Bitcoin’s Nosedive Jolts Crypto Market
Bitcoin has plunged to a new low. For the past several months, the hallmark volatility that previously attracted hordes of investors to the world’s largest cryptocurrency has been absent, with the rate of its swings reaching its lowest point since 2016. That lull snapped on 17th of August, when Bitcoin plunged more than 8% in the space of a few hours to a two-month low of $25,314 late in the New York day. The slump sparked a broad decline across all of crypto, leading to more than $1 BN in liquidations and putting Bitcoin on pace for its worst week since November and crypto exchange FTX’s collapse. The carnage — fueled by the prospect of prolonged high interest rates and exacerbated by thin crypto trading — was a reminder of the various threats that continue to stalk digital assets, from hostile regulators to a broader rout in risk assets. And even as Bitcoin has recovered smartly from last year’s lows, many investors are still sitting out, depriving the market of the breadth and depth that are key ingredients for a sustained bull run. “There are still significant amounts of macro uncertainty keeping investors away, and liquidity is still thin,” said Noelle Acheson, author of the “Crypto Is Macro Now” newsletter and former head of market insights at Genesis Trading. “Bottom line, there’s not yet enough conviction.” Thursday’s activity marked another entry in an emerging trendline for Bitcoin in 2023, with the token having already crashed to two similar low points in January and March. But every sharp decline this year has been followed by recovery, said FRNT Financial’s Stephane Oullette. The last four months have had the lowest average daily volume of spot crypto transactions since October 2020, according to Riyad Carey, a research analyst for blockchain data firm Kaiko. At that time, Bitcoin was worth around $10,000, while the second most popular crypto asset Ether, now at $1,670, was valued at $350.
More Impressions, Money and Twitterati ‘Xclaims’
It’s screenshots galore at X, formerly Twitter, ever since the platform started sharing ad revenue with eligible paying users. Since July, hundreds of Twitter Blue subscribers in India and around the world have been posting screenshots of the payouts they received as part of the company’s new monetisation programme that rewards users with a share of the revenue earned from impressions (views) of verified users on the ads placed in replies to their tweets. They have to meet the eligibility criteria of over 15 MN impressions over a three-month period, now brought down to 5 MN, and a minimum of 500 followers. The first tranche of payouts amounts to $ 5 MN, owner Elon Musk ‘Xclaimed’ on the platform in June. While there is no clarity or confirmation from X on how the amount is calculated, a few US-based users reckon they earned roughly $9 for everyone million impressions. According to estimates from analytics site Similarweb, visits to twitter.com had taken a 7.3% year-over-year drop in March, the third straight month of declines. However, the site’s traffic saw an uptick June onwards, data from the analytics site shows. Twitter.com’s desktop traffic has increased by 0.97% in July compared to the previous month, as per Similarweb. Because of this ad sharing many users are reconsidering their Twitter Blue subscription. Globally, the creator payouts don’t seem to have factored in differential CPM (cost per million impressions) rates across geographies either, some noted; a factor that may reduce earnings of non-US users going forward. For instance, with close to 23 million users, India contributes to roughly 5% of Twitter’s user base. “While it’s the third-largest audience segment after the US and Japan, India may not be contributing to more than 2%-4% of its ad revenue due to low CPMs (cost per million impressions),” said Gautam Mehra, cofounder of ProfitWheel, an ad analytics solutions platform. “Going by India’s low CPM rates, India would be making around $40-60 MN, which is less than 2% of the overall ad revenue,” he added.
How AI, blockchain are taking India’s insurance industry to next level
We live in a VUCA world which stands for volatility, uncertainty,complexity, and ambiguity Insurance industry is not immune to these changes. It is reinventing itself by technological innovations. Technological innovations – Standard and vital insurance processes like policy issuance, claim settlement, pre-medical check-up, and the like, which were predominantly paper-based, are now being augmented with digital integration to ensure a seamless customer experience and streamline processes. Technologies like machine learning, artificial intelligence, automation, and data analytics have played a significant role in digitizing insurance processes. Through AI-Powered chatbots and virtual assistance, insurance companies are providing instantly personalized customer services. Initiatives like Bima Sugam and ABHA are a step towards making insurance and related services accessible to everyone and ensuring they are adequately covered. IRDAI is also bringing 100% cashless settlement of claims. Virtual sales officers are being established in all tier-2 & tier-3 towns of India in order to increase penetration of insurance. Bima Sugam is a centralized online marketplace that will facilitate sales, servicing, and management of insurance policies. Predictive analytics, which will help in forecasting risks and the probability of events, will play a crucial role in underwriting risks accurately. Blockchain technology can facilitate secure transactions along with policy management & claim settlement.
Artificial intelligence can unlock unrivalled efficiencies in e-commerce
According to a recent McKinsey report, AI applications within the Indian e-commerce sector are projected to generate a staggering $20 BN in annual value by 2030, propelling the industry to unprecedented heights through the realization of unparalleled efficiencies. By strategically harnessing AI capabilities, businesses can streamline their operations, boost productivity, and achieve sustainable growth. A multitude of factors contribute to the operational costs of Indian e-commerce companies, ranging from India’s complex last-mile logistics and steep transportation charges to the expensive management of inventory within warehouses. Nonetheless, data-driven AI and machine learning (ML) tools provide an excellent opportunity for Indian e-commerce companies to cultivate enduring efficiencies across the system, spanning from customer service to doorstep delivery. Chatbots, personalization, smarter stock-taking through predictive AI are the new technologies being used. AI algorithms optimize delivery routes.
Online gaming is more price sensitive than OTT
Esya Centre a Think-tank and IIM Ahmedabad have published a survey that outlines that users spend the maximum time about 194 minutes a day on social media, compared to 46 minutes on online gaming and 44 minutes on OTT. Also, 28 per cent of the surveyed population consider online gaming important for their employment prospects. As per the report, “Policymakers’ concerns around online gaming are unsupported by user time-spend and money-spend data.” GST levied on the online gaming industry from 18 per cent on Gross Gaming Revenue (GGR) to 28 per cent on deposits, leading to a 350% to 400 per cent jump in the industry’s GST outgo.User addiction and loss of money were cited as key reasons behind this steep hike in tax rate. A 30% increase in participation fee for online games may lead to a 71% dip in engagement, which indicates higher price sensitivity in contrast to 17% population affected by price hike on OTT platforms, according to the survey. 89% of the users remain active every day on social media, while just 22% of surveyed users access online gaming on a daily basis.
India Leads The Way in App Downloads
Data on app downloads in the second quarter of 2023 yet again cements India’s dominance as a strategic market for social media giants like Meta and Google. It also saw JioCinema being among the most widely downloaded apps globally following the Indian Premier League (IPL). Online game Ludo King too continued its winning streak in Asia. Interestingly, the Sensor Tower Q2 2023: Store Intelligence Data Digest suggests that Instagram experienced a 36% QoQ decline in Asia but still held its ground as the top app on both the App Store and Play Store. The 2023 IPL , which set a global record for the highest number of concurrent views during a live-streamed event, Jio Cinema experienced remarkable growth in Q2 2023. With 68 MN downloads, JioCinema witnessed a 168% quarter- over- quarter (QoQ ) increase, making Q2 2023 its best performing quarter to date. “This exceptional performance speaks of JioCinema’s ability to leverage the success of marquee events and cater to the evolving demands of streaming audiences,” the report stated. In Asia Meta, the parent company of Instagram and Facebook, continued to dominate the Asian market. Instagram and Facebook consistently maintained their positions within the top three apps for the eighth consecutive quarter in Asia. While Instagram experienced a 36% QoQ decline in Q2 2023, it held its ground as the top app on both the App Store and Google Play. Among social apps, Instagram experienced a substantial decline, with a 46 % decrease in new user adoption in Q2 2023 compared to the previous quarter. In Q2 2023, India maintained its impressive level of app downloads, at 6.6 BN, which remained consistent with the same period the previous year. This was primarily driven by Google Play, a trend observed in the top 10 markets, with the exception of the US.
RBI kicks off digital lending pilot project
The Reserve Bank of India (RBI) is set to launch its digital lending pilot project for public tech platform for ‘frictionless credit’. The RBI, in a notification dated August 14, said the platform is being developed by the Reserve Bank Innovation Hub (RBIH), a wholly-owned subsidiary of the central bank. The RBI stated that the Public Tech Platform is designed to facilitate the smooth provision of credit by ensuring the effortless transmission of essential digital data to lenders. This comprehensive digital platform will operate with an open structure, inclusive Application Programming Interfaces (APIs), and established standards, enabling all participants in the financial sector to effortlessly integrate through a ‘plug and play’ approach.
70% of youth in Bharat never or rarely use Facebook
The Bharat Lab – a think tank launched by Rediffusion and the University of Lucknow to track consumer insights from India’s Tier 2 and 3 markets and hinterland villages – has released a report titled ’Apna Time Aa Gaya’ a study on how the youth in Bharat kill their time versus how they fill their time.
How does the Youth in Bharat Kill Time?
Socializing: Only 18% of the youth spend above four hours socializing with friends and extended family, across weekdays as well as weekends.
Entertainment Platforms:
Radio: A good 87% of the sample population does not access the radio for entertainment or news.
Television: Just 24% of the population prefers watching television in their leisure time, while others would rather kill time on social and other online media.
Social Media: While 56% of the sample population consume social media for entertainment, close to 70% prefer YouTube and WhatsApp over other platforms.
YouTube emerges as the winner in rural areas as well, as 50% of the youth in villages report consuming YouTube regularly for entertainment, over and above all other platforms. 60% of youth prefer movies, web series.
Flipkart targets GenZ users with new offering Spoyl
Ecommerce firm Flipkart announced a new offering named Spoyl, which, it said, was aimed at GenZ users. It will be inside the main Flipkart app and available as an “app-in-app”, the company said. About a quarter of Flipkart’s shoppers are GenZ users, born between 1997 and 2012, the company said in a statement. Spoyl will focus on this segment, offering more than 40,000 products in categories such as western wear, accessories and footwear. This meant equipping sellers with the know-how around fast fashion and working with them to improve their capabilities. “95% of our products on Spoyl will be made in India … D2C in India is often heavily reliant on foreign suppliers as a lot of categories like, say dresses, need specialized machinery and select fabrics,” Flipkart’s spokesperson said. In May, Flipkart-owned fashion platform Myntra had launched its own GenZ focused app-in-app shopping vertical, FWD. Myntra also launched a programme for students to access special deals in relation to FWD last week, called “FWD Campus Tribe”.
Microsoft lags behind Google despite head start in AI search
Google parent company Alphabet beat market expectations in the first quarter of 2023 with a net profit of $15 BN, the company said, in a sign that the search engine behemoth is regaining its footing. The tech titan has found itself under pressure due to a general slowdown in advertising spending, over-hiring during a Covid-era boom and a major challenge by Microsoft on artificial intelligence. Its quarterly revenue came in at nearly $70 BN, a billion better than expected by analysts, and in the same three-month period that the company said it would lay off 12,000 staff, or six percent of its workforce. Microsoft’s results for the first three months of the year also pleased investors, lifted by its industry-leading business cloud products. The company reported profit of $18.3 BN on revenue of $52.9 BN as Cloud and AI more than offset drops in revenue from licensing Windows software to computer makers, as sales suffer in that market. Most market attention was on Google, which became a focus of worry when Microsoft-backed ChatGPT was released and quickly went viral late last year. The Windows maker has added the technology to its Bing search engine and office software. The search giant has since rushed out Bard, its own version of the language-based AI, but the release was seen as clumsy and has so far disappointed observers and company insiders, according to media reports.
Surf & Search’s Up for Online Advertising
Digital advertising revenue in India is mimicking mature markets like the US, with a rising share of spending on ecommerce search like those on Amazon, as opposed to general search engines like Google or Bing. The spread of ecommerce works to Google’s benefit, sure. However, it works to Amazon’s benefit even more. eCommerce offers advertisers more focused insights into consumption behaviour than generalized interests revealed on other digital platforms. It is also among the fastest-growing online ad segments in the country. This could speed up as ecommerce scales up on new digital infrastructure that should make it more competitive. The Open Network for Digital Commerce (ONDC) visualizes a network of interconnected e-marketplaces that makes it easier for small store owners to tap demand online. Early user experience has been positive with customers reporting noticeable price differences in orders placed on apps using ONDC. Even in this widening market, mainstream online advertising has a lot going for it. Alphabet (Google) and Meta (Facebook, Instagram, Threads, WhatsApp), which still dominate, have built up an extensive tool chest to push the envelope further. Video-streaming platforms like YouTube and Instagram are cannibalizing television advertising at a phenomenal pace. Google has not yet monetised non-commercial search, which is roughly four out of every five queries on the internet.
Amazon Ads Equals a Minus for Google
For nearly a decade now, Google and Meta have enjoyed a duopoly in the digital advertising space in India, with almost a 90% share in what is pegged to be a ₹70,000-crore market at present. Over the last couple of years though, Amazon Ads seems to be rapidly eating into their share of the digital pie. Advertisers, especially in categories such as consumer packaged goods as well as DTC (direct-to-consumer) brands, are moving as much as 15-20% of their advertising budget — previously dedicated to Google and Meta — towards the Seattle-based ecommerce giant’s ad tech suite. In the US, platforms like Apple and TikTok, along with Amazon and Walmart in retail media, have shrunk Google and Meta’s share of digital ad dollars to less than 50% as of last year. With no TikTok back home, and a single-digit percentage proliferation of Apple products to boot, Amazon Ads emerges as the single-biggest challenger to the duopoly in India. In 2020, Amazon launched its global ‘demand-side platform’ (DSP) in India. Through Amazon DSP, advertisers can buy programmatic ads to reach new and existing audiences on and off Amazon. It combines data points from all its different properties, such as Prime Video, Fire TV, Kindle, Alexa, Audible, etc, to provide sharper audience segmentation. “You can use it to create customer cohorts based on different spending sizes. Programmatic ads also prove more efficient and cost-effective compared to direct advertising/media-buying,” said Anil Pandit, senior vice-president at Publicis Media Services.