Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy Monday, folks. 🙏

Today we’re diving into -
- Netflix’s Jio partnership to tackle India’s OTT scene,
- Titan’s $560 million clean-up of CaratLane,
- And the government’s latest play to bring inflation down.

Our read time today is 4 minutes and 37 seconds - faster than you can grab a plate of Cheese Maggi from the thelewala. 🔥

Let's dive in. 👇

Market Vibe Check

Netflix pushes into India’s OTT market with Jio’s blessing. 📽️

TLDR -
- Netflix is now giving away subscriptions along with prepaid Jio plans.
- Pretty unorthodox, since Netflix makes ¼th the money from an Indian user vs. a North American user.
- Gives Netflix instant distribution to Jio’s 450mn-strong user base.

Netflix is making a run into India’s streaming segment with the support of the world’s largest telecom provider, Jio.

They’ll be bundling 3-month Netflix subscriptions along with 3-month phone plans.

The specifics are boring, but here are 3 big-picture things to keep in mind.

1 - Netflix makes a LOT less money from India

As a streaming platform, one metric is KEY.

It’s the ARPU - average revenue per user.

A North American user gives Netflix $16.6 per month.

An Indian user gives Netflix $6.5 per month.

In other words, a North American user is “worth” 2.5X more than an Indian one to Netflix.

2 - Jio is giving them effortless distribution.

With the flick of a switch, Netflix gets access to Jio’s entire user-base of 450 million subscribers.

Even if Netflix takes a loss on these bundled customers, they make up for it with the free marketing & interest from users that subscribe after their Jio plan ends.

3 - India’s telecom market still runs on “recharges”

Over 75% of India doesn’t use postpaid plans.

They top-up their phones with “recharges”.

This is effectively a 3-month recharge with a world-class OTT subscription - making it SUPER value for money in the market.

Solid move of business chess. ♟️

Titan takes a $600 million majority bite out of the CaratLane pie. 💎

TLDR -
- Titan just bought out the founders of CaratLane for $560mn in an all-cash deal.
- They first invested at a $69mn valuation in 2016… now this cash deal makes CaratLane a $2 billion company.
-

Titan is the titan of India’s luxury segment - and they’ve practically minted a unicorn under our noses.

This is the CaratLane story in 30 seconds. 👇

CaratLane started out as an online jewelry player with modest sales.

They got noticed by Titan in 2016, who bought 62% of their company at a $69 million valuation.

Titan decided to go omni-channel, and with their proven distribution network, CaratLane built out 223+ stores in the next few years.

This operational excellence paired with stellar products pushed them closer & closer toward becoming the “Amazon” of jewelry.

They’re now at an annual run-rate of over 1800 Cr/year with the backing of a luxury giant who knows how to scale.

Crazy liquidity for the founders. 😏

Government slaps a 40% export tax on onions to battle prices. 🧅

TLDR -
- You now have to pay a 40% tax to export onions from India.
- The logic: it’s now more expensive to export → less countries will buy → prices will come down.
- Comes hot on the heels of a relatively lukewarm inflation print at 7.5%

Next move in the inflation wars - a 40% export tax on onions.

Onions are the lifeblood of Indian cooking, and prices have been surging of late.

The logic behind why these export taxes should work -
- it’s now more expensive to export onions from India
- onions can be exported from other countries for cheaper
- less onions will leave India
- more onion supply = moderating prices

Never mess with Motabhai.

In other news… ☕

Russia’s Luna-25 aircraft explodes on the Moon’s south pole (BBG)

China’s slow economy forces lenders to cut rates (FT)

Mushroom protein startup raises $45mn to ramp up production (TC)

SoftBank makes a $53bn bag on FirstCry’s IPO pre-sale (Mint)

Jio Financial gets ready to go public at a $20bn price tag (BBG)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it. Have a mauj-masti filled day ahead.

Lots of ❤️,

Team Cutting Chai 😤