Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy Monday folks, hope you all had a smashing weekend. Merry Christmas to those who celebrate!

Today we’re diving into -
- Walmart’s $600mn fresh cash injection,
- Harley Davidson’s story so far,
- and SHEIN’s stellar success story.

Our read time is 4 minutes and 53 seconds - faster than Australia looted India in revenge for the UK…

Let's dive in. 👇

Market Vibe Check

Walmart doubles down with a $600mn top-up of cash. 💸

TLDR -
- Walmart spent $3.5bn over the last 6 months buying out Flipkart shareholders.
- They want to take the fight to Amazon - who’s the current e-com king.
- Flipkart’s e-com unit is still growing at 25-30% annually.

Tons of big US companies are hunting for their next billion users - and a prime battleground is India.

Walmart has spent around $3.5 billion over the last few month to buy up more shares from Flipkart shareholders, and they just closed a $600mn cash injection to give the business more dry powder.

That brings their total ownership of Flipkart to ~85%, and gives a clear signal about where they’re placing their chips.

E-commerce is now second nature to Indian consumers - clearly seen in Flipkart’s e-com business which is still growing at ~25-30% a year in a tough market.

There’s obviously merit in going for the India - but it all becomes clear when you see that Jeff Bezos & Amazon have planned out a $26 billion investment in India over the next 6-7 years.

Walmart is their biggest competitor in e-commerce, and both are gunning to be #1.

Neck and neck…

Harley Davidson gets rip-roaring with it’s budget-premium bikes. 🏍️

TLDR -
- Harley is facing a “too much demand problem” in India.
- 26,000 customers have fully paid them in cash for a bike that’s set to be produced.
- 65% of these 26k customers opted for the 2.7L-priced highest end model.

2 years back, Harley-Davidson left India because of “low demand” and “sluggish growth”.

Yesterday, they were forced to stop orders for their new India-focused bike because there was more interest than they could possibly handle.

Long story short -

• Hero Motocorp teamed up with Harley to create a bike for the Indian market

• It’s gonna be a Harley-branded, Hero manufactured vehicle

• Pricing is gonna still be premium (gotta stay Harley)

In the last month, they’ve received just under 26,000 customers who have paid fully in cash for their new Harleys.

The crazier part - of these 26,000, 65% of the orders are for the highest-end model - weighing in at 2.7L INR ($3.3k).

This tells us two big things.

1 - You can build a multimillion dollar business by servicing India’s 1%

There are tons of brands out there who’ve managed to carve themselves a niche by exclusively pricing themselves out of reach for 99% of the market.

India isn’t a ‘poor’ country per se - there’s a very large, very affluent chunk of the population hidden behind a low median per capita income.

2 - There is still CRAZY appetite for luxury in India

‘New money’ is very hot to the market, and it attracts flashy, cool, and chic-looking products.

Almost every big luxury retailer is ramping up their locations in India, with resale markets ticking up in value by the day.

Insane…

SHEIN <> Reliance partnership gets some odd eyebrows. 👕

TLDR -
- SHEIN is looking for a pre-IPO funding round at a $90b valuation.
- They were a no-name company just 5-7 short years back, and they’re now market leaders in logistics & supply chain.
- SHEIN tied up with Reliance to ship their Chinese maal all across India, which helps due to the nature of the government.

A few years back, no one had heard about SHEIN.

Today, they’re raising money at a $90 billion valuation.

If you aren’t familiar with SHEIN, they’re like the McDonald’s of fashion - cheap clothing that looks good but wears out fast. And by cheap, I mean really cheap.

Their lowest priced t-shirts start from 100-150 INR, which helps them undercut the market like no one else can and offer more of that instant gratification which the younger generation seem to be chasing.

Their business revolves around three simple steps -
- get Garment X made as quickly as possible
- move Garment X to customer as quickly as possible
- make Garment X's price tag as small as possible

Supersonic supply chains like this mean that you can ship new styles very quick, very often. Zara & H&M take almost 5 weeks to take a new design from paper to product. SHEIN takes 3 days!

They just entered a tie-up with Reliance to streamline shipping and logistics all over India, which is super important because SHEIN is a Chinese company, meaning that Indian regulators haven’t been taking to it kindly.

They were actually banned from operating in India until very recently, which is why it’s important to have friends in higher-up places who can put pressure on the right people.

SHEIN did $24 BILLION in sales last year with an eye-watering 7.5% profit margin, which is very hefty at the price point which they service.

Killer stuff.

In other news… ☕

America points a finger at Iran over Indian Ocean shipping threats (BBG)

Hyperloop goes bankrupt (TC)

Jim Ratcliffe nears a $1.3bn deal to buy a fourth of United (FT)

Harvard Management Company comes into the spotlight (NYT)

China stops geeking on gaming after the industry sheds $80bn (BBG)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC