05.07.22
Blame it on the pandemic. A surge in Covid-19 cases in Shanghai and other Chinese cities has put a damper on beauty sales in the world's No. 2 cosmetics market.
China’s beauty sales fell 6.3% in March, according to Steph Wissink, an analyst with Jeffries. She expects the slump to continue due to draconian lockdown measures. For example, Shanghai residents were forced to remain indoors for weeks at a time as the government imposed curfews to combat coronavirus.
Procter & Gamble said beauty sales in China fell in Q1, with SK-II’s business in China “under pressure,” executives told Wall Street in April. L’Oréal, the world's largest beauty company, also blamed the lockdown for putting pressure on results in China. Estée Lauder’s Asia-Pacific sales fell 4% in its fiscal third quarter ended March 31. Lauder blamed the decline on reduced retail traffic as well as limited distribution capacity at its Shanghai facilities, which were subject to Covid-19 restrictions.
A droid patrols Shanghai streets, urging citizens to stay inside.
“We are confident that our business in China will rebound when Covid-19 abates,” said Lauder President and CEO Fabrizio Freda when the company released the latest earnings report.
Finally, Beiersdorf noted that traditional department stores account for 75% of La Prairie sales. With stores closed and consumers locked in their homes, analysts predict it will be quite some time before sales return to normal. Normalcy may be in the distant future in the world's largest city. After all, Shanghai is synonymous with four-legged droids patrolling city streets, barking orders to remain inside. It's just one facet of China's zero-Covid policy.
Yet, there are signs of improvement. On Friday, Shanghai officials insisted the worst outbreak of Covid-19 was under control following a month-long lockdown. The number of new Covid infections in China's financial hub had been on a "continuous downward trend" since April 22, the city's vice major Wu Qing said.
"Currently, our city's epidemic prevention and control situation is steadily improving, and the epidemic has come under effective control," he declared at a news conference.
China’s beauty sales fell 6.3% in March, according to Steph Wissink, an analyst with Jeffries. She expects the slump to continue due to draconian lockdown measures. For example, Shanghai residents were forced to remain indoors for weeks at a time as the government imposed curfews to combat coronavirus.
Procter & Gamble said beauty sales in China fell in Q1, with SK-II’s business in China “under pressure,” executives told Wall Street in April. L’Oréal, the world's largest beauty company, also blamed the lockdown for putting pressure on results in China. Estée Lauder’s Asia-Pacific sales fell 4% in its fiscal third quarter ended March 31. Lauder blamed the decline on reduced retail traffic as well as limited distribution capacity at its Shanghai facilities, which were subject to Covid-19 restrictions.
A droid patrols Shanghai streets, urging citizens to stay inside.
Finally, Beiersdorf noted that traditional department stores account for 75% of La Prairie sales. With stores closed and consumers locked in their homes, analysts predict it will be quite some time before sales return to normal. Normalcy may be in the distant future in the world's largest city. After all, Shanghai is synonymous with four-legged droids patrolling city streets, barking orders to remain inside. It's just one facet of China's zero-Covid policy.
Yet, there are signs of improvement. On Friday, Shanghai officials insisted the worst outbreak of Covid-19 was under control following a month-long lockdown. The number of new Covid infections in China's financial hub had been on a "continuous downward trend" since April 22, the city's vice major Wu Qing said.
"Currently, our city's epidemic prevention and control situation is steadily improving, and the epidemic has come under effective control," he declared at a news conference.
