Retail spending has crossed the pre-pandemic levels.
As China’s economy rebounds, a rise in domestic demand has contributed to a surge in the country’s retail sales, according to a report from GlobalData.
The country’s relative success in containing the COVID-19 and the early relaxation of restrictions have encouraged wary consumers to return to malls and shops, according to GlobalData’s retail analyst Ankita Roy.
“The key drivers of this rise also came from the planned increase in the ‘dining-out’ spending and holidays, with more consumers now feeling confident and comfortable about traveling, socialising with holidays being offered at discounted prices,” Roy said.
China’s sequential improvements have been aided by favorable government reforms and policies made to mitigate losses from the crisis. The government also pledged to add a total of 9 million jobs in 2020, which is crucial for encouraging retail spending.
With the revival of events in China, retail spending has also crossed the pre-crisis levels. The mid-autumn eight-day national holiday called "Golden Week" showed to be golden for retailers as it caused a spur in shopping, travel, and special events.
Alibaba’s Singles Day sales reached $74b, breaking last year’s sales record. Similarly, JD.com has witnessed a strong growth of 27% in its product segments on the backdrop of a surge in online sales during this quarter.
“With sealed borders and international travel bans, many purchases that would have been made overseas, have now been restricted to China, thereby aiding the domestic retail sales,” Roy commented.
Furthermore, strong Internet penetration along with more social media exposure has opened up new avenues for retailers in the country as customers have more informed now than ever before.
As China has started returning to a more normal retail environment with the slowdown in the number of infections, retailers were urged to step on to tap on to the upcoming festive rush.
“GlobalData believes that the Chinese New Year will see a multi-fold expenditure increase with more products on sale and other lucrative offers & discounts in strong contrast to 2020.This makes it a very attractive market for Western brands, which are still struggling under the pandemic,” Roy said.
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