MNI REALITY CHECK: China Nov Sales Boosted By Online Sales

China's retail sales should see further growth in November, supported by continued strong auto sales and a boost from the e-commerce shopping festival which could take online good sales to a new high, industry insiders and analysts told MNI.

The 'Double 11 Shopping Festival' held by e-commerce platforms in China saw online retail sales during Nov 1-11 hit a new high of CNY840.3 billion, a rise of 29% y/y, close to the 30.5% growth same period last year, according to Syntun, a Beijing-based e-commerce big data provider. Syntun told MNI that their calculations include all B2C platforms but exclude individual retailers such as those who run a store on Taobao.com.

Among which, home appliance, mobile phone, apparel, cosmetic products as well as furniture and home decoration materials were the top five sectors with most sales, data by Syntun showed.

Demand for wedding supplies and furniture surged, seeing sales of over CNY120 million and CNY16 billion during Nov 1-11 as many people catch up on plans delayed in H1 due to the pandemic, analysts from Syntun said.

LIVESTREAMING SALES

A highlight this year is livestreaming sales, which generated a total sale of CNY72.9 billion since the warm-up phase of the festival from late October, according to Syntun, although the data has been queried by some as massaged by event hosts.

After studying postal volumes, analysts from Huachuang Securities note November online retail sales may come in at 15%, lower than the 20%-plus growth seen in May, June and October.

On 'Double 11' this year, 675 million shipments were processed nationwide, a rise of 26.16% y/y, which is lower than the shipment growth over any of this year's other major holidays.

FOOTFALL

Along with fired-up online sales , shopping mall footfall also has recovered well. In November, the average shopper flow across the country increased by 4.98% y/y, according to Zhang Bin, a senior analyst at Win Data, a big data platform serving real estate developers and retail business nationwide. Among the 3600 shopping malls monitored by Win Data, about one-third saw increased footfall, with over 1000 seeing a 10%-plus y/y gain.

However, on a monthly basis, about 70% of the shopping malls saw fewer consumers in November than October with the week-long holiday, Zhang added.

Despite the strong recovery of in-store traffic, the vacancy rates remain high, Zhang noted. The average rate of stores occupied in shopping malls was 91.37%, five percentage points lower than that in 2019, as many smaller merchants were forced to close, Zhang added.

Meanwhile, catering revenues may rise further to 3.3% y/y in November from October's 0.8%, Qin Tai, an analyst at Shenwan Hongyuan Securities predicts.

AUTO SALES

Spending on autos remains strong, with the China Passenger Cars Association saying retail sales of passenger cars hit 2.08 million in November, up from October's 1.99 million sales, a rise of 8% y/y. The growth rate has stayed near 8% for a fifth consecutive month, the highest levels in two years.

The sales of electric vehicles doubled following the release of new car licenses in major cities, helping the overall auto market, a trend likely yo continue until year-end. Luxury cars also retained strong growth due to upgrades to high-end vehicles, the CPCA said.

Qin expects November retail sales may rise by about 5.2% y/y, accelerating from the 4.3% gain in the previous month, while helping to narrow the annual decline to about 3.8%, Qin added.