P&G’s China Sales Pick Up Despite Lukewarm Global Performance
Procter & Gamble Co.’s latest quarterly sales in China grew 8% amid growth in online orders and a strong demand for premium brands.
This uptick comes despite lukewarm global growth of 1% for the quarter ending September 30, partly because P&G’s operations in the U.S. and Mexico were affected by natural disasters, Chief Financial Officer Jon Moeller said.
P&G has made “significant progress” in China in recent years, bouncing back after sales declined 5% two years ago, and growing only 1% last year, said Moeller. Its rebound strategy includes opening stores on popular e-commerce sites and pushing premium brands.
The American consumer goods giant aims to achieve “mid-single-digit growth” in terms of sales in China this year, Moeller added without giving any details.
He made the rare disclosure of the financial specifics of P&G’s China business on Friday, when he hosted the company’s earnings call for the first quarter of fiscal year 2018 at P&G’s China headquarters in the southern city of Guangzhou.
P&G has seen its global sales decline for three consecutive years, but says its China figures have
For example, the double-digit growth in global sales for skin and personal care products last quarter was “driven by demand from China” for premium brands like SK-II, P&G said in a report on Friday.
China is P&G’s second largest market, following the U.S. But it has become more strategically important after a series of natural disasters — including the September earthquake in Mexico and the hurricanes that devastated Texas, Florida and Puerto Rico this summer — halted operations there and lowered global quarterly sales growth by 0.3 percentage points, Moeller said.
Last year, the company focused on strengthening its online sales networks in China and launched a store on Alibaba’s popular e-commerce site Tmall.
“E-commerce is the fastest growing channel in China” with orders rising 60% in the last quarter, said Jasmine Xu, who heads P&G’s ecommerce business in China.
According to Xu, the company’s network of suppliers and online consultants were “fully ready” China’s upcoming Double 11 shopping fest — a month-long scramble for online discounts beginning Nov. 11.
Contact reporter Coco Feng (firstname.lastname@example.org)
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