“Life is food, music, exploration. Life is being together, living well, learning. Life is where you go, how you dress, the joy you feel. To shape a joyful lifestyle.”
Nio designs and manufactures high-performance premium electric vehicles. But, unlike its competitors, Nio really is a lifestyle brand, rather than a typical speed-loving, rubber-burning auto brand.
This is an auto brand that partners with over 500 of the world’s top fashion and industrial designers, that shows at Beijing Fashion Week, that indulges in a food lab, that celebrates its own vintages with an online bar. This is a brand that is truly people rather than product-centric, that is about the future more than today.
It is also one of the most interesting, fastest growing, and valuable companies in the world.
Dairy farming, bike sharing, NYSE listing
Nio was co-founded in 2014 by William Li (also known as Bin Li) and has received investment from Tencent and Baidu, driving it to the top of China’s fast-growing domestic EV market.
William Li has been called the “Elon Musk of China”.
Born in August 1974 on a dairy farm in Anhui province, Li grew up in modest circumstances. His parents began saving for his college education when he was seven years old, and he later worked part-time to support his family. Li attended Peking University where he received his bachelor’s degree in sociology as well as a minor in law.
Similar to Musk, he has either founded or invested in more than 40 companies in the tech and automotive industries, including the bike-sharing platform Mobike.
He launched his first internet-based start-up at the age of 21 in 1996. In 2000, he founded his first major company, Bitauto, which provided web content and marketing services for China’s automotive industry. He gained a broad understanding of the auto market as a Bitauto reporter, interviewing high-profile movers and shakers in the industry.
The company went public on the American Stock Exchange in 2010 and was valued at over US$1 billion. Bitauto’s success propelled Li to stardom and he became one of the most influential entrepreneurs in China. He served as the CEO and chairman of the company for 13 years and sold Bitauto in 2013.
With a passion for cars, and inspired by the success of Chinese tech brand Xiaomi, Li began laying the groundwork to launch a new automobile manufacturer.
After receiving $2.1 billion investments from major tech companies such as Tencent, Baidu and Lenovo, Li founded Nio in 2014, his fourth start-up.
By 2016, it had debuted its two-door sports car, Nio EP9, at the Saatchi Gallery in London. Six EP9s were sold to investors for £2.5 million (US$3.2 million) each and the EP9 went on to set fastest lap records for an electric vehicle at various race circuits around the world.
The compamy went public in September 2018 on the New York Stock Exchange. Li owns just under 14% of stock.
Blue Sky Coming
Like many start-ups, making huge tech investments in advance of launch, the business was on the verge of bankruptcy at the end of 2019 but has staged a remarkable turnaround since then, majorly attributed to the investment by the Hefei government.
Nio’s Chinese name Weilai which means “Blue Sky Coming” which seeks to capture its mission to create a sense of freedom and joy through its autonomous driving solutions, and potentially much more.
China is rapidly becoming the world’s largest EV market – benefiting from government subsidies, consumers leapfrogging to EVs as their first cars, and obviously the huge potential audience size. EV sales are forecasted to breach the value of 6 million by 2025, and Nio, alongside the likes of BYD, are frontrunners to meet this demand.
Despite its youth, Nio has grown rapidly by focusing on innovation of the consumer experience, and developing an ecosystem of partners to deliver this, faster and more holistically than most competitors.
Innovation and design
Nio focuses on innovation to stay ahead of the curve and has filed for over 300 patent applications in the last five years. These are related to various aspects like communication systems, safety features, lighting, HVAC system, distribution, and electric power conversion. This creates a patent licensing opportunity for the brand. With three research centers in China and one each in the US, Germany, and the UK, it is constantly seekingtechnologically-based advances.
Nio Autonomous Driving (NAD) technology is key to its progress. Nio ET7, a sedan, is the first autonomous driving model launched by the brand in January 2021. NAD consists of NioAquila Super Sensing and Nio Adam Super Computing to make autonomous driving a safe experience.
Nio Aquila comprises 33 high-performance sensing units, including components like 8-MP high-resolution cameras, 1 ultralong-range high-resolution LiDAR, 5 mm-wave radars, 12 ultrasonic sensors, and 2 high-precision positioning units, all in sync generating 8-GB data per second. Nio Adam is a supercomputer that deals with all this data to create high-clarity images and enhanced details to make autonomous driving convenient.
Energy and batteries
Battery technology – or more specifically Battery as a Service (BaaS), is at the heart of an electric vehicle and generally amounts to at least a third of the EV’s cost. In April 2020, China issued a new regulation, which clearly exempts “battery swap model” vehicles from the “300,000 RMB price threshold for getting subsidies” set by the policy.
BaaS is a subscription model or leasing service that aims to reduce costs for consumers. The consumers who opt for this service can save up to 100,000 Yuan by choosing not to own the battery.
Alternatively, they can pay a battery leasing fee of around 1,280 Yuan per month for six consecutive years and then own it. It allows the consumers to tackle the three-pronged challenge of battery degradation, upgradability, and lower resale values.
Nio Power helps in reducing range anxiety by providing customers a range of mobile internet-based power solutions. “One Click for Power,” i.e., a 24/7 on-call valet charging system, is one such option on the Nio app. It provides a pick-up and drop service for recharging an Nio vehicle within the shortest time based on the best option (Power Swap, Mobile, or Charger).
Nio Power provides services for both home and on-road situations. For home, there are Power Home Plus chargers that enable fast-charging of vehicles. For on-road, Power Swap involves battery swapping, Power Charger, and Power Mobile, which is akin to a portable power bank for a vehicle. The Power Mobile facility provides a charging van at the requested place, offering a range of 100kms after charging for 10 minutes.
Nio had 792 Power Chargers across 53 cities in China and 318 Power Mobile vans as of 31st December 2020.
Battery swapping technology can be tricky to master, and being first in the market does not guarantee success. Battery swapping was first introduced in 2011 by an Israeli start-up Better Place, which filed for bankruptcy in May 2013.
Tesla launched its Model S in 2013 with battery swapping enabled, but even they ended the initiative by 2015. The technology was a game-changer, but the implementation was anything but easy. NIO has managed to crack the puzzle by creating a Power Grid.
Nio had 172 Power Swap stations across 74 cities in China, having completed 1.4 million battery swaps as of 31st December 2020. Their Power Swap station 2.0, expected to be launched in the second quarter of 2021, will reduce the battery swapping time to under three minutes, accommodating up to 13 battery packs way above the current number of 5 battery packs.
Lifestyle brand
NIO House is an offline channel that fosters a community of Nio users. It functions as a showroom plus clubhouse for users, their family, and friends. The NIO House is divided into 7 areas: a café, library, and living room that cater to the varying consumer preferences. Thus, Nio’s business model focuses on creating a brand community that takes care of the customer experience, word-of-mouth marketing, and brand loyalty.
Nio’s business model is not only about selling electric cars and associated services. As we have mentioned before, Nio is building a community.
NIO Life is a lifestyle brand catering to various segments like apparel, home and living, travel, and bags. So, what makes it different, you ask? NIO has collaborated with over 100 designers worldwide to reuse and restyle vehicle scrap to create lifestyle and fashion products under the Nio Life label. Over 2.6 million Nio Life items have been sold through online and offline channels since 2016.
Global Ecosytem
For Nio, the business model is not just about premium EVs. Instead, it is a blend of EVs with charging solutions (Nio Power), subscription services (BaaS), Nio Life, Nio Spaces, and Nio House.
By offering premium and personalized services, Nio focuses on a long-term strategy to drive sales by creating an ecosystem. It considers the lifetime value that a customer provides rather than a one-time purchase. Most tech companies – from Alphabet, Microsoft, Apple, to Amazon – are proponents of ecosystem strategies.
Norway is one of the most advanced EV markets in the world, thanks to government subsidies and a society that has embraced sustainable change. Nio House Oslo is located at Karl Johans Gate 33, Oslo’s center of commerce and culture, and has a total area of 2,100 square meters, and is the largest user center in Norway. The two-story structure has an upper floor for the display of products and services, and a lower floor for the Nio Cafe, Library, Forum, Lab, Living Room and Joy Camp areas exclusive to NIO users.
The Norway Collection jointly designed by Nio Life and two Norwegian artists, Anette Moi and Sandra Blikås, is now available in Norway and China.
“Today marks a significant moment in the history of NIO. Today the very first European users have the opportunity to experience what it means to be part of the Nio community,” says Nio Europe’s CEO Alexander Schwarz
“Norway is our starting point of our journey in Europe and beyond. Our vision is clear: to provide our users with seamless and worry-free services as well as supreme and joyful user experiences. We offer to be their friend and partner on their personal journey to a brighter and more sustainable future. From our NIO Houses, such as the first one in Oslo, through to our battery swap stations, our worry-free Battery-as-a-Service subscription models and our convenient online services, Being part of the NIO community will bring joy, friendship and meaningful interaction.”
https://www.youtube.com/watch?v=Phk3KmoewQU
Inspired to share the Japanese strawberry experience with the world, Hiroki Koga brought Omakase Berry seeds to New York to establish the world’s first indoor vertical strawberry farm.
Oishii seeks to grow the best fruit in the world by deploying ground-breaking vertical farming technology that pushes the boundaries of agriculture. The business claims to be the first in the world to grow fruit in an indoor vertical farm at commercial scale. It started with strawberries, which debuted at Chef’s Table at Brooklyn Fare, the three star Michelin restaurant considered by critics to be among the best in the world. Since then, it has supplied strawberries to food-loving consumers, world-class restaurants, and specialty retailers across NYC.
The proprietary technology, developed through years of intensive research in Japan and the US, enables Oishii to grow the very best produce year-round, at the same high level of quality, all without using any pesticides. It has rapidly expanded its farm facilities and assembled a world-class team with backgrounds spanning vertical farming, industrial automation, farm operations, and data analysis.
Here’s an extract from a recent interview with Artful Living magazine:
What does food mean to you?
Food means everything to me. Some people think I am a little obsessed, maybe too obsessed with food. I optimize my entire day around what I am going to eat and where. The best example of this is when I travel. The first thing I do is sort out where I want to eat. What are the must-try restaurants? What’s new? What have I read about? What am I craving? I do my research then plan all other activities around my pending dining reservations and locations. Food is the North Star of any good vacation. Any budget I set aside for a trip, food is always prioritized and if I must make sacrifices in other areas to accommodate, I will!
Why did you decide to launch Oishii?
I wanted to bring the incredible experiences and knowledge of Japanese produce, fruit culture and farming techniques to the United States. I knew people would love it, and I was excited at the opportunity to truly surprise and delight with the incredible Omakase Berry taste and aroma. It’s since become our mission to bring delicious-tasting produce to people and do so in a sustainable way. Ultimately, I want people to experience the joy that a delicious berry can truly bring. I love food and sharing it, and Oishii lets me do that on a larger scale.
What makes the Omakase Berry different from other berries?
The Omakase Berry is such a different experience from the conventional berries you find in a local grocery store. From the incredible aroma to the creamy texture to the sweet taste, it’s unlike any berry you’ve ever had. It’s a varietal that typically grows in the Japan Alps during the winter months. After years of research, development and testing, we were able to recreate that optimal environment for the Omakase Berry to thrive year-round in a vertical farm environment, allowing us to deliver consistently delicious, fresh and pesticide-free berries.
What is the best way to eat the Omakase Berry?
I love to share this tip! You can eat the Omakase Berry any way you like, but I recommend you eat them from the side to get the full flavor profile and the most delicious experience. The sweetness of the berry is concentrated in the tip, so if you eat that first, which most people naturally do, you get a big flavor burst. If you enjoy it from the side, you get that sweetness burst in every bite.
Are there any exciting new products or collaborations on the horizon?
We are very excited about our next product. We’re currently in the research and development phases for the Oishii tomato. I just tried some tomatoes yesterday and was blown away by their appearance and taste. Our team of plant scientists, farmers and tomato experts is working hard to perfect the environmental recipe, farming techniques and TLC that strike the right balance to create a tomato that is worthy of the Oishii name.
Pinduoduo, less than five years old, is the latest extraordinary e-commerce business from China, an online shopping site that specialises in extraordinary discounts on everything from tissues to Teslas.
Pinduoduo’s success has turned its founder, Colin Huang Zheng, a 40-year-old former Googler, into China’s third-richest person. Explaining his vision for the company before its flotation on the US Nasdaq two years ago, Huang said Pinduoduo was a mixture of “Costco and Disneyland” that combined bargain products with entertainment.
What distinguishes Pinduoduo from China’s other e-commerce giants, such as Alibaba and JD.com, is that it uses social media. Buyers put details of products on sites like WeChat – China’s answer to WhatsApp with 1.2 billion users – to get friends and family to buy as a group. The bigger the group, the bigger the discounts available.
The result has supercharged Pinduoduo’s growth. It now has 683 million active users and 50m orders a day. In August 2020 its market value had more than doubled in recent months to $114bn (£87bn). In just its fifth year Pinduoduo reported almost $4.5bn in revenues in the year to the end of March – almost half that of eBay, which reported $10.8bn in revenues last year.
Huang, who earned a masters degree at the University of Wisconsin USA, joined Google as an intern in 2004, aged 24, and then worked there for 3 years as an engineer, and then also worked with Microsoft. He founded Pinduoduo in 2015. He stepped down as CEO in 2020 after 5 years of rapid growth, handing over to new CEO Lei Chen, but remains chairman. He is Pinduoduo’s largest shareholder, with a 29.4% stake worth around $34bn.
But not everyone is impressed with the company’s business model. When Pinduoduo shoppers managed to pick up bargain-priced Tesla cars through a group-buying event on the site, the US electric carmaker at first refused to supply the vehicles. Tesla only sells direct to buyers through its website, cutting out dealers and middlemen.
The buyers did eventually get their cars, but the clash put a spotlight on the way Pinduoduo regularly offers customers cash subsidies in order to offer the discounts, which it then records as sales and marketing fees. As a result the company has never even come close to making a profit. In fact, these fees often outstrip quarterly revenues.
One analyst said “Pinduoduo’s discount model has powered its impressive growth story. The company has achieved massive user growth in the last two years, which it has prioritised over profits.”
Many tech companies, from Amazon to Netflix, have put growth before profits and investors continue to be happy with what they are seeing. Pinduoduo has pulled in $5bn from investors in four separate rounds of fundraising, including its flotation.
The company’s second-biggest shareholder is the Chinese web giant Tencent, which has a 16.5% stake and also has investments in companies including Universal Music, Spotify and Snapchat. Tencent also owns WeChat, which Pinduoduo exploits heavily to bring in sales.
Pinduoduo says “We are an innovative and fast growing “new e-commerce” platform that provides buyers with value-for-money merchandise and fun and interactive shopping experiences.”
“We pioneered and popularized a dynamic shopping experience through “Pin”, a team purchase format that seamlessly integrates social experiences with online shopping experiences. We have consciously built our platform to resemble a “virtual bazaar” where buyers browse and explore a full spectrum of products on our platform while interacting with one another. Using Pinduoduo, buyers could share product information on popular social networks and invite their friends, family and social contacts to purchase together, through which they not only enjoy the fun and excitement of discovery and shopping, but also a comprehensive selection of value-for-money products.”
The business makes most of its money from advertising and promotions by its more than 5 million sellers. They account for almost 90% of revenues, with sales fees low, given the wafer thin margins most sellers operate on.
Unlike Amazon, Pinduoduo holds no stock, products are shipped directly from the seller, who also has to cover shipping costs.
It has successfully tapped the super-budget end of the consumer market but its reputation has suffered from large numbers of counterfeit products being posted on the site, as well as customers complaining about issues such as delivery.
As a result the company is now also trying to cultivate an image as a destination for more premium products, gaining high-profile coverage for events such as the Tesla sale and offering big discounts on products from brands like Apple.
Pinduoduo describes its strategy in this strategic report, and in its fact sheet:
Our Vision
Pinduoduo’s day-to-day business decisions are guided by three core principles:
Build a mobile commerce platform that benefits all – Our pla6orm is built to benefit consumers, merchants, and partners by making high-quality, value- for-money products accessible. Pinduoduo’s user base spans China and mirrors the populaDon distribuDon of the country. Through our pla6orm, these users are able to access products that may have been previously unavailable to them. At the same Dme, through the process of demand aggregator and our Consumer-to-Manufacturer (C2M) initiatives, Pinduoduo helps reduce costs throughout the supply chain by driving greater volume of sales, benefiDng both our users and merchants.
Put people first — User satisfaction is at the core of everything we do. Our recommendaDon engine puts people first, and is centered on understanding users and their evolving needs through our innovaDve “team purchase” model. By focusing on users’ needs, we can generate more relevant recommendaDons for our consumers, aggregate demand, and drive customized producDon for manufacturers.
Maintain an open platform – People prefer to have more choices. As such, Pinduoduo seeks to grow while maintaining an open pla6orm for our merchants, logisDcs operators, payment processors, and other ecosystem players. By being open to all parDcipants in the market, PDD can concentrate its resources on the most meaningful investments – increasing user satisfaction.
Our Business Highlights
The “Pin” Model
In this new mobile era, Pinduoduo is building a dynamic online community of merchants and consumers that mirrors the social interacDons consumers tend to have offline. The innovaDve “team purchase” model that Pinduoduo has pioneered leverages social networks such as WeChat and QQ so consumers can easily share product informaDon and shopping experiences with family and friends. When two users parDcipate jointly in a team purchase, they both get to enjoy a lower price than if they had bought it individually. This naturally incenDvizes users to share and invite their contacts to engage with them on our pla6orm. Pinduoduo can thus benefit from network effects that further sDmulate our buyer and GMV growth. As users interact more on our pla6orm, we are able to gain better insights into their shopping preferences and needs, and use that to show them more relevant products, driving a virtuous cycle of even greater user saDsfacDon and engagement. At the same time, these insights could be relayed to our merchants, to drive the creation of more tailored products for our users.
Consumer-to-Manufacturer
As a pla6orm connecDng millions of merchants with users, Pinduoduo also sees an opportunity to transform the manufacturing supply chain in China by uDlizing the sheer volume of data and traffic generated daily on our pla6orm. Under the tradiDonal mode of retail, developing a new product ofen involves a lengthy process of market research, focus group tesDng, feedback through distribuDon channels and then large-scale producDon. Through our C2M model, factories can design and produce based on a large volume of anonymized user preference data provided by Pinduoduo, shortening the new product development process by 50%, such that new products can reach the market in a more Dmely fashion.
New Brand Initiative
Pinduoduo believes that as the manufacturer of the world, we will see many Chinese brands emerge as internaDonal brands over Dme. In December 2018, we launched our “New Brand Initiative” campaign, which aims to support 1,000 manufacturers in developing their own brands.
The pla6orm provides factories and manufacturers with big data analyDcs on consumers’ needs, comprehensive R&D planning on products, and accelerated IP registraDon with the government. This helps them to offer value-based products that saDsfy consumers’ ever-changing needs through customized producDon. Access to Pinduoduo’s large user base helps manufacturers to ramp up sales more quickly than convenDonal channels, helping them speed up the brand-building process.
IP Protection
From the first day, Pinduoduo has had a zero-tolerance approach to counterfeit products and we are one of the most stringent pla6orms when it comes to enforcing penalDes on counterfeits. We take IP protecDon very seriously and have employed both technological and human intervenDon to combat infringing products on our pla6orm.
Pinduoduo is the first e-commerce company in China to impose a 10x penalty on merchants found guilty of selling counterfeit goods, with the penalty being applied against the monetary value of the enDre batch of goods idenDfied to be counterfeit and then paid out as compensaDon to all buyers of these products. This is done regardless of whether these buyers actually complained about the products. We have also introduced sophisDcated onboarding procedures that all merchants are required to undergo in order to open a store on our pla6orm. With the latest technology in keyword idenDficaDon, image filtering, text and video imagery recognition, opDcal character recogniDon, and semantic analysis, Pinduoduo has developed AI-based models to screen product lisDngs on our pla6orm to idenDfy potentially infringing products.
Internet + Agriculture
Using Pinduoduo’s differenDated and personalized approach to e-commerce through our Distributed AI framework, we have developed an “Internet + Agriculture” iniDaDve that aims to facilitate sales between small-scale farmers and consumers. By analyzing a broader amount of data, Pinduoduo’s dynamic AI engine can understand consumers beQer over Dme, construcDng more robust user profiles to beQer match buyer demands, and provide product trend informaDon that was previously inaccessible to farmers. With our advanced data analytics capabilities, Pinduoduo is helping farmers to beQer understand user demand and leverage Pinduoduo’s unique model to quickly aggregate larger volume orders for their products.
This deeper understanding of consumers makes it possible for farmers to be less dependent on tradiDonal distributors, by allowing them to sell directly to consumers, thereby improving the overall supply chain efficiency and reducing costs. Through this initiatve, consumers can get fresher products at a lower price, while farmers earn more through lower distribuDon costs and larger orders. For farmers, this is addiDonal capital that can be reinvested in farming equipment and beQer pracDces to further improve production quantity and quality.
Interaction + Fun
Coupled with the “team purchase” model, we have added to Pinduoduo’s interacDve and fun shopping experience with the launch of our in-app game Duo Duo Orchard in May 2018. Through the app, users choose a virtual fruit tree (the choices vary depending on seasonality) that they need to tend to in order to grow from a sapling to a fruit tree. Once the user’s virtual tree is fully grown, they will receive a free box of real fresh fruit from Pinduoduo.
Over 60 million users log on to the game to play and explore each day. To earn water droplets for their tree, players need to fulfil a variety of missions such as shopping on Pinduoduo’s pla6orm, sharing products, and inviDng friends to join Pinduoduo. Players can also see how their friends’ trees are doing and either help them water their trees or “steal” their water droplets. Duo Duo Orchard is not only an effecDve channel for incenDvizing consumers to browse and purchase, but it also allows users to interact and enjoy shopping with friends. The acDvity of a user can thus generate positive knock-on effects by acDvaDng other users.
The founder of White Claw, Anthony von Mandl is a British Canadian who started out in the wine industry in the 1970s. He marketed his wine out of his car and eventually a small office in Canada’s Vancouver region.
He purchased his first vineyard, Mission Hill, at 31 in 1981. He currently owns three other vineyards: Checkmate Artisan Winery, Martin’s Lane Winery, and Cedar Creek Estate Winery, all located in the Okanagan Valley in British Columbia.
In 1996, as part if his company Mark Anthony Brands, von Mandl launched Mike’s Hard Lemonade, a brand of flavoured alcoholic lemonades.
In 2016 he launched White Claw Hard Seltzer, an alcoholic seltzer water, with nine different flavours (Black Cherry, Ruby Grapefruit, Natural Lime etc), and 5% alcohol at 100-calorie. By the summer of 2019, it was reported that White Claw accounted for over half of all total hard seltzer sales, with sales of White Claw growing 275% in the last 12 months.
Since 2016, hard seltzer sales have been steadily increasing at a triple-digit annual rate. As of 2019, White Claw was noted the top-selling hard seltzer in the USA. It’s popularity was met with a nationwide shortage, resulting in the company working towards significantly increasing supply in order to meet consumer demand. Throughout 2019, White Claw’s popularity grew as a result of the hard seltzers being circulated through viral social media videos, which included the slogan “Ain’t no laws when you’re drinking Claws,” coined in a video by YouTube comedian Trevor Wallace which gained 4.2 million views.
Wallace then attempted to popularize his video further by releasing a t-shirt with the phrase from his video. White Claw took legal action. Many White Claw memes have also circulated and Halloween costumes of the beverage have also shown to be a growing trend. As the popularity of the drink brand rose throughout the summer, many media personalities coined the term “White Claw summer”. The light beer brand Natural Light, better known as ‘Natty Light’ struck back in the fight to be the better beverage brand by using Wallace in a stunt directed at White Claw.
“White Claw is starting to become the Kleenex of spiked seltzer,” wrote Jenna Fanduzzi, 27, who writes blogs about seltzer as a hobby. “If you were to go to the fridge and there were a bunch of different brands, you would call all of them White Claw.”
Nielsen, the consumer research firm said “For many consumers, White Claw grew to become synonymous with the entire hard seltzer category and (at least partially) grew to represent the summer of 2019. It captured the zeitgeist of American drinkers, as it sits at the nexus of health, wellness and convenience. Yes, consumers posted about what they drank — but, it seemed as though they were posting more about what the brand has grown to symbolize.”
Genevieve Aronson, a Nielsen spokeswoman, said “For many consumers, White Claw grew to become synonymous with the entire hard seltzer category and (at least partially) grew to represent the summer of 2019. It captured the zeitgeist of American drinkers, as it sits at the nexus of health, wellness and convenience. Yes, consumers posted about what they drank — but, it seemed as though they were posting more about what the brand has grown to symbolize.”
White Claw does not aggressively market itself. And when it does, the aesthetic is aggressively bland and minimalist. Also, says Nielsen, “the drink is unextraordinary”.
In March 2020, Fast Company named White Claw it’s most innovative brand, saying “The overall hard-seltzer market exploded last year, with a 202% sales boost over 2018 and hitting $1.3 billion. And it was Mark Anthony Brands’ White Claw that led the way. It rode the wave of this rise with both a design and marketing approach that was appealing to men, women, and memes, making the most of events like the Kentucky Derby and Coachella, while embracing influencers and even unauthorized parodies.”
“While competitors focused on wooing female consumers with ultrafeminine touches (cans emblazoned with pink fruits and flirty mermaids), White Claw adopted a more neutral approach, including an elegant black-and-white logo, and marketing that showcases men and women hanging out together and proudly touting White Claw’s low-cal, low-carb, gluten-free credentials. That led to a near 50-50 gender split among customers. “The new generation doesn’t want to be told who to hang out with or how to act based on gender,” says Mark Anthony Brands president Phil Rosse.
The rapid shift of all forms of transactions online – from shopping to entertainment – is good news for digital payments platform Stripe.
Brothers John and Patrick Collison started Stripe in 2010 to make the whole digital payments space easier. The hurdle with payment platforms, as they saw it, wasn’t on the finance side. Difficulties more often were due to coding and design issues. That’s when they decided to build a developer-focused instant-setup payment platform any company could use and scale.
Today thousands of companies, including Amazon, Slack, Glossier, Shopify and Under Armour, use Stripe’s software tools to securely accept payments from anywhere in the world. The company makes money by charging these customers a swipe fee of 2.9%, plus 30 cents for every transaction it processes (the same as PayPal). The money comes on top of $250 million raised in September. No word from either Collison brother about when — or if — they will take their company public.
In 2019, Stripe announced the formation of Stripe Capital, a lender for customers’ small businesses. Securing financing from traditional banks is time-consuming, and lending standards often are overly strict. Stripe Capital will advance funds to a small business, usually within a few days. The business will repay the loan by giving Stripe a fixed percentage of daily sales until the loan is paid off.
South Korea’s leading online shopping platform was launched in 2010 by Bom Kim.
Kim was born in Seoul but left Korea at the age of 7. At age 13, he went to boarding school in Massachusetts at Deerfield Academy, where he lettered in varsity wrestling and track and later attended Harvard University. He later attended Harvard Business School but dropped out after only six months.
After interning at The New Republic and starting a student magazine called Current, Kim briefly worked at Boston Consulting Group before raising $4 million to start a magazine called 02138, which folded in 2009.
He started Coupang the next year. That was in 2010, when he saw how technology could create the opportunity for an on-demand delivery service for a country whose citizens work long hours and live in densely populated cities.
Today the company serves the world’s third-largest e-commerce market and has over 5,000 drivers who deliver more than 99% of orders in less than 24 hours. Last year it went even further, with the introduction of Dawn Delivery. Orders placed before midnight are delivered to customers’ doors by 7 a.m. the next day.
That level of detail has garnered the company fiercely loyal customers. It claims that over 30% of them buy from Coupang more than 70 times per year. Though Amazon isn’t active in South Korea, there are other local competitors, including Gmarket and 11Street, that Coupang consistently has beat in surveys of favorite online retailers.
Kim admits that the coronavirus created massive disruptions in supply, logistics and prices but that it took bold steps early on. It was able to replenish supplies of face masks and hand sanitizer just as the virus began to spread, but Coupang froze prices so customers wouldn’t be adversely affected.
Coupang has raised $3.4 billion in eight rounds of funding and counts SoftBank’s Vision Fund, Sequoia Capital and BlackRock among its investors. The company has begun working on tax structuring and other key changes as it eyes a public listing that may happen as soon as 2021.
Founded by CEO David Perry and two colleagues in 2014, Indigo Ag (aka Indigo Agriculture) seeks to apply AI to farming Berry, aged 42 has co-founded and helped build over 25 companies in life sciences, technology, and sustainability including category-defining companies such as Seres Therapeutics and Axcella Health.
The Boston-based company started in 2014 under the name Symbiota, and developed microbial seed treatments to help farmers grow corn, rice, soybeans and wheat without excessive use of costly fertilizers, fungicides and other chemicals.
The company then expanded its ambitions and business lines to look more like an Amazon for agriculture, running marketplaces that connect grain growers, buyers and shippers, and an agronomy consulting arm that employs satellite imagery and analytics to help farmers increase their yields and margins.
Consumer demand for healthier, sustainable and traceable food is growing — even in the face of the coronavirus crisis. This agricultural technology start-up creates seed treatments that optimize the health of a plant in order to increase its yield. Since the beginning of the pandemic, it has launched several efforts to support growers as they make their way through a planting season unlike any other. For instance, the company’s GrainWaves podcast offers real-time market insights, and its transportation logistics support hotline is available to any carrier.
Indigo Ag’s mission is to use natural microbiology and technology to improve sustainability, profits for growers and consumer health. The company’s seed treatments are used for corn, wheat, soybeans, rice and cotton. In 2018, the company rolled out Indigo Marketplace, a digital platform that connects grain growers directly with buyers willing to pay for high-quality crops that retain their unique identities rather than those that get combined with similar crops. Its Indigo Carbon offering gives growers a financial incentive to enrich their soil with carbon.
The company also announced a partnership with Anheuser-Busch to deliver 2.2 million bushels of rice grown with specific environmental attributes. Rice grown for the partnership reduces water and nitrogen use by 10% and achieves at least 10% savings in greenhouse gas emissions compared to state benchmarks.
In 2020, Indigo joined an alliance led by the World Bank to help supply real-time satellite agricultural data generated by Indigo Atlas to advance food security across the world. Indigo Atlas, which combines remote sensing, ground equipment, historical and weather data, is capable of identifying subtle differences in crop performance across regions.
The company’s focus on technology as a tool to reimagine agriculture is wildly appealing to investors. In January it closed $200 million in financing, bringing its total funding to $850 million. In 2015 David Perry joined as CEO. He had previously run and sold two successful start-ups, one of which was acquired by Pfizer for $5.2 billion. Indigo Agriculture has more than 1,000 employees and six global locations.
Here’s how Klarna works: A customer making an online purchase enters only their email address and post/zip code to buy an item. Klarna pays the retailer immediately and then collects the amount due from the consumer either immediately, in 30 days, in four interest-free payments or over six to 36 months, with interest.
The company makes its money predominately through the fees it charges merchants for its service and says that by using proprietary data analytics and modeling, it can give approved consumers a seamless buying experience. The service is available in 200,000 stores, such as H&M, Sephora, Adidas and Abercrombie & Fitch, and has about 85 million users worldwide, including about 6 million in the U.S. The company claims it adds a new merchant every seven minutes.
Since its founding in 2005, Klarna has distinguished itself from other fintech companies by turning a profit every year. In February it reported its first annual loss, after a year of expansion in the U.S. and Europe. In August 2019 it raised $460 million in financing, giving the company a staggering $5.5 billion valuation. Ant Financial, the payment affiliate of Chinese e-commerce giant Alibaba, bought a minority stake in Klarna in March for an undisclosed amount. Klarna counts U.S. rapper Snoop Dogg and Swedish retailer H&M among its investors.
So what can any online retailer learn from Klarna?
Staying true to his hip-hop roots, Sven Voth has transformed Snipes from a small German retailer into a global streetwear brand with almost 400 stores worldwide.
In the late 1990s, the heroes of hip-hop’s golden age had some of their greatest hits behind them, and the bling era was pushing hip-hop towards massive commercial success and mainstream appreciation. Artists like A Tribe Called Quest and the Fugees were giving way to younger artists like Jay-Z and Puff Daddy, who started churning out the ‘jiggy’ hits that defined the turn of the millennium.
It was during this transitional period that Voth, then a young hip-hop enthusiast, decided to set up a business that would honour his favourite art form by making street fashion and footwear accessible to the masses.
In 1998, Snipes was born. In the retailer’s early days, when there was just one Snipes store selling the latest hip-hop fashion in Essen, Germany, a shortage of resources forced Sven to get creative.
He initially hoped to name his brand Spike’s, but without the funds to purchase the rights to the name, he had to change a few letters and drop the apostrophe. When he couldn’t afford a proper paint job for the store’s interior, he filled it with street art, paying homage to the pastime of his youth.
“There was a lot of pressure to achieve strong sales numbers back then because we had no support from any banks,” Sven recalls. “But I always knew Snipes had the potential to be much more than just a retailer. I wanted to connect with my consumer and develop this hip-hop lifestyle. It was never about opening at 10am, closing at 8pm, counting the money and going home.”
Twenty-two years later, Snipes operates almost 300 stores across Europe and, in 2019 alone, opened 93 stores in the US. Moreover, the retailer has expanded beyond just hip-hop fashion to streetwear, forging partnerships with Nike, Adidas, Reebok, Fila and Asics, plus exclusive licences to distribute streetwear labels like FUBU, Sean John and Karl Kani, the latter of which is distributed by Urban Styles, a wholesale agency owned by Snipes Group.
“We are involved in an industry that could hardly be more dynamic,” Sven says. “Our motivation is not to react, but to set standards.”
In a recent interview with CEO Magazine, Both takes up the story.
With more than two decades as CEO under his belt, Sven has learned that the secret to success in fashion retail is that “you have to sell more than just the product”. Indeed, sales numbers are just one ingredient in the complex recipe of Snipes’ colossal growth.
To maintain its presence in the awareness of its customers, Snipes held a total of 288 promotional events in Europe last year – far more than any domestic retailer.
Moreover, starting with a visit by Michael Jordan to Snipes’ Hamburg store in 2006, the company has maintained a star-studded line-up of product partners, including artists like Wu-Tang Clan, Snoop Dogg and Rick Ross.
Last year, Snipes named mega-producer DJ Khaled its Chief Creative Officer. Such collaborations aren’t limited to big names in hip-hop. Last year, Snipes teamed up with Netflix for collections based on Stranger Things and Money Heist, and a collaboration with Sprite has just been announced. “This is how we get on everyone’s radar,” Sven says.
“It’s why we always say we are an entertainment event company with a little bit of retail.” These partnerships coincide with Sven’s belief that consumers increasingly expect in-store retail to be an experience that stirs positive memories and tantalises the senses.
It would not be unusual to walk into a Snipes store and see hip-hop music videos playing on several screens and staff dancing playfully on the sales floor.
“People sometimes have reservations about our employees. Maybe they just look too cool, I don’t know. But our employees are actually our USP. They are well-trained and are very special people, both visually and professionally. We regularly receive emails in which parents who come into our stores with their children tell us about the positive experiences they had with our employees,” Sven says.
The appreciation flows both ways. Many Snipes employees have stayed with the company for 10, 15, even 20 years – a trend Sven attributes to the company’s efforts to involve its staff in events and assure them they are each an essential part of the company’s journey.
“More than any other professional achievement, I am proud of the family values that we have always fostered within the company. The closeness, the connection between colleagues here is simply incredible,” Sven says.
“It was through this closeness and transparency that we managed, as a unit, to overcome the effects of COVID-19 on our company this spring. We always describe ourselves as family, but if you could see all of the employees at the Snipes family party every summer, you would understand that it is not empty phrases.”
Transforming a local fashion retailer into a global brand, however, does not come without hitting a few bumps in the road. One such bump for Snipes was the crash of Lehman Brothers in 2008 and the ensuing global financial crisis.
“I consider the Lehman crash to be a very formative and influential event in my career,” Sven says. “In no other period since I founded Snipes were the challenges as concentrated as in this time after the crash.”
As the global economy slowed and sales dwindles, Sven had a choice – save money by cutting marketing and personnel costs, or spend more to maintain contact with the few customers still coming in. “We ordered products and brands that did not suit Snipes or our customers, we worked with inappropriate testimonials and started unfortunate campaigns. Although we reached more people, we lost sight of our own DNA and authenticity, which threw us a long way back as a brand,” Sven says.
“During this time, I learned the meaning of ‘stick to your roots’ very clearly.” In the 12 years since, Sven has not let the memory of that turbulent period fade, and he keeps its lessons close at hand.
“Our brand is all about authenticity. We are raised from concrete. We do it for the kids in the street,” he says.
“If you look at the whole sneaker game and the other players, they have a sports heritage rather than an urban one, which gives us a chance to create a different assortment to the others. We have the chance to establish the streetwear look and develop our brand in both directions, which is a really big point of differentiation.
“We remain a cool, young, forward-thinking company, with a lot of growth potential for individuals. And we will maintain our own growth as a company by expanding our fleet. Opening 500 stores is a short-term goal to us. So expect a lot from us in the years to come.”
DP World sees how global trade is changing. It continues to grow at pace, but – more importantly – it is transforming rapidly to meet the rise of a new generation of consumers, who demand both personalized products and customized services. For retailers at scale, this requires a comprehensive retooling of their supply chains. For logistics at large, this means significant changes are on the way – driven by new technologies and concepts.
This is an industry that already is at the leading edge of innovation. The McKinsey Global Institute estimates that the transportation-and-warehousing industry already has the third-highest automation potential of any sector. And according to PWC, there is “no other industry where so many industry experts ascribe a high importance to data and analytics in the next five years than transportation and logistics – 90%, compared to an average of 83%.”
Consider these five core technologies and trends that will shape trade and logistics in the 2020s:
- Hyper personalisation
- New cargo technologies (see Cargospeed, below)
- Increased automation (see Boxbay, below)
- Efficient marketplaces
- Digitalisation
DP’s portfolio of more than 65 container and non-container terminals spans six continents. The business continues to invest in developments and expansions, with new developments to come in India, Africa, Europe and the Middle East. Many of its existing terminals also have the ability to increase capacity, as utilisation and customer demands grow. Its investment pipeline is anticipated to increase our gross capacity to more than 100 million TEU by 2020, subject to market demand.
DP World seeks to communicate their ambitions and business purpose and define their corporate culture through a framework of Vision, Mission and Values, underpinned by the DP World Balanced Scorecard Framework.
DP’s strategic pillars define the objectives it needs to achieve across the group. They drive a sustainable business model, develop robust risk and compliance processes, communicate effectively to all stakeholders and implement our strategy.
The four strategic pillars are:
- Strategy Implementation: communicating key messages and defining measurable performance milestones.
- Corporate Governance: ensuring good corporate governance and adhering to international best practice.
- Communication: enhancing communication with our people and external audiences.
- Corporate Responsibility: building and sustaining strong communities through strategic investment, to leave a sustainable legacy and take the lead in being a good corporate citizen.
DP’s strategic priorities explain the strategy and describe how it will create value for stakeholders. Each of the four priorities are broken down into key goals to facilitate the setting of group-wide objectives and allow us to measure our progress.
The four strategic priorities are:
- Financial: driving sustained long-term shareholder value.
- Customer: creating a satisfied and profitable customer experience.
- People & Learning: creating a learning and growth environment.
- Internal & Operational: developing efficient, safe and secure methods of managing our operations.
DP says the key features of its business model are as follows:
- High Barriers to Entry: We operate our container terminals through long-term concession arrangements with the owner of each port. These concessions average 40 years but they are effectively perpetual, as historically concessions have always been renewed. This creates very high barriers to entry and allows us to build strong relationships with port authorities, shipping lines and joint venture partners.
- Rising Returns and Long-term Cash Flow: The length of our concessions allows us to invest to meet growing demand and changing customer needs, and to improve our efficiency and profitability. Our returns on investment increase as our assets mature and we are able to deliver stable and long-term cash flows.
- Focus on Growth Areas : We focus on origin and destination (O&D) cargo, where the container’s journey starts or ends at one of our terminals, rather than transhipment cargo, where containers are transferred from one ship to another on their way to their destination. O&D cargo delivers higher margins, is less affected by competition than transhipment and creates opportunities to provide ancillary services beyond the terminal gate. Our portfolio is also focused on faster growing emerging markets, which helps us outperform growth in the industry as a whole.
- World-class Operations: We are market leaders in automated technology, with exceptional standards of operational performance and productivity. We manage our terminals locally, so they can respond to customer needs, and support their operations through the advantages of our global network.
- World-class People: Our dedicated, experienced and innovative people serve customers in some of the world’s most dynamic economies. We invest in developing our people and providing a workplace that encourages continuous learning and growth.
- Strong Brand: DP World is recognised for delivering excellent customer service, for our commitment to strong governance and being a good corporate citizen.
So what does the future look like?
DP World Cargospeed will become the first international brand for hyperloop-enabled cargo systems to support the fast, sustainable and efficient delivery of palletised cargo.
More visions of the future of logistics
https://www.youtube.com/watch?v=LeKapqAQimk