Under the effects of the Covid-19 epidemic, the world economy faces serious challenges, but with the improvement of the epidemic prevention and control situation in China, the Chinese economy continues to recover, and quite a few foreign companies have achieved excellent results in the Chinese market. The positive plans of these companies to release new products in the Chinese market, their increased investment in research, development and production, and the increasing number of headquarters of cross-border companies in China … are all indications of the confidence of foreign companies in the Chinese market in the long term.
Business in China scores the best result in the global market
Despite the impact of the epidemic, L’Oréal Group’s business continued to flourish in China, as the group’s brands opened major stores in Beijing, Shanghai, Hangzhou and other large cities in China, including the first smart fashion store for Maybelline New York in the world, and the first perfume store under the Yves San brand. Laurent cosmetics and beauty in the world, the first flagship salon of L’Oréal Paris in the world, and the first flagship store of Lancôme in Asia. These stores have become the destinations of many consumers.
At the same time, modern products, advanced science and technology and new brands appearing in the market one by one bring new shopping experiences. For example, the L’Oréal Group’s Research and Innovation Center in Shanghai for the L’Oréal Group has been researched and developed especially for Chinese consumers, and has seen great popularity after its appearance in the Chinese market.
In the first half of this year, the China subsidiary of L’Oréal Group achieved a growth of 17.5% compared to the same period of the previous year, and the growth rate for the second quarter of this year reached 30%, achieving the best result among the L’Oréal group’s subsidiaries in the world. Mr. Fabrice Megarban, President and CEO of L’Oréal Group in China, said his company’s performance remains more solid despite the impact of the epidemic.
Johnson & Johnson Group also witnessed a rapid boom in the Chinese market. The first surgical robot named “Tianji” was sold to the orthopedics department, which was developed in cooperation between Johnson & Johnson Group and Beijing Tianzhihang Medical Technology Corporation Limited in September this year, driving the speed of application of innovative medical technology and promoting the development of digitalization of medical care. From 2018 until today, the Xi’an Jansen Pharmaceutical Co., Ltd. of the Johnson & Johnson Group has received approval to introduce 25 new drugs. Meanwhile, the Johnson & Johnson Group is entering the health consumption market in China, as in July 2020 the Johnson & Johnson Group’s Acuvue contact lens brand became the first successful brand to offer color contact lens testing services on the Internet. Rogenin brand products entered the Chinese market in August 2020, and thus Johnson & Johnson Group began to officially enter the healthy consumption market in China.
Song Weiqun, China Area Director of Johnson & Johnson Group, said that his group’s business regained its strong growth in China in the second quarter of this year, especially the group’s medical care business, which is ahead of the medical care business in other markets in the world.
In the Chinese market quite a few foreign companies have similar experiences. An article published on the website of the American Wall Street Journal indicated that the recovery of the Chinese market is helping some American companies to offset the losses resulting from the sharp decline in their domestic sales, and China has become a “haven” for quite a few American companies. Senior officials of some well-known US brands said in their new reports that China had helped their companies navigate difficulties over the past three months.
Confidence in investing in the future
In August of this year, the volume of foreign investment actually used in China reached 84.13 billion yuan (the US dollar equals 6.8 yuan now), an increase of 18.7% over what it was at the same time last year, and a report issued by the American Chamber of Commerce in Shanghai indicated that most US companies in China are optimistic about the Chinese market.
So why have excellent results been achieved in the Chinese market?
According to Fabrice Megarban, Chinese consumers’ fondness for cosmetic products has not been affected by the epidemic. He said that these remarkable results are inseparable from the various measures and favorable policies taken by the Chinese government. He added, “We are confident and determined to continue to maintain a strong performance.”
Even when the epidemic increased much uncertainty due to the spread of the epidemic since the beginning of this year, Schneider Electric continues to increase its investment in research and development in China, it increased by 15% compared to 2019. From 2017 to 2019, Schneider Electric’s investment in Research and development in China by 50%. “China is the largest consumer market in the world, able to drive the formation of new business patterns, it has the power to drive the speed of technological innovation, and I am confident that it will become the center of innovation,” said Yin Cheng, Executive Vice President and CEO of Schneider Electric.
Dr. Li Xiaojia, a professor at the School of Public Administration at the University of International Trade and Economics, said that China provides a broad development market and a great scope for foreign companies investing in it. In the current difficult situation of world economic stagnation, declining consumption demand and difficult profit making, opening up China’s large-scale market, strong consumption capacity and stable prospects is important for cross-border companies.
Expected innovative business arrangements
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