This may be remembered as the last week of the social media landscape as we know it.
TikTok owner ByteDance is facing a Jan. 19 deadline to either sell the short video platform or see it removed from US app stores. The company had appealed to the US Supreme Court to intervene, but in a Friday hearing justices seemed inclined to allow the ban to go through (theyâll release their ruling sometime this week). A consortium of investors led by former Los Angeles Dodgers owner Frank McCourt are hoping to buy TikTok, but ByteDance has shown no interest in selling.
Users, creators and advertisers have mostly taken a wait-and-see attitude ever since President Joe Biden signed the potential ban into law in April. The clock is running out on that strategy. Behind the scenes, there are signs the ban is being taken more seriously. Measured, a marketing optimisation platform, found that TikTokâs share of ad spending peaked at around 5 percent last summer, and today hovers at just over 4 percent.
A seismic shift, this is not. However, itâs safe to say that brands are starting to hedge their bets, after several years where marketing spend flowed almost entirely in one direction. Influencers are taking a similar approach, sticking with TikTok while urging their audiences to follow them on other platforms, just in case. This proved effective in India, where users quickly migrated over to Instagram after the country banned TikTok in 2020.
So far, those redirects are mostly pointed toward Instagram, Youtube and other established platforms, and centred on the content itself. Less clear is what will happen to the attention and dollars that have poured into TikTok Shop. E-commerce exploded this past year on TikTok, with sales more than tripling over the holiday shopping season compared with a year ago, according to Earnest Analytics. Thereâs no obvious place for that spending to go; Instagram and other TikTok rivals have repeatedly tried and mostly failed to build shopping directly into their services.
The e-commerce question is a big reason why Whatnot, an e-commerce start-up that positions itself as a rival to TikTok Shop, last week raised $265 million in funding at a $5 billion valuation from investors. We may learn this week how likely it is that their bet will play out.
Luxury Bellwethers
Brunello Cucinelli is first out of the gate with fourth-quarter and full-year results due on Jan. 13. The Italian luxury brand was an outlier last year in continuing to report double-digit percentage sales growth even as most of its rivals stumbled.
As a seller of ultra-expensive cashmere and other staples in billionairesâ wardrobes, Cucinelli is relatively insulated from the pullback in spending by aspirational customers that has dragged on other brands. Weâll see on Monday whether that remains the case.
Richemont reports its third-quarter results on Thursday, and by contrast its performance will be heavily scrutinised as a pacesetter for the rest of the industry.
Yoox Net-a-Porter remains technically on the books pending the completion of its sale to Mytheresa, but fixing the e-tailer is no longer Richemontâs problem. Instead, watch for how the Swiss conglomerate characterises its business in China, which fell 27 percent last quarter, and in the US, where revenue has continued to grow. Luxury watches are another focus; at the companyâs annual meeting in September, chairman Johann Rupert declared that boom over.
Finally, thereâs Pitti Uomo, kicking off in Florence on Jan. 14, with shows from MM6 Maison Margiela on Jan. 15 and Setchu the next day. Milanâs menâs shows follow starting on Jan. 17. âLow energyâ is the vibe heading into the week, particularly with Gucci and Fendi off the Milan schedule (the former opting for a co-ed collection in February, the latter sitting the season out following Kim Jonesâ exit in October).
The labels that are showing will need to revive excitement around luxury menswear, where growth is slowing and brands are struggling to shake off the perception that they lack fresh ideas.
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