European multinational companies release quarterly reports with bright spot in Chinese market

BRUSSELS -- Multinational companies in Europe have posted strong performances during the third quarter (Q3) earnings season, including impressive results attributable to China's economic development.

With effective control of the pandemic, steady economic growth and constantly restored consumer confidence in China are reflected in the figures of many well-known European brands.

Over the past two years, L'Oreal China sustained high growth, with Q3 sales up 42.8 percent compared to 2019, according to the company's latest figures.

L'Oreal China continued to post double-digit growth and significantly increased its leadership in Q3, with dynamic growth in all categories, especially haircare and skincare, and selective makeup making a good recovery.

Food company Danone also reported strong growth. According to Juergen Esser, Danone's Chief Financial Officer, the company's specialized nutrition business saw good dynamics driven by adult nutrition and the return to growth of infant milk formula in China.

The company saw net sales of 6,158 million euros (7,081 million U.S. dollars) in Q3, up 3.8 percent on a like-for-like basis.

French luxury brand Kering reported Q3 sales of about 419 million euros (482 millon dollars), up 12.2 percent on a comparable basis relative to the same quarter last year. Kering-owned luxury jewelry brand Boucheron's new collections were very well-received, resulting in exceptional growth, particularly in China and South Korea.

According to a report released by Mintel, a London-based market research firm, Chinese consumers' financial confidence has continuously rebounded, and the total consumer spending will slowly recover to the pre-COVID-19 level by 2021.

While many European giants are attracted by China's thriving consumer market, major players in the manufacturing industry also continue to reaffirm their commitments to China by expanding investment and strengthening mutually beneficial cooperation in the high-tech sector.

On Oct. 20, Daimler officially started operations of its new "R&D Tech Center China" in Beijing.

With an investment of 1.1 billion RMB (172 million dollars), the company is further strengthening its R&D footprint and technological capabilities in the world's biggest car market.

"With the Daimler R&D Tech Center China we are opening a new chapter in our commitment of 'Growing in China, with China.' It will enable an even sharper focus on customer requirements in our biggest market and accelerate the localization of new models, including electric vehicles," said Hubertus Troska, member of the board of management of Daimler AG, responsible for Greater China.

According to Troska, the company's R&D activities in China are expected to grow even further, fostering local innovation and contributing to their global success.

"When it comes to digitization, artificial intelligence, autonomous driving, cutting-edge computing, our R&D team in China plays an increasingly important role for us," said Markus Schaefer, member of the board of management of Daimler and Mercedes-Benz, responsible for Daimler Group Research and chief operating officer of Mercedes-Benz Cars.

Nokia is also targeting China's huge potential in digitalization and information technologies. On Oct. 25, it signed a strategic cooperation framework agreement with China Mobile, covering network infrastructure services in radio, core and transport and home broadband, 6G, cloud and network convergence and 5G enterprise.

The buoyancy of China's economy and promising potential can be closely mirrored in these long-term investments and commitments to the Chinese market.

Matthew Nelson, newly appointed global CEO of Mintel, said that the Chinese economy will see a continuous growth.

"We're also seeing a real confidence from a lot of the reports that Mintel published in consumer spending going forward," said Nelson, referring to the data reports on China.

"We're expecting that to increase moderately over the next few years, really driven by stable economic growth, as well as the desire for healthier lifestyles," the CEO said.

Mao Xuxin, principal economist at the National Institute of Economic and Social Research, a London-based economic think tank, told Xinhua that the Chinese consumer market has maintained healthy growth in the first three quarters, a key factor for the stable progress of the country's economy.

According to Mao, the COVID-19 control and prevention in China have been very effective, and its industrial supply chain has shown strong resilience. Innovation momentum continues to increase at the same time, with emerging business models and new forms being active continuously.

"The high-quality development of China's economy is vital to the world economy. China's contribution to world economic growth has exceeded 30 percent for many consecutive years. In the post-pandemic era, China will certainly play a more important role," said Mao.