Although P&G sales on a global scale grew by 2 percent, revenue in China fell by 5 percent this year. The news is worrying the manufacturing giant as China accounts for 8 percent of total global sales.
According to the company’s website, “the company's greater China region, which includes the Chinese mainland, Hong Kong, Macao and Taiwan, accounted for 8 percent of P&G's sales.”
Kimberley Clark also felt the pressure in China. The company had to slash prices of diapers in April just to keep up with competition. These manufacturers, as well as Colgate-Palmolive Co. and Coca-Cola, admitted that loss of sales is due to the growing e-commerce market in the country.
Ian Cook, CEO of Colgate-Palmolive Co., said, "revenue in China fell by 5 percent this year. The statistics are worrying the manufacturing giant as China accounts for 8 percent of total global sales.
Global consumers are turning to e-commerce recently to buy grocery items. According to a report from Euromonitor International, "the world's online shoppers spent over $87 billion on grocery items like food, drink, beauty and personal care items in 2015."
E-commerce and a weak Chinese economy are seen as reasons for a slow turnaround of inventory.
Chen Yuefeng, editor-in-chief of the China Chain Store magazine, observed, "Weak demand in the Chinese market is going to be the 'new normal' for every consumer products maker, as the nation's economy has not totally recovered."
The Boston Consulting Group (BCG) released a report in June stating the consumer spending in China this year declined to 8.7 percent from 9.4 percent from the previous year.
Chen also believed that weak consumer spending on brands like Coca-Cola and P&G fail to innovate their products to meet the demands of the new middle class.
She said, "Also, global brands such as P&G and Coca-Cola haven't built up support from Chinese consumers because they're too slow to introduce new products."