Amazon’s India operations crossed another key milestone, accelerated by the lockdown restrictions around the world.
Meanwhile, Facebook is striking deals to strengthen its music library in India although the social networking giant is witnessing cutbacks from its largest advertiser in the United States.
Amazon India‘s export milestone
Amazon India’s total cumulative exports from the India market has surpassed the $2 billion milestone, with the last $1 billion coming in the last 18 months, Amazon India country head Amit Agarwal told ET.
The Covid-19-induced lockdowns led to a spike in e-commerce sales across categories like home, health and personal care, apparel, jewellery, and kitchen. As of now, about 60,000 sellers from the country export using Amazon’s global channels.
What’s the goal?
In January, Amazon had pledged to export locally made goods worth $10 billion from the country by 2025. Founder Jeff Bezos had committed to invest $1 billion in India to help 10 million Indian small and medium businesses (SMBs) to sell online earlier this year. Amazon has invested more than $5 billion in India since its entry in 2013. Read more.
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eBay’s sale of classified ads business
eBay is in advanced talks to sell its classified ads business to Norwegian group Adevinta, as it looks to refocus on its core marketplace business, The Wall Street Journal reports. The deal could value the eBay unit at about $8 billion or more.
Other suitors in the mix
Apart from Adevinta, eBay has reportedly received offers from Naspers-backed consumer internet-focused investor Prosus and a private equity consortium that comprises of Blackstone, Hellman & Friedman and Pemira. However, the bid from Prosus hit a bump since eBay wants to retain a stake in the classifieds business, as per Bloomberg.
eBay’s classifieds business has a collection of brands like Kijiji and Gumtree that operate across 1,000 cities in markets like Canada, Europe, Africa, Australia, and Mexico. The business posted an operating income of $83 million and revenue of $248 million in the first quarter of 2020.
The sale comes as a result of pressure from activist investors Elliott Management and Starboard Value LP that are pushing the firm to shed all non-core businesses to focus on its marketplace business. eBay sold its ticketing arm StubHub to viagogo for more than $4 billion last year.
Facebook’s music deal
Facebook is strengthening its music library as the company looks to double down on short videos and other experiences across its social networking platform and Instagram.
It has signed a licensing deal with the Indian Performing Rights Society (IPRS), that has several musicians as its members, to license “hundreds and thousands of songs” from the IPRS repertoire which users will be able to add to their videos and stories via music stickers on Facebook and Instagram.
Previous deals
Last month, Facebook signed a similar deal with Saregama to license over 100,000 songs across multiple genres last month. It also has tie-ups with top music labels like T-Series, Zee Music Company, and Yash Raj Films in the country.
Instagram launched a broad pilot of its TikTok-like short video feature Reels in India earlier this month, in a bid to capitalise on the void left by the ByteDance-owned short video platform.
Facebook’s advertiser boycott
The social networking giant, however, is facing a setback in its home market, with Disney “dramatically” cutting back its advertising spends on Facebook and Instagram, as per a Wall Street Journal report.
Disney was Facebook’s top advertiser in the United States for the first six months of 2020, according to research firm Pathmatics. The firm said that Disney spent an estimated $210 million on Facebook ads to promote its video streaming service Disney+ while Disney-owned Hulu spent an estimated $16 million on Instagram from April 15 to June 30.
To be sure, Facebook generates $70 billion in annual advertising revenue from over eight million advertisers. Last year, Facebook said that its top 100 advertisers accounted for less than 20% of total ad revenue.
Some startups roll back salary cuts
Some Indian internet companies like Grofers, Zomato, UpGrad, and Ixigo have begun rolling back the salary cuts introduced during the lockdown in the April-June quarter while companies like Snapdeal have rolled out increments and reinstated bonuses.
What are they saying?
Grofers CEO Albinder Dhindsa said they had been conservative earlier due to uncertainty in operations “That seems to be stable now, so we reinstated salaries from July 1.”
Ixigo chief executive Aloke Bajpai said there was more pent-up demand than anticipated as flights began to resume, however, they later saw that “demand would not go south of a particular level”, due to which they reinstated salaries back to the February level. Read more.
Rise of live video chat apps
While short video platforms have hogged the limelight in recent weeks, a new ecosystem of ‘Live video chat’ apps has silently garnered millions of users.
A lot of these apps have seen a sudden spike in downloads and user spending during the lockdown in India, as per Sensor Tower data. Four such apps are among the top 10 grossing apps on the Play Store in India at present. Most of these apps are from China, Hong Kong, South Korea, and the United States.
Elusive monetisation of short video apps
Speaking of short video apps, monetisation remains elusive for these apps, since India is still a user-led story, unlike in China.
Risk investors are divided over investing in these apps. While Nexus Venture Partners is learnt to be leading a $5-million financing round in Indian social and short video app Mitron TV, some other venture firms are learnt to have seen and passed some of these newbies like Chingari among others. These investors are taking a wait-and-watch approach for now.
While several new apps are seeing a rapid increase in downloads, most in the industry feel this unhindered rise won’t be sustainable.
A venture capitalist who is looking to back one of the Indian social startups says he expects a few meaningful platforms to emerge as a result of the Chinese apps being banned. “While a TikTok clone is not the answer, there will be short-video-led categories across communities,” he said.
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(Illustrations and graphics by Rahul Awasthi)
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