Beauty market

In 2022, China is not a beauty growth market

Blame it on the pandemic. A rise in Covid-19 cases in Shanghai and other Chinese cities has dampened sales of beauty products in the world’s second-largest cosmetics market.

Sales of beauty products in China fell 6.3% in March, according to Jeffries analyst Steph Wissink. She expects the crisis to continue due to draconian lockdown measures. For example, Shanghai residents were forced to stay indoors for weeks as the government imposed curfews to fight the coronavirus.

Procter & Gamble said sales of beauty products in China fell in the first quarter as SK-II’s China business was “under pressure”, executives said on Wall Street in April. L’Oreal, the world’s biggest beauty company, also accused the lockdown of putting pressure on results in China. Estée Lauder’s Asia-Pacific sales fell 4% in its third fiscal quarter ended March 31. Lauder blamed the decline on reduced retail traffic as well as limited distribution capacity at its Shanghai facility, which was under Covid-19 restrictions.

A droid patrols the streets of Shanghai, urging citizens to stay indoors.

“We are confident that our business in China will rebound as Covid-19 abates,” Lauder Chairman and CEO Fabrizio Freda said when the company released the latest earnings report.

Finally, Beiersdorf noted that traditional department stores account for 75% of La Prairie’s sales. With stores closed and consumers locked in their homes, analysts expect it will be some time before sales return to normal. Normalcy may be in the distant future in the biggest city in the world. After all, Shanghai is synonymous with four-legged droids patrolling the city streets, barking orders to stay indoors. This is just one facet of China’s zero Covid policy.

Still, there are signs of improvement. On Friday, Shanghai officials insisted the worst Covid-19 outbreak was under control after a month of lockdown. The number of new Covid infections in China’s financial hub has been on a “continuous downward trend” since April 22, city vice chief Wu Qing said.

“At present, the epidemic prevention and control situation in our city is steadily improving, and the epidemic is under effective control,” he said at a press conference.