In November of this year, the total retail sales of consumer goods (social retail) in the first-tier cities of Beijing and Shanghai in China both saw a decrease from the previous year, with growth rates dropping by 14.1% and 13.5% respectively.
According to a report from Caixin on December 22, data released by the statistical bureaus of the Chinese Communist Party in Beijing and Shanghai showed that the growth rates of social retail in Beijing and Shanghai in November dropped by 14.8 and 24.4 percentage points respectively, reaching 14.1% and 13.5%. Looking at the data from January to November of this year, the cumulative decline in social retail in Beijing and Shanghai expanded to 2.8% and 3.1% respectively, significantly below the national average.
In October, the social retail sales in Beijing and Shanghai grew by 0.7% and 10.9% year-on-year respectively, but saw a significant decline in November.
Specifically, in Beijing, in November, the decline in revenue from dining reached 4.2%; while commodity retail, including online sales, shifted from a 1.4% growth to a 14.9% decrease; the retail sales of automobiles, cultural and office supplies showed a downward trend.
In Shanghai, categorized by consumption purposes, the total retail sales of “daily necessities” and “clothing” in November saw a year-on-year decrease of 20.3% and 7.4% respectively, with a decline in growth rates of over 30 and 20 percentage points. This performance was similar to that of Beijing, where the growth rates of “daily necessities” and “clothing” commodities also turned negative, with decreases of 17.0% and 2.1% respectively.
Caixin reported that since 2024, China’s consumer performance represented by the total retail sales of consumer goods has remained weak, with even weaker growth rates in the first-tier cities of Beijing and Shanghai, showing a trend of year-on-year declines in multiple months. As of November, the year-on-year growth rates for social retail in Shanghai and Beijing have experienced negative growth for nine and seven months respectively. In November, the year-on-year decline in both cities even expanded to over 10%. This phenomenon may be attributed to both common factors such as a decrease in household income and early promotions like the “Double Eleven” sales event, as well as the influence of special factors like the movement of enterprises and populations in Beijing and Shanghai.
A market analyst stated that the shift to negative growth in social retail in Beijing and Shanghai is partly due to the withdrawal of some foreign enterprises from China in recent years, leading to a weakening of related consumer spending as some high net worth individuals who used to reside in these two cities have left. While this impact may have been gradual, it has become more pronounced in 2024.
Nomura’s Chief Economist for China, Lu Ting, analyzed that under normal circumstances, the consumption capacity of young people is higher than that of elderly individuals, but during an economic downturn, the reduction in job opportunities in major cities may lead to a reshuffling of the population, with young people leaving Beijing, Shanghai, and Guangzhou to seek opportunities in other cities. Furthermore, as the economy goes downhill, high-end dining experiences are also facing significant challenges. These factors are among the reasons contributing to the weakened consumption in Beijing and Shanghai.
Moreover, in Tianjin, another direct-administered municipality in China adjacent to Beijing, the year-on-year cumulative growth rate of social retail has remained negative since May, with the decline expanding by 0.2 percentage points to 2.9% from January to November. The aforementioned analysts mentioned that the limited data disclosed by Tianjin might be related to the slowdown in industries such as manufacturing, finance, and real estate.
A netizen from Shanghai, using the online moniker “Stubborn Rock Ha,” expressed that the current economic woes have already manifested in daily life: “Going out to watch a movie on the weekend, and there are only single-digit seats filled.”
A netizen from Hebei, named “Prefer Simple Things,” believed that “the data for December will look even worse…”