Home rental platform Airbnb is eyeing its much-anticipated initial public offering after witnessing a surprise turnaround in recent months.
We also go deeper into various issues that are currently impacting India’s influencer marketing industry.
Airbnb’s IPO plans
The Covid-19 pandemic has hit several businesses across the world, especially those in the travel and hospitality industry. Airbnb was no exception. In fact, Airbnb chief executive Brian Chesky had characterised the pandemic in April as a “torpedo hitting a ship”, derailing the company’s IPO plans. In the following month, the company also laid off 25% of its workforce.
However, just a few months down the lane, the US home-sharing platform is reportedly close to confidentially filing IPO paperwork later this month and gear up for a public market debut before the end of this year, according to The Wall Street Journal. This could be either in the form of a traditional IPO, a direct listing or merging with a blank-check company.
What has changed?
Airbnb is witnessing a change in how people are travelling during the pandemic, with domestic travel rebounding strongly for the US firm across the world in the last few weeks of May and early June.
“From May 17-June 3, we have seen that domestic bookings, globally, are greater right now for us than the same period last year. The nature of travel is different and people are opting to stay closer home,” Airbnb co-founder Nathan Blecharczyk had told ET in June this year.
Last month, Airbnb claimed that guests had booked more than 1 million nights’ worth of future stays on July 8, the first time it hit this milestone since March.
In April, Airbnb had raised about $2 billion in debt and equity financing including $1 billion from private equity firms like Silver Lake and Sixth Street Partners.
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Influencer marketing problems
The influencer marketing industry is in the limelight again as rapper-singer Badshah (Aditya Sisodia) is being investigated by the police for allegedly paying money to get fake followers and likes to promote his music. This comes at a time when influencer marketing is emerging as the fastest-growing category in the Rs 21,000 crore digital advertising space.
While the issue of fake followers has been around for several years now, it is not the only problem the industry grappling with, in the absence of standard industry practices and regulations.
Key issues
- Lack of pricing and measurement standards
- Absence of contracts between many agencies and influencers
- Unprofessional behaviour by some creators
- Obsessive focus on reach instead of impact
- Bidding war to hire top influencers
Changing dynamics
Things, however, are changing. The ecosystem is slowly getting over its obsession with the number of followers as brands start working with macro and nano influencers who grow their social clout along with the brand’s growth. They are also increasingly favouring influencer marketing firms equipped with tech-enabled tools.
Popular companies in the space like Eleve Media, Greenroom, Mad Influence, and a few others have developed proprietary tech tools to suit the advertiser needs and deliver measurable influencer campaigns. Qoruz has a tool to help companies discover the right influencers based on their relevance, perception and engagement rate.
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Credit for low-income borrowers
Prime Minister Narendra Modi’s office is directly monitoring a project that aims to give organised credit to millions of daily wage workers, small farmers, and beneficiaries of various government welfare schemes
Niti Aayog has been commissioned to lead the development of the digital network which would involve banks, fintech companies and fiduciary intermediaries working in tandem to underwrite small-ticket loans to bottom-of-the-pyramid borrowers through the existing direct benefit transfer (DBT) infrastructure
Niti Aayog CEO Amitabh Kant has presented two prototypes forming the key cog of the model to PM Modi last Friday.
What are the two prototypes?
- Kashi (Cash over Internet): A network of top lenders on the Jan Dhan network coming together to create a DBT-based digital lending protocol. Through this, the future DBT inflows to the beneficiary borrowers’ account will be deducted every time they access credit, a source with knowledge of the discussions said.
- KYC Setu: A common protocol for KYC (Know Your Customer) sharing using UPI rails. Financial institutions including banks, NBFCs, and insurers to vet the credentials of a prospective bottom-of-the-pyramid borrower without repeated authentications.
Tencent’s gaming boost
Tencent’s overall revenues grew 29% year-on-year to about $16.5 billion in the quarter ended June, while net profit soared 37% YoY to $4.77 billion on the back of strong gaming demand.
Gaming revenues surged 40% on a yearly basis to $5.5 billion for the quarter, with smartphone gaming witnessing a 62% revenue increase. Other divisions like social networking, fintech and business services, and social advertising revenues rose by nearly 30%. Media advertising revenues, however, fell by 25% due to lower advertising sales from Tencent Video.
WeChat US Ban
The company’s strong earnings performance is, however, overshadowed by a looming ban on WeChat in the United States. Last week, US President Donald Trump issued executive orders banning any US transactions with WeChat parent Tencent after 45 days, although the scope of this ban is yet unclear.
Also Read: Trump ban on top messaging app risks snarling global business
How Trump could ban Chinese Apps
Trump’s ban order on WeChat and Bytedance-owned TikTok could prevent US app stores from offering the popular short-video app and make advertising on the platform illegal, according to Reuters. The ban order is set to be effective from September 15, 2020.
“Prohibited transactions may include, for example, agreements to make the TikTok app available on app stores … purchasing advertising on TikTok, and accepting terms of service to download the TikTok app onto a user device,” according to a White House document obtained by the publication. While the ban order is set to be effective from September 15, it is yet to be seen whether the ban would actually be implemented.
ByteDance’s hiring freeze
Back in India, Bytedance has frozen hiring and reassigned some senior management roles in the country amid employees leaving or looking to exit the Chinese company following the ban on its TikTok and Helo apps.
The Chinese Internet giant, which has around 2,000 employees in India, is trying to hold on to staff amid discussions of a sale of TikTok with Microsoft and Twitter.
Benefiting from this move are rival short-video apps like Chingari, Trell, Bolo Indya, Sharechat’s Moj, and DailyHunt’s Josh.
“We’ve had at least five-six senior professionals from ByteDance reach out to us,” said Anuj Roy, managing partner at executive search firm Fidius Advisory. “This includes individuals who had joined the company even a few months ago. A lot of senior-level hiring happened at ByteDance over the last year or so.”
Read: TikTok parent ByteDance halts hiring in India; tries to retain employees
(Illustration and graphics by Rahul Awasthi)
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