2015-2016 outlook for the retail and consumer products sector in Asia: a PWC report

[Shotgunner51]

I agree that Chinese should save, but should spend some . I think if people knew that spending more in Chinese economy helps the economy grow bigger and more prosperous, people will spend.

For people to spend, the government should provide some social safety net for the citizens. Do you know how China's bankruptcy law work for individuals?

Well said bro!

It's almost a cultural thing for East Asian to save more than spend, and this is particularly serious in mainland China. According to latest data from World Bank, the Gross Domestic Savings Rate of China ranks #8 in the world at 50.4%, note that #1~#7 are all small or even tiny wealthy economies like Macao, Singapore, Brunei, Kuwait & Luxembourg! The sheer size is enormous, Gross Domestic Savings at US$ 4.785 trillion per annum, ranks #1 in the world, bigger than the next 3 countries combined!

Such a unusual savings tradition is not good for domestic consumption, hence lowering Gross Domestic Product (GDP).

Why Chinese save so much money? Can it change into consumption?

That's a big agenda. Other than cultural reasons, you have mentioned social welfare, which should include say public housing, retirement plan, medical, education, etc. Other reasons might include poor design of tax system, inefficiency of finance sector, outdated legal system (as you mentioned say bankruptcy law, IP protection law), unnecessary administrative limits on startups or business licensing.

 

[AndrewJin]

i like shopping malls personally. I like smiling and looking at the nice looking girls

 

[AndrewJin]

Well said bro!

It's almost a cultural thing for East Asian to save more than spend, and this is particularly serious in mainland China. According to latest data from World Bank, the Gross Domestic Savings Rate of China ranks #8 in the world at 50.4%, note that #1~#7 are all small or even tiny wealthy economies like Macao, Singapore, Brunei, Kuwait & Luxembourg! The sheer size is enormous, Gross Domestic Savings at US$ 4.785 trillion per annum, ranks #1 in the world, bigger than the next 3 countries combined!

Such a unusual savings tradition is not good for domestic consumption, hence lowering Gross Domestic Product (GDP).

Why Chinese save so much money? Can it change into consumption?

That's a big agenda. Other than cultural reasons, you have mentioned social welfare, which should include say public housing, retirement plan, medical, education, etc. Other reasons might include poor design of tax system, inefficiency of finance sector, outdated legal system (as you mentioned say bankruptcy law, IP protection law), unnecessary administrative limits on startups or business licensing.

BUY BUY BUY!
China’s retail sales of consumer goods rise by 10.5 percent in July
In July this year, China’s total retail sales of consumer goods amounted to RMB 2.4339 trillion ($0.38 trillion), up 10.5 percent year on year.

I'm waiting for the number of August.

 

[AndrewJin]

China’s value-added industrial output expanded 6.1 per cent year on year in August, up from 6 per cent in July, the National Bureau of Statistics said on Sunday.

China’s retail sales grew 10.8 per cent year on year to 2.49 trillion yuan ($390.89 billion) in August, higher than forecasts.

Beijing has set its official growth target for 2015 at 7 per cent.

Fixed asset investment, a measure of government spending on infrastructure, expanded 10.9 per cent on-year in the January-August period.

China’s economy expanded 7.3 per cent in 2014.

After 30 years of unprecedented economic expansion during which nearly 800 million people were raised out of poverty, China’s growth model is beginning to show signs of stress.


In one month, Chinese consume worth more than half of India's annual figure. Any comment on your consumption-driven model and "we have the biggest middle class in the world" type of bragging, Rovil? @Bussard Ramjet

 

[AndrewJin]

China November Retail Sales: E-Commerce Leading The Way
Dec. 20, 2015 9:12 AM ET
Summary
China November retail sales were up 11.2%, beating the consensus of 11.1%.

Gold and jewelry showed a minor recovery while e-commerce remains strong.

Top picks: BABA and NKE.

China's November retail sales were partially driven by the strong Singles Day sales (see - Alibaba: Still The Champ), but the transition from an export/manufacturing-driven economy to a consumption-based economy remains intact. Given that many US-listed companies have exposure to China's retail sales, I find this monthly update provides a unique read-through to Alibaba (NYSE:BABA), JD.com (NASDAQ:JD), as well as US brands such as Tiffany (NYSE:TIF) and Coach (NYSE:COH).

Overall, retail sales was up 11.2%, beating consensus growth expectations of 11.1%. Gold/jewelry sales were up 4.9%, a slight acceleration from the prior month's +4% and this provides a good read-though to TIF that has been seeing tough comps in Hong Kong due to weak tourist volume. It is difficult to gauge how much of an impact Singles Day may have on this category, but given my personal observation on the amount of discounts, I suspect that December gold/jewelry sales could see a little pullback. That said, investors should not expect much meaningful recovery in the near term.

Clothing and apparel sales saw a 9.9% increase for the month, consistent with the 9.8% from the prior months. Interestingly, most of the merchants blame the warmer than usual weather for the weaker than expected sales. I note that the El Nino impact this year could push the cold weather back to early 2016 with parts of January and February being warmer than last year.


Retail sales in China increased by 11.2 percent in November of 2015 over the same month in the previous year, as compared to a 11.0 percent rise in the previous month and slightly above market consensus. It is the highest rise since December 2014, as sales grew for most of categories except oil and oil products. Sales of office supplies recorded the highest gain by 22.2 percent (from +15.5 percent in October), followed by home appliances (+18 percent from +7.1 percent), building materials (+16.9 percent from +19.7 percent), furniture (+14.5 percent from +12.4 percent), personal care (+14.0 percent), telecommunication/communication equipment (+12.2 percent from +36.6 percent), cosmetics (+9.1 percent from +10.6 percent), automobiles (+9.0 percent from +7.1 percent) and jewelry (+4.9 percent from +4.0 percent). In contrast, sales fell further for oil and oil product (-7.9 percent from -7.1 percent). Retail Sales YoY in China averaged 13.63 percent from 2010 until 2015, reaching an all time high of 19.90 percent in January of 2011 and a record low of 10 percent in April of 2015. Retail Sales YoY in China is reported by the National Bureau of Statistics of China.

China ranked first in the world for online retail trade
The period from January to October, witnessed China clinching the world no 1 spot for online retail trade, according to the "Internet Development in China over the Last Two Decades" report, which was published on Tuesday.

The report was published prior to the World Internet Conference to be held in Wuzhen, China, from 16-18 December, according to the people.cn website.

The total number of netizens in China reached an estimated figure of 668 million — the world's largest online population. "The four Chinese companies which made it to the list are Alibaba, Tencent, JD.Com and Baidu," said head of Chinese Academy of Cyberspace, Yang Shuzhen.

China's online retail sales skyrocketed at 2.8 trillion yuan in 2014, as reported by the en.people website. But the figures have more than doubled in 2015, with total transaction reaching 2.95 trillion yuan.

In the month of November, an online shopping sale was conducted by Alibaba which recorded a sale of 91.2 billion yuan, according to the report.

Internet has been the biggest boon to the Chinese economy, contributing 7% to the GDP.

According to statistics, the number of people who shop online now is 307 million.

China's cross-border retail transactions reached 449.2 billion yuan in 2014 alone, people.cn reported. China has 321 Internet-related companies (listed) whose market value was estimated at 7.85 trillion yuan—equivalent to 25.6% overall stock market value, according to the website.

Since the last year, online sales in China have increased 44%.

Mobile internet is also rapidly developing in China. According to statistics, there were 594 million phone users who accounted for 88.9% of all netizens, as reported by people.cn.

The development of mobile internet services in China has also brought a boost to travel industry, as well as car rental and medical services.