Business

AS THE HEAD office of Northern Heavy Industries (NHI) comes into view, so does a huge slogan fixed permanently to its roof in metre-high red Chinese characters, where you might usually see a company name. The 22-character mouthful reads: “Wave High the Great Banner of Xi Jinping Thought in the New Era of Socialism with Chinese Characteristics.” A billboard-sized image of Mr Xi, China’s leader, waves to visitors as they enter the lobby. In a nearby factory NHI’s tunnel-boring machines, used for digging metro lines, rise four storeys into the air. The company was founded by the state many decades ago. Today more than ever it embodies an archetypal image of a state-owned enterprise (SoE).Except that on paper NHI is private. A company called Fangda Group, which is listed in Shenzhen and fully privately owned, took a 47% stake in NHI in 2019, in a rare instance of a private company bailing out a state one. This made Fangda by far the largest single shareholder. The deal should have privatised NHI.But in China’s corporate sector nothing is so straightforward. Fangda is not the controlling shareholder. Executives say it does not have one. Some staff in its factories call it a state firm; some say it is private. When asked about Fangda’s involvement in NHI, a manager says the investment was a “policy decision”. An investment adviser says that, for reasons he cannot divulge, investors should approach Fangda itself as if it had the backing of the state—even though the state does not feature in its shareholder register. Fangda’s website is covered in Communist Party imagery such as sickles and hammers. It describes its corporate mission as “listening to the party and following the party”.Chinese business has become much more professional in the past three decades. Its stockmarket is one of the world’s largest and has been rapidly opening up to Western investors. In futuristic industries like electric vehicles and green energy Chinese firms lead the world. China’s digital economy has produced rare rivals to America’s internet giants. Many have global ambitions and are backed by some of the world’s savviest asset managers.Yet over the same period the lines between the state sector and private business have grown blurrier. Many global investors increasingly view China’s private sector as a captive of the Communist Party. So do Western politicians, who rail against companies such as Huawei and TikTok for their alleged links to the party (which the firms deny). A recent paper from the Centre for Strategic and International Studies, a think-tank in Washington, asks: “Can Chinese firms be truly private?” Monitoring state influence has thus become more important than ever. It has also become more difficult than at any time in the past.One factor that has complicated matters is the central government’s policy that explicitly seeks to blend state and private interests. Launched in 2013, “mixed-ownership reform”, as it is known, has encouraged private investments in some state firms and vice versa. The philosophy behind the policy was to introduce private capital into clunky state firms.Most of the investment since then, however, has flowed in the other direction. According to Fitch, a ratings agency, on average 50 state companies a year took the controlling rights of listed private business between 2019 and 2021, up from fewer than 20 in 2018. Privately owned firms’ share of market value among China’s 100 largest listed firms shrank from a peak of about 55% in mid-2021 to just 39% at the end of June this year, according to the Peterson Institute for International Economics (PIIE), another Washington think-tank. State companies may have spent around $390bn investing in private companies since 2018, according to data from Dealogic, a research firm.Mixed-ownership reform may have helped some SoEs perform better. Several academic studies found that it improves innovation and the return on assets. However, the reform has also created a vast grey sector that has characteristics of both state and private companies. The rise of government-backed funds armed with $1trn in capital has injected state funding into many private technology companies, including plenty of promising startups. State investors have also been taking “golden shares”, tiny stakes that grant outsized voting powers, in China’s internet giants. In October it was revealed that a government agency had taken a 1% stake in a subsidiary belonging to Tencent, China’s mightiest internet titan.With the exception of top executives and government officials no one really understands what golden shares do. Company spokespeople say they are harmless. Investors disagree. When earlier this year such an arrangement came to light at Tencent and Alibaba, another internet giant, their share prices sank. An investment manager in Hong Kong explains that the discount was the result of state links being associated with corporate and financial stability, not risky innovation and animal spirits. From the state’s perspective, he adds, rapid profit growth and high valuations could be perceived as dangerous if they take place in the wrong sectors.Distinguishing between state and private companies is becoming more difficult because state influence over companies is no longer just tied to ownership, says Margaret Pearson of the University of Maryland, College Park. In “The State and Capitalism in China”, published in May, Ms Pearson and her co-authors say that China is moving from state capitalism, where business is guided by national interests, to “party-state capitalism”, in which it is organised around the interests of the Communist Party.Until the late 2000s how the party exercised its power over corporate management was mainly evident in its appointments of SoE bosses. That has changed significantly since Mr Xi became party chief in 2012. A sweeping anti-corruption campaign, followed by a crackdown on tech companies, has helped deflate and reshape China’s digital economy. Outspoken tech entrepreneurs have vanished. A handful of tech founders and other business leaders have stepped down. Alibaba is splitting itself into several firms. Tencent has shed tens of billions of dollars in assets. New Oriental, China’s most promising private-education group before the state snuffed out its entire industry almost overnight, has become an online marketplace for agricultural and other products. Insiders argue about precisely how much direct influence the party had on such corporate decisions. Most agree that it is pleased with the outcome.State support, implicit or explicit, can help businesses aligned to Mr Xi’s vision. A lot of innovation in green energy, electric vehicles, robotics and digitisation is done by private firms but bankrolled by the state. Many entrepreneurs report that life is good in those areas. In sensitive domains like generative artificial intelligence (AI), new services are developed hand in hand with the state. Private companies working on AI frequently consult regulators, who provide guidance for what development is and is not permissible. Rather than regarding such consultations as an obstacle to innovation, Chinese AI firms often see it as a fast track to success.The party exercises control in subtler ways, too. One tool is its corporate “social credit” system. Launched not long after Mr Xi came to power, it rates companies based on factors including legal and debt-payment record. A recent review of all publicly available scores in Zhejiang, a wealthy coastal province, by Lauren Yu-Hsin Lin at the City University of Hong Kong and Curtis Milhaupt of Stanford Law School, found that companies with more political connections had higher scores. Other than a company’s size, the variable most closely associated with a high score is having directors or a chief executive who served in important government or party positions.Firms with high scores can be “red-listed”, or given preferential access to credit. Ending up on the system’s blacklist makes it exceedingly hard to get loans. This gives private firms a strong incentive to follow state policies even in the absence of direct state ownership.Another way for the party to control firms is through party committees, where employees who are party members meet to discuss ideology and its place in corporate life. These cells typically do not have formal administrative clout. But they channel information about the company or its industry to regulators. This information may in turn shape local regulations, notes a banker. As with golden shares, the clearest impact that party committees have had so far is to breed distrust among foreign investors, and between foreign firms’ local subsidiaries and their headquarters.Many of the changes in the private sector can be explained as an attempt on the part of entrepreneurs to balance commercial activity while also showing loyalty to the party and fulfilling political duties, says Huang Tianlei of PIIE. Showing loyalty does not necessarily make them less profit-seeking. They are simply trying to adapt to a political economy founded on the supremacy of the party.Yet the blurrier the line between the state and the private sector, the harder it becomes for entrepreneurs to strike a balance between party and profit. Ms Pearson and her co-authors find that private companies may not be “secure enough in their autonomy from the state to pursue their own interests with ease”. It is not just investors who find the system tiresomely muddled. The view from within is getting hazier, too. ■ More

For many independent music venues without corporate backstops, adapting to inflation poses a particularly difficult challenge.
While large stadiums saw fans rushing back to see big stars, some performance venues haven’t seen their businesses completely recover from the Covid-19 pandemic.
Live performance venues grapple to keep ticket prices and concessions affordable as raw costs rise and cash-strapped consumers watch their budgets.

Melis82 | Istock | Getty Images

It has never been easy for small or independent music venues to turn a profit. Now, with inflated operating costs, some owners are struggling to keep ticket prices affordable for audiences and take chances on lesser-known artists.
The past year has seen music fans roaring back to large stadiums to see sold-out shows for icons such as Beyoncé or Taylor Swift, even as consumers cut down on spending for leisure activities. But many smaller, independent venues have yet to see business return to pre-pandemic levels, according to Stephen Parker, executive director of the National Independent Venue Association.

“If you are a larger venue, you’re probably doing quite well post-pandemic,” he said. “But if you were a smaller venue, you are seeing business, and you’re keeping your head above water, but you’re also seeing that many of the things that larger organizations have at their disposal, which is economies of scale, is becoming harder.”
NIVA was founded in 2020 as a means to lobby for government relief while venues struggled to stay open through Covid lockdowns. It was a driving force behind $16 billion in federal aid to the industry and now focuses its efforts on other issues such as price gouging in the resell market.
The latest challenge facing NIVA’s network of independent venues, Parker said, is protecting margins in the face of higher costs.
First Avenue Productions, which operates several venues around Minnesota’s Twin Cities, has seen operating costs increase nearly 30% since before the Covid-19 pandemic, with everything from beer to ice to insurance becoming pricier, according to owner Dayna Frank.
“We don’t have corporate backstops, we have limited resources,” said Frank, a founding member of NIVA and former board president. “Most folks are, you know, owner, operator, floor sweeper, booker, marketer, light bulb changer, everything.”

No bourbon, no scotch, no beer

Paul Rizzo, owner of New York City’s historic club The Bitter End, said that while food and “every other cost” has increased, he has seen consumers spending less in general.
Part of that is a broad pullback as American tighten their wallets, he said. But it also fits a trend cited by some venue owners of younger generations of music fans drinking less than their older counterparts.
Some owners suggested the legalization of marijuana in many markets may be eating into bar sales — a significant portion of revenue for music venues.
For Alisha Edmonson and Joe Lapan, co-owners of Songbyrd Music House, a 250 people capacity venue in Washington, D.C., it’s an ongoing challenge to price concessions in an atmosphere where raw costs are rising and consumers are spending less.
Lapan said many fans expect higher-priced drinks at larger venues and stadiums but don’t have the same expectations at small venues.
“There’s this idea that you’re going to a small venue and it should be like your small local bar, but that’s not the economics of a venue,” Edmonson said. “We’re providing this extra service that we have to find a way to pay for.”

Fighting for the right to party

It all contributes to what NIVA Board President Andre Perry describes as a “very difficult balancing act” to run a successful small venue.
Owners must figure out how to market different acts every night, decide whether to take risks on newer performers, as well as continually adapt to their community as the economic landscape inevitably changes, said Perry, who has worked in live music for 20 years and now serves as the director of the Hancher Auditorium, a performing arts theater at the University of Iowa.
Unlike some small businesses, venue owners are not selling the same thing every day, Perry said.
“You’re taking a cultural practice and pushing it into the marketplace, and I think there’s some tension there. Doesn’t mean it’s bad or that it’s broken, it’s just, we got to really work hard to make it sustainable for all the people involved.”
Many owners of small venues are in the business for the love of music and community, not necessarily to make a lot of money, said Cat Henry, executive director of the Live Music Society.
Henry’s organization serves venues of under 300 capacity by providing grants to start new programs or take chances on newer artists that won’t necessarily draw crowds.
“I hope that at the state level, at the private foundation level, it will be recognized that this is not necessarily a commercial model, that there are supports that need to be put in place in order for something that is a huge part of American culture,” Henry said. 
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New Jersey’s American Dream Mall — the second-largest mall in the country — was briefly evacuated on Black Friday because of a bomb threat, according to state officials. 
The incident appeared to be resolved quickly, and shoppers were allowed back in the mall.

American Dream megamall and entertainment complex in East Rutherford, N.J., seen on Oct. 25, 2019.
Timothy A. Clary | AFP | Getty Images

New Jersey’s American Dream mall — the second largest mall in the country — was evacuated minutes after it opened on Black Friday because of a bomb threat that was later deemed unfounded, police said.
Around 7:13 a.m. ET on Friday, just after American Dream opened its doors at 7 a.m., a person told police there was a bomb inside the facility, and officers evacuated the shopping center so they could search it, a spokesperson for the New Jersey State Police told CNBC.

The agency’s bomb and K-9 units swept the East Rutherford mall for explosive devices but didn’t find any, the spokesperson said. Police reopened American Dream around 9:15 a.m. for shoppers and retail workers, the mall said.
“The mall has been deemed safe and American Dream will be returning to normal operations. This is still an active investigation and there is no additional information available,” the spokesperson said.

New Jersey State Police patrol the American Dream Mall in East Rutherford, New Jersey, after a bomb scare, Nov. 24, 2023.
David Dee Delgado | Reuters

“American Dream was evacuated this morning following what was later deemed a non-credible threat. This was done out of an abundance of caution, as the safety of our employees and guests is and will always be our priority,” American Dream told CNBC in a statement. “The center has already re-opened. We look forward to a joyous and safe holiday season.”
Prior to the mall reopening, New Jersey Gov. Phil Murphy posted about the evacuation on X, formerly known as Twitter. He urged shoppers to heed instructions from law enforcement and walk safely to the nearest exit.
“We will remain vigilant to ensure everyone stays safe this holiday season,” he said after the mall was reopened.

The evacuation came on the biggest shopping day of the year, when many Americans are expected to flood malls across the country in search of the best holiday deals. The shopping holiday poses unique risks to retailers because of the large crowds that it draws. In years past, fights have broken out between customers, and others were injured in stampedes.
Compounding the issue is the nationwide rise in mass shooting events, which have happened at a number of grocery stores and other retail establishments such as Walmart.

Read more CNBC retail news More

Consumers spent $5.6 billion online on Thanksgiving Day, a jump of 5.5% year over year, according to Adobe Analytics.
The uptick reflects that holiday shoppers are buying more of their gifts online and responding to discounts.
Hot sellers included Barbie items, gaming consoles and Bluetooth speakers, Adobe found.

Anastasiia Krivenok | Moment | Getty Images

Online spending on Thanksgiving Day jumped 5.5% compared to a year ago, according to Adobe Analytics, a reflection of holiday shoppers who are buying more of their gifts online and responding to discounts.
E-commerce sales totaled $5.6 billion on the holiday. That’s nearly twice as much as the $2.87 billion consumers spent on Thanksgiving Day in 2017, according to the company’s analysis.

For Black Friday, online spending is expected to climb even higher and bring in an expected $9.6 billion, up 5.7% year over year.
Still, it’s too soon to say if the pop will be enough to propel a strong season overall.
Holiday shoppers are expected to spend 3% to 4% more year over year in November and December, according to the National Retail Federation’s forecast. That would be a significant slowing from the holiday sales growth seen during the Covid-19 pandemic and a return to more typical growth levels prior to the Covid crisis.
Adobe’s data covers more than one trillion visits to U.S. retail websites, 100 million unique items and 18 total product categories. It does not cover in-store purchases, where the majority of U.S. holiday purchases still take place. Last year, about 70% of total holiday sales took place in physical retail locations, according to the NRF.
As retailers face slowing sales, companies have dangled sharp promotions in October and in recent weeks issued cautious outlooks for the holiday quarter. To motivate shoppers, retailers such as Target, Macy’s and Best Buy are pulling out all the stops, from Disney- or toy-themed experiences to limited-time discounts on hot consumer electronics.

So far, shoppers have seen big discounts in major gifting categories. On Thanksgiving Day, toys were up to 28% off, electronics were up to 27% off and computers were up to 22% off, according to Adobe.
And shoppers responded: Online purchases of toys shot up 182% compared to average daily sales in October. Jewelry sales rose 126%, apparel rose 124% and personal care products rose 67%.
On Thanksgiving, some of the best sellers were Barbie items, Marvel superhero action figures, gaming consoles including Playstation5 and video games such as Super Mario Bros. Wonder. Some consumer electronics, such as robot vacuums, Bluetooth speakers and tablets, have been popular, too, Adobe found.
Shoppers are also browsing and buying more on their smartphones. Mobile shopping played a big role in Thanksgiving sales, with nearly 60% of sales coming through a mobile device — an all-time record for Thanksgiving, Adobe said.Don’t miss these stories from CNBC PRO: More

The NFL’s first-ever Black Friday game will be on Amazon’s Prime Video rather than traditional TV. The Miami Dolphins and the New York Jets play at 3 p.m. ET.
The streaming broadcast will feature nods to Amazon’s Black Friday deals and an exclusive performance by Garth Brooks.
Sports fans have so far remained loyal to linear TV, but even cable stalwart ESPN is working on offering all its programming to streaming audiences.

Jacob Kupferman | Getty Images

The Miami Dolphins and the New York Jets face off in the National Football League’s first ever Black Friday game this week — but it’s not going to be the usual broadcast or cable offering. The game will stream exclusively on Amazon’s Prime Video.
The NFL’s decision to start a new Thanksgiving tradition with a streaming platform instead of a broadcast or cable channel is yet another indicator of trouble for linear, or traditional, TV, which has suffered from slumping ad revenue and customers cutting the cable cord.

The Black Friday matchup is an expansion of Amazon’s “Thursday Night Football” deal with the NFL, which has helped drive a 6% jump in NFL viewership since last year. And with the game streaming the day after Thanksgiving, Amazon could capture some of the holiday viewership, which broke records last year.
“I don’t make predictions on ratings,” Brian Rolapp, the NFL’s chief media and business officer, told CNBC’s Julia Boorstin this week. “But I think they’ll be good.” The Black Friday game kicks off at 3 p.m. ET.
Thanksgiving Day is already a football tradition, with the Detroit Lions and Dallas Cowboys headlining matchups through the years. Fox, CBS and NBC all will broadcast games on the holiday.

The NFL and Amazon hope the Black Friday game will become an annual tradition, executives said Tuesday at a media conference. In a push to drive Amazon e-commerce sales, the streaming broadcast will feature QR codes at the bottom of the screen that will link to some of Amazon’s Black Friday deals. Country music icon Garth Brooks will take the stage in an exclusive postgame concert.
Amazon’s 11-year “Thursday Night Football” deal and YouTube TV’s “NFL Sunday Ticket” package are just a few examples of live sports programming making the jump from cable to streaming. In October, Warner Bros. Discovery rolled out its Bleacher Report Sports Add-On Tier for the company’s flagship streaming platform Max, offering subscribers hundreds of live sports events.

ESPN’s pivot

ESPN has long ruled sports programming on traditional TV. But that could all change when the cable stalwart brings all its programming to streaming, in a planned direct-to-consumer release.
Yet even as the streaming trend picks up, sports programming is helping keep cable and traditional TV alive, for the moment.
Earlier this year, data firm Nielsen reported that traditional TV made up less than half of overall TV usage in July. But linear popped back in August and September. The jump was largely driven by the return of college and professional football, Nielsen said in a report released last month. ESPN also snagged the top 11 telecasts for the month of September, 10 of which were football-related.
ESPN has so far weathered the storm of the TV decline, capturing a “modest increase” in ad revenue in parent company Disney’s most recent quarterly report, even as overall TV revenue for the company fell.
Sports programming is holding the linear television industry together, according to Macquarie analyst Tim Nollen. And ESPN is a huge part of that.
But ESPN’s dominance in sports programming could pose a potentially fatal threat to linear TV. When ESPN unleashes its direct-to-consumer service, which would offer much more than its current ESPN+ app, it could be the push sports fans are waiting for to abandon the bundle altogether.
“When ESPN puts their DTC product online, depending on the pricing, it may create a critical mass of live sports outside of the bundle to accelerate cord cutting,” said UBS media and telecom analyst John Hodulik. “That’s what I think people are waiting for.”

Disney CEO Bob Iger told CNBC’s Boorstin on Nov. 8 that Disney will launch a direct-to-consumer ESPN flagship no later than 2025, putting the sports programming world on notice.
But not everyone is convinced that ESPN’s foray into streaming will do too much damage too quickly.
“When you look at the economics that ESPN gets from the pay TV bundle, they cannot just step away and pirouette to DTC and everything stays the same,” said sports media consultant and former Fox Sports executive Patrick Crakes. “There’s no DTC streaming product that scales like pay TV, even today, with pay TV in decline.”
The future looks more like a reimagined pay TV bundle, Crakes said, with streaming products included in the traditional economics of bundle. It’s reminiscent of the recent Disney-Charter agreement, in which Disney+ and ESPN+ are now included in some Spectrum cable packages.
But challenges could lie ahead for media companies that have not yet made the jump to bring their programming to the streaming world.

How vulnerable is Fox?

A FOX Sports TV camera operator during the week 5 NFL game between the Atlanta Falcons and the Carolina Panthers at Mercedes-Benz Stadium on October 11, 2020 in Atlanta, Georgia.
David J. Griffin | Icon Sportswire | Getty Images

The biggest loser of the slowing ad market will be Fox, Macquarie’s Nollen said. (Macquarie Group and its affiliates own a net long of 0.5% or more of the equity securities of Fox Corp.)
Other media companies, including NBCUniversal through its Peacock service, have pivoted in large part to streaming ventures, where ad revenue through those platforms can partially offset the slump in linear. The problem with Fox? It doesn’t have a streaming platform beyond its free, ad-supported service Tubi.
“Fox made the decision to double down on the bundle a few years ago and then they’ve done surprisingly well for it,” said Nollen. “But if cord-cutting accelerates and everyone picks up streaming sports elsewhere, I just don’t understand what Fox’s plan is.”
When asked for comment, Fox referenced a quote made by Fox Corp. CFO Steve Tomsic at the Bank of America media conference in September.
“I can see a world where the ESPNs of this world do go DTC, but I’m not sure how impactful that will be for us or the entire industry,” he said. “If there is the emergence of some sort of sports bundle that is across different network providers, then the first port of call is going to be Fox in terms of people wanting to aggregate our content with their service just given how strong our sports offering is.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More

TikTok Shop launched in September in the U.S., following in the footsteps of other social media platforms launching shopping platforms.
Shoppers remain divided on whether they love or hate the shopping feature.
Some are taking advantage of the low prices while others question the ethics of some of the products.

TikTok has officially launched its e-commerce service TikTok Shop in the US. 
Costfoto | Nurphoto | Getty Images

Consumers are increasingly turning to social media for their shopping this holiday season, and TikTok’s latest venture into e-commerce has emerged at the forefront.
The platform introduced TikTok Shop in the U.S. in September as an in-app shopping experience, capitalizing on the #TikTokMadeMeBuyIt trend. The shop gives opportunities to both content creators who could sell their own products and avid TikTok users who could buy directly on the app, following in the footsteps of other social media apps like Instagram.

Though TikTok Shop previously faced backlash and was forced to shut down in Indonesia, consumers are increasingly trending toward buying off of social media. According to a recent Shopify-Gallup survey, nearly half of Generation Z respondents – people born after 1997, according to the Pew Research Center – said they plan on buying some holiday gifts on social media apps. And 86% of Gen Z shoppers say social media influences their shopping habits, according to an ICSC report.
One of those TikTok Shop enthusiasts is 29-year-old Chuck Vaughn, who called the TikTok Shop phenomenon “a gold rush.”
“There’s some crazy coupons on there combined with sale prices, and then you end up getting things 50% off or 60% off,” the Tennessee resident told CNBC. “There’s no good reason to not be using it as far as I can tell.”
Though some argue that using the platform strips shoppers of their privacy, Vaughn said it’s clear that consumers today are already giving up data in most of their apps. Instead, he’s leaned into the trend, with his most recent purchase being Pokémon cards. Whereas the market price for cards would normally be around $70, Vaughn said, he bought his on TikTok Shop for just $33 with free shipping – and they arrived in under a week.
As he heads into the holiday season, Vaughn said he plans on doing at least some of his holiday shopping on the app and is recommending his friends and family to use TikTok Shop as well.

Social media and commerce

With in-app purchases, the ability to purchase quickly is even more prevalent. It’s a trend that was especially bolstered by the earlier days of the pandemic, when people were largely staying home either due to mandates or worries about catching Covid. According to the U.S. Department of Commerce, Americans spent $791.7 billion on e-commerce during 2020.
According to TikTok, the Shop platform has over 200,000 sellers, and the #TikTokMadeMeBuyIt hashtag has over 77 billion views as of this month. This holiday season, TikTok added that the Shop feature will include multiple promotions, coupons and deals on trending products.
Though in-person commerce has made a comeback post-pandemic, according to Gartner digital commerce analyst Ant Duffin, consumers’ propensity to buy online has undoubtedly surged in the past few years.
The social media commerce landscape has constructed a particularly interesting ecosystem made up of brands, creators, technology and consumers, each playing a role in bolstering the e-commerce space, Duffin told CNBC.
“What you’re now starting to see is TikTok bucking the trend where they’re providing a complete social commerce ecosystem of tactics, from paid advertising to short-form video through to immersive shops and being able to transact all within the app,” Duffin said.
This new realm could be a “fresh battleground” for small and medium-sized businesses, according to Duffin. Especially over the holiday season, smaller businesses can raise awareness and build their brands successfully on the social media app and fill in the gaps for brands looking to capitalize on new market opportunities.
However, Duffin said he does not believe TikTok Shop will be able to rival the likes of Amazon or have an impact beyond a stocking stuffer purchase just yet.

Questioning the ethics

But not everyone is a fan of being able to scroll and purchase simultaneously.
Grace Romine, a sophomore at Indiana University, said she first found the Shop feature to be annoying, especially with the increased advertisements. She also said she found it was drowning out some of the creative content produced by creators on the app.
Romine said she doesn’t agree with some of the ethics of the products being sold on the app, especially with lower prices begging broader conversations about where those products are coming from.
“TikTok Shop does offer the opportunity for small businesses to succeed, and small businesses really need e-commerce platforms,” she said. “But a lot of the products I’ve seen that thousands of people are promoting are not small businesses.”
She added: “They are, you know, the $4 purse, and if they’re selling it for $4, what are the ethics behind that? Is it sustainably made? What kind of labor was used to make this product?”
Romine said the combination of fast fashion and overconsumption work together to sour her taste for the Shop feature, even as she sees classmates walking around campus in sweatshirts she’s seen ads for on the app. She’s also eager to see how the app adapts to its “first Christmas” in the holiday market.
For Fordham senior and history major Ana Kevorkian, the ads have become increasingly tempting even though she’s “principally opposed” to buying anything on TikTok Shop. She said she’s specifically had her eye on a leather purse being sold for $3, but she’s still questioning the ethics behind it.
“I try to be intentional about my shopping, and I think TikTok Shop is the exact opposite of intentional shopping,” Kevorkian said, adding that it encourages people to overspend and overconsume.
“It takes 10 seconds to go onto Safari and buy something, and that’s not a huge inconvenience,” she said. “If we need to shop so much that that is too much, then there is something wrong with the culture.”
Still, every time that leather purse pops up on her For You Page, Kevorkian said she hesitates. Since she’s never bought anything on the app, she has an automatic 70% discount for her first purchase. More

Retailers have a challenge this season: Winning over holiday shoppers who are holding out for cheaper prices or other incentives to spend.
That could increase the importance of promotional events like Black Friday and Cyber Monday.
Companies have tried to create urgency with limited-time discounts, eye-catching merchandise or free events.

Target hosted a free “Winter Wonderland” event in New York City to show off the holiday season’s hottest toys. It’s an example of the extra effort that retailers are putting in to motivate shoppers.
Melissa Repko | CNBC

NEW YORK CITY — On a recent weekend in downtown Manhattan, a long line of families with strollers and small children lined up to step inside of Target’s “Wonderland”
Santa’s helpers handed out free cookies. Mario and Luigi from Nintendo’s “Super Mario” video game posed for photos. A toy train winded through a miniature village made from the retailer’s gingerbread kits. And children looked wide-eyed at some of the season’s hottest toys, including a large Barbie Dreamhouse.

Getting people to show up was one thing. Turning the event into a sale is another entirely.
Target’s pop-up event, which will travel to Dallas and Los Angeles, captures the lengths that retailers are going to this holiday season to try to motivate shoppers to open their wallets. Caution and uncertainty has colored the outlook for the peak shopping season as inflation, higher interest rates, the return of student loan payments and consumers’ emphasis on experiences take a bite out of shoppers’ budgets for gifts and decor.
Holiday spending is expected to grow at a more modest rate than in recent years, as customers seek out deals. Holiday-related sales in November and December are expected to rise by 3% to 4% year over year, according to the National Retail Federation. That’s a sharp drop from the pandemic years, but about in line with the pre-pandemic growth average of 3.6%.
Over the past two weeks, many retailers, including Walmart, Nordstrom and Target have said shoppers have made fewer store trips, postponed big purchases or held out for better deals. This week, Lowe’s, Best Buy and Kohl’s all cut their sales forecasts. Even some retailers that raised their outlooks, such as Dick’s Sporting Goods, referred to dynamics outside of their control that could dampen spending.
Marshal Cohen, chief industry advisor for market research firm Circana, said this year will bring a “complex Christmas” for retailers.

The average credit card balance is at a 10-year high. Fall weather was unseasonably warm in many parts of the country, delaying the need to spring for new sweaters or winter coats. And a steady drip of Black Friday deals, started early in November at many retailers, has also delayed the rush, as some shoppers bet that the best deals are still coming.
Early holiday sales have lagged, despite many early promotions that coincided with Amazon’s Prime deals event in October and Black Friday sales beginning in November, according to the market research firm, which was formerly called The NPD Group. Holiday shoppers spent 7% less in dollars and 6% less in units from mid-October to mid-November compared with the year-ago period, Circana found.
“Consumers have kind of held back,” Cohen said.
That delay in spending puts pressure on retailers for the rest of the season. It has led retailers like Target to pull out all the stops this year generate demand.
“You’ve got to create impulse, ” he said. “You’ve got to create the sense of urgency, and you’ve got to create the desire to buy.”

Barbie dolls (R) are displayed for sale ahead of Black Friday at a Walmart Supercenter on November 14, 2023 in Burbank, California. 
Mario Tama | Getty Images News | Getty Images

Black Friday state of mind

Among the biggest themes this holiday season: shoppers are hungry for deals and willing to wait for them.
In an interview with CNBC last week, Walmart Chief Financial Officer John David Rainey said customers are holding out until they feel like they can nab the lowest price.
“We are seeing that consumers are leaning heavily into events, promotional type periods,” he said, adding that “some of the periods before and after those events or promotional periods are weaker.”
Walmart saw weaker sales in the last two weeks of October compared to the rest of the three-month period, a potentially worrying sign about consumer health, Rainey said. Yet he said sales began to pick up again in early November as Walmart debuted its Black Friday deals.
Footwear company Steve Madden saw a similar dynamic. On an earnings call in early November, CEO Edward Rosenfeld said customers are often showing up in a big way only when there’s a promotion.
“The shopping pattern is becoming more and more event driven,” he said, adding that “in between, the valleys have been a little deeper.”
He said the company hopes that as key shopping holidays such as Black Friday and Cyber Monday kick in, that “customers will really show up.”
Lowe’s and Best Buy have noticed a deal-hunting mentality, too. Both companies cut their full-year sales forecasts after weaker-than-expected fiscal third quarters.
Lowe’s CEO Marvin Ellison said shoppers have postponed bigger projects and major purchases, such as new refrigerators.
To counteract that, Ellison said the home improvement retailer has rolled out deep discounts on appliances and launched a new lowest price guarantee.
“We’re going to have a sustained drumbeat of great offers for the entire holiday season, starting this week,” he said on a call with CNBC. “So there are lots of efforts going into creating a little bit more urgency around getting our customers to come in for the holiday season.”
Discounting levels at Best Buy have increased from last year and are even higher than before the pandemic, CEO Corie Barry said on an earnings call with investors. She said the company anticipates a season punctuated by moments when shoppers believe they can get the best prices.
“Since we are preparing for a customer who is very deal focused, we expect shopping patterns will look even more similar to historical holiday periods than they did last year with customers shopping activity concentrated on Black Friday week, Cyber Monday and the last two weeks of December,” she said.

Shoppers at Bloomingdale’s stores and on the company’s website can browse a collection of purple suit jackets, sequin dresses, gourmet candies and even candy-themed cuff-links inspired by the “Wonka” movie.
Melissa Repko | CNBC

A bit of razzle dazzle

Along with deals, retailers are trying to grab customers’ attention — and dollars — with special events, limited-time offers and eye-catching merchandise.
Some retailers, such as Best Buy, are trying to rush shoppers to hit the “buy” button by dangling short-term sales. The consumer electronics retailer debuted “Best Buy Drops,” flash sales events through its app that feature short-term price cuts on limited edition items or popular product releases.
Target, Ulta Beauty and LVMH-owned Sephora have had “Deals of the Day” with popular brands or gift items that are only discounted for 24 hours.
Others have tried to attract shoppers with fun and free experiences, as they bet that will put consumers in the frame of mind to spend.

Macy’s is carrying a special collection of Disney merchandise for the holidays. Customers can also virtually try on Disney princess dresses in a “magic mirror” at the company’s flagship store in New York City.

At Macy’s flagship store in New York City’s Herald Square, shoppers can twirl in Disney princess dresses in an augmented reality-powered “magic mirror” before shopping a special collection of Disney jewelry, toys, apparel and more that’s available online and across its stores.
In mid-December, all Macy’s stores will host beauty-themed events with DJs, free makeovers and fragrance bottle engraving. At all stores, customers will find stations where they can create their own beauty gift sets.
With special events and seasonal displays, the department store wants to “bring the retail-tainment factor” and “create a little bit of a party on our floor,” Chief Merchandising Officer Nata Dvir said.
Macy’s higher-end department store, Bloomingdale’s, is carrying a colorful collection of chocolates, candy-themed cuff links, purple blazers, sequin dresses and more inspired by “Wonka,” the prequel movie that debuts in December.
As Nordstrom sees slower traffic, the retailer is trying to draw shoppers with extra incentives and more convenient options, Chief Merchandising Officer Jamie Nordstrom said. Holiday shoppers get extra rewards points on beauty purchases. The company also just began rolling out free two-day shipping to all customers in more than 20 markets.
He said Nordstrom can stand out with popular brands, superior customer service and quicker shipping in a season that can be stressful.
“The faster we can get that merchandise to the customer, the easier their life is going to be,” he said.
Across the industry, retailers hope novelty and flash will get reluctant consumers to spend more than they have been.
Target is trying to emphasize convenience and newness this year, along with value. The company’s “Wonderland” pop-ups showed off the chain’s top toys for the holiday season. Kids could scan their favorites, which got compiled into a shoppable wish list parents could print off or email to themselves.
Melissa Fleury, 27, of Brooklyn brought her one-year-old daughter and four-year-old nephew to the event. Yet so far, she said she hasn’t done much holiday shopping.
“Usually, I have half of my list done,” she said.
She said she has trimmed her budget for gifts from $1,000 last year to a maximum of $800 this year. She has kept tabs on the best sales by swapping tips with her aunt and sister. And she said she is spending slowly, deliberately and only when she spots deals.
“The price has to be right,” she said.
— CNBC’s Robert Hum contributed to this report. More

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