Unilever sees consumption boom in China, Southeast Asia

LONDON Reuters -- Unilever said on Thursday it expects a consumption boom in China as lockdowns ease, and $1.5 -- $2 trillion in excess household savings that could boost its sales in the country and Southeast Asia.

After almost three years of a zero-COVID strategy, Beijing almost completely dropped restrictions in early December. In January, China's cabinet said it would boost imports and promote a consumption recovery to boost the economy.

As Chinese consumers have limited options where they can invest their savings, the housing market is not a viable option, according to Alan Jope, Unilever Chief Executive. China's coming back quite quickly, as you look at things like air flight bookings, travel and hotels, cinema occupancy, and air flight bookings, it's going to be a lot of fun, Jope said.

The company said that Chinese tourists will boost consumption in Southeast Asian countries, including Thailand and Vietnam.

Domestic holiday trips for the same period surged 74% in January as people celebrated outside their homes for the first time in years, while Lunar New Year consumption was reported as 12.2% higher than last year by China's tax authority.

Domestic orders and consumption increased output in January, and the country's economic activity went back to growth in January.

The full-year underlying sales in China fell 1% as people stayed home, according to Unilever on Thursday. The country is one of the top three markets by sales, with the other two being the United States and India.

On Wednesday, ratings agency Fitch revised its forecast for China's economic growth to 5.0% from 4.1%, leading mostly by consumption.

The luxury industry is keeping an eye on China, with hopes that high-end spenders will splurge on designer goods.