Insyte Weekly: Checkers' plans to compete with Takealot & Amazon, The Booming Global Tourism Industry, The Future of Gaming and More

This was an interesting week in the business world. Sustainable fashion, the tourism industry’s recovery, and the future of gaming are just a few stories that took centre stage this week. Here’s a breakdown of some of the week’s top stories.

Media & Entertainment

Crystal Koe reported Spotify is facing a lawsuit in the United States federal court over allegations of underpaying royalties to songwriters and publishers. The lawsuit, filed by the Mechanical Licensing Collective (MLC), centres on Spotify's decision to classify its Premium Individual, Duo, and Family subscription plans as "bundles" due to the inclusion of audiobook access. This reclassification, according to MLC, has led to a nearly 50% reduction in royalty payments to musicians and publishers. The lawsuit argues that Spotify's move to categorize its service differently without changing the actual Premium plan has resulted in underpayment of royalties. Spotify, on the other hand, maintains that the lawsuit concerns terms agreed upon in the Phono IV agreement and that bundles were a critical component of that settlement. They emphasize that they paid a record amount to publishers and societies in 2023 and expect to pay even more in 2024, expressing readiness for a swift resolution of the matter.

In gaming news, Eddie Makuch revealed insights from Gamingspot’s annual Inside Gaming report. The report revealed that while many play games to unwind and relieve stress, 46% of respondents also value games for their capacity for creation, imagination, and self-expression. This trend has seen a 10% increase from the previous year, indicating a growing interest. Players are particularly drawn to in-game customization features such as character personalization, Gamertags, communication options, signatures, and emotions, reflecting their desire to express themselves uniquely within gaming environments. Furthermore, gaming communities are viewed as essential safe spaces for self-expression by 60% of respondents, with titles like Fortnite, Minecraft, and Roblox cited for offering extensive options for personalizing characters.

Kenny Fong shed some light on the future of gaming based on lessons from the BEYOND summit. During the summit, experts focused on the impact of AI on gaming. Mario Ho, chairman of NIP Group, and David Lee, CEO of NEX, discussed AI's revolutionary potential in gaming. Lee introduced NEX playground, featuring an AI chip for motion tracking, which he believes can enhance multiplayer family games without multiple controllers. Ho highlighted Apple's Vision Pro VR headset as an example of AI's transformative power. They foresee AI-generated NPCs adding complexity to games, VR and motion control reshaping esports, and AI enhancing e-sports analytics and player training. Lee emphasized AI's role in broadening gaming's audience across age groups and households.

Fashion

An article by Rich Johnson highlighted how the fashion industry, responsible for up to 4% of global climate emissions and significant water pollution, is seeing innovative solutions to reduce its environmental impact. Traditional materials like cotton and leather are harmful due to pesticide use, forced labour, deforestation, and high carbon emissions, while synthetic alternatives contribute to microplastic pollution. The article mentions two companies, Inversa and TomTex, which are creating eco-friendly fabrics from unconventional sources. Inversa uses invasive species like lionfish and Burmese pythons to produce leather, helping to restore ecosystems. TomTex constructs biodegradable textiles from seashells and mushrooms, eliminating toxic processes and petrochemicals.

Restaurant

Famous Brands, known for franchises like Steers, Debonairs, and Wimpy, faced a decline in profits due to various challenges affecting South African consumers, such as political uncertainty, water shortages, and increased costs as cited by Luke Fraser. While the group's revenue grew by 8%, operating profit decreased by 7% primarily due to a previous liquidation dividend. The group's key brands performed well, but overall performance was below expectations due to lower consumer spending. The outlook includes plans to expand Leading Brands, invest in technology and delivery capabilities, divest from non-core assets, and optimize logistics and manufacturing operations over the coming years.

Tourism

In 2023, international tourist arrivals reached 89% of 2019 levels, with export revenues from tourism at 96% and direct tourism GDP matching 2019 levels according to United Nations Tourism. The UN Tourism's 2024 projection predicts a full recovery, with arrivals growing 2% above 2019 levels. The Middle East saw the highest growth, exceeding pre-pandemic levels by 36% in Q1 2024, while Europe surpassed pre-pandemic numbers for the first time by 1%. Africa recorded a 5% increase in arrivals compared to Q1 2019, and the Americas reached 99% of pre-pandemic levels. Asia and the Pacific experienced a rapid recovery, reaching 82% of pre-pandemic levels in Q1 2024.

Travel Weekly shared some valuable insights pertaining to Africa’s Travel Indaba 2024, themed "Unlimited Africa," which took place from May 14th to 16th. The event, held in Durban, significantly boosted the local economy with a direct impact of R226 million and an overall contribution exceeding R500 million, creating over 1,000 jobs. Nombulelo Guliwe, CEO of South African Tourism, highlighted a 9% increase in African country participation, reflecting robust tourism sector growth. The event also supported 120 SMMEs, showcasing their products to international buyers, and involved local students and chefs, emphasizing sustainable local economic benefits.

Christiano Volpi reported that Kenya's tourism sector experienced a significant 31% revenue increase, reaching Ksh352.5 billion, driven primarily by an influx of African visitors from Uganda and Tanzania, while the United States remains the primary overseas market. Notable growth was also seen from emerging markets like China, Italy, South Korea, and Australia, highlighting the sector's diversification and resilience. However, average spending per tourist decreased due to currency fluctuations.

Despite Kenya’s record growth, Samuel Mwanawanjuguna highlighted there are some concerns about the country’s tourism infrastructure. Citing a recent World Economic Forum report, Samuel reports Kenya has been ranked as the second worst country in Africa for tourism services and infrastructure. Kenya scored a low 1.25 out of 7, trailing behind Rwanda and Tanzania, with Botswana leading the continent. While Kenya's ground and port infrastructure and air transport infrastructure are among Africa's top ten, broader structural issues, such as inefficiencies at the Jomo Kenyatta International Airport (JKIA), have negatively impacted the score. Kenya's cultural and non-leisure resources also scored poorly, but its natural resources and sustainability metrics performed better, with high scores in environmental sustainability and the socioeconomic impact of travel and tourism. Despite these mixed results, Kenya's overall mean score has slightly improved, indicating a modest gain in the global ranking. The report underscores the potential of Kenya's tourism sector for socioeconomic growth but highlights the need for policymakers to address significant challenges, including business environment improvements, health and safety conditions, and ICT infrastructure advancements.

Retail

Katie Searles shared some insights from the latest ConsumerX report. Surveying over 7,200 shoppers across 14 countries, the report found that social commerce, used by 27.2% of respondents, and live shopping, at 25.8%, are the most popular technologies. Virtual shopping assistants and augmented reality were less utilized, with 16.1% and 15.2% usage respectively, while voice shopping and metaverse shopping had even lower adoption rates. Despite the interest in these technologies, 45.2% of respondents did not use any in the past year. Looking ahead, 32% of shoppers are interested in augmented reality features, followed by 28.6% in virtual shopping assistants, and 27.5% in live shopping. However, social commerce interest is expected to decline slightly, with only 25.1% anticipating its future use. Among social media platforms, Instagram and Facebook are the most popular for purchases, while Snapchat and Pinterest lag behind. Overall, while shoppers have varying expectations for future technologies, a significant portion remains sceptical about their widespread adoption in the near term.

Cate Lawrence reported Lithuanian retailtech startup Pixevia has secured €1.5 million in new funding to fuel its expansion. Pixevia offers a unique technology platform that provides real-time receipts in AI-driven stores, applicable to various retail formats. Since launching Europe's first AI-powered store in 2019, Pixevia has partnered with the Lithuanian supermarket chain IKI, resulting in the creation of five autonomous stores and a total of 16 stores globally. The recent funding round, led by Coinvest Capital with contributions from Iron Wolf Capital, Omni Commerce Ventures, and others, will support Pixevia's expansion into new markets, including the U.S. and Europe, targeting venues like sports arenas and airports.

Biz News revealed South Africa’s Shoprite is expanding its Checkers on-demand delivery service to include general merchandise, such as small appliances, on its grocery app. The updated app will offer over 10,000 larger products with same-day delivery within a 60-minute window. This move aims to capture a larger share of the e-commerce market, challenging Takealot and Amazon. The new version of the app, currently in beta in Cape Town, will roll out nationwide.

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