Worldview: Debunking China’s Consumption Myths

🇨🇳 McKinsey debunks Chinese consumption myths and misconceptions. According to Daniel Zipser, McKinsey & Company’s Shanghai-based senior partner, “most agree that some of the underlying issues that are putting a damper on consumption, like the historically low consumer sentiment and the property slump, could take another 12-18 months to turn around [but] it’s important to keep in mind…that while [this may be] discouraging, there continue to be pockets of consumer confidence and growth in consumption.” Highlighting sportswear, urban outdoor apparel and consumer health as sectors which have seen double-digit growth, Zipser also painted a more nuanced picture of the luxury sector. While “luxury brands are seeing their sales decline in mainland China…[Chinese] overseas spending on luxury goods in just the first half of 2024 has already exceeded 2019 levels…[suggesting] that Chinese consumers…are simply choosing to make these purchases outside of China.” [McKinsey China Brief]

🇧🇩 Garment workers’ protests leave one dead in Bangladesh. A clash between workers and police in the world’s second-largest garment exporting country has resulted in one death and over 20 injuries on Monday, as workers demanding higher wages and better conditions blocked a highway on the outskirts of the capital Dacca. Tasked with restoring stability, Bangladesh’s interim government took charge in August following the deadliest violence the country has seen in decades, which claimed over 700 lives and led to the resignation of Prime Minister Sheikh Hasina. [BoF]

🇹🇭 Thailand’s Central Group acquires Swiss department store Globus. The Bangkok-based conglomerate that owns an extensive portfolio of malls across Asia and controls Selfridges Group department stores in the UK, Ireland and Netherlands, KaDeWe in Germany, Italy’s La Rinascente chain and Illum in Denmark, is taking control of Globus’ seven luxury department stores in Switzerland from Rene Benko’s insolvent Signa Group. The latest transfer from the Austrian financier’s retail firm to Central Group covers only the company operating the stores and doesn’t change the ownership of the respective buildings. [BoF]

🇨🇳 Shein and Temu ‘will not be a significant growth driver’ for FedEx. “Obviously, these are two massive shippers coming out of the Asia market, and…we’re really happy with the relationship,” said FedEx chief customer officer Brie Carere. “They are accretive, but …they will not be a significant growth driver for us,” he predicted, conceding that the logistics giant is instead focusing on “the parts of their business where they need speed and/or where we have available capacity coming into the US.” [Sourcing Journal]

🇮🇳 Indian skincare brand Conscious Chemist secures $1.4 investment. The Gurgaon-based company founded in 2019 by Robin Gupta and Prakher Mathur offering science-backed skincare to customers on platforms like Amazon, Nykaa, Myntra, Flipkart and its own D2C channels has secured 12 crore rupees in funding from Atomic Capital. The venture capital firm’s founder and MD Apoorv Gautam said he is “looking forward to supporting the team as they work toward their 100 crore rupees ARR goal.” [Economic Times]

🇨🇳 Adrian Cheng steps down as CEO of New World Development. The Hong Kong retail magnate behind K11 and other upmarket malls across mainland China who steered the property developer to its first annual loss in two decades has resigned. The third-generation heir joined the company in 2007 as an executive director and became CEO in 2020 before being relegated to a non-executive director role in the latest leadership shuffle, which sees him replaced by COO Ma Siu-Cheung. [BoF]

🇮🇳 India’s Beauty Garage Professional acquires Gofab Genesis. The Mumbai-based hair care brand founded in 2017 has bought the local beauty company for an undisclosed amount. “This acquisition not only enhances our product portfolio but also positions us as a leader in the premium salon segment…by integrating Gofab Genesis’ expertise and innovative products,” said co-founder and CEO Mahesh Ravaria. [Economic Times]

🇨🇳 Breitling CEO is ‘quite confident’ that the luxury industry has hit bottom. Georges Kern made the remarks in the context of the China-led economic slowdown that’s taken a toll on high-end retailers around the world. Swiss watchmakers last week cautioned about a negative outlook for the industry, which has been grappling with the pullback from once-flush shoppers in China, the second-biggest market after the US, and a cornerstone of the global luxury market. [BoF]

🇮🇳 India’s gem and jewellery exports fall more than 18.79% in August. Annual exports fell to $2012.51 million, according to the Gem & Jewellery Export Promotion Council. The council’s former chairman Colin Shah said, “with about 60 plus countries in the world undergoing elections in the days to come, the trade activities could witness a slowdown... However, we hope to see normalcy soon after the elections are over…which will help in revival of demand.” [Economic Times]

🇦🇪 Dubai’s Dar Global partners with jeweller Mouawad for Saudi villas. The Dubai-based, London listed international real estate company, has joined forces with the heritage jeweller founded in 1891 by Lebanese entrepreneur David Mouawad and currently headquartered between Geneva and Dubai, to launch a unique 880 million Saudi riyal ($234 million) branded residential project close to World Expo 2030 in Riyadh, Saudi Arabia. [BoF Inbox]

🇰🇷 Calvin Klein appoints South Korean band NewJeans as ambassadors. The American fashion brand has tapped band members Minji, Hanni, Danielle, Haerin and Hyein, to endorse its products. The K-pop girl group previously inked a global ambassadorship with Levi’s collectively and ambassadorships as individuals for several other fashion, luxury and beauty brands. [Variety, Elle Singapore]