Quick commerce faces stern test in 2023; govt looks to regulate gaming among children
Also in this letter:
Indian government looks to regulate gaming among children
Ola set to pilot new EV cab service in Bengaluru
Gaming industry welcomes proposed guidelines on self-regulation
For quick commerce firms, new users may be hard to come by in 2023
Quick commerce was one of the hottest tech properties during the pandemic. But 2022 saw most investors stay away from the cash-burning sector, and this cold shoulder is expected to reach freezing point in the coming year.
All companies in the space, including Dunzo, BigBasket, Zomato’s Blinkit, Swiggys Instamart and Zepto, focused on improving unit economics throughout 2022 and further improvements are expected this year.
In one quote: Aadit Palicha, cofounder and CEO of Zepto, said, The funding environment deteriorated in 2022 and I expect it to deteriorate further in 2023, given the way the private markets have behaved and the state of companies in the venture-backed space. It is obviously looking bleaker and bleaker The way that we look at the sentiment and how to tackle this environment is to fundamentally have great unit economics and great execution.
Is user growth plateauing? The tough funding environment is already taking a toll on quick commerce firms, which may have to make do with existing customers this year.
According to a source in Swiggys quick commerce service Instamart, the firm has seen its new user growth rate slowing over the past few months. Getting to 300,000 users was fairly easy, but growth from here on will be slow, the source said.
Companies are already scaling back to deal with this. A person associated with Zomatos Blinkit said the company reduced its dark-store count in Bengaluru from 60 to 50, and almost all those cut were on the outskirts of the city.
A Zomato spokesperson told ET that the company continues to evaluate non-performing stores and learn what does not work.
Indian government looks to regulate gaming among children
The Indian government is drafting new rules to limit the amount of time children can spend on a gaming app. It may also require gaming companies to submit anonymised reports on such usage, people in the know told us.
Tackling addiction: The intent, they said, is to curb gaming addiction among children. The new rules are likely to be a part of the upcoming Digital India Act.
The ministry of electronics and information technology (MeitY), which is drafting these regulations, may also require gaming companies to prevent children below the age of 18 from making in-game purchases.
These provisions will be an addition to the draft rules for gaming released on Monday, according to the people cited above. The draft proposed a self-regulatory mechanism for online gaming firms as well as mandatory verification of players through know-your-customer (KYC) checks.
Quote: Addiction (to games) has to be dealt with whether we do it partly in the IT Rules and partly in the DIA (Digital India Act), it is going to be done. We are dealing with issues that need very new, innovative solutions, a senior government official said.
The IT ministry will consult with gaming companies, parents, school associations and adult gamers on how best to frame a new solution, if needed, he added.
Ola set to pilot new EV cab service in Bengaluru with around 1,000 cars
Ola is planning to start its own electric vehicle (EV) cab service and will begin the pilot in Bengaluru with around 1,000 cabs, multiple sources told us.
Second time lucky? This will be Olas second pilot with EV cabs. It had launched a similar pilot in Nagpur in 2017, in partnership with vehicle manufacturer Mahindra. The project, which involved around 200 EVs, was eventually shut down.
The service is similar to that of Gurugram-based EV ride-hailing company BluSmart, which recently started operations in Bengaluru. Olas main rival Uber also recently started an EV cabs pilot in Delhi.
Details: The new service will be available on the Ola app as a separate category along with regular cabs and auto rickshaws. The company plans to increase the number of EV cabs in Bengaluru to over 10,000 in a year.
It plans to procure cars and lease them out to drivers who will have a fixed income and a variable pay component, one of the sources said.
Gaming industry welcomes proposed guidelines on self-regulation
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The gaming industry has welcomed draft amendments in the IT Rules to regulate online gaming but will seek more clarity from the government on the structure of the proposed self-regulating body.
Yes, but: The gaming industry has raised concerns on the ambiguity around certain aspects, such as the definitions of games of chance and games of skill, and issues pertaining to the sharing of intellectual property rights of games with the self-regulating body, which may comprise executives from competing firms.
The SRO would be made up of industry members and, if this is the case, then it means that members would have access to intellectual property of a competing company even before the game is launched, said Saumya Singh Rathore, cofounder, WinZO.
Indias lead on digital public goods is extraordinary: Satya Nadella
Microsoft chairman and chief executive Satya Nadella on Tuesday lauded digitisation initiatives in India and said the countrys lead on creating digital public goods is extraordinary.
Nadella is on a four-day official visit to India, where he will visit Mumbai, New Delhi, Bengaluru and Hyderabad to meet key customers, startup executives, developers, non-profit organisations and students.
Cloud adoption: Nadella said there is huge scope for growth in the cloud adoption market in India, adding that this is imperative for economic growth with low energy consumption.
Every factory, warehouse, hospital and retail facility is going to need computers where data is generated. So, distributed computing will remain distributed. And, with Azure Arc, we’re even making sure the cloud infrastructure gets truly embedded in the physical infrastructure.
ET Ecommerce Index
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Crypto trades worth Rs 32k crore shifted abroad from Feb to Oct 2022
Cumulative trade volumes worth Rs 32,000 crore shifted from domestic crypto exchanges to foreign ones during February-October 2022, after finance minister Nirmala Sitharaman announced new taxes on these digital assets in last years budget, according to a study by policy think tank Esya Centre.
Since the announcement, around 1.7 million Indian crypto investors have switched from domestic exchanges to foreign ones, the study said.
Step by step: Following the announcement in Budget 2022 of a 30% tax on gains, and a 1% tax deductible at source (TDS) on all crypto transactions, domestic crypto exchanges saw a 15% drop in trading volumes in February and March 2022. And after the 1% TDS came into effect on July 1, exchanges lost up to 81% of their trading volumes in four months, according to the study.
Other Top Stories By Our Reporters
BharatPe CFO Nalin Negi to take over as interim CEO: The chief executive of digital payments startup BharatPe, Suhail Sameer, will transition from his current role and become a strategic advisor to the company, effective January 7. Its chief financial officer Nalin Negi, who was brought in from SBI Cards in August, will be the interim CEO, the company said on Tuesday.
Uolo acquires coding platform Tekie: Uolo Technologies has acquired Bengaluru-based code-learning platform Tekie in an all-stock deal. The transaction involves a cash component for Tekies two founders Naman Mukund and Anand Verma, in addition to equity that will vest over a three-year period and a performance-linked incentive. The sum was not disclosed.
SarvaGram closes Series C round at $35 million: Rural household-focussed SarvaGram Solutions said on Tuesday it has closed its Series C funding round at $35 million, led by impact investment venture capital fund Elevar Equity. Other investors that participated in the round were Elevation Capital, Temasek and TVS Capital Funds, as per a statement.
Global Picks We Are Reading
TikTok ban debate moves from Washington to Main Street (WSJ)
Caroline Ellison wanted to make a difference. Now shes facing prison. (The Washington Post)
Amazon finally authorised Pakistani sellers. A wave of scammers followed. (Rest of World)
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