Good morning! Our comfort foods are not so comfortable for the environment. As per The Telegraph, a study by the National University of Singapore has found that idlis and rajma are among the foods with the highest biodiversity footprints. This is primarily because the ingredients used in making these dishes adversely impact biodiversity in areas where they’re grown. Don’t know about you, but this feels like something that will definitely unite North and South Indians in anger. 

Jessica Jani, Dinesh Narayanan, Soumya Gupta, Venkat Ananth, and Adarsh Singh also contributed to today’s edition.

The Market Signal*

Stocks & Economy: The guessing game about the timing of a US Federal Reserve rate cut continues as central bank officials speaking in public stick to the as-long-as-necessary line while traders and investors search for clues in data. A fresh set of consumption data, which is seen as a key variable in the Fed decision making, will be revealed later this week. 

Asian markets have begun mixed, with Japan’s Nikkei 225 within striking distance of the record 40,000 mark. Chinese stocks were up marginally while Korea and Singapore were subdued. 

Indian equities are expected to bounce back after a lacklustre Monday. The GIFT Nifty indicates a flat opening though. 

Meanwhile, Bitcoin prices have been rising quietly and suddenly shot through $55,000 this morning, gaining nearly $5,000 apiece or 7.75% in 24 hours.

CONSUMER

Function Over Fairness

For the first time ever, fairness creams aren’t selling like hotcakes. Thank the kids. Data from consumer research firm NielsenIQ shows fairness cream sales volumes declined 3% last year, although they increased in value by a modest 5.4%. Still, the market is worth ₹15,800 crore (~$1.91 billion), a sizable segment in India’s personal care industry. 

Image makeover: Middle-aged and older consumers are still taken by fairness creams, The Economic Times reported, while Gen Z consumers were more likely to pick functional products designed for skincare concerns such as sun protection. 

Meanwhile, fairness products have slowly abandoned the word ‘fair’, replacing it with innocuous alternatives such as “glow”, “bright”, and “radiance”. Unilever Plc changed its iconic “Fair & Lovely” to “Glow & Lovely” in 2020. However, the marketing communications of these brands continue to promise a lighter complexion as a benefit of using these products. 

🎧  It's not Fair and Lovely anymore. Also in today’s episode: Redditors vs. the Reddit IPO. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you listen to podcasts.

A MESSAGE FROM OUR PARTNER

How Does India Shop?

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India’s leading digital payments and financial services provider has tons of fascinating insights on the matter. For example:

1. Did you know that a whopping 44% of transactions in the beauty and personal care category are done by men? Talk about breaking stereotypes and owning the grooming game!

2. A staggering 44% of FMCG transactions in our country happen between 5-9 pm. PM truly is the power hour when we talk about shopping!

3. Tier 3 cities in India are the largest contributor to the offline beauty category, accounting for 60% of the transactions. 

If you’re still hungry for more, just check out PhonePe Pulse, your one-stop shop for all things data!

See the Pulse

BANKING

Big Boys With Big Bucks Prep For India Deal Hunt

Indian banks will soon face competition from an aggressive class of lenders newly expanding in Asia. Goldman Sachs' asset management division will likely lead the charge after getting Abu Dhabi sovereign fund Mubadala to agree to invest $1 billion arm-in-arm with it. The focus is India.

What’s the deal?: Any debt financing, usually structured by asset managers and capital pools to companies, can be counted as private credit. High interest rates are making countries such as India, where companies are starved of funds, an attractive market. India also has the added advantage of the central bank keeping away banks from acquisition financing. Currently, buyouts are funded by foreign banks. 

Private credit investments in Asia Pacific currently stand at $81 billion, a fraction compared to the $912 billion in North America. 

ELECTRIC VEHICLES

Sales ✅ Service ❌

After accelerating in the past two years, electric vehicle (EV) adoption is hitting speed bumps globally. Deloitte’s 2024 Global Automotive Consumer Study released last week says Indian car buyers prefer hybrid cars to EVs. That’s true of even the world’s largest EV market, China. 

Service woes: Potential EV buyers worry that it isn't easy to repair their vehicles. The after-sales service ecosystem for EVs isn’t keeping pace with vehicle sales. The handful of service technicians on ground are woefully underprepared to deal with a technology that often has nothing to do with mechanics and everything to do with software. 

Double bind: There’s demand for training directly under EV makers, but this is often in response to the number of existing users. An MG Motor India service trainer from Mumbai explains that they analyse monthly electric car sales from authorised dealerships to decide how many special technicians are needed. 

The Signal

This is a Catch-22 for the industry: there aren’t enough skilled technicians to meet growing demand, and not enough vehicles to draw them out yet. 

Government bodies have launched several short-term EV skilling courses, and they’re gaining popularity. A LinkedIn report from October 2023 stated that India saw the biggest jump—140%—in EV skill acquisition in five years, with 5.1% of auto workers now having EV skills. But three months in a classroom isn’t enough. Head to The Core to find out more.

ARTIFICIAL INTELLIGENCE

Nvidia Changes Its Colours

When AI chipmaking biggie Nvidia crossed the $2 trillion mark in market cap after reporting bumper quarterly earnings, cynics asked: has its stock reached bubble-like levels? If so, how long before Nvidia comes back to earth—especially when the AI frontrunners depending on its hardware are building their custom chips?

Nvidia has a plan: to future-proof itself by supplying more chips for AI inferencing rather than AI training.

Say what?: The two core phases of AI-anything are training and inferencing. The first is computationally-intensive because it requires cutting-edge chips to feed large language models troves of data. Because inferencing is training put into practice (read: making predictions), it’s faster and less computationally-intensive.  

In the past year, over 40% of Nvidia’s data centre business was for inferencing, marking a strategic shift.

But: AMD, Amazon, and Google have in-house inference chips. So does Microsoft, which is gradually moving towards an Nvidia-free ecosystem.

TECH

Will Apple Put A Ring On It?

Sales of its wearables, which account for 10% of company revenue, declined last year. Is that why some Apple insiders are pitching new wearables to cater to new customers? Reportedly, according to Bloomberg’s Mark Gurman.

Ideas include a health ring (like the Oura), augmented reality (AR) glasses, and AirPods equipped with cameras. The rationale for each is:

A health ring could appeal to people interested in a wearable with health monitoring functions, minus the Apple Watch’s bells and whistles.

AR glasses, equipped with audio and AI capabilities, could be an alternative to the Vision Pro headset.

For those averse to wearing both the Vision Pro and AR glasses, AirPods equipped with low-resolution cameras and AI processing could be a stand-in.

The operative word in all of the above is could. Our take: it makes little sense to cannibalise your premium portfolio by offering cheaper “me-too” alternatives.

FYI

Left the building: Vijay Shekhar Sharma has resigned from the board of Paytm Payments Bank, according to a company filing. Sharma’s exit is part of a rejig in the board, which now has four new independent directors, including two former IAS officers. 

RIP: Legendary ghazal singer Pankaj Udhas, 72, passed away after a prolonged illness in Mumbai. 

To the bourses: The Tata Group is considering listing its EV subsidiary Tata Passenger Electric Mobility Limited, per Hindu Business Line. The company is reportedly looking to raise $1-2 billion via the initial public offering.

Hitching a ride: The Adani Group is reportedly entering the cab service business with a strategic alliance with Uber. The alliance would involve Adani becoming a fleet operator by buying and listing electric cabs on Uber.

Bonjour: OpenAI-backer Microsoft has struck a partnership with French AI startup Mistral in a move that will see the tech major take a minor stake in the Paris-based company. As part of the deal, Mistral will also be available on Microsoft’s Azure platform.

Fresh dough: Zomato and Tata Digital-backed fitness company Cult.fit has raised $10 million (~₹84.5 crore) in a Series F round led by existing investor Valecha Investments. The company has raised over $650 million from marquee investors such as Accel and Temasek.

Across the pond: In a potential boost to the struggling London Stock Exchange, Chinese fast fashion giant Shein is considering a UK IPO instead of a US one after facing mounting resistance from US lawmakers, according to Bloomberg.

THE DAILY DIGIT

96.8 crore

The number of voters registered in India as of February first week who are eligible to vote in the upcoming general elections. The figure includes 21.5 crore voters below the age of 29. (The Economic Times) 

FWIW

Crisis alert: Mexico City is on the verge of drying. The city of 22 million people is suffering from an unholy trident of low rainfall, long dry periods and high temperatures. The city is dependent on its underground aquifers for 60% of its water needs, while the rest is pulled from water sources outside the city. With most of these sources dry, there has been added pressure on the underground aquifers. This extra pressure is leading to land subsidence, at 20 inches a year. If this doesn’t qualify as a wake-up call, we don’t know what else will. 

False data: They say the road to hell is paved with good intentions. Something similar happened in the world of genetics as well. The US National Institutes of Health is running a programme called All of Us, with the goal of collecting the genomic and health profiles of one million people in the US by 2026. That data was visualised using an algorithm called UMAP; the only problem with that is that UMAP makes these relationships seem distinctive, which isn’t exactly how genetics works. UMAP’s use reinforces social concepts of race and ethnicity in the world of genetics, a problem that geneticists fear will be misused. 

Narcos 2.0: Fans of Narcos listen up. There might be a script ready for another season. Mexico’s drug cartels are anything but dead and they’ve been bolstered by the policies of its President Andrés Manuel López Obrador. Manuel’s policy of “hugs, not bullets” has seen arrests drop precipitously. Many officers in the local government have seen this as a message to co-opt henchmen into government offices and are doing so. Distraught locals are either fighting back or leaving the country in hordes, with the cartel making the most of it either way. Looks like the perfect time for the rise of a new Kiki Camarena.