to rage. Nest, now fully integrated back into Google, announced its Nest Hello video doorbell and a smart lock this week. Integrated with Google Assistant in Home speakers, the suite of products now includes a doorbell, camera, smart speakers, a lock and the thermostat. Comprehensive, to say the least.
Random Tidbits
The Scaffolding of Rhetoric
An unpublished article by Winston Churchill on the value of oratory. Sit back, relax, and enjoy.
Quote I’m thinking about: “To improve is to change, so to be perfect is to change often.” - Winston Churchill