U.S. firms get boost from China's resilient consumer market
China is bolstering American firms as demand drops in the United States and Europe due to another round of COVID-19 cases surge, the Wall Street Journal reported, citing Coca-Cola Co., General Motors Co. and Estée Lauder that claim a sales lift in September quarter thanks to Chinese consumers.
The number of confirmed COVID-19 cases has exceeded 50 million globally, with over 1.2 million fatalities and more than 33 million recoveries, according to the latest tally from Johns Hopkins University. Confirmed cases in the U.S. surpassed 10 million, with more than 237,000 deaths. Germany, France and the UK all issued new restrictions to help curb surging infections.
Against this backdrop, China's return to business as usual has taken on added importance for American firms.
"This was another extraordinary quarter for Chinese consumer consumption," Estee Lauder Chief Executive Fabrizio Freda said on the company's quarterly earnings call last Monday, reported the Wall Street Journal.
Despite the firm's global sales fell by 9 percent year on year, its China sales increased by 28 to 30 percent the same period, Freda said.
The cosmetic giant said Chinese shoppers ramped up spending in stores and online buying pricey skin creams, perfumes and other high-end beauty products.
The recovery of domestic travel also fueled sales of Estee Lauder products at airports. "Tremendous growth" is seen in the southern island province of Hainan, China's free trade port aided by relaxed duty-free rules, according to Freda.
In the first three quarters of this year, China's total retail sales reached 27.3 trillion yuan ($4.13 trillion). The figure grew in August for the first time in 2020, increasing by 0.5 percent year on year and continued to pick up in September with retail sales up 3.3 percent year on year.
Coca-Cola said it expects to see growth this year in China, despite the gloomy business environment elsewhere around the world.
The company reported revenue of $8.65 billion in the third quarter, a decline of 9 percent from a year earlier. The company's case volume fell in the quarter by 6 percent in North America and 4 percent globally, while its case volume of carbonated soft drinks rose by a mid single-digit percentage in China.
Regarding premium-car sales, it also bounces back in China along with the broader auto market in China. GM reported a 12-percent annual increase in China's sales in the September quarter, while its sales in the U.S. declined by 10 percent during the same period.
(Cover: A view of Nanjing Road, the main shopping streets of Shanghai, China. /CFP)