Covid-19 China Update: June Retail Sales Show Mixed Recovery

摘要

1. China retail sales data for June 2020 highlights that our view of a slow, but steady recovery in consumer spending across all retail segments is playing out. 2. Chinese consumers are adapting to the 'new normal' and their purchasing habits are shifting. June 2020 data shows that y-o-y growth in spending on priority items is now slowing, while there has been recovery in spending within non-essential retail segments. 3. The demand side risks, that we first highlighted in our analysis of China April retail sales figures is still evident. 4. Spending on household goods is recovering, after supply shortages limited spending in previous months. We are now seeing pent up demand for these items, especially household appliances. 5. Discretionary spending is still contracting, as many spending events, like weddings, have been cancelled. However, we believe that this retail segment will see pent up spending over H220, as these event resume. 6. Online retail continues to make significant strides. As a result of the pandemic, we believe there has been a distinct shift in consumer preference towards e-commerce.