| Here's your daily business briefing. - 🛍️ Chinese e-commerce giants slash prices for Singles Day
- 🥩 Deep Dive: Beef prices skyrocket
- 🐟 Canned tuna industry faces threats
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | China's Singles Day festival, initiated by Alibaba in 2009, encounters economic challenges, prompting fierce price competition among e-commerce giants like Alibaba, JD.com, and Pinduoduo. In response to economic uncertainties, these platforms are leveraging catchy slogans and discounts, engaging in a pricing war to stimulate sales amid a potentially subdued market. More: - During the sales period, which began on Oct. 24, Alibaba hopes to provide over 80 million products at its lowest rates.
- JD.com offers 50% off a selection of devices and the chance for customers to purchase top-selling products for just one yuan ($0.14).
- China's middle class struggles with high unemployment rates, slow income growth, and a property market crisis, lowering consumer spending.
- E-commerce sites aim to entice customers by providing incredible discounts on a range of goods on Singles Day, a significant shopping occasion for the sector.
- Despite aggressive promotions, doubts persist about the effectiveness of lower prices in attracting consumers, as social media users express skepticism about promotion authenticity and indicate reduced spending compared to previous years.
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| 2 | | 
What the numbers say: Record-high retail beef prices in the U.S., currently at approximately $8 per pound, are attributed to the smallest number of cattle herds in decades, a consequence of prolonged drought in major cattle ranching states such as Texas and Kansas. Relevance: Record-high beef prices are driven by a diminishing cattle supply and rising input costs, as producers face challenges posed by prolonged dry weather, poor forage conditions, and increased costs in labor and transportation. More data: USDA forecasts a 180 million-pound decline in beef production for the year's second half, driven by challenges in feeding cattle due to skyrocketing input costs. With cattle ranchers liquidating the breeding herd, beef inventory is at its lowest in nine years, leading to a demand-supply gap that could keep prices at record levels for the next 18 months. | | | |
| 3 | | Multinational companies like Thai Union Group dominate the global canned tuna industry, valued at $40B. In the U.S., 71% of the 637.9 million pounds of imported tuna in 2021 were canned, and per capita consumption dropped by 45% between 2000 and 2021 due to shifting preferences, market consolidation, sustainability concerns, transparency issues, and a price-fixing scandal. More: - Amid the COVID-19 pandemic in 2020, U.S. tuna consumption rose to a level not seen since 2011.
- Thai Union Group's increased demand during the pandemic resulted in a nearly 19% profit rise in 2020 compared to 2019.
- Inflation-driven cost increases and geopolitical developments like the conflict between Russia and Ukraine present hurdles for the sector today.
- The tuna business faces challenges in the future due to existential risks such as climate change, illicit fishing, and sustainability issues.
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| 4 | | Polestar has adjusted its 2025 delivery target to 155,000 to 165,000 vehicles, with a revised gross profit margin goal in the high teens. The company reported a net loss of $155.4M in Q3 2023, contrasting with a net profit of $299.4M in the same period last year. More: - Polestar delivered 13,976 cars in the third quarter of 2023, a 51% increase YoY, and 41,817 cars in total in the first nine months of 2023.
- Polestar anticipates delivering around 60,000 vehicles in 2023 with a positive gross margin of about 2%, a revision from its earlier guidance of 60,000 to 70,000 vehicles and a 4% gross margin.
- Founder investors Geely Automobile Holding and Volvo Cars gave Polestar an additional $450M in loans, and the company expects to need roughly $1.3B in outside capital to reach break-even cash flow in 2025.
- The corporation is reducing expenses to increase productivity and lower its funding requirements, and its stock is down 7%.
- Polestar plans to produce the Polestar 3, a large electric SUV, in China in Q1 2024 and in the U.S. in the summer, while the smaller Polestar 4 crossover SUV begins production in China next week, with deliveries expected next month in China and globally early next year.
- The upscale sedan, Polestar 5, is set to go into production in China by the end of 2024.
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| 6 | | On Dec. 14, SiriusXM will introduce a revamped app and a new streaming plan, targeting a younger demographic, specifically millennials. Priced at $9.99 per month, the Streaming All Access Plan includes features like "always-on" curation, a personalized library, and four new stations, aiming to compete with streaming rivals such as Spotify and Apple Music. More: - The app's new features are improved podcast listening, enhanced search, and improved content discovery.
- The ability for listeners to effortlessly continue where they left off across devices — such as vehicles, phones, or Fire TVs — improves the whole listening experience.
- There has been a decrease in SiriusXM's subscriber base; in Q3, the satellite radio provider reported losing 94,000 customers.
- The business highlights its "human touch" and unique material, including channels handpicked by well-known musicians like Kelly Clarkson, John Mayer, and Dolly Parton.
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| 7 | | Quick Hits: - Bike Friday is on! Upway sells discounted e-bikes from top brands, rigorously inspected and certified by master mechanics. Get discounts of up to $1,000 on a selection of e-Bikes!*
- In response to slowing demand and ongoing inflation, Canadian Tire has laid off 3% of its full-time employees as part of a cost-cutting initiative.
- Shell launched a $3.5B share buyback program after third-quarter earnings, driven by higher refining margins, oil prices, and sales, slightly missed market expectations.
- McDonald's and Krispy Kreme are in talks to extend their partnership beyond Kentucky, where they have been collaborating for over a year to offer Krispy Kreme doughnuts at McDonald's locations.
- Rockstar Games, a division of Take-Two Interactive Software Inc., confirmed plans to release a new Grand Theft Auto game next month, coinciding with the company's 25th anniversary.
- Design UIs in seconds with Uizard's AI. Generate screens from text, convert screenshots to wireframes, and hand off to collaborators. Try it free!*
*This is a sponsored listing. | | | |
Term of the Day Inferior good: Inferior goods are goods whose demand decreases when income increases, as opposed to normal goods whose demand increases when income increases. Question of the Week What perks would convince you to return to the office? Join the conversation |
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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