Consumer Confidence in Communist China Drops Due to Zero Covid” Policy”

Consumer confidence has suffered significantly as a result of the lockdown imposed by the Chinese Communist Party’s (CCP) “Zero Covid” policy. Sales of well-known brands of a variety of products, including coffee, jewelry, and T-shirts, have recently declined in Communist China. As of August 22nd, Starbucks’ quarterly sales had decreased by more than 40%. Due to the pandemic, the corporation had to close around 25% of its locations in China, including 940 outlets in Shanghai. Starbucks locations across the nation were closed over two-thirds of the fiscal quarter.

The “Zero Covid” policy has also had a significant negative influence on the luxury market. Adidas AG, Richemont Group, and Burberry Group recently posted their quarterly profits that were at least 35% lower. Gucci owner Kering Group witnessed a more than 30% decline in quarterly sales, while Nike saw a 20% decline. However, despite marginally improved performances, Yum China Holdings Ltd. and Uniqlo both had declines of around 13%.

With sales in China declining just 1.1% in the third quarter, Apple Inc. outperformed other big foreign brands. However, this month, the company began an unusual promotion of some of its top-of-the-line iPhones and associated accessories in Communist China to increase sales.

Sales suffered for numerous businesses during Shanghai’s two-month lockdown in the most recent quarter. Shanghai’s strictest regulations have started to loosen up, but other Chinese cities have been placed under lockdown due to an outbreak of illnesses, which has once again dampened consumer confidence and harmed shop sales.

According to Louis Vuitton Group, sales in Communist China decreased by double digits in the second quarter as a result of the recent CCP shutdown, which resulted in significantly less traffic in its stores than during the same period last year.

Louis Vuitton CFO Jean-Jacques Guiony told the Financial Times at the end of July that there is no cure and nobody can foresee whether those savage blockades will reappear, Communist China’s recent economic slump has had a big impact on the company.

In response to the current circumstances, certain luxury companies have considerably decreased their sales projections for the Chinese market, according to a recent report by Oliver Wyman. In addition, 80% of the executives polled said they did not anticipate a “V-shaped” rebound this year. Concern over China’s economic prospects has increased due to the consumption fall that resembles a cliff.

Furthermore, the top CCP officials privately acknowledged that this year’s targeted annual growth rate would not be met.

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Translator: MOS Writing Group team
Design&editor: HBamboo(昆仑竹)

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