Good morning. Today we're talking about Shein’s UK strong performance, Google’s Chrome takeover offer and Tesla’s bid for UK energy.

Big Stories

Shein’s UK surge

Chinese fast-fashion giant Shein has reported a significant increase in its UK business, with sales surging to £2.05bn in 2024. This marks a 32.3% year-on-year rise, solidifying Britain's position as the company's third-largest market globally, behind only the US and Germany. The remarkable performance underscores Shein's effective model of leveraging ultra-low pricing and a rapid response to micro-trends, which has allowed it to capture market share from established UK rivals like ASOS and Boohoo. The company's success is not just limited to sales; its pre-tax profit for the UK arm also saw a sharp increase of 56.6%, reaching £38.25m in 2024. This profitability comes as Shein has expanded its physical and operational presence in the country, including the opening of new offices in London and Manchester, a pop-up shop in Liverpool, and a nationwide Christmas bus tour. As Shein moves forward with its plans for a potential public listing, the strong financial results from its UK operations highlight the brand's immense appeal to consumers seeking affordability amidst economic pressures. However, the company said it recognised "higher inflation and increased cost of living may affect customer purchasing habits" going forward. The brand could also be hit by import taxes after the UK government announced a review of the exemption for packages worth less than £135.

Google’s Chrome takeover offer

In a surprising development, AI startup Perplexity has made a $34.5bn unsolicited offer to acquire Google's web browser, Chrome. The bid, which is reportedly backed by a consortium of investors including Amazon founder Jeff Bezos, is nearly double Perplexity's own $18bn valuation. The offer comes as Google is grappling with a US federal judge's ruling that it operates an illegal search monopoly. The judge is now considering a remedy that could include breaking up the tech giant, and analysts believe Perplexity’s bid is a strategic move to convince the court that a viable market exists for Chrome. Google has long resisted calls to sell Chrome, which runs on 3.5bn devices and commands over 60% of the market. The browser serves as a critical gateway, funnelling traffic and user data directly into Google’s massive advertising machine. For Perplexity, acquiring Chrome would provide instant scale and a direct path to billions of users, allowing it to control user defaults and influence behaviour. While Google has dismissed the offer for now, the bid highlights the immense value of the browser and the intense competition for web dominance. The outcome of the legal battle will likely determine if Google is forced to consider Perplexity's offer, or if other tech giants like OpenAI will also step into the fray.

Tesla’s bid for UK energy

Tesla has formally applied to become a licensed electricity supplier in the UK. The application, submitted to the UK energy regulator Ofgem, signals Tesla's ambition to enter the domestic energy market as early as 2026, competing with established providers like British Gas and Octopus Energy. This strategic pivot capitalises on Tesla's existing infrastructure in the UK, which includes hundreds of thousands of electric vehicles and home battery systems. By leveraging its solar and storage technology, Tesla aims to replicate its successful "Tesla Electric" model from the US. This service would allow customers to charge their EVs at favourable rates and potentially earn money by feeding surplus energy from their home batteries back into the grid, creating a seamless ecosystem of generation, storage, and consumption. The timing of this venture coincides with a downturn in Tesla's European car sales, suggesting a diversification strategy to secure new revenue streams. If approved, the move could significantly disrupt the UK's energy landscape, offering consumers an innovative, integrated solution that ties their transportation and home power needs together under a single brand.

Elsewhere...

Closing up: Fashion accessories chain Claire’s has appointed administrators for its UK and Ireland business, putting around 2,150 jobs at risk.

Bread merger: Kingsmill's owner has said it has agreed to buy rival Hovis and plans to merge the companies in a move that would create the UK's biggest bread brand.

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