LONDON/MILAN/FRANKFURT: The world’s largest consumer and luxury goods companies have seen sales of everything from cosmetics to condoms grow in China since Beijing imposed strict Covid-19 curbsanother sign that the No. 2 economy in the world is reviving after the pandemic.
Upbeat comments on Wednesday from Reckitt Benckiser, Nivea maker Beiersdorf, Moncler and Puma came after data China’s factory sector grew at its fastest pace in more than a decade in February.
Beiersdorf chief executive Vincent Warnery said the company had seen the first signs of recovery in China and the global travel retail business, fueled by the country’s reopening.
“After a very volatile January, with traffic still heavily impacted by the release of Covid restrictions in December, we are seeing a marked turnaround in retail sales from February,” he said in a briefing to analysts.
“China is growing again, not only online but also physically.”
Speaking on the sidelines of the briefing, Warnery said growth in Beiersdorf’s premium La Prairie and lower-priced Eucerin and Nivea skincare lines is likely to be driven by Chinese demand. Tourism from China helped sales in neighboring Macau, Hong Kong, Taiwan and even Japan, he added.
Reckitt Benckiser, which makes Nurofen tablets, cold remedy Lemsip and Durexsaw an uptick in China after a drop in volumes due to lockdowns.
“I have no doubt that the intimate wellness (business) in China is going to do well,” said interim CEO Nicandro Durante, referring to the division that includes KY Jelly and Durex condoms.
The upbeat comments echo those of many executives during the fourth-quarter earnings season, particularly from luxury labels expecting a strong recovery, fueled by Chinese shoppers drawing on savings accumulated during pandemic lockdowns.
Resilient sales in China would be a relief to companies struggling with higher energy and labor costs, particularly in Europe, while rising food, energy and rent prices are forcing consumers to be more choosy about what they buy.
Stronger signs that Chinese factories recovering after Covid restrictions were lifted late last year could also dampen an expected downturn in the global economy as the US Federal Reserve sticks to its longer interest rate path.
Padded jackets
The data relieved investors and boosted global equities.
The pan-European STOXX 600 was up 0.3% at 1109 GMT, contributing to its year-to-date gains of more than 8% and regaining some of the ground lost last year as the region fell into turmoil brought on by the war in Ukraine and the energy crisis it triggered.
Shares of Moncler rose more than 5%, making it one of the top performers on the index after the Italian luxury group, known for its warm puffer jackets, said it had a strong start to the year.
Chief marketing and operating officer Roberto Eggs told analysts on a phone call Tuesday evening that the company saw double-digit sales growth in China before and after the Chinese New Year holiday in January.
“We always look at the results two weeks before and one week after the Chinese New Year and the impact is really positive,” he said.
In addition to growing confidence in the luxury sector, the company said it had not seen any adverse effects on demand from a 10% price hike at the start of the winter season.
Reuters reported in February that LVMH’s top fashion brand Louis Vuitton was expected to raise prices by as much as 20% in China.
Upbeat comments on Wednesday from Reckitt Benckiser, Nivea maker Beiersdorf, Moncler and Puma came after data China’s factory sector grew at its fastest pace in more than a decade in February.
Beiersdorf chief executive Vincent Warnery said the company had seen the first signs of recovery in China and the global travel retail business, fueled by the country’s reopening.
“After a very volatile January, with traffic still heavily impacted by the release of Covid restrictions in December, we are seeing a marked turnaround in retail sales from February,” he said in a briefing to analysts.
“China is growing again, not only online but also physically.”
Speaking on the sidelines of the briefing, Warnery said growth in Beiersdorf’s premium La Prairie and lower-priced Eucerin and Nivea skincare lines is likely to be driven by Chinese demand. Tourism from China helped sales in neighboring Macau, Hong Kong, Taiwan and even Japan, he added.
Reckitt Benckiser, which makes Nurofen tablets, cold remedy Lemsip and Durexsaw an uptick in China after a drop in volumes due to lockdowns.
“I have no doubt that the intimate wellness (business) in China is going to do well,” said interim CEO Nicandro Durante, referring to the division that includes KY Jelly and Durex condoms.
The upbeat comments echo those of many executives during the fourth-quarter earnings season, particularly from luxury labels expecting a strong recovery, fueled by Chinese shoppers drawing on savings accumulated during pandemic lockdowns.
Resilient sales in China would be a relief to companies struggling with higher energy and labor costs, particularly in Europe, while rising food, energy and rent prices are forcing consumers to be more choosy about what they buy.
Stronger signs that Chinese factories recovering after Covid restrictions were lifted late last year could also dampen an expected downturn in the global economy as the US Federal Reserve sticks to its longer interest rate path.
Padded jackets
The data relieved investors and boosted global equities.
The pan-European STOXX 600 was up 0.3% at 1109 GMT, contributing to its year-to-date gains of more than 8% and regaining some of the ground lost last year as the region fell into turmoil brought on by the war in Ukraine and the energy crisis it triggered.
Shares of Moncler rose more than 5%, making it one of the top performers on the index after the Italian luxury group, known for its warm puffer jackets, said it had a strong start to the year.
Chief marketing and operating officer Roberto Eggs told analysts on a phone call Tuesday evening that the company saw double-digit sales growth in China before and after the Chinese New Year holiday in January.
“We always look at the results two weeks before and one week after the Chinese New Year and the impact is really positive,” he said.
In addition to growing confidence in the luxury sector, the company said it had not seen any adverse effects on demand from a 10% price hike at the start of the winter season.
Reuters reported in February that LVMH’s top fashion brand Louis Vuitton was expected to raise prices by as much as 20% in China.
