India’s new-age startups are taking over sponsorship rights for key cricket tournaments amid growing anti-China sentiment.
Meanwhile, retail giant Walmart clocked its biggest-ever online sales growth in the pandemic-hit quarter.
Dream11‘s IPL sponsorship win
Fantasy gaming platform Dream11 has outbid edtech firms Byju’s and Unacademy to secure the title sponsorship of IPL 2020 with its Rs 222 crore bid. Tata Group was other player in the fray, although it didn’t submit any bid.
This is nearly half of Rs 440 crore that previous title sponsor Vivo was paying the Board of Control for Cricket in India (BCCI) per season. The Chinese handset maker had acquired the five-year IPL title rights for Rs 2,190 crore in 2017.
- Change in role: Edtech firm Unacademy will be taking over the role of IPL’s official partner from Dream11, Brijesh Patel, chairman of the IPL Governing Council told ET.
This will likely entail several brand integrations and on-ground activations during the matches, which could help the edtech firm gain from more brand awareness in the competitive online education sector.
Indian startups & cricket sponsorship rights
The development comes as Indian Internet firms are increasingly taking over sponsorship rights for key tournaments from Chinese brands who are either keeping a low profile in the country due to the increasing anti-China sentiment or finding the value of these rights to be extremely high.
- In July last year, Byju’s had replaced Oppo as the official sponsor for the Indian cricket team, in a deal that runs up to March 31, 2022.
- Last year, digital payments firm Paytm also retained the title sponsor of the Indian cricket board’s domestic and international matches for Rs 326.80 crore.
Read more: Dream11 wins IPL 2020 title sponsorship
Flipkart‘s sales recovery
Flipkart’s sales, which were down for half of the second quarter of 2020, have now exceeded the pre-Covid-19 levels in the country, after the lockdown restrictions were eased, Walmart CEO Doug McMillon told analysts in a post-earnings conference call.
These government-mandated closures in India, Africa, and Central America, however, pulled down the US retail giant’s international sales by 6.8% to $27.2 billion. In the United States, the company saw a 97% jump in its e-commerce offerings.
What’s driving the sales?
While the ecommerce sector has recovered nearly 90-100% of its gross merchandise value in July in India, it is largely driven by categories such as grocery, personal care, and other non-discretionary items. Smartphones, fashion, and white goods, which make up for the bulk of sales on Flipkart and Amazon, still remain below pre-Covid-19 levels.
Both the firms are now gearing up for the crucial festive season, which they expect to drive up a significant sales growth. Festive sales typically account for 40-50% of annual business for most brands.
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What to watch out for: Reliance is ramping up its ecommerce play, so expect them to make a big splash during the festive season. Reliance Industries chairman Mukesh Ambani recently said that they are accelerating JioMart’s rollout to cover other sectors including electronics, fashion, pharmaceuticals, and healthcare.
E-pharma consolidation
PharmEasy has entered into a formal agreement to merge with its smaller rival Medlife, kicking off a likely consolidation in India’s online pharmacy space that is witnessing the entry of deep-pocketed players like Amazon and Reliance.
The deal: Medlife will sell 100% of its shares in return for 19.59% ownership in the combined entity that is expected to be valued at $1.2 billion.
Reliance Industries is reportedly in talks to acquire Chennai-based Netmeds while Amazon launched a medicine delivery service in Bengaluru last week.
Offline fightback: The All India Organisation of Chemists and Druggists (AIOCD), which represents 8.5 lakh chemist and drug retailers in the country, however, alleged that Amazon’s entry could have “legal implications” on the ecommerce platform. It claimed that home delivery cannot be undertaken by any online pharmacy and entities doing so are facing ‘contempt of court’.
The sector also faces challenges due to the absence of a clear regulatory framework from the country’s policymakers
TikTok’s newest suitor
Tech giant Oracle is the latest entrant in the race to buy the popular short-video app TikTok. It is engaging in preliminary talks with Chinese firm ByteDance to buy the app’s operations in the United States, Canada, Australia, and New Zealand, The Financial Times reported.
Oracle is reportedly working with existing US investors like General Atlantic and Sequoia Capital for this deal. Microsoft is currently the frontrunner in the race which has also seen the entry of players like Twitter. These developments come as the US government has set a 90-day deadline for ByteDance to divest TikTok’s US operations.
Oil-to-telecom conglomerate Reliance is also in early-stage talks to buy TikTok’s operations in the country, ET reported last week.
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SoftBank‘s focus on Big Tech
After unveiling a plan to invest $10 billion in public stocks last week, SoftBank has disclosed stakes in a clutch of US tech giants including Amazon, Alphabet, Microsoft, Netflix, Adobe, Tesla, and Nvidia. This development comes at a time when tech stocks are touching record highs on the US stock exchanges.
In Amazon, SoftBank owns a stake worth $1.2 billion, as per regulatory filings. The Japanese conglomerate was previously an investor in rival Flipkart and had reportedly even backed a bid for Amazon to buy the homegrown online retailer. Flipkart was eventually acquired by Walmart and SoftBank exited with handsome 60% returns.
SoftBank also pulled off a remarkably speedy comeback last week after recording the worst loss in his company’s 39-year history, aided by the improved performance of its portfolio firms.
Also Read: SoftBank gives up pretending it isn’t a fund
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