Week in a Nutshell #5

Welcome to the fifth episode of the 'Week in a Nutshell’ series.

It was a busy week for the tech world with couple of acquisitions took place. 

Headlines:

  1. India, Indonesia and Bangladesh, big three mobile phone markets beyond China
  2. Yelp Buys Delivery Network Eat24 For $134M To Ramp Up In Food Operations
  3. Twitter Buys Niche, a Social Media Talent Agency, for at Least $30 Million

India, Indonesia and Bangladesh, big three mobile phone markets beyond China

Mobile phone market in Asia is on the rise not just in China but also in India, Indonesia and Bangladesh. In Q4'2014, total mobile phone shipments in these three countries reached to 89 million units. Market research conducted by Counterpoint estimates that smartphones shipments were about one third of that number which is approximately 30 million units. Just as a comparison, smartphone shipments in China in Q4'2014 is estimated as 122 million units. This is a great statistic to understand the market potential in China.

According to Counterpoint research, smartphone markets in India, Indonesia and Bangladesh are driven by the success of regional brands especially in the entry level smartphone segment. Domestic brands have market shares of 62%, 52% and 50% in Bangladesh, India and Indonesia respectively. Market research states that domestic brands have strong distribution reach and price competitiveness. This could be one of the reasons why Google launched the Android One initiative and partnered with domestic brands couple of months ago to address the price sensitivity issue in these markets.

Chinese companies such as Xiaomi and OnePlus also entered these markets hoping to expand their presence in Asia outside of China. It seems like smartphone market in Asia will be very colorful in 2015.


Yelp Buys Delivery Network Eat24 For $134M To Ramp Up In Food Operations

Yelp acquired Eat24, food delivery company that has 20,000 restaurants across 1,500 cities for $134 million, $75 million in cash and the rest in Yelp shares. 

I think Yelp will benefit from this acquisition in several ways. First, Eat24 does not charge the users but they commissions from the restaurants for each transaction so Yelp will generate a new revenue stream through those commissions. Second, Yelp will have tighter and deeper integrations with the restaurants. For example, Yelp will have the data for the most ordered items in each restaurant and will show these statistics/ratings in local listings available on Yelp. Yelp currently has 135 million average monthly users, with 72 million average monthly unique users on mobile. 

Online food delivery industry has been very competitive over the years due to the thin profit margins based on the delivery fees and order commissions. It is obvious that there is a move towards consolidation of the companies such as GrubHub and Seamless, DeliveryHero and JustEat and especially the recent acquisitions of Rocket Internet across Europe and MENA region. This is the reason why I'm a bit surprised that Eat24 is acquired by Yelp instead of a merger with another online food delivery company.

I'm very curious whether Foursquare has any plans of entering to the online food delivery service now that their biggest competitor, Yelp, is in it.


Twitter Buys Niche, a Social Media Talent Agency, for at Least $30 Million

Niche is a small company that enables social media users to organize and monitor their various social media accounts in one dashboard and then help them connect with advertisers for potential promotion partnerships.

I think Twitter made a good strategic decision to acquire Niche. Twitter and Vine are probably the most important and most used platforms for social media stars/phenomenons and Niche has been doing a good job in monetizing the relationship between social media stars and advertisers where Twitter did not get anything out of it. Now, Twitter generated another revenue stream, started to own the data for those partnerships and also created another advertising method for its advertisers.


Hereby, we came to the end of the fifth episode of ‘Week in a Nutshell’ series. If you enjoyed this post, I'd be happy if you could comment, share, like and/or recommend it. 

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Thanks,
Birkan