Amid concerns of consumers spending less due to economic uncertainty, China is experiencing a retail resurgence in 2024. China’s National Bureau of Statistics data released yesterday showed that total consumer goods retail sales reached $1.85 trillion (12.03 trillion RMB) in January-March, up 4.7% year-on-year.
During the same period, national online retail sales amounted to $509.72 billion (3.31 trillion RMB), up 12.4% year-on-year. Among them, online retail sales of physical goods reached $431.58 billion (2.81 trillion RMB), an increase of 11.6%, accounting for 23.3% of total retail sales of consumer goods. Within the online retail sales of physical goods, the categories of food, clothing, and daily-use commodities increased by 21.1%, 12.1%, and 9.7%, respectively.
Meanwhile, China’s first-quarter GDP grew by 5.3%, exceeding expectations, but challenges lie ahead as retail sales and industrial output slowed in March. Economists raise concerns about the sustainability of growth and policymakers’ response. Despite manufacturing resilience, a real estate crisis and weakening consumer demand pose risks.
As we have reported, the most recent Hurun Chinese Luxury Consumer Survey from the Hurun Research Institute shows that China's luxury consumer market is still strong, having reached 1.66 trillion RMB ($237 billion) in 2023, up 3% from 2022.
Hurun predicts that the nation’s high-net-worth individuals will continue to indulge their desire for travel, and pursue a higher quality of life while paying more attention to their health and wellness this year.
All things considered, Hurun's research demonstrates post-pandemic attempts made by the luxury and hospitality to court wealthy Chinese consumers via slower, more deliberate and experiential definitions of luxury.
Ultimately, experts believe regional markets react negatively to doubts over economic momentum. Policymakers must address uneven recovery and delayed measures amid unexpectedly strong growth. Monetary policy may be constrained by the strong US economy.