China’s Covid-19 “new normal” will challenge Western multinationals’ hopes for a quick rebound in the world’s second largest economy. Big groups from Apple to General Electric suffered a hit to revenue in the first quarter as renewed lockdowns paralysed factories and distribution networks and dented retail sales. Many companies are downplaying the impact as temporary. That’s overly optimistic.
insists its growth potential for the year remains unchanged, even though the French premium liquor maker’s revenue fell in the quarter ended in March, driven by a double-digit percentage drop in China.
China’s 400 million middle-class consumers make the country a key growth market for companies like Italian luxury goods maker Salvatore Ferragamo - 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.
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