Arvind's Newsletter

1.CEO and cofounder of Airbnb (US Headquartered marketplace for homestays, valued at ~$75 bn ),Brian Chesky spoke to Anumeha Chaturvedi and Vinod Mahanta of Economic Times about India being one of the biggest growth markets of this decade.

Overall booked nights from India on Airbnb rose 70% in 2022 from pre-pandemic 2019. Bookings for India properties grew by almost 110%. Globally as well, 2022 was a record year for Airbnb. Net income stood at $1.9 billion, making it the company’s most profitable year ever. Some excerpts from the interview. Long Read.

“Although our penetration in India is much lower than in more mature markets like the US, I believe we are just scratching the surface of what is possible in India. There is no reason to think that Airbnb couldn't be as popular in India as it is in the US. People in India want authentic experiences, to connect with others around the world, to travel, to stay in homes, and to save money. These desires are universal and transcend cultural boundaries.

From a business perspective, India is an exciting new market for us. We now have 1,000 employees there, and I believe it will be one of the biggest growth markets, if not the biggest, in this decade.India is now the most populous country in the world and will soon have one of the biggest middle classes in the world. As smartphone penetration and the GDP continue to rise, I believe we have all the foundations to build a really important business there. The real opportunity, I think, will be when the Indian middle class emerges, particularly younger travellers who want to experience the world. Airbnb is a great way for them to do that for the first time. What I find especially exciting about India is its robust culture of hospitality. It is a unique aspect of Indian culture that I believe will only help to further our business growth in the country.

“ Another important trend we have noticed is that people are seeking authenticity and human connection in a world that is becoming more artificial. At Airbnb, we want to use technology to bring people together and offer opportunities for genuine human connection. We have also noticed a significant portion of our business is for longer stays, with a fifth of our bookings being for more than a month.This shows that people are not just looking for short-term vacations but are also seeking longer stays and a more immersive experience. “

“Despite the challenges posed by the Covid-19 pandemic and rising inflation, the travel industry has proven to be more resilient than many expected. People still have a strong desire to travel, and this has been reflected in Airbnb's strong business performance. We have noticed that affordability has become an even more critical consideration for travellers. With inflation affecting the cost of travel, people are looking for more affordable options. This was one of the driving factors behind our focus on Airbnb Rooms, which offers a more affordable option for travellers.”

Airbnb has $9.6 billion cash on the balance sheet, so which are the growth areas for investments?

“One opportunity that is obvious is international expansion — especially in Asia, especially in India. China, India, South Korea and Japan within Asia are big opportunities. I think some parts of Africa will be interesting. We have been investing quite a lot in Latin America. Even other parts of Europe — Northern and Eastern Europe. There are really big opportunities there.”

Secondly, there are going to be some new verticals and new opportunities that could be really interesting as well. The great thing about our business is it's a highly capital-efficient business. Networks aren't very expensive to scale.

2.Refurbished iPhones boost Apple’s share of Indian market.Apple has experienced a big boost in demand in India, driven by a surge in refurbished iPhone sales in Asia’s second-biggest economy reports the Financial Times.

The iPhone accounted for 11 per cent of secondary smartphone sales in India last year, up from 3 per cent in 2021, making it the “fastest-growing refurbished brand in India”, according to data from Counterpoint Research, a market intelligence group.

Apple has pinned its hopes for future growth on India as the US tech giant looks to ramp up its share of the world’s third-largest smartphone market.

Apple’s share of new smartphones in India grew to 5 per cent last year, up from 1 per cent in 2019. Demand has been limited by the luxury price point, as the average sales price of a new iPhone is Rs80,000 or nearly $1,000.

But the brand has experienced unprecedented interest in the secondhand smartphone market, which acts as a gateway into Apple’s network of products and services.

Refurbished iPhones are “selling like hot cakes,” said Glen Cardoza, a Mumbai-based analyst for Counterpoint. The research found that volumes grew by a fifth in 2022, four times the global average.

In terms of new smartphone sales, Apple is the only major company expected to grow global shipments this year. This is largely down to India, where iPhone shipments are projected to grow by “a massive” 31 per cent in 2023, compared to 2 per cent in China and none in the US, its two biggest markets, according to Counterpoint.

The Android-dominated country currently has a small base of available refurbished iPhones. Meanwhile, Delhi has largely prohibited the import of used phones from abroad since 2012 over concerns it could impact initiatives to support domestic manufacturing.

3.Eli Lilly says its new Alzheimer's drug can stop the disease's progression reports CNN.An experimental Alzheimer’s medication slowed declines in patients’ ability to think clearly and perform daily tasks by more than a third in a large clinical trial, drugmaker Eli Lilly said .The drugmaker says it will apply for FDA approval although safety concerns remain

4.Google is edging closer to ditching passwords for good, reports the Verge. Cryptographic passkeys are both easier and safer.

Google’s next step into a passwordless future is here with the announcement that passkeys — a new cryptographic keys solution that requires a pre-authenticated device — are coming to Google accounts on all major platforms. Starting today, Google users can switch to passkeys and ditch their passwords and two-step verification codes entirely when signing in.

Passkeys are a safer, more convenient alternative to passwords being pushed by Google, Apple, Microsoft, and other tech companies aligned with the FIDO Alliance. They can replace traditional passwords and other sign-in systems like 2FA or SMS verification with a local PIN or a device’s own biometric authentication — such as a fingerprint or Face ID. This biometric data isn’t shared with Google (or any other third party), and passkeys only exist on your devices, which provides greater security and protection since there’s no password that could be stolen in a phishing attack.

5. China is an export powerhouse.

   In 2001, when China joined the World Trade Organization, the value of its merchandise exports stood at $266 billion. Over the next seven years, the country’s exports grew uninterrupted until the 2008 financial crisis caused a sharp decline in global trade.

   This cycle would repeat again with consecutive growth until 2015 (another global trade slowdown), followed by slowed growth until 2020 (the onset of the COVID-19 pandemic).

   But its merchandise exports skyrocketed by 30% in 2021, and by the end of 2022 had grown to an estimated $3.6 trillion per year. That means China’s exports alone are bigger than the entire economies of countries like the UK, India, and France.