Ged Carroll

Category: business | 商業 | 상업 | ビジネス

My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.

At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.

I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.

Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.

I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.

Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.

  • Luxe streetwear

    I started thinking about the latest developments in luxe streetwear after leafing through the FT to see the following advert marking the proposed purchase of Stone Island by Moncler. (Stone Island had already sold its parent brand CP Company and intellectual property back in 2015 to Hong Kong manufacturer Tristate Holdings Limited).

    Moncler buys Stone Island
    R+R SpA – published in the Financial Times – a luxe streetwear merger

    It follows hot on the heels of Supreme being purchased by VF Corporation.

    Luxury disruption

    From the luxury market point of view their customer base over the past 30 years has done three things:

    • The customers have become younger. Luxury shopping is no longer dominated by dowager heiresses in Europe and the New World. Now the man purchasers of luxury are much younger and are second generation money. They’ve had money in their families for somewhere between 20 and 50 years. They are the scions of political leaders or business leaders. Money has allowed them access to the world’s best education institutions. They might have had etiquette classes, but they’re no more than two generations away from having known deprivation.
    • The customers are in a different place. Globalisation massively changed their customer base. First it was the Japanese middle classes who picked up a taste for luxury brands whilst travelling abroad. As the Asian tigers took off, you started to see luxury purchases being made in Singapore, Hong Kong, Korea and China. When the Soviet Union fell luxury consumption also sprang up in the East as some people had money to burn. Much of the luxury retail in traditional shopping areas like London and Paris are derived from tourists rather than local purchasers. A change in the luxury tax regime in China has seen more domestic luxury consumption. China is now looking to build Hainan into a domestic luxury shopping and holiday resort.
    • Luxury serves a different purpose. Luxury has traditionally reflected status. Goods of a superior nature that the ‘wrong sort’ of people would never be able to afford. Luxury then became a symbol that you’d made it. In Asian markets, particularly China, luxury became a tool. People gifted luxury products to make relationships work better. It also signified that you are the kind of successful business person that partners could trust. You started to see factory managers with Gucci man bags and premium golfwear to signal their success. Then when the scions of these business people and figures in authority were adults, luxury has become about premium self expression. It has been mixed up with streetwear in a manner reminiscent of the Buffalo Collective.

    So from the perspective of the luxury industry, they are feeling a massive amount of disruption going on. And that’s even before you get into digital transformation.

    It is this transformation of customer segments, geographies and use cases which is forcing the luxury industry to ‘go casual’ fit in a luxe streetwear space.

    Streetwear evolution

    The perspective from the streetwear side of the table is more exemplified by my favourite Thai English phrase: same-same, but different. Their market hasn’t been disrupted in the same way as luxury. It has got a lot bigger.

    Rise of Streetwear
    Growth in streetwear

    The internet has meant that streetwear culture has become global and trends catch on much faster. It has become more popular around the world and there are thriving secondary markets like StockX and GOAT.

    Streetwear has pushed into luxury pricing models led by Japanese brands; who brought a higher attention to detail to the market. It has continued the trend of innovation that companies like Stone Island started. This is best exemplified now by the likes of German label ACRONYM.

    From a design perspective right back to the origins of what we know as streetwear by the likes Shawn Stüssy or Harlem’s Dapper Dan co-opted luxury product language. In Dapper Dan’s case using fake fabrics and labels to make clothing. His customer base of African Americans from poor neighbourhoods whether early hip hop stars or criminals didn’t see the items that they wanted in boutiques. And even if they did, many of them didn’t feel welcome in the uptown boutiques.

    From Stüssy’s point of view it was the pop art ethos and DIY fanzine culture that infused his work. The reversed double S in a circle is an obvious reference to Chanel’s design language.

    Over the space of a decade Supreme went from being sued for aping Louis Vuitton’s design language to collaborating with them. Dapper Dan has recently been collaborating with Gucci.

    Does luxe streetwear lack ambition?

    Highsnobriety asked the question five years ago and concluded that no streetwear company had shown the serious ambition to become an umbrella brand the size of LVMH or Kering. Skiwear, skate wear and snow sports equipment are sectors that are a tenth of the size of streetwear. Yet they have seen consolidation into larger holding groups. These groups provided the financial cushion for these companies through the 2008 financial crisis.

    The closest that luxe streetwear has got to the holding group is likely to be New Guards Group. New Guards Group describes itself as a contemporary luxury fashion holding group. It owns Off-White, Opening Ceremony and Palm Angels. This in turn was bought out by luxury e-tailer Farfetch. Farfetch in turn has Richemont and Alibaba as minority shareholders.

    Surfwear is also described as having a generational strain. Dads keep wearing the gear. Kids no longer want to wear it. Given the commonality with the streetwear lifestyle. You could see similar things happening at even the largest of streetwear brands eventually. Some of the people wearing Supreme in the mid 1990s are still wearing it. The original international Stüssy Tribe are still going strong, repping streetwear in their 50s and 60s.

    Luxe streetwear brand A Bathing Ape has definitely seen better days, by the time Nigo sold the business to Hong Kong I.T. Group. The transitory nature of streetwear brands is littered with names that were formerly prominent like XLarge (that came back) or 90s icon Massimo.

    Stone Island and luxe streetwear

    Moncler get a technically proficient firm in Stone Island. It was built on a foundation of experimenting with materials. It is the only company able to garment dye polyester fabric for lightweight applications like summer jackets.

    The brand is widely respected and has collaborated with other innovators like Nike. It has been worn by Drake regularly that opened the brand up to hip hop fans. This has helped the brand widen its association beyond football hooligans and scally culture.

    More luxury related content here.

    More information

    Moncler to buy Stone Island in deal that values rival at €1.15bn | Financial Times

    VF snaps up streetwear line Supreme in $2bn deal | Financial Times

    Luxury brands set sights on Chinese tourists in Hainan as extended duty-free quotas and pandemic-free shopping attract travellers | South China Morning Post

    Dapper Dan’s collaboration with Gucci – focused on ‘hip hop style ready to wear and accessories featuring the GG logo

    Everything we know about the Supreme x Louis Vuitton collection | High Snobriety

    The umbrella brand: is streetwear ready for corporate takeover? | Highsnobriety

    Billabong’s demise is emblematic of a wider crisis in the surfwear industry | Guardian

    Silk or Synthetic | Financial Times

  • New Balance factory closure + more

    New Balance Boston factory closure

    New Balance to Layoff Dozens of Workers as It Closes Boston Factory – Footwear News – this is huge for New Balance. It is a major knock to the perceived wisdom around the New Balance brand and its differentation versus other footwear vendors like Nike or Adidas. New Balance his made US manufacturing a big part of its corporate story. Being private owned, it can take a longer view than competitors. But that doesn’t seem to have helped New Balance during the pandemic. It will be interesting to see how New Balance handles this moving forwards.

    Business

    The inadequate trials of Philip Green | Financial Times – There is something else at work too — distaste for the wheeler-dealer made good. His parties and celebrity schmoozing were considered vulgar. He was accused by MPs of being a “spiv”. Three commenters under one FT article this week described him as a “barrow boy”. A campaign was launched to strip him of his knighthood, as if that is what mattered. – interesting op-ed that makes a valuable point about the discussion around Philip Green

    Consumer behaviour

    Streetwear in China: hip-hop influence and form of expression for the Chinese youth – Daxue Consulting – Market Research China 

    Economics

    Hong Kong chief has ‘piles of cash’ at home after US sanctions – A government survey taken between June and September registered for the first time in 11 years a reduction in the number of foreign businesses operating in Hong Kong. The survey found 9,025 companies had offices in Hong Kong compared with 9,040 the previous year. Only 15 per cent of the companies said they had plans to expand in the city in 2020, whereas last year 23 per cent expected an expansion. – I thought that this quote was interesting in the FT article. What becomes apparent is that the Chinese government thinks that internal circulation is more important than Hong Kong as a gateway to foreign direct investment (Paywall)

    Media

    NSFW TikTok Porn: Bree Louise OnlyFans Is the Future of Adult Content – According to Alex Hawkins, Vice President of xHamster, Gen Z and young millennials are “disproportionately” willing to pay for adult content compared to previous generations, especially if the star of the video is also the one creating it. “We see the shift from studios to performer-producers dramatically changing the industry,” he says. Aesthetically, this translates to “a surge in realistic situations and more natural bodies.” In other words, more of what you might find on TikTok, albeit with fewer clothes. “We believe that consumers are much more likely to pay for performer-created content than they are traditional porn,” says Hawkins. “It feels more intimate.” – Mirrors the record labels have been historically looked at from at least the 1980s.

    Francis Fukuyama: How to Save Democracy From Technology | Foreign Affairs – everyone hates big tech. Fukuyama is famous for his Warsaw Pact break-up era book The End of History and The Last Man. Here’s his opinion on social paltforms: But few recognize that the political harms posed by the platforms are more serious than the economic ones. Fewer still have considered a practical way forward: taking away the platforms’ role as gatekeepers of content. This approach would entail inviting a new group of competitive “middleware” companies to enable users to choose how information is presented to them

    How Biden’s Rebels Blew Up Trump’s Death Star | AdExchanger – on combating disinformation: “Instead of chasing down and knocking down every ANTIFA rumor, we knew that the best defense was convincing people that the Joe Biden they did like, whose values they shared, would be the author of his own presidency,” said BPI partner Danny Franklin. “And when we reminded them of those values … and validated that through trusted endorsers, we could win the argument and defeat the attack.”

    Technology

    Warning lights are flashing for Big Tech as they did for banks | Financial Times – The pandemic has emphasised our reliance on technology. It’s not just the interminable video calls or the technology that underpins deliveries to our locked-down doors. It is the mountains of data that dictate the ads we see as we scroll through coverage of the latest coronavirus briefing. Digital transformation is sweeping through my industry, too. Consumers have squeezed years-worth of adoption of apps and online banking into just a few months. Yet the risks go much deeper than the risk of hastily managed change. The algorithms that determine how much work delivery drivers get and what we see when we go online are no better understood than the structured credit products that brought the banking system to its knees in the financial crisis. – Interesting and provocative analogy to the financial system

    Teaching in the Pandemic: ‘This Is Not Sustainable’ – The New York Times – vehement debates have raged over whether to reopen schools for in-person instruction, teachers have been at the center — often vilified for challenging it, sometimes warmly praised for trying to make it work. But the debate has often missed just how thoroughly the coronavirus has upended learning in the country’s 130,000 schools, and glossed over how emotionally and physically draining pandemic teaching has become for the educators themselves. In more than a dozen interviews, educators described the immense challenges, and exhaustion, they have faced trying to provide normal schooling for students in pandemic conditions that are anything but normal. Some recounted whiplash experiences of having their schools abruptly open and close, sometimes more than once, because of virus risks or quarantine-driven staff shortages, requiring them to repeatedly switch back and forth between in-person and online teaching. Others described the stress of having to lead back-to-back group video lessons for remote learners, even as they continued to teach students in person in their classrooms – I imagine that it is probably pretty similar levels of burnout in knowledge workers as well. (Paywall)

    Do serious games help you learn? – Hello Future Orange – Serious games are more effective than traditional teaching but they do not produce better results than more active forms of knowledge transmission and are often more costly to implement.

    Thailand

    Pornhub, along with several other adult entertainment sites have been banned in Thailand. This has been part of a wider political debate within the country on government performance and what role the royal family should play. Asian Boss asked Bangkok residents on their opinions. What pleasantly surprised me about this video was thoughtful opinions on both sides of the argument

    More Thai-related posts here.

  • Bots in education + more things

    Bots Grade Your Kids’ Schoolwork—and They’re Often Wrong – WSJ – not surprising that Bots get grading wrong. A lot of ‘AI’ is math, it isn’t that far along from Business Intelligence systems of the 1990s. What would have been called fuzzy logic in the 1990s is now ‘AI’ bots; both of which rely on mathematics from the 1960s. ‘AI’ bots using Bayesian statistics rely on mathematics from the 18th century. ‘AI’ bots require a large amount of training. Bots don’t develop a ‘universal’ intelligence.

    Battery life: the race to find a storage solution for a green energy future | Financial Times – MIT’s Prof Sadoway believes that technologies need to be based on more abundant materials than those used in lithium-ion and vanadium batteries such as aluminium, sulphur, calcium and antimony. In 2005 he helped develop a liquid metal battery that uses calcium and antimony and a molten salt electrolyte. The company that developed it, Ambri, was backed from the beginning by Mr Gates, who invested in it after watching Mr Sadoway’s chemistry lectures online

    Xi’s aim to double China’s economy is a fantasy | Financial Times – challenged by demographics and politics

    ‘Humaning’ and the greatest marketing bullshit of all time – Marketing Week – Maslow built his model from qualitative research on the Native American inhabitants of the Blackfoot reservation who later pointed out that his whole theory was entirely incorrect when applied to their culture and identity. The hierarchy has subsequently been criticised on the basis of missing stages, putting stages in the wrong sequence and the fact stages change according to circumstance, culture and geography. So basically everything. But the dreaded hierarchy proved a hit with marketers who had no formal training but wanted something scientific-looking and faintly European-sounding to beef up their empty marketing plans. Its prevalence across every crap marketing plan (along with the equally redundant SWOT analysis) serves only one positive: to identify badly trained marketers and crappy marketers at 50 paces.

    Stop playing politics or face a ban, Nintendo warns Animal Crossing gamers | Hong Kong Free Press HKFP – I suspect that this is less about Hong Kong and more about the political chasm in the US

    Celebrity deepfake porn cases in Japan point to rise in sex-related cybercrime | South China Morning Post – the old law of the adult entertainment industry pioneering with technology a la film to VCRs and cable and online paywalls strikes again

    Scaling back – Why commercial ties between Taiwan and China are beginning to fray | Business | The Economist – “Little Taipei”, as Kunshan is known, illustrates a broader phenomenon. Exact estimates vary, but as many as 1.2m Taiwanese, or 5% of Taiwan’s population, are reckoned to live in China—many of them business folk. Taiwan Inc has not let fraught political relations with China, which views the island as part of its territory, get in the way of business. Taiwanese companies have invested $190bn in Chinese operations over the past three decades. Foxconn, a giant Taiwanese contract manufacturer of electronics for Apple and other gadget-makers, employs 1m workers in China, more than any other private enterprise in the country

    Grocery Drives Walmart Online Orders – Consumer Intelligence Research Partners, LLC – Among all US Walmart.com customers, CIRP estimates Walmart+ has 2.6 million-3.4 million members as of October 31, 2020, with 12%-15% of Walmart.com customers joining. US Walmart.com customers that shop for groceries at Walmart.com are two times more likely to report a Walmart+ membership. “Walmart launched the Walmart+ membership service in the quarter, and we estimate a range of membership that suggests about 3 million Walmart.com customers joined,” said Mike Levin, Partner and Co-Founder of CIRP. “At that level, it seems like a success, especially after only six weeks. Of course, grocery customers found it particularly attractive. Like Amazon Prime, Walmart+ is most valuable to regular Walmart.com shoppers, so it appealed to those grocery shoppers right away. And like Amazon’s experience with Prime, Walmart appears to want to build on that natural affinity to gain greater share of online shopping for those customers, and then to entice less frequent shoppers to grow their online shopping habits.” – groceries are over 30% of sales (food, household and pets 25%, clothing shoes & accessories 16%, same for pharma and electronics and office supplies were about 12%) (PDF)

    Muddy Waters accuses YY and Bigo of faking their revenues – Singapore-based analyst Ke Yan of DZT Research, told Bloomberg that the strategies discussed in the Muddy Waters report are aimed at boosting YY’s popularity among users instead of inflating revenue. Chen Da, executive director of Anlan Capital, offered Bloomberg a similar view. “You can’t really apply the research methods used to collect fraudulent evidence against real-economy or manufacturing firms to internet firms.” He added that their “business model does pay off and there is real cash flow brought in after the fakes ‘get the ball rolling’.” – sketchy growth hacking rather than fraud

    How the U.S. Military Buys Location Data from Ordinary Apps | Vice News – surprised if they didn’t. More related posts here.

    6 Points to Consider Before Betting the Farm on ‘All Made in China’ | EE Times – Some “three-nos” companies with “no experience, no technology, and no talents” have joined the IC industry. Some companies have insufficient knowledge of the law of IC development and blindly start projects. The risks of horizontal duplication of construction are apparent, and even the construction of individual projects is stagnant, and the factory buildings are empty, causing waste of resources. In this regard, Wei said that we must respect the law of industrial development and overcome the rapid development shooting for quick success. Since 2007, China’s wafer manufacturing capacity has increased rapidly in the world, far higher than other countries and regions. In 2019, China has 199 integrated circuit wafer manufacturing production lines (above 4 inches), of which there are 28 12-inch production lines and 35 8-inch production lines (including 1 pilot line). The enthusiasm for investment and construction of factories in various places is high, but a number of manufacturing projects are facing unfinished shutdowns. The blind impulse that violates the development law of the semiconductor industry is worthy of vigilance

  • Humaning marketing + more

    Mondelēz International, Inc. – Announcing Humaning: A New Approach to Marketing – Humaning is a unique, consumer-centric approach to marketing that creates real, human connections with purpose, moving Mondelēz International beyond cautious, data-driven tactics, and uncovering what unites us all. We are no longer marketing to consumers, but creating connections with humans – no I am not wiser than when I started reading this as to what humaning actually is. More marketing related posts here.

    The Three Eras of 32-/64-Bit Embedded CPUs – EE Times Europe – Arm’s responses to the RISC-V phenomenon could have come straight out of the dominant player’s playbook, under the chapter heading “When you’re spooked.” First, it released marketing collateral attempting to generate fear, uncertainty, and doubt (FUD) about RISC-V, which merely served to help inform the industry of the existence of RISC-V (IBM’s FUD campaign about minicomputer vendors achieved much the same effect). Second, Arm waited to see if the RISC-V startups ran out of money. To Arm’s surprise, the emerging RISC-V vendors were beginning to win customers with low-end processor IP cores, as customers finally saw an alternative to Arm, at least at the low end. More venture capital (and corporate VC) investment flowed toward RISC-V. Companies like Western Digital heavily backed it. To make matters worse for Arm, Softbank seemed to demand that Arm raise prices for its low-end M-class processors. That apparent misstep drove further business away from Arm and toward RISC-V. Now, more Arm customers are reviewing the value their long-term supplier offers for the money.

    Once a household name, Chinese maker of copycat Nintendo consoles driven to bankruptcy – bye bye Sabor

    Introducing a total online advertising restriction for products high in fat, sugar and salt (HFSS) – GOV.UK 

    SoftBank in talks to sell Boston Dynamics to Korea’s Hyundai | Techinasia – SoftBank’s second major sale in just two months, following its divestment of UK-based chip designer Arm Holdings to computer hardware giant Nvidia in a US$40 billion deal. SoftBank had acquired Arm in 2016 for about US$31.4 billion in cash

    Project MUSE – The Authoritarian Assault on Knowledge – Journal of Democracy – interesting stuff here on China’s influence on university campuses around the world

    Beijing’s Erosion of Hong Kong’s Freedoms Has Been in the Works for Years – Pro Market 

  • Things that caught my eye this week

    This project among older Irish people in the UK caught my eye Dementia and Music | Comhaltas in Britain.

    Comhaltas Ceoltóirí Éireann (to give it its proper name) is an Irish based organisation with international branches that promotes Irish traditional music. It puts on grass roots sessions in local communities, trains young musicians and organises touring parties of musicians from Ireland around the world.

    As a young child the Comhaltas tour of Britain meant a night out in the then packed Irish centre. There was the stress of getting ready; seeing my parents getting into their Sunday best (which has become less formal over the years) and my Mum never being able to find the shoes she wanted.

    I would be wearing scratchy formal wear listening to Irish comedian / MC, mournful sean-nós singing and the lively céilí music with the occasional puirt à beul accompaniment.

    A YouTube video with classic Irish tunes like these take me back playing records on my Granny’s turntable as a child; or my Uncle, Granny and I dancing like dervishes around the Marley tiled farmhouse floor as we whooped and clapped.

    So the fit with Comhaltas and dementia made a lot of sense given the long term memories that would be likely accessed. And its amazing that something like this is specifically developed for the Irish community in the twilight of their years. Other organisations have looked to build something similar, such as Boots’ multi-sensory box. But this lacked the same degree of cultural relevance.

    I loved Akira from the first time I saw it at an arthouse cinema in Liverpool in the early 1990s. It mirrored the cyberpunk culture I had loved since I originally watched Blade Runner. Akira had a quality and visual style way beyond what I had ever seen before. I’ve watched it many times since. But this video by an animator, going through a small section frame by frame was a revelation to me. The clever hacks that the animators did were amazing.

    https://youtu.be/2ltgr21jMag

    While we’re back in the 1990s, here’s Public Enemy live at Brixton Academy. Yet in 2020, Chuck D’s monologues feel even more relevant now than they did in 1990.

    https://soundcloud.com/flip-the-script/public-enemy-live-at-brixton

    TikTok could be used for more than repeatable dance moves like BlackPink’s Samsung #danceawesome routine collaboration or Dettol India’s hand washing meme. This is a great video on publishing ‘serious content’ based on the experience of the World Economic Forum.

    Google has launched a new workflow tool in the US. It looks interesting, here’s a YouTube walkthrough of it.