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From condoms to cosmetics, sales in China grow after lockdowns end

From condoms to cosmetics, sales in China grow after lockdowns end

The world’s leading consumer and luxury goods companies have seen growth in China sales of everything from cosmetics to condoms since Beijing ended strict restrictions on the COVID-19another sign that the world’s second largest economy is reactivating after the pandemic.

Upbeat comments on Wednesday from Reckitt Benckiser, Beiersdorf (maker of Nivea), Moncler and Puma followed the release of data showing China’s industrial sector grew at the 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 in the global travel retail business, buoyed by the country’s reopening.

“After a very volatile month of January, with traffic still heavily affected by the easing of COVID restrictions in December, we see a clear turnaround in retail sales starting in February”he said at an analyst briefing. “China has returned to growth, not only on the Internet, but also in physical commerce.

On the sidelines of the briefing, Warnery said growth in Beiersdorf’s premium ranges, La Prairie, and cheaper skincare ranges, Eucerin and Nivea, is likely driven by Chinese demand. He added that tourism from China is helping sales in neighboring Macao, Hong Kong, Taiwan and even Japan.

Reckitt Benckiser, which makes Nurofen lozenges, Lemsip cold remedy and Durex, saw a rebound in China after volumes fell due to lockdowns.

“I have no doubt that the intimate wellness business in China is going to do well”said interim chief executive 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 luxury brands betting on a strong rebound fueled by Chinese shoppers drawing on savings accumulated during pandemic shutdowns. .

The recovery of sales in China would bring relief to companies struggling with rising energy and wages, especially in Europe, while rising food, energy and rent prices force consumers to consumers to be more demanding with what they buy.

Clearer signs that Chinese factories are on the mend after the lifting of COVID restrictions late last year could also temper an expected downturn in the global economy as the US Federal Reserve maintains its higher interest rate path. high for longer.

The data relieved investors and boosted world stock markets. The pan-European STOXX 600 index was up 0.3% at 1109 GMT, adding to its rise of more than 8% since the start of the year and recovering some of the ground lost last year when the region was convulsed by the war in Ukraine and the energy crisis that triggered.

Source: Reuters

Source: Gestion

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