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Is the Internet Turning into QVC?
In a webcast last month, a Chinese pitchman known as the ‘lipstick brother’ sold $1.9 billion worth of merchandise in a single day.
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Here are today’s highlights:
There is a way to bring down the price of gasoline.
Opportunity zones were supposed to revitalize impoverished neighborhoods.
Companies have been ordering a record number of robots.
The current chip shortage does offer a silver lining.
The internet is turning into QVC: “For years in China, young people have been in love with shopping webcasts, short videos and social media personalities that both inform them about products and let them buy instantly. This often happens in the form of in-app webcasts, which my colleague Raymond Zhong has described as ‘QVC and late-night television infomercials reinvented for the mobile age.’ In one such webcast last month, a Chinese online pitchman known as the ‘lipstick brother’ sold $1.9 billion worth of merchandise in a single day. Technologists have predicted that it is only a matter of time before Americans get hooked on similar blends of e-commerce and social media, but that hasn’t quite happened.”
“Lots of people and businesses on Instagram, YouTube and TikTok sell merchandise, but they often direct you to buy on Amazon, Sephora or another website.”
“Part of the magic of Chinese in-app shopping is that you can buy something the millisecond that your brain says, ‘Oooh, I want it!’”
“This week, YouTube, which is owned by Google, detailed its plans to introduce live shopping webcasts and ‘shoppable videos’ in time for the holidays.”
“Amazon, Snapchat, Pinterest, Facebook and Instagram are going bigger with shopping webcasts and features to buy items directly in those apps, too.” READ MORE
The very real silver lining to the chip shortage could be a renaissance in U.S. chip manufacturing: “One Arizona-based semiconductor supplier, Microchip Technology, is investing in expensive new equipment and hiring more staff because its profits tripled last quarter, according to the New York Times. GlobalFoundries, a chipmaker based in Malta, New York, announced in July that it would build another chip plant nearby in a bid to double its production capabilities. And just last month, a manufacturer in North Carolina announced its pivot to semiconductors and changed its name from Cree to Wolfspeed. The company is also in the process of building a new manufacturing facility in upstate New York. GM has already signed up as a strategic customer ...”
“Last May, Texas Instruments started construction on a $3.1 billion chip plant near its Dallas headquarters and may finalize plans for another facility soon.”
“Intel announced this past March that it would spend more than $20 billion to build two new chip manufacturing factories in Arizona ...”
“The world’s biggest chipmaker, Taiwan-based TSMC, has already started construction on a $12 billion plant in Arizona.” READ MORE
A Vermont manufacturer of wooden toys, Maple Landmark, has had little trouble getting supplies but little success finding workers: “[Founder Mike] Rainville has been trying for weeks to hire three or four workers to add to his crew of 46, but competition is fierce. The cheese factory up the road has eight open positions. The cidery next door and the teddy bear factory on Route 7 have large ‘Help Wanted’ signs outside. Maple Landmark has raised its average wage rate by more than 7 percent over the last year, Rainville said — the average production worker earns over $15 an hour — but some local companies with deeper pockets are offering signing bonuses, a perk Rainville said he can’t afford to match.”
“A nationwide shopping spree is exacerbating the strain on companies like Maple Landmark. Flush with cash from nearly two years of forgoing restaurant meals and travel, Americans are bingeing on products — electronics, clothes, gifts and anything else they can click into an online shopping cart.”
“A rush of online orders last year nearly made up for the collapse in Maple Landmark’s sales to shuttered retailers. Now, with many shops having reopened, ‘we’re getting hit from all sides.’”
“Recently, the company stopped taking Christmas orders from new retailers so it could focus on its existing retail clients.” READ MORE
Companies have been ordering a record number of robots: “Total robotics sales for the first nine months of the year were $1.48 billion, topping a previous record of $1.47 billion set over the same period in 2017, according to the Association for Advancing Automation, or A3. Sales rose from $1.09 billion in the first nine months of last year.”
“‘With labor shortages throughout manufacturing, logistics and virtually every industry, companies of all sizes are increasingly turning to robotics and automation to stay productive and competitive,’ A3 President Jeff Burnstein said.”
“Companies ordered nearly 29,000 robotics units in the first nine months of the year, A3 said.” READ MORE
The rise of electric vehicles is likely to render the price of gas irrelevant: “Prices increased rather quickly in October. The consumer price index registered a 6.2 percent increase relative to last year — the highest monthly rate since 1990. Prices are up in many items (particularly meat), but the largest component of the price increase was energy. Gas prices are up 50 percent year-on-year, while fuel oil prices are up 59 percent. These uncomfortable increases point to an underrated side benefit of climate policy and the future of electrification — by moving away from non-carbon sources of energy, America will free itself from its dependence on oil, and all the toxic political side effects that creates.” READ MORE
Launched in 2017, Opportunity Zones were supposed to revitalize impoverished neighborhoods: “Was it wise to roll out a massive tax break designed to help impoverished areas with only a minimum of restrictions and reporting requirements? That’s one of the key questions that David Wessel, a former Wall Street Journal and Boston Globe reporter who’s now a senior fellow at the Brookings Institution, explores in his new book, Only the Rich Can Play: How Washington Works in the New Gilded Age. Wessel explains how a Silicon Valley entrepreneur with no policy experience was quietly able to implement one of the most important — and controversial — anti-poverty programs in a generation.”
“Several projects — like Baltimore’s Port Covington project or a new hotel in New Orleans’ Warehouse District that was built with funds from an OZ fund established by former Trump aide Anthony Scaramucci — appear not to need the tax break.”
“Other developments that take advantage of the program, such as self-storage facilities, offer little in the way of community benefits.” READ MORE
Believe it or not, MoviePass is planning to take another shot: “MoviePass, the movie theater ticket subscription service that became a sensation in the summer of 2017 before collapsing in epic fashion, is coming back. MoviePass co-founder Stacy Spikes was granted ownership of the company by a Southern District of New York bankruptcy court judge who approved the sale on Monday, according to court documents reviewed by Insider. The financial transaction took place on Wednesday.”
“‘I can confirm that we acquired MoviePass out of bankruptcy on Wednesday,’ Spikes said in a statement to Insider. ‘We are thrilled to have it back and are exploring the possibility of relaunching soon.”
“Spikes hopes to relaunch MoviePass sometime next year. A new site has been created for the relaunch, iwantmoviepass.com.”
“Mark Wahlberg's non-fiction production company Unrealistic Ideas is currently developing a documentary on the rise and fall of MoviePass based on award-winning reporting by Insider.” READ MORE
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Framework, a startup, has raised $2 million to create an “on demand business school” to help startups: “The edtech platform says it has more than 2,500 people on its waitlist ahead of its launch next year. The idea is that Framework members learn directly from tech operators from companies including Slack, ASOS, Flo Health and Netflix, via 15-minute ‘Frameworks’ and live office-hours sessions. Members can also make 1:1 connections with each other. This is sometimes called ‘snackable’ content.’”
“Asha Haji, co-founder at Framework, said: ‘Our mission is to scale a new generation of tech leaders by building the go-to learning community for startups and scaleups around the world.’”
“Riya Pabari, co-founder at Framework, added: ‘As two female founders of color, it’s also our chance to fly the flag for all of the incredible under-represented founders who deserve more attention from the VC community.’” READ MORE
THE 21 HATS PODCAST
I Can Do It. I Promise You, I Can Do It: This week, Dana White takes us along for the ride. After a triumphant trip to Germany, where she expects to open salons on multiple military bases, she’s just returned to Detroit—only to learn that the team she’s counting on is showing serious cracks. Those cracks have shaken Dana and left her questioning her approach as a CEO. Ultimately, she talks about those moments many entrepreneurs experience in the cold of night, when things aren’t going well, and they realize this is all on them. In those moments, Dana confesses, “I’m scared. And I feel alone.”
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