The Retail Invasion

It's here to stay.

The Retail Invasion

It’s highly unlikely that the Chinese army will be marching through the streets of London. At least, I hope not. I prefer to live in times of peace and not have to worry about being blown to smithereens or wiped out in a nuclear bomb.

But back in April 1990, a lowly shop opened in Stechford, Birmingham. Nobody took much notice. Indeed, management didn’t even bother to advertise its opening.

The business slowly expanded, battling suppliers and the Big Four’s influence, and slowly encroached on the major players.

Then came the the Financial Crisis. The big players refused to cut prices and instead drove shoppers into the welcoming arms of Aldi and Lidl.

And that’s how the Germans invaded and succeeded.

But now there’s a new threat on the horizon. It’s not the Germans. It’s the Chinese.

MINISO first landed on UK shores in November 2019. OK, not on UK shores, but in a west London suburb called Ealing.

As of December 2023 it had another 23, with the flagship store being opened a month earlier.

And now there’s one near me, another flagship, on Camden High Street. I hate that area as it’s full of tourists, but if I might take a look in if I get the tube.

MINISO focuses on Japanese style and has been accused of false labelling, copyright infringement, and other various no-nos.

It’s the physical version of Temu/Shein which have both ravaged the ecommerce sector with super low prices.

It turns out that customers are willing to wait longer for low prices, which is strange given Amazon is focused intensely on next and even same day delivery.

Customers can wait days or even weeks for Temu products to arrive from China to our house.

Here’s the growth rate of the app. It took Temu just over a year to get to 51 million US monthly active users, not too far behind Amazon’s 67 million which took decades.

Shein is an active thorn in the side of Asos and Boohoo which we’ve spoken about in the past. The landscape has changed, the interest rate environment has changed, and there are now far too many competitors so it’s no longer a blue ocean.

But MINISO is just getting started.

I see this as being a seriously big thorn in the side of retailers in the future.

Maybe not tomorrow, but MINISO is a serious competitor and we already know customers are price-conscious.

More stores are on the way in 2024. MINISO is not going to go away.

Moving on, the markets appear to have discounted the Iran/Israel strikes already and are accepting these as finished.

This is the first time in history that Iran and Israel have swapped direct attacks rather than doing it through proxies.

I don’t think that accepting that everything is done and settled now is the right way to think about this.

I think it’s definitely not unlikely we see more aggression and more escalation.

Be careful.

Audioboom (BOOM)

A pattern is very quickly emerging on BOOM. It’s clearly a hot stock and punter driven.

Traders buy the stock ahead of the results, the stock announce results, traders sell.

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