What happened
The National Bureau of Statistics of China announced in a statement that the country’s total retail sales of consumer goods during July reached $4.64 million (3.22 billion yuan). It was a year-on-year decrease of 1.1 percent but a rise from 1.8 percent in June.
Garments, footwear, and knitwear all saw a disappointing drop of 2.5 percent. Yet jewelry, which is categorized alongside gold and silver, was up by 7.5 percent, and cosmetics, which have been surprisingly popular during the COVID-19 outbreak, continued to soar, climbing 9.2 percent year-on-year.
The Jing Take
Measuring retail sales is the most reliable indicator of consumer spending and the best barometer of overall economic activity. After a steep slump at the start of 2020, China became the first economy to recover from the global pandemic, giving hope to many other countries that are still battling economic uncertainty. Worryingly, these latest figures have come in lower than what was generally predicted by analysts and China-watchers.
Yet, it is still a month on month increase and only incrementally under forecast, which should offer hope. Moreover, this continued slump begs the question: Will Beijing implement an additional economic stimulus to boost and promote domestic spending? And, if so, how will it impact international brands selling in China? If the domestic C-beauty battlefield is any indicator, Chinese spending should be even harder for global luxury brands to win going forward.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.