Cosmetics, holiday season buoy China retail sales growth

The rate of China retail sales growth rose for the second consecutive month in May, buoyed by the holiday season.

According to government data, retail sales rose 8.6 per cent, which followed 8.3 per cent growth in April and 7.2 per cent in March.

The strongest-performing categories were cosmetics, where sales rose by 16.7 per cent, food up 11.4 per cent, beverages up 12.7 per cent, and daily goods, up 11.4 per cent.

The weakest categories included apparel and footwear, down 4.1 per cent, and jewellery, down 4.7 per cent.

Despite efforts by the Chinese government to encourage consumers to upgrade home appliances, that sector remained subdued, growing at 5.8 per cent in May and 6.4 per cent year to date.

The growth rate encouraged Jeffries Hong Kong equity analyst Summer Wang to express confidence in Chinese retail companies.

“We stay bullish on function-led premiumisation and content-driven consumption,” she said in a  research note.

May’s China retail sales growth exceeded the consensus of analysts by about half a percentage point. Excluding inflation, the growth rate was estimated at 6.4 per cent in May, following 5.1 per cent in April.

Urban sales rose 8.5 per cent, while rural sales were up 9 per cent.

Sales of goods online grew by 21.7 per cent in May and now account for 18.9 per cent of total China retail sales. 


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