Stay positive

13 May 2022 By Yawen Chen Follow @ywchen1

Western companies like Estée Lauder and Remy Cointreau remain hopeful about the country even though lockdowns have hit revenue. Yet continued mass testing due to Beijing’s zero-Covid push will weigh on demand. Excessive optimism risks delaying a much-needed diversification drive.

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The Director-General of the World Health Organization Tedros Adhanom Ghebreyesus told a media briefing on May 10 that China’s zero-tolerance Covid-19 policy is not “sustainable” given what is now known of the virus.

Marco Gobbetti, chief executive of Salvatore Ferragamo, on May 10 vowed to increase investments, revamp stores and attract younger customers to double revenues to almost 2.3 billion euros by 2026. The Italian luxury group forecast a rise in sales in 2022 despite problems in China, where retail revenues declined in the first quarter due to new Covid-19 restrictions.

Beijing on May 4 shut more than 60 subway stations and 158 bus routes. The Chinese capital on April 29 ordered its 22 million residents to present a negative Covid test before entering public venues.

Estée Lauder’s sales in the Asia Pacific region declined by 4% in the first three months of 2022, the cosmetics group reported on May 3, primarily due to new restrictions implemented in China. Chief Financial Officer Tracey Thomas Travis told investors in a call that the company believes China could open up in mid-May.

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Beijing on May 4 shut more than 60 subway stations and 158 bus routes. The Chinese capital on April 29 ordered its 22 million residents to present a negative Covid test before entering public venues.

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