Hey folks!

Hot phones and laptops are an everyday thing. We’re talking about devices overheating when used for long hours. And with our lives revolving around these gadgets now, we wish somebody came up with a solution to this problem. Well, the good news is that the solution is here. And it’s a diamond.

Okay, before you think we aren’t making any sense, let’s break it down. Diamond is known to be the best conductor of heat.. So engineers at chip companies are actually experimenting with slices of lab grown diamonds. Basically, they’ll wipe a chip clean of its inactive silicon layers and bond what’s left of it to a single crystal of diamond to absorb heat. Using this, Diamond Foundry, a producer of lab grown diamonds has even managed to triple the speed of one of Nvidia’s most powerful chips without overheating a device.

Does that mean we’ll be bigger couch potatoes now? Well, we don't know if there are engineers who can answer that!

Here’s a soundtrack to put you in the mood 🎵

Jeete Hain Chal by Kavitha Seth

Thanks for the rec Sara Chawla!

A couple of things caught our eye this week 👀

Sephora shakes hands with Reliance

Reliance just spent ₹99 crores on buying the rights to Sephora India. And looks like the Louis Vuitton brand has finally found the right partner to make it big in India’s beauty market.

You see, Sephora is a popular beauty brand globally. And it’s been in India for a decade now. Despite that, it hasn’t been able to replicate its global success here. The reason?

Well, Sephora entered Indian markets only a few months after the government allowed a 51% foreign direct investment in multi-brand retail or companies selling multiple brands. The year was 2012. And if it doesn’t ring a bell, it’s the same year Nykaa took off too. Now, Sephora took its own sweet time to make a mark. Back then, people bought beauty products off physical stores. So Sephora chose to set up stores inside popular city malls. But Nykaa was way ahead of its time. It simply chose to create the country’s first beauty e-marketplace and changed how people shopped for beauty products.

So, while Nykaa was experimenting and getting better at what it was doing, Sephora was still switching brand partners. It started off with Genesis Luxury Fashions, jumped to DLF Brands and finally settled for Arvind Fashions in 2015. Although late to the party, that’s also when it made its online debut via Arvind’s Sephora NNNOW website. And let's just say that it wasn’t a big hit.

But the setback didn’t deter it from aspiring to increase its offline presence. In 2018, it aimed to have 50 stores over the next 3-4 years. That brings us to now. So how many stores does it have? A mere 26. But shift the spotlight to Nykaa, and you’ll see that it actually became synonymous with beauty, besides having 145 physical stores of its own.

So why didn’t Sephora India click? People were actually spoilt for choice with Nykaa and other mushrooming apps. They offered a wide range of products and deals, something Arvind’s Sephora NNNOW couldn’t match up to.

And both Arvind and Sephora seem to realise now that theirs isn’t a great partnership. Arvind Fashions divested its entire beauty business to Reliance, who has already started building its beauty and personal care (BPC) empire with its personal brand Tira. The BPC market is worth $17 billion as of now and is pegged to grow at 11% every year. That’s a lot of room for growth. And with Reliance's customer network, growth isn’t anything to worry about. So maybe it’s Sephora’s time to shine?

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Why is Coca-Cola selling its bottling units?

India is Coca-Cola’s 5th largest market globally. In FY23 its profits in India jumped 57%! But the beverage giant has a trick up its sleeve to add more fizz to its margins parting with bottling units.

How will that help, you ask?

Well, to understand that you’ll need to know more about Coca-Cola’s global business model. See, Coca-Cola makes a bulk of its revenues through 2 major businesses ― selling concentrates and syrups to its bottling partners and then selling finished products. And it doesn’t own most of its bottling partners. Instead, it runs on a franchise model.

But soon, Coca-Cola realised that some of its small bottling franchisees were struggling to scale operations. Even when it set foot in India and became popular in the late 90s, no one really had the financial might to invest in a Coca-Cola franchise. The reason was simple. The bottling business is capital-intensive. You need huge factories, heavy machinery, human hands and a lot of money to maintain all of it. So, it developed something called The Coca-Cola System.

It simply consolidated all the bottling operations the company owned and formed the Bottling Investments Group (BIG). The subsidiary would simply identify struggling franchisees and help them scale. Coca-Cola would handhold them financially and help them scale until they’re ready to take off on their own. Then it slowly sells off a majority of its stake to convert them into independent bottling partners. It’s called refranchising. And Coca-Cola actually aspires to become the world’s smallest bottler through it.

It’s a win-win for both. Coca-Cola controls its bottlers through a small stake, concentrates on introducing better products and building marketing strategies. While bottling partners make money independently. As of now Coca-Cola has refranchised its operations in major markets including the US, Canada, China, Guatemala and Uruguay. This initially increased costs, but ultimately improved margins.

And that’s exactly why it’s now trying to use this global strategy in India too. What impact it’ll create on Coca-Cola’s Indian profits, is something we’ll have to wait and see.

Jargon of the day ✏️

Money tips 💰

The guilt of buying things

Buying my first big budget phone wasn’t a great feeling. I’d just started working and shelling out ₹35,000 on a phone was a big deal. 4 years later, I still use the same device since it works like a charm. But all I remember feeling when I bought it then was guilt.

Oftentimes this is how we feel before making big purchases. We just end up feeling guilty about the whole thing even if the purchase makes us happy.

And there’s actually a psychological term for this. It’s called buyer’s remorse. A phone might just be a small example. But think about how you’d feel when you buy a car, home or even a big insurance policy. The mind often ignores the fact that the big money going out is for a necessity or a long term purchase.

So how do you deal with this feeling?

You could change the way you look at it. See, you spend a lot of money socialising and buying things you sometimes even don’t need. Do you feel guilty then? Even if you do, it might be just momentary. But the guilt of a bigger purchase stays longer. So you’ll need to imagine how this new purchase can change your life. A car could help you take your family around town, a home is actually an appreciating asset and insurance is protection in times of distress. Even when you get a lower net pay, you know a part of it is going to fund your retirement.

Fundamentally, it’s all about perspective and it’s all in the head. So when buyer’s remorse hits you, just look at your life through a kaleidoscope.

Readers Recommend 🗒️

Attitude Is Everything by Jeff Keller

This week we have a book recommendation by our reader Arshita Chopra. It’s based on the author’s experience as a motivational speaker. Arshita says,

“It’s like a friend who shares stories of everyday people achieving extraordinary things. Imagine meeting someone like J.K. Rowling, who faced rejection but kept a positive attitude, leading to the creation of Harry Potter. Or consider Thomas Edison, the inventor of the light bulb who faced numerous failures and setbacks while working on his invention. However, he maintained an unwavering positive attitude, famously saying ― I have not failed. I've just found 10,000 ways that won't work. This book unveils the power of optimism in everyday life. It's your tool to overcome obstacles, just as ordinary folks like you have, to accomplish remarkable feats.”

Thanks for this Arshita!

Finshots Weekly Quiz 🧩

It’s time to announce the winner of our previous Weekly Quiz. And the winner is…🥁

Anish Nair! Congratulations. Keep an eye on your inbox and we’ll get in touch with you soon to send over your Finshots merch.

And for the rest of you, we’ve moved the weekly quiz to our weekly wrapup. So make sure you answer all the questions correctly and tune in here next week to check if you got lucky.

Until then, don’t forget to tell us what you thought of today’s newsletter. And send us your book, music, business movies, documentaries or podcast recommendations. We’ll feature them in the newsletter! Just hit reply to this email (or if you’re reading this on the web, drop us a message: morning@finshots.in).

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