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| Here's your daily business briefing. - 🛍️ Black Friday online sales hit record high
- 🎓 Deep Dive: Edtech stock stages comeback
- 🎄 TikTok Shop's Christmas deals raise ethical concerns
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Shriram
p/Shriram | |
| 1 | | Black Friday achieved a record-breaking $9.8B in U.S. online sales, experiencing a 7.5% YoY increase as consumers prioritized maximizing discounts through online deal hunting. The growth, bolstered by $5.3B in mobile shopping, suggests that influencers and social media advertising have fostered consumer comfort with mobile spending, potentially contributing to impulse purchases. More: - Customers are price-sensitive, keeping a closer eye on their spending because of rising interest rates and inflation.
- With $79M in sales, the "Buy Now, Pay Later" flexible payment option was utilized, a 47% increase over the previous year.
- On Black Friday, toys, games, and electronics (including televisions and smartwatches) were the top-selling categories.
- Adobe predicts that online consumers will spend a record $12B on Cyber Monday and approximately $10B throughout the weekend, indicating sustained momentum in buying.
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What the numbers say: Despite a more than 95% drop during President Xi Jinping's crackdown on the education sector, New Oriental's stock has more than doubled in 2023 and is trading at its highest since July 2021. Diversification into e-commerce and travel and 48% revenue growth in the latest quarter contributed to its resurgence, with the highest gross margin since 2017. Relevance: New Oriental's resilience and adaptability in navigating challenging regulatory changes in China are evident in its successful business model transformation. Expanding into sectors like livestreaming e-commerce and cultural tourism, the company has not only weathered regulatory headwinds in the education technology sector but also gained increased market share amid the exit of some rivals. More data: Regulatory hurdles in China's education tech sector, aimed at banning profits from specific classes, affected a $100B industry. New Oriental's diversified strategy, seen in 48% revenue growth, garnered positive attention, with Morgan Stanley initiating coverage at overweight. Analysts predict a $78.6 target, implying a 9% upside from Tuesday's close. | | | |
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| 3 | | TikTok Shop, introduced in the U.S. in September, is emerging as a notable e-commerce hub, leveraging the #TikTokMadeMeBuyIt trend. TikTok Shop is reshaping the social commerce landscape with an in-app shopping feature, over 200,000 sellers, and the hashtag amassing 77 billion views. More: - According to a Shopify-Gallup survey, almost 50% of respondents aged 18 to 29 intend to purchase holiday gifts through social media apps, highlighting the growing impact of social platforms on shopping behavior.
- In research published by the ICSC, 86% of Gen Z consumers — those between the ages of 16 and 26 — state that social media impacts their purchasing decisions.
- Despite criticism and its closure in Indonesia, TikTok Shop's popularity is rising; the platform boasts over 200,000 retailers and high user engagement.
- TikTok Shop is leveraging the social commerce paradigm by offering a whole ecosystem for in-app purchases, immersive stores, short-form videos, and paid advertising.
- Though TikTok Shop products are becoming increasingly popular, some users express ethical issues, raising questions about overconsumption, labor practices, and sustainability.
- While some users praise TikTok Shop for its price and ease of use, others worry about its ethical implications and potential adverse effects on creative output.
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| 4 | | Best Buy is asserting effective control over shoplifting with increased in-store staffing, full-service cashier lanes, and security personnel at entrances. CEO Corie Barry notes the absence of material impacts from shrink (loss from theft) on the company's business for at least the past two years, attributing success to well-trained and well-staffed stores prioritizing customer service for electronics buyers. More: - Shoplifting and organized theft have been identified as critical factors in the 19% increase in shrink that retailers, including Best Buy, reported for 2022, which totaled $112B.
- Best Buy's strategy runs opposed to current retail trends, wherein numerous shops have boosted self-checkout lanes, automated services, and lowered employee counts to save money.
- According to criminologist John Eck, having more employees can discourage stealing since people are likelier to be watchful when observed.
- Another business, Lowe's, believes that having more employees in-store deters theft more than anything else, citing higher staffing levels as the main factor.
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| 6 | | Thanksgiving Day witnessed a 5.5% YoY increase in online spending, totaling $5.6B, signaling a shift toward online purchases driven by discount motivations. This surge is almost double the online spending recorded on Thanksgiving Day in 2017, amounting to $2.87B, with Black Friday expected to increase further to $9.6B, reflecting a 5.7% YoY growth. More: - The National Retail Federation predicts that holiday spending will rise between 3% and 4% over the previous year, a slower growth rate than during the epidemic.
- According to Adobe's data, which spans over 1 trillion visits to U.S. retail websites, there are notable Thanksgiving Day discounts in several important gifting categories.
- Popular video games, Barbie merchandise, Marvel superhero action figures, and PlayStation 5 gaming consoles are some notable Thanksgiving Day best sellers.
- With nearly 60% of Thanksgiving Day sales coming from mobile devices — a record high for the holiday — mobile shopping was a significant factor.
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| 7 | | Quick Hits: - Competitors are killing your efficiency. Read how Greenhouse gained $85mil in revenue from reps who used Klue over non-Klue users.*
- Colt CZ Group has made a surprise offer to acquire U.S.-based Vista Outdoor for $1.74B.
- Study: In the post-COVID recovery, Black, Hispanic, and less-educated workers saw notable gains, outpacing whites and college degree holders.
- Marel hf experienced a surge in shares following a non-binding initial proposal from John Bean Technologies Corp. to acquire all the shares in the Icelandic food processing technology company for $2.6B.
- Casino Guichard-Perrachon SA has received initial expressions of interest for certain hypermarkets and supermarkets as part of its ongoing restructuring efforts.
*This is a sponsored listing. | | | |
Term of the Day Capital call: An investment firm's right to request a portion or all of the committed capital from a limited partner (LP) at discretion is called a capital call. Question of the Week What perks would convince you to return to the office? Join the conversation |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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