November 28, 2025 • 37 mins
Bloomberg Daybreak Weekend with Host Nathan Hager take a look at some of the stories we'll be tracking in the coming week.
- In the US – a look ahead to earnings from Crowdstrike, Snowflake, and Salesforce.
- In the UK – a look ahead to the seventh Milken Institute Middle East and Africa Summit.
- In Asia – a look ahead to whether Asia's Labubu toy has hit its peak.
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Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
This is Bloomberg Daybreak Weekend, our global look at the
top stories in the coming week from our Daybreak anchors
all around the world. Straight ahead on the program will
get you set for more corporate earnings in the tech sector.
I'm Nathan Hager in Washington.
Speaker 3 (00:24):
I'm Caline Hetpet in London, where we're asking how Middle
Eastern and African countries are focused on business in a
changing world order.
Speaker 4 (00:31):
I'm Doug Krissner looking at whether the le boo boo
craze is due for a Beeanie Baby style bust.
Speaker 1 (00:37):
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
eleven three YEO New York, Bloomberg ninety nine to one, Washington, DC,
Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius
XM one twenty one, and around the world on Bloomberg Radio,
dot Com and the Bloomberg Business App.
Speaker 2 (01:02):
Good day to you. I'm Nathan Hager. We begin today's
program with more corporate earnings in tech. Cybersecurity provider crowd
Strike reports on Tuesday than we hear from software names
Snowflake and Salesforce on Wednesday for more. We're joined by
the analysts who cover these companies most closely, Bloomberg Intelligence
Global head of Tech Research Mandeep Singh and On a
(01:24):
rag Rana, tech analyst for Bloomberg Intelligence. It's great to
have the both of you with us on this weekend program.
Of course, we've heard from a lot of big tech
names already. A lot of the hyper scalers have reported
as well. Mandy, we'll start with you. Do the results
that we've heard so far. Tell us anything about what
we could hear from these software players this week.
Speaker 5 (01:42):
Yes, I think when you look at the hyperscale cloud numbers,
especially Microsoft and Google, it's pretty clear that you know,
we are seeing that lift from AI workloads for both
Microsoft and Google, and that's why Microsoft is growing close
to forty percent. Google was mid thirty percent, and they're
(02:05):
ramping up kpex in anticipation of those numbers going even higher.
So I expect that to trickle down to some of
the software players like Snowflake, for example, is in the
business of using enterprise data for deploying some of these
agents that everyone is looking to add in terms of
(02:27):
their enterprise functionality and snowflake data is to my mind critical,
so they should see a similar lift to their top
line from AI workloads and CrowdStrike. Being a cybersecurity provider,
I think they are finding the tack surface when it
comes to generative AI is far bigger than what anything
(02:52):
you know, these security companies have dealts with and you
could have prompt injunction attacks and some other types of
new attack at that no one even conceived of before.
So they should similarly benefit from enterprises looking to secure
their you know, firewalls and their infrastructure. Given everyone is
(03:14):
deploying AI, so I expect a crowd strike print should
be strong as well. In terms of AI demand.
Speaker 2 (03:22):
Let's bring you into the conversation on a RAG as well.
I know you cover salesforce pretty closely as well. What
do the hyper scale numbers tell you about what we
could get from salesforce?
Speaker 6 (03:32):
So salesforce is on the other side of the equation.
They really, you know, are in a completely different business
than some of the other vendors that when they've talked
about In their case, the only product that hasn't overlapped
is some of the data cloud that they started to
sell in the last couple of years as part of
their Jenny I offering. Now that product is a small
(03:53):
portion of the overall portfolio, so even if they doubles,
really it's not going to really move the needle for them.
For them, they're on the receiving side of the lower
end of it spending, which is as people are spending
more and more money on AI related workloads and AI
related infrastructure. You know, it's taking out from some of
(04:15):
the stuff that Salesforce is selling. And in fact, one
of the things that they are grappling with is the
lack of seat count growth in their enterprises that they
sell into. So it's I mean, you know, in our view,
it's not going to be that exciting for them. They're
running at at about ten percent Booking's growth rate number.
That's a that's probably where it will see for them.
(04:36):
The big question for them would be, you know, how
much of the guidance they're going to go out and
improve because of the closure of the Informatica deal which
just happened.
Speaker 2 (04:46):
Let's dig into all these companies much more closely. Man, Deep,
I know you cover CrowdStrike in particular, and I got
to admit, whenever I think of CrowdStrike, I think of
outage from last year, just because you know, full disclosure,
it affected me personally, I think a lot of listeners
can relate to that as well. Is that still an overhanger?
Is it fair to still think about the outage when
(05:08):
it comes to crowd strength?
Speaker 5 (05:10):
Well, so when I look at the new customers that
CrowdStrike has at it since, then, clearly their pace of
new customer ads have slowed because of what happened, and
I feel they've come out of it relatively okay, even
though there was a slowdown, but they managed to hold
(05:31):
on to their existing customer base. And now we are
at a point where because of generative AI deployments. I mean,
there are three or four companies that probably our best
position to benefit from, you know, the GENAI deployment. So
I would put CrowdStrike amongst one of them. And clearly
(05:52):
there is M and A going on with pallel to
buying you know a Chronosphere and cyber Arc and Google
buy with so there are other dynamics at play. But
on an organic basis, I think crowd strike has done
well and they have themselves made some tuck in, so
I feel they have been able to at least stabilize
(06:17):
the impact and second half for them would be faster
growth compared to the first half of twenty twenty five.
And so from that perspective, I mean, given there around
twenty percent growth, I expect growth to improve going forward.
Speaker 2 (06:34):
It's interesting to think about the opportunities presented by artificial
intelligence for the cybersecurity space. When it comes to CrowdStrike,
are there challenges?
Speaker 5 (06:43):
So crowd Strike to me, you know, is still a
company that is a category leader in the endpoint security space,
and so the challenge is if everyone starts deploying security
in a different way. So imagine, you know, we have
a lot more agent take functionality out there, you don't
(07:06):
need to secure as many human users, and so that
could have an impact on crowd Strike going forward, and
they clearly have to adapt to their business model in
terms of the agentic functionality. But as I said, you know,
I don't see any pure play AI security provider really
(07:27):
challenging their position right now.
Speaker 2 (07:29):
And when it comes to artificial intelligence opportunities on a
rog looking at sales forces upcoming earnings, we just heard
from the CEO ahead of the report saying he's not
going back to chat GPT after seeing what Google's Gemini offers.
Now there's been a lot of attention on this new
large language model coming from the alphabet unit. Where does
(07:52):
that position salesforce hetting into earnings?
Speaker 6 (07:55):
Yeah, I think the Google THEO must thank him for
a few billion in market capital over there, because that
was a very big statement. Google works very closely with Salesforce.
They provide cloud services to Salesforce, so it is a
very good relationship between the two firms. And also remember
that open ai is starting to get into the wheelhouse
(08:16):
of a lot of these software providers by saying that
you can run some of the software like functionalities through CHATGPT,
so they could be a little bit of that. But
frankly speaking, when it comes to Salesforce, the fundamentals are
that non AI related it spending is weak, and it
has been weak for some time in the last couple
(08:36):
of years. As corporations are spending more on expanding their
AI footprint or either an infrastructure or models, they are
pulling back in areas such as traditional software spending where
salesforce lies, or in consulting, which is impacting some of
the consulting names. So that's the theme that we are
(08:57):
seeing right now. Let's see if that reverses in twenty
twenty six. But as of now, things you know, I
would say from a macro point of view are not
that rosy for Salesforce.
Speaker 2 (09:07):
Interesting Why is that? Is it just because there's too
much of a reliance on artificial intelligence right now?
Speaker 7 (09:13):
No, that's not that.
Speaker 6 (09:15):
You know, if you are a JP Morgan or a
City Bank, I mean, you have to make sure that
you invest aggressively in AI related aspects of it now.
And these companies also don't have unlimited budgets. So if
your overall budget is only going to grow up by seven,
eight percent or nine percent, you know, and you are
allocating a large portion of that into AI, you know,
you have to find money from somewhere else, and that
(09:36):
somewhere else is usually tapering down in some of the
other areas, whether it's buying new hardware or you know,
cutting your consulting spends, et cetera.
Speaker 7 (09:44):
And that's what's you know, impacting Salesforce.
Speaker 2 (09:47):
And Mandeep looking at Snowflakes earnings the same day as
Salesforce on Wednesday, looks like there's a lot of focus
on how they're navigating artificial intelligence as well.
Speaker 5 (09:58):
Yeah, I mean, look, I mean I come pair Snowflake
to a company like Palenteer. Palenteer has seen, you know,
remarkable acceleration on the commercial side, you know, by integrating
their ontology product with these llms. And to me, the
closest competitor for Snowflake is Palenteer and Data Breaks. So
(10:20):
from that perspective, you know, Snowflake hasn't seen that kind
of a bump that Palenteer has seen. That's partly to
do with they didn't have as many llms on their platform,
you know, to integrate with for agentic functionality. They've been
trying to add more llms and that for me, is
(10:43):
a catalyst for that top line acceleration. But there is
no doubt that they are behind when it comes to
some of the agentic functionality compared to Data Breaks and Talenteer.
Speaker 2 (10:53):
So when it comes to bringing in more of those
large language models, does that add to some of its
costs And could that have an effect on its margins?
Speaker 5 (11:02):
It certainly could, And that's our view as well that
Snowflake may see some pressure on margins. And look, they
use all these hyperscalers, Microsoft, Google and Amazon for deploying
their products. So if Microsoft or Google have to raise prices,
(11:22):
then they're going to pass it on to a Snowflake.
So from that perspective, we do think with more AI
workloads Snowflake, a company like Snowflake may see pressure on
the margins.
Speaker 2 (11:34):
Of course, all these earnings are coming at a time
where investors broadly are questioning artificial intelligence valuations on a
rog How does that play into what we could get
this week?
Speaker 7 (11:45):
Yeah, I mean you look at valuations mine.
Speaker 6 (11:47):
You know, Salesforce, as I said, is the completely opposite
realm of all the AI infrastructure play that's out. Their
evaluation is a lotless which has been historically. In fact
SaaS trend that have seen a decline in the last
twelve for twenty four months because of the seatcout pressure
that we talked about, and even for them, you know,
when you look at margins, you're not going to get
(12:08):
the same lift in margins that we have seen in
the last two to three years of Salesforce under the
attack of some activist investor really went out and gave
margin back to the investors. But I think right now
with their Agent Force product, they really are investing heavily
into sales and marketing, and I think a lot of
that will you know, show up in this quarter's earnings.
Speaker 2 (12:32):
Again, we hear from a crowd strike on Tuesday and
then Snowflake and Salesforce on Wednesday. Thanks to both of
you for being with us. That's man Deep Singh and
on a rag rana of Bloomberg Intelligence and coming up
on Bloomberg day Break weekend, we'll look at how Middle
Eastern and African countries are focused on business in a
changing world order. I'm Nathan Hager, and this is Bloomberg.
(13:06):
This is Bloomberg Daybreak Weekend, our global look ahead at
the top stories for investors in the coming week. I'm
Nathan Hager in Washington. Up later in the program, we'll
look ahead to the holiday shopping season, as those trendy
La Boo Boo dolls are expected to be a hot
item in Asia. But first in the coming days, industry leaders, investors,
and government officials descend on the UAE for the seventh
(13:28):
Milkin Institute Middle East and Africa Summit. This year's edition
is taking place at a time when shifting geopolitical landscapes
and technological advances are dramatically altering the world order. Attendees
will seek to understand where the Middle East and Africa
fit in the new hierarchy. For more, let's go to
London and bring in Bloomberg Daybreak Europe anchor Caroline hepger Nathan.
Speaker 3 (13:50):
The Middle East and Africa have the advantage of young
demographics and strategic location. They could well be poised to
take advantage of the next frontier in global devaslopment this year. Already,
Middle Eastern states, including Kuttar have played a pivotal role
in the signing of the Gaza Peace Plan, with President
Donald Trump thanking Arab and Muslim nations in advance for
(14:12):
pledging money to rebuild the devastated Palestinian territory. Questions, do
you remain over the extent to which these nations in
the region, including Saudi Arabia and the UAE, will help
fund the reconstruction. While several deep pocketed and energy rich
countries in the area worked on and enthusiastically endorsed the
(14:33):
peace Plan, almost all have specific reservations. Meanwhile, countries in
Africa are grappling with a complex relationship with the US President.
Bloomberg opinion columnist Andrea's Kluth has written about how Donald
Trump's claims that South Africa is facing government sponsored race
based discrimination and that in Nigeria quote, they're killing Christians
(14:57):
are evidence of the current administration's u use of African
policy to promote an America First agenda. The position of
African countries, therefore, in a world increasingly dominated by US rhetoric,
does face challenges, and it's something that was discussed widely
at the recent Bloomberg Africa Business Summit. During the event,
(15:21):
South Africa's Minister of Finance, Ino Godongwana told Bloomberg Jennifer's
Abasaja that talks between the United States and South Africa
are ongoing.
Speaker 8 (15:33):
The and negotiations taking place between ourself and the USA.
Accept that we can be through the media through what
details of this agament when we're not negotiating with them
in the media.
Speaker 9 (15:46):
What would you say the current state of relations are
between South Africa and the US.
Speaker 8 (15:51):
Absolutely non problem. Accept that now and again we hear
what the the USA says about general side and all
of them.
Speaker 9 (16:00):
Do you think it is putting a dent on potential
investment into the country.
Speaker 8 (16:05):
Yes, the US is powerful and to that extent it
influenced the attitude of Inversta community to South Plus, I
love you.
Speaker 3 (16:15):
That was South Africa's Enoch Godongwana speaking there to Bloomberg's
Jennifer Zaba Saja on the sidelines of the Bloomberg Africa
Business Summit. This ahead of the Milkan Institute Middle East
and Africa Summit in the coming days. So I've been
getting some information about what is to come from Bloomberg's
(16:38):
UK and Middle East Finance editor Jenny Seraine and our
Chief Africa correspondent Jennifer Zabasaja. Welcome to both of you.
Thank you for speaking to me in terms of the
Milkan Institute this particular event. Jenny, give us a sense
of how big a deal the gathering is, who the
main players are going to be attending, because there is
(17:00):
increasingly a focus on the Middle East and it's connections
around the world.
Speaker 10 (17:05):
What we've seen increasingly is, especially as the US, you know,
maybe has pulled back in a lot of ways from
some of these big global summit type things, you've seen
a real big emphasis on some of these midiest players
that can kind of step in and fill the void.
So this is a region that just has vast amounts
of capital You've got entities and specific investors that are
(17:29):
looking to put that capital to work in new and
interesting ways, and so that's why you see so many
Wall Street names and sovereign names from around the world
kind of flocking to these events and looking to get
in touch with these investors.
Speaker 3 (17:41):
How do you think those Middle East and countries the
GCC are balancing the bizarre for investment and also their
domestic issues.
Speaker 10 (17:52):
Yeah, it's interesting. I do think we're starting to see
more of a divergence between the different countries themselves. So
over the years, Abudabi's relying on oil, it has lessened
to some degree, and a large part of that is
because they've been able to go and invest so heavily
in these new and different areas. Saudi, on the other hand,
is still heavily reliant on oil, and so you kind
of see that and how their different budget dynamics play out.
(18:14):
But you see, I think across the board a desire
to move beyond oil. That's why you see them rushing
to invest in all these new economy up and coming area.
Speaker 3 (18:25):
Jennifer, You've just come through a very busy time in
the past few days in Africa, talking to a lot
of African leaders. We heard a little snippet of one
finance minister who you spoke to, just tell us first
some of the complexities that are facing African nations, of
which there are so many right now as this sort
(18:46):
of new world order is establishing itself.
Speaker 9 (18:49):
You know, it was the first Group of twenty summer,
and of course that was on the African continent, that
was held on the African continent, which was significant for
many countries outside of just South Africa, which is really
the only sovereign nation that's a part of the G twenty,
but also the African Union was also a part of
(19:10):
the Group of twenty, and so we saw a number
of leaders that use this opportunity, and even South African
President Zero Ramaposa, who has held the G twenty presidency
for the past year, used this, you know, opportunity to
amplify a lot of the challenges that these countries are
facing that even pre date a lot of the shifting alliances,
(19:34):
if it were, that we've seen in the past few months.
And so of course one of the major you know,
and probably one of the top concerns that many of
them have told us is this issue of debt sustainability.
This is of course, you know, really came to light
even more so after the pandemic when we saw a
(19:54):
number of African countries actually you know, fall into to
debt and they were not able to pay back some
of the debt that they had borrowed. We saw that
from from Zambia. We've also seen that from Ethiopia, and
so the concern really was how do these African countries
(20:16):
develop and industrialize when most of the revenues and the
payments and you know, their their cash flow that they
have domestically is going to servicing debt more so than
you know, many of our reports indicate more so than
sectors like education and health. And so we heard from
a number of ministers wanting to at least find some
(20:41):
ways in which they are able to maybe look at
various ways of financing. And so it's not just you know,
getting services from the IMF or the World Bank, but
it's also from from new investors.
Speaker 3 (20:54):
Jen, where do you think the focuses then, what do
you think that as African nations are thinking about in
terms of their ties to the Middle East. As you say,
you know, there's a lot of focus on the Trump
administration and the US relationship with these countries. What are
those ties between African countries and the Middle East.
Speaker 9 (21:15):
What's been interesting is that, you know, the Trump administration
and the US sort of scaling back in their aid,
you know, going from aid to trade or transactions to
a certain extent, has sort of come at the same
time in which a number of African countries have been
able to stabilize many of their economies, so much so
(21:36):
that there's some of the fastest growing economies in the world.
And so while of course the shock of usaid was
very relevant and focused for a number of countries, it's
also come when there's a lot of new investors that
are looking for capital to deploy. And you know, we
were actually speaking to the Barclays head of South Africa,
(22:00):
and he's also head of the private banking across the continent,
and he was just saying just how much capital there
is in some of these Gulf nations and how you know,
the extent of the money and where it's coming from,
and the opportunities are or more so than he's seen
in the past few years.
Speaker 3 (22:20):
Okay, So that's an interesting point, Jenny. I'm also thinking,
i mean, maybe some of this turns on the military,
but also a lot of it turns on soft power
as well. How does soft power, not just hard power,
play into the mindset of the Middle East?
Speaker 11 (22:38):
Now?
Speaker 3 (22:38):
Huge investment in lots of other things to project, you know,
whatever image it is that those leaders want to, maybe
in sports or in other ventures. How do you think
about soft power now in the Middle East?
Speaker 10 (22:54):
I think it's definitely still top of mind for these governments,
and so that's why you see a lot of the
different entities, whether it's sovereign wealth funds or other alternative
asset managers that they've set up, going after these kind
of more unique assets that are on the market. I mean,
I think you saw it with the piffs decision to
(23:14):
you know, go and take electronic arts private and kind
of the big take private deal of the year. That
was a huge display of the kind of wealth and
then the kind of ambitions that they have, and that
was all tied to, you know, their desire to be
the leader of the gaming industry and have this huge,
you know, footprint in a space that's obviously fast growing
(23:36):
but also kind of captures the minds and imaginations of
a lot of consumers around the world and so I think, yeah,
we'll definitely continue to see these players, you know, look
for ways that they can make that kind of mark
and kind of these key industries, and I think sports
is a great one. As you mentioned, you see them
doing it in arts and culture increasingly, so it'll be
really interesting to watch as they kind of pick their
(23:58):
spots and pick their moments to deploy this trillions and
trillions of dollars of sovereign wealth that they have.
Speaker 3 (24:03):
My thanks to Bloomberg's UK and Middle East Finance editor
Jenny Soarraine and to our chief Africa correspondent Jennifer Zaba Saja.
I'm Caline Hebgar here in London, and you can catch
us every weekday morning for Bloomberg Daybreak Europe, beginning at
six am in London. That's one am on Wall Street.
Speaker 2 (24:22):
Nathan, Thanks Caroline, and coming up on Bloomberg day Break Weekend,
we'll look at whether the La Boo Boo craze is
due for a Beanie Baby style bust. I'm Nathan Hagar
and this is Bloomberg. This is Bloomberg day Break Weekend,
(24:46):
our global look ahead, the top stories for investors in
the coming week. I'm Nathan Hager in Washington. As the
holiday shopping season gets underway, those trendy La Booboo dolls
are expected to be a hot item. The toys are
produced and sold exclusive by the China based retailer PopMart,
But some are wondering if these toys have reached their
peak and whether La Boo Boo is due for a
(25:08):
Beanie Baby style bust. For more, let's go to Daybreak
Asia podcast hosts Doug.
Speaker 4 (25:13):
Krisner Nathan These dolls have become a global phenomenon. They're
fictional characters, and they appear to be an interesting mix
of cute and creepy. If you haven't seen a Laboobu doll,
it might be helpful to think of it as a
fuzzy elf like figure with a row of jagged teeth.
Images of these dolls reminded me of the characters from
(25:34):
Where the Wild Things Are created by Maurice Sendek, Lu
Boobo isn't a standalone character. I was surprised to make
that discovery. She is part of a larger group called
the Monsters, created by Hong Kong artist and author Ki
Sing Loom. For a closer look at the popularity of
La Booboo and what it means for the company that
(25:55):
controls this property. I'm joined by Bloomberg Shirley Jao. Shirley
covers consumer companies in Asia and she joins us from
Hong Kong. Thank you for making time to chat with me.
So we know now La booboo is gone global. Can
you help me understand the beginning of this craze? How
did things start?
Speaker 11 (26:12):
So the things really started around late last year when
it started to you know, caught a lot of people's
attention and the global craze really started to rise after
a series of K pop stars and Hollywood stars started
to feature La Booboo in their photos. And the most known,
(26:36):
perhaps is Black Pink's Lisa, and she is known as
a huge fan of La Booboo and she is seen
in many photos, you know, showing her personalized La Boo
Boo with really trendy clothing and really fancy handbags. And
(26:58):
you know a lot of well people started to show
a Boo boo in in their you know, social media.
That really triggered this global frenzy starting from earlier this year.
Speaker 4 (27:12):
Can we say that it began in China on the mainland.
Is that accurate.
Speaker 11 (27:17):
Yes, it is accurate. I think a lot of this
trend is to do with the economic slowdown in China.
So previously consumers in China were seen posting photos on
social media flaunting you know, air Mess handbags or you know,
Louiston handbags and other really pricey luxury goods. But now
(27:40):
with consumers confidence starting to weaken, but still people want
a taste of this luxury lifestyle of you know, the
lifestyle of really well off people. But they don't. They're
being more cautious in buying luxury goods now, so what
else can they do? And they see people like Lisa
(28:03):
and people like a lot of rich people all, you know,
showing their La Booboo dolls, and then they want to
buy the doll because that gives them a taste, like
what they call a small luxury, a taste of the
upper class lifestyle in the background of an economic slow down.
Speaker 4 (28:25):
Are these expensive? How are they priced?
Speaker 11 (28:27):
They are relatively pricey in terms of you know, just
the little fluffy doll. For small dolls like this, it's
quite easy to fake it. So you can find a
lot of different versions of fake La Boo boos on
China's e commerce platforms going for much cheaper than the
(28:49):
real ones, and sometimes you can't tell whether it's real
or it's fake. The fake ones are known as La fufus.
So a lot of people are joking that even though
they spend a lot of money and effort to buy
a La Boo Boo doll that they want, they don't
know whether it's real La Boo Boo or La fufou. So.
Speaker 4 (29:09):
The doll is made by a company called PopMart. What
do we know about PopMart?
Speaker 11 (29:14):
So? PopMart is known as McKain. The so called blind
box dolls they actually have started quite a few years ago,
before the global popularity of La Boo Boo. A lot
of other popmarked products are also relatively well known, although
(29:35):
none of them is as viral as La Boo Boo. So.
Other pop marked toys include Skulp Panda, Molly Twin called
Twin Cole, and even La Boo Boo's boyfriend Tay Cocoa.
Speaker 4 (29:52):
Suirley, can you help me understand the history of blind
box gift giving? How did it start?
Speaker 11 (29:58):
I think it really starts guarded in recent years, and
it's actually no different from other forms of blind box
toys like Gatcha machines that has been going on in
Japan for many, many years. I think it's the sense of,
you know, excitement that you don't know what you'll get,
(30:21):
and especially if you have a line of products. For example,
there is a series of La Boo booths, and every
La Boo Boo features a different outfit or a different theme,
and you want to collect every one of them, and
you have to spend a lot of money because sometimes
you know, you may end up getting the same one
(30:43):
over and over and over. And that's what get people
get consumers into spending to get what they want, to
get the toy that they want, or to collect the
whole series of the toys.
Speaker 4 (30:57):
So in terms of PopMart, it's a publicly traded company
right the trades in Hong Kong? Is that correct? How
well has the stock been performing well?
Speaker 11 (31:05):
The stock actually surged more than one five hundred percent
from the start of last year to August, so the
price is peaked in August and a lot of that
was writing on the global popularity of La Boo Boo,
but then it dropped more than thirty percent since August,
(31:27):
and that highlights a lot of questions and concerns in
the market about whether this la booboo frenzy can last.
Speaker 4 (31:36):
I would imagine that. Yeah, calling into question the sustainability
of a fad like this makes good sense. But I
think we would be remiss if we didn't acknowledge the
fact that the holiday shopping season is coming up in
the West. Obviously, we have the Christmas holiday, and then
New Year will be here before you know it for
parts of Asia that celebrate the New Year holiday, not
(31:57):
the Chinese New Year necessarily, but just the beginning of
the calendar year. Is the expectation here that we see
a lot of sales moving into the holiday season.
Speaker 11 (32:07):
We are definitely expecting a surge into the holiday season,
but as I mentioned just now, there is also a
rise of fake la boo boos. So a lot of
people have already been complaining about these fakes, and actually
different countries, especially China, has been tightening their scrutiny against
(32:28):
the fakes of la boo boos. So it remains to
be seen whether the holiday season can really trigger a surge.
Speaker 4 (32:38):
Would you consider giving it as a gift still?
Speaker 11 (32:42):
I would still because I know, you know, a lot
of my friends are still quite into la Boo boo.
And I think it's this sense of scarcity and the
secondary market price that's still there, So that's still making
people think, you know, oh they want this doll because
it's often out of stock in stores. For consumers like me,
(33:06):
if I see, you know, even if I'm willing to pay,
but then you know, after a long time of waiting
or after a lot of effort, and I finally get
a lat Boo boo, but still, you know, I see
a lot of fake La boo boos that's much cheaper
and much easier to get. For me, it's you know,
(33:29):
I tend to think that it may be a waste
of effort and time, but for a lot of other consumers,
they still think the sense of scarcity makes it such
a rare thing that they still want.
Speaker 4 (33:43):
When you look at the market, surely, is there a
specific demographic that we should address here? Are they primarily
younger people? Are they teenagers? Are they a little older? Certainly?
And I'm wondering about whether there is an adult audience
for this product.
Speaker 11 (33:58):
I think there is definitely an adult audience. You know,
a lot of them are in their mid thirties. But
I think it's worth noticing that a lot of them
are parents, so that means it's their children who got
into it first. But then they started to get into
it as well. I remember last year I was chatting
(34:19):
with somebody who started looking at PopMart and La Bubu,
and I asked them, you know, why do you think
that this toy or the company will will be successful?
And they said that they went to China and they
went to a shopping mall and the majority of the
shopping mall was very empty because you know, in China,
(34:43):
the e commerce platforms are ubidiquous and that's really affected
the performance of a lot of shopping malls in the country.
But the only place where there were a lot of
people gathering, especially you know, young people like primary school students,
is Popmark stores and that's where you know, people are
(35:05):
gathering and they are spending money to try to get
their blind box toys. And that was when this person
started to think that, oh, this may become a trend.
But again, how long this trend may last it remains
to be seen.
Speaker 4 (35:23):
So the Hollywood Reporter recently reported that Sony Pictures has
a deal now to the rights from PopMart International. This
is the company that has the rights to the doll
about creating a motion picture. And to the point that
you were raising earlier about the analyst community being a
little suspicious or at least questioning whether this mania can continue.
(35:47):
That seems to say to me that the idea of
putting a film together based on this phenomenon, it may
not last, and that is inherent in that is maybe
a little bit of risk.
Speaker 11 (36:00):
There are indeed questions about whether this film is going
to be a hit or not. We don't know a
lot of details about the film, like we don't even
know whether this film will be animated or if it
will be live action. The observation is that it appears
that this deal came first and then you know, Sony
(36:22):
will probably figure out all those details later. But we
have seen in the past examples of similar films developed
from popular toy lines that turn out to be failures.
For example, there are Brats, the Movie, Masters of the Universe,
(36:43):
pand Puppies, and The Legend of Big Paul, and they're
all based on really popular toy lines, but they weren't
developed until several years down the line, and some of
them barely recover their budget, while others didn't really sell
tickets to cover the cost.
Speaker 4 (37:03):
Shirley, We'll leave it there, Thank you so very much.
That is Bloomberg Shirley Choo. Shirley covers consumer companies for
US in Asia from Hong Kong. I'm Doug Krisner. You
can catch us weekdays for the Daybreak Asia podcast. It's
available wherever you get your podcast, Nathan.
Speaker 2 (37:18):
Thanks Doug. And that does it for this edition of
Bloomberg Daybreak Weekend. Join us again Monday morning at five
am Wall Street Time for the latest sun markets overseas
and all the news you need to start your day.
I'm Nathan Hager. Stay with us. Top stories and global
business headlines are coming up right now
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
This is Bloomberg Daybreak Weekend, our global look at the
top stories in the coming week from our Daybreak anchors
all around the world. Straight ahead on the program will
get you set for more corporate earnings in the tech sector.
I'm Nathan Hager in Washington.
Speaker 3 (00:24):
I'm Caline Hetpet in London, where we're asking how Middle
Eastern and African countries are focused on business in a
changing world order.
Speaker 4 (00:31):
I'm Doug Krissner looking at whether the le boo boo
craze is due for a Beeanie Baby style bust.
Speaker 1 (00:37):
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
eleven three YEO New York, Bloomberg ninety nine to one, Washington, DC,
Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius
XM one twenty one, and around the world on Bloomberg Radio,
dot Com and the Bloomberg Business App.
Speaker 2 (01:02):
Good day to you. I'm Nathan Hager. We begin today's
program with more corporate earnings in tech. Cybersecurity provider crowd
Strike reports on Tuesday than we hear from software names
Snowflake and Salesforce on Wednesday for more. We're joined by
the analysts who cover these companies most closely, Bloomberg Intelligence
Global head of Tech Research Mandeep Singh and On a
(01:24):
rag Rana, tech analyst for Bloomberg Intelligence. It's great to
have the both of you with us on this weekend program.
Of course, we've heard from a lot of big tech
names already. A lot of the hyper scalers have reported
as well. Mandy, we'll start with you. Do the results
that we've heard so far. Tell us anything about what
we could hear from these software players this week.
Speaker 5 (01:42):
Yes, I think when you look at the hyperscale cloud numbers,
especially Microsoft and Google, it's pretty clear that you know,
we are seeing that lift from AI workloads for both
Microsoft and Google, and that's why Microsoft is growing close
to forty percent. Google was mid thirty percent, and they're
(02:05):
ramping up kpex in anticipation of those numbers going even higher.
So I expect that to trickle down to some of
the software players like Snowflake, for example, is in the
business of using enterprise data for deploying some of these
agents that everyone is looking to add in terms of
(02:27):
their enterprise functionality and snowflake data is to my mind critical,
so they should see a similar lift to their top
line from AI workloads and CrowdStrike. Being a cybersecurity provider,
I think they are finding the tack surface when it
comes to generative AI is far bigger than what anything
(02:52):
you know, these security companies have dealts with and you
could have prompt injunction attacks and some other types of
new attack at that no one even conceived of before.
So they should similarly benefit from enterprises looking to secure
their you know, firewalls and their infrastructure. Given everyone is
(03:14):
deploying AI, so I expect a crowd strike print should
be strong as well. In terms of AI demand.
Speaker 2 (03:22):
Let's bring you into the conversation on a RAG as well.
I know you cover salesforce pretty closely as well. What
do the hyper scale numbers tell you about what we
could get from salesforce?
Speaker 6 (03:32):
So salesforce is on the other side of the equation.
They really, you know, are in a completely different business
than some of the other vendors that when they've talked
about In their case, the only product that hasn't overlapped
is some of the data cloud that they started to
sell in the last couple of years as part of
their Jenny I offering. Now that product is a small
(03:53):
portion of the overall portfolio, so even if they doubles,
really it's not going to really move the needle for them.
For them, they're on the receiving side of the lower
end of it spending, which is as people are spending
more and more money on AI related workloads and AI
related infrastructure. You know, it's taking out from some of
(04:15):
the stuff that Salesforce is selling. And in fact, one
of the things that they are grappling with is the
lack of seat count growth in their enterprises that they
sell into. So it's I mean, you know, in our view,
it's not going to be that exciting for them. They're
running at at about ten percent Booking's growth rate number.
That's a that's probably where it will see for them.
(04:36):
The big question for them would be, you know, how
much of the guidance they're going to go out and
improve because of the closure of the Informatica deal which
just happened.
Speaker 2 (04:46):
Let's dig into all these companies much more closely. Man, Deep,
I know you cover CrowdStrike in particular, and I got
to admit, whenever I think of CrowdStrike, I think of
outage from last year, just because you know, full disclosure,
it affected me personally, I think a lot of listeners
can relate to that as well. Is that still an overhanger?
Is it fair to still think about the outage when
(05:08):
it comes to crowd strength?
Speaker 5 (05:10):
Well, so when I look at the new customers that
CrowdStrike has at it since, then, clearly their pace of
new customer ads have slowed because of what happened, and
I feel they've come out of it relatively okay, even
though there was a slowdown, but they managed to hold
(05:31):
on to their existing customer base. And now we are
at a point where because of generative AI deployments. I mean,
there are three or four companies that probably our best
position to benefit from, you know, the GENAI deployment. So
I would put CrowdStrike amongst one of them. And clearly
(05:52):
there is M and A going on with pallel to
buying you know a Chronosphere and cyber Arc and Google
buy with so there are other dynamics at play. But
on an organic basis, I think crowd strike has done
well and they have themselves made some tuck in, so
I feel they have been able to at least stabilize
(06:17):
the impact and second half for them would be faster
growth compared to the first half of twenty twenty five.
And so from that perspective, I mean, given there around
twenty percent growth, I expect growth to improve going forward.
Speaker 2 (06:34):
It's interesting to think about the opportunities presented by artificial
intelligence for the cybersecurity space. When it comes to CrowdStrike,
are there challenges?
Speaker 5 (06:43):
So crowd Strike to me, you know, is still a
company that is a category leader in the endpoint security space,
and so the challenge is if everyone starts deploying security
in a different way. So imagine, you know, we have
a lot more agent take functionality out there, you don't
(07:06):
need to secure as many human users, and so that
could have an impact on crowd Strike going forward, and
they clearly have to adapt to their business model in
terms of the agentic functionality. But as I said, you know,
I don't see any pure play AI security provider really
(07:27):
challenging their position right now.
Speaker 2 (07:29):
And when it comes to artificial intelligence opportunities on a
rog looking at sales forces upcoming earnings, we just heard
from the CEO ahead of the report saying he's not
going back to chat GPT after seeing what Google's Gemini offers.
Now there's been a lot of attention on this new
large language model coming from the alphabet unit. Where does
(07:52):
that position salesforce hetting into earnings?
Speaker 6 (07:55):
Yeah, I think the Google THEO must thank him for
a few billion in market capital over there, because that
was a very big statement. Google works very closely with Salesforce.
They provide cloud services to Salesforce, so it is a
very good relationship between the two firms. And also remember
that open ai is starting to get into the wheelhouse
(08:16):
of a lot of these software providers by saying that
you can run some of the software like functionalities through CHATGPT,
so they could be a little bit of that. But
frankly speaking, when it comes to Salesforce, the fundamentals are
that non AI related it spending is weak, and it
has been weak for some time in the last couple
(08:36):
of years. As corporations are spending more on expanding their
AI footprint or either an infrastructure or models, they are
pulling back in areas such as traditional software spending where
salesforce lies, or in consulting, which is impacting some of
the consulting names. So that's the theme that we are
(08:57):
seeing right now. Let's see if that reverses in twenty
twenty six. But as of now, things you know, I
would say from a macro point of view are not
that rosy for Salesforce.
Speaker 2 (09:07):
Interesting Why is that? Is it just because there's too
much of a reliance on artificial intelligence right now?
Speaker 7 (09:13):
No, that's not that.
Speaker 6 (09:15):
You know, if you are a JP Morgan or a
City Bank, I mean, you have to make sure that
you invest aggressively in AI related aspects of it now.
And these companies also don't have unlimited budgets. So if
your overall budget is only going to grow up by seven,
eight percent or nine percent, you know, and you are
allocating a large portion of that into AI, you know,
you have to find money from somewhere else, and that
(09:36):
somewhere else is usually tapering down in some of the
other areas, whether it's buying new hardware or you know,
cutting your consulting spends, et cetera.
Speaker 7 (09:44):
And that's what's you know, impacting Salesforce.
Speaker 2 (09:47):
And Mandeep looking at Snowflakes earnings the same day as
Salesforce on Wednesday, looks like there's a lot of focus
on how they're navigating artificial intelligence as well.
Speaker 5 (09:58):
Yeah, I mean, look, I mean I come pair Snowflake
to a company like Palenteer. Palenteer has seen, you know,
remarkable acceleration on the commercial side, you know, by integrating
their ontology product with these llms. And to me, the
closest competitor for Snowflake is Palenteer and Data Breaks. So
(10:20):
from that perspective, you know, Snowflake hasn't seen that kind
of a bump that Palenteer has seen. That's partly to
do with they didn't have as many llms on their platform,
you know, to integrate with for agentic functionality. They've been
trying to add more llms and that for me, is
(10:43):
a catalyst for that top line acceleration. But there is
no doubt that they are behind when it comes to
some of the agentic functionality compared to Data Breaks and Talenteer.
Speaker 2 (10:53):
So when it comes to bringing in more of those
large language models, does that add to some of its
costs And could that have an effect on its margins?
Speaker 5 (11:02):
It certainly could, And that's our view as well that
Snowflake may see some pressure on margins. And look, they
use all these hyperscalers, Microsoft, Google and Amazon for deploying
their products. So if Microsoft or Google have to raise prices,
(11:22):
then they're going to pass it on to a Snowflake.
So from that perspective, we do think with more AI
workloads Snowflake, a company like Snowflake may see pressure on
the margins.
Speaker 2 (11:34):
Of course, all these earnings are coming at a time
where investors broadly are questioning artificial intelligence valuations on a
rog How does that play into what we could get
this week?
Speaker 7 (11:45):
Yeah, I mean you look at valuations mine.
Speaker 6 (11:47):
You know, Salesforce, as I said, is the completely opposite
realm of all the AI infrastructure play that's out. Their
evaluation is a lotless which has been historically. In fact
SaaS trend that have seen a decline in the last
twelve for twenty four months because of the seatcout pressure
that we talked about, and even for them, you know,
when you look at margins, you're not going to get
(12:08):
the same lift in margins that we have seen in
the last two to three years of Salesforce under the
attack of some activist investor really went out and gave
margin back to the investors. But I think right now
with their Agent Force product, they really are investing heavily
into sales and marketing, and I think a lot of
that will you know, show up in this quarter's earnings.
Speaker 2 (12:32):
Again, we hear from a crowd strike on Tuesday and
then Snowflake and Salesforce on Wednesday. Thanks to both of
you for being with us. That's man Deep Singh and
on a rag rana of Bloomberg Intelligence and coming up
on Bloomberg day Break weekend, we'll look at how Middle
Eastern and African countries are focused on business in a
changing world order. I'm Nathan Hager, and this is Bloomberg.
(13:06):
This is Bloomberg Daybreak Weekend, our global look ahead at
the top stories for investors in the coming week. I'm
Nathan Hager in Washington. Up later in the program, we'll
look ahead to the holiday shopping season, as those trendy
La Boo Boo dolls are expected to be a hot
item in Asia. But first in the coming days, industry leaders, investors,
and government officials descend on the UAE for the seventh
(13:28):
Milkin Institute Middle East and Africa Summit. This year's edition
is taking place at a time when shifting geopolitical landscapes
and technological advances are dramatically altering the world order. Attendees
will seek to understand where the Middle East and Africa
fit in the new hierarchy. For more, let's go to
London and bring in Bloomberg Daybreak Europe anchor Caroline hepger Nathan.
Speaker 3 (13:50):
The Middle East and Africa have the advantage of young
demographics and strategic location. They could well be poised to
take advantage of the next frontier in global devaslopment this year. Already,
Middle Eastern states, including Kuttar have played a pivotal role
in the signing of the Gaza Peace Plan, with President
Donald Trump thanking Arab and Muslim nations in advance for
(14:12):
pledging money to rebuild the devastated Palestinian territory. Questions, do
you remain over the extent to which these nations in
the region, including Saudi Arabia and the UAE, will help
fund the reconstruction. While several deep pocketed and energy rich
countries in the area worked on and enthusiastically endorsed the
(14:33):
peace Plan, almost all have specific reservations. Meanwhile, countries in
Africa are grappling with a complex relationship with the US President.
Bloomberg opinion columnist Andrea's Kluth has written about how Donald
Trump's claims that South Africa is facing government sponsored race
based discrimination and that in Nigeria quote, they're killing Christians
(14:57):
are evidence of the current administration's u use of African
policy to promote an America First agenda. The position of
African countries, therefore, in a world increasingly dominated by US rhetoric,
does face challenges, and it's something that was discussed widely
at the recent Bloomberg Africa Business Summit. During the event,
(15:21):
South Africa's Minister of Finance, Ino Godongwana told Bloomberg Jennifer's
Abasaja that talks between the United States and South Africa
are ongoing.
Speaker 8 (15:33):
The and negotiations taking place between ourself and the USA.
Accept that we can be through the media through what
details of this agament when we're not negotiating with them
in the media.
Speaker 9 (15:46):
What would you say the current state of relations are
between South Africa and the US.
Speaker 8 (15:51):
Absolutely non problem. Accept that now and again we hear
what the the USA says about general side and all
of them.
Speaker 9 (16:00):
Do you think it is putting a dent on potential
investment into the country.
Speaker 8 (16:05):
Yes, the US is powerful and to that extent it
influenced the attitude of Inversta community to South Plus, I
love you.
Speaker 3 (16:15):
That was South Africa's Enoch Godongwana speaking there to Bloomberg's
Jennifer Zaba Saja on the sidelines of the Bloomberg Africa
Business Summit. This ahead of the Milkan Institute Middle East
and Africa Summit in the coming days. So I've been
getting some information about what is to come from Bloomberg's
(16:38):
UK and Middle East Finance editor Jenny Seraine and our
Chief Africa correspondent Jennifer Zabasaja. Welcome to both of you.
Thank you for speaking to me in terms of the
Milkan Institute this particular event. Jenny, give us a sense
of how big a deal the gathering is, who the
main players are going to be attending, because there is
(17:00):
increasingly a focus on the Middle East and it's connections
around the world.
Speaker 10 (17:05):
What we've seen increasingly is, especially as the US, you know,
maybe has pulled back in a lot of ways from
some of these big global summit type things, you've seen
a real big emphasis on some of these midiest players
that can kind of step in and fill the void.
So this is a region that just has vast amounts
of capital You've got entities and specific investors that are
(17:29):
looking to put that capital to work in new and
interesting ways, and so that's why you see so many
Wall Street names and sovereign names from around the world
kind of flocking to these events and looking to get
in touch with these investors.
Speaker 3 (17:41):
How do you think those Middle East and countries the
GCC are balancing the bizarre for investment and also their
domestic issues.
Speaker 10 (17:52):
Yeah, it's interesting. I do think we're starting to see
more of a divergence between the different countries themselves. So
over the years, Abudabi's relying on oil, it has lessened
to some degree, and a large part of that is
because they've been able to go and invest so heavily
in these new and different areas. Saudi, on the other hand,
is still heavily reliant on oil, and so you kind
of see that and how their different budget dynamics play out.
(18:14):
But you see, I think across the board a desire
to move beyond oil. That's why you see them rushing
to invest in all these new economy up and coming area.
Speaker 3 (18:25):
Jennifer, You've just come through a very busy time in
the past few days in Africa, talking to a lot
of African leaders. We heard a little snippet of one
finance minister who you spoke to, just tell us first
some of the complexities that are facing African nations, of
which there are so many right now as this sort
(18:46):
of new world order is establishing itself.
Speaker 9 (18:49):
You know, it was the first Group of twenty summer,
and of course that was on the African continent, that
was held on the African continent, which was significant for
many countries outside of just South Africa, which is really
the only sovereign nation that's a part of the G twenty,
but also the African Union was also a part of
(19:10):
the Group of twenty, and so we saw a number
of leaders that use this opportunity, and even South African
President Zero Ramaposa, who has held the G twenty presidency
for the past year, used this, you know, opportunity to
amplify a lot of the challenges that these countries are
facing that even pre date a lot of the shifting alliances,
(19:34):
if it were, that we've seen in the past few months.
And so of course one of the major you know,
and probably one of the top concerns that many of
them have told us is this issue of debt sustainability.
This is of course, you know, really came to light
even more so after the pandemic when we saw a
(19:54):
number of African countries actually you know, fall into to
debt and they were not able to pay back some
of the debt that they had borrowed. We saw that
from from Zambia. We've also seen that from Ethiopia, and
so the concern really was how do these African countries
(20:16):
develop and industrialize when most of the revenues and the
payments and you know, their their cash flow that they
have domestically is going to servicing debt more so than
you know, many of our reports indicate more so than
sectors like education and health. And so we heard from
a number of ministers wanting to at least find some
(20:41):
ways in which they are able to maybe look at
various ways of financing. And so it's not just you know,
getting services from the IMF or the World Bank, but
it's also from from new investors.
Speaker 3 (20:54):
Jen, where do you think the focuses then, what do
you think that as African nations are thinking about in
terms of their ties to the Middle East. As you say,
you know, there's a lot of focus on the Trump
administration and the US relationship with these countries. What are
those ties between African countries and the Middle East.
Speaker 9 (21:15):
What's been interesting is that, you know, the Trump administration
and the US sort of scaling back in their aid,
you know, going from aid to trade or transactions to
a certain extent, has sort of come at the same
time in which a number of African countries have been
able to stabilize many of their economies, so much so
(21:36):
that there's some of the fastest growing economies in the world.
And so while of course the shock of usaid was
very relevant and focused for a number of countries, it's
also come when there's a lot of new investors that
are looking for capital to deploy. And you know, we
were actually speaking to the Barclays head of South Africa,
(22:00):
and he's also head of the private banking across the continent,
and he was just saying just how much capital there
is in some of these Gulf nations and how you know,
the extent of the money and where it's coming from,
and the opportunities are or more so than he's seen
in the past few years.
Speaker 3 (22:20):
Okay, So that's an interesting point, Jenny. I'm also thinking,
i mean, maybe some of this turns on the military,
but also a lot of it turns on soft power
as well. How does soft power, not just hard power,
play into the mindset of the Middle East?
Speaker 11 (22:38):
Now?
Speaker 3 (22:38):
Huge investment in lots of other things to project, you know,
whatever image it is that those leaders want to, maybe
in sports or in other ventures. How do you think
about soft power now in the Middle East?
Speaker 10 (22:54):
I think it's definitely still top of mind for these governments,
and so that's why you see a lot of the
different entities, whether it's sovereign wealth funds or other alternative
asset managers that they've set up, going after these kind
of more unique assets that are on the market. I mean,
I think you saw it with the piffs decision to
(23:14):
you know, go and take electronic arts private and kind
of the big take private deal of the year. That
was a huge display of the kind of wealth and
then the kind of ambitions that they have, and that
was all tied to, you know, their desire to be
the leader of the gaming industry and have this huge,
you know, footprint in a space that's obviously fast growing
(23:36):
but also kind of captures the minds and imaginations of
a lot of consumers around the world and so I think, yeah,
we'll definitely continue to see these players, you know, look
for ways that they can make that kind of mark
and kind of these key industries, and I think sports
is a great one. As you mentioned, you see them
doing it in arts and culture increasingly, so it'll be
really interesting to watch as they kind of pick their
(23:58):
spots and pick their moments to deploy this trillions and
trillions of dollars of sovereign wealth that they have.
Speaker 3 (24:03):
My thanks to Bloomberg's UK and Middle East Finance editor
Jenny Soarraine and to our chief Africa correspondent Jennifer Zaba Saja.
I'm Caline Hebgar here in London, and you can catch
us every weekday morning for Bloomberg Daybreak Europe, beginning at
six am in London. That's one am on Wall Street.
Speaker 2 (24:22):
Nathan, Thanks Caroline, and coming up on Bloomberg day Break Weekend,
we'll look at whether the La Boo Boo craze is
due for a Beanie Baby style bust. I'm Nathan Hagar
and this is Bloomberg. This is Bloomberg day Break Weekend,
(24:46):
our global look ahead, the top stories for investors in
the coming week. I'm Nathan Hager in Washington. As the
holiday shopping season gets underway, those trendy La Booboo dolls
are expected to be a hot item. The toys are
produced and sold exclusive by the China based retailer PopMart,
But some are wondering if these toys have reached their
peak and whether La Boo Boo is due for a
(25:08):
Beanie Baby style bust. For more, let's go to Daybreak
Asia podcast hosts Doug.
Speaker 4 (25:13):
Krisner Nathan These dolls have become a global phenomenon. They're
fictional characters, and they appear to be an interesting mix
of cute and creepy. If you haven't seen a Laboobu doll,
it might be helpful to think of it as a
fuzzy elf like figure with a row of jagged teeth.
Images of these dolls reminded me of the characters from
(25:34):
Where the Wild Things Are created by Maurice Sendek, Lu
Boobo isn't a standalone character. I was surprised to make
that discovery. She is part of a larger group called
the Monsters, created by Hong Kong artist and author Ki
Sing Loom. For a closer look at the popularity of
La Booboo and what it means for the company that
(25:55):
controls this property. I'm joined by Bloomberg Shirley Jao. Shirley
covers consumer companies in Asia and she joins us from
Hong Kong. Thank you for making time to chat with me.
So we know now La booboo is gone global. Can
you help me understand the beginning of this craze? How
did things start?
Speaker 11 (26:12):
So the things really started around late last year when
it started to you know, caught a lot of people's
attention and the global craze really started to rise after
a series of K pop stars and Hollywood stars started
to feature La Booboo in their photos. And the most known,
(26:36):
perhaps is Black Pink's Lisa, and she is known as
a huge fan of La Booboo and she is seen
in many photos, you know, showing her personalized La Boo
Boo with really trendy clothing and really fancy handbags. And
(26:58):
you know a lot of well people started to show
a Boo boo in in their you know, social media.
That really triggered this global frenzy starting from earlier this year.
Speaker 4 (27:12):
Can we say that it began in China on the mainland.
Is that accurate.
Speaker 11 (27:17):
Yes, it is accurate. I think a lot of this
trend is to do with the economic slowdown in China.
So previously consumers in China were seen posting photos on
social media flaunting you know, air Mess handbags or you know,
Louiston handbags and other really pricey luxury goods. But now
(27:40):
with consumers confidence starting to weaken, but still people want
a taste of this luxury lifestyle of you know, the
lifestyle of really well off people. But they don't. They're
being more cautious in buying luxury goods now, so what
else can they do? And they see people like Lisa
(28:03):
and people like a lot of rich people all, you know,
showing their La Booboo dolls, and then they want to
buy the doll because that gives them a taste, like
what they call a small luxury, a taste of the
upper class lifestyle in the background of an economic slow down.
Speaker 4 (28:25):
Are these expensive? How are they priced?
Speaker 11 (28:27):
They are relatively pricey in terms of you know, just
the little fluffy doll. For small dolls like this, it's
quite easy to fake it. So you can find a
lot of different versions of fake La Boo boos on
China's e commerce platforms going for much cheaper than the
(28:49):
real ones, and sometimes you can't tell whether it's real
or it's fake. The fake ones are known as La fufus.
So a lot of people are joking that even though
they spend a lot of money and effort to buy
a La Boo Boo doll that they want, they don't
know whether it's real La Boo Boo or La fufou. So.
Speaker 4 (29:09):
The doll is made by a company called PopMart. What
do we know about PopMart?
Speaker 11 (29:14):
So? PopMart is known as McKain. The so called blind
box dolls they actually have started quite a few years ago,
before the global popularity of La Boo Boo. A lot
of other popmarked products are also relatively well known, although
(29:35):
none of them is as viral as La Boo Boo. So.
Other pop marked toys include Skulp Panda, Molly Twin called
Twin Cole, and even La Boo Boo's boyfriend Tay Cocoa.
Speaker 4 (29:52):
Suirley, can you help me understand the history of blind
box gift giving? How did it start?
Speaker 11 (29:58):
I think it really starts guarded in recent years, and
it's actually no different from other forms of blind box
toys like Gatcha machines that has been going on in
Japan for many, many years. I think it's the sense of,
you know, excitement that you don't know what you'll get,
(30:21):
and especially if you have a line of products. For example,
there is a series of La Boo booths, and every
La Boo Boo features a different outfit or a different theme,
and you want to collect every one of them, and
you have to spend a lot of money because sometimes
you know, you may end up getting the same one
(30:43):
over and over and over. And that's what get people
get consumers into spending to get what they want, to
get the toy that they want, or to collect the
whole series of the toys.
Speaker 4 (30:57):
So in terms of PopMart, it's a publicly traded company
right the trades in Hong Kong? Is that correct? How
well has the stock been performing well?
Speaker 11 (31:05):
The stock actually surged more than one five hundred percent
from the start of last year to August, so the
price is peaked in August and a lot of that
was writing on the global popularity of La Boo Boo,
but then it dropped more than thirty percent since August,
(31:27):
and that highlights a lot of questions and concerns in
the market about whether this la booboo frenzy can last.
Speaker 4 (31:36):
I would imagine that. Yeah, calling into question the sustainability
of a fad like this makes good sense. But I
think we would be remiss if we didn't acknowledge the
fact that the holiday shopping season is coming up in
the West. Obviously, we have the Christmas holiday, and then
New Year will be here before you know it for
parts of Asia that celebrate the New Year holiday, not
(31:57):
the Chinese New Year necessarily, but just the beginning of
the calendar year. Is the expectation here that we see
a lot of sales moving into the holiday season.
Speaker 11 (32:07):
We are definitely expecting a surge into the holiday season,
but as I mentioned just now, there is also a
rise of fake la boo boos. So a lot of
people have already been complaining about these fakes, and actually
different countries, especially China, has been tightening their scrutiny against
(32:28):
the fakes of la boo boos. So it remains to
be seen whether the holiday season can really trigger a surge.
Speaker 4 (32:38):
Would you consider giving it as a gift still?
Speaker 11 (32:42):
I would still because I know, you know, a lot
of my friends are still quite into la Boo boo.
And I think it's this sense of scarcity and the
secondary market price that's still there, So that's still making
people think, you know, oh they want this doll because
it's often out of stock in stores. For consumers like me,
(33:06):
if I see, you know, even if I'm willing to pay,
but then you know, after a long time of waiting
or after a lot of effort, and I finally get
a lat Boo boo, but still, you know, I see
a lot of fake La boo boos that's much cheaper
and much easier to get. For me, it's you know,
(33:29):
I tend to think that it may be a waste
of effort and time, but for a lot of other consumers,
they still think the sense of scarcity makes it such
a rare thing that they still want.
Speaker 4 (33:43):
When you look at the market, surely, is there a
specific demographic that we should address here? Are they primarily
younger people? Are they teenagers? Are they a little older? Certainly?
And I'm wondering about whether there is an adult audience
for this product.
Speaker 11 (33:58):
I think there is definitely an adult audience. You know,
a lot of them are in their mid thirties. But
I think it's worth noticing that a lot of them
are parents, so that means it's their children who got
into it first. But then they started to get into
it as well. I remember last year I was chatting
(34:19):
with somebody who started looking at PopMart and La Bubu,
and I asked them, you know, why do you think
that this toy or the company will will be successful?
And they said that they went to China and they
went to a shopping mall and the majority of the
shopping mall was very empty because you know, in China,
(34:43):
the e commerce platforms are ubidiquous and that's really affected
the performance of a lot of shopping malls in the country.
But the only place where there were a lot of
people gathering, especially you know, young people like primary school students,
is Popmark stores and that's where you know, people are
(35:05):
gathering and they are spending money to try to get
their blind box toys. And that was when this person
started to think that, oh, this may become a trend.
But again, how long this trend may last it remains
to be seen.
Speaker 4 (35:23):
So the Hollywood Reporter recently reported that Sony Pictures has
a deal now to the rights from PopMart International. This
is the company that has the rights to the doll
about creating a motion picture. And to the point that
you were raising earlier about the analyst community being a
little suspicious or at least questioning whether this mania can continue.
(35:47):
That seems to say to me that the idea of
putting a film together based on this phenomenon, it may
not last, and that is inherent in that is maybe
a little bit of risk.
Speaker 11 (36:00):
There are indeed questions about whether this film is going
to be a hit or not. We don't know a
lot of details about the film, like we don't even
know whether this film will be animated or if it
will be live action. The observation is that it appears
that this deal came first and then you know, Sony
(36:22):
will probably figure out all those details later. But we
have seen in the past examples of similar films developed
from popular toy lines that turn out to be failures.
For example, there are Brats, the Movie, Masters of the Universe,
(36:43):
pand Puppies, and The Legend of Big Paul, and they're
all based on really popular toy lines, but they weren't
developed until several years down the line, and some of
them barely recover their budget, while others didn't really sell
tickets to cover the cost.
Speaker 4 (37:03):
Shirley, We'll leave it there, Thank you so very much.
That is Bloomberg Shirley Choo. Shirley covers consumer companies for
US in Asia from Hong Kong. I'm Doug Krisner. You
can catch us weekdays for the Daybreak Asia podcast. It's
available wherever you get your podcast, Nathan.
Speaker 2 (37:18):
Thanks Doug. And that does it for this edition of
Bloomberg Daybreak Weekend. Join us again Monday morning at five
am Wall Street Time for the latest sun markets overseas
and all the news you need to start your day.
I'm Nathan Hager. Stay with us. Top stories and global
business headlines are coming up right now
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