Apple Isn’t the Only Casualty of China's Slowdown

(Bloomberg) -- Sign up for China Rising, a new weekly dispatch on where China stands now and where it's going next.

Apple Inc. has become the latest and biggest corporate casualty from the pullback of the Chinese consumer.

The smartphone maker, which pinned its reduced revenue outlook on a slowdown in the country, joins a growing list of companies struggling as a trade war with the U.S. and an equity selloff weigh on the world’s second-largest economy.

Here are other prominent companies now finding it harder to sell everything from cars to takeaway coffee in China:

FedEx

The U.S. delivery giant slashed its profit forecast in late December -- just three months after raising it. While FedEx Corp.’s woes weren’t limited to China, the company cited trade tensions, especially between the U.S. and China, among its troubles. FedEx Chief Executive Officer Fred Smith said most of the problems he faced were due to “bad political choices.”

Starbucks

The coffee behemoth opens a new store in China every few hours and expects it to become the company’s largest market. But last month, Starbucks Corp. said sales growth in China could be as low as 1 percent in the long term. That’s slower than the 3 percent to 4 percent growth seen for the U.S. and the rest of the world. It’s not clear how much China’s economy or trade tensions are to blame -- or if China is just losing its taste for caffeine.

Tiffany’s

China’s economic woes are more of a headache for the jeweler outside the country than inside. In November, Tiffany & Co. reported weaker-than-expected sales and highlighted a “clear pattern” of Chinese shoppers cutting back on spending when they’re overseas. It’s a trend first highlighted by Louis Vuitton owner LVMH in October as Chinese officials cracked down on travelers returning home with undeclared goods in a bid to encourage local consumption instead.

Daimler

The German maker of Mercedes cars was among the first global brands to blame escalating trade tensions when it warned in June that retaliatory tariffs in China on car imports from the U.S. would hit sales on the mainland. Daimler AG cut its profit a second time in October -- but didn’t single out the trade war as a culprit. Jaguar Land Rover and BMW AG have since weighed in, saying they’ve been hit by sinking demand in China.

Zegna

Italian suit-maker Ermenegildo Zegna Group in October highlighted the psychological impact of the trade war on consumption. Chinese shoppers had become more cautious in recent months and the company was planning to invest more conservatively in China in 2019, CEO Ermenegildo Zegna said in an interview in Shanghai at the time.

To contact the reporter on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net

To contact the editors responsible for this story: Emma O'Brien at eobrien6@bloomberg.net, Jeff Sutherland

©2019 Bloomberg L.P.