Bloomberg Daybreak Weekend with Tom Busby takes a look at some of the stories we’ll be tracking in the coming week.
In the US – we preview Disney and Uber earnings
In the UK – we detail how big oil is grappling with geopolitics and climate change
In Asia – we look to the Lunar New Year and the health of the Chinese consumer
See omnystudio.com/listener (https://omnystudio.com/listener) for privacy information.
Bloomberg Daybreak delivers today’s top stories, with context, in just 15 minutes. Get informed from Bloomberg’s 2,700 journalists and analysts in 120 countries.
Subscribe to Bloomberg Podcasts: https://bit.ly/BloombergPodcasts
Listen to more of Bloomberg Daybreak: US Edition: https://youtube.com/playlist?list=PLe4PRejZgr0Pfj-MCX1dSTXnEBCGHl3Yo
#Bloomberg #Podcast #News
Visit us: https://www.bloomberg.com/podcasts
Follow Bloomberg Podcasts on Twitter: https://twitter.com/podcasts
Visit our other YouTube channels:
Bloomberg Television: https://www.youtube.com/@markets
Bloomberg Originals: https://www.youtube.com/bloomberg
Quicktake: https://www.youtube.com/@BloombergQuicktake
For coverage on news, markets and more: http://www.bloomberg.com/video
This is Bloomberg Daybreak weekend our Global look at the top stories in the coming week from our Daybreak anchors all around the world and straight ahead on the program the Cavalcade of earnings continues on Wall Street and we take a deep dive into two closely watched
Companies I’m Tom Busby in New York I’m Steven Carol in London where we’re taking the temperature of the European oil and gas industry as we head into another week of big name earnings reports I’m Doug krisner looking at what the Lunar New Year festivities will mean for the Chinese economy that’s all
Straight ahead on Bloomberg Daybreak weekend the business news you need to wrap up your week available on Apple Spotify the Bloomberg business app and everywhere you get your Podcasts good day to you I’m Tom Busby and we begin today’s program with the world’s biggest media company Disney reporting earnings this Wednesday and boy there’s a lot to unpack there production still catching up from last year’s twin holiday ollywood strikes what to do about the ABC Network and other non-core units unprofitable
Streaming TV services activist investor Nelson peltz’s proxy battle with Disney’s board news that it’s selling off most of its Indian broadcasting unit and a real setback in Disney’s Feud with Florida Governor Rona santis over control of the municipal District in Florida that includes the cash cow theme
Park Disney World it’s a lot and for answers we turn to Gea Ragan Us Media analyst with Bloomberg intelligence and Gea what is the headline that’s a lot but what do you expect to see in Disney’s second quarter earnings report yeah Disney is a very very complex story
Tom as you pointed out um and I think you know what we’re really looking to see there’s no one specific Catalyst per se but I think the sentiment for this stock has definitely turned and there’s there’s there’s a variety of factors at play here I think you have uh some
Really positive commentary coming out from them in terms of cost cutting we are seeing margin Improvement and we’re seeing improved profitability at the streaming business now remember that there’s still losses going on there but they’re better uh or they’re they’re less bad than feared um and I think the
One thing that really kind of stood out uh and and has investors kind of excited going into fiscal 2024 was their free cash flow guidance and they’re guiding to a whopping $8 billion in free cash flow which kind of takes them back back to pre- pandemic levels and and really
Supports the stock and that is good news I mean streaming I I know they’ve been counting on several properties including ESPN Hulu Disney plus but uh it’s not all good news is it for Disney not at all um there are a lot of challenges that remain uh and and you alluded to
This just a short while ago in terms of at least the linear TV networks uh you know that there is secular pressure on that part of the business um they are looking to uh you know U dispose of some of the networks and I think that’s that’s the right thing that they’re
Doing especially as far as their India unit is concerned but they have to kind of articulate a much better strategy for some of their us properties uh the most um famous of them of course being ESPN now this is uh you know the uh the Juggernaut when it comes to sports
Networks in the US but it is a cash cow it generates about $3 billion in Eid but there has to be a clear Strate from Disney in terms of the future of ESPN and and how and when it goes over the top now also there was talk last time I
Think we spoke about Byron Allen making A1 billion doll bid for the ABC Network now that was obviously turned down but is there any movement in the selling of that what is now a non-core business for Disney it is definitely a non-core business for Disney but actually after
Uh you know there was initially some chatter about Disney maybe wanting to sell out some of its linear networks including of course the ABC broadcast network but after that uh Bob Iger has kind of walked back the talk on you know the sale of the linear networks and he
Has to be I think really careful as he uh orchestrates uh any you know any sale of of assets especially the linear networks because again remember they do definitely want to hold on to ESP and that is a core property for them a core brand name for them and most of ESPN’s
Revenue is tied to the linear Network so they need to do it in a very very careful way and it’s it’s a very tricky uh Balancing Act for for Bob Iger and so I think he realizes that he does need to hold on to some of the linear networks
For just a little white little while longer before he can kind of figure out a viable strategy for that entire TV network business well let’s talk a little bit more about Bob Iger and some of the challenges he’s facing especially from you know tryan fund Management’s Nelson pelts and his proxy fight with
The board and in essence with Bob igera is not so triumphant return yeah so I mean this I think is is uh a little bit of a distraction I would say for the company I mean yes we have Nelson pels and and he he does make some Fair points
Um in terms of the stock price being very challenged and of course there are a lot of things that Disney has to do and they have done that uh of course one could argue that you know it maybe needs to be done even faster and maybe even
More needs to be done but I I don’t necessarily see felt having articulated anything specific that Disney hasn’t already come up with so he spoke about most recently spoke about you know bundling ESPN plus with Netflix I mean the Disney bundle is one of the most successful products out there in the
Streaming market right now um so it’s going to be really interesting to see what exactly pels has to offer uh in terms of suggestions for Disney that you know they haven’t already uh that they’re not already working on or they haven’t already come up with but I think
Otherwise kind of having him you know lingering and and having this this proxy battle is just an unnecessary distraction for for Disney’s management team right now yeah and it keeps going on there’s always something Nelson Belz has to say boy um well one thing I want
To talk to you about and I don’t think you and I and we we’ve talked before have ever really talked about is the theme parks which it seems to be just a constant source of income of Revenue theme parks and cruises does it still continue to be the the cash cow for the
Company that it has always been it absolutely does and this is where you know one really has to wonder you know if you just kind of look at at Disney U you know income statement 65% of this company’s profits comes from the theme parks and yet investors continue to
Obsess over ESP and continue to obsess over the linear TV networks um you know even though they don’t make up such a big portion of of the company’s revenue or profits and so that’s kind of really baffling but anyway going back to your point um you know Parks absolutely are
The key growth driver for Disney in the coming years they’re planning to invest about $60 billion in their Parks business over the next 10 years or so and what we’ve seen is of course after the pandemic we saw this huge Rebound in the domestic Parks uh you know so much
Of pent-up demand continued growth a lot of cost efficiencies operating margins touching record high levels and now what we’re seeing is we’re seeing a lot of Tailwinds actually coming from International Parks so you know all of them are open and running right now we’ve seen price increases implemented
Across the board um and we’re seeing International Revenue growth that is extremely strong as well as of course you mentioned the cruise ships so we have five cruise ships right now for Disney that are in operation but you have three new cruise ships that are coming on board um from 2024 through
2026 and so that is going to contribute significantly uh to the profit of this segment it just never seems to amaze me how many people will go to those parks and take those cruises well our Thanks To gether ronathan Us Media analyst with Bloomberg intelligent Gea thank you so
Much next up on the earnings calendar is Uber Technologies posting its latest results this coming Wednesday and for more on what to expect we welcome Bloomberg intelligence senior technology analyst M deep Singh now Uber has been on a roll demand for rides up food delivery up it’s share price more than
Doubling in the last year what do you expect to see in its results this Wednesday yeah look uh the mobility segment which is the driver of profitability for Uber and it’s driving all the optimism uh continues to do very well we’re talking about you know above
25% growth and that has been the case uh for the last three quarters it’s going to be the case in the holiday quarter the 4 q that we are talking about and going forward also I feel Uber Mobility has an advantage in the sense it’s gaining market share from lift which
Isn’t executing very well and it’s actually struggling in terms of the supply side so there aren’t as many dri drivers on L platforms as they are on Uber right now and we know with marketplaces Supply growth really makes a difference if your supply growth keeps up with demand that’s very healthy for
The marketplace so netn net Mobility should continue to do well even in 2024 even though the comps get tougher now is this a return of the business consumer people going back to work needing rides all around I I think the thing about Uber is uh big because they are a verb
And you know they have that 150 million monthly active users they cater to both airport rids which are more business rights but also the consumer rights where people are just uh using that more and more and for a while there was this uh kind of expectation that with
Inflation people are going to cut back on the rights because there is that elastic City when it comes to you know prices going up people will take fewer rights what that has done is is really helped the inflationary aspect has helped Uber on board more drivers on the
Platform so in a sense it’s uh brought down the prices for Uber rides because their supply growth has been so good and uh people need supplemental income and Uber is one of the best platforms out there if you want uh to work for two hours you can earn decent money that gig
Economy really has boosted these now let’s talk about uh something where there is a lot of competition not just Uber but food y MH and you’re up against some pretty big names when you’re Uber Eats and and what’s the prospect there I look I I think Uber delivery definitely
Is not uh you know a category leader like the mobility side is I mentioned how Uber is executing so much better than Lyft on the mobility side on the delivery side door Dash definitely has an advantage in the suburbs it has had that for a while now a few years and
What Uber is trying to do is is to expand in multiple categories so they have added grocery convenience and all kinds of other uh delivery that they could uh tag on to that online food delivery and to me the value proposition is a bundle so Uber uh has really
Emphasized their Uber one subscription which is like Mobility Plus delivery plus anything convenience and it all comes with a $9.99 uh subscription per month which is quite attractive Ive if I had to go for a door Dash subscription that just does you know food delivery and grocery delivery or an instacart
Subscription Uber is more attractive because it covers right sharing as well so from a bundling perspective I definitely see that value proposition and it is working you can see the delivery take rates are getting better because of this bundling aspect and they’re layering ads as well on the
Platform so the ads is the other uh kind of profitability driver that looks like a big growth Market at the ads for for Uber yeah and and that’s where scale matters for a Marketplace like uber as long as they maintain the scale through the supply acquisition I mentioned as
Well as you know the bundling and the frequency of rides they have an inherent advantage over all the smaller players thank you very much our thanks to Bloomberg intelligent senior technology analyst Mand deep Singh and coming up on Bloomberg Daybreak weekend we head to Europe for a look at upcoming earnings
From several energy Giants and the possible impact of the Israel Hamas war is having on the industry I’m Tom Busby and this is Bloomberg this is Bloomberg Daybreak weekend our Global look ahead at the top stories for investors in the coming week I’m Tom Busby in New York up later in our program a major holiday kicks off this coming week and what that could mean for China’s economy but first after shell kicked off the
Earning season for the European oil Majors we’ll be focused on total energies and BP in the coming days apart from their financial performances questions remain about how the industry will respond to Growing efforts to meet Net Zero targets and ongoing disruptions in the Middle East for more now let’s go
To London and bring in Bloomberg Daybreak Europe anchor step Carrol Tom the big oil companies have spent much of the past four years grappling with existential problems from geopolitics to climate change record losses during the pandemic turned into record profits two years later activist investers have come and gone big oil’s post-pandemic
Playbook has been simple take cash from rising oil prices and hand it right back to shareholders the challenge this earnings season is to avoid missing expectations but crude prices were down 20% in the final three months of last year so that’s easier said than done in
Europe kicked off this season with a big beat on adjusted net income coming in a billion dollars higher than had been expected add to that another three5 billion dollars of share BuyBacks here’s what the shell CEO way saan told Bloomberg’s Tom McKenzie about the company’s plans for further returns to
Shareholders what we guided to is 30 to 40% of our cash flow from operations coming uh coming back to shareholders so shareholders distributions um what we saw in 2023 is we were slightly above the higher end of that range at 42% as we continue to deliver the strategy the
Whole point and the whole focus of the strategy is creating more free cash flow per share so we will continue to to stay within the 30 to 40% or there bat through the cycle but continue to create the capacity to be able to reward our shareholders as we have done in 2023 and
As we hope to continue to do in 2024 okay so you have the cash flow you have the balance sheet many would look at that and say you are ready you are primed for more m&a Act activity do you expect to be more active this year when
It comes to mergers and Acquisitions our focus is very much on delivering the first Sprint that we announced we are essentially just over two quarters into what is a 10 quarter Sprint and what we have identified is that actually a the largest value o opportunity for us uh is
In just unlocking the full potential of this company and so while we will continue to look at bolons to our current portfolio we expect to stay within the 22 to$ 25 billion uh capex range that we have guided to uh and we will continue to look at preferentially
Going after BuyBacks because if I’m honest with you Tom the most attractive opportunity to allocate Capital to in the sector I think right now is to buy back our shares at north of 15% free cash flow yield uh and that is with a company that is actually building the
Momentum that we have it’s not a bad buy for us and that’s why we’re focused on on ourselveses from now okay let me get your view on the on the oil price we’ve seen gains in oil of about 7% through the month of January there is this tension it seems between the demand
Question whether that’s softening and the geopolitics how do you see that evolving in the months and quarters ahead what we see at the moment is the market is well supplied uh the demand has been remarkably resilient in 2023 despite multiple headwinds the supply side is the bigger question at the
Moment questions around OPEC cohesion um questions around how sanctions might play up uh you’ll have picked up of course uh potential increase of sanctions against Venezuela and Iran potential enforcement or tightening the enforcement of sanctions against Russia um all of that I think is is Raising questions around the supply side not to
Mention the slight slowdown in the in the growth of the shes patch all of that I think is just creating a bit more of tightening in the overall market and we’ll see how that plays out but a lot of it will be based on geopolitics more
So than anything else at the moment the the gas trading desk once again knocking it out of the park doing very well well putting a very good performance in is there anything that derails the strength that’s coming through from the gas trading team I think a the Q4 was indeed
Uh an exceptional quarter for our trading and optimization organization we saw the opening of east west arbs uh through the quarter and we had length as we typically do in the northern hemisphere Winters uh and that allowed us to take opportunity to take those opportunities and create real value what
You have seen so far this year at the start of of 2024 is the the arbs aren’t as wide as they were so less less Running Room there uh and and prices have come down I think with fundamentals being reasserted now as you you see a better storage balance in places like
Europe and Asia and a milder winter how do you see the LG Outlook or demand Outlook kind of evolving and changing as well given that economies growth is slowing rates remain relatively High the inventories are well filled here in Europe how what what does the picture
Look like in terms of that demand for LG so far we’re in balance from what we see but the the biggest determinant of of demand growth I think will come from China and how China responds through 2024 early signs are are positive uh while China uh hasn’t essentially
Fulfilled what some people had expected coming out of covid they continue to grow and we see the LG growth LG import growth continue in particular at these uh lower prices now that they are able to uh uh to buy at these levels and so that’s going to be a big determinant
What’s what’s U I think key in 2024 is there isn’t a lot of new Supply coming into the market and so as you go back into stock refilling after the winter I suspect you’ll see robust demand so for the for the coming year year and a half
I think there’ll be some good demand I think one thing to keep in mind on the in the medium term is China again will draw a lot of gas um to give you a sense of that just in 2024 and 2025 the volume of natural gas power generation capacity
That China is building is equivalent to the entire installed capacity in the UK today and that’s just China China’s build ad so there will be a a lot of demand for energy what is what is your reaction to this decision by the Biden Administration to pause the buildout the
Licenses the approvals for for export facilities LG export facilities in the US what’s your reaction does it put any of your investment plans in the US risk I I think the short medium term uh there will be very little impact to the LG markets what it does is it undermines
Confidence I think in the longer term uh when it comes to us LNG which is which is a real shame given the the world uh demands for L is going to continue to grow and the US is the largest supplier of LG today so a PS like this can can
Always create more uncertainty in particular when you’re looking at long-term Investments um that and for example uh the behavior of venture Global in the US to uh not honor the contracts towards its off-takers all of that just undermines confidence in US LNG at a time when the world including
Here in Europe really need the stability of LG supplies that’s Shell’s CEO way sa and speaking to Tom McKenzie discussing some of the big issues facing the sector as we look ahead to the next set of results in the coming days from BP and total energy very interesting to hear
His comments on the Biden administration’s move to pause a approving new LNG export facilities that’s something that came up at an industry gathering in Florence in recent days as well the Baker Hughes annual conference this year’s theme was energizing change addressing themes of affordability and sustainability our energy reporter Laura Hurst was there
I’ve been speaking to her about the atmosphere at the conference and whether she felt it was an industry that was ready for change well certainly there was quite a lot of Buzz around LG hydrogen and other new uh new low carbon fuels uh but there was not much love for
For the Biden administration’s announcement last Friday that said that there’ be in moratorium on LG exports so a lot of backlash there in the room and basically a lot of a lot of gas producers there saying this is the transition fuel that we need and this is
What it’s going to replace coal so essentially criticizing the administration for what looks like a political move yes so penty of focus on on those policy shifts and how they’re affecting this sector as well when we think about the reporting that we’ve had from Shell around their earnings is that
A strength that we’re likely to see in this earnings Seasons across the sector as we’re looking ahead to the next set of oil Majors reporting well it really depends which company you’re looking at so for example shell much of their beating was thanks to their gas trading
They had a what the CEO called an exceptional quarter on gas trading and shells peers like BP have quite a big uh big trading unit as well so it could be reflected there but there are a lot of uh other areas which aren’t looking so bright so for example chemicals
Chemicals for Shell uh was down almost by a billion dollars Exxon they’ve got a very big chemical units so we’re likely to see weakness there so it’s a bit patchy and of course in general commodity prices are softer than they were this time last year how are these
Companies when we think more broadly adapting to the energy transition as well Laura this is something that we look out for details of of how it affects their business when we gets earnings updates but I’m Keen given that you’ve been having that those conversations at the Baker Hughes
Conference as well as you’re reading as where the industry is now well so you’ve got on the one hand uh the American Majors X on Chevron who pretty much for the last few years have have stuck to their guns of oil and gas saying this is what we’re good at and
We’re not going to you know go into win because that where we’re going to make make money and that’s not where our competency lies now shell and BP they both kind of went down the renewable route but um have pivoted back to oil and gas as of late so there’s definitely
A retreat there total energy is probably the one that has a a little more um of a footing in the renewable side with quite a big focus on on power generation as well as having a very big uh footprint in the LNG Market one of the other factors that these companies are all
Having to deal with is as well as disruption to shipping in the Red Sea how much is that a factor that we should be watching out for as we continue to look through the season of earnings results yes absolutely I mean it’s is an important choke point at the moment the
Industry is managing that their shipping around the cape or rather the Horn of Africa and and so at the moment it’s it’s kind of being managed and while Taiwan the CEO Shel said they’re also looking at other things like swapping tankers from one region to another so at
The moment it’s manageable but it’s definitely something that could over spill into the wider region and could be become more of a problem this is something of course we’ll we’ll continue to be looking for details of in these earnings reports as well as as we look ahead to you’ve you’ve mentioned BP and
Some of the the sort of factors will’ll be watching in their results as well when it comes to total energy or or other majors in the sector too what are the other themes that you’re going to be watching for as we get the next set of results well definitely anything that uh
Talks to demand because demand is looking a little bit weaker at the moment we saw that again this morning from Shell’s results that product results were a lot softer than than they were a few quarters ago so that’s something that we’ll definitely be looking out for and on gas demand you
Know we’ve had since that Russia’s invasion of Ukraine gas has obviously had some very volatile quarters and so far this winter has been quite soft we we’ve had a mild winter so and inventory levels in the Europe will quiet full that’s our energy reporter Laura Hurst
And of course we will have full coverage of those next set of earnings from the big oil companies BP and totel next week on Bloomberg Radio I’m Steven Carol in London you can catch us every weekday morning here for Bloomberg Daybreak Europe beginning at 6:00 a.m. in London
And 1:00 a.m. on Wall Street Tom thank you Stephen and coming up on Bloomberg Daybreak weekend the Lunar New Year kicks off at the end of the week could the holiday usher in a new wave of consumption I’m Tom Busby and this is Bloomberg I’m Tom Busby in New York with your Global look ahead at the top stories for investors in the coming week the Year of the Dragon is upon us the Lunar New Year falls on Saturday February 10th but it’s the pref festival spending patterns that will give some
Hints to the state of China’s economy and for a preview we turn to Daybreak Asia co-host Doug krisner who spoke with Shirley Jiao Bloomberg news reporter in Hong Kong Tom the travel rush for the Lunar New Year holiday or spring festival is already started a key question is whether Chinese consumers
Are confident enough to give a much needed boost to the domestic economy for a closer look we’re joined by Bloomberg Shirley jaia who covers Chinese conglomerates including companies focused on consumers gaming and telecommunication Shirley thanks so much for taking time to chat with us I want
To begin with the fact that as we enter the Year of the Dragon I’d like to know a little bit more about the Year of the Dragon what is it known for well actually the Year of the Dragon is supposed to be a year of particularly
Good luck in China so you’ll see more babies being born and you’ll see people uh typically spending more than usual in the year of the dragon so um there is expectation that the recovery this year would be faster than than last year so travel as we know is obviously a big
Part of the story when it comes to celebrating and being with family and friends are the expectations pretty high this year um well I think for domestic travel in China the expectation is certainly High because we’ve seen last year even though you know China’s economy was slowing down and people spending power
Has declined and the consumer sentiment wasn’t that good travel was really one of the bright spots in China last year so the expectation is that the trend will continue this year uh people you know because they don’t want to spend on any big ticket items and uh the demand
For international travel is just starting to pick up but still pretty weak uh so people tend to you know seek um entertainment and Leisure for uh during domestic travel yeah the the most recent data that we had on the PMI services for China showed a bit of an
Improvement it was small but it may have been kind of a leading indicator that people are expecting some of the Services Industries to do well during the the holiday period is that a fair statement yes Services industry especially experience uh Le activities for example last year we saw the box
Office doing quite well and we saw people typically spending on food and drinks uh like they’re buying beer going to restaurants they’re going to second tier or third tier cities for barbecue and uh yeah people tend to I think during an economic slowdown when the Outlook is still not very certain for a
Lot of people they tend to Splash out on you know just instant gratification activities so when you look at things like ticket prices or movie tickets are prices generally higher than they were a year ago well definitely if you you know by China standards uh movie ticket
Prices in China now would be higher than a few years ago but the increase isn’t that much and generally ticket prices in China is still fairly low for example we’re talking about 50 Yan for seeing a movie that’s why a lot of people from Hong Kong which is neighboring you know
Some Mainland Chinese cities like shenen a lot of people are going to shenen to watch movies because it’s so cheap when we looked at the latest activity data for the month of December I think the unemployment rate was around 5% so has there been an urge uh among companies in
The services industry to bring back workers now at least on a temporary basis I think the demand is certainly picking up um and I think the reason why we’ve seen a lot of Hong Kong people going to shinen to shop and spend on entertainment partly is because the service industry there performs much
Better than in Hong Kong Kong um and I’ve heard that that’s because because there because there were a lot of layoffs uh the youth unemployment was pretty high so people just went to shinen and started their started up their own businesses like street food stalls um and restaurants uh are able to
Hire younger employees and they typically are more creative and they you know provide better services to customers and that’s one of the reasons why a lot of Hong Kong people uh who are used to the sort of subpar service quality in Hong Kong because you know it’s a very cut throw very fast-paced
City they feel that the service quality in shinen is much higher so they all flock to shinen to to shop and and to entertain themselves Shirley one of the other destination points that I think of is maau obviously gaming a big part of that story how do do you think the the
Gaming companies the casinos will do this year during the holiday period Well last year for casinos it was a great year so people sort of expected you know the recovery would do quite well but actually the performance of maau cinos exceeded uh the expectation and I think
It’s because maau is Shifting to attract more you know Mass Market tourists after beijing’s Crackdown on the VIP gamblers so we saw casinos hosting more concerts and more conferences and more sports events to draw in a lot of people to maau and this year I think the growth
Will sort of start to stabilize uh maybe because the pent up travel demand among Chinese to maau could slow down at certain point of the year and also you know casinos uh typically are spending more to attract these people so they’re earning things may you know the growth
May not be as fast as last year but generally I would say sentiment Wise It’s still quite good people are still going to maau to see concerts and then they may just you know drop by casinos to gamble and um shop luxury so I think
So far I see maau is still on the recovery track well that’s a great transition because I want to talk about gift giving next traditionally aren’t the red envelopes given and that’s just basically giving cash right you’re not giving an item yes so that’s a you know longtime Chinese New Year tradition so
People just put very new newly either iron them or you go to bank for new bank notes and you put them in the rep packets and you give it to your security guards to your relatives to any people senior um more Junior to you like you know children of your relatives so for
Friends friends and family members and if you wanted to spend a little bit more money and you were interested in giving let’s say a particular item whether it was a luxury good or something else do you have a sense of kind of the price range that the average person would
Spend uh giving a gift to a family member is it less than $50 US I would say it would be more than $50 US okay and how might they spend that might they buy a device of some kind might it be a piece of technology or a piece of
Clothing how would the average consumer go about choosing a gift we saw the general Trend last year is that people just sort of you know they prefer to uh spend on uh less expensive items uh and they didn’t spend as much on luxury items as before so we’ve seen like a
Decline in spending over for example jewelry uh High fashion clothing handbags um and and these are actually not for traditional Chinese New Year gifting as well so uh for Chinese New Year gifting I would say really people would spend more on uh the sort of health care products and
Medicine um and you know dried Seafood these are more like um preferred by Chinese families so the other question then that I have would be how do you acquire these Goods is it going to a brick and mortar physical store or is a lot of Commerce being conducted online a
Lot of Commerce would be conducted online so in China eCommerce is everything that’s why we’ve seen a lot of luxury Brands they even though they want to maintain their very high-end Exclusive Image they have to set up shops on some of China’s biggest e-commerce platforms because they know
That’s the best access to Chinese consumers especially after after Co you know during covid people just did everything online and delivery in China is so fast and convenient if you order for example at 10:00 a.m. this morning it’s likely that your products will be delivered by noon so um people just find
It so convenient and you can find everything online so e-commerce is really a dominating force in China that’s why you’ve seen a lot of the mid-range or low range shopping malls in Decline so if you go to China chances are that you will see some shopping malls that have no people in and
Sometimes you know maybe the lights aren’t on because nobody’s going one of the things that’s popular here in the US around holiday time and gift giving gift cards where the Gift Giver doesn’t actually have to purchase an item they simply purchase a card with a dollar value that they can give the recipient
And then the recipient would in turn uh decide what they want to purchase with with that card is that way of of gift giving popular at all or is is there the kind of the obligation to come up with a gift uh per se I think the red packet
Would really cover a lot of that so as as we discussed just now cash giving is a big thing and particularly nowadays in China cash giving on social media for example WeChat is one of China’s biggest social media plat forms it’s actually got a virtual rep packet giving um
Service so you can just you know send your relative or your friend uh 10 bucks or 100 or even 1,000 wow um yeah and you can spend you know and they can spend anything surle before I let you go can you just tell me share with me how
You’re planning to spend the holiday are you planning to travel yes I do I’m planning to go back to Mainland China where my parents par s live and when you get together with them what what’s kind of the typical way that the family would celebrate the Lunar New Year uh so first
We would just have a big dinner um and we will watch this you know annual it’s a big tradition annual Spring Festival Gala uh organized by state media um the quality of which I would say has been in Decline uh every year and the younger generation are you know starting to
Not want to watch it anymore but out of filial piety and out of family Duty because your parents are all watching that you have to watch with them Shirley thank you so much for helping us preview the Lunar New Year festivities it’s the Year of the Dragon coming up shirely
Xiao covers Chinese conglomerates including companies focused on consumers gaming and Telecommunications I’m Doug krisner you can join Brian Curtis and myself weekdays here for Bloomberg Daybreak Asia beginning at 9:00 a.m. in H Kong 8:00 P.M on Wall Street Tom our thanks to Doug and Shirley and that does it for
This edition of Bloomberg Daybreak weekend join us again Monday morning at 5:00 a.m. Wall Street time for the latest on the markets overseas and the News you need to start your day I’m Tom Busby stay with us top stories and Global business headlines are coming up right now
