Shein's IPO filing in London, Amazon launching a low-price competitor, LVMH's expanding portfolio. Discussing challenges faced by Shein, Amazon's direct supplier shipping, and LVMH's strategic acquisitions. Delving into regulatory challenges in the fashion industry and the influence of LVMH on global markets.
Shein's shift to IPO in London showcases market adaptability amidst US-China complexities and production concerns.
Amazon's low-price shipping model mirrors Shein's strategy but raises quality control, environmental, and competition issues.
Deep dives
SHEIN's IPO Move From US to London
SHEIN shifted its Initial Public Offering (IPO) plans from the US to London due to complexities between the US and China, as well as production outsourcing concerns. Despite facing opposition in the US, SHEIN confidentially filed for an IPO in London. The move, although not the ideal choice, aligns with the UK's market seeking business stimulation amidst a dull stock market.
SHEIN's Potential IPO Impact on Transparency and Growth
SHEIN's IPO, if successful, may enhance its transparency and operational legitimacy through public financial disclosures. The IPO could lead to increased shareholder scrutiny, potentially altering business practices. Despite limited public financial data, SHEIN's estimated value of $66 billion underscores its significant market presence and growth potential, especially appealing to price-conscious consumers.
Amazon's Venture into Low-Cost Direct Shipping
Amazon's plan to introduce a low-price direct shipping model akin to SHEIN signifies a strategic shift towards cost-effective offerings. This model replicates SHEIN's success by offering extremely affordable products shipped directly from suppliers in China. While the pricing strategy appeals to budget-conscious customers, concerns arise regarding potential compromises in quality control, environmental impact due to increased air shipping, and market domination challenges for competitors in the luxury space.
LVMH's Diversified Acquisitions Strategy
LVMH's recent acquisition spree, including Swiss clockmaker, L'Épée 1839, reflects its strategic focus on expanding its luxury portfolio. The acquisition aligns with LVMH's efforts to bolster its presence in the watches and horological sector. LVMH's diverse acquisitions across various sectors like hospitality, media, and now clocks, suggest a broadening of its luxury offerings, potentially transforming Paris into an LVMH-centric luxury destination. However, concerns regarding market consolidation and regulatory challenges loom over potential major acquisitions, highlighting the company's ambitious expansion efforts.
On the Glossy Week in Review podcast, senior fashion reporter Danny Parisi and international reporter Zofia Zwieglinska break down some of the biggest fashion news of the week.
This week, we talk about the confidential IPO filing by Shein in London, the effect of Shein’s low-price model on industry players like Amazon and the ever-growing portfolio of LVMH.
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