Caixin
Jan 03, 2019 01:21 PM
BUSINESS & TECH

China’s Slowdown Claims Biggest Corporate Scalp Yet With Apple

FedEx CEO Fred Smith said most of the problems he faced were due to “bad political choices.” Photo: Bloomberg
FedEx CEO Fred Smith said most of the problems he faced were due to “bad political choices.” Photo: Bloomberg

(Bloomberg) — Apple Inc. has become the latest and biggest corporate casualty from the pullback of the Chinese consumer.

The smartphone-maker, which pinned its reduced revenue outlook on a slowdown in the country, joins a growing list of companies struggling as a trade war with the U.S. and an equity selloff weigh on the world’s second-largest economy.

Here are other prominent companies now finding it harder to sell everything from cars to takeaway coffee in China:

FedEx

The U.S. delivery giant slashed its profit forecast in late December — just three months after raising it. While FedEx Corp.’s woes weren’t limited to China, the company cited trade tensions, especially between the U.S. and China, among its troubles. FedEx CEO Fred Smith said most of the problems he faced were due to “bad political choices.”

Starbucks

The coffee behemoth opens a new store in China every few hours and expects it to become the company’s largest market. But last month, Starbucks Corp. said sales growth in China could be as low as 1% in the long term. That’s slower than the 3% to 4% growth seen for the U.S. and the rest of the world. It’s not clear how much China’s economy or trade tensions are to blame — or if China is just losing its taste for caffeine.

Tiffany’s

China’s economic woes are more of a headache for the jeweler outside the country than inside. In November, Tiffany & Co. reported weaker-than-expected sales and highlighted a “clear pattern” of Chinese shoppers cutting back on spending when they’re overseas. It’s a trend first highlighted by Louis Vuitton owner LVMH in October as Chinese officials cracked down on travelers returning home with undeclared goods in a bid to encourage local consumption instead.

Daimler

The German manufacturer of Mercedes cars was among the first global brands to blame escalating trade tensions when it warned in June that retaliatory tariffs in China on car imports from the U.S. would hit sales on the mainland. Daimler AG cut its profit a second time in October — but didn’t single out the trade war as a culprit. Jaguar Land Rover and BMW AG have since weighed in, saying they’ve been hit by sinking demand in China.

Contact editor Yang Ge (geyang@caixin.com)

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