China’s retail sales of consumer goods recorded 26,450 billion yuan ($3,740 billion), a 15.8 percent decline in March, though up from 20.5 percent in the first two months this year, according to a release by the National Bureau of Statistics this Friday. Meanwhile, fashion-related sectors — from department stores to apparel e-commerce — were still behind the curve.
In the first three months this year, retail sales in department stores plunged by 34.9 percent compared to that of last year, while those of specialty stores and brand boutiques dropped by 24.7 percent and 28.7 percent, respectively. In terms of e-commerce, the retail sales of the apparel category also dropped by 15.1 percent in the first three months, whereas food and daily necessities saw an increase of 32.7 percent and 10 percent.
Given the current state of the Chinese economy, which reportedly shrank for the first time in decades, with a 6.8 percent of decline in GDP year-on-year, it’s no wonder that people are not splurging on consumer goods. When asked in a press conference whether the economy will turn around in the second quarter, Mao Shengyong, the bureau’s spokesperson, was ambiguous. “Given the improvement in March, we should be able to continue with the positive momentum. So it will definitely be better.”
It’s still too early to call the second quarter the turnaround point for the economy, as Caixin, the financial publication wrote: “Companies have yet fully recovered their production despite having reopened, as China still faces weak demand internally and externally.” Meanwhile, if retail can somehow piggyback on China’s economic recovery, it could help this struggling sector through the long summer and into the winter before seeing any real gains.
The Jing Take reports on a leading piece of news while presenting our editorial team’s analysis of its key implications for the luxury industry. In this recurring column, we analyze everything from product drops and mergers to heated debates that sprout up on Chinese social media.