Stay informed with free updates
Simply sign up to the Global Economy myFT Digest — delivered directly to your inbox.
Carlsberg, Estée Lauder and AB InBev have all issued warnings of a sales slump in China, highlighting the challenges faced by Beijing in reviving the fortunes of the world’s second-largest economy.
In September, Chinese political leaders and the central bank announced stimulus measures to boost economic growth, including interest rate cuts and support for the stock market.
However, Danish brewer Carlsberg’s CEO Jacob Aarup-Andersen stated that the current stimulus efforts in China did not have a significant impact, as both Carlsberg and AB InBev reported lower-than-expected volumes in the country.
Estée Lauder also faced a decline in sales in China, leading to the company cutting its dividend and withdrawing its profit forecast. The slowdown in Chinese consumer spending has particularly affected Western consumer groups such as luxury, beauty, and beer companies.
Despite the stimulus measures announced by the Chinese government, companies remain skeptical about a substantial growth boost in the coming months. AB InBev’s CFO Fernando Tennenbaum expressed concerns about the prolonged softness in the market, while Carlsberg reported a significant drop in volumes in China.
L’Oréal and other luxury groups have also warned of challenges in China, with sales being impacted by various factors including a crackdown on daigou shoppers.
Analysts are eagerly awaiting details of a fiscal stimulus package expected to be announced by Chinese authorities next week. They believe that China may need to spend up to Rmb10tn ($1.4tn) over three years to restore consumer confidence.
Beijing has set a GDP growth target of about 5% this year, with GDP expanding 4.6% in the third quarter. The uncertainty surrounding the Chinese economy continues to pose challenges for both companies and investors.
Additional reporting by Joe Leahy in Beijing