India’s ultrafast delivery apps and Samsung’s slow decline in market share

admin 14 July 2022 Technology & Digitalization 0

Hello, this is Akito from Singapore. With the Covid-19 restrictions over the past few years, delivery apps have become a staple service in our lives, and they are still improving fast.

One of the most common delivery apps here is Grab. I ordered a few snacks at a Japanese food store about three kilometres away from my house, and it took about 45 minutes for Grab’s rider to deliver. When I lived in Tokyo, I used Uber Eats frequently. Again, it took more than 30 minutes for the items I ordered at a convenience store in my neighbourhood to arrive.

Singapore and Tokyo are mature metropolises with relatively low traffic congestion and a well-oiled delivery network. I can only look and marvel at what is happening in the urban areas of India, where fierce competition has driven delivery times down much further.

Fast, faster, fastest

The race between “quick commerce” delivery start-ups is heating up in India to the benefit of impatient consumers, Nikkei Asia’s Sayan Chakraborty writes from Bengaluru.

According to Sayan’s own unscientific experiments, the eight-year-old delivery app Dunzo was the fastest among India’s four quick commerce start-ups one recent Friday afternoon. The company took an order via WhatsApp and had a loaf of bread and chocolate to his home in just 16 minutes. The remaining three competitors delivered vegetables, milk, eggs and more in about 20 minutes.

The secret to these ultrafast times in a city known for its heavy traffic is that companies have hundreds of small fulfilment centres in local neighbourhoods. The entrepreneurs behind these companies are taking full advantage of cutting-edge technology and deep knowledge of the local market to develop services that outperform the world’s leading companies, such as Amazon. One consultancy estimates quick commerce will be worth over $5bn by 2025, accounting for about a fifth of the country’s overall online grocery market.

It’s another example of the “leapfrog” innovation happening all over Asia, where previously less developed markets are adopting the newest technology and business models.

But it is not yet clear which start-up, or start-ups, will dominate in India. “It’s a level playing field now,” said a venture capital investor who has backed a quick commerce start-up. “This is the time to acquire customers, which unfortunately necessitates some cash burn.”

Distant second

Bar chart of Per cent showing Global share of chip foundries

It has been three years since top management at Samsung Electronics declared they would seize the title of world’s largest semiconductor foundry. How’s it going? Well, not only is the company still settled in second place, it is slipping further behind its top rival, Taiwan Semiconductor Manufacturing.

If Samsung continues to slip, the world will become even more dependent on TSMC for the manufacturing of advanced semiconductors, increasing risk in the global supply chain.

In the first quarter of 2022, TSMC captured 53.6 per cent of the foundry market, and Samsung was a distant second at 16.3 per cent. That’s a gap of more than 37 percentage points, wider than the 29 points in early 2019.

Samsung’s foundry business has had problems since the beginning of 2021, Nikkei’s Kotaro Hosokawa and Hideaki Ryugen write. It started mass producing 5-nanometer chips in the second half of 2020 but struggled to raise the yield rate, a measure of chips produced without defects. It faced difficulty providing a stable supply to Qualcomm, one of its largest clients. Ultimately, Qualcomm expanded its orders from TSMC at Samsung’s expense.

To make up lost ground, Samsung has shaken up its executive team, replacing about a dozen senior managers — and hiring from Qualcomm.

India-China tech tensions rise

Beijing has criticised New Delhi for “frequent investigations” into Chinese companies operating in India, writes the Financial Times’ Chloe Cornish from Mumbai.

The salvo from the Chinese embassy in India came days after financial authorities raided Chinese mobile phone maker Vivo over money-laundering allegations, targeting $60mn worth of assets. Vivo said it is co-operating with authorities.

That was just the latest raid by the enforcement arm of India’s finance ministry on Chinese companies. In May, it swooped on Chinese-owned smartphone maker Xiaomi, targeting over $700mn in bank accounts.

The two countries have a tense recent history. Following border clashes in 2020 between Indian and Chinese troops in the Himalayas that damaged bilateral relations, New Delhi banned hundreds of Chinese-owned apps, accusing them of “stealing and surreptitiously transmitting” users’ data. The government also made clear that it wanted to phase out use of Huawei equipment in the telecoms sector.

Yet the crackdown has not done much to dislodge the Chinese smartphone sellers from their dominant position in India: Chinese technology companies control about three-quarters of India’s smartphone market, one of the biggest and fastest-growing globally.

No video game summer

It may be good news for their parents, but it will be a disappointing summer for game-loving kids in China. Nikkei Asia’s Cissy Zhou writes from Hong Kong that Tencent Holdings, China’s biggest gaming group, had to tell people it will continue to enforce the strict limits imposed by the Chinese authorities.

Last year, Beijing restricted minors to just three hours of playing time a week. There were rumours on social media that this cap would be relaxed during the two-month summer holiday. Tencent quashed the talk on Monday by posting that “there might be a bit of a misunderstanding”.

“It’s better to breathe some fresh air instead of getting addicted to playing games,” the company said, shattering the expectations of young gamers.

It may be Tencent that was most hoping the rumours were true. The company’s gaming sales to minors have tumbled since the limits were put in place. And none of Tencent’s new video game titles were granted licenses by the National Press and Publication Administration between April and July.

India’s ultrafast delivery apps and Samsung’s slow decline in market share