(Updates share prices)
By Richa Naidu, Elisa Anzolin, Christoph Steitz and Jessica
DiNapoli
LONDON/MILAN/FRANKFURT/NEW YORK, March 1 (Reuters) - The
world's top consumer and luxury goods companies have seen sales
of everything from cosmetics to condoms grow in China since
Beijing ended strict COVID-19 curbs, another sign that the
world's No. 2 economy is reviving after the pandemic.
Upbeat comments on Wednesday from Reckitt Benckiser ,
Nivea-maker Beiersdorf , Moncler and Puma came after data showing China's factory sector grew in
February at the fastest pace in more than a decade.
Beiersdorf Chief Executive Vincent Warnery said the company
had seen the first signs of recovery in China and the global
travel retail business, fuelled by the country's reopening.
"After 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," he
said in a briefing for analysts.
"China is back to growth, not only online but also in brick
and mortar."
U.S. toothpaste-maker Colgate-Palmolive Co 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.
"The second half of the year will be far better," said Yves
Briantais, a marketing executive for Colgate's 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's Warnery said growth in its premium La Prairie
and cheaper Eucerin and Nivea skincare ranges was likely to be
driven by Chinese demand. Tourism from 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.
"I have no doubt that the intimate wellness (business) in
China is going to perform well," said interim CEO Nicandro
Durante, referring to the division which includes KY Jelly and
Durex condoms.
The upbeat comments echo those of other executives during
earnings season, particularly from luxury labels which are
banking on a strong rebound fuelled by Chinese shoppers drawing
on savings built up during pandemic lockdowns.
Upmarket U.S. companies including Coach handbag maker
Tapestry Inc and Ralph Lauren Corp last month
recently said demand had started picking up in China.
"We certainly have seen a meaningful trend change in Greater
China," 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.
"We expect China to come back resiliently in the quarter,"
Ralph Lauren's 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.
U.S. retailer Walmart Inc , which operates nearly 400
retail and wholesale stores in China, reported strong traffic
in its stores since reopening.
"We have seen people returning more to stores, which is what
you would expect, and also wanting to celebrate events," Judith
McKenna, CEO of Walmart International, said on a call last week.
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 1.5% in London, while shares in Moncler
rose 3.3% after the Italian luxury group, known for its warm
puffer jackets, reported a strong 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.
"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.
Adding to growing confidence in the luxury sector, the
company said it had seen no adverse effects on demand from a 10%
price increase at the start of the winter season.
Reuters reported in February LVMH's top fashion
brand Louis Vuitton was expected to increase prices in China by
as much as 20%.
(Reporting by Christoph Steitz in Frankfurt and Jan Schwartz in
Hamburg, Elisa Anzolin in Milan, Richa Naidu in London and
Siddharth Cavale and Jessica DiNapoli in New York and Aishwarya
Venugopal in Bengaluru; Writing by Josephine Mason in London;
Editing by Catherine Evans and Richard Chang)
Messaging: josephine.mason.reuters.com@reuters.net))
