Even though China has seen negative growth for months, their e-commerce and retail sales are starting to rise above 0% growth YoY. China is already #1 in e-commerce (in large part due to companies like Alibaba, Pinduoduo, and JD.com), but analysts now predict that China will unseat the US as the largest retail market in 2020.
Despite a 4% decline this year in retail sales, China’s retail market is expected to rise to $5.072 trillion in sales, while the US will decline and end the year with $4.894 trillion. Chinese consumer spending on retail online is also expected to go up 16% to around $2 trillion.
One big reason is that most consumers postponed celebrating the Chinese New Year. Months later, consumers are excited to splurge in-store. Even luxury items have been selling well since China eased restrictions.
In addition to unemployment impacting the US deeper than it does China, retail lockdown only lasted four weeks in some parts of the country, from January 19th to February 16th. It’s been 14 weeks since US retailers began to shutter their doors, including businesses that sell nonessential items. Although individual US states are in various phases of reopening for business, China sits in a much different place than the US in terms of economic recovery and consumer spending.