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- [00:00]
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At the moment, AI can help you search for business advice, but it can't step in to help if things take a bad turn. But how about quickly finding an AI expert who can? Siemens Xcelerator Ecosystem helps you connect with top industrial AI providers and find innovative solutions from a single trusted source. That's AI for real. From the global market leader in industrial AI, Siemens. Learn more on USA.Siemens.com AI.
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Welcome to Tech News Briefing. It's Tuesday, August 26th. I'm Julie Chang for the Wall Street Journal. Some dating apps have lost their charm, but one that everyone still wants to join. We'll tell you about Raya, the privately held company that has attracted an A list clientele. Then has Amazon finally cracked the code for the online grocery business? We'll tell you what it's doing and what it's up against. But first, singles are sick of dating apps. The companies behind them are reporting declines in revenue and paying subscribers. But not Raya. Raya, which is privately held, says its revenue has grown at least 50% each year over the past five years. And you can't just sign up in order to pay its almost $25 monthly subscription, you first have to apply and get approved. Lane Florsheim is a reporter at the Journal's Style News desk. She spoke to its founder and some of its users. Lane how is Raya different from other dating apps?
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Raya is a little bit different from other dating apps in that you can't just download the app and log in and make a profile. Everyone who wants to be on the app has to apply to it. And right now the app's membership is in the low six figures and there is a waiting list of 2.5 million people.
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So why set it up like this?
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The founder of Raya, Daniel Gendelman, started the app 10 years ago and in his mind, by limiting the number of people who are on the app, you can create a quote unquote trusted community that's safe and where people are treating each other with respect, etc. He says that the question that every potential investor has asked him is why do you not let more people in? And also, can't an algorithm help you with the selection process? Because right now he has a team of 15 employees looking at every single application and five of them are dedicated solely through going through the wait lists. And also Raya does have a reputation for attracting a certain user base which is a lot of like art directors and DJs and multi hyphenates. And you know, it's also become known as the quote unquote like celebrity dating app. And so there's both this trusted community aspect but then it also is this pretty specific subset with a lot of more creative types.
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Yeah. Can you tell us about someone who used Raya and their experience with it?
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I interviewed the supermodel Paulina Puraskova who did didn't have the best experience on Raya. She downloaded it in 2020 along with a bunch of other apps and she saw very few people on the app and she joked that all she was seeing were Icelandic DJs because the app will show you every day people who aren't in your city. The idea is that the company says that 25% of members are traveling every day and that it's a global community. And she ended up taking a break from it, opened it up after a year long break, saw two profiles honed in on one and that ended up being her fiance who's a TV writer.
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What does this tell us about the landscape of dating apps?
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One of the things that was interesting in reporting this story is that it seems that other dating apps founders, whereas the idea used to be having the biggest pool possible was best, are starting to recognize the benefits of a model like Raya's. On a call with investors earlier this year, Whitney Wolf Hurd, who's the CEO of Bumble, said that just adding more profiles does not guarantee better matches. In fact, it can lead to the opposite, like more mismatches, more fake or low quality profiles, and a frustrating experience.
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That was WSJ reporter Lane Florsheim. Coming up, the online grocery wars are heating up, but Amazon's latest moves may not be enough to increase its market share. We'll explain after the break.
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At the moment, AI can help you search for business advice, but it can't step in to help if things take a bad turn. But how about quickly finding an AI expert who can? Siemens Xcelerator Ecosystem helps you connect with top industrial AI providers and find innovative solutions from a single trusted source. That's AI for real from the global market leader in industrial AI, Siemens. Learn more on USA.Siemens.com AI.
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Amazon wants to be your Go to Grocery store recently, the e commerce giant announced same day delivery for fresh groceries in a thousand US Cities, with plans to more than double that number by the end of the year. How worried should competitors be? The WSJ's Liz Young spoke with Hurt on the street columnist Dan Gallagher about this, who said Amazon's big bet on groceries isn't a knockout blow to rivals.
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Dan, walk us through Amazon's latest investment in online grocery delivery.
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It's a pretty significant expansion of what they've been trying to do for years. They've been working in groceries for years, they bought Whole foods. They've done other efforts to kind of get some share in this business. And what they did, the most recent move was they lowered the price threshold. If you're a prime member, you can now get access to these perishable goods groceries that Amazon has added for free shipping threshold of around $25. And that price threshold used to be a lot higher, so it lowers the price threshold and they've overlaid essentially a lot of perishable grocery stuff into their same day network. So they're not just having runners come from like a Whole Foods Market to bring you a gallon of milk. They have this embedded in their delivery infrastructure that's very, very efficient. And so it allows them to charge very competitive price, these types of goods. So it's very aggressive expansion. It contrasts with like, you know, if you're using third party platforms like Instacart or DoorDash, you're paying shipping, you're tipping the driver. It tends to be a more expensive offering from those places. So Amazon at this point looks like they could be like very price competitive with the things they're going to sell in this offering.
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Why is Amazon interested in expanding into grocery in the first place?
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Amazon is a huge company now. Over 680 billion a year in revenue. We're getting to that. Walmart's actually the only company in the world that makes more in annual revenue than Amazon. So it's a huge company. They always have to find new areas of growth. And groceries are still a very massive market of consumer spending that they have only barely cracked. So there's a lot of upside for them if they can figure this out. So there's potentially a lot of growth for them for a company that's already very, very, very large.
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What is Amazon's market share of grocery today and how big is the overall US Grocery market?
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The estimates I've seen from third party companies who estimate this are low single digits for Amazon. If you add in, you know, Amazon has these fresh stores, you add that in with Whole Foods still very small share, whereas Walmart is something like 30% of the US grocery market. So Amazon has a lot of room to come up here, but they also have to challenge very established consumer habits.
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Amazon, as we all know, has come to dominate retail in the US in so many different ways. But to your point and what you're saying is its grocery operation has lagged behind. Why has Amazon struggled so much to compete in that specific space with the likes of Walmart, Kroger, some of those other big players?
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You have to have a different structure, especially if you're into the area of groceries. It's called perishable goods. Think meat, milk, vegetables. Think things that are going to go bad if they're not in a refrigerator certain period of time. Unlike books, stereos, like clothes, all the stuff we typically buy on Amazon that can sit in a warehouse forever until somebody grabs it. You have to have, you have to have these fresh things chilled, refrigerated, but also close enough to the consumer to get them out there. You know, if you order something and it comes same day, it has to be actually fairly close to you already. So Amazon had to build essentially an infrastructure within its infrastructure to service this. Because simply owning places like Whole Foods, these Amazon Fresh stores, they've grown, but they're only in certain markets so they can't really get an aggressive national expansion on that. So if they were going to make a dent in groceries, it had to come on the backs of this very big fulfillment network they already have.
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How will Amazon's latest expansion position it against some of those larger rivals in the grocery space?
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Ill challenge to be sure for all of them. They're certainly aware competing with Amazon is not for the faint of heart, but all of them have some of their own competitive advantages which is going to make it so that it's not a done deal. And Amazon's gonna take a bunch of share from them. We're gonna have to see how it plays out. Walmart, of course has a huge network of existing stores already. This big share companies like Instacart and DoorDash, when you go on their sites, you're actually shopping the entire inventory of a bunch of grocery stores in your area. Amazon, you're getting like a selection of goods that they have ready for you in their center. So the selection's not gonna be as vast. Now with those other third party platforms, you're going to pay more, but you're also going to get it faster probably, and you'll have a better selection. So they'll probably have that as an advantage to help them. But Amazon, of course, this is a starting point for them.
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What do you see as the areas that Amazon still needs to invest in to be able to better compete?
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They're going to expand in groceries. They're going to have to keep investing into this infrastructure, expand the space in their warehouses that they can put in more perishable goods and basically get a bigger selection available to people to get. And of course, the trick is that kind of investment is going to come while they're putting in a whole bunch of money into AI in other parts of the business. So Amazon's spending a lot of money already, but their investments into grocery are not going to be over by any means.
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That was the WSJ's Liz Young speaking with Heard on the street columnist Dan Gallagher. And that's it for Tech News Briefing. Today's show was produced by me, Julie Chang with supervising producer Melanie Roy. We'll be back later this morning with TNB Tech Minute. Thanks for listening.
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At the moment, AI can help you search for business advice, but it can't step in to help if things take a bad turn. But how about quickly finding an AI expert who can? Siemens Accelerator Ecosystem helps you connect with top industrial AI providers and find innovative solutions from a single trusted source. That's AI for real, from the global market leader in industrial AI, Siemens. Learn more on USA.siemens.com AI.