China_Hong Kong Consumer_ China Retail Sales – Sep 2024_ Slight Improvement

Summary of Key Points from the Conference Call Industry Overview - Industry: China Retail Sector - Date: October 18, 2024 - Source: Morgan Stanley Research Core Insights 1. Retail Sales Growth: - China's retail sales growth in September 2024 improved to 3.2% YoY, up from 2.1% in August, exceeding expectations [1] - Recovery pace compared to 2019 levels increased to 119% from 114% in the previous months [1] 2. Category Performance: - Electronics & Appliances: Recorded the highest YoY growth at 21%, attributed to trade-in subsidies [2] - Home Furnishing: Showed a slight positive growth of 0.4% YoY in September [2] - Food & Beverage (F&B): Experienced slight growth deceleration, with Alcohol & Tobacco and Soft Drinks returning to negative growth YoY [2] - Restaurant & Dining: Growth weakened slightly as the summer holiday ended, with a YoY growth of 3.1% [3] 3. Comparison to 2019 Levels: - Overall retail sales momentum improved to 119% of 2019 levels, with notable recoveries in categories like Alcohol & Tobacco (158%) and Electronics & Appliances (115%) [3] - Cosmetics recovery remained volatile, declining to 129% in September after a peak of 138% in August [3] 4. Detailed Category Analysis: - Apparel, Shoes, and Textile: Showed a decline of -0.4% YoY [3] - Gold & Jewelry: Experienced a decline of -7.8% YoY despite rising gold prices [3] - Cosmetics: Declined by -4.5% YoY [3] - Food, Grain, and Oil: Maintained steady growth [2] 5. Online Retail Sales: - Online retail sales growth was reported at 6.4% YoY, indicating a recovery trend [5] Additional Important Insights - Consumer Sentiment: The improvement in retail sales growth suggests a potential recovery in consumer sentiment, which may continue into October, supported by National Day holiday data [1] - Economic Indicators: The data reflects broader economic conditions in China, with implications for various sectors including consumer goods and services [1][2] - Analyst Insights: Analysts from Morgan Stanley express a cautious but optimistic view on the retail sector's recovery trajectory, highlighting the importance of consumer spending patterns [4] This summary encapsulates the key findings and insights from the conference call regarding the current state and outlook of the retail sector in China, providing a comprehensive overview for stakeholders and investors.