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| Here's your daily business briefing. - 🚗 BYD outpaces Tesla in Q4 2023
- 🛍️ Deep Dive: Excess inventory floods luxury retailers
- 🚚 DoorDash plans to diversify beyond restaurants in the U.S.
Thanks for reading!! Shriram
p/Shriram | |
| 1 | | In Q4 2023, BYD overtook Tesla as the world's largest electric car company, achieving record sales of 525,409 battery electric vehicles (BEVs) in the quarter. Tesla delivered 484,507 electric cars during the same period, narrowing the gap between the two companies to about 230,000 units, compared to 400,000 units in 2022. More: - During 2023, BYD sold 1.57 million electric vehicles, a 73% increase, while Tesla sold 1.8 million.
- In addition, BYD sold 1.44 million hybrids.
- The swift expansion of BYD in China indicates the nation's rise in the electric vehicle sector, bolstered by robust government policies and support.
- By 2025, China wants new energy vehicles (NEVs), such as BEVs, plug-in hybrids, and hydrogen fuel cell vehicles, to account for at least 20% of total new automobile sales.
- During the first 11 months of 2023, China saw over 8.3 million new energy vehicles, or more than 30% of all automobiles sold.
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| 2 | | 
What the numbers say: While the luxury industry saw a robust 15% growth in sales at constant exchange rates in 2022, projections for 2023 suggest a slowdown to approximately 7.5%, as reported by Bain & Company. Online luxury retailer MyTheresa noted a 44% increase in inventory compared to the previous year. According to Bain & Company, off-price outlets now account for 13% of all luxury goods by value, a significant rise from 5% a decade ago. Relevance: Due to the slowdown in the luxury market, there is an oversupply of inventory, which presents a problem for e-commerce retailers, independent boutiques, and brand-owned stores. Given their reputation for exclusivity, luxury brands are hesitant to use deep discounts or burn through surplus inventory. More data: Reduced reliance on wholesale accounts and concessions in department stores are two ways the luxury sector has tried to reclaim control over pricing and minimize discounts. After some luxury businesses backed off from their attempts to limit the resale of their products, unofficial resellers have become a go-to source for luxury brands looking to clear out inventory. | | | |
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| 3 | | DoorDash, led by CEO Tony Xu, aims to expand its reach beyond restaurant meal delivery, strategically focusing on international markets and diversifying into new areas. The company is particularly interested in smaller geographies and countries, aligning with its emphasis on suburban areas and smaller cities in the U.S. More: - Eighteen months after completing the $7.6B all-stock acquisition of Finland's Wolt, which expanded its footprint to 27 countries, DoorDash is venturing into new markets.
- By the end of September 2023, the company had $878M in free cash flow, giving it the stability it needed to make more investments.
- With revenue in the third quarter of 2023 climbing 27% to $2.2B, the company outperformed competitors like Delivery Hero and Just Eat Takeaway, indicating an optimistic outlook.
- Building on its success in non-restaurant delivery, DoorDash is looking into the potential in retail and groceries, emphasizing convenience and supermarket expansion.
- With a market valuation of $39.4B in 2023, the firm has maintained a strong lead in the U.S. restaurant delivery sector over the last five years, having doubled its market share.
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| 4 | | Forrester reported that same-day and next-day delivery services may not justify retailers' costs, as most shoppers do not highly desire them. Three-fourths of U.S. online consumers prioritize free shipping, while only a fifth consider next-day or same-day delivery as critical factors in selecting a retailer, with nearly half indicating that the option has no impact on their choice. More: - Regarding grocery shopping, 47% of American customers prefer to shop in-store to check things before purchasing.
- According to Forrester, buy online, pick up in-store (BOPIS) services are a more economical means for merchants to give customers prompt access to products.
- Online shoppers in the U.S. are interested in BOPIS in about 22% of cases, while curbside pickup is preferred by 27% and drive-thru pickup is desired by 15%.
- Large stores such as Target, Walmart, and Amazon have invested in same-day delivery services; however, Forrester notes that more customers are choosing BOPIS, a more economical option.
Zoom Out: | | | |
| 5 | | Dish Network Corp. and EchoStar Corp. concluded their merger on Dec. 31, 2023, with Charlie Ergen, the chairman and co-founder of both companies, now serving as the executive chairman of the combined firm. The merger announced in August is one of the main components of Ergen's strategy to move Dish away from the waning pay-TV market and toward cellular services. More: - Dish's TV customer base has dropped by 37% in the last 10 years, and the business needs to raise an estimated $12B to $16B in fresh funding.
- According to Bloomberg Intelligence, Ergen most likely plans to use EchoStar's $1.9B in cash and an expected $265M in free cash to finance the expansion.
- With $24.6B in debt, Dish has more time and money to develop its 5G network and mobile services.
- Dish and EchoStar have named Hamid Akhavan as their president and CEO.
- After a little regulatory examination, the Regulatory Communications Commission gave the deal a green light on Dec. 7.
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| 6 | | Baidu's $3.6B acquisition of Joyy (YY), the owner of live streaming platform YY Live, collapsed due to unmet conditions, including regulatory approvals, by the Dec. 31 deadline. The termination hindered Baidu's expansion of its live-streaming business and diversified revenue sources beyond advertising. More: - The Nasdaq-listed company, which has over 277 million active monthly users worldwide, manages social platforms, including Bigo Live, Likee for short-form videos, Hago for multiplayer social networking, and an instant messaging product.
- With live streaming revenues down almost 9% to $495.8M, Joyy's Q3 2023 net revenues of $567.1M represented a slight dip from $586.7M in the same period the previous year.
- Baidu's plan to enter the live-streaming business and make money from user-purchased virtual goods has been hampered by the deal's collapse.
- Despite recent indications of a potential relaxation of such regulations, the termination occurs amid China's past regulatory crackdown on significant internet enterprises.
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| 7 | | Quick Hits: - Calendly is more than a scheduling link. Teams are seeing a 2x conversion rate, +30% retention, and 323% ROI. Join 20 million people — Sign up free.*
- The PGA Tour and LIV Golf seek to extend their merger deadline beyond Dec. 31 amid ongoing talks between the PGA Tour and LIV Golf, backed by the Saudi Public Investment Fund.
- Tesla led Norway's car sales for the third consecutive year in 2023 despite ongoing conflicts with local labor unions.
- CNN Business' CEO of the Year is Satya Nadella, outshining competitors like Jamie Dimon, Sam Altman, and Jensen Huang, per the staff's selection.
- Iberdrola abandons the $8.3B acquisition of U.S. power utility PNM Resources due to opposition from New Mexico regulators, prompting a reevaluation of its U.S. expansion plans.
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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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