Multinational consumer goods companies are reporting good results in China. French cosmetics firm L’Oreal Group said its growth in the Chinese mainland last year was double the average of the overall beauty products market. In the quarter ending in December, L’Oreal China achieved year-on-year growth of more than 50% compared with pre-Covid 2019. The North Asia zone, which is centered around Shanghai and also encompasses markets like Japan and South Korea, registered a 17.6% year-on-year surge in 2021, which slightly surpassed the 16.1% rise for the entire group. Fabrice Megarbane, President of L’Oreal North Asia Zone and CEO of L’Oreal China, said the company will “keep growing fast in double digits in 2022”. “China continues to make the market become more stable, open and fair,” he told China Daily. “A better business environment is one of the best pieces of evidence of China’s growing economic development, and L’Oreal is benefiting a lot from it.”
Likewise, fast-moving consumer goods company Unilever presented a solid China growth story. Sales in the country grew 14.3% year-on-year whereas global turnover was up 3.4%. Calling China a “priority market”, Unilever CEO Alan Jope said the growth was broad-based across categories and channels, and especially in e-commerce.
China’s vast domestic demand, which contributed to nearly two-thirds of the country’s economic growth last year, provided ample space for multinational consumer goods brands, said Jason Yu, General Manager of consultancy Kantar Worldpanel China. Likewise, Coca-Cola Co registered exceptional growth in sales China. The Asia-Pacific unit case sales volume (CSV) saw an 11% year-on-year jump for the fourth quarter, outperforming the 9% surge globally, and the company attributed the growth to having been “driven by China, India and the Philippines”. “China delivered strong performance in the quarter by capturing a growing trend among consumers of zero-calorie offerings. We doubled our Zero Sugar sparkling portfolio in terms of volume compared to the fourth quarter of 2019,” said James Quincey, Chairman and CEO of Coca-Cola, adding that an increased share in e-commerce sales has driven growth.
“In China, with a suite of measures in place to shore up consumption and brands optimizing offerings, we expect more room for growth for consumer brands of both domestic and foreign firms,” Kantar's Yu said. China is becoming a promising market where Chinese and Western cultures converge and businesses from both home and abroad stand to thrive, said Zhu Danpeng, Senior Researcher at the China Brand Research Institute. Zhu said the younger generation of consumers is boosting Coca-Cola as a icon of self-expression, while L’Oreal is benefiting from Chinese teenagers taking up skincare and makeup habits at an earlier age. “Recent data showed that China is a market where consumers do have growing confidence in local brands while embracing any brand that has the ability to be innovative, adaptive and agile,” he said.
Yu said international labels that invest heavily in building digital channels, omni-channel sales and agile decision making in China stand to enjoy long-term success. He said fast-moving consumer goods sales should stabilize at a 3% to 4% growth this year, likely fueled by a growing variety of digital channels along with items that promote health benefits and cater to shoppers’ psychological well-being, the China Daily reports.
