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Kao's 1H profit falls 2% as China e-commerce law hits diaper sales

Japanese toiletry maker feels chill from slowing sales to Chinese shoppers

The Chinese government tightened rules on the resale of items purchased overseas, hurting Kao's first-half sales in 2019.   © Reuters

TOKYO -- Japanese toiletry and cosmetics maker Kao appears to have logged a slight drop in operating profit in the six months to June, as tighter controls by Beijing on Chinese shoppers buying overseas slowed demand for the company's products, including its popular diapers.

Kao's operating profit likely fell 2% on the year to about 89 billion yen ($820 million) in the first half of 2019. But it is likely to keep its profit estimate unchanged for the full year through December because it expects to see a surge in sales ahead of a planned increase in Japan's national sales tax in October to 10% from 8%.

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