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These stocks of American consumers are faced with higher Chinese risks

These stocks of American consumers are faced with higher Chinese risks

 


American brands quickly lose their appeal in China, because residents are increasingly preferring competitive local players, especially since economic growth slows down, according to a TD Cowen survey published Thursday. While the overall preference for Western brands fell 9%, compared to 14% last year, some American companies faced higher risks than others, according to the report, citing interviews in person of 2,000 consumers with varied income levels in large Chinese cities. TD Cowen has teamed up with an unnamed consulting firm of Beijing to conduct the investigation in February 2025, following a similar study in May 2024. Analysts saw the classification of apples among the best placed brands in China. But they have warned that several other American companies are faced with high regional risks despite the optimism of management. On Friday, the main Chinese leaders recognized the growing effect of trade tensions and promised targeted measures for difficulties in difficulty. Official reading stopped below a complete recovery announcement. “This year's investigation was carried out before the intensification of the American-Chinese trade war, although the threats are on the horizon,” said TD Cowen analysts. “Add this factor to the equation, and it is easy to see why uncertainty will remain high and households will be likely to remain cautious in the future.” The survey revealed that income expectations have decreased, the share of respondents expecting a drop in remuneration in the next 12 months, which increased to 10% compared to 6%. In particular, Chinese consumers plan to spend less on beauty items over the next six months, has shown the survey, while increasing their preference for Chinese brands. The American cosmetics giant, Este Lauder, has retained first place in terms of the highest awareness among western beauty brands in China, but preference among consumers fell to 19.6% of respondents, against 24.3% last year. This contrasts with the increase in respondents expressing a preference for the second and third players in the Lancoma and Chanel market, respectively. During the quarter which ended on December 31, Este Lauder said that its net sales in Asia-Pacific had dropped by 11%, due to “the feeling of consumer control in mainland China, Korea and Hong Kong”. Asia-Pacific represented 32% of global sales during the quarter. In the lucrative sportswear category, Nike “has lost a significant preference in all categories” compared to last year, while local Li-Ning and Anta competitors have gains, the survey revealed. The analysis of TD Cowen has shown that among American sports clothing brands faced with the risk of the most in relation to consensual expectations, Nike has the highest exposure to sales in China at 15%. “The Chinese market is characterized as a growth opportunity for sport according to the management of Nike in its recent call for financial results of Q3: 25 in March 2025”, said analysts, “but that the macro offers an increasingly difficult operational environment”. It is not necessarily a slower growth or nationalism. Although the survey has revealed a fall of 4 percentage points preferably for foreign brands of clothing and shoes, it also showed an increase of 3 percentage points of the tendency to buy the “best” original product. “The implicit perception here is that Western brands offer fewer better products or value,” said TD Cowen analysts. Starbucks also comes up against fierce local competition while trying to maintain prices in a third party or more above that of the competitor Luckin Coffee, according to the report. The survey revealed that the American coffee giant “is lagging behind peers in terms of value and improvement in quality perception”. Other coffee brands such as Ways, Tim's, Cotti,% Arabica and M Stand have also developed recently in China. Sales with comparable stores from Starbucks in China fell 6% over a year in the quarter which ended on December 29, which brought the share of the region of total income to just under 8%. More worrying is that a long -awaited coffee boom in China may not materialize. “We note that the daily and weekly purchase frequency in coffee drinkers is decreasing, suggesting that the habit of coffee seen in the United States does not settle in China,” analysts said. They noted that a new property structure for Starbucks China Business would be positive for the stock given the lack of short -term catalysts. TD Cowen assesses Starbucks a purchase, but has notes on Nike and Este Lauder.

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