Will Xmas Crash & Burn This Year?
As if 2020 hasn’t already been challenging enough, the UK is now in a month-long lockdown – again. This time it’s during the run up to the holidays.
Analysts predict that the biggest winner will be Amazon. Not because other retailers don’t have online stores. Most have been ramping up their e-commerce efforts.
For casual browsing and one-off purchases their online stores will serve brands well. However for Christmas, it’s a different story.
As consumers shop for gifts across many product categories, the big e-commerce platforms are simply more convenient.
Also, when that all-important free shipping requires meeting a minimum spending target, there’s a huge incentive to consolidate all shopping on one platform.
However, even Amazon is facing challenges this season.
Delivery overload; Brexit concerns; Consumers still swayed by deals
This past week the U.S. presidential election got attention even from people who don’t really care about U.S. politics. For many, it was a break from the ongoing coverage of COVID.
MARKETS
Myanmar will hold its general election on Nov. 8.
- Aung San Suu Kyi and her ruling National League for Democracy are demonstrating their seriousness in buttressing the coronavirus-hit economy.
RETAIL FINANCE
Alibaba (China) reported that Q3 revenue hit US$22.8 billion, up 3 0% year-on-year.
- EBITDA increased 28% year-on-year to $7 billion.
- Annual active consumers on its China retail marketplaces reached 757 million for the 12 months ended September 30, 2020, a quarterly net increase of 15 million.
Amazon (USA) announced record Q3 sales, with profits tripling. Its net sales increased by 37% to $96.1 billion in the third quarter.
- However, shipping costs rose by $1.4 billion and are now $5 billion higher than the same period a year earlier.
Marks & Spencer (UK) posted a £87.6 million pre-tax loss for the six months to Sept 26, compared to a £159 million profit for the same period last year.
- Revenue fell almost 16% year-on-year to £4.09 billion.
- Performance was better than expected, with the revenue decline outperforming the company’s Covid-19 planning scenario by 22.8%.
- The decline was driven by its clothing and home business, with sales down by more than two-fifths.
Stein Mart (USA), the bankrupt discounter, received a $4 million bid from Retail Ecommerce Ventures (USA), the same group that recently purchased the intellectual property of Pier 1, Dressbarn, and Modell’s.
Alibaba (China) and Richemont (Switzerland) both invested $300 million in Farfetch (UK), and $250 million each in Farfetch China
- Farfetch’s revenue rose 74% in Q2, and gross merchandise volume increased 48% year-on-year.
- Farfetch’s roughly 700 brands now have access to Alibaba’s 757 million customers.
- China is forecast to account for 50% of luxury goods sales by 2025.
- In China, selling luxury products online isn’t seen as diminishing their value (unlike in traditional markets).
HanesBrands (USA) reported that activewear sales fell 41% in Q3.
- Hanes’s sales mostly come from licensed gear for universities and sports teams. It suffered as consumers stayed away from sporting events and college bookstores
Columbia Sportswear (USA) reported Q3 net sales decreased 23% year-on-year to $701.1 million. In Q4 it expects net sales of $850 to $880 million, a decline of 8-11%.
- e-commerce net sales increased 55% year-on-year
- Operating income decreased 44% year-on-year to $85.6 million
- Ended Q3 with $314.5 million in cash and short-term investments, no bank debt and nearly $1 billion in total liquidity
PODCAST
Creating Brands Chinese Millenials Want
Jenny Bai has spent over 15 years in China brand development, marketing and media.
She knows the nuances of what resonants with China’s young and incredibly sophisticated consumers.
In this podcast you’ll learn how to position your brand for success in China.
THE RUN UP TO XMAS
Primark (UK) plans to have its stores open 24/7 in December as it races to meet holiday shopping demand, while meeting social distancing requirements.
STORE OPENINGS
Foot Locker (USA) will open a 20,000 sq. ft. Power Store in Hong Kong’s Mongkok district in January 2021.
Do you have something to share? You can contact us here.
(we’d love to hear from you!)
