Weekly Market Expectation
Week Starting: Monday, August 10, 2020
The TikTok Saga: Trump signs orders banning US business with TikTok owner ByteDance while Instagram launches Reels, their TikTok rival
On August 6th, President Donald Trump signed an executive order banning transactions with ByteDance who is the parent company of popular app TikTok.
- Trump’s executive order on ByteDance said that “the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China…continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.”
- Microsoft announced over the weekend that it is in negotiations to buy TikTok’s services in the U.S., Canada, Australia, and New Zealand, from ByteDance, naming September 15 as a deadline for negotiations.
- For Microsoft, who has been successful focusing on business customers rather than individual customers, this potential TikTok acquisition would be new yet exciting territory for them.
- With TikTok’s uncertain future, Instagram launched Reels in more than 50 countries on August 5th, including the US, UK, Japan, and Australia, on both iOS and Android, in hopes to lure creators away from TikTok.
- Reels allows people to record videos up to 15 seconds long and add popular music, as well as an array of filters and effects, over top of them.
- Reels’ biggest difference from TikTok is its tie-ins to the overarching Instagram ecosystem. People can send Reels to their friends directly on Instagram and they can use Instagram-specific AR filters and tools — everything that people want to do is part of an existing network.
- The Bottom Line: The decision is ultimately President Trump’s to make, however the acquisition of TikTok would be smart for Microsoft to pull off while ByteDance risks Instagram coming in as a direct competitor especially in the US.
Impact on Small to Midsized Businesses
Given the unclear nature of the future of TikTok, there has arisen an opportunity for innovative Small to Mid sized technology companies to enter the video-sharing industry and social networking space and potentially cause a disruption. From a marketing and advertising standpoint, TikTok has provided many small business owners opportunities with free marketing, promotion, and engagement just from the nature of their algorithm. If President Trump decides to ban TikTok from the US, many small business owners would be forced to find alternative ways to promote their brands and businesses, leading to increased spend on marketing. The introduction of profit seeking players like Facebook and Microsoft also threaten the free/cheap advertising model that so many businesses have enjoyed.
Sources: TechCrunch, Verge, WSJ
TemperPack Bags $31M Series C For Sustainable Thermal Packaging
(Market trend towards sustainable safe packaging for foods and medicines) 
- TemperPack is a packaging technology platform that ship perishable food and temperature-sensitive medicine. Founded in 2015, the Richmond, Virginia-based company raised $31.3 million in Series C financing led by Wheatsheaf Group.
- The new funding will enable TemperPack to buy more equipment to boost manufacturing of ClimaCell, which in turn will increase market share in the food and life sciences markets and position the company for future growth in new regions and applications.
- Company also plans on expanding into Europe and building facilities there.
- In a sustainable way, TemperPack has found a way to ship perishable food and temperature-sensitive medicine.
- Its flagship product is the patented ClimaCell thermal liners that provide similar levels of thermal protection as expanded polystyrene foam (EPS)–what we know as Styrofoam®. Unlike EPS, ClimaCell, is plant-based, 100 percent curbside recyclable, and reduces carbon emissions
- The Bottom Line: Due to COVID, there is a shift in direct-to-consumer, where things like food and medicine are being delivered online and this is an area where TemperPack is focused on. People are also getting more discerning to do business with those who are more transparent about how they make products and are willing to invest in a brand that is familiar. TemperPack wants to be thought as a market leader in sustainability and eliminating plastic waste.
Impact on Small to Midsized Businesses
With the rise of sustainable thermal packaging, companies currently in the packaging industry will need to be cautious from repercussions from this shift in consumer preferences. The patented ClimaCell from TermperPack is plant-based, 100% curbside recyclable and reduces carbon emissions. Furthermore, businesses that are currently using expanded polystyrene foam (EPS) may be inclined to shift towards alternatives such as ClimaCell as they are better suited to address social and environmental corporate responsibilities.
Source: Crunchbase