China’s retail sales increased by 3% year-on-year (yoy) in November 2024, marking a slowdown from October’s 4.8% growth and falling short of market expectations of a 4.6% rise. This represents the weakest retail performance since August, reflecting subdued consumer demand in key categories. The data signals challenges for the domestic economy as it works to balance growth in industrial production with weaker retail activity.

Key Categories Witness Decline

Several retail categories experienced sharp slowdowns in November. Sales of sports and entertainment products rose by only 3.5%, a significant drop from October’s 26.7% growth. Similarly, daily necessities grew by a modest 1.3%, compared to 8.5% previously. The household appliances and audio-visual equipment sector also saw growth decelerate to 22.2% from a remarkable 39.2% in October. On the other hand, declines continued for beverages (-4.3%), tobacco and alcohol (-3.1%), and gold and silver jewelry (-5.9%).

Apparel and Cosmetics Take a Hit

The apparel and cosmetics segments were among the hardest hit in November. Sales of clothing, shoes, hats, and textiles fell by 4.5% after recording an 8% increase in October. Cosmetics, a key driver of retail growth earlier in the year, saw a dramatic decline of 26.4%, reversing from a 40.1% surge in October. Similarly, Chinese and Western medicine sales dropped by 2.7%, compared to a 1.4% rise in the previous month, highlighting weaker demand across discretionary spending categories.

Year-to-Date Growth Holds Steady

Despite November’s sluggish performance, retail sales grew by 3.5% during the first eleven months of 2024, supported by stronger growth earlier in the year. However, on a monthly basis, sales contracted by 0.16% in November, indicating a near-term pullback in consumer activity. As China approaches the end of 2024, the focus will likely shift to stimulating consumer demand through targeted policies and addressing factors impacting key retail sectors.