China’s retail sales show home is where the pocketbook is
After 2016's splurge on apartments, the nation's consumers turn to nest-building, while e-commerce continues its irresistible advance
When it comes to shopping, there’s nothing quite like an empty apartment to open the pocketbooks of increasingly wary consumers.
And so it proved with last year’s splurge on homes, which saw sales measured by floor space jump 22.5% from the year before. Now, these new and proud homeowners are doing what comes naturally: nest building.
Durable home goods were the stars of a retail sales report on Monday that otherwise reflected the softening seen in the business and industrial side of the economy. Sales in April expanded 10.7% from a year earlier, slightly below the median forecast of analysts polled by Bloomberg who had expected the number to remain unchanged from 10.9% in March.
Consumer purchases of medicine, food and drink all held onto double-digit growth. However, home-related items stood out: sales of furniture and electrical appliances accelerated by 13.9% and 10.2% in April, versus the first quarter’s 12.9% and 8.6%, respectively. And while sales of decorating materials and soft furnishing slowed by 1.4 percentage points in April, at 13.4% they remain well ahead of the pack.
No crazy shoppers here, they’re all online
And once our new homeowners are snuggled up on their new sofa, watching their new TV in their newly decorated new apartment, why better way to celebrate than join the growing army of online consumers and order in a takeaway with a bottle of wine?
Aggregate sales of goods and services online mushroomed by a massive 32% during the first four months of the year to 1.92 trillion yuan (US$278 billion) – maintaining the heady pace of expansion seen in the first quarter.
The total value of physical goods sold via the internet expanded 25.9% to 1.46 trillion yuan during January-April, making up 12.9% of overall retail sales. Online sales in China have accounted for more than 10% of retail sales since 2014 and have been steadily gobbling up more market share.