News

13 Jul, 2020
Woolworths takes lion's share in online groceries
Financial Review

Woolworths has taken the lion's share of growth in the online grocery market and now has more than double the share of arch rival Coles.

Woolworths accounted for about 57.4 per cent of online grocery sales in the year ending March 2020, according to figures released on Wednesday by Roy Morgan, well above its estimated 33 per cent share of the total fresh food and grocery market.

Coles' share of online grocery sales was estimated to be 26.1 per cent, slightly below its 26.6 per cent share of the total market, Roy Morgan said.

The market share estimates are based on surveys of consumer shopping habits and spending, rather than credit card data, but they suggest Woolworths is well positioned to win the online war as more consumers shift their weekly grocery shop from stores to e-commerce.

"Over the last three years, and particularly in the last 18 months, we've seen a really substantial increase in online [food] expenditure," Roy Morgan chief executive Michele Levine said.

"It really looks like the lion's share of that increase has gone to Woolworths.

"They're [Woolworths and Coles] are both growing but Woolies started growing sooner and is in a higher position ... it almost looks as if the major growth in the market has been either driven by Woolworths or picked up by Woolworths."

Woolworths is expected to have taken more online market share during the pandemic, despite having to ration services. Woolworths' online food sales rose 26 per cent in the March quarter, while Coles' online sales rose 14 per cent.

Promiscuous shoppers

Australian consumers are notoriously promiscuous when it comes to grocery shopping – Roy Morgan's research found about 25 per cent of brick and mortar customers shop at Woolworths, Coles and Aldi in any four week period.

"There's very little loyalty. It's always been a very fickle market," Ms Levine said.

"Despite having things like Flybuys and Everyday Rewards to make people loyal, people simply have both cards and shop for convenience. They're really not distinguishing one from another."

However online grocery shoppers appear to favour one retailer, possibly because of the time it takes to set up grocery lists and account details.

Ms Levine believes subscription-based schemes designed to reduce delivery costs will make online shoppers even more loyal.

"Loyalty is behavioural – I always do the same thing – and emotional – I love this store," she said. "I think the behavioural loyalty will probably increase."

7 Jul, 2020
ASX set to rise as Wall Street jumps; Amazon shares hit record high
The Sydney Morning Herald

US stocks rose sharply on Monday (US time) as a rebound in US services industry activity in June and expectations of a revival in China's economy boosted optimism, helping investors look past a surge in new coronavirus cases in the United States.

A non-manufacturing activity index jumped to a reading of 57.1 last month, the highest since February, from 45.4 in May, according to a report from the Institute for Supply Management (ISM).

"These numbers are important, and it helps to explain the increase in consumer confidence," said Quincy Krosby, chief market strategist at Prudential Financial in New Jersey.

Investors also bet on an improving Chinese economy and its impact on the global growth as the yuan led commodity currencies higher against the dollar. Earlier, Chinese stocks jumped more than 5 per cent.

Unofficially, the Dow Jones Industrial Average rose 459.47 points, or 1.78 per cent, to 26,286.83, the S&P 500 gained 49.66 points, or 1.59 per cent, to 3,179.67 and the Nasdaq Composite added 226.02 points, or 2.21 per cent, to 10,433.65.

It sets up the Australian sharemarket for gains on Tuesday, with futures at 6.07am AEST pointing to a jump of 27 points or 0.5 per cent at the open. On Monday, the ASX fell by 0.7 per cent.

A slew of upbeat US data recently, including a record rise in monthly payrolls, has powered the Nasdaq to all-time highs and has driven the S&P 500 up roughly 44 per cent from its March bottom.

The gains came despite a record surge in new COVID-19 cases in 16 states in the United States this month that could further hamper reopening plans and create a risk to the economic recovery.

Over the Independence Day weekend, several states reported a record increase in new infections, with Florida surpassing the highest daily tally reported by any European country during the peak of the outbreak there.

Online retail giant Amazon.com crossed $US3,000 for the first time and provided the biggest boost to the S&P 500 and the Nasdaq.

Tesla shares also jumped, rising for the fifth session as JPMorgan bumped up its price target for the electric carmaker's stock following better-than-expected quarterly deliveries.

Uber climbed after the ride-sharing company agreed to buy food-delivery app Postmates in a $US2.65-billion all-stock deal.

7 Jul, 2020
How KitKat Chocolatory is helping the 84-year-old brand connect with Gen Z
Inside FMCG

Sydney’s first KitKat Chocolatory officially opens to the public on Monday, bringing an air of decadence to the classic chocolate bar which has delighted consumers for nearly 85 years.

The boutique store focuses primarily on customisation to bring unique products to guests, while showcasing local and international flavour innovations to broaden the customer experience.

Nestlé’s general manager of confectionery Chris O’Donnell told Inside FMCG that the goal was to “wow” consumers.

“The intention was to create a concept that really brought to life the creativity of KitKat and to bring something that was next level for the brand, but also really immersive for the consumer,” he said.

The Chocolatory concept was based on a pop-up KitKat Studio which opened for four weeks in Sydney back in 2015, O’Donnell explained. The first KitKat Chocolatory then opened in Melbourne and through that process the team identified the type of experience that consumers were looking for.

“As we started to look to Sydney, we really looked at how we could take that to the next level what could we bring to Sydney that would create a concept that would really wow consumers,” he said.

“We brought new ideas, new experiences, that bring to life not only that creativity but gives people a much more personal experience that you can’t get anywhere else in the world.”

The store offers a feast for the senses, with flowing chocolate, a wall of unusual flavours from around the world, a Chocolate Train with a rotation of unique flavours in single finger form, and a cafe serving up hot and cold chocolate and cookies.

Create Your Break allows visitors to design their own eight finger KitKat, from up to 30,000 possible combinations, to be created there and then by in-store chocolatiers, while the KitKat Tasting Table presents a selection of premium desserts that champion the classic bar in a variety of ways.

O’Donnell told Inside FMCG that creating a “next level” experience is essential to connect with today’s consumers.

“Connecting with consumers is becoming increasingly difficult, the marketing mix is changing, and for brands to really connect with consumers, they need to create a connection that’s more based on experience than it is based on you know the historical telling of advertising,” he said.

“For me, this was a critical part of the journey that KitKat has been on, which is about offering much more personalised, much more experience-based content, and bringing something to consumers that you just can’t get anywhere else.”

Supplementing the store, is KitKat’s e-commerce site which offers the same products and customisation to consumers online. O’Donnell said the online store has experienced “phenomenal growth” in recent months.

“There’s nothing like experiencing it firsthand yet, but for those who can’t come to the store that’s what online is there for. Our e-commerce platform over the last three to four months has experienced phenomenal growth, of up to 400 per cent. So if [consumers] are not in Sydney or Melbourne or can’t get into the store then that obviously gives the brand much more reach across Australia to provide people with personalisation and customisation at home,” he said.

O’Donnell is hopeful that the store will drive the confectionery giant’s pipeline of innovation.

“We can use this as an innovation incubator, we can trial new things relatively quickly. In retail, to develop a new product it might take six to 12 months, we can do it here in six to 12 hours. That allows us to test something and get an instant reaction from the consumer. That gives us really good insights on what could work in retail,” he said.

“We have some ideas coming out next year that we’ve tested in here. We’ll use this on an ongoing basis to help drive our pipeline of innovation.”

The Chocolatory has also allowed the brand to connect with younger shoppers that are not yet consumers of the brand, and has helped it reconnect with those consumers that have drifted away from the brand over the years.

“What we learned through the Chocolatory in Melbourne is that we had somewhere between 30-40 per cent of people coming into the store that hadn’t tried KitKat before, or weren’t regular consumers of KitKat. We then learned that those people who then experienced KitKat through the Chocolatory began buying back in retail, so it helped build our base business as well,” he said.

“There’s a circular economy of people who come in here, that then get the brand experience and then really start to engage with the brand.”

3 Jul, 2020
Online retail platform BigCommerce expected to list in the US
The Sydney Morning Herald

Retail platform BigCommerce could be the latest tech business with origins in Australia to list in the United States, as the coronavirus pandemic continues to drive demand for online shopping.

On Thursday, Bloomberg reported the platform confidentially filed documents for an initial public offering in the United States which could value it at $US1 billion ($1.46 billion), however, BigCommerce has refused to comment on the report.

BigCommerce was founded in Sydney in 2009 by Eddie Machaalani and Mitchell Harper and is now headquartered in Austin in the United States.

Mr Machaalani and Mr Harper no longer run the company but sit on its advisory board, and BigCommerce has an office with around 60 staff in Sydney.

The platform, which has recorded over $US25 billion in sales, enables businesses to manage their online sales through marketplaces like Amazon and social media sites like Instagram.

BigCommerce has raised more than $US200 million to date, including $US64 million from Goldman Sachs, General Catalyst and GGV Capital in 2018.

Telstra Ventures has been an investor in BigCommerce since 2014 and while partner Yash Patel was not willing to comment on the IPO reports, he said like any venture investor, Telstra Ventures always looked towards companies reaching liquidity either through listing or a trade sale.

"We really have been excited about BigCommerce's ability to democratise e-commerce for small to medium businesses basically allowing them to launch a fully functional store with almost no code," he said. "Right now that's even more important with COVID as everyone moves to e-commerce."

Online retail has boomed during the coronavirus pandemic, with shares in competitor platform Shopify trading at a record high after more than doubling since March to give it a market valuation of $US109 billion.

Tobias Yao, a portfolio manager with Wilson Asset Management, said the coronavirus had created increased demand for online retail which would not subside.

"There has been a step change in the growth trajectory for e-commerce in general," he said. "We think this is a decade -long growth journey."

In an interview last year with The Age and The Sydney Morning Herald, BigCommerce chief executive Brent Bellm said an initial public offering was on the agenda "at some point".

"We are a one product company, all we have is our one platform and we focus on making it the best in the world and the most partner-centric in the world," he said.

Even before the coronavirus pandemic, Mr Bellm said BigCommerce hit an average revenue run rate of "well over" $US100 million and growth was "exploding".

"The majority of the world's websites are still commerce enabling themselves and we can take the assets they have and extend them into commerce," he said.

29 Jun, 2020
Atlassian’s new 40-storey behemoth
The Australian Business Review

Australian tech giant Atlassian has detailed plans for its new headquarters at the tech precinct at Sydney‘s Central Station, with the company declaring the building will generate 2500 jobs and nearly $1bn for the local economy.

Atlassian, which is run by billionaire co-CEOs Mike Cannon-Brookes and Scott Farquhar, will be the key tenant of what they say will be the world’s tallest hybrid timber building.

The Australian first reported the plans, with Mr Farquhar telling The Australian the precinct would be a home to future generations of Australians who might otherwise take their great ideas overseas.

The building will be designed by New York-based architects SHoP, who will work in conjunction with Australian outfit BVN. Atlassian said the project will be about 40 storeys high, using a timber design with a glass and steel facade.

The building, part of a new hub dubbed Tech Central, will operate on 100 per cent renewable energy, and will use 50 per cent less carbon in construction compared to a conventional building.

Atlassian co-CEO Scott Farquhar said the existing backpackers’ accommodation at the site will be revitalised and incorporated into the lower levels of the new building. The building is a key part of the NSW Government’s plan to build a new tech precinct attracting 25,000 workers.

Mr Cannon-Brookes and Mr Farquhar are no stranger to property. Mr Cannon-Brookes owns Australia’s most expensive property - Fairwater - and is estimated to own more than $131m worth of real estate. Mr Farquhar meanwhile bought the Elaine estate next door to Fairwater in 2017 for $71 million.

The Atlassian co-founders have long argued that Sydney needs a centralised technology district and were against a shift to the former White Bay Power station or suburban areas, as they want to create networks between advanced companies.

“Technology can turbocharge Australia’s recovery. That’s why we’re building this precinct. We want to create jobs, ideas and innovation. This will be home to thousands of workers and the best new ideas. If you want to work in tech – this is the place you will want to be,” Mr Farquhar said in a statement.

“Sydney has the potential to be one of the world’s leading technology cities and the creation of a tech precinct sends a loud signal that we’re in the race to take a slice of the world’s most valuable market. That’s an exciting place to be.

“This building will breathe new life into this part of Sydney. It’s an amazing design. We’ve searched the world to find the best architects and engineers to put it together. We’re embarking on this project at a critical time.

“Projects like these will help the state and the nation bounce back from the massive impact of COVID-19. Even with a highly distributed workforce, we’ll need a place to come together. Now we can design this space especially for these new ways of working.”

NSW Premier Gladys Berejiklian described Atlassian as a great Australian success story.

“It’s very fitting for them to have their headquarters here in Sydney,” she said.

“Tech Central will rival Silicon Valley as the place to be. This means more jobs and opportunities for all of our citizens.”

SHoP Founding Principal William Sharples said in a statement his company‘s collective work around the world focuses on elevating the experience of the public realm in urban environments.

“We really welcome this opportunity to work with such wonderful partners to create a high-performance landmark for Sydney‘s new tech district, at ground level and in the skyline.’

29 Jun, 2020
Inside Apple’s secretive headset plans
Financial Review

n late 2018, Apple was a few years into its plan to build a powerful headset with both virtual- and augmented-reality capabilities when things shifted dramatically. Jony Ive, then the company’s design chief, objected to some fundamental aspects of the product and urged Apple to change course.

The headset was to be the first big launch from the company since the Apple Watch and the debut device from the Technology Development Group (TDG), a secretive unit devoted to VR and AR.

The TDG is led by an equally under-the-radar executive, Mike Rockwell. After stints at Dolby Laboratories and media-editing software company Avid Technology, Rockwell, 53, was hired in 2015 by Dan Riccio, Apple’s top hardware executive.

At first his role was loosely defined, according to interviews with current and former employees, who asked not to be identified discussing internal matters. Representatives for Apple and Ive declined to comment, and the company didn’t make Rockwell available for an interview.

He started building his team in late 2015, and what grew into a 1000-strong group of engineers went to work developing two products aimed at upending the VR and AR segments. A device code-named N301 would take the best of both VR and AR – the first an all-encompassing digital experience for gaming and consuming content, and the second a tool for overlaying information such as text messages and maps in front of a viewer. The other device, N421, a lightweight pair of glasses using AR only, is more complex.

N301 was initially designed to be an ultra-powerful system, with graphics and processing speeds previously unheard of for a wearable product. The processing capabilities were so advanced – and produced so much heat – that the technology couldn’t be crammed into a sleek headset. Instead, Rockwell’s team planned to sell a stationary hub, which in prototype form resembled a small Mac, that would connect to the headset with a wireless signal. In Rockwell’s early version, the headset would also be able to operate in a less-powerful independent mode.

This isn’t the first time Apple has redirected huge resources to an ambitious, potentially risky project.

Ive balked at the prospect of selling a headset that would require a separate, stationary device for full functionality. He encouraged Rockwell and his team to redevelop N301 around the less powerful technology that could be embedded entirely in the device. Rockwell pushed back, arguing that a wireless hub would enable performance so superior that it would blow anything else on the market out of the water. The standoff lasted for months.

Rockwell is highly respected at Apple, with a reputation for being sharp, smart, and effective. He has the support of Craig Federighi’s software-development group and Johny Srouji’s chip-development unit, among others. The stakes are high – Apple spends more than $US15 billion ($22 billion) a year on research and development – and this isn’t the first time it’s redirected huge resources to an ambitious, potentially risky project.

Rockwell’s team is still in good standing and, although it collaborates with the rest of Apple, insiders see it as enjoying an unusual degree of independence. Based mostly in a Sunnyvale, California, office park about a 15-minute drive from headquarters, the TDG has its own hardware, software, operations, and content groups – staffed by some of the company’s hottest talent.

As for the impasse between Rockwell and Ive, chief executive officer Tim Cook ultimately sided with the design chief. Although the headset now in development is less technologically ambitious than originally intended, it’s pretty advanced. It’s designed to feature ultra-high-resolution screens that will make it almost impossible for a user to differentiate the virtual world from the real one. A cinematic speaker system will make the experience even more realistic, people who have used prototypes say. (The technology in the hub didn’t go entirely to waste: Some is being recycled to build the powerful processors Apple plans for its Macs, replacing components made by Intel.)

Still, dispensing with the hub means graphics won’t be as good as they might have been and the download speeds could be slower. It will also probably make the experience less lifelike than originally hoped.

For Ive, who left last year after almost three decades at the company, a more realistic experience was potentially problematic: He didn’t want Apple promoting technology that would take people out of the real world. According to people familiar with the matter, he preferred the concept of the N421 glasses, which would keep users grounded in reality while beaming maps and messages into their field of vision.

Prototypes of N301 look like a smaller Oculus Quest, Facebook’s VR headset, with a mostly fabric body but less plastic than the Quest. Apple’s engineering teams are still testing the device on different head shapes to find the ideal fit. The company hasn’t settled on pricing. By way of comparison, the Oculus Quest retails for $US399, and Microsoft’s enterprise-focused Hololens 2 mixed-reality headset and Magic Leap AR goggles sell for $US3500 and $US2295, respectively.

N301 would have its own App Store, with a focus on gaming, and the ability to stream video content, while also serving as a sort of super-high-tech communications device for virtual meetings. Siri, Apple’s voice assistant, will control both the headset and the eventual glasses, though the headset is also being tested with a physical remote. Apple has reassigned some engineers who were working on Siri’s interface to Rockwell’s team.

The division has recently lost a few key players. Peter Meier, who joined Apple in 2015 from German AR startup Metaio, left last year. Former DreamWorks Animation executive Ian Richter switched to another area of Apple in October after almost two years on the job. Cody White, who helped develop Apple’s RealityKit software, which allows developers to implement 3D rendering in augmented-reality apps for the iPhone and iPad, quit in December.

Rockwell, whose team also contributes to the kit, continues to push forward. Apple is slated to announce new tools for iPhone AR apps at its annual developer conference this month. The actual hardware will take longer. Although plans could change, in an all-hands meeting in the third quarter of last year, Rockwell said the first headset may be announced in 2021 and released in 2022. Apple fans can expect the AR glasses by 2023 at the earliest.

29 Jun, 2020
Malcolm Turnbull and Aussie big names back anti-trolling technology
Financial Review

Former prime minister Malcolm Turnbull has led a coterie of high-profile Australian investors in backing a $19 million funding round for a Silicon Valley start-up, which has made an AI platform for spotting and reporting malicious content online.

The company, Sentropy, was co-founded by John Redgrave, a former executive at big data analytics firm Palantir. Its funding round was led by Sydney-based King River Capital, alongside Mr Turnbull, businessmen Andrew Kaldor and David Smorgon, and the Fairfax family office, Marinya Capital.

Finding an automated way to uncover defamatory content has taken on new importance in Australia, where the Supreme Court ruled last year that publishers could be sued for derogatory comments on their social media pages made by individuals.

So Sydney's King River Capital leaned in when talk started circulating in Silicon Valley last year of a start-up whose efficiency in rooting out hate speech on online platforms, using natural language processing and machine learning, was surpassing that of the vast internal teams of human moderators employed by the likes of Google and Facebook.

Mr Redgrave was head of strategy and operations at Palantir, and it was a link from the company that sparked the investment discussions. Chris Barter, a former Goldman Sachs partner who moved to Sydney 18 months ago and co-founded King River, was an investor in the company.

"Sentropy was hot, it was working with Reddit data to categorise toxic content on their platform ... not even our limited partner [on the Palantir investment] could get in on the deal," Mr Barter said.

However, King River's Australian location dealt them a trump card in April 2019, when the federal government passed the world's toughest social media regulations in the wake of the Christchurch massacre, threatening jail for publishers or internet service providers who failed to remove "abhorrent violent material" in an expeditious manner.

King River's other Sydney-based partner, Zebediah Rice, a Silicon Valley veteran who moved across the Pacific with his Australian wife in the early 2010s, happens to be a friend of Mr Turnbull.

The pair enjoyed a big windfall on OzEmail in the 1990s and have looked at deals together since. The political connection suddenly came in handy.

 

Sentropy claims it can detect and report online abuse more efficiently than human moderators. 

"We knew the Attorney-General's office had drafted this legislation, so I rang Malcolm and asked if he could help make a connection," Mr Rice said.

"Within 24 hours I had the chief executive of Sentropy on the phone with the chief-of-staff in the A-G's office, who had written this world-leading legislation ... we set up four or five meetings like that for them, so come their Series A nine months later we were in a good place with them."

Identifying and eliminating hate speech is a familiar problem for the largest of Sentropy's US investors, Serena Williams' husband and co-founder of Reddit, Alexis Ohanian.

“I’ve seen first-hand the difficulty of manually moderating online communities,” said Mr Ohanian.

“The breadth and depth of this issue require serious resources and machine learning chops. Sentropy has built the tech that is much needed across social media communities. User safety has become a competitive differentiator for those willing to take a stand against abuse.”

An 'ad blocker for abuse'

Sentropy has not revealed any of its clients but Reddit is rumoured to be one of them. Its flagship product, Detect, provides application programming interface access to its content classification technologies, so that developers can adapt them to their own user-generated content sites – online dating and gaming sites, and the email systems of large corporates.

An out-of-the-box product, Defend, is also available to managers of online communities and may eventually be offered as a sort of "ad blocker for abuse" to individual internet users, Mr Rice said.

The challenge of detecting and reporting hate speech and bullying online was endless, according to Mr Barter.

"The [online] Urban Dictionary gets 10,000 new words a week going into it, and we have to keep on top of that," said Mr Barter, noting that California-based King River partner Megan Guy had joined Sentropy's board. "We see some pretty crazy and confronting stuff."

A recent example has been posts about the Black Lives Matter protests with the phrase "honk honk" attached.

"Turns out that means 'Heil Hitler' when a white supremacist is trying to cloak their messaging," Mr Barter said.

"Sentropy can track the use of that phrase in proximity to other words associated with white supremacy, and find a positive correlation for hate speech that a human moderator might miss."

King River raised a $60 million fund last year, including a $21 million sub-fund dedicated to Series A raised and beyond in Australia, with the balance earmarked for US investments.

Its two Australian investments to date are fintechs Finclear and Cover Genius. About 40 per cent of the Australian sub-fund will have been drawn down after a third investment is announced shortly, Mr Rice said.

29 Jun, 2020
Portmans, Country Road, Cotton On: the data is in for 2020
SOURCE:
Ragtrader
Ragtrader

All of the major Australian fashion sites saw growth for the first five months of this year compared to 2019, according to exclusive data analysis conducted for Ragtrader.com.au.

As eCommerce sales continue to grow during COVID-19, SEMRush has revealed there are clear winners in the Australian market.

Global marketing director Olga Andrienko said the data indicated a trend towards local brand support.

Country Road led at 49.3% growth, followed by Decjuba which saw an increase of 35.9%, Bonds at 32.3%, Portmans at 19.5% and Witchery, which achieved 19.5% growth since the time last year.

In terms of growth from April to May 2020, the best performer was Portmans at 41.4%, followed by Decjuba at 30.2% growth and then The Iconic at 11.9%, Country Road at 9.8% and Bonds at 9.7%.

“None of the Australian brands saw negative growth in any of the periods our online fashion study compared, so this could mean there has been a trend towards Australians being more loyal to their local brands,” Andrienko said.

In May, The Iconic zoomed ahead with over 7 million visits. 

For a full data breakdown, including Australian uptake of global brands, see our July edition.

18 Jun, 2020
TikTok snaps up local talent and launches Sydney office
Inside Retail

Chinese social video platform TikTok has launched its local office and appointed local general managers to better serve the Australian audience. 

Based in Sydney, the TikTok Australia team will be led by former Google and YouTube executives Lee Hunter and Brett Armstrong. 

Hunter will take up the role of general manager for TikTok Australia, while Armstrong will step up as the general manager of global business solutions. Additionally, Brett Thomas will serve as director for public policy and Arjun Narayan Bettadapur Manjunath as the head of trust and safety for APAC. 

“I’ve been truly inspired watching Australia’s unique and creative spirit shine through on TikTok, especially through this challenging time,” Hunter said.

“I love that TikTok has helped bring Australian communities together when they’ve needed it most, whether it’s having fun at home, sharing how we’re feeling, or expressing ideas and messages that need to be heard.”

Hunter spent over a decade at Google, where he held a multitude of roles including global head of brands for YouTube.

And, according to Armstrong, TikTok Australia already has campaigns underway and the team is excited to grow the business locally. Armstrong formerly served as Google’s country manager for New Zealand, and the head of media agencies for Australia and New Zealand. 

The local team will be overseen by Vanessa Pappas, general manager of TikTok US.

“As we continue to build a positive and safe environment for users, our focus is on hiring the right local talent and strengthening our local leadership team to best support the Australian TikTok community,” Pappas said. 

Over the past 18 month TikTok has hired local teams in the US, UK, India, Japan and Canada, strengthening its global reach. 

18 Jun, 2020
Data security, censorship concerns flagged as TikTok opens local office
SOURCE:
The Age
The Age

An expert has raised concerns over how consumer data is being used by social media application TikTok, after the Chinese-owned company announced plans to open an Australian office.

TikTok, which has more than 1.6 million Australian users according to Roy Morgan, is largely used by teenagers and features lip-syncing and comedy skits that appear in 15-second bursts. The platform, owned by tech giant ByteDance, this week appointed its first local general manager, Lee Hunter, and several former Airbnb and Google executives specialising in government policy and advertising to its local division.

But Fergus Ryan, an analyst at the Australian Strategy Policy Institute, said that there are still concerns about the platform's use of data and censorship (removal of content that is sensitive to the Chinese government and others) that need to be addressed.

"There are many apps that most people with smartphones have that harvest a scary amount of data from users and send that information back to servers around the world, which is concerning. But what makes this even more concerning that the data is being sent back to Beijing and ... China has a whole suite of national security laws that effectively remove any firewall," Mr Ryan said.

"The CEO of Reddit referred to TikTok as an inherently parasitic app. When you think about ByteDance, what that company really is is an artificial intelligence company and they already have a remarkable ability to scan videos that are posted to TikTok and pick up and identify various items in the video."

Mr Ryan said the expansion - while with commercial benefits - will allow the company to tackle policy issues and government concerns which have risen over the past year.

Federal MP and chairman of Parliament's joint intelligence and security committee, Andrew Hastie, and Labor MP Tim Watts have previously warned that although popular, the app could pose a national security threat. Mr Hastie said earlier this year that TikTok could be sharing private information with authorities in Beijing.

"There’s a commercial imperative to have a deeper presence in various markets and particularly in markets where they predict that there might be certain regulatory headwinds that they want to deal with in a proactive way," Mr Ryan said.

"First and foremost it's a commercial decision ... the next phase is to monetise that network and to link with and deal with content creators and influencers and connect them with advertisers.

"But by further developing commercial relationships in Australia, they are in effect building a constituency stakeholder group that will be helpful ... in saying that this platform is beneficial to them through the advertising it is enabling them to do."

Plans to open the office were first revealed by The Sydney Morning Herald and The Age in February but the company has been looking to expand its local presence since last year when representatives from China started scouting the market for local content creators.

New executives at TikTok Australia include head of policy Brent Thomas and head of trust and safety Arjun Narayan Bettadapur Manjunath, who is leading TikTok's broader Asia-Pacific team from Singapore.

Brands like Optus, the AFL and Milo are already working with the platform, which boasts more than 800 million active users.

TikTok US general manager Vanessa Pappas, who oversees Australia and New Zealand, said the company's local expansion had been inspired by local creativity.

"I am confident in the management team we've assembled to drive TikTok's growth and opportunity in Australia for creators and brands, and look forward to furthering the incredible creativity of our Australian community," Ms Pappas said.

18 Jun, 2020
Unilever's Australian CEO urges climate change focus in COVID-19 stimulus
SOURCE:
The Age
The Age

The Australian chief executive of the $124 billion consumer goods giant behind Dove soap, Lipton tea and Rexona deodorant has implored the Morrison government to embed climate change policy at the core of its coronavirus recovery plans.

Nicky Sparshott, who was appointed as the head of European consumer goods giant Unilever's operations in Australia and New Zealand in February, said state and federal governments must prioritise climate change in stimulus packages to secure sustainable jobs and revive the economy.

"We're on the precipice of seeing the government invest huge sums of money into driving the economy and we have a real opportunity here to ensure that climate action is at the core of those investment decisions," she told The Age and The Sydney Morning Herald.

"Not only would it stimulate economic growth, but it gets Australia on a path to being imminently more sustainable and future-facing."

The Morrison government has already spent over $200 billion in stimulus to keep workers and businesses afloat during the COVID-19 pandemic and has outlined further packages such as JobMaker, which is focused on infrastructure spending and reform of industrial relations and the vocational sector.

Ms Sparshott said the COVID-19 crisis has proven governments and business can work together quickly and efficiently when needed, an approach she believes should now be applied to the looming climate crisis.

"The coronavirus has been a really stark reminder of the fragility of our current economic system," she said. "With climate change posing a similar threat, here is our opportunity to be much more future-focused."

Ms Sparshott's challenge comes as Unilever on Monday announced a €1 billion ($1.63 billion) climate fund dedicated to helping the business and its suppliers achieve net zero emissions by 2039, 11 years ahead of the 2050 Paris Agreement deadline.

Carbon labels

The fund will power a range of initiatives across the broader business, which also includes the Australian tea chain T2 and icecream franchise Ben & Jerry's. Landscape restoration, carbon capture, wildlife protection and water preservation are among the iniatives it plans to take.

Unilever will also look to significantly increase its use of recycled plastics and will label its products to let consumers know how much greenhouse gas was emitted in the manufacturing and shipping process. Global chief executive Alan Jope has also warned the business would not hesitate to sell off any brands which could not meet the company's sustainability targets.

Unilever Australia, which boasts local sales of around $1.6 billion, has joined with the wildlife protection non-profit WWF as part of its push. The organisation recently released a report with consulting giant EY showing every dollar spent on clean energy projects generates three times as many jobs as fossil fuel investments.

The report highlights areas such as battery manufacturing, solar power, electric public transport fleets and renewable hydrogen as areas the government should focus on as part of a renewables stimulus package.

In Australia, Ms Sparshott said her company hopes to be carbon-positive by 2030 and has already switched its local operations to be powered by 100 per cent renewable energy. These moves make "good business sense", she said and should be emulated by other businesses where possible.

"[Corporate Australia] needs to be way more ambitious," she said. "This country has experienced the effects of climate change through the drought and through the bushfires. If we don't take action, it will threaten food security, it will accelerate water scarcity, and it will put downward pressure on the global economy."

"The case for change is there, and we have the ability to do it."

Numerous Australian companies have faced pressure from investors over their climate change commitments. Recent examples include major oil and gas companies, Santos and Woodside, with 50 per cent of shareholders supporting a push for the company to slash its emissions.

Dan Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility (ACCR), supported Unilever's actions and said companies were increasingly starting to view climate change as a real business risk. However, too few of those revelations are occurring in Australia, he said.

"It's a shame we don't have many Australian companies following the same lead," he said. "There are some bright spots...but there's not many that are willing to go out and be a proactive advocate for climate action."

 

16 Jun, 2020
Beauty queen Kate Morris on her $100m year
Financial Review

Kate Morris, the founder and director of Australia's e-tail powerhouse Adore Beauty, refused to let COVID-19 affect projected sales of more than $100 million this year. So as Adore's head office acted on the "work from home" directive, Morris' 80-plus desk-workers took to makeshift home offices while 100-plus warehouse staff maintained shifts from before dawn to beyond dusk.

It was not "business as usual" – Morris saw sales of bath products, candles and face masks in particular, and skincare in general, soar. It revealed intimate details about Australia's lockdown rituals. "It reinforced my belief that beauty is about self-care and not about appearances as such," says the 42-year-old beauty entrepreneur.

As a university student with a part-time job selling cosmetics in a department store, which Morris sensed was "an intimidating experience for most women", she was just 21 when she launched her ecommerce site from a garage in a nondescript northern suburb of Melbourne.

It was 1999 and the site offered customers just two brands. She had little more than a "gut feeling" it would work, and no tech experience (she later learnt to code after becoming frustrated with failing websites).

Twenty years on, the company has an inventory of 220 brands offering 15,000 products serving more than a million transactions a year. She joined the Financial Review Young Rich List in 2018 with an estimated wealth of $30 million. With her long-time partner in business and in life, Adore's CEO James Height, she ended 2019 with the sale of a 60 per cent stake in the company to Quadrant Private Equity. Adore was estimated to be worth $110 million at the time.

I meet Morris at Adore's head office while most of the staff are still working from home. As we walk down a darkened hallway bordered by sleek, empty offices, I catch the glint of a serious watch. "It's Apple," she says, lowering her pale blue eyes to her wrist. "I bought it at the start of isolation to remind me to exercise because, I thought, I'm going to feel like an absolute blob at home, getting no incremental exercise."

Morris' charm, resolve and quiet glamour seem integral to Adore's success – a business started with $12,000 borrowed from Height's father. "I didn't have the budget to do market research," she says. "I simply believed in it."

She delivered beauty facts but not opinions. "From the get-go we offered information like how to read an ingredients label, told you what the stuff actually does," she says. "That's novel for a lot of retailers." There was lots of feedback, and requests for more products.

"No" was a word she heard consistently as she tried to build the business. "I lost my nerve, but I just kept turning up. That's half the thing. Eventually you get there. It took 14 years to get Estée Lauder [on the site]," she says with a wince.

Yet her model is now almost a non-negotiable point-of-sale for any brand. "[It's] the sheer volume, with millions of visitors every month. A lot of what we do for brands is connect with new customers, covering the discovery journey with a podcast, YouTube channel, a blog, Instagram and emails."

Adore has 220 brands that span luxury (which accounts for 15 per cent of the business) to professional, cosmeceutical and some mass brands, and Morris says she could add 20 more luxury brands tomorrow, if only they would understand the way her digital platform – and its clientele– works.

"There are luxury brands that still believe empowering the consumer is not something to get excited about," she says. "We find ourselves hand-holding brands and saying … you do have to let consumers generate comment about your product and yes, that will be scary because sometimes you don't get to approve everything or airbrush it and that is OK. You can't fight it any more."

Her business "kicked along steadily" until about 2012, when she saw the "uptick". Her conversation consistently references the customers who empowered her as she delivered "objective", "unbiased" and "unopinionated" information.

I’m a 42-year old white woman. We should have different people representing the business if we're to be a properly inclusive beauty company.

— Kate Morris, Adore Beauty

"The uptick was a million things including a better website, better product selection, new communication channels. At its core was mutually respective relationships."

Morris' 60 per cent sale to Quadrant has bought expertise without interference. "They are tremendous to work with. They are on the board, they bring different perspectives." Was it difficult to find an investor? (Morris bought back a 25 per cent stake held by Woolworths in 2017, saying both companies' strategies diverged so they parted amicably.) "Oh yes. People didn't get the business. I heard remarks like, 'Well, Amazon is here now so why would you want to grow?'"

She doesn't plan expansion to a wider international market in the near future (Adore ships to only Australia and New Zealand). "Our hands are full but when we do, we will be influenced by the significant foreign traffic to the website."

A typical day for Morris is "a mishmash of board-level work, representing the company and building brands. I'm a 42-year old white woman and it's certainly not how our customers look. We should have different people representing the business if we are to be a properly inclusive beauty company."

In building brands, Morris has already moved beyond beauty with a category called Adore You, featuring supplements and sleep, self-care and sex products (such as the quaintly named jonny brand of condoms). "It's a frank and upfront approach because sex shouldn't be anything anybody's embarrassed about. We ask for consent before you open the page because we respect the fact that everybody has boundaries."

Is she the Net-a-Porter of beauty? Natalie Massenet, a former UK fashion journalist, started the behemoth of online fashion the same year Morris launched Adore. "No, we're not. [Adore is] more accessible. A luxury strategy is to elevate a brand so that you aspire to it. We're the opposite. If you want a 10-step Korean beauty routine we can help, or if all you want is sunscreen we're totally cool with that.

"And we don't do bows or luxury packaging. We do eco-friendly packaging with recyclable brown paper and boxes."

Morris spied more than one opportunity during COVID-19. "We're advertising on TV right now. We had it on the back burner then COVID-19 came along and we thought, everyone's stuck at home and we're an online business." It's too soon to say if the commercial – the brand's first – worked, she says, but the message is clear: Adore still has room to grow.

"COVID-19 showed us things can be very fluid, that you have to be constantly reading the room."

15 Jun, 2020
Amazon has launched an online booze store in Australia, setting up a challenge to local players like Dan Murphy’s and BWS
Business Insider Australia

You can now get alcohol on Amazon Australia.

Amazon Australia has opened a wine, beer and spirits store, adding to the list of platforms Aussies can use to purchase alcohol. It will compete with other alcohol delivery services such as Jimmy Brings and Tipple, as well as delivery options available from traditional retailers like BWS, Dan Murphy’s and Liquorland.

Amazon’s new store includes global brands like Johnnie Walker, VB and Penfolds as well as local brands like SOFI Spritz and Curatif Cocktails. Amazon Prime members can get free delivery on eligible products.

Amazon Australia Country Manager Matt Furlong said in a statement customers will be able to purchase their favourite beer or spirits alongside other products available on Amazon.

“Australian brewers, distillers and wine makers make some of the world’s best beverages from Organic Wines to Curatif Cocktails,” he said. “We’re particularly thrilled to work with local brands at launch and help them access our customers, marketing tools and logistics expertise to grow their business.”

Curatif, the cocktail-in-a-can company, is also launching its latest Curatif Plantation Rum Pineapple Daiquiri ready to serve beverage exclusively on Amazon.

“Curatif is thrilled to be in the first wave of Australian liquor companies to launch on Amazon Australia,” Curatif cofounder Matt Sanger said in a statement.

Demand for alcohol has risen during the coronavirus pandemic, with Woolworths Group telling Business Insider Australia in March that BWS had seen “elevated customer demand” during the time. Also in March, alcohol delivery service Jimmy Brings told Business Insider Australia it had a 23% rise in customer numbers compared to the same time last year.

A BWS spokesperson told Business Insider Australia via email it welcomed the competition.

“At BWS, we’re focused on offering our customers the most convenient shopping experience in our stores and online,” the spokesperson said. “We have an unparalleled network of more than 1300 stores across Australia, offering great value, localised ranges and fast home delivery.

“We welcome competition because it will help keep us at the top of our game for customers.”

Research from the Australian National University found Australians are drinking more alcohol during the coronavirus pandemic.

The consumption rate varied between men and women, with women drinking at a “substantially higher” rate while men drank at a “slightly higher” rate. According to the research, nearly 1 in 4 women who drank reported an increase in drinking during May 2020, compared to almost 1 in 5 men.

For both men and women, the main reason for the increase in alcohol consumption was more time spent at home.

“For males, a strong predictor for increased drinking was because of a loss of job or decline in working hours,” report co-author Professor Nicholas Biddle – from the ANU Centre for Social Research and Methods – said in a statement. “For females, a strong predictor for increased drinking was having a child-caring role.”

 

10 Jun, 2020
Market darling Kogan.com in $100m raise; taps two brokers
Financial Review

Runaway online retailer Kogan.com will make the most of its strong share price run and tap the market for fresh funds on Wednesday.

Kogan is expected to seek to raise $100 million in an underwritten placement via Canaccord Genuity and RBC Capital Markets' equities desks, sources told Street Talk.

The deal will be done at $11.45 a share which was a 7.5 per cent discount to the last close.

Funds raised will be pegged for growth opportunities, with Kogan looking to make the most of a surge in online sales thanks to the COVID-19 lockdown.

Those opportunities are expected to include future M&A - similar to its acquisition of furniture retailer Matt Blatt a fortnight ago.

The raising comes less than one week after Kogan updated shareholders on its recent trading performance. 

The company's founder and chief executive, Ruslan Kogan, told the market on June 4 that the initial flood of online purchases of laptops, webcams, office chairs and bread makers during lockdowns had translated into a big shift into broader categories that drove a doubling of sales in April and May.

Ruslan Kogan also said the group's 13 distribution centres around Australia were busier than they had ever been as an additional 126,000 extra customers joined the company in May, propelling active customer numbers to 2,074,000.

"We're definitely seeing a transformation in terms of how people shop,'' Kogan said at the time. "E-commerce in Australia has advanced several years in the space of a few months."

Kogan.com was in the spotlight in mid-May over a proposed options package for Ruslan Kogan and long-time chief financial officer David Schafer, which on paper delivers a benefit of more than $21 million.

10 Jun, 2020
Kogan grows active customers to over 2 million
SOURCE:
Ragtrader
Ragtrader

Australian variety etailer Kogan has announced that it is set to undertake equity raising, following strong results for the fourth quarter to date. 

Kogan will undertake a $100 million fully underwritten Institutional Placement comprising the issue of 8.7 million shares at an issue price of $11.45 per share. 

This will be conducted in conjunction with Share Purchase Plan to raise up to an additional $15 million. 

In its business update, Kogan states that it grew active customers to over two million by 31 May, with an incremental 126,000 active customers in May 2020. 

Gross sales grew by 103.6% across the fourth quarter to date (4QTDFY20) compared to the same period last year, while gross profit also jumped up 130% in the period. 

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) was up by 219.3% in the fourth quarter to date, with the average run-rate of adjusted EBITDA for the period at $7 million per month. 

As at 31 May, Kogan reported that cash was $58.6 million with the debt facility drawn to $26 million. 

The figures follow Kogan's acquirement of designer furniture label Matt Blatt for $4.4 million. 

5 Jun, 2020
News Corp closes over 100 print papers, with 14 titles to disappear completely
SOURCE:
Mumbrella
Mumbrella

Over 100 of News Corp’s regional and community titles will no longer produce print editions and instead move to digital-only formats. In addition, 14 titles will cease to exist.

There are reports this amounts to over 500 job losses.

The restructure comes after talks with Australian Community Media’s (ACM) Antony Catalano to buy some of News Corp’s papers fell over.

In April, the media company said it was temporarily suspending 60 community print titles in the wake of COVID-19 and plunging advertising revenues. Very few of these titles are now returning.

“Three Sydney community titles, Wentworth Courier, Mosman Daily and North Shore Times, which are distributed in the city’s most affluent suburbs, will resume print editions,” News Corp said.

News Corp said it had undertaken a comprehensive review of its assets and observed consumers shifting to online news sources.

The titles which will cease to exist completely include news brands across Victoria, New South Wales, Queensland and South Australia.

In Victoria, the Leader titles disappearing are:  Manningham, Preston, Diamond Valley, Heidelberg, Sunbury Macedon, Progress and Northcote.

The Rouse Hill Times in New South Wales is also getting the chop, along with the Northside Chronicle/Bayside Star, North-West News, South-East Advertiser, Southern Star, Bribie Weekly Quest titles in Queensland. South Australia is losing the Messenger Coast Plus.

In addition, the following regional titles will stop producing print products, and instead provide news online.

Queensland: Mackay Daily Mercury, Rockhampton Morning Bulletin, Gladstone Observer, Bundaberg News Mail, Fraser Coast Chronicle, Gympie Times, Sunshine Coast Daily, Queensland Times, Warwick Daily News, Central and North Burnett Times, Central Queensland News, Chinchilla News, Dalby Herald. Gatton Star, Noosa News, South Burnett Times, Stanthorpe Border Post, Western Star, Western Times, Whitsunday Times, Whitsunday Coast Guardian and Bowen Independent, news from the towns covered by the Atherton Tablelander, Northern Miner, Post Douglas & Mossman Gazette and Burdekin Advocate will continue to appear, as it does currently, under the regional sections of the Cairns Post and Townsville Bulletin.

News South Wales: Tweed Daily News, Ballina Advocate, Byron Shire News, Coffs Coast Advocate, Grafton Daily Examiner and Lismore Northern Star; Northern Territory – The Centralian Advocate.

The community titles getting the chop, but maintaining a digital presence are:

Melbourne Leader titles: Stonnington, Mornington Peninsula, Knox, Whitehorse, Monash, Northern, Whittlesea, Maroondah, Moorabbin, Mordialloc Chelsea, Moreland, Lilydale and Yarra Valley, Frankston, Bayside, Caulfield Port Phillip, Cranbourne, Greater Dandenong, Moonee Valley, Maribyrnong, Wyndham;

NewsLocal in NSW and ACT: Fairfield Advance, Penrith Press, Macarthur Chronicle, Blacktown Advocate, Canterbury Bankstown Express, Central Coast Express, Hills Shire Times, Hornsby Advocate, Liverpool Leader, Manly Daily, Northern District Times, Parramatta Advertiser, Inner West Courier, Southern Courier, Illawarra Star, Wagga Wagga News, St George Shire Standard, Canberra Star, Newcastle News, Blue Mountains News, Central Sydney, South Coast News;

Quest in Queensland: Albert and Logan News, Caboolture Herald, Westside News, Pine Rivers Press, Redcliffe and Bayside Herald, South-West News, Wynnum Herald, North Lakes Times, Redlands Community News, Springfield News;

Messenger in SA: Messenger South Plus, Messenger East Plus, Messenger North, Messenger West, Messenger City, Adelaide Hills and Upper Spencer Gulf.

The changes are effective from Monday 29 June.

News Corp’s Australian executive chairman Michael Miller said the portfolio review highlighted that many of its print mastheads were challenged, and the double impact of COVID-19 and the tech platforms not remunerating local publishers had made them unsustainable publications.

“COVID-19 has impacted the sustainability of community and regional publishing. Despite the audiences of News Corp’s digital mastheads growing more than 60 per cent as Australians turned to trusted media sources during the peak of the recent COVID-19 lockdowns, print advertising spending which contributes the majority of our revenues, has accelerated its decline,” Miller said.

“Consequently, to meet these changing trends, we are reshaping News Corp Australia to focus on where consumers and businesses are moving and to strengthen our position as Australia’s leading digital news media company. This will involve employing more digital only journalists and making investments in digital advertising and marketing solutions for our partners.”

Miller noted the scale of today’s changes, both in terms of how the business is structured and the resulting job losses, were significant.

“These initiatives are significant. They will involve fundamental changes to how we operate our business but they are necessary.  Together with senior executive and editorial appointments announced recently, they will enable us to be more effective in driving further success in the growth areas News Corp is excelling in such as digital advertising products, solutions and subscriptions and will embed a more collaborative way of working to maximise our sport and news coverage, hyper local digital subscriptions and the success of our all-important weekend editions,” he said.

He thanked the staff who would be leaving the organisation.

“They have provided News with invaluable years of service. Their passionate commitment to the communities in which they live and work and their role in ensuring these have been informed and served by trusted local media has been substantial,” he said.

Despite the doom and gloom, Miller was keen to spruik News Corp’s local journalism credentials and digital achievements.

He noted more than 375 journalists will be covering regional and community news and information, with the majority living and working in regional Queensland.

He’s confident, he said, that digital subscriptions off the back of local news will continue to increase.

City-based titles, Miller noted, will now double down on their state focus, to fill the void left by today’s changes.

“At the same time, News Corp’s major mastheads in Brisbane, Sydney, Melbourne and Adelaide – The Courier-Mail, The Daily Telegraph, the Herald Sun and The Advertiser – will now become more state focused with increased regional content and will partner with our regional and community local titles in their states to ensure we deliver compelling journalism to Australian consumers regardless of where they live. Subscribers wherever they live will now have access to the best of News Corp’s local, regional, state, national and international news, sport, features and columnists,” he said.

He also said News Corp’s simplified structure would make it less complex for partners, which would lead to better results and greater innovation.

The organisation’s commitment, he said, is still strong.

“News Corp remains committed to Australia’s regions and communities and the initiatives we are implementing today represent a detailed, considered strategy to ensure we will better serve our journalism to Australians who live outside its major cities.

“News Corp and its employees also will retain at their creative core their passion for championing, and advocating for an ever improving Australia. As our country emerges in coming weeks from the lockdown enforced on us by the threat of COVID-19 into a ‘new normal’, we will ensure these values that separate News Corp from other media companies are even stronger than ever.”

5 Jun, 2020
Amazon intensifies push into Australian pharmacy with trademark application
SOURCE:
The Age
The Age

Retail giant Amazon has intensified its push into Australia's highly competitive pharmaceuticals sector, brushing off industry opposition with a fresh trademark application for a range of private-label over-the-counter medications.

Amazon filed the application for the 'BasicCare' trademark on Friday and refers to Amazon-branded medication which shoppers can buy directly from the e-commerce giant. The move comes as Amazon faces a fight with the Pharmacy Guild of Australia over a previous application for the trademark 'Amazon Pharmacy', which it filed in January this year.

The guild, which lobbies on behalf of pharmacy owners across the country, has filed an objection with IP Australia arguing the multinational has no right to own the words "Amazon Pharmacy". The group said tight regulation of pharmacy operators meant such a trademark could only be used by trained pharmacists.

"Under Australian state and Territory law, only a pharmacist can own a pharmacy and consumers are entitled to be sure when they deal with a pharmacy that it is a pharmacy and not a business entity purporting to be a pharmacy," a spokesperson for the guild said.

According to a listing with IP Australia, the Pharmacy Guild has until this Thursday to provide grounds for objecting to the trademark registration.

The application for "Amazon Pharmacy" covered the use of the word relating to 10 different classes of goods and services, including a "pharmacy packaging service that aligns, sorts and packages a patient's medications by date and time into individual packets".

Amazon has a pharmacy retail service in the US which it expanded in 2019 after the billion-dollar acquisition of pharmacy startup PillPack. It offers pre-sorted medication packages containing individual daily doses.

Since January, Amazon has filed two more healthcare-related trademarks, BasicCare and Amazon Care, the latter of which is a telehealth and telemedicine service the company is trialling for its employees in Seattle.

Amazon's BasicCare product does not supply prescription medication, and Australian customers can already buy over-the-counter medication through the company's online store. However, a range of Amazon-owned medications would likely come at a lower cost than other branded products, putting pressure on pharmacists and manufacturers. The company's tagline for the product is "basic healthcare ... without having to pay for extras like expensive marketing".

A foray into the $20 billion pharmacy sector by Amazon could upset players such as Chemist Warehouse and ASX-listed Priceline owner Australian Pharmaceutical Industries, which are some of the largest distributors of pharmaceutical products in the country.

Amazon has previously not commented nor made any indication as to what markets outside the US it intends to launch pharmacy services. A spokesperson for the company declined to comment on Monday.

Pharmacies across the country have been amping up investment in online deliveries over the past few months, with the coronavirus pandemic forcing many to pivot to delivery and click-and-collect prescription models.

The Department of Health is investigating electronic prescription methods and is set to begin implementing measures to allow for digital prescriptions from the middle of the year.

28 May, 2020
Amazon in talks to acquire self-driving startup Zoox
SOURCE:
The Age
The Age

Zoox, the autonomous vehicle startup co-founded by a Melbourne designer Tim Kentley-Klay and backed by Australia's most prominent tech entrepreneur, Mike Cannon-Brookes, is reportedly on the radar of online retail giant Amazon.

A person familiar with the matter has confirmed the takeover talks between the two parties to Bloomberg, with the news coming on the back of speculation that the startup was having trouble sourcing further funding and was looking for a buyer.

"Zoox has been receiving interest in a strategic transaction from multiple parties and has been working with Qatalyst Partners to evaluate such interest," Zoox said. It declined to comment on Amazon's interest. A spokeswoman for Amazon declined to comment.

The Zoox board includes Mr Cannon-Brookes, who invested $100 million in the company. Other local investors include Sydney based Blackbird Ventures, Grok Ventures and Melbourne superannuation fund Hostplus. {fetch(a,{keepalive:!0,credentials:"include",redirect:"follow",method:"get",mode:"no-cors"}).catch(()=>{{const b=new Image;b.src=a.replace("&","&");viewReq.push(b)}})};window.vu=a=>{if(window.fetch)c(a);else{{const b=new Image;b.src=a.replace("&","&");viewReq.push(b)}}};}).call(this); //-->

27 May, 2020
Elana Rubin drops her ME board seat as she takes the chair at Afterpay
The Sydney Morning Herald

Afterpay has formally appointed Elana Rubin as its chairman, a role she has filled on an interim basis since last year when the company founders announced they would surrender control of the buy now, pay later provider's board.

Ms Rubin also announced that she would step down from the board of Members Equity Bank which has been dogged by revelations in The Sydney Morning Herald and The Age this month that it had unilaterally reduced the amount of money thousands of customers could access from their redraw facilities. The policy has since been reversed.

"Following an extensive global search ... the board deemed that Elana was best placed to lead the board of Afterpay," company co-founder and chief executive Anthony Eisen said. "Her ongoing stewardship and focus on good corporate governance will continue to deliver value to shareholders."

The decision to make the Afterpay board independent was made in July last year following a turbulent month which saw the company receive three inquiries from the ASX, and an audit from AUSTRAC into its compliance with money-laundering laws.

The announcement was made Monday morning ahead of the stock reaching a fresh intraday record high of $47.47.

This represents a rise of almost 600 per cent since its March low when the markets were pricing in a significant financial hit from the pandemic-induced recession which is now hitting its key markets.

It has also been boosted by the news that Tencent, which owns social media and payments app WeChat with its 1.2 billion customers, had become a strategic investor, as well as better than expected customer numbers in the US last week.

UBS issued a report this week upgrading its price target on the stock based on the 5 million active US customers Afterpay announced,

"Given the impressive US customer growth, we assume that Afterpay's credit decisioning system is performing well, we therefore lower the magnitude of our bad debt forecasts for FY2021," said UBS.

But it remains sceptical about the company's valuation with a target of just $14. UBS said Afterpay is currently trading at 13.5 times its book value compared to its valuation of the stock at 4.3 times.

Afterpay also announced on Monday that US executive Sharon Rothstein will join the board as of June 1. She is the former chief global marketing officer for Starbucks and is currently a partner at venture capital group Stripes.

"Sharon's background will provide the board and management with key retailer insights and will also assist us in developing new relationships and networks globally," Ms Rubin said.

27 May, 2020
City Chic online growth carries through lockdown, stores to reopen
Inside Retail

Fashion retailer City Chic has begun reopening stores across Australia and New Zealand after the lockdown led to a period of online growth.

A number of stores were reopened on a trial basis over the past two weeks to ensure safety protocols were prepared for a wider relaunch, and as such a staged rollout of City Chic’s 107 Australian and New Zealand stores.

“I am proud of how engaged our store teams have been throughout the closure period and know they are ready and energised to get back to serving our customers in store,” City Chic chief executive Phil Ryan said. 

City Chic didn’t comment on a time frame for the relaunch of stores, though has been able to negotiate lower or more appropriate rents for the majority of its sites. An eligibility for JobKeeper in Australia and the Wage Subsidy Scheme in New Zealand has helped to further keep costs down. 

The business’ e-commerce operations previously made up about two-thirds of sales, making the closure of its stores less punishing than in the case of some other retailers. 

And during this period online sales grew 57 per cent versus the same period of the year prior. 

“We achieved that by quickly moving to adjust our product mix to better suit the customer’s needs during these times,” Ryan said. 

Customers leaned toward the intimates, streetwear and casual categories of City Chic’s offer, which offset the fall in its higher-end ranges, though increased promotional activity pushed online gross margin down. 

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