There’s a place that gives me the shivers: And not just because it’s cold. The fresh section of the supermarket has become terrifying.
I’m not frightened of the vegetables themselves. What’s different is the numbers on the price tags. They suddenly make vegetables look like luxury goods.
The latest consumer price inflation figures are out and they tell a shocking story.
As the next chart shows, the price of vegetables has gone supernova. It’s hardly the only product to have shot up. Your breakfast cereal and the sandwich in your lunch box are also much more expensive than before. Only one product category fell in price in the most recent data: pork.
The price of vegetables went up a lot between March and June this year because in winter, we get our veg from Queensland, and the state got flooded in March. Fields that would usually be full of happy young lettuces were instead knee-deep in filthy floodwater.
The basic law of economics says when things are in short supply, the market starts raising prices. Only buyers who really want something – and who can afford it – are left buying. The rest of us stop buying. This is what markets do – change prices to make sure demand equals supply. Sometimes that means raising prices a lot to scare off most buyers.
I was definitely put off buying my favorite fresh vegetables by high prices. I bought frozen veg a few times, and even bought brussels sprouts instead of broccoli at one point – talk about desperate times!
The price of fruit
Fruit was up by a lot in the three month period too. It rose 3.7 per cent, which is significant. Berry crops got hit by bad weather too. But fruit inflation would have been a lot higher if it wasn’t for avocados. Those guys have their seed on the inside, so they count as fruit, and they have tumbled in price. Who among us hasn’t shoveled in a lot of guacamole in recent times?
Avocado farmers seem to have gone on a planting spree back when jokes about smashed avo were at their peak. It takes five years or so for an avocado tree to grow enough to make fruit, and now the farmers are pulling in massive crops. Jokes about smashed avocado are over in 2022 however, and in a grim irony, it’s avocado prices that are now toast.
“The additional [avocado] trees started producing fruit around the middle of last year, leading to oversupply and sharp price falls,” said a spokesperson from the ABS when I asked about why fruit prices were not as high as vegetables.
She explained avocados are often eaten in cafes and restaurants, so when we eat at home more the avocado industry takes an extra hit.
“Reduced demand from the food service industry due to lockdowns also reduced demand for avocados during the later parts of last year,” she said.
That adds up to cheap avocados. I bought a bagful yesterday for well under a dollar each.
Pork on your fork
The outlier in the graph above is pork. Why is it cheaper, I asked? The answer seems to be cheap imports. I went digging for data and found the Australian pork industry published loads of information on pork imports. They say that by May 2022 we had brought in a lot more pork – 22,000 tonnes instead of 13,000 tonnes by May 2021. Our extra bacon is especially coming from Denmark and the Netherlands.
That extra supply has helped eased prices after a period early in 2022 where pork prices got a lot higher.
But why are the Europeans suddenly sending us so much pork? The answer is a fascinating one – pigs don’t graze grass like cows – you have to feed them (not unlike people!) and as the next chart shows, the cost of feed as a percentage of the eventual price of the pig got very high in early 2022.
Pig farmers have the choice to either make money by turning pigs into bacon, or spend money keeping on feeding them. They are choosing the former. So ironically, high food prices in Europe may be helping keep down the price of Australian pork.
Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.
Citi analyst Siraj Ahmed, for example, lifted his forecast for cash earnings before tax, depreciation and amortization (EBTDA) for 2023 and 2024 – the latter year when Zip hopes to move into the black. However, in a sign of the uncertainty still facing Zip, Ahmed added a “high risk” rating to his “neutral” stance on the stock.
BNPL businesses such as Zip and Afterpay provide short-term, interest-free facility loans to consumers, and are seeking to challenge the might of the global credit card industry. They were market darlings last year, but have since been swamped by a wave of negative forces: high bad debts, growing competition and plunging tech valuations, as rising interest rates cause investors to demand profits sooner from companies that burn through cash.
In response, Zip unleashed a drastic reconfiguration of its business known internally as “Operation Blue Sky.” It promised to slash more than $30 million in employee costs, tighten new lending, halt global expansion plans, and pause proposals to push into new products, such as cryptocurrency trading.
Gray, a finance industry veteran who co-founded Zip in 2013 with chief executive Larry Diamond, says it has been a tough period for the company and affected staff. But, ultimately, the changes are about survival.
As a loss-making company focused on rapid growth, Zip was reliant on raising capital from investors to fund its operations. Gray says that since the market “collapsed in the short term,” it must prove it can make a profit.
“I think it’s very important that we have that as an underlying part of our thinking – we don’t want to rely on capital markets to support our survival,” Gray says.
“We were in the fortunate position where we had sufficient capital to adjust our settings to deliver the outcomes we want without needing to tap the market again.”
Gray grants Zip did not expect the blowout in bad debts, which have reached 3.8 per cent of accounts in its flagship Australian business.
“I think we’ve acknowledged that bad debts are performing outside our target range,” he says. But he argues the company is dealing with the problem by tightening its lending criteria, which flows through quickly into loan performance because short-term loans roll over quickly.
Despite the recent share price rise, many analysts remain skeptical about Zip’s future. UBS’s Tom Beadle, who has a “sell” rating on its shares, last month said Zip’s credit risks appeared to be worsening – in contrast to the big banks’ consumer-loan portfolios, which are improving.
And even if Zip can curb bad debts and make a profit, its recent changes still raise major questions. For one, when it is slashing its expansion plans so deeply, is it still classed as a growth company?
Gray maintains it can still grow with tighter lending standards, due to the sheer scale of the potential market in the US, where BNPL is far less common than in Australia. “Tempering our risk appetite doesn’t necessarily need to come at the expense of growth,” he says.
He also says there is still “burning ambition” to be a global company, despite announcing it would close its small Singapore business and put operations in Europe and the Middle East under review.
Another massive question still looming over BNPL firms is the entrance of cashed-up giants into the sector: Apple, Commonwealth Bank, Citi and PayPal have all launched or announced plans to enter BNPL.
Some analysts question whether “pure-play” BNPL firms such as Zip can compete against such size, but Gray dismisses the threat from what he calls the “imitators.” He says the entry of larger rivals into the BNPL market has had a “very minimal” impact on Zip, partly because these businesses do not provide the same digital services to merchants as BNPL firms.
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The crucial test for Zip will remain whether it can deliver on its hopes of posting positive EBTDA by 2024, against a challenging environment of more subdued consumer spending.
For many investors, and analysts at Macquarie, there remains a chance Zip could be caught up in merger and acquisition activity as the industry consolidates. However, Gray indicates Zip is unlikely to be on the lookout for merger opportunities – for now.
“For the short term, no, we’re pretty laser-focused on our core markets of ANZ and the US, and accelerating that path to profitability. So, it would have to be something extraordinary that fits in with that objective.”
The Federal government has been urged to consider intervening in the energy market, amid concerns of a gas shortage that could lead to higher prices, according to the latest report by the consumer watchdog.
Key points:
The ACCC’s report projects the largest supply shortfall of domestic gas since 2017
The projected shortfall could place further upward pressure on prices
Concerns are raised that some manufacturers could shut down
The Australian Competition and Consumer Commission (ACCC) has released an interim report of its inquiry into gas supply along the east coast.
It noted that while Australia has “relatively abundant gas resources”, most of it is produced for export and substantial volumes were required for the domestic market next year to avoid a shortfall.
“The outlook for 2023 is very concerning and is likely to place further upward pressure on prices, which could result in some commercial and industrial users no longer being able to operate,” the report said.
“This is a significant deterioration in conditions relative to what we projected for 2022 at the same time last year and presents a real risk to Australia’s energy security.”
It has recommended that the government consider intervening in the market, by pulling what’s known as the “gas trigger” to ensure there is enough supply.
The Gorgon project in Western Australia has been supplying gas since 2017.(Chevron)
The ACCC has predicted a shortfall of 56PJ next year, which is equivalent to about 10 per cent of domestic demand, the largest projected supply shortfall since 2017.
“This represents a further [almost tenfold] deterioration in conditions relative to what was forecast for 2022 at an equivalent time last year,” the report said.
The ACCC has partly pointed the blame at liquefied natural gas (LNG) exporters.
“LNG exporters are expected to contribute to the shortfall in 2023 by withdrawing 58 PJ more gas from the domestic market than they expect to supply into the market,” the report said.
The shortfall is expected to mainly affect New South Wales, Victoria, South Australia, Tasmania and the Australian Capital Territory, with less significant consequences for Queensland.
How to fix the problem
To avoid the gas shortage, the ACCC has encouraged LNG exporters to act immediately to increase domestic supply and has recommended the government work with exporters to ensure they supply more into the domestic market.
“LNG producers will need to divert a significant proportion of their excess gas into the domestic market,” the report stated.
It has also recommended the federal government go further and initiate the first step of the Australian Domestic Gas Security Mechanism (ADGSM), more commonly known as the ‘gas trigger,’ and formally determine if 2023 will be a shortfall year.
The gas trigger is an emergency provision, which allows the Resources Minister to directly intervene in the gas market and impose export controls to ensure there are adequate supplies for use in Australia.
Treasurer Jim Chalmers says the report highlights “alarming” elements of the east coast gas market.(ABC News: Adam Kennedy)
The government is yet to outline whether it will follow the recommendations but in a statement, Federal Treasurer Jim Chalmers said he was concerned by the findings.
“The ACCC’s latest gas inquiry report highlights some alarming features of the east coast gas market,” he said.
“The government takes these findings extremely seriously and will shortly respond to the ACCC’s recommendations.
“I urge gas producers to do the right thing by Australians.”
The ACCC said other measures that could also help with supply issues include sourcing additional gas from the Northern Territory and withdrawing gas from storage.
Long-term plans
The government has an agreement with LNG exporters that aims to ensure there is enough reasonably priced gas supplied to the domestic market, known as the Heads of Agreement.
However that deal ends next year, and the ACCC has recommended the government strengthen the stipulations which include reporting obligations.
It has also made a similar recommendation on strengthening the ADGSM.
The ACCC has also pointed to supply issues being resolved in the medium to long term through the expansion of gas projects in the Gippsland Basin, the south-west pipeline in Victoria and further progress on LNG import terminals.
However the report notes the growing focus on other energy supplies, as Australia tries to reduce its emissions, and has acknowledged federal funding will help further support natural gas, carbon capture and storage, and hydrogen projects.
A new video by a popular Australian comedian has cast a spotlight over the easy-to-miss detail on the green aprons all Bunnings staff wear.
In his latest video, TikTok star Luke Donkin poses as a Bunnings employee in a fake ad for the hardware giant.
Watch Luke Donkin’s latest Bunnings ad above
For more Lifestyle related news and videos check out Lifestyle >>
The comedian has gained a cult following for his amusing videos promoting leading supermarket and retail stores, including Woolworths, Coles and Kmart.
In this latest video, Donkin questioned the purpose of the clear pockets on the front of the Bunnings apron.
Luke Donkin questioned the purpose of the clear pockets on Bunnings staff aprons in a recent video. Credit: LukeDonkin/TikTok
“I honestly have no idea what this pocket is used for,” he said.
“I’ve always wanted to put like a trail mix in it and then just (motions to eat it) throughout the day.
“But I’d probably get in trouble.”
‘I honestly have no idea what this pocket is used for,’ he said. Credit: LukeDonkin/TikTok
7NEWS.com.au understands that the clear pockets are used to display the Bunnings team member’s name tag – a fact confirmed by many TikTok users.
“It’s for your name badge!” said one.
Another added: “The pockets meant for a name tag but nice idea!”
The clear pockets are used for Bunnings staff member name tags. Credit: Reddit
Qantas passengers queue for security checks at Sydney Airport’s Terminal 3 last month. Photo: Louise Kennerley
Travelers passing through Sydney Airport have been beset by long queues for security in recent months, on occasion stretching out of the terminal and down the footpaths.
But some passengers, at least, will now enjoy quicker checks after the airport finally rolled out new baggage scanners that no longer require travelers to remove their laptops or aerosols when passing through security.
The three-dimensional CT scanning technology aims to cut waiting times by up to 50 per cent, but have only just started operating at Sydney Airport almost three years after they first went into operation at some other terminals around the country.
During the Easter holidays, when travelers experienced long waits at the airport, questions were asked as to why the new scanners, that could help alleviate the problems caused by COVID-19-related staffing shortages, had not yet been rolled out.
Now, almost four years after the Department of Home Affairs mandated the upgrades, the new scanners are operating at Terminal 3, where Qantas domestic flights depart from.
Sydney Airport did not confirm when the new scanners went into operation, but a staff member said they had been online for about a month. They will be rolled out to the other terminals but no timeline has been provided.
Despite a large queue on Thursday evening, passengers moved quickly through security with wait times just 10 minutes.
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But the problems travelers face are not over yet. On Monday morning lines again stretched outside Terminal 2 and down the footpath, with the airport citing heavy fog and a “technical issue” with security for the delays. Airlines continue to recommend domestic passengers arrive 90 minutes before their flights.
Meanwhile, Melbourne Airport confirmed the new scanners were now operating at Terminal 2 for international flights, while Virgin Australia passengers, who currently go through screening at Terminal 3, would soon be moved to an expanded Terminal 4 security check, which has had the new scanners operating since late 2019.
See also: Right now, Australia hates Qantas. But it won’t last
See also: Ten key tips for surviving the current travel chaos
Ashley Hodak has taken the opportunity to pursue a career as a flight attendant amid a jobs boom in the travel industry. Photo: Brook Mitchell
Ashley Hodak’s new career is about to take off.
The 27-year-old former childcare and administration worker just finished her five-and-a-half-week flight attendant training program with Virgin Australia. Next week she will join a fellow cabin crew for her first flight from Sydney, destination Hamilton Island.
“I’m so excited!” she said.
Ashley Hodak (centre) and colleagues during their last day of training with Virgin Australia. Photo: Brook Mitchell
“I’ve experienced the nine-to-five Monday-to-Friday routine, but I wanted a different lifestyle, and I’ve always had a passion to be a flight attendant. Now I absolutely love it, and how the days will be all so different. It’s so cool to get paid to travel and become a part of people’s holidays.”
If you’ve ever dreamt of a career in the travel industry, there’s never been a better time to join, with thousands of jobs now on offer in Australia – and often at better-than-usual pay rates.
Those roles range from flight attendants to pilots, baggage handlers to airport café workers, travel IT specialists to agents, accountants to flight check-in staff, and everything in between.
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“It’s an absolutely wonderful time to be thinking about joining the travel industry, with all sorts of jobs on offer, from entry level staff to pilots,” said Tourism and Transport Forum chief executive Margy Osmond.
“The industry has essentially lost a whole generation of workers from people leaving during the pandemic, and it’s now offering more money because it needs to fill these vacancies from a recovery perspective.”
Virgin Australia, like many of the world’s major airlines, is now recruiting for hundreds of roles within cabin crew, baggage handling, guest services and corporate, with perks including heavily discounted air travel and annual travel credits.
“We strive to create a workplace culture which emphasizes an authentic, fun loving, hardworking and irreverent challenger nature,” a Virgin spokesperson said.
Qantas and Jetstar have just recruited more than 1000 people into operational roles, and are still seeking many more, especially with international flights restarting, new aircraft on order and additional routes being planned.
“Restarting an airline after a two-year grounding is complex, and aviation labor markets, as with many others, are extremely tight,” said Qantas domestic and international chief executive Andrew David.
New Australian budget airline Bonza – set to launch in September – is also recruiting for its Sunshine Coast and Melbourne bases, with assessment centers running in parallel with crew training schools.
“We have around 100 cabin crew and 50 pilot roles being filled in a two-month period,” said Bonza chief executive Tim Jordan.
“We’re also hiring a number of other legends [staff] to join our team including crew controllers, operations controllers, and flight dispatchers on the Sunshine Coast, as well as specialist roles such as in e-commerce, marketing, operations, and finance.”
Middle East carrier Emirates is also on the lookout for prospective Australian candidates to join its cabin crew, with a series of recruitment open days around the country.
Emirates’ divisional vice president for Australasia Barry Brown said “as the travel demand continues to increase and we ramp up our operations locally and globally, naturally we need to continue building our cabin crew team in the sky.
“Australians are well represented in our global workforce, and with significant interest in our previous open days in Australia, we have great optimism that this next wave of recruitment will welcome more Australian talent to our workforce.”
Qatar Airways has similarly been advertising globally for new staff, looking for all categories of cabin crew, lounge staff, call center workers, ground operations and catering staff, especially in the run-up to the FIFA World Cup in Doha later this year.
Singapore Airlines is also recruiting operational and commercial staff, with particular emphasis on ground handlers, catering and ground operations; it recruits cabin staff from Asia.
The main airports at Sydney and Melbourne have also been running jobs fairs to attract applicants to the hundreds of vacancies both still have, alongside their ground handling companies recruiting baggage handlers.
“Now that the uncertainty caused by lockdowns and border closures has ended, we hope that more people will consider a career with the airport or the airlines,” said a Melbourne Airport spokesperson.
“As one of the largest employment hubs in Victoria, there are hundreds of roles that need filling.”
Sydney Airport has similarly been advertising more than 5,000 jobs in retail, government agencies and terminal service providers, after having lost 15,000 jobs during the pandemic. Its jobs fair on June 16 had 4600 applications for jobs, with people lining up at the airport from 6am for the 10am start.
The average salaries in the travel industry
Pilot: $104,461 per year or $53.57 per hour plus allowances (depending on the size of the aircraft being flown, and the years of experience)
Flight attendant: $66,670 or $32.00 per hour
Baggage handler: $61,000 or $29.33 per hour
Airport cafe worker: $55,000 or $26.44 per hour
Airport payroll officer: $71,384 or $34.31 per hour
Airport engineer: $90,000 or $43.27 per hour
Security supervisor: $71,469 or $34.36 per hour
Airport receptionist: $60,000 or $28.85 per hour
Air traffic controller: $109,661 or $52.72 per hour
Source: Fair Work Ombudsman, payscale.com, au.indeed.com and seek.com
I am aged 85, single and retired, and need to provide for my only child, who is single and on a disability support pension. My assets include my home, valued at $1.7 million, shares worth $60,000 and superannuation of $10,000. I get the full single age pension of $987.60 a fortnight ($25,678 a year). This is insufficient for me, and I have been selling my shares. My options seem to be: 1. Downsize. This would cost about 2 per cent in sales commission, plus marketing costs. Then, to buy another property, I would pay stamp duty of 4.3 per cent on the purchase price, and most probably a strata levy, while I may also lose some or all of my age pension. 2. Access equity in my home under Centrelink’s Home Equity Access (HEA) scheme, or similar. What are your thoughts? G.W.
Regarding your two options, I would favor accessing your property’s equity under Centrelink’s HEA scheme.
Credit:
However, if providing for your child is an immediate priority, you could consider a land-lease community, whereby you sell your property and buy a smaller home in an estate, without paying stamp duty.
Prices can be less than $400,000, but always check their fees. Some have no exit or deferred-management fees, while others do not.
That could leave you with enough money left over to place up to $500,000 in a Special Disability Trust for your child, which is the maximum gifting concession allowed without affecting your age pension.
Your child could then claim an assets-test assessment exemption of up to $724,750 (indexed each July).
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You recently covered the question of capital gains tax after death when assets pass on to non-residents. Two of my three children previously lived overseas and, had I died at the time, CGT would have been payable by the estate on their inheritance, and my Australian-resident third child would have been disadvantaged. So, my solicitor added the following clause to my will: “Should the liability for such tax arise as a result of the transfer of any asset from my estate to a tax-exempt and/or non-resident beneficiary, such beneficiary shall pay to my trustee the assessed amount of such tax prior to any such asset transfer or agree to an equivalent reduction in his her or their entitlement to my estate of the assessed amount of such tax.” JH
Thank you for that, it may assist others in similar situations.
There are only two public anecdotes about Xu Yangtian, also known as Chris Xu – the mysterious billionaire founder of Shein. One positive, one negative. They both – if true – hint at the determination and ruthlessness needed to build a global empire in the savagely competitive world of fast fashion.
In one, shared widely across Chinese media, an anonymous supply chain worker talks of visiting the company’s Guangdong headquarters.
“No matter when you go,” the worker says, “even if it is two or three o’clock in the morning, you can find Xu Yangtian and his team. Always in meetings, never lazy, and always trying to learn all the good things about you.”
The other anecdote is less flattering. According to two former business partners and colleagues, after having successfully built an e-commerce company together, one day they turned up and he was gone. Allegedly taking the company’s PayPal accounts with him, Xu ignored their calls and “kicked [them] out of the game”.
Alone, Xu went on the establish a company that would reach a $100bn valuation within a decade.
Blue DeTiger performs during Shein X Rock the Runway in Simi Valley, California. Photograph: Stefanie Keenan/Getty Images
In a funding round earlier this year, Shein was valued at more than Zara’s owner Inditex and H&M combined. Last week it announced a new executive hire to spearhead its expansion to Europe, Jacobo Garcia Miña, whose CV includes senior roles at Inditex and Britain’s luxury Burberry label. He will oversee operations from Dublin, as Shein prepares to open pop-up stores in major European cities this summer.
Its brand recognition, particularly among young shoppers, is already enormous. Even if you have never visited its site or app, your browsers and social media platforms have more than likely fed you its ads.
Xu is among China’s richest men, but is far less well known than figures like Alibaba’s Jack Ma, or Tencent’s Pony Ma. He refuses interviews and rarely comments publicly outside the occasional press release quote.
Differing reports describe him as a Chinese-American who studied at George Washington University, or as born in Shandong in 1984, going on to study at Qingdao University of Science and Technology. Shein has told media that Xu is Chinese-born. Chinese media describes him as being an average student from a poor background, who had to work to support himself through college. He developed a skill with search engine optimization (SEO) which would underpin his future success.
Reports on Xu’s background and rise through the industry have painted a picture of a hardworking SEO whiz, with an alleged capacity for ruthless business decisions. In 2008 I formed a cross-border e-commerce business, Nanjing Dianwei Information Technology, with two partners: Wang Xiaohu had an equal share and Li Peng was a consultant with a 10% stake.
Li told Wired in May the trio rented a small office, trying to sell anything from teapots to phones, before moving towards clothing. They began honing the model for what would later become Shein – tiny direct-to-customer orders placed with small suppliers, turned around quickly in response to demand rather than predicted sales, and using Xu’s SEO skills for trend spotting and promotion. “We were going for low margins and large quantities,” Li told the outlet.
In 2011 Xu created SheInside, a Nanjing-based online wedding dress retailer and Shein’s predecessor. Multiple reports have detailed controversy around this move, with Li claiming Xu “kicked me and [Wang] out of the game”. According to Li, Xu disappeared from the office one day with control of the company’s PayPal accounts, ignoring all calls. Li directed the Guardian towards previous interviews where he had already made the claim, but also declined to elaborate further. Wang told the Guardian Li’s version was correct, but declined to comment further.
A satin dress by Shein. Photograph: Shein
Shein has rejected this characterization of events in previous reports, and Xu reportedly threatened to sue when the claims were first published. A spokesperson told the Guardian that Li only worked for Nanjing Dianwei from October 2008 to mid-2009, but confirmed neither Wang or Li became partners of SheInside nor had any business ties with SheInside. Xu could not be reached for comment.
Two years after starting SheInside, in one of his only known public social media posts, Xu wrote on Facebook: “The company has grown rapidly and has more than 50 employees!” In 2015, the company became Shein, moving its headquarters to Guangzhou, and opening an office in the US.
Under Xu, Shein began to develop its own supply chain, what the tech analyst and founder of Tech Buzz China Rui Ma terms the “dirty work” that other less successful competitors neglected. It hired technical college graduates to scour the internet for popular designs. It also formed an inhouse design team, and bought competitor Romwe – an e-commerce company founded by Li and his then girlfriend of him. Shein’s ads and products became ubiquitous, flooding the internet and becoming a major user of advertising driven by influencers, celebrities and social media – especially TikTok.
The company earned a rare reputation among its thousands of suppliers – primarily in the Nancun neighborhood of Guangzhou – for paying accounts on time, but also for stringent requirements that reportedly led to high attrition rates. Ma says the consistent monthly pay cycle is a contributing reason for why suppliers try to stick with Shein, despite tough commercial conditions.
“Basically, suppliers are either making no money, or often times, losing money on the initial order,” says Ma in a recent analysis. “They’re mostly hoping to make a viral item that can result in a large volume order for that item.”
Shein’s spokesperson said it was innovative practices that allowed it to cut costs and pass savings on to customers. “Our technology-driven, nimble supply chain model is able to reduce overproduction by utilizing current market demands to predict sales and control production,” they said.
The company has also been dogged by accusations and instances of plagiarism.
Industry insiders tell the Guardian there is widespread skepticism of Shein’s sustainability as a business model. That skepticism has only increased during the pandemic, as supply chain woes have slowed down or crushed the rest of the industry, but Shein has continued to grow, largely unaffected.
In recent years the focus has returned again to Xu, amid rumors and reports of expansions and international asset transfers demonstrating the CEO’s ambition that Shein grow even larger. Reports in May said Shein was angling to buy UK clothing giant Missguided before its recent collapse, after a failed attempt to buy Topshop in 2021. In December Xu reportedly visited Brazil to inspect factories and suppliers over a potential expansion.
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Shein has attracted high-profile investors, including Tiger Global Management and Sequoia Capital China, amid reports this week suggesting that a US stock market listing is planned for 2024.
In what may be a related move, Xu was reported by Reuters in February to have become a permanent resident of Singapore – a possible step towards citizenship. There are now numerous links between Shein and Singapore, with key assets including the headquarters of the legal operators of Shein’s website – Roadget Business, now shifted from China to the city-state. The shift could be helpful in bypassing China’s strict and often unpredictable regulation of offshore IPOs.
Chinese business records show Xu has been cutting some business ties with his homeland. He began dropping management and legal roles with Shein and related entities, including Guangzhou Xiyin International Import & Export, in late 2020, and his second in command, Molly Miao, took over as legal representative of Shein in China. Miao could not be reached for comment. Records show the main Chinese entity – Nanjing Lingtian Information Technology – was deregistered in 2021.
Shein did not respond to questions about changes to the business ownership and asset locations, or the plans in Singapore or New York.
While the business has continued to grow, some the shine has come off Shein’s performance. Sales grew 60% in 2021 to $16bn, Bloomberg reported, down from a 250% jump to $10bn the year before, and recent private sales of its shares are said to be at discounts from its April valuation of $100bn. Investors will be asking if Xu can maintain the momentum.
Additional reporting by Xiaoqian Zhu and Chi Hui Lin
For much of the past decade, Tesla lacked competitors that matched its models’ battery range and other measures of performance.
The trends have shown up in one consumer survey and market research report after another: Tesla commands high brand awareness, consideration and loyalty, and customers are mostly delighted by its cars. Musk’s antics, on the other hand? They could do without.
Creative Strategies, a California-based customer-experience measurer, mentioned owner frustration with Musk in a study it published in April. A year earlier, research firm Escalent found Musk was the most negative aspect of the Tesla brand among electric-vehicle owners surveyed.
“We hear from Tesla owners who will say, ‘Look, I love my vehicle, but I really wish I didn’t have to respond to my friends and family about his latest tweet,’” says Mike Dovorany, who spoke with thousands of EV owners and potential buyers during his two years working in Eswarm’s automotive and mobility group.
Tesla has so far had no trouble growing its way through Musk’s many controversies. The dip in vehicle deliveries the company reported last quarter was its first sequential decline since early 2020 and largely had to do with COVID-19 lockdowns in Shanghai forcing its most productive factory to shut for weeks. Competitors that have been chasing the company for a decade may still be years away from catching up in the EV sales ranks.
Musk’s star power, built in no small part by his activity on Twitter – the same forum where he’s become such a lightning rod – has contributed immensely to Tesla, especially since it’s shunned traditional advertising. His steady stream of online banter, punctuated with the occasional grandiose announcement or stunt (see: shooting a Roadster into space) keeps Tesla in the headlines. During the company’s earlier days, the trolling and glib comments were a feature, not a bug. They allowed Musk to shape media coverage and made him the ringleader for Tesla’s legion of very-online fans.
But after making Tesla and himself so synonymous with one another, Musk has waded into political conflicts, attempted to buy one of the world’s most influential social media platforms and struggled to bat back unflattering coverage of his personal life, putting the company’s increasingly valuable brand at risk.
Jerry James Stone, a 48-year-old chef in Sacramento, California, who teaches his 219,000 YouTube channel subscribers how to make vegan and vegetarian meals, drives a Volkswagen Beetle convertible and plans to go electric with his next car. He is not sure yet which model, but he is certain it wo n’t be a Tesla.
“Elon has just soiled that brand for me so much that I don’t even think I would take one if I won one,” Stone says. “You have this guy who’s the richest dude in the world, who has this huge megaphone, and he uses it to call somebody a paedophile who’s not, or to fat-shame people, all these things that are just kind of gross.”
Teslas off the table
According to Strategic Vision, a US research firm that consults auto companies, some 39 per cent of car buyers say they wouldn’t consider Tesla. That’s not necessarily out of the ordinary – almost half of respondents say they won’t consider German luxury brands. But Tesla does lag more mass-market brands: Toyota, for example, is only off the shopping list for 23 per cent of drivers.
Emma Sirr, a 28-year-old worker in cloud computing who lives in Bozeman, Montana, gets around with her partner and their two dogs in a 2004 Nissan Frontier. They’ve been researching EVs for about three years and until recently considered Teslas the only viable option, given their range and the charging infrastructure the company has built in their area. But they refused to buy one because of Musk, their main concerns being his politics, staff turnover at the company and its cavalier approach to autonomous-driving technology.
“We took Tesla off the table from the get-go,” Sirr says. She and her partner de ella have their eyes on the Kia Niro and Chevrolet Bolt as possible alternatives. “As consumers, our power is what we buy. I think younger generations in particular vote with their wallets, and I feel like that might come back to bite.”
For much of the past decade, Tesla lacked competitors that matched its models’ battery range and other measures of performance. Consumers put off by Musk’s mischief had few EVs to turn to. As legacy vehicle makers introduce more capable electric models, Tesla won’t have as much leeway.
“We’ve seen among the early adopters more of a willingness to take risks or to put up with things that are out of the ordinary,” says Dovorany, who left Escalent for an automotive tech start-up earlier this year. “We’re not seeing that as much with incoming buyers.” To win this cohort, automakers need to check every box, and for some, that includes employing a chief executive who doesn’t share Hitler memes on social media.
Levitt, the self-described former Musk fanboy, took a test ride last month in a Lucid. He was n’t sold on it, partly he says because it did n’t have enough cargo space for his golf gear. He’s still waiting for another automaker to steal him away from Tesla and considering models from Audi, Mercedes and BMW.
“If you take Mr. Musk and his antics out of the equation, I’m about 98 per cent certain that my next car would be a Tesla,” Levitt says. “His antics of him put me in play.”
House prices in Australia are dropping at their fastest pace since the global financial crisis — and market conditions are “likely to worsen” as interest rates continue to rise, according to property analytics firm CoreLogic.
Key points:
Economists predict Australian house prices could fall between 12 and 20 per cent
The median property value dropped 8.5pc during the GFC
Rents have arisen 9.8pc in the past year
The latest data shows that the nation’s median property value has dropped by 2 per cent since the beginning of May, to $747,182 (a figure which includes houses and apartments).
“Although the housing market is only three months into a decline … the rate of decline is comparable with the onset of the global financial crisis (GFC) in 2008, and the sharp downswing of the early 1980s,” said CoreLogic’s research director Tim Lawless.
But he noted that, on average, prices had jumped 28.6 per cent from mid-2020 (the low point of the housing market during the COVID-19 pandemic) to April 2022 (when national prices hit their peak).
Regional Australia had an even bigger surge, with prices up 41.1 per cent in two years — as smaller towns outside the capital cities experienced a huge influx of city-dwellers seeking better lifestyles (as working remotely became the new normal).
“In Sydney, where the downturn has been particularly accelerated, we are seeing the sharpest value falls in almost 40 years.”
Property prices in Sydney, Melbourne and Hobart fell sharply in July.(CoreLogic)
The median price in Australia’s most expensive city fell by 2.2 per cent in July (taking its quarterly loss to 4.7 per cent). Despite that, an average house in Sydney still costs around $1.35 million, while an average unit may fetch about $806,000.
Melbourne and Hobart also recorded steep falls, with prices in both cities down 1.5 per cent last month, while Canberra prices dropped 1.1 per cent.
Prices in Brisbane and regional Australia fell 0.8 per cent (their first monthly decline since August 2020).
At the other end of the spectrum, Darwin, Adelaide and Perth were the only capitals where prices actually went up in July (by between 0.2 and 0.4 per cent). However, it has been a sharp slowdown since May, when the Reserve Bank began to aggressively lift the cash rate from its record low levels.
short and sharp
“I think this downturn will be similar to the global financial crisis in that it will be quite short and sharp,” Mr Lawless told ABC News.
Australia’s median property price fell by around 8.5 per cent over an 11-month period during the GFC, according to CoreLogic.
Adelaide property prices jumped 3.6pc in the past three months.(CoreLogic)
Mr Lawless said the property downturn is “accelerating”, and that he would not be surprised if “the current decline gets worse than what we saw during the GFC”.
He noted the main difference is that governments and central banks are currently determined to withdraw trillions of dollars worth of stimulus, in a desperate bid to lower inflation (instead of pumping it into the global economy, liked they did after the 2008 crisis).
Many analysts are predicting Australian property prices, on average, will fall between 10 and 20 per cent (from peak to trough) — with the two most expensive cities Sydney and Melbourne likely to suffer the biggest declines.
But even if the worse case scenario eventuates, it will not drastically improve housing affordability.
“If we saw say, a 15 per cent drop in national housing values, it would take prices back to where they were in about April 2021.”
How quickly (and by how much) prices fall will depend on how aggressively the RBA decides to lift its cash rate target in the next few months.
Brisbane and Adelaide tenants are experiencing the sharpest rent increases.(CoreLogic)
Since May, the RBA has lifted its cash rate target from 0.1 to 1.35 per cent.
If the central bank delivers another double-sized rate hike on Tuesday (0.5 percentage points), as widely expected, that would bring the new cash rate up to 1.85 per cent.
Buyers’ market and surging rents
“The market has moved to being very much more in favor of buyers over sellers now, especially in markets like Sydney and Melbourne,” Mr Lawless said.
“Buyers are getting back in the driver’s seat. They have more choice, and there’s less urgency.
“But for sellers, it means they need to be much more realistic about their pricing expectations, and they should expect there’s going to be more negotiation.”
Renters are also disadvantaged in the current property market. As their landlords’ mortgage repayments increase (and more foreign workers and students) return to Australia, rents have surged rapidly.
“Rental markets are extremely tight, with vacancy rates around 1 per cent or lower across many parts of Australia,” Mr Lawless added.
“If you consider the history of rents, it’s very rare to see dwelling rents rising at more than say 3 – 4 per cent per annum.”
But in the past quarter, the national average rent jumped 2.8 per cent — and they are up nearly 10 per cent in the past year.
Looking forward, Mr Lawless said renters may be under increasing pressure to rent out any spare bedrooms to more flatmates, look for cheaper rents in apartments (rather than houses), or “stay at home with mum and dad longer.”
“There’s definitely going to be some negative social outcomes from such high rents, which aren’t showing any signs of slowing down at the moment.”
