Weekly Reads - July 4, 2022
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With market sentiment on Meta’s metaverse ambitions lukewarm at best it’s interesting to see Meta dominate VR headset market share. While it’s difficult to foresee what the metaverse will look like in the future it is striking to see Meta currently hold 50% VR market share on Steam (largest PC marketplace for games) in a market with heavyweights like Valve (parent company of Steam) and PlayStation. With Meta’s codenamed Project Cambria expected to release later this year it is worth monitoring to see if the company can further increase their market share and help boost market sentiment on their metaverse ambitions.
The TikTok takeover has hit a snag with the company dropping plans to expand its live ecommerce venture to the U.S with its recent U.K launching generating very little success. TikTok saw great success in China with its live ecommerce feature which centered around a QVC-styled environment in which influencers would push products to users via live stream. TikTok launched this feature outside of China for the first time in the U.K where the feature saw very little traction. This failed expansion shows how certain features do not translate outside certain regions or require time and resources to gain widespread traction. While TikTok is ending its U.S ambitions for now its doubling down on expanding this feature to other Asian markets where the feature is more likely to be successful early on.
With the slowdown of COVID and the end of travel restrictions, travel stocks were primed to be the big market winners as consumers were expected to rebalance their budgets in favor of travel after many months of lockups. This enthusiasm has dried up with rising oil prices and inflation eating at consumer wallets forcing many to forgo travel plans in the near future. While travel trends are expected to continue passing COVID levels, the pent-up demand theory many experts were predicting post COVID is becoming less likely over time. While many travel stocks already faced operating crisis during COVID, further negative trends in travel could prove impossible for some of these companies to overcome.