LONDON/MILAN/FRANKFURT/NEW YORK 鈥 The world鈥檚 top consumer and luxury goods companies have seen sales of everything听蹿谤辞尘听cosmetics to肠辞苍诲辞尘蝉听grow in China since Beijing ended strict COVID-19 curbs, another sign that the world鈥檚 No. 2 economy is reviving after the pandemic.
Upbeat comments on Wednesday听蹿谤辞尘听Reckitt Benckiser聽Nivea-maker Beiersdorf, Moncler聽and Puma聽came after data showing聽聽grew in February at the fastest pace in more than a decade.
Beiersdorf Chief Executive Vincent Warnery聽聽the company had seen the first signs of recovery in China and the global travel retail business, fuelled by the country鈥檚 reopening.
鈥淎fter a very volatile January, with traffic still heavily impacted by the release of COVID restrictions in December, we see a clear turnaround in retail sales starting in February,鈥 he said in a briefing for analysts.
鈥淐hina is back to growth, not only online but also in brick and mortar.鈥
US toothpaste-maker Colgate-Palmolive Co.聽executives said last week at an industry conference that travel in China is back to pre-pandemic levels and that it expects strong improvement in coming months. Colgate recently introduced new premium whitening toothpastes in China targeting affluent city dwellers.
鈥淭he second half of the year will be far better,鈥 said Yves Briantais, a marketing executive for Colgate鈥檚 Asia-Pacific region.
Procter & Gamble Co., whose second-largest market is China, is carefully watching its high-end SK-II skincare line as China reopens, said finance chief Andre Schulten at the conference.
Beiersdorf鈥檚 Warnery said growth in its premium La Prairie and cheaper Eucerin and Nivea skincare ranges was likely to be driven by Chinese demand. Tourism听蹿谤辞尘听China was helping sales in neighbouring Macau, Hong Kong, Taiwan and even Japan, he added.
Reckitt Benckiser, which makes Nurofen tablets, cold remedy Lemsip and Durex, saw a pick-up in China after a decline in volumes because of lockdowns.
鈥淚 have no doubt that the intimate wellness (business) in China is going to perform well,鈥 said interim CEO Nicandro Durante, referring to the division which includes KY Jelly and Durex听肠辞苍诲辞尘蝉.
The upbeat comments echo those of other executives during earnings season, particularly听蹿谤辞尘听luxury labels which are banking on a strong rebound fuelled by Chinese shoppers drawing on savings built up during pandemic lockdowns.
Upmarket US companies including Coach handbag maker Tapestry Inc.聽and Ralph Lauren Corp.聽聽recently said demand had started picking up in China.聽
鈥淲e certainly have seen a meaningful trend change in Greater China,鈥 Tapestry Chief Financial Officer Scott Roe said last month, while Ralph Lauren executives said they were seeing traffic at its brick-and-mortar stores surge.
鈥淲e expect China to come back resiliently in the quarter,鈥 Ralph Lauren鈥檚 operating chief Jane Nielsen said.
Resilient sales in China would be a relief for companies struggling with higher energy and wage costs, particularly in Europe, at the same time as rising prices of food, energy and rents are forcing consumers to be pickier about what they buy.
Stronger signs that Chinese factories are rebounding after COVID restrictions were lifted late last year could also temper an expected downturn in the global economy, as the U.S. Federal Reserve stays on its higher-for-longer interest rate path.
US retailer Walmart Inc., which operates nearly 400 retail and wholesale stores in China, reported strong traffic in its stores since reopening.聽
鈥淲e have seen people returning more to stores, which is what you would expect, and also wanting to celebrate events,鈥 Judith McKenna, CEO of Walmart International,聽聽last week.聽
GROWING CONFIDENCE
Retailer shares rose across global equity markets on Wednesday, even as broader indexes gave back gains on more concerns about inflation.
Reckitt shares rose聽1.5%聽in London, while shares in Moncler rose 3.3% after聽the Italian luxury group, known for its warm puffer jackets, reported a聽聽start to the year.
Chief marketing and operating officer Roberto Eggs told a call with analysts on Tuesday evening the company saw double-digit sales growth in China before and after the Lunar New Year holiday in January.
鈥淲e always look at the results two weeks before and one week after the Chinese New Year and the impact is really positive,鈥 he said.
Adding to growing confidence in the luxury sector, the company said it had seen no adverse effects on demand听蹿谤辞尘听a 10% price increase at the start of the winter season.
搁别耻迟别谤蝉听 in February LVMH鈥檚聽top fashion brand Louis Vuitton was expected to increase prices in China by as much as 20%. 鈥斅Reuters
