Luxury, Retail, FMCG and Media News & Trends: Aug Week 2

1. Markets

i. Abu Dhabi Wealth Fund to Invest $1b in Sotheby’s

Abu Dhabi’s wealth fund ADQ announced a $1 billion investment in Sotheby’s, giving ADQ a minority stake in the auction house. This move will address Sotheby’s debt and support its expansion into new markets, particularly the Middle East. Patrick Drahi, who owns Sotheby’s through Bidfair, will remain the majority shareholder and contribute additional funds despite earlier indications that he would not seek external investors. The deal is expected to close by the end of the year.

Takeaway: ADQ’s investment reflects the increasing interest from Gulf states in the art and luxury sectors. While not within ADQ’s usual investment focus, this partnership could lead to Sotheby’s establishing a presence in Abu Dhabi, aligning with the region’s cultural development ambitions.

Read the full article about ADQ’s investment in Sotheby’s.

ii. Heytea Snaps Up Hong Kong Retail Space, Mirroring Peers’ Interest

Mainland Chinese brands have been aggressively entering the Hong Kong retail market in 2024, capitalising on reduced rents and the city’s strategic position as a gateway to global markets. New leases by these brands, particularly those offering food and beverages (F&B), have increased by 215% in the first seven months of the year. High-street locations and prime shopping centres are the primary targets for expansion, with major players like Heytea leading the charge.

Takeaway: Despite broader economic challenges and a dip in tourist spending, the influx of mainland brands highlights their long-term confidence in Hong Kong’s retail potential.

Read the full article about Chinese brands’ interest in Hong Kong.

2. Offline Business Moves

i. Malaysia’s 99 Speed Mart Launches RM2.36b IPO

Malaysia’s major convenience store franchise, 99 Speed Mart, launched an RM2.36 billion (S$702.8 million) IPO. This makes it the country’s largest listing in seven years. The company aims to expand its footprint and reduce debt with the proceeds, offering up to 1.43 billion shares at RM1.65 each. The founder, Lee Thiam Wah, and his wife are set to sell a significant portion of the shares. Founded in 1987, 99 Speed Mart has grown from a single store to over 2,600 outlets and posted substantial profits in early 2024.

Malaysia’s IPO market has gained momentum in 2024. The country has emerged as Southeast Asia’s leading IPO market, with a diverse range of companies, including small and mid-cap firms, opting to go public. Retail investors have played a significant role in driving IPO demand, particularly in the Ace Market, which has seen substantial gains post-listing.

Takeaway: The IPO market’s performance signals renewed global investor interest in the nation, driven by favourable conditions like shortened approval timelines, tax incentives and the nation’s focus on AI, which has also positioned it as a promising hub for such services in the region. 99 Speed Mart’s listing is expected to further energise Malaysia’s IPO market, which has already outperformed last year’s fundraising figures.

Read the full article about 99 Speed Mart’s IPO.

Read the full analysis of Malaysia’s IPO market.

ii. Chantecaille Partners with Tmall to Expand in China

The luxury skincare and cosmetics brand Chantecaille is expanding its presence in China through a strategic partnership with Tmall, the country’s leading online retail platform. The partnership includes launching a virtual flagship store on Tmall that offers a curated range of Chantecaille’s products alongside exclusive deals and personalised recommendations. The brand is known for its commitment to clean beauty and naturally derived ingredients. Chantecaille is also introducing immersive pop-up experiences in Shanghai to further engage Chinese consumers.

Takeaway: Chantecaille’s strategic approach of combining digital expansion with immersive, on-the-ground experiences reflects a trend where luxury brands increasingly offer unique experiences to engage Chinese consumers better and help them connect with the brand’s ethos.

Read the full article about Chantecaille’s partnership with Tmall.

iii. Lilanz Forms JV with Descente to Launch Munsingwear

Chinese menswear brand Lilanz is forming a joint venture with Japanese company Descente to launch the American golf brand Munsingwear in China. This move is aims to tap into the growing demand for sports and outdoor apparel, particularly in the golf sector, where consumers’ spending is less vulnerable to economic fluctuations. Munsingwear entered China as early as 1997 but has struggled with market penetration and brand visibility, especially in major cities. However, Lilanz aims to revitalise the brand by focusing on its American golf heritage and expanding into more affluent market segments.

Takeaway: Currently, Lilanz only operates a single brand with two series: the main series “LILANZ” and the light business series “LESS IS MORE.” The joint venture reflects the company’s move to diversify into a multi-brand strategy. Lilanz’s entry into the golf apparel market through Munsingwear aligns with the broader trend of leveraging premium and specialised brands to cater to high-net-worth (HNW) consumers in a maturing but underpenetrated segment.

Read the full article about Lilanz’s joint venture with Descente.

iv. Shinsegae Buys Amuse from Naver Snow

South Korean retail giant Shinsegae International is acquiring Amuse Corp., a K-beauty brand popular among Gen Z, for approximately 71.3 billion won. Amuse has built a strong following in North America, Japan, and Southeast Asia, with its flagship products like the Dew Tint gaining top rankings on platforms like Amazon. Shinsegae International plans to leverage Amuse’s appeal to younger consumers to capture a significant market share in these key regions.

Takeaway: The move will diversify Shinsegae’s cosmetics portfolio beyond luxury products while strengthening its global footprint. As the acquisition follows their earlier purchase of Swiss luxury skincare brand Swiss Perfection, it also indicates the company’s dual strategy of tapping into both luxury skincare and mass-market beauty segments.

Read the full article about Shinsegae’s acquisition of Amuse.

3. E-Commerce Business Moves

i. Shopee Hikes Seller Fees Above That of TikTok and Temu

E-commerce platform Shopee has increased merchant commission fees by around a third in key markets since early 2024. With fees in Thailand now as high as 13%, Shopee’s charges exceed those of its rivals, though its established infrastructure and broad user base provide an edge. As Shopee’s parent company, Sea Limited, prepares to report earnings, investors are keen to see if this pricing strategy bolsters profitability without undermining Shopee’s market dominance. While merchants have so far absorbed increased commissions, the next earnings report will reveal if this approach can continue to sustain growth and profitability in a competitive environment.

Takeaway: This fee hike reflects Shopee’s growing confidence in retaining sellers despite rising competition from platforms like TikTok, Temu, and Lazada. Nonetheless, the strategy is not without risk. As competitors quickly gain market share, they could attract sellers if Shopee’s costs become prohibitive. Its long-term success will hinge on balancing profitability with competitive pressures as new entrants aggressively target Southeast Asia’s growing e-commerce market.

Read the full article about Shopee’s seller fee hike.

4. People Moves

i. FMCG: Unilever

Unilever: According to multiple media reports, former FrieslandCampina China President Chen Ge will replace Qu Wei as Unilever’s President for China and General Manager for the Beauty & Wellbeing division, effective August 15. Chen Ge previously held leadership roles at FrieslandCampina, Procter & Gamble, and Kraft Heinz. Chen has over 20 years of industry experience and was recognised for elevating the Friso brand to a leading position in the Chinese market during her time at FrieslandCampina.

ii. Fashion: Victoria’s Secret and Haglöfs

Victoria’s Secret: Victoria’s Secret hired Hillary Super, a former Savage x Fenty executive, as its new CEO, effective September 9. Super succeeds Martin Waters and will join the board of directors. Her appointment aligns with the company’s strategy to accelerate growth in North America and explore new local and international opportunities. With a career spanning nearly three decades, including leadership roles at Anthropologie, Guess?, American Eagle Outfitters, Gap Inc., and Ann Taylor Inc., Super brings a wealth of experience in merchandising and operations.

Haglöfs: Swedish outdoor brand Haglöfs appointed Martin Daniels as its new CEO, effective August 2024. Daniels has a strong background in product development, brand strategy, and retail. He previously served as Deputy CEO at Scandinavian optical retailer Synsam and focused on strategy and business development during his time at Boston Consulting Group. He succeeds Fredrik Ohlsson following a transition period led by interim co-CEOs.

Read the full article about Victoria’s Secret’s CEO from Savage x Fenty.

Read the full article about Martin Daniel’s appointment as CEO.

iii. F&B: Starbucks and FINE+RARE

Starbucks: Starbucks hired Brian Niccol, the successful CEO of Chipotle, to lead its turnaround. Niccol has been known for revitalising Chipotle and driving its significant growth since 2018. His appointment comes after the previous CEO, Laxman Narasimhan, struggled to reverse Starbucks’ declining performance during his short tenure. He takes on a range of challenges, including pressure from activist investor Elliott Investment Management to enhance its operations, rising competition and declining demand in both the US and China markets. Niccol’s track record and the support from the investment community signal confidence in his ability to steer the coffee giant back on track.

FINE+RARE: The FINE+RARE Group, an international fine wine and spirits marketplace, formed a Global Portfolio Management (GPM) team. The GPM team will provide guidance on buying, selling, and storing clients’ wine and spirits. Concurrently, FINE+RARE made 10 new hires.

Asia:

• Jose Lau joins as the Asia sales director based in Hong Kong. Lau has 14 years of experience in the industry. He comes from the UK’s oldest wine and spirits merchant, Berry Bros & Rudd, where he served as the Head of Sales for private clients.
• Christie Chan joins as a customer experience executive in Hong Kong.

US:

• Allan Frischman joined as the Vice President of Global Portfolio Management in the US and will lead the GPM team. Frischman previously served at Sotheby’s and Hart Davis Hart Wine.
• Desiree Anderson joins as a portfolio manager in the US and will be part of the GPM team.
• Brenda Ramirez joins as a sales support associate in the US.
• Jonathan Garcia joins as a warehouse operations manager in the US.

Europe:

• Ashika Matthews, an influential wine writer and maker, joins as a portfolio manager in the UK and a member of the GPM team.
• Andrea Olalla joins as a head of customer experience in London.
• Peter Hauszknecht joins as a lead backend developer in Hungary.
• Csaba Hovráth joins as a senior backend developer in Hungary.

FINE+RARE operates worldwide with locations in London, Milan, Singapore, Hong Kong, Napa, and Budapest.

Read the full article about Starbucks’ CEO from Chipotle.

Read the full article about FINE+RARE’s GPM team and new hires.

5. Marketing

Threads Rolls Out Analytics and Scheduling

Meta announced feature enhancements to its Threads app as the app steadily gained momentum recently. Key updates include:

• Enhanced Analytics: Desktop users can now access detailed key performance metrics, including view counts, interaction insights, follower growth, and audience demographics.
• Post Scheduling and Drafts: Native scheduling and the ability to save multiple drafts.

Takeaway: The added performance metrics will benefit marketers and creators aiming to expand their audience on Threads and support influencer marketing efforts by allowing creators to showcase their precise audience reach. The enhancements are also expected to streamline content planning within the Threads app without third-party scheduling solutions.

In terms of growth potential, Threads currently has 200 million monthly active users, which is below X’s 250 million daily active users. Although its growth has slowed after its rapid initial surge, data indicates that Threads is steadily gaining traction. The platform is also increasingly becoming a lively space for discussions, at least among specific communities, which could position it for sustained success. Nonetheless, whether it will evolve into the Twitter alternative Meta envisions remains to be seen.

Read the full article about Threads’ feature enhancements.

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