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Tag: BAIN

  • Video Commerce Captures 20 per Cent of Southeast Asia E-Commerce GMV

    Video Commerce Captures 20 per Cent of Southeast Asia E-Commerce GMV

    Video commerce now accounts for roughly a fifth of Southeast Asian e-commerce gross merchandise value, forcing consumer brands across the region to overhaul their distribution models. Data compiled by Google, Temasek and Bain shows creator-led sales shifting from experimental promotional spending into core retail infrastructure across key markets including Indonesia, Thailand and Vietnam.

    That expansion brings operational friction. Sellers running live broadcasts face steep drops between top-line gross merchandise value and realized revenue once cash-on-delivery refusals, return windows, creator fees and platform commissions clear. Promotional subsidies, including platform-funded vouchers and discounted freight, have masked true channel margins during market-share acquisition phases. When platforms pull back subsidies, merchant unit economics drop quickly.

    Platform control and merchant margin pressure

    Selling through creator streams leaves transaction infrastructure in third-party hands. Platforms control storefronts, checkout systems, payment rails, customer records, delivery terms and dispute resolution, leaving brands to supply inventory and absorb product returns.

    Multi-market operators managing sales across Jakarta, Bangkok and Manila face diverging compliance environments. Content licensing, creator contracts, disclosure mandates and withholding taxes vary by jurisdiction, preventing companies from running uniform regional campaigns without local adaptation.

    The pattern follows China’s live commerce cycle. Brands in that market initially concentrated volume through top independent hosts before margins deteriorated. Chinese consumer labels responded by building internal broadcast studios and running scheduled daily programming to retain customer data and protect gross margins.

    Regulatory scrutiny reshapes regional operations

    Governments across Southeast Asia have moved to regulate social commerce platforms as critical retail infrastructure rather than digital advertising channels. Indonesia enacted Ministry of Trade Regulation 31 in September 2023, banning direct e-commerce transactions inside social media applications. The rule halted TikTok Shop until parent company ByteDance completed a 1.5 billion dollar investment to secure a controlling stake in GoTo’s Tokopedia platform.

    Vietnam enacted Decree 147 in late December 2024, enforcing strict account verification requirements before individuals can post or host livestreams. Merchant operators are now building direct customer channels, internal studio facilities and formal data-rights clauses into creator agreements across tier-two Vietnamese cities and eastern Indonesia, where production overhead remains competitive.

    Retailers across the region now track net settlement data and return rates per stream as platforms adjust commercial take rates and enforcement rules throughout 2026.

  • Bain Capital Acquires Bubble Tea Giant Gong Cha for $635 Million in Surprise Deal

    Bain Capital Acquires Bubble Tea Giant Gong Cha for $635 Million in Surprise Deal

    Private equity firm Bain Capital has successfully completed the acquisition of the global bubble tea franchise, Gong Cha, a deal estimated to be worth around US$635 million. This figure falls significantly short of the $2 billion valuation that was initially sought by Gong Cha’s owner, TA Associates, earlier in the year.

    Exploring Strategic Options

    Speculation about the acquisition began circulating months ago, after it was revealed that TA Associates had engaged the services of JPMorgan Chase & Co. The global financial services firm was to explore strategic options for Gong Cha, which was founded in Taiwan, including the potential for a sale.

    Initial discussions proposed that the business could be valued at approximately $2 billion. However, these talks were still in the preliminary stages and a transaction was far from guaranteed. During the sale process, TA Associates, the bubble tea chain’s owner since 2019, reportedly piqued the interest of several private equity firms, including Bain Capital and General Atlantic.

    Global Bubble Tea Giant

    Since its establishment in 2006, Gong Cha has evolved into one of the largest bubble tea franchises in the world. The brand currently operates more than 2,100 stores across over 30 markets. Its franchise model extends across the Asia-Pacific, North America, Europe, and the Middle East.

    The acquisition is expected to finalize before the close of the current year.

    Questions & Answers

    What is the estimated value of the Gong Cha acquisition by Bain Capital?
    The acquisition is estimated to be worth around US$635 million.

    Who was engaged to explore strategic options for Gong Cha?
    Global financial services firm, JPMorgan Chase & Co, was engaged to explore strategic options for Gong Cha.

    How many markets does Gong Cha operate in worldwide?
    Gong Cha operates in over 30 markets across the globe.

  • Bain Capital Acquires Global Bubble Tea Giant Gong Cha in $635 Million Deal

    Bain Capital Acquires Global Bubble Tea Giant Gong Cha in $635 Million Deal

    Private equity firm Bain Capital has finalized the purchase of the globally recognized bubble tea franchise, Gong Cha, in a deal worth roughly $635 million USD.

    This acquisition comes after widespread speculation concerning the future of the well-known Taiwan-based brand. The deal’s value falls significantly short of the $2 billion estimation initially posited by its former owner, TA Associates, earlier this year.

    Deal Developments

    Earlier reports suggested that TA Associates sought strategic options for Gong Cha, including the potential for a sale. The valuation placed on the business was thought to be around the $2 billion mark, but these discussions were preliminary, and a guaranteed transaction wasn’t certain.

    TA Associates became the owners of Gong Cha in 2019 and saw keen interest from various private equity firms including Bain Capital and General Atlantic during the sale proceedings.

    Brand Background

    Since its inception in 2006, Gong Cha has successfully expanded its reach to become one of the most recognized bubble tea franchisors globally. It boasts over 2100 stores spread across more than 30 markets, relying mainly on a franchise model. The brand has a significant presence in the Asia-Pacific, North America, Europe, and the Middle East.

    The deal between Bain Capital and Gong Cha is expected to reach completion before the year ends.

    Questions & Answers

    Who has acquired the Gong Cha franchise?
    Private equity firm Bain Capital has acquired the Gong Cha franchise.

    What was the estimated worth of the deal?
    The deal is approximately worth $635 million USD.

    When is the transaction expected to close?
    The transaction is projected to close before the year ends.

  • Global luxury goods sales drop: Bain

    Global luxury goods sales drop: Bain

    New data from Bain & Company shows global luxury goods sales will struggle to maintain growth, as the US-Sino trade war and other geopolitical events impact on consumer confidence.

    In June, Bain said the personal luxury goods market was “on a tear” this year and would grow by between 6 per cent and 8 per cent at constant exchange rates to reach €276-281 billion. It said the market could reach €390 billion globally in sales by 2025.

    But now, Bain has released a more tepid projection of €260 billion and a growth rate of 5 per cent this year.

    It has pared back its 2025 projection of personal luxury goods sales to €320-365 billion, slashing €35 to €70 billion off its forecast in just five months.

    And it cautioned that even this figure may be under threat saying “socio-political issues, commercial policies, and potential short-term soft recessions could make this road to growth a bumpy one in the short term”.

    The Bain & Company Luxury Study was released in Milan in collaboration with Fondazione Altagamma, the Italian luxury goods manufacturers’ industry foundation.

    In June, Bain said Mainland China is expected to account for the lion’s share of growth this year. “We forecast this market to grow by 20-22 per cent … Brands are learning how to cater to local consumers, often young and heavily influenced by social media.”

    China kept close to its projections, rising 20 per cent, albeit with the year still not over.

    “Chinese consumers are leading the positive growth trend around the world. Between 2015 and this year, their purchases in Mainland China contributed twice as much growth as their spending abroad. Their share of global spending has continued to rise (now estimated at 33 per cent of global luxury spend, up from 32 per cent in last year), while the share of Mainland China has also risen to 9 per cent (up from 8 per cent in last year). In Mainland China, luxury sales grew 18 per cent at current exchange rates to €23 billion (20 per cent at constant exchange rates), driven by rising demand rather than by price increases,” the report said.

    Claudia D’Arpizio, a Bain partner and lead author of the study, said luxury purchases in Japan softened slightly this year, pushing brands to find new solutions to bring consumers back to stores. However, retail sales still grew at 3 per cent at current exchange rates to €22 billion. “Increased consumption from tourists in Japan is prompting brands to rethink their distribution models.”

    Across the rest of Asia retail sales grew 7 per cent at current exchange rates to €39 billion, due to dynamic growth in South Korea, driven by strong local consumption. Brisk growth in other Asian countries – Singapore, Thailand and Taiwan – also contributed while Hong Kong and Macau benefitted from Chinese purchases.

    Europe lagged in 2018 due to a strong Euro that impacted tourists’ purchasing power. Local consumption was positive overall, despite mixed country performance, helping to boost retail sales 1 per cent at current exchange rates to €84 billion.

    The Americas grew 5 per cent at current exchange rates to €80 billion. “A positive US economy boosted disposable income and overall luxury spending from locals, even as brands remained wary of continued economic prosperity,” the report said. “However, the strong dollar impacted tourists’ spending from Asia and Latin America. Canada and Mexico were strong players in the region, while political uncertainties derailed Brazil’s performance.”

    In other areas, there was nil growth, holding at €12 billion, mainly due to stagnation in Middle East brought on by a recent government spending restriction.

    Luxury online

    The retail channel grew 4 per cent this year, with three-quarters coming from like-for-like sales growth. Wholesale channels grew at only 1 per cent, brought down by high-end department stores still trying to recover, and a slow-down among specialty stores facing tough competition from online.

    Luxury shopping online continued to accelerate this year compared with physical channels, growing 22 per cent versus 2017 to €27 billion.  The US market made up close to half of online sales – 44 per cent– but Asia is emerging as the new growth engine for luxury online, slightly ahead of Europe. Accessories remained the top category sold online, ahead of apparel; beauty and hard luxury (jewellery and watches) were both on the rise.

    Brands are catching up to other online players, comprising 31 per cent of sales, compared to e-tailers (39 per cent) and retailers (30 per cent).

    “New technologies are at once enriching the online and mobile shopping experiences, while potentially putting role of physical channels at risk,” said Federica Levato, a Bain partner and co-author of the study.

    “The luxury store-opening path is slowing down, leading to channel consolidation in the future. Brands must therefore rethink their physical channels and evolve their role from point-of-sale to point-of-touch, and use new technology to enhance customers’ in-store experiences.”

    Luxury consumers getting younger

    The report concluded that younger generations are becoming increasingly more important luxury brands. This year, Generations Y and Z contributed 100 per cent of the total luxury market growth, compared with 85 per cent last year. Bain predicts Generation Z, which today comprises just 2 per cent of the market will account for 10 per cent of it in 2025.

  • Luxury-brand in China rising from grave

    Luxury-brand in China rising from grave

    Luxury-brand sales are reviving in mainland China, with Macau paying the price.

    As China’s currency depreciates, the narrowing price gap is keeping mainland luxury shoppers at home, further contributing to Macau’s retail slump, reports the Macau Business Daily.

    Some brands in China are expecting this year to return to the figures of their sales peak in 2012, says partner Bruno Lannes of Shanghai-based consulting firm Bain. He says luxury sales in the mainland have risen an estimated 4 per cent after three years of decline.

    According to the latest data from the Macau Statistics and Census Services (DSEC), retail sales of watches, clocks and jewellery have fallen 21.2 per cent year-on-year, with the overall volume of retail sales dropping 5.9 per cent in the third quarter.

    More than 45 per cent of retailers interviewed by DSEC expect their sales volume to decrease for the present quarter. Meanwhile, visitor numbers from the mainland edged up 0.4 per cent year-on-year in October, but have fallen by the same amount over the first 10 months of this year.

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