An Old Beef, The Pendulum & A Modern QVC 🥩

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A Modern Marketplace for U.S. Startups

A modern twist on QVC has made millions for savvy U.S. startups.

Three years ago, Welden, a high-end US handbag startup, was struggling to build a brand in the States. Now it sells 20% of its bags through the Chinese live-streaming market. 

It all started in 2017, when founder Sandy Friesen sold 10 of her Welden bags over a single weekend on Taobao Live, an Alibaba-owned live-stream shopping channel. During the following Thanksgiving break, Welden’s vice president of sales, Cori Adams, went on a Black Friday live-stream sale. Adams smiled as she held the brand’s purses, while the show’s main host, Zoe, a fashion influencer, interacted with Chinese customers in Mandarin.

Tens of thousands of viewers watched the session on their phones and clicked to buy Welden’s woven leather bags, priced around $350. The startup’s two-day sales: $350,000.

Welden is one of a bevy of international businesses that have capitalized on China’s fast-growing live-streaming shopping market.

Anthom, a New York-based boutique shop selling independent designer products has been working on live-stream shows since 2016. Each 3-hour live streaming session generates $6-$12k in sales, with 10-20k Chinese customers watching, according to the store’s co-founder, Ashley Turchin.

This see-now-buy-now marketing approach, which started to take off in 2016, is China’s modern twist on QVC.

Live-streaming market in China (in billion yuan)

The ecosystem is supported by big-name celebrities selling products on the channels and the millions of live-stream viewers.

Some stats:

  • China had more than 500 million webcast viewers in 2018. 
  • In 2018, the most profitable live-stream host on Taobao Live, Wei Ya, raked in $390m in sales through live streaming. Another beauty influencer, dubbed Top Lipstick Seller, is said to sell one lipstick every 30 seconds during his live streams.
  • Alibaba’s Taobao Marketplace, the biggest live stream platform and e-commerce site in China, generated more than $15B in sales volume through live streaming sessions in 2018.

Alibaba’s Tmall Live and bourgeoning platform Xiaohongshu are some of the other live-streaming shopping platforms in the ecosystem.

Chinese influencer Wei Ya selling over 3 billion yuan of products a day
Agricultural influencers live streaming farm products

How can startups tap into the market? 

There are specific digital marketing agencies such as ShopShops that collaborate with international retailers of luxury fashion and “fast fashion,” or items that appeal to a massive audience in China. 

The agencies help boutique stores, contemporary retailers, and independent designers:

  • Market their items to China through live streaming.
  • Create content on Chinese social media.
  • Handle international shipping and product distribution for their partnering retailers.


An Old Beef With Rules

A new House subcommittee report has unveiled a flagrant violation of rules. Meat-packing companies exaggerated product shortages during the pandemic to keep factories open.

Tyson, Smithfield, JBS, National Beef, Hormel, are just some of the meat producers named in the report. In fact, Tyson even drafted the executive order issued by former President Trump in April 2020 to keep factories open. Since these companies account for the majority of the US’ beef and pork industry, they had the power to influence regulation. 

Result: Covid spreading rapidly through factories and killing 269 employees during the first year of the pandemic.

Approximately 334,000 Covid cases across the country can be linked to meat-packing factories, and per capita infection rates doubled in towns where such facilities were open, according to research from the University of California.



Where Will The Pendulum Stop?

In just three trading days, Big Tech has lost a total of $1 trillion.

For Meta or Netflix, such falls are common, as previous declines have been based on low growth numbers. But a number of VC-backed companies that recently debuted on the market such as Coinbase, Rivian or Robinhood are trading at 70% below their starting price.

The cryptocurrency market is also sharply down with most coins losing over 50% of their value.

What explains this sudden downturn? 

  • A looming economic crisis: Rising interest, supply shortages and high inflation leading to a feeling of uncertainty in the market.
  • Tech Regulation: A new generation of antitrust rules making life harder for big tech.
  • Extra Inventory: E-commerce giants like Amazon practically doubled the number of warehouses during the pandemic to serve increasing demand. Now they’ve got to a point where inventory is out-sizing orders as demand slows due to inflation.

Where are we headed from here? 

Signs are that this is no minor correction.

For a while, investors will be conservative. But eventually, companies that truly represent value might emerge from the crisis stronger. We may even see a new wave characterised by worsening climate emergency and the emergence of clean technologies.



Shorts ⏳
Want More Dollars - The U.S. Dollar hit a 20-year high last week as imports get expensive and demand for USD rises.

A Meaty No - 37% American support an extra 10% meat tax to cut consumption.

Gas Caps - Spain and Portugal approve a price cap on natural gas to tame rises prices. 

Another Shortage - Alminium inventories in London Metal Exchange warehouses hit a record low, signalling more shortages. But prices are still not rising

Hungry Babies - US retailers including CVS are rationing baby formula as shortages hit 50%.

Apple Dethroned - Apple is no longer the world’s most valuable company. That position goes to Saudi Aramco.

Celebs Escaping Ukraine - Maria Alyokhina of punk band Pussy Riot disguised herself as a food delivery worker.

Popular Plates - Amazon searches for Wheat straw plates” are up 62% over the last 90 days


Stash Recommends: Tools to Explore
🚦FiddlerA tool that captures network traffic between the Internet and test PCs to help you debug web applications.

☄️ MeteorAn open-source framework for creating and distributing Javascript web, mobile, and desktop applications.

🕓 TiemchartA multi-award-winning web-baed corporate project management system for businesses of all shapes and sizes.

🈁 Susy: A trendy tool for developing responsive web pages with a grid-like style.


 
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