Rishi Taparia - Issue #67
This week we look at Alibaba’s monster Singles Day, Amazon’s HQ2 (and HQ3?), the new realities facing grocers, Bill Gates reinventing the toilet, Google’s ongoing affair with China and more. Enjoy!
Commerce
Alibaba Singles Day sales frenzy surpasses records
Chinese ecommerce growth can best be described as ferocious, exemplified by Alibaba’s Singles Day (11/11). Started 10 years ago, last year the site did $25.3bn in sales (all processed via Alipay mind you). This year, Singles Day blew through that number with hours left to spare! With total GMV expected to be over $30bn (for reference, Amazon Prime Day did $4.2bn in sales in 36 hours!), China is teaching the rest of the world about how ecommerce actually works.
Walmart is building an AI lab inside one of its stores
Walmart’s Project Kepler was originally expected to be a cashierless store, competing with the AmazonGo experience created by their Seattle based nemesis. Instead, the retailer wants to complement the in-store experience with AI, figuring out when inventory is low, where spills have happened in aisle and when items are misplaced.
The tragedy of Amazon’s HQ2 selections: Long Island City, NY, and Crystal City, VA
HQ2 turns into…HQ 2*? The company announced their final selection this Tuesday (that just so happened to be midterm election day in the US - talk about a “let’s hope this gets buried” story). It didn’t. Amazon’s HQ2 reality TV show ended with two winners, cities that make a LOT of sense for the Bezos’ (see GIF below), perhaps less sense for the cities.
GIF credit: Scott Galloway
The Grocery/CPG Business Wakes Up to A New Reality
The first annual Grocery Shop conference took place in Las Vegas, with notable grocers and service providers gathering to talk about the future of the industry. This article offers a good summary, worth a read in full (if you’re into grocery…), but quick hits below:
The entire grocery/CPG business is about $800 billion a year. Or it could be $1 trillion. Or it could be $1.2 trillion. Depends who’s counting…and what they are counting.
The online grocery business is currently about two percent of the overall market. It could be 35 percent by the year 2022…give or take a pretty wide margin of error.
CPG represents about 15 percent of the total online retail business today.
Private label represents about 18 percent of the current CPG business. It will grow to 25 percent as online expands.
Only one percent of alcohol is purchased online today, mostly due to outdated and complicated state and federal regulations.
62 percent of shoppers use a digital tool in planning their purchases.
Kraft Heinz has set a goal to do 25 percent of its total annual sales through e-commerce by the year 2025.
The number of stores in the country selling grocery products has declined from 50,000 in 2006 to 41,000 today. The number of restaurants in the country has increased 18 percent since 2000.
80 percent of the total internet traffic in India is on mobile devices.
55 percent of millennials are non-white.
FinTech
Advance Pay Service May Reduce Use of Payday Loans
$50bn a year is taken out a year in payday loans in the US, often with onerous, sometimes debilitating terms. The reasons for taking out a payday loan vary widely (timing of pay periods, emergency situations, timing of bills and so on). Some interesting data here from Even, the startup that has partnered with Walmart to help employees get access to funds that they have already earned. According to Even “28 percent of its users took out a payday loan in the months before signing up for the service. Four months after signing up for Even, that figure drops to less than 20 percent.”
Technology
Bill Gates Aims to Save $233 Billion by Reinventing the Toilet
Bill Gates agrees with me: toilets are a serious business. He, however, is putting serious money to work. The billionaire philanthropist is betting that a reinvention of this most essential of conveniences can save a half million lives and deliver $200 billion-plus in savings. With 2.3 billion still without access to basic sanitation, toilets are projected to be a $6bn a year business by 2030.
Google Never Stopped Trying to Go to China
Well researched story on Google’s fits and starts in China, despite the internal pushback it has received.
Random Tidbits
Can libraries save America?
“The library is quietly one of the places that is saving democracy.”
Survival of the Richest – Future Human
The wealthy are plotting to leave us behind.
Quote I’m thinking about: “Humans think in stories rather than in facts, numbers or equations, and the simpler the story, the better. Every person, group and nation has its own tales and myths.” - Yuval Noah Harari