about 3 years ago • 3 mins
Keep it between us, but fresh data out on Monday showed China’s exports had their biggest monthly increase in November since early 2018 🤫
What does this mean?
Chinese companies shipped $268 billion worth of goods abroad in November – a 21% jump compared to the same time last year, and the most on record for any single month ever. This is becoming a bit of a habit: Chinese exports have repeatedly surprised expectations since the country emerged from coronavirus lockdown in the second quarter of this year 🇨🇳 And while exports were previously driven mostly by personal protective equipment and medical gear, they’re now getting a boost from electronics as workers-from-home upgrade their new working-from-home lifestyles.
Why should I care?
For markets: Enjoy it while it lasts...
China’s industrial sector – which makes all the goods that are shipped abroad – makes up around 40% of its economy, compared to the US and the European Union’s 20%. Those countries’ economies, meanwhile, are more heavily dependent on the services sector, which includes the restaurants and retailers that have been hit particularly hard by the pandemic 🦠 That might partly explain why China’s economy has already recovered all the ground it lost in lockdown, while its biggest rivals continue to struggle. Of course, those fortunes could take a turn when coronavirus vaccines arrive and shoppers start throwing money at real-life experiences all over again…
The bigger picture: Take, take, take.
The rise in Chinese exports was driven in part by a surge in the number of products shipped to the US, but that relationship isn’t necessarily working both ways 📦 Even though China pledged in January to steeply boost US imports this year, it hasn’t actually followed through with that promise – and that might not do much to patch up the two countries’ already-fraught relationship.
Keep reading for our next story...
All that Dom Perignon must’ve gone straight to Moncler’s head, because the Italian luxury fashion brand announced it’ll buy compatriot Stone Island for $1.4 billion 🍾
What does this mean?
The pandemic has decimated demand for high-end goods, and Moncler’s luxury ski jackets are no exception: sales have been hammered by the closure of ski resorts across Europe. So to keep its head above water – or, uh, snow – the company’s been looking for a way to attract new customers.
And it might just have found that in the form of Stone Island: the retailer’s high-end streetwear isn’t just more colorful than Moncler’s offering, it’s cheaper too – not to mention all the rage with celebrities ⭐️ And that, Moncler hopes, should help it win over a younger, trendier, and potentially more spend-happy customer.
Why should I care?
Zooming out: Mais non!
Before news of the acquisition surfaced, investors were expecting Moncler to be the “buyee” rather than the “buyer” – especially considering Gucci-parent Kering was reportedly sniffing around the company last year 👀 No surprises there: Kering and rival French conglomerate LVMH have been buying luxury fashion retailers left, right, and center over the last few years. Moncler and Stone Island’s decision to team up with a fellow Italian, then, might come as music to their country’s ears.
The bigger picture: Fashionably late.
A new report by McKinsey released last week suggests the future of fashion is, putting it kindly, uncertain. The consultancy firm reckons fashion sales will need until the third quarter of 2022 at best and the fourth quarter of 2023 at worst to return to pre-pandemic levels 👗 And between now and then, the only two areas that stand to grow in any meaningful way are online sales and the Chinese market. Still, it’s not all bad: the firm thinks there’ll be a rise in mergers and acquisitions as businesses like Moncler take advantage of low valuations to increase their market share.
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