"EDITION 103"

Published: 7/1/2020

Happy Wednesday, folks! Vedica here today. I've just wrapped up a frustrating day at work. A 1000+ row beast of a financial model I've been building at work crashed on me and had to be fixed. My eyes are now numb. 😩😩😩 Lots of interesting news today: Amazon is doubling down on its pantry business, and unsurprisingly Chinese investors are looking to exit their Indian investments.

  • https://bit.ly/2NG14bA: Amazon opens its grocery vertical Pantry in 300 new cities
  • ➡️ Amazon is expanding its grocery vertical ‘Amazon Pantry’ to 300+ cities in India. With this, the grocery delivery service will become available in ~10,000 pin codes across the country. Amazon Pantry caters grocery and everyday essentials with some 3,000+ products eligible for Pantry delivery.

    ➡️ Amazon already offers offers scheduled deliveries from Amazon Pantry products in select cities such as Bengaluru, Delhi, Mumbai, Chennai, Hyderabad, Kolkata and Pune. The company will now be able to offer the same level of service in tier 2 cities as well.

    ➡️ The Pantry expansion comes on the heels of Amazon foraying into food delivery. Last month the company launched its food delivery business, which is being piloted in Bengaluru and Mumbai. While one might question expanding into food delivery at this point, the Pantry expansion makes 100% sense. The pandemic is here to stay and consumer shopping behaviour is clearly changing.

    ➡️ Amazon isn't the only company looking to benefit from Cov-19. We've covered quite a few stories on how e-commerce companies are venturing (back) into grocery and hyperlocal deliveries. Flipkart, Udaan, Meesho, Snapdeal, ShopClues and of course the big daddy of them all, Reliance, are all experimenting with delivering groceries and other essentials. Personally, I am a big Amazon fan and love their pantry offering in the US, which allows me to put in a recurring orders for pantry staples. If they get the supply chain right I can definitely see it doing well in India.

    2. https://bit.ly/38j70Ra: Chinese VCs are beginning to look for exits from India

    ➡️ In a totally unsurprising follow-up to the app ban, the Economic Times reported today that some early / mid stage Chinese investors are exploring quick exits.

    ➡️ Chinese investments in India’s tech ecosystem amounted to ~$3.9 billion in 2019. Paytm, BigBasket, Ola, Zomato, ShareChat, Delhivery and Doubtnut are some of the big names who have received funding from Chinese investors.

    ➡️ The app ban has been the most attention grabbing move by the government, but other moves such as changing FDI norms and making follow-on investments more complex for Chinese capital have already made India less attractive for Chinese investors.

    ➡️ There has been a lot of talk in India about how the app ban will hurt Chinese investors, who were looking at India as an attractive investment destination in light of China's slowing economic growth. But as I said yesterday, there are two sides to every coin. The flight of Chinese money might end up hurting the Indian start-up ecosystem overall if the net-net is a dearth of capital for Indian entrepreneurs. Let's hope Indian start-ups do seize the moment, and think more broadly and ambitiously than just filling the vacuum left by TikTok et al.

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