Caixin
Oct 23, 2017 06:46 PM
BUSINESS & TECH

P&G’s China Sales Pick Up Despite Lukewarm Global Performance

China has become particularly important to Procter and Gamble Co. after natural disasters halted the firm's operations in the US this summer, hitting quarterly global sales. Photo: Visual China
China has become particularly important to Procter and Gamble Co. after natural disasters halted the firm's operations in the US this summer, hitting quarterly global sales. Photo: Visual China

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 (renkefeng@caixin.com)

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