The Chinese market has proven to be a reliable earnings engine many multinational firms cannot afford to lose or even neglect in a tough time, as the latest financial reports from many world-renowned brands have revealed. From automobiles to consumer goods, multinationals such as BMW, Yum and L’Oreal logged robust market growth in China in the third quarter. Corporate revenues were boosted despite facing headwinds, including the lingering Covid-19 pandemic, disrupted supply chains, weakened consumer sentiment and rising production costs. For many car manufacturers, China remained a significant source of demand in the quarter.
The BMW Group cited strong sales in China as one of the drivers behind a year-on-year rise in its third quarter revenue by over one-third to nearly €37.2 billion. “Contributing to this were solid pricing for new and used cars, a favorable product mix, and in particular, revenue from its Chinese joint venture,” the company said in a news release. The company’s sales were down 0.9% to 587,800 units compared with the same quarter of 2021, but its business in China was strong, up 5.7%. Europe, on the other hand, saw an 11.1% decrease in the quarter. Volkswagen Group saw a recovery in China accelerated with a 26% increase in deliveries in the quarter. In particular, regional demand for electric vehicles continued to grow, and deliveries more than doubled year-to-date to 112,700 units.
The catering industry has been one of the hardest hit by the pandemic. However, Yum China’s total revenue rose 11% year-on-year to USD2.68 billion, and the company opened 239 new restaurants in Q3. Delivery continued to be a popular option, which contributed approximately 38% of KFC’s and Pizza Hut’s sales in China in the quarter, an increase of four percentage points from the previous year. Yum China announced on its website that it aims to open approximately 1,000 to 1,200 new stores and make capital expenditures of USD800 million to USD1 billion this year.
Danone’s infant milk formula sales registered competitive growth on a high base, while adult nutrition and pediatric specialties reported another quarter of outstanding growth. L’Oreal Group saw its sales on the Chinese mainland in the quarter go up 20.5% yearly to €27.94 billion. In addition, the company said it strengthened its position in e-commerce in China, topping the rankings on short-video sharing platform TikTok, with L’Oreal Paris being No 1 in skincare. Last month, L’Oreal China inaugurated two pioneering projects in Suzhou, Jiangsu province, by laying the foundation of its first direct-to-consumer intelligent center and announcing the opening of its new healthy beauty workshop. Foreign direct investment (FDI) in actual use on the Chinese mainland expanded 15.6% year-on-year to surpass CNY1 trillion in the first three quarters of 2022, the China Daily reports.
