CHINA NEWS BRIEF: 19 March 2024

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March 19, 2024

Leading Chinese electric vehicle manufacturer Xpeng announced its entry into the competitive EV market segment by launching a new, more affordable brand. Xpeng’s CEO, He Xiaopeng, disclosed plans to unveil models priced between 100,000 RMB ($14,000) and 150,000 RMB ($21,000), significantly undercutting premium EV prices typically ranging from 200,000 RMB ($28,000) to 300,000 RMB ($42,000). This move comes amid escalating price competition within China’s EV industry, with market leader BYD driving further price reductions. Xpeng aims to release various models under the new brand, prioritizing intelligent driving capabilities targeted at young consumers.

Some netizens on social media have indicated that the hoarding at Prada’s location in Shanghai’s Taikoo Li Qiantan has been removed, suggesting a cancellation of the store opening plan. The hoarding had been in place for two years previously, and it’s speculated that Prada might be considering future occupancy in the second phase of Taikoo Li Qiantan. If confirmed, Prada would be the first luxury brand to withdraw from Taikoo Li Qiantan.

Boucheron announced the opening of its boutique at Starlight 68 Plaza in Chongqing on March 16. This marks Boucheron’s first boutique in Chongqing and the third in the southwest region of China. With this, Boucheron now boasts 16 boutiques across mainland China.

Hourglass, a luxury cosmetics brand known for its animal-friendly values and innovative products, is set to open its first store in South China at Shenzhen MixC World. Founded in New York in 2004 by Carisa Janes, the brand offers popular items like Ambient Lighting Foundation and Veil Translucent Setting Powder. With stores already established in 11 Chinese cities, Hourglass continues to expand its presence across the country.

American streetwear brand Supreme announced on Weibo that its Shanghai store will officially open on Saturday morning, marking its first official store in China and the 17th globally. At the same time, the official Supreme WeChat mini-program tailored for the Chinese market will also be launched. To promote the brand, Supreme recently illuminated a massive light advertisement on a skyscraper in Shanghai. However, the public’s response to the news of Supreme’s opening in Shanghai hasn’t been particularly enthusiastic, likely due to consumer fatigue from dealing with counterfeit Supreme products in recent years.

China’s economic activity in January-February showed resilience, with factory output and retail sales surpassing expectations, signaling a promising start to 2024 despite ongoing weaknesses in the property sector. Industrial output surged by 7%, surpassing analysts’ forecasts, while retail sales grew 5.5%, supported by increased travel during the Chinese New Year holiday. However, concerns linger over the property market’s downturn, with declines in property investment and sales persisting. Structural challenges, including job market fluctuations and the need for economic transformation towards household consumption, remain pivotal for China’s long-term economic outlook.

According to the Financial Times, ByteDance-owned TikTok generated approximately $16 billion in revenue in the US last year, even as the popular video-sharing platform faces the threat of a ban. With ByteDance’s overall revenue reaching $120 billion in 2023, up about 40% from the previous year, TikTok’s explosive growth significantly contributed to this surge, although a substantial portion of ByteDance’s sales still originate from China. TikTok, boasting about 170 million American users, recorded record-breaking sales in the US in 2023, potentially positioning ByteDance to surpass Meta Platforms as the world’s leading social media company by revenue. Meanwhile, the US House of Representatives recently passed a bill mandating ByteDance to divest TikTok’s US assets within six months or face a ban, though ByteDance has yet to respond to a media request for comment.

Swire Properties disclosed its 2023 full-year performance, revealing a 6% increase in operating revenue to $1.88 billion (HK$14.67 billion) compared to 2022, while net profit attributable to shareholders plummeted by 67 percent to $337.54 million (HK$2.64 billion). The main revenue source remains investment properties, with 9.6% YoY growth to $1.73 billion (HK$13.53 billion), driven by a 22% surge in retail property revenue, notably from the Taikoo Li and Taikoo Hui brands. In mainland China, rental income from retail properties skyrocketed 42% to $536.45 million (HK$ 4.2 billion). Group Chairman Bradley Whiteley outlined plans to double mainland China’s total gross floor area by 2032, emphasizing the country’s pivotal role in global growth.

JD.com Inc. has announced its decision not to pursue an offer for British electronics retailer Currys, mirroring the recent retreat of US buyout firm Elliott Investment Management. Following JD.com’s withdrawal, Currys’ share price plunged 4.8% to 56.10 pence, sparking speculation of a potential bidding war after Elliott’s failed attempts. Despite offering up to 67 pence per share valuing Currys at $988 million (£760 million), both bids were rejected, with Currys insisting on a higher valuation.

Saudi Arabia’s Public Investment Fund (PIF) and luxury goods giant Kering are reportedly eyeing a stake in Selfridges following the insolvency of the department store’s co-owner, Signa. Interest has surged due to the collapse of Signa, which owns half of Selfridges’ property company, prompting the availability of its stake. Selfridges’ other co-owner, Thailand’s Central Group, is also seeking a new partner amid Signa’s uncertain future. With Selfridges’ ownership in flux, potential buyers are awaiting Signa’s resolution before declaring their interest in the stake, estimated at around $2.6 billion (£2 billion).

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