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Oct 3, 2017 | 2 min read

Economy

This Week in GAFAnomics, October 3rd

“This Week in GAFAnomics” features top articles from FABERNOVEL’s internal Slack discussions. Get your weekly dose of curated news about the Network Economy here.

Joachim Renaudin

Project Analyst


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GAFAnomics [ga-fɑː-nom-iks], noun: A modern, networked, economic system spurred by the eponymic GAFA (Google, Amazon, Facebook, Apple) but also encompassing Unicorns, Chinese tech giants and all other companies changing our lives through computer technology.

#The week of October 3rd

So what happened this week in GAFAnomics ?!

Amazon is eyeing French retailers

Amazon is looking to expand its foothold in France by acquiring a French retailer, just like it did a few months ago in the US through the acquisition of WholeFoods. Amazon reportedly initiated discussions with Monoprix (Casino), Intermarché and Système U, who all closed the door on Amazon. In the UK, Amazon is also rumored to be looking for an acquisition target, and is discussing with Morrisons.
Amazon wants to accelerate the development of its Amazon Go Stores (automated, cashless stores) by acquiring an existing network of physical stores.

Will French retailers accept Amazon’s offer? Probably not. Offering a foothold to Amazon in France would exacerbate the competitive environment, enabling Amazon to leverage synergies between its online platform and its physical network. Unless retailers think they’re already doomed…

The next time you visit a museum will be on Snapchat

Snapchat announced last week that it will launch an augmented reality art platform. Partner artists will be able to pin art to specific locations in augmented reality, and users who point their phone to the location will be able to contemplate the artwork.

Snapchat partnered with renowned artist Jeff Koons, famous for his “balloon sculptures”.

Will this art feature be able to reinvigorate Snapchat’s falling user growth? Probably not as it will require millions of partnerships and specific work to be able to flood the real world with digital work of art. Yet, it will provide a nice way for artists to share their work out of museum walls and reach out to a younger audience.

Samsung’s growth is dependent on iPhone sales

According to The Verge, Samsung’s component division will make more money from Iphone X sales than from Samsung Galaxy 8 sales. Samsung is mostly known to the customer as the company that builds smartphones or refrigerators. But a large chunk of its revenue comes from its components business (mainly chips and screens), as it is the world’s largest OLED screen provider, and the only provider for the iPhone X. Apple is therefore very dependent on Samsung, whose monopoly on OLED technology is almost total and who makes the Cupertino firm pay the high price. That explains why Apple has made a $2,6Bn investment in LG to help them grow their OLED division, and provide an alternative to expensive Samsung components.

 

Ola raises $2Bn to fight Uber in India

Last week, Ola, India’s largest ride hailing company announced that it had closed a new $2Bn funding round. The round is led by Softbank, a Japanese conglomerate that is flooding the tech sector with billion-dollar investments (earlier this year, Softbank committed to investing $5Bn in Didi Kuaidi, Uber’s Chinese rival).

Since last year, other venture capital firms have poured billions of dollars into Uber’s rivals in emerging markets (mainly in Asia), increasing the competitive pressure in each market. Uber, the only truly global actor, faces competition everywhere from local players. Because network effects are naturally local in the ride-hailing markets, Uber’s large-scale status is more a threat than an opportunity, and the company might have to focus on specific markets, where its chances of winning are highest.

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