Consumer Products and Services

New rules will spoil India’s e-commerce party

3 Aug 2018

A draft plan to force online retailers to limit discounts, among other things, shields mom-and-pop stores from competition and strikes a nationalist tone. That could dramatically upset the strategies of Amazon and Walmart and leave India's marketplace looking rather Chinese.

China’s prickly new watchdog can hit at home too

2 Aug 2018

Fresh from its role in torpedoing Qualcomm’s $44 bln NXP bid, Beijing’s all-in-one consumer regulator is now investigating the newly-listed Pinduoduo over fake goods, sending the stock down 10 pct. China has built a powerful champion: investors are right to be afraid.

Prada’s hottest trend is investor FOMO

1 Aug 2018

The Italian label grew first-half sales 9 percent thanks to spruced-up handbags. Operating margins are almost two-thirds below their peak, but a full turnaround is priced in. Fear of missing out on the next Gucci-style makeover makes shareholders reluctant to wait for results.

Asian videogame giant gives away online store

31 Jul 2018

Tencent-backed Sea, at $4.5 bln, trades at a 50 pct discount to the sum of its three parts, Breakingviews calculates. Investors essentially get the Shopee e-commerce business for free. With Alibaba-owned Lazada a big rival in Indonesia, the valuation gap may prove hard to close.

Heineken short on ideas to close AB InBev chasm

30 Jul 2018

The Dutch brewer’s shares fell after it said operating margins would dip this year instead of rise. The gap between its profitability and that of bigger rival AB InBev is widening. And beyond more craft beer, Heineken has few convincing ways to close it.

Imran Khan’s Pakistan vision is beyond reach

30 Jul 2018

The former cricket hero and likely new premier wants to fight corruption and improve the lives of the poor. It’s fanciful given the likely demands of a bailout of the $300 bln economy by China or the IMF. Khan’s agenda is also hard to reconcile with Pakistan’s powerful army.

China’s Starbucks-wannabe has a weak brew

30 Jul 2018

Luckin Coffee says it's worth $1 bln after raising money from Singapore’s GIC and others. It’s growing fast and wants to woo consumers away from its dominant rival. Yet an emphasis on takeaways and sub-prime locations means the startup is not shaping up as a threat.

Baby food will only briefly sate consumer giants

27 Jul 2018

The best second-quarter sales performer for Reckitt Benckiser and Danone was infant formula. Demographics are favourable in China, and parents are less tempted by cut-price brands. But with so many companies homing in on this lucrative market, competitive pressures are growing.

Pinduoduo polishes New York’s tech IPO crown

27 Jul 2018

The shopping app’s shares rose 40 pct in their U.S. debut, valuing it at $34 bln. New York has lost some marquee China tech floats to Hong Kong of late, but those it won have mostly outperformed Fragrant Harbour debutants. The Big Apple is still the host with the most.

Yum China deserves more than a cheap takeout

27 Jul 2018

Hillhouse is reportedly in talks to buy the KFC operator. It looks opportunistic given Yum’s knockdown valuation. If successful, the Beijing investment outfit gets a China consumption play with Western-style governance, and its tech savvy could supersize the $14 bln company.

Nestlé has easier wins ahead in activist battle

26 Jul 2018

New products in the U.S. and an overhaul of baby foods boosted growth in the first half. There are early signs that CEO Mark Schneider’s strategy is working, in the face of pressure from investor Dan Loeb. Yet to keep Loeb at bay Schneider needs to do more to prune tired brands.

Burberry spotlights fashion’s burning issue

20 Jul 2018

The brand is under fire for incinerating 29 million pounds of unwanted stock last year. It is unusually transparent about a common practice in the luxury sector. As consumers become more sensitive about carbon emissions and waste, the wider industry can expect greater scrutiny.

Unilever has a first-world problem to fix

19 Jul 2018

Supermarket price wars and greater competition from other manufacturers hit second-quarter sales in the U.S. and Europe. That leaves the Magnum ice cream maker reliant on more volatile regions for growth. Bolder acquisitions would be one way to address the issue.

TSMC etches chip fortunes onto investor memories

19 Jul 2018

The $190 bln Taiwanese semiconductor maker delivered the $2 bln in quarterly earnings that was anticipated. Weak smartphone and cryptocurrency demand, as well as global trade tensions, will be a drag in the second half, though. Betting on AI and 5G should help TSMC longer-term.

Race to governance bottom won by China’s Pinduoduo

18 Jul 2018

The shopping app’s owner apes Alibaba with a partnership that controls the board and an insider committee on top. It then adds super-voting stock for founder Huang Zheng, who is a member of all three groups. Investors who buy into the $1.6 bln IPO are just along for the ride.

UK retailers’ pain is ominous for overseas peers

17 Jul 2018

Debenhams shares hit record lows this week after insurers reduced credit cover for suppliers. Retail is the second-riskiest UK sector for insolvency and Britain is one of the most exposed to the shift to online shopping. Its stores offer an early warning for counterparts abroad.

Alibaba’s $2 bln food sale hints at indigestion

17 Jul 2018

The e-commerce firm is raising new funds from outside investors for its meal delivery arm Ele.me, media reports. This comes just three months after Alibaba took full control of the unit. Rival Meituan's mooted $4 bln Hong Kong flotation might be giving Jack Ma stomach jitters.

Supermarket buying pacts dodge primary problem

16 Jul 2018

Alliances to pool purchases, like one signed by Carrefour and Tesco, have in the past boosted grocers’ operating margin by up to 1.5 percentage points. Wringing savings without all the hassle of a merger is great. It does less to stop Aldi and Lidl grabbing market share.

India Insight: Mukesh Ambani goes after Jeff Bezos

16 Jul 2018

The energy billionaire built an upstart telecoms data network into the world’s biggest. Now Ambani wants to redefine how Indians shop, pitting him against Amazon and Walmart. India’s e-commerce market is young enough – and his pockets deep enough – for him to be a real threat.

Walmart credit-card shift signals race to bottom

13 Jul 2018

Investors knocked 7 pct off $25 bln consumer-finance firm Synchrony on fears the giant retailer will move its card business to Capital One. That looks optimistic, given Amex’s experience with Costco. But loosening credit standards suggest industry-wide pain lies ahead.