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Tech

Pandemic revs up race for U.S. online car sales

DES MOINES, Iowa After years of being part of a future that never quite arrived, the coronavirus pandemic has put U.S. online car sellers on the map.

Now comes a race to spend vast sums on digital commerce platforms specifically designed to handle auto sales. Without deep pockets, many startups and others trying to join the online game will likely be left in the dust.

“The big three (auto) e-commerce players will grow substantially, but it will be hard to be a new entrant,” said Toby Russell, joint chief executive officer of Shift, which will go public to join rival Carvana and Vroom later this quarter.

“The pay to play on this thing is in the hundreds of millions and the early journey is hard, especially building out the technology,” Russell said.

Online sales still only account for around 1% of the roughly $840 billion Americans spend annually on around 40 million used cars. But after numerous U.S. states went into COVID-19 lockdowns in March, the advantage of socially-distant online sales has come squarely into focus.

“With coronavirus we’ve seen an additional shift in desire to purchase vehicles online,” said Carvana CEO Ernie Garcia, whose company has grown by triple digits for six years running.

Investors are buying in. Vroom’s shares are now trading at more than double their $22 launch price on June 8. Carvana’s market value is near that of No. 2 U.S. automaker Ford Motor Co , though it has yet to post a profit.

In a sign of the times, an April survey by CarGurus Inc , an online marketplace for new and used cars, found 61% of people shopping for cars were open to buying online. That compares with 32% before the pandemic.

Selling vehicles online with no physical showrooms requires more than just a nifty app though.

The $2 billion Carvana has spent since 2013 rolling out its digital network has included payments for technology to evaluate trade-in vehicles, financing for car loans, switching car titles across U.S. states with different rules and a logistics network to recondition, store and deliver thousands of vehicles to customers’ homes.

“It’s expensive to build up an entirely new supply chain that’s nationwide and supports tens of thousands of cars,” Garcia said.

Rival Vroom has spent around $1 billion on its online platform and inventory so far. It hopes some day to also use the platform to sell auto parts or insurance, or to serve as a marketplace for smaller auto retailers, CEO Paul Hennessey said.

Vroom could provide smaller dealers with reconditioning services, logistics and a vast pool of potential car buyers — for a fee.

Shift’s Russell, meanwhile, also hopes to host other dealer’s vehicles on his company’s platform.

The three main online sellers say they have no interest in new car sales because they are unprofitable and dealer franchise laws make selling across state lines difficult. Of the automakers, only Tesla Inc has avoided franchises and always sold vehicles online.

CarMax , the No. 1 used car retail chain, has spent

over $300 million rolling out a digital platform to accompany its 200 U.S. stores. It is still working through the logistics of serving America’s vast geography.

“It’s not for the faint-hearted,” said CarMax Chief Marketing Officer Jim Lyski.

Lyski and other executives say other major brick-and-mortar auto retail chains will likely roll out online sales, but the huge investments involved will limit digital competition.

“I think the largest players are the only ones that can actually afford to build that capability,” Lyski said.

Industry experts say Amazon.com Inc , which provides auto research for consumers but does not sell cars, has a huge potential in online vehicle sales. But the e-commerce titan, which has seen its profit surge during the pandemic, declined to comment.

“This isn’t something we’d speculate on,” said Amazon spokeswoman Lori Torgerson.

CHALLENGE FROM DEALERS

CarMax launched “contactless” curbside pickup during the pandemic, a popular choice for online customers. It also offers free home delivery up to 60 miles (97 km) from a dealership, a service to available to most customers.

But home delivery is cost-prohibitive in some areas, or state regulations prevent it, CarMax said.

CarMax’s Des Moines store, for instance, does not offer home delivery, though general manager Brandon Parram said some customers have asked about it.

“I know it takes time to figure out how to make it work,” Parram said, “but I’m a fan of any new way to give customers the options they want.”

Major automakers have been pushing for more online new vehicle sales, especially after COVID-19 shuttered many dealerships.

In April, Fiat Chrysler Automobiles NV (FCA) launched online shopping tools allowing U.S. customers to buy a vehicle through a franchise dealer.

But automakers face a big potential challenge from dealers, a powerful lobbying group. Laws restrict direct online sales by auto manufacturers in some parts of the country with franchised dealers.

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“The automakers built this system and they have to live with it,” said Peter Bible, a former executive at General Motors Co . “They are trying to turn a battleship on a dime and it just doesn’t work that way.”

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


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Categories
Tech

Zoom to shift to 'partner-only' model in China, suspend direct sales

SHANGHAI Zoom Video Communications will shift to a partner-only model in mainland China from Aug. 23, suspending direct sales to all customers in the region, the company said on Monday.

Zoom customers in China received an email on Monday informing them of the change, and telling them it would provide users with “better local support.”

In the email, seen by Reuters, Zoom listed Bizconf Communications, Suiri Zhumu Video Conference, and Systec Umeet – as partners that can offer its commercial service to customers in China.

Zoom has been distancing itself from its China operations, which had come under the scrutiny of human rights activists and privacy advocates.

The company announced in May that it would suspend new free user registrations in China and limit new user registrations to enterprise customers who sign up through authorized sales representatives.

But in June, Zoom came under fire when it was revealed it had shut an account belonging to a group of U.S.-based Chinese activists who were attending an online video group chat to memorialize the Tiananmen Square massacre.

In a blog post, Zoom confirmed it had temporarily shut down the accounts due to request from China’s government. It said that it had re-instated the terminated accounts and “will have a new process for handling similar situations.”

Months earlier, security researchers discovered that Zoom re-routed some calls through its servers in China, even if those calls were placed outside China.

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The company said that the re-routing took place in “extremely lmited circumstances” and that it took its mainland China data centers off of an approved list of backups for users outside of China.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


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Categories
Tech

Apple Reports 25% Growth in Smartphone Market With 45.1mn iPhone Sales Globally

Image for Representation
(Image: Reuters)

Image for Representation
(Image: Reuters)

Compared to Apple’s growth, Samsung fell 30 percent, Huawei 5 percent, Xiaomi 10 percent, OPPO 16 percent, and others 23 percent in terms of smartphone shipments.

  • IANS
  • Last Updated: August 1, 2020, 11:24 AM IST

As the global smartphone market plummeted 14 per cent in the June quarter, Apple was the only vendor to grow as it shipped 45.1 million iPhones globally, a growth of 25 per cent compared to the previous year, according to a new report. Samsung fell 30 per cent, Huawei 5 per cent, Xiaomi 10 per cent, OPPO 16 per cent and others 23 per cent in terms of shipments in the second quarter, reported market research firm Canalys.

“Apple defied expectations in Q2. Its new iPhone SE was critical in the quarter, accounting for around 28 per cent of its global volume, while iPhone 11 remained a strong best-seller at nearly 40 per cent,” analyst Vincent Thielke on Friday. According to him, iPhone SE will remain crucial to prop up the volume this year, amid delays to Apple’s next flagship release. “In China, it had blockbuster results, growing 35 per cent to reach 7.7 million units. It is unusual for Apple’s Q2 shipments to increase sequentially,” said Thielke. The smartphone market worldwide fell to 285 million units, a second consecutive quarter of freefall, as lockdown orders caused by the Covid-19 pandemic persisted through April and May.

Huawei toppled Samsung with shipping 55.8 million units, compared to Samsung’s 53.7 million in Q2 2020. Apple was third with 45.1 million units. Xiaomi came fourth, shipping 28.8 million units, which was down 10 per cent, and OPPO reclaimed fifth place from Vivo, shipping 25.8 million units with a 16 per cent decline. “As well as the new iPhone SE, Apple is also demonstrating skills in new user acquisition. It adapted quickly to the pandemic, doubling down on the digital customer experience as stay-at-home measures drive more customers to online channels,” said the report.


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Categories
Tech

Apple loyalists prove physical stores not needed to drive iPhone sales- J.P. Morgan

Apple customer loyalty and response to the COVID-19 pandemic have proven brick-and-mortar stores are not essential to drive sales of its products, J.P.Morgan said on Friday, as the iPhone maker’s blockbuster quarterly results pushed its shares up 7%.

The United States’ most valuable company was forced to shut down more than 70 stores again in the third quarter in response to surging COVID-19 cases, but consumers were unfazed with the company topping analysts’ estimates for iPhone sales by $4 billion.

Revenue gains were splashed across every category and geography for the quarter, while a juicy stock split was added for extra measure, giving Wall Street and investors more cheer.

JPM analyst Samik Chatterjee said the performance spoke volumes about the importance of Apple products to consumers, and showed them willing to circumvent the traditional practice of buying from the physical channel when required.

Online retailers have emerged as big winners during lockdowns with people preferring to shop from their homes, driving malls and physical shopping globally into crisis and questioning their future in retail globally.

E-commerce giant Amazon.com Inc is also riding high on the online shopping boost. The company posted its biggest profit ever on the back of a 48% rise in online store sales.

At least seven brokerages raised their 12-month price targets on Apple’s stock, with Piper Sandler making the most aggressive move and raising its target by $160 to $450. The current median price target on the stock is $409.63.

Shares of the California-based company were up 7% to $411 in pre-market trade, on course to open at a record.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


Categories
Tech

Apple loyalists prove physical stores not needed to drive iPhone sales – J.P. Morgan

Apple customer loyalty and response to the COVID-19 pandemic have proven brick-and-mortar stores are not essential to drive sales of its products, J.P.Morgan said on Friday, as the iPhone maker’s blockbuster quarterly results pushed its shares up 7%.

The United States’ most valuable company was forced to shut down more than 70 stores again in the third quarter in response to surging COVID-19 cases, but consumers were unfazed with the company topping analysts’ estimates for iPhone sales by $4 billion.

Revenue gains were splashed across every category and geography for the quarter, while a juicy stock split was added for extra measure, giving Wall Street and investors more cheer.

JPM analyst Samik Chatterjee said the performance spoke volumes about the importance of Apple products to consumers, and showed them willing to circumvent the traditional practice of buying from the physical channel when required.

Online retailers have emerged as big winners during lockdowns with people preferring to shop from their homes, driving malls and physical shopping globally into crisis and questioning their future in retail globally.

E-commerce giant Amazon.com Inc is also riding high on the online shopping boost. The company posted its biggest profit ever on the back of a 48% rise in online store sales.

At least seven brokerages raised their 12-month price targets on Apple’s stock, with Piper Sandler making the most aggressive move and raising its target by $160 to $450. The current median price target on the stock is $409.63.

Shares of the California-based company were up 7% to $411 in pre-market trade, on course to open at a record.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


Categories
Tech

Can Apple's 24X7 services store-front make up for falling iPhone sales?

Many of Apple Inc’s physical stores re-opened and re-closed in recent months because of spikes in cases of the novel coronavirus.

But two of the iPhone maker’s most important storefronts were open the whole time: The App Store and Apple’s content businesses such as music and streaming video.

When Apple reports earnings Thursday, investors will be keen to see if its services segment raked in enough to help offset expected declines in most hardware sales and uncertainty about the timing of this fall’s iPhone lineup, historically the company’s biggest sales driver.

Analysts expect pandemic disruptions to pull down total revenue about 3% year-over-year to $52.1 billion and Apple’s bellwether iPhone business by nearly 14% in the third quarter, according to IBES data from Refinitiv as of July 28.

The two expected growth spots are services revenue – expected to be up 15% to $13.18 billion – and revenue from the companies wearables segment, expected to rise 8.6% to $6 billion, according to Refinitiv data on July 28.

Investors have viewed Apple as a comparative safe haven during the pandemic, pushing up shares 65% since mid-March when much of the world was urged to stay home to help slow the spread of the novel coronavirus.

When Apple last reported its fiscal second quarter in April, the company did not give a forecast. Analysts do not expect it to give a forecast when it reports this week but will be listening for clues about whether iPhone production for this fall is on track after reports of production delays because of the pandemic.

Analysts are also likely to watch for clues about whether the budget iPhone SE, priced at $399 and released in April, is helping Apple gain or retain customers.

Twenty-nine analysts rate Apple “buy” or “strong buy” and seven say “hold” and three have “sell” or lower ratings.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor


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Tech

Amazon steps up competition in UK online grocery sales with faster, free delivery

Amazon will begin free and same-day deliveries of groceries in London for its ‘Prime’ members from Tuesday, as it looks to cash in on fast-growing demand for buying essentials online, a trend that has been boosted by the coronavirus lockdown.

Customers with a ‘Prime’ subscription can order meat, produce, snacks and other household essentials from Amazon UK’s ‘Fresh’ service in two-hour windows for orders above 40 pounds ($52), the e-commerce giant said. Orders made before 9 p.m. will be delivered the same day in most areas, it said.

It said it has lowered the minimum order value for Prime customers to 15 pounds, from 40 pounds, and it aims to roll out free, same-day delivery to Prime customers across the United Kingdom by the end of the year.

The lockdown has led to changing consumer behaviour as people shun supermarket trips, with nearly one in five British households now buying over the internet, market researcher Kantar said last month.

Industry data shows that grocery sales in Britain rose 14.6% in the four weeks to July 12 compared with last year, though growth was slower than previous weeks as restrictions to contain the coronavirus were eased.

Internet supermarket group Ocado forecast earlier this month that online grocery shopping will double its share of the UK market over the new few years, building on a huge increase during the lockdown.

Amazon has been tapping into this sector since 2016, when it first launched its ‘Fresh’ service, although it has been selling food and drinks since the launch of its grocery store in 2010.

Last year the U.S. company extended its partnership with Morrisons which allowed customers to order from the UK supermarket chain and have it delivered by Amazon. It is unclear how the new plan affects this collaboration.

The new service applies to around 300 postcodes across Greater London and the South East of England.

Amazon’s move had been flagged by trade press in April.

($1 = 0.7765 pounds)

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5G Smartphone Sales Hit the Headlines in China in Q2 2020 With Huawei Topping the Chart

image for Representation
(Reuters)

image for Representation
(Reuters)

While smartphone sales increased 9 percent quarter on quarter indicating some signs of recovery, overall sales in China declined 17 per cent year-over-year in Q2 2020.

  • IANS
  • Last Updated: July 27, 2020, 1:05 PM IST

One-third of the total smartphone sales in China were 5G devices during the June quarter as Chinese operators, as well as original equipment manufacturers (OEMs), actively pushed 5G smartphones via lowering prices along with attractive 5G plans, according to a new report. Overall smartphone sales in China declined 17 per cent year-over-year in Q2 2020.

However, the sales increased 9 per cent quarter on quarter indicating some signs of recovery. Covid-19 has been mostly contained in China but the demand for smartphones is yet to recover to pre-COVID levels, said the report by Counterpoint Research.

“Despite a slowdown in the smartphone market in China, Chinese OEMs have picked up the pace in 5G developments that were hampered by Covid-19 disruptions in Q1 2020,” Ethan Qi, Senior Analyst, Counterpoint, said in a statement. In Q2, 33 per cent of smartphones sold were 5G enabled compared to just 16 per cent in Q1. “The proportion was even higher in June, where more than 40 per cent of smartphones sold were 5G capable,” Qi added.

China’s 5G smartphone market is quite consolidated with HOVX (Huawei, OPPO, Vivo and Xiaomi) grabbing 96 per cent of the market. Huawei dominated 5G smartphone sales, accounting for 60 per cent of the market. High-end 5G smartphones are predominantly from Huawei, while Oppo, Xiaomi, and Vivo all have various offerings in the mid-tier.


Categories
Tech

E-commerce Sector in India Posts 90% Recovery as Sales Volumes Return to Pre-Lockdown Levels: Report

Sales volume in the e-commerce sector in India has recovered by over 90 per cent as compared to its pre-lockdown level, said a report on Monday. The sector is predicted to fully recover and achieve the pre-lockdown order volume by the end of this month, according to the consumer trend analysis by Unicommerce, one of India‘s leading e-commerce focused supply chain SaaS (software-as-a-service) platform.

“The e-commerce sector continues to lead the growth for the overall economy of India. The increasing change in consumer behaviour to prefer online shopping has come as a great surprise and relief for online sellers and marketplaces,” Kapil Makhija, CEO, Unicommerce said in a statement. “With the current pace and recovery rate, we are positive that the sector will fully recover in the next couple of weeks.”

Analysing the overall category growth, consumer electronic appliances category, excluding smartphones, have witnessed the strongest growth than any other category. The sector has not just recovered its pent up the volume but also shown great improvement with over 45 per cent growth in the overall order volume compared to pre-lockdown levels, said the report. However, the average cart size has decreased by around 5-10 per cent, as people are ordering more low value required to operate from home.

As most of the organisation continue to work from home, there has been a significant surge in demand for products that will help professionals operate easily from homes such as USB cables, extension cords, trimmers and wifi routers to name a few. On the other hand, the online fashion sector has seen an overall 70 per cent recovery rate compared to pre-lockdown levels. However, the average cart size has decreased by around 25 per cent. This signifies that the demand for high-value products is significantly less as compared to affordable products.

The popular products in the category are nightwears and comfortable home-wear that have seen the maximum traction. In fact, few sub-categories in fashion such as kids apparels have witnessed over 100 per cent growth already in the last 15 days compared to the pre-lockdown levels, said the report.


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Categories
Tech

Online Sales of Smartphones in India to Clock The Highest Ever Numbers This Year

Online channels are likely to account for a highest-ever 45 per cent share of smartphone sales in 2020 owing to the Covid-19 situation as people would prefer to buy devices online to maintain social distancing, a new report has said. Among the online channels, Flipkart is likely to hold top position while Amazon will grow the fastest.

“Xiaomi is likely to lead the online brand rankings while Realme will be the fastest-growing brand in the online space in 2020,” according to the latest report from Counterpoint Research. In Q1 2020, Flipkart led the overall online market with a 50 per cent share but its shipments declined 7 per cent (YoY). However, Amazon grew in Q1 2020 with a 3 per cent (YoY) growth.

“The Covid-19 crisis had little impact in the March-ending quarter. However, during the lockdown, the market has come to an almost complete standstill, massively impacting all aspects of the smartphone market including both online and offline channels,” said Prachir Singh, Senior Research Analyst. While all sales volume is set to decline, sales through online channels will only decline by 5 per cent while sales through offline channels are expected to decline by 19 per cent.

“This means the share of sales through online channels will reach around 45 per cent of total volume this year,” Singh informed. In Q1 2020, Xiaomi remained the market leader in online channels with 48 per cent share, followed by Realme with 18 per cent share. Realme regained its top position on Flipkart. Among the top 10 online brands, Realme grew the fastest compared to the previous quarter.

However, the brand is also expanding in offline channels. It registered 269 per cent (YoY) growth in the offline channel shipments, said the report. “Online channels remained strong during Q1 2020 due to multiple sales promotions on both Flipkart and Amazon. In terms of the price band, more than 60 per cent of the smartphone shipments on Flipkart were below Rs 10,000 while 80 per cent of the smartphones sold on Amazon were above Rs 10,000,” informed Shilpi Jain, Research Analyst.

Smartphone brands are hurriedly evolving their business models and updating channel strategies to cope with the new reality. “We have already seen multiple brands adopting an online to offline (O2O) model and hyperlocal delivery to help their offline channel partners,” said Singh. Xiaomi has launched Mi Commerce, Vivo has launched Vivo Smart Retail (VSR) and Samsung has partnered with payments startup Benow to help its offline retailers.


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