My Brain Food This Week...

Apr 13, 2024

(Zheping Huang and Min Jeong Lee)

Key takeaways:

ByteDance experienced a remarkable 60% surge in profit in 2023, surpassing the growth rates of industry giants like Tencent and Alibaba.
This puts ByteDance in Meta’s league - nearing Meta’s $135B of revenue in 2023, from $117B in 2022.
ByteDance's platforms, including TikTok and Douyin, are not only solidifying their position in China but also expanding globally, with initiatives like TikTok Shop. Douyin's evolution into an all-in-one platform akin to WeChat poses a challenge to Alibaba's e-commerce dominance, while TikTok aims to grow its U.S. e-commerce business significantly.
Despite its success, ByteDance faces challenges, including regulatory scrutiny and the potential ban of TikTok in the U.S. The company is restructuring its operations, cutting jobs in less profitable units, and focusing on innovative areas like generative AI while navigating the uncertainties surrounding its potential stock market debut.

💎 Africa

Nigeria's central bank announced a 20-fold increase in the minimum capital requirement for banks, forcing them to hold up to ₦500 billion ($378m) in capital to maintain their bank status. Different tiers of banks facing varying capital demands. Banks now have two years to raise the required capital, either through new investments or mergers.
The Nigerian government wants to revitalise the economy, which has been struggling due to recessions, declining oil exports, and currency devaluation. By injecting significant capital into the economy through banks, the government aims to spur investment and stimulate economic growth. Many banks are expected to fall short of meeting the new requirements, leading them to consider options like raising capital, merging with others, or downgrading their licenses. Fintech companies appear as likely winners, as they are not currently affected by the new regulations and can focus on growth opportunities while traditional banks navigate this challenging period. Yet, there are concerns that fintechs might face similar regulatory pressures in the future, signalling a turbulent period ahead for the entire Nigerian financial services industry.

Tesla will reveal its robotaxi in August this year. According to Elon, through the Tesla Network you will be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have your car generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost.
As an example of supply chain diversification, and amidst trade tensions between the U.S and China, Apple now makes as much as 14% of its iPhone from India.