Published: 8/3/2020

Happy Monday, people! Vedica here with the update today. The weekend was dominated by talk of Microsoft's potential acquisition of Tik Tok. Latest is that Microsoft would own and operate TikTok services in the United States, Canada, Australia and New Zealand (and unfortunately not India). I for one am excited about this potential acquisition. Can you imagine embedded Tik Tok videos in MSFT's enterprise products? It'll at least make work more fun in these ridiculously depressing times. Coming to our news today: WhatsApp is a step closer to launching payments, and we could potentially see more Apple suppliers move manufacturing to India.

  • https://bit.ly/3fjPOx7: WhatsApp a step closer to pay play
  • ➡️ WhatsApp looks set (perhaps, maybe?) to (finally!) launch its payment services in India, with the National Payments Corp. of India (NPCI) informing the Reserve Bank of India (RBI) that the messaging platform has met data localization requirements.

    ➡️ Apparently, the National Payments Council of India told the Reserve Bank of India in June that it was satisfied with WhatsApp’s compliance with the regulator’s data storage rules and that the company was good to go live on the UPI platform. According to the RBI's rules payments data, information on payments or settlement transactions, customer data, etc. have to be stored in India.

    ➡️ WhatsApp’s payments initiative has been in the pipeline for a long time now. The company began piloting payments almost two years ago by partnering with ICICI, while it awaited regulatory clearances. With 400M+ users India is one of the company’s biggest markets, and the broad assumption is that WhatsApp payments will likely see quick adoption.

    ➡️ The launch of WhatsApp payments will be a big development for UPI players. Google Pay leads the market with a 42% market share , while Flipkart-owned PhonePe has a 35% share. The remaining 23% is split between Paytm, Amazon Pay, Bharat Pe and others. I wonder how much the recent news about the NPCI considering caps on the number of transactions on payment platforms was driven by Facebook's potential entry into the payments sphere via WhatsApp.

    2. https://bit.ly/2PfgB2S: Apple vendor eyes production shift to India

    ➡️ The Economic Times reports that a contract manufacturer for Apple is shifting six production lines looking forward to exporting around $5 billion worth of iPhones from India apart from catering to the domestic market.

    ➡️ While the article does not name the vendor, it does note that the move is expected to generate employment for around 55,000 Indian workers over a year or so, and may eventually involve expanding operations beyond phones to include tablets and even computers and laptops in the coming years.

    ➡️ A couple of weeks ago TechCrunch reported that Foxconn had started building iPhone 11 units in a facility near Chennai, the first time Apple has made one of its top-tier phones in the country. Most of the reportage focused on the fact that by selling locally-made devices in India, Apple would be able to avoid a 20 percent import duty that India imposes on foreign-made electronics. However, there's a bigger geopolitical angle here: that of diversifying supply chains and manufacturing away from China.

    ➡️ This is something the India government is clearly keen to seize on to build the country's manufacturing credentials. The government recently launched a $6.6B Production-Linked Incentive Scheme, which will offer a range of incentives to companies including a 6% financial incentive on additional sales of goods produced locally over five years, with 2019-2020 set as the base year.

    ➡️ Apple's contract manufacturing partners Foxconn, Wistron and Pegatron, South Korean giant Samsung, and Indian smartphone vendors Micromax and Lava are among the 22 companies that have already pledged investments in the country linked to the Scheme. India has historically always been behind the curve when it comes to attracting manufacturing; it will be worth following this scheme to see if it marks a departure.

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