Still a Magnet

By Li Xiaoyang

The COVID-19 pandemic still spreading globally has forced people to wear masks and reduce their outdoor activities， but women in pursuit of beauty have never really ceased to buy cosmetics. According to U.S.-based cosmetics giant Estée Lauder， its net sales for the first quarter （Q1） of the year reached $3.86 billion with a year-on-year increase of 16 percent， a number in which the Chinese market held some high stakes.

In Q1， its makeup sales rose slightly in the Asia-Pacific market， reflecting the regions more advanced recovery， primarily in China where occasions to actually wear makeup are on the rise. The net sales in the Chinese mainland saw a double-digit growth， which can be largely attributed to the opening up of domestic travel， especially in Hainan Province where duty-free stores tend to cluster， the company said.

“The Chinese market performed exceptionally well in fiscal 2020. Impressively， we are investing in many compelling long-term growth drivers， including end-to-end innovation with a new center in Shanghai，” Fabrizio Freda， CEO of the company， told a conference on its quarterly earnings back in March.

Like Estée Lauder， many U.S. enterprises have remained upbeat about the Chinese market and expect to improve their presence in China. According to the 2021 American Business in China white paper released in mid-May by the American Chamber of Commerce in China（AmCham China）， China continues to be a priority market for U.S. companies. Its surveyed member enterprises totaling around 1，000 have provided positive remarks， with 75 percent optimistic about the countrys economic recovery in the next two years. More than 50 percent said the domestic growth of consumption and the rise of its middle-income group bring in great business opportunities. While 35 percent registered revenue growth in 2020， 31 percent reported their revenue was comparable to that of 2019.

Half of the companies said Chinas business environment is improving. With positive market expectations， about two thirds of the respondents plan to increase their investments in the Chinese market this year， with the majority expecting an increase of 1 to 10 percent. A total of 85 percent of the members said they are not considering relocating their manufacturing or sourcing outside of China and 61 percent believe China， as the worlds largest recipient of foreign direct investment （FDI） in 2020， will continue to open up its market to foreign investment.