China’s retail sales soared by 4.8% year-over-year in October 2024, marking the fastest growth since February and significantly outpacing the 3.2% increase in September. This impressive uptick exceeded market expectations of 3.8% and was fueled by a perfect storm of factors, including a week-long national holiday, a vibrant shopping festival, and government measures introduced in late September to stimulate demand. The data signals a strong rebound in consumer spending, a critical component of China’s economic recovery.

Boost from Key Sectors and Festivals

October’s growth was particularly driven by strong performances in sectors closely tied to consumer spending. Personal care sales surged by 8.5%, a significant leap from September’s 3%. Meanwhile, sports and entertainment sales skyrocketed by 26.7%, up from 6.2% the previous month, highlighting increased leisure and recreational spending. Household appliances also saw a dramatic jump, growing by 39.2%, nearly doubling September’s 20.5%. These gains were bolstered by national holidays and shopping events that drove consumers to splurge on big-ticket items.

Fashion and Cosmetics Lead the Charge

The fashion and cosmetics industries experienced a remarkable recovery in October. Sales of clothing, shoes, and hats rebounded sharply, growing by 8.0% compared to a 0.4% contraction in September. Similarly, cosmetics sales rose by an astonishing 40.1%, a stark contrast to the 4.5% decline the previous month. This surge reflects not only the impact of promotional events but also a shift in consumer sentiment, with shoppers more willing to spend on discretionary items. Grain, oil, and food sales also continued to grow steadily, albeit at a slower rate of 10.1%.

Jewelry and Building Materials Show Recovery Signs

Despite the positive momentum, some sectors continued to face challenges. Jewelry sales, while still in decline, saw a smaller drop of 2.7% compared to September’s 7.8% contraction. Similarly, building materials sales decreased at a slower pace, falling by 5.8% versus 6.6% the prior month. These figures indicate a gradual stabilization in areas previously hit hard by weaker consumer confidence and subdued demand.

Overall, China’s retail sales growth of 3.5% for the first ten months of 2024 paints a cautiously optimistic picture of the nation’s economic health. With continued government support and festive spending, retail remains a key driver of recovery. Stay tuned for deeper insights into China’s economic trends in our upcoming posts.