Speaker 1: This is what the flux.
Speaker 2: I'm justin and I'm harsh Deep and it's Friday, the
Speaker 2: fourteenth of June.
Speaker 1: Ag The unemployment rate for May was down ever so
Speaker 1: slightly on April, from four point one percent to four percent.
Speaker 1: The good news is it this minor change is unlikely
Speaker 1: to drive the RBA to lift interest rate.
Speaker 2: Good news indeed.
Speaker 1: But the bad news is it this minor change is
Speaker 1: also unlikely to drive the RBA to drop interest rates.
Speaker 2: Flux fam, we're coming up to the end of the
Speaker 2: financial year and that means starting to think about all
Speaker 2: the last minute ways to reduce your tax. In the
Speaker 2: Flux app, we've listed a whole range of ways to
Speaker 2: reduce your tax before June thirty, so make sure to
Speaker 2: check it out.
Speaker 1: Really nifty ones in their HD absolutely three savvy stories today,
Speaker 1: let's get into it for our first. Chemist Warehouse is
Speaker 1: eight point eight billion dollar IPO listing has hit a
Speaker 1: roadblock after the ahribl C has worned that its merger
Speaker 1: would substantially lessen competition.
Speaker 2: Surely this merger is too big to fail. Tell me everything.
Speaker 1: It's fair to say that pretty much everyone in Australia
Speaker 1: would know the Chemist ware house brand by now.
Speaker 2: Those big yellow stores that give more Bunnings Warehouse than
Speaker 2: local pharmacy vibes.
Speaker 1: They even have their own radio station, Chemists Warehouse Remix.
Speaker 2: You know you've made it when you've got your own
Speaker 2: radio station and a share.
Speaker 1: Over the past twenty years, chemist Warehouse has grown into
Speaker 1: an absolute manine.
Speaker 2: We're talking over five hundred stores and over twenty thousand
Speaker 2: employees across Australia, New Zealand and even China.
Speaker 1: Now, in December last year, Chemist's Warehouse announced it would
Speaker 1: merge with Sigma Healthcare through an eight point eight billion
Speaker 1: dollar reverse takeover.
Speaker 2: Sigma is a wholesaler in the pharmacy space who supplies
Speaker 2: drugs to small and large pharmacies.
Speaker 1: But it's also the owner of Amcal pharmacies and discount
Speaker 1: drug stores so Jazz.
Speaker 2: Obviously, this massive eight point eight billion dollar merger caught
Speaker 2: the eye of the A Triple C and.
Speaker 1: The A Triple C the big dog has now warned
Speaker 1: that this merger would substantially lessen the competition in the
Speaker 1: pharmacy retailing space.
Speaker 2: With both the wholesale and retail arms, the merged group
Speaker 2: would extend its vertical integration.
Speaker 1: And its influence across the country.
Speaker 2: So tell me Judz, what's the key learning here.
Speaker 1: The greater the vertical integration, the greater the chance of
Speaker 1: being anti competitive.
Speaker 2: As well. Vertical integration can help streamline operations, it can
Speaker 2: also help increase market control.
Speaker 1: And this can raise big red flags with regulators.
Speaker 2: Vertical integration is when a company expands its operations into
Speaker 2: other areas that serve its main business.
Speaker 1: It's kind of like a bakery deciding to grow its
Speaker 1: own wheat as well as selling its delicious cheese mites,
Speaker 1: scrolls and cinnamon buns and jazz.
Speaker 2: Sigma's move to merge with Chemist Warehouse is a textbook
Speaker 2: example of vertical integration.
Speaker 1: So actually, given more than seventy percent of chemist warehouses
Speaker 1: revenue comes from front of house items like sunscreen and
Speaker 1: toothbrushes and perfumes, Chemist Warehouse is actually arguing that it
Speaker 1: competes more with coals and woolies, okay, rather than small pharmacies.
Speaker 2: We'll see what the competition watchdog thinks about that.
Speaker 1: For our second story, Apple is introducing buy now, pay
Speaker 1: later style loans to Australian customers through a new partnership
Speaker 1: with an Z.
Speaker 2: Just as we got the buying our pay later chat
Speaker 2: out of the media. It's back tell me more.
Speaker 1: Okay. So Apple launches Apple Pay feature in iPhones back
Speaker 1: in October twenty fourteen.
Speaker 2: That's where you can connect your card and then tap
Speaker 2: your phone to make a purchase.
Speaker 1: And the whole tap your phone leave you a lot
Speaker 1: at home movement has really taken off.
Speaker 2: Oh yeah, and A and Z was the first Australian
Speaker 2: bank to let its customers make card payments from iPhones
Speaker 2: in twenty sixteen.
Speaker 1: But now they're going one step further because A and
Speaker 1: Z has partnered with Apple to allow iPhone users to
Speaker 1: access buy now, pay later style loans via Apple Pay.
Speaker 2: Basically, when a customer taps their phone, it gives them
Speaker 2: the option to split the payment into three, six or
Speaker 2: twelve month installments, and.
Speaker 1: Then they pay a fee on that rather than interest.
Speaker 2: And Apple ane stopping with just A and Z. They're
Speaker 2: willing to open it up to after pay, Zip and
Speaker 2: others to grow its buy now pay later, but.
Speaker 1: ATCHI many of the other big banks like CommBank a
Speaker 1: pretty reluctant to be out with Apple for this.
Speaker 2: Yep. It allows Apple to grow its power in the
Speaker 2: financial services space.
Speaker 1: Even more so, tell me what is the keyler Keep.
Speaker 2: Your friends closed, but keep your enemies closer HG.
Speaker 1: Well hand Z is partnering with Apple today. It's also
Speaker 1: a direct competitor Apple if it decides to step deeper
Speaker 1: into the banking arena does.
Speaker 2: Apple often seems to buddy up with other companies when
Speaker 2: they lack specific capabilities.
Speaker 1: In this case, it's a banking license in Australia.
Speaker 2: Or back in twenty twelve, it was using Google Maps
Speaker 2: as a default map on iPhones before building their own maps.
Speaker 1: But AHG, once they develop their own solutions or have
Speaker 1: enough market chair, Apple starts to tighten their grip on
Speaker 1: that speciet market.
Speaker 2: Apple first partnered with banks on tap to Pay in
Speaker 2: twenty sixteen, and by twenty twenty two, transactions through smartphones
Speaker 2: in Australia hit ninety three billion dollars.
Speaker 1: And Apple's Tap to Pay represents an eighty percent share
Speaker 1: of Wow Digital Wall at payments.
Speaker 2: Now, Apple makes more than one hundred and thirty million
Speaker 2: dollars in annual fees in Australia from the banks using
Speaker 2: its software and AHG.
Speaker 1: This is part of the reason why CommBank has been
Speaker 1: so critical about Apple's growing power in payments and financial
Speaker 1: services in Australia.
Speaker 2: For our third and final story, Quantas has whole only
Speaker 2: acquired online travel business trip a Deal in a two
Speaker 2: hundred and eleven million dollar acquisition with the hopes to
Speaker 2: ramp up its loyalty points offering.
Speaker 1: Quanta's really been showing its loyalty program a lot of
Speaker 1: love this year, so tell me more. Well.
Speaker 2: Just Quantus, which is Australia's national airline carrier, is also
Speaker 2: the third oldest airline in the world.
Speaker 1: But it's fair to say it has been on a
Speaker 1: roller coast to geny lately yep.
Speaker 2: Since twenty twenty, Quantus has had mass layoffs, gigantic profit announcements,
Speaker 2: a concerning a triple C inquiry I ME, and a
Speaker 2: CEO change just to name a few.
Speaker 1: But after bringing in a new CEO, Quantus has been
Speaker 1: on a mission to rebuild its reputation.
Speaker 2: And now Quantus has announced that it will acquire the
Speaker 2: remaining forty nine percent stake in online travel business trip
Speaker 2: a Deal in a deal worth two hundred and eleven
Speaker 2: million dollars.
Speaker 1: And this is after Quantus had acquired a major stake
Speaker 1: in tripa Deal back in twenty twenty two. They've now
Speaker 1: come back for the whole business. Yep.
Speaker 2: Quantus expects this investment to bring in at least fifty
Speaker 2: million dollars annually.
Speaker 1: What Quantus is most excited about is leveraging Triper Deal
Speaker 1: to offer its customers more ways to cash in on
Speaker 1: their frequent fly points.
Speaker 2: So tell me, Jars, what's the key learning here.
Speaker 1: When a business officer loyalty program, it needs to manage
Speaker 1: the risk of its growing liability very carefully.
Speaker 2: You see, Quantitus customers have been earning their points at
Speaker 2: an increasing rate.
Speaker 1: We're talking about two hundred billion points accumulating annually.
Speaker 2: In fact, points issuance shot up by forty eight percent
Speaker 2: last financial year.
Speaker 1: But actually, these unused points aren't just an issue for customers.
Speaker 1: They're a liability on Quantus's balance sheet too.
Speaker 2: Yeah, unused frequent flyer points are a liability worth about
Speaker 2: thirteen point eight percent of Quantus' overall revenue.
Speaker 1: And that's why Quantus has been putting in efforts to
Speaker 1: find better ways for customers to use their frequent fly points.
Speaker 1: Flux Family. We are sixteen days away from the end
Speaker 1: of this financial year, and that means sixteen days to
Speaker 1: reduce your caxible income in financial year twenty twenty four.
Speaker 1: We've got to cover it in the Flux app with
Speaker 1: a whole range of ways to reduce attacks before June thirty,
Speaker 1: so make sure to check it all out.
Speaker 2: Thanks for listening, and we'll see you on Monday.