JD.com, one of China's largest e-commerce companies, is facing challenges as its shares hit a record low. Banks and brokers have cut price targets and revenue growth forecasts for the firm, reflecting concerns over the slowdown in consumer spending and the overall state of China's economy. Citi Research has lowered its revenue assumption for JD.com for the third and fourth quarter, citing a muted consumption trend and intense competition. Nomura has also expressed concerns, stating that JD.com has not seen any meaningful improvement in retail and has missed out on the positives from China's stimulus policies. In response to the challenging environment, JD.com has filed a police report over online rumors maliciously linked to the company.
Estée Lauder shares have plummeted after the company cut its outlook due to a slow recovery in China. The cosmetics giant had previously expected a strong rebound in the Chinese market, but the ongoing impact of the COVID-19 pandemic has led to a more cautious outlook. Estée Lauder's sales in China have been significantly affected by the closure of stores and reduced consumer spending. The company now expects its sales in China to decline in the current quarter. As a result, Estée Lauder's shares fell by more than 8% in premarket trading. The company's disappointing outlook reflects the challenges faced by many businesses in China as they navigate the uncertain economic recovery from the pandemic. Estée Lauder reported an 11% decrease in organic sales, driven primarily by a 51% drop in the global travel retail business. The company faced headwinds in Asia, particularly in mainland China and Asia travel retail, due to travel restrictions and reduced consumer demand. Estée Lauder is implementing an accelerated profit recovery plan, focusing on optimizing product and category mix, reducing discounts, exercising pricing power, reducing costs, and leveraging investments in supply chain and regionalization. The plan will be operationalized in the second half of fiscal year 2024. Despite the challenges, Estée Lauder remains confident in the long-term prospects of the global prestige beauty industry.
Chinese consumers are reducing their spending on high-end products from Western brands like Apple, Estée Lauder, Canada Goose, and SK-II. The restrictive zero-covid policies in China have impacted the economy, leading to high youth unemployment and a struggling property market. As a result, Chinese consumers are opting to shop locally or save their money. Estée Lauder, Canada Goose, and SK-II have all cut their sales forecasts due to China's economic challenges. Apple's sales in China have also dropped, and the company is facing a probe into its manufacturing partner, Foxconn. The future of Western brands in China is uncertain.
Shiseido, a Japanese cosmetics company, has seen a drop in its shares due to boycotts in China related to the Fukushima nuclear disaster. The boycotts have affected the company's earnings. Shiseido is known for its skincare and beauty products. The Chinese government has been encouraging its citizens to boycott Japanese products due to political tensions between the two countries. Shiseido's stock price has been declining as a result of the boycotts. The company is now facing challenges in the Chinese market, which is a significant source of revenue for them. Shiseido's earnings have been negatively impacted, and the company is working to address the situation and regain consumer trust.
Japanese cosmetics maker Shiseido Group plans to invest further in China and build its second-largest research and development center in the country. The company is confident in the Chinese market and sees it as a global source of innovation for beauty and cosmetics. Chinese consumers are more conscious of their beauty needs and willing to accept new products, which assures Shiseido's investments. To drive innovation, the company will introduce new brands and products from around the world. Shiseido aims to make China the first market for cutting-edge innovation. Despite subdued global investment sentiment, multinational companies like Shiseido are confident about investing in China and believe innovations represent significant growth opportunities. Shiseido has been present in China for over 40 years and has witnessed the country's commitment to growing together with the world.
Sales of Procter & Gamble's high-end SK-II skincare brand fell 34% between October and December, with executives blaming anti-Japanese sentiment in China. The decline in sales was attributed to China's slow recovery and the release of treated radioactive water from Japan's Fukushima nuclear power plant. China banned all seafood imports from Japan and consumers boycotted Japanese brands, including SK-II. However, P&G executives stated that SK-II is already seeing sales turn around in recent months. This is not the first time SK-II or Japanese brands have faced a boycott in China, as tensions in 2012 over a territorial dispute also impacted sales. P&G's overall earnings were mixed, with a cut in annual profit forecast due to a one-off charge related to its Gillette business.
Chinese smartphone brands face retailer backlash in India over low margins, delayed payments, and stock issues. Retailers demand higher margins and timely settlements, impacting brands' offline expansion plans in a shifting smartphone market. The Chinese smartphone companies, which are facing pressure from the Indian government to localise operations, are staring at a loud adversary—mobile phone retailers. While the brands are looking to expand their footprint and tap the country’s hinterland, retailers, big and small, are up in arms, alleging low margins, unrealistic targets, insufficient supply of stocks and piling up of dues.
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