• Stories
  • Visual Stories
  • Newsletters
  • Podcast
Subscribe
India
Login
  • Login
  • Subscriptions
    • Individual Plans
    • Corporate Plans
    • Campus Plans
    • Gift a Subscription
  • Company
    • About Us
    • Team
    • Careers
    • Community
    • Blog
    • FAQ
  • Editorial
    • Narratives
    • All Stories
    • Newsletters
  • Contact Us
    • Write For Us
    • Queries
    • FAQ
  • Follow Us
    • Twitter
    • linkedIn
    • Instagram
India
  • Home
  • Search
  • Visual Stories
  • Newsletters
  • More
  • Subscriptions
    • Individual Plans
    • Corporate Plans
    • Campus Plans
    • Gift a Subscription
  • Company
    • About Us
    • Team
    • Careers
    • Culture
    • Community
    • Blog
    • FAQ
  • Editorial
    • Narratives
    • All Stories
    • Free Stories
    • Newsletters
  • Contact Us
    • Write for us
    • Queries
    • Twitter
    • Facebook
    • Facebook
  • Unlock more benefits of the The Ken Subscribe
  • Already Subscribed? Login

Sign Up

Login Login with google
OR

You’re signing up for an account which gives you access to a weekly free story and our archive of free stories. You will also receive a daily newsletter in your inbox. You can unsubscribe by clicking the link in the footer of all our emails.

Thanks! Logging you in

“When you're in a position to have gotten so much, the gift at this point is giving back.”
– Paul Stanley

Oops. An account with this email address already exists.
Have an account?
Login now

Sign Up

Login Login with google
OR
You seem to be already logged in from the following devices

We allow only two simultaneous login sessions per subscriber. If you continue, we will log you out from the above devices

Account successfully created

Almost Done!

Log in

Continue to your account at The Ken
Login Login with google
OR
Forgot Password?

Please add your name

Account details updated

Reset Password

Just enter your email address registered with
The Ken
Log in

Reset Password

Email Sent to:

Check your inbox for instructions to reset your password.

Netflix’s last growth market

The Nutgraf is a 10-min newsletter sent at 10 AM IST every Saturday. It connects the dots and synthesizes one big event in business, technology and finance that happened over the week in India. In a way you’ll never forget.

This is a paid newsletter that’s available exclusively to The Ken’s premium subscribers.

Just 10 mins long Synthesis not analysis Sometimes memes

Netflix rests hope on India. Ebay returns. Snapdeal finds its heartbeat. And a medical drama.

Yes. We have a name.
 
More importantly, we have a ‘what’.
 
The Nutgraf is your weekly newsletter that provides context and helps you decode the most significant events around business, technology and healthcare in India. If you are focused, career-minded and want to improve yourself and the world around you, this is for you.
 
Also, completely coincidentally, the nutgraf has a very specific meaning in journalism. You should look it up.
 
Last week had a lot happening. So here we go.


Are you still watching India on Netflix?
Netflix posted its Q2 earnings last week.
 
Like the final season of House of Cards, it wasn’t pretty.
 
How bad was it?
 
Um. Quite.
 
Netflix added a net of 2.7 million subscribers in Q2. All from its international markets. For the first time ever, it lost subscribers in the United States.
 
It gets worse. Just three months ago, Netflix forecast a net addition of 5 million subscribers. It missed its own forecast by nearly 50%.
 
For a public company, reduced growth is one thing. Not being able to see it coming is another thing altogether.

1+3 Reasons Why
 
Netflix attributed this to the following:
 
  1. We are fine: Q2s are always Netflix’s slowest growth quarter. There’s a seasonality factor.
     
  2. But our shows also sucked: According to the company, “Q2’s content slate drove less growth in paid net adds than we anticipated”
     
  3. Also maybe the increased pricing: Netflix said it saw lower retention in regions where it had raised prices a few months ago.
     
  4. It’s not bad because it’s good: Mystifyingly, Netflix also blamed the previous guy…itself. It suggested an exceptional Q1 may have led to a bad Q2 thanks to something called a ‘pull-forward’ effect.
 
Analysts listened politely, asked a few questions, and Netflix watched as its stock fell by 12%—one of its largest single day drop in its history.
 
 
Baahubali to the rescue
 
In Netflix’s earnings call transcript, a search of how many times a country is mentioned is revealing. USA is referenced 5 times. Spain. 3 times. Europe, Japan, South Korea all get a mention each.
 
India gets 8 mentions. The most.
 
It’s clear that Netflix is really banking on India, its largest and last growth market. Apart from a slew of original programming, from Baahubali, to Sacred Games 2 (both of which were mentioned by name in the earnings call), Netflix is about to do something in India that it’s never done anywhere else in the world.
 
It’s dropping prices. By offering a new, mobile-only, one-device plan, at roughly half the price it offers a subscription right now. This was always in testing, but Netflix finally confirmed its roll-out at the earnings call.
 
So, to summarise: 5 million subscribers forecast in Q2. 2.7 million achieved. What’s Netflix forecasting next quarter?
 
7 million subscribers.
 
No pressure, Sacred Games. No pressure.

An e-commerce company snaps back to life

Snapdeal also posted its annual revenue numbers. And it was…interesting.
 
The backstory
 
A few years back, Snapdeal was the third largest e-commerce company in India, behind Flipkart and Amazon. It was backed by a marquee set of investors including Softbank and Alibaba, and was valued at $6.5 billion at its peak.
 
In 2017, things took a turn for the worse. Losses mounted. Growth dried up. At the time, Snapdeal had revenues of Rs 1,158 crore (~ $174 million), with expenses of Rs 4,400 crore (~$660 million). Not good.
 
Investors pushed the company to sell to Amazon or Flipkart, neither of which worked out. Finally, the founders rebelled (sort of), laid off nearly 70% of the company, and decided to chart a new course, which they called Snapdeal 2.0.
 
Default Alive
 
English computer scientist and co-founder of Y Combinator, Paul Graham once wrote that the most important question for an early startup was whether it was default alive, or default dead. Default alive companies need capital to grow. Default dead companies need capital to be saved.
 
In 2019, Snapdeal posted a revenue of Rs 925 crore (~$139 million), nearly the same as it did in 2017. But its expenses fell to just Rs 186 crore ($27 million).
 
It’s impressive. But for perspective, Flipkart’s last annual revenue is around Rs. 30,000 crore (~$4.5 billion), so Snapdeal has a long, long way to go.
 
In fact, a Snapdeal executive had this to say back in 2017:
 
“What happens now is a good question. People can criticise the Snapdeal 2.0 business model but the fact is, there is an opportunity to build a lean, category-focused e-commerce company. Can you create your own niche? Of course you can.”
 
It remains to be seen how long it can keep this up.
 
But for now, Snapdeal is default alive.
 
Sometimes, being alive is good enough.

From Ebix to Ebay
Speaking of Snapdeal, we really must get to Ebay. But before that, Yatra.
 
Yatra was once a serious contender among India’s online travel portals. Now it is part of Ebix, the NASDAQ-listed company that is a bit of something and everything. On 19th July, Ebix announced the formal closure of its March 11th offer to acquire Yatra. For $337.8 million, Yatra will now become part of EbixCash, an Ebix subsidiary that calls itself “India’s largest financial exchange” and wants to IPO next year. In preparation for that, it has been acquiring Indian companies left, right and centre.
 
Ebix is a tremendous stock. Just as recently as September 2018, the Ebix stock was up a stupendous 445% over the past four years. Since then though, it’s down 44%. And had you bought it on 11 March, the day Ebix announced its intent to acquire Yatra, you’d still be down 13%.
 
There was this rather inexplicable press release it put out last month though: “Ebix Is Not Aware of Any News, Events or Tariffs that Would Negatively Impact its Business or Account for Today’s Abnormal Trading Activity. Reiterates Goal of Achieving Greater Than $800M in Annualized Quarterly Revenues by 2019″
 
Three horses of the ebaycalypse
 
Last week also saw Ebay make its third major attempt to crack the elusive Indian market in 15 years with its purchase of a 5.5% stake in Paytm Mall, the e-commerce marketplace linked to Paytm*. Neither company announced the valuation. Poor Ebay has had rotten luck with India, being either too early, too late or too unlucky.
 
In 2004 when they entered India by acquiring auction marketplace Bazee.com, they were way too early.
Ten years later, in 2014, they invested $133 million in e-commerce marketplace Snapdeal, doubling down on a smaller investment a year earlier. Snapdeal would go on to semi-implode and become the first of the tech unicorns in India to deflate.
Realising they bet on the wrong horse, Ebay then threw its hands up and invested $500 million in Flipkart in 2017. It also decided to hand over its India marketplace to Flipkart. But the very next year, Walmart bought Flipkart for $16 billion.
 
“We are deeply committed to India and believe there is huge growth potential and significant opportunity in this dynamic market,”
 
– Jooman Park, eBay Senior Vice President, APAC.
 
Well, that’s one way to say “we’re back to square one”.

Outrageous Medical Bills
Last week, the cabinet finally cleared a bill to set up a National Medical Commission (NMC). It replaces the MCI (Medical Council of India), a regulator plagued by accusations of widespread corruption, which had vast powers.
 
What kind of powers?
 
Lots. Approving and assessing medical colleges. Conducting entrance exams. Setting course fees. Basically deciding requirements of who become doctors, and who don’t.
 
Isn’t that a good thing?
 
Depends. If you ask the Indian Medical Association (IMA) and its 300,000 doctors, they would disagree. They have protested against the NMC multiple times.
 
But why?
 
Well, it’s complicated, but here’s the gist:
  • The IMA wasn’t involved in drafting the bill. Instead, it was done mostly by NITI Aayog, a non-government think tank.
  • The NITI Aayog proposed changes which benefit private institutes, and alternative forms of medicine like homeopathy and ayurveda. The IMA thinks this will reduce the quality of doctors.
 
But why drop the standards like this?
 
Simple. There aren’t enough doctors in India. Not nearly enough.
 

What We’re Reading
A book about the first 5,000 years of debt. By David Graeber, an anthropologist, self-proclaimed anarchist, and a leading figure of the Occupy Wall Street movement, and often credited as the person who coined ‘We are the 99%’.
 
“Arguments about debt have been going on for at least five thousand years. For most of human history—at least, the history of states and empires—most human beings have been told that they are debtors. Historians, and particularly historians of ideas, have been oddly reluctant to consider the human consequences, especially since this situation—more than any other—has caused continual outrage and resentment. Tell people they are inferior, they are unlikely to be pleased, but this surprisingly rarely leads to armed revolt. Tell people that they are potential equals who have failed and that therefore, even what they do have they do not deserve, that it isn’t rightly theirs, and you are much more likely to inspire rage.”
 
– Debt, The First 5000 Years
 
It’s surprisingly lucid. 

That’s it for this week.
 
Did you like the newsletter? Send it to your friends.
 
Hated it? Never mind. Send me a bottle-cap challenge video instead.
* Disclosure: Vijay Shekhar Sharma, the founder of Paytm, is an investor in The Ken

Subscribe to read this premium newsletter

Get this newsletter at Rs. 149/month Get The Stack at Rs. 199/month

25 Jun, 22

The real reason why Uber and Ola drivers are cancelling your rides

Praveen Krishnan

18 Jun, 22Free

How Reliance made chaos into a ladder

Praveen Krishnan

11 Jun, 22

Two stories about UPI and Credit Cards

Praveen Krishnan

04 Jun, 22

Why everyone wants a piece of India’s open e-commerce platform

Praveen Krishnan

28 May, 22

Amazon and Flipkart go back to go forward

Praveen Krishnan

21 May, 22

How Adani became the richest billionaire in Asia

Praveen Krishnan

14 May, 22

Are we entering a recession?

Praveen Krishnan

30 Apr, 22

Why freshers are abandoning Infosys, Wipro and TCS

Praveen Krishnan

23 Apr, 22

Ola Electric woke up and chose violence

Praveen Krishnan

16 Apr, 22

Crypto is cursed for two seconds in India

Praveen Krishnan

The Ken, on tap. Get the app

Download the Ken App and unlock the full potential of The Ken.

Subscriptions
  • Individual Plans
  • Corporate Plans
  • Campus Plans
  • Gift a Subscription
Company
  • About Us
  • Team
  • Careers
  • Culture
  • Community
  • Blog
CONTACT US
  • Write for us
  • Queries
  • FAQ
FOLLOW US
EDITORIAL
  • Narratives
  • All Stories
  • Free Stories
  • Newsletters
JOIN THE CONVERSATION

@NatesanSiv Been glued to The Ken for a while now. Gives you all you need to know in a non traditional language both concise and to the point. Well done @TheKenWeb

@Climateabhi @TheKenWeb gives personal touch to each and every mail subscriber newsletter, makes reading so engaging and connected! Platforms like The Ken are revolutionizing the way financial/business journalism is done in India.

Kenrise Media Private Limited, No.677, 1st Floor, Suite #643, 13th Cross, HSR Layout, Sector 1, Bangalore - 560102
  • 2021 The Ken
  • Terms & Conditions
  • Privacy
Built at The Ken

Create Corporate Account

Success

Verification Code has been sent to your Email address

Update your email

Sorry, our free subscriptions require a real email id, because that's how we send you our daily stories. Please enter a valid email.

Account Detail Updated

Please Wait ...

Delete Account?

Are you sure you want to delete ()?

On deletion the user will become free starter

Cancel

Emails has been sent

Invite Sent!

We’ve sent your invite. Continue adding your teammates to your subscription here?

Add more members

Logout

Pending invitation

Join Team

Generate payment link

Enter the email address that you’d like us to send this payment link to. This could be your HR, finance representative, or anyone from your organization. A copy of this email will be sent to the team’s admin as well.

Email Sent Successfully

Corporate pricing applies to teams of 5 or more members only.

Thank you. We have received your request to post comments. You’ll hear from us soon.

Are you sure? Your subscription will expire at the end of your current subscription period.

Dismiss

Automatic payments successfully cancelled. You will not be charged again.

Your order invoice has been resent to your billing email. (You may have entered a different email than the one you’re logged in with)

Please upgrade to a paid account first

Are you sure? Canceling automatic payments can not be undone.

NO

You’ve got access!

Deepak Shahdadpuri has unlocked this article for you

Sponsor Details

Loading user data

Your email’s on its way!

We’ve emailed your gift link. Want us to send some more?

Yes, send more
T

The Ken has invited you to sign up for The Nutgraf by The Ken.

T

The Ken has invited you to sign up for The Nutgraf by The Ken.

Having your name allows us to address you personally in emails and on our website. That’s all, nothing else.

T

The Ken has invited you to sign up for The Nutgraf by The Ken.

Sign up for free by entering your primary email address. You can also login using your Google or Facebook account.

Login Login with google

Or

T

The Ken has invited you to sign up for The Nutgraf by The Ken.

Sign up for free by entering your primary email address. You can also login using your Google or Facebook account.

Login Login with google

Or

By registering, you will be signed-up for a free account with The Ken

Invite your friends and colleagues to read The Nutgraf.

Just copy and share your unique referral link to invite anyone to sign up for The Nutgraf.

COPY LINK

T

The Ken has added you as a partner. Read The Ken as a couple. Sign in to get started.

T

The Ken has added you as a partner. Read The Ken as a couple. Sign up to get started.

Having your name allows us to address you personally in emails and on our website. That’s all, nothing else.

T

The Ken has added you as a partner. Read The Ken as a couple.

The Ken’s stories are available only for paid subscribers. As a partner, you can now access The Ken subscription. For free. Just activate your account to get started.

T

The Ken has added you as a partner. Read The Ken as a couple.

The Ken’s stories are available only for paid subscribers. As a partner, you can now access The Ken subscription. For free. Just activate your account to get started.

By registering, you will be signed-up for a free account with The Ken

Sharp, original,
insightful, analytical

Alert

Our anti-piracy system has flagged your account for suspicious activity and has temporarily paused your account. This may happen due to a number of reasons.

If you think that this was done in error, please get in touch with us at [email protected].

Are you sure?

You will be changing your registered email address to access your account. All email newsletters will be delivered to the new email ID.

Dismiss

Searching...

No results found for .

Top Searches

20 Feb, 20

OYO's Battle of the Bulge

Sumanth Raghavendra

03 Jan, 20

Bajaj, Razorpay, Zerodha carry the Indian fintech torch

Arundhati Ramanathan

04 Dec, 19

Selling to those who can't pay: human cost of modern banking

Arundhati Ramanathan, Shreedhar Manek

20 Jan, 20

OYO's long march—retreat of the red army

Abinaya Vijayaraghavan, Savio D'Souza

03 Dec, 19

Reliance Jio travels first-class on the tariff hike gravy train

Pratap Vikram Singh

22 Jan, 20

Zomato swallows Uber Eats India — just desserts or a bitter pill?

Sumanth Raghavendra

12 Dec, 19

Ajit Mohan to Sanjay Gupta: Facebook, Google hot on Hotstar's big stars

Jon Russell, Pranav Shankar

27 Dec, 19

Flipkart, Amazon, Snapdeal: 10 years, 3 players, 1 e-commerce story

Durga M Sengupta

16 Jan, 20

Project Manager is dead. Long live the Product Manager

Olina Banerji, Shreedhar Manek

See all results for .

Welcome to The Ken

As a part of the Learning and Development program at Myntra-Jabong, you have complete access to 300+ original daily stories over the next year, 500+ previously published stories and our comment sections. Also, do keep an eye out for our exclusive subscriber-only iOS and Android apps which will be rolled out for you shortly.

Happy Reading!

By continuing to browse our site you agree to our use of cookies to improve our performance and enhance your user experience.
Accept

Contact Us

  • For Queries
    [email protected]
  • For Feedback
    Write to us here

We’ll get back to you within 2-7 working days .

Have a great story idea for The Ken?

We welcome contributors from journalists, subject matter experts, and anyone who has a good story to tell.

Learn More
Follow us to stay updated

Twitter

Facebook

LinkedIn

Activating your subscription