Quick Commerce, Shein's IPO, CIO Insights and a weekly wrap

The Big Weekly Idea

📈 Quick Commerce and the Convenience Economy (Download the report!)

Consumers who once celebrated two-day delivery as revolutionary now expect their purchases to arrive in less than 30 minutes. This phenomenon, known as quick commerce (q-commerce), has experienced explosive growth, with the global market projected to reach $70 billion by 2025—representing a staggering compound annual growth rate (CAGR) of 27% since 2020. Note: this figure reflects a subsegment focused on rapid grocery and convenience delivery.

Quick commerce represents the latest evolution in retail's perpetual quest to remove friction from the purchase journey. It's far more than simply "faster delivery"—it fundamentally reimagines retail logistics, customer expectations, and the very definition of convenience. For traditional retailers, quick commerce presents both an existential threat and an unprecedented opportunity.

You can download and read my analysis that examines the origins, current state, and future trajectory of quick commerce, providing retailers with actionable insights to navigate this rapidly evolving segment.

 🔍What’s Happening and Why It Matter

What does the future of Shein look like and can they survive?

Shein's IPO might be moving forward, but the company is facing some rough seas. Washington's latest tariff hike, with duties on Chinese imports soaring up to 145%, is a major threat to Shein's cost advantage and operational model.

On top of that, the U.S. is set to end the "de minimis" tax exemption on shipments under $800, which means one of Shein's biggest loopholes in its cross-border business might soon close.

Although sales are booming ahead of this deadline, likely because consumers are anticipating price hikes, the long-term sustainability of this surge is uncertain. The brand's valuation has reportedly dropped to $30 billion from a peak of $100 billion, reflecting investor doubts about whether Shein can keep growing in a more challenging policy environment.

So, what does all this mean for Shein and its stakeholders?

The escalating tariffs and the potential end of the "de minimis" tax exemption could significantly impact Shein's cost structure and pricing strategy. This means that Shein might have to increase prices, which could deter price-sensitive customers and affect sales volumes. The surge in sales ahead of the deadline suggests that consumers are already bracing for these changes, but this spike might not be sustainable in the long run.

Moreover, the drop in Shein's valuation from $100 billion to $30 billion indicates that investors are wary of the company's ability to navigate these new challenges. This skepticism could make it harder for Shein to attract new investment, which is crucial for funding its growth and expansion plans.

In summary, while Shein's IPO is progressing, the company faces significant hurdles that could affect its competitive edge, market position, and long-term growth prospects. Investors, customers, and other stakeholders should closely monitor how Shein adapts to this evolving landscape.

💼 From the Field

Technology debt and future fit operating models are top of mind.

In a conversation this week with the CIO of one of the leading APAC retailers, one quote stood out:

"We want to embrace AI and reduce our technology OPEX, but struggle with an operating model of old and technology debt that restricts us."

This echoes a broader issue I’m seeing across industries—companies want to embrace AI, but are struggling with legacy operating models that are not aligned to core future ready engineering practices such as BizDevOps and SRE. They don’t have a steel thread from development activities through to business outcomes, and still operate based on SLAs not XLAs (Experience Level Agreements). The operating model is typically siloed, and duplication of activities is rife.

What forward-thinking execs are now prioritising isn’t just putting in AI POCs, we’re far beyond that — it’s a future ready organisational strategy. Without embracing a new way of working, the business will detach from IT and AI solutions will pop up like whack-a-mole where costs begin to spiral without value creation or tracking.

My advice: Review your OKRs across your technology organisation, conduct an audit of your systems landscape, understand your technical debt and why it has got to where it is; and then look at how your team is serving the business. Focus on your teams efficiency and effectiveness, not just efficiency. There’s no point doing things faster if they don’t add value to the business.

🧰 Framework of the Week

🎯 Rewiring retail and CPG: 2025 CIO agenda for resilience, relevance, and reinvention by HFS Research

HFS Research have just released their view on key things that the RCG CIO need to be thinking about. The retail and consumer goods sector is operating in a paradox where consumers are price-sensitive and principle-driven, underpinning why chief information officers (CIOs) need a bold, multifaceted agenda.

Read more about it here: https://www.hfsresearch.com/research/retail-cpg-cio-agenda/ 

 📡 Link Roundup + My Take

• Kering sales drop 14% in Q1 as Gucci sales plunge — The Gucci revival is yet to appear and will likely face a more difficult context, as luxury consumer demand softens.

• Walmart is all in on GenAI and the Agentic World — The company is “throwing the doors wide open” and wants associates to use the technology every day, executives said.

• Spur raises $4.5 million from various investors to build out agentic AI solution for online retailers— Spur, which provides e-commerce retailers and travel booking platforms with AI powered quality testing that emulates real consumer shopping behaviour, has secured $4.5 million from investors including First Round, Pear VC, Neo, Conviction, Liquid2Ventures, and Predictive Venture Partners.

• Korea to apply AI technology in retail businesses to boost productivity — The alliance plans to initiate 10 projects aimed at developing AI-based retail sales models, supporting the creation of 30 AI-focused retail startups and compiling a database of 1 million standardised retail product entries.

My commentary: The luxury market is softening in general, driven by misconceptions around production locations, tariffs and a generational shift away from status symbols. AI is still the talk of the town and will be over the coming years, but we are seeing more real life applications of Agentic AI, and the retailers that are successful in adopting multi agent models aligned to business outcomes will be the leaders of the future.