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July 30th, 2019

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1. How to Tap Into China’s Billion-Dollar Live-Streaming Shopping Craze

For those of you quietly stewing over your top-secret live-stream/QVC idea — sorry. It already exists in China. And it’s massive, according to our NYC-based correspondent, Shen Lu.

The low-down:
  • China had more than 500m webcast viewers in 2018 and expects to hit 1B by 2020.
  • Some marketplaces have 4x’d their revenue since 2017.
  • Alibaba’s Taobao Marketplace brought in more than $15B in transactions through live-streaming sessions last year alone.
What’s in it for you?

Savvy US tech startups have profited millions from these live-stream marketplaces, and so can you. Allow this article to be your guide.

  • A few years ago, a little-known Connecticut company started selling its handbags through Chinese live streams. Now 20% of its sales come through this lucrative market.
  • Learn the complexities of the Chinese market. It’s so lucrative, Amazon recently decided to go after it.
  • Gain strategy tips from marketing specialists to help you sell your niche products in front of billions of Chinese consumers who admire Western styles.
Click here to read more
Dollar Store image

2. The last big e-commerce holdout is about to fall

Dollar stores are an $87B industry. But analysts see a downturn in the ol’ buck-o-rama race to the frugal top as low-cost retailers like Walmart and Target push the darlings of middle America to consider a more serious e-commerce play.

Bottom line: The dollar meccas of industrial-grade Fruity O’s need to catch up to the 20th century. It’s up to all of you 21st-century business minds to get them there.

Here’s how you can break in:

  • Digital marketing: Research shows that more customers would jump at the chance to use digital coupons if the retailer offered them. 
  • Mobile capabilities: To survive the retail-pocalypse, brick-and-mortar retailers have started using their storefronts as mini-warehouses for online inventory. You can help dollar store chains take the leap by building out their websites and mobile apps to do the same.

Dollar stores are finally starting to see the e-need. Now they need someone to e-bring them the goods. And it’s up to you to e-deliver.

Read more here

3. News you need to know 

The activity market for kids (WSJ): Millennials don’t just want experiences for themselves; they want experiences for their kids. These days, downtime is seen as screen time because kids naturally choose the glow of a device. Parents, particularly those with means, are trying to program nearly every second of their kids’ days. There are opportunities to create businesses around providing these activities or helping parents find and organize these activities. For instance, a former marketing executive in New York founded The Wonder, a members-only phone-free kids’ playspace. 

Makeup’s new shine (Quartz): For decades, fashion magazines have pushed oil-free faces as the go-to look. Now, dewy and glossy faces are in. This trend, which started in South Korea, is expected to continue growing, especially in Western countries, where it also fits with the natural look promoted by athleisure. With consumers preferring dewy skin, demand for foundation, lip gloss, moisturizers, and creams that have highlighting and glowing capabilities will increase. The makeup industry is already valued at $532B worldwide and expected to increase by 7% the next few years (Remember: men are more likely to wear makeup these days, too). The startup Glossier, a leader in minimalist and dewy-look products, has been valued at $1B.

Affordable mobile technology (WSJ): The billions of people who don’t have smart phones might start buying used phones, as we mentioned in a Trends story last week. But they might also opt for smart feature phones, which cost $25, look like old Nokia phones, and connect to the internet. Some 370m of these phones will be sold in the next three years. Smart feature phones open up several opportunities for entrepreneurs in hardware and software, including for developing new apps or tweaking existing apps on an operating system different than iOS or Android.

The Athletic hits 500k subscribers (Bloomberg): The fast-growing sports site, which recently expanded to cover professional soccer in England, is proving that people will pay for ad-free digital sports content. The company expects to end the year with 1m+ subscribers, with average revenue per user of $64. Interested in content subscriptions? Follow Eric Stromberg on Twitter. He’s an early Athletic investor and tweets constantly about subscriptions.

The Trade Desk might be the most interesting startup to go public recently (Twitter): The company, which helps advertising agencies spend their money more effectively, went public in 2016 and continues to grow at an impressive pace. Early-stage investors have quintupled their money and analysts say there’s plenty more growth ahead for the company, which helps agencies optimize real-time bidding. Here’s how Trade Desk’s unique business model works.


4. Where retail sales are alive and well

Malls are dead, and downtown areas haven’t been much better for brick and mortar. In comparison, airports are like a party. Retail is thriving at airports.  

The past two years, airport retail sales have risen 7%. The global market for airport retail, at $40B in 2017, is expected to expand to $60B in 2022. And companies that bring digital disruption techniques used elsewhere to the other side of TSA checkpoints are going to win.

We found several opportunities:   

  • Consulting airports on big data: Airports make big money on retail offerings, but they are stuck in the early 2000s when it comes to figuring out their (captive) audience’s habits. According to a white paper by Amadeus, airports are seeking to track how long the average person spends at the airport in part to improve marketing strategies for retailers. 
  • Airport app design: Airports are hungry for apps that help travelers understand the airport’s offerings and make retail choices on demand. You’d need to design an app that works for multiple airports.       
  • Postmates for the terminal: People don’t want to walk from A23 to A3 to get their smoothie. Companies like At Your Gate and Airport Sherpa are already in a handful of airports, delivering food and retail items to a person’s gate or even on the plane before takeoff. Your 12 oz. water can’t make it through security, but their employees get background checks that allow them to zoom through security with food. The next opportunity? How about food delivery from outside the airport to stranded travelers?     
  • Local flavors: Chains dominate many airport offerings, but airports are beginning to realize the demand for local restaurants and shops. The Portland and Austin airports feature almost entirely local food offerings. Getting even a pop-up at an airport can bring new exposure to a local brand.
How big can these things get?
Hudson News, the airport leader in convenience stores, has consistently grown revenue while non-airport retail has dried up. The company has nearly 1k stores that earn about $2m each in sales.

Hudson’s biggest sellers are beverages, candy, and food — a category that accounted for $572m, or about one-third, of its revenue. Perfumes and cosmetics were its next-largest category, accounting for 14% of revenue last year. Books made up just 12% of sales.

Like other companies, Hudson News says it hopes to boost sales by investing in technologies that allow customers to pre-order merchandise.
Hudson Group Revenue chart

5. What’s the next

Six years ago, the popular investor Fred Wilson wrote that the popular job site Indeed was his first great investment. Now, Indeed does nearly $2B/year in revenue.

So this got us thinking: What’s the next Indeed? The prediction: niche job sites. More specifically, sites that list blue-collar jobs that pay high salaries and do not require a degree (or graduate degree).

Here are a few industries with big job shortages.

  • Construction: 263,000 construction jobs went unfilled last year. Average salaries are $40k and increase to $50-$70k with a bachelor’s degree and up to $80-$110k for some specialties like residential carpentry.
  • Mining: Mining and oil rigging jobs grew 6.9% last year. Average oil riggers make nearly $75k, with opportunity for experienced drillers to make up to $200k. RigUp is a gig work marketplace for oil rigging and has raised over $120m to tackle this.
  • Trucking: Large fleets are scrambling to hire entry-level drivers. Today’s driver shortage of 60k is expected to grow to 174k by 2026. The median pay for truckers is about $43k. But they can purchase their own trucks to become owner-operators and make six figures annually.
More on this soon…
Mikael Cho image

6. How Unsplash grew from 10 free photos to 11 billion monthly views

Unsplash is one of the fastest-growing free stock photo sites. In just shy of six years, it’s grown into a juggernaut, now landing more downloads than Getty, ShutterStock, and Adobe Stock combined.  

We caught up with co-founder Mikael Cho for an interesting conversation about how he and his team built Unsplash — which, at 11B monthly pageviews, is on pace to overtake Wikipedia in a few years — and the challenges they have overcome.

Unsplash is at an inflection point: the company has yet to make a buck, but Cho hints at how Unsplash plans to unlock monetization of its billions of users.

Mark Dent
Mark Dent
Steph Smith
Steph Smith
Brad Wolverton
Brad Wolverton
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