The Glossy Podcast: Week in Review – The TikTok Ban Looms
Released on December 13, 2024

Hosts:

• Dani Parisi: Senior Fashion Reporter
• Lexi Lebsack: West Coast Correspondent (Specializing in Beauty)

1. Introduction

In this crossover episode of The Glossy Podcast, host Dani Parisi teams up with beauty correspondent Lexi Lebsack to delve into two significant topics impacting the fashion and beauty industries: the impending TikTok ban and Coty's recent licensing deal with Swarovski. The conversation highlights the interconnectedness of fashion and beauty, exploring how technological and business developments influence both sectors.

2. The Looming TikTok Ban

Background and Legal Developments

The primary focus of the episode is the potential ban of TikTok in the United States, a situation that has been unfolding over the past few years. The discussion begins with the recent court decision where three federal judges unanimously ruled that the law banning TikTok does not violate the First Amendment. This decision significantly increases the likelihood of the ban taking effect in mid-January 2025.

Key Points:

• Origin of the Ban:
  Lexi notes, "It started back in 2020 when Trump initiated the conversation to ban TikTok" (03:02).

• Current Status:
  The Department of Justice (DOJ) is pushing forward with the ban, even as TikTok seeks to appeal the decision up to the Supreme Court. Lexi mentions, "TikTok and ByteDance filed an emergency motion... but the Justice Department asked the Appeals Court to reject the bid" (02:54).

• Potential Outcomes:
  Dani and Lexi discuss possible scenarios, including temporary extensions or new appeals, but agree that the ban is increasingly likely to proceed. Lexi adds, "The markets are betting there's about a 25% chance that this happens" (06:15).

Implications for Brands and Creators

The potential removal of TikTok from app stores would predominantly affect smaller brands and independent creators who rely heavily on the platform for marketing and sales. Larger brands may pivot smoothly to alternatives like Instagram Reels and YouTube Shorts.

Notable Quotes:

• Lexi: "Influencers and small brands are really going to get hit" (09:51).
• Dani: "It's not like they're going to come onto your phone and delete it, but it won't be hosted on any app stores" (07:43).

Shift to Alternative Platforms

With TikTok's future uncertain, brands and creators are already beginning to shift their focus to other social media platforms. Dani observes, "Some influencers and brands are moving focus to Instagram Reels and YouTube Shorts" (06:15).

Global Impact

The conversation also touches on the international scope of the ban, noting that Canada has already taken steps to remove ByteDance offices and implement similar restrictions, indicating a broader geopolitical tension between the US and China.

Geopolitical Context:

• Dani remarks, "The TikTok ban is part of the larger rivalry between the US and China" (12:01).
• Lexi: "Consumers are starting to realize the dangers are potentially real" (13:03).

Data Privacy and Government Oversight

The episode highlights concerns about data privacy and the potential for the Chinese government to influence TikTok's algorithms, drawing parallels to issues with American tech giants like Meta and Google.

Notable Insight:

• Lexi: "The government is looking for a little bit more oversight to understand the algorithms better" (14:52).

3. Coty Secures Swarovski Licensing Deal

Shifting focus to the beauty sector, the hosts discuss Coty's recent acquisition of the fragrance licensing deal for Swarovski, replacing the previous licensee, Clarins.

Key Points:

• Significance of the Deal:
  Lexi states, "Coty has secured a pretty big deal with Swarovski, a major brand" (17:57).

• Fragrance Industry Trends:
  There's a notable boom in the fragrance category, with brands like Parlux collaborating with influencers such as Billie Eilish and Paris Hilton to launch successful fragrance lines.

Licensing as a Growth Strategy

Coty's move exemplifies a broader trend where large beauty conglomerates leverage licensing deals to expand their product offerings without diluting brand integrity.

Notable Quotes:

• Lexi: "Fragrance margins are just absolutely crazy" (19:32).
• Dani: "It's super profitable and also blowing up with consumer interest" (25:33).

Consumer Behavior and Market Adaptation

Younger consumers are driving demand for diverse fragrance options, often seeking a "wardrobe" of scents, leading brands to release multiple fragrances simultaneously. This strategy aligns with consumer desires for variety and personalization.

Licensing Dynamics:

• Lexi highlights, "You see these licensing deals leading to more than one set of smaller fragrances" (20:19).

Regulatory Changes Impacting Fragrance:

• Lexi notes, "The regulatory change with MOKRA requires ingredient lists to be disclosed to the FDA" (21:14), prompting brands like Unilever to invest in bringing fragrance creation in-house.

4. Broader Implications for Licensing in Fashion and Beauty

The conversation extends to the role of licensing in helping brands enter new categories, such as footwear and apparel. While licensing can mitigate risks and streamline product development, it also raises concerns about brand dilution and loss of control over product quality.

Key Insights:

• Strategic Licensing:
  Lexi explains, "Big brands use licensing deals to navigate the complexities of new categories" (24:11).

• Impact on Smaller Brands:
  Smaller brands benefit from incubators and accelerators that help them launch products without the heavy investment required for in-house development.

Notable Observations:

• Dani: "Brands need to be deliberate when entering new categories to avoid brand dilution" (22:56).
• Lexi: "Licensing deals make it easier for big brands to manage compliance and production" (24:11).

5. Conclusion and Takeaways

The episode underscores the interconnectedness of technology, regulation, and business strategies in shaping the fashion and beauty landscapes. The potential TikTok ban represents a significant shift in digital marketing dynamics, while Coty's licensing deal with Swarovski highlights the strategic importance of collaborations in expanding product portfolios.

Final Thoughts:

• Dani emphasizes the necessity for brands to stay informed about regulatory changes and market shifts to navigate the evolving landscape effectively.

Closing Remarks:

• The hosts encourage listeners to stay engaged with industry developments, as these changes have profound implications for brand strategies and consumer engagement.

Notable Highlights:

• TikTok Ban Ruling: The ban is moving forward with a high likelihood of taking effect in January 2025 (02:54; 06:15).
• Coty and Swarovski Deal: Reflects a strategic move in the booming fragrance market (17:57; 19:32).
• Licensing Trends: Essential for brands expanding into new categories, balancing growth with brand integrity (24:11).

For those interested in the intersection of technology, fashion, and beauty, this episode provides insightful analysis and expert perspectives on current and future industry trends.