Motor vehicles and the 6.18 shopping festival spurred a healthy increase in Mainland China retail sales in June.
Official government figures show a 9.8 per cent year-on-year increase for the month, higher than the 8.6 per cent of May and 8.4 per cent for the first half year.
Summer Wang, an equity analyst at Jefferies, said auto sales surged due to deep discounts on older models ahead of stricter State VI emission standards which took effect on July 1, and the 6.18 Shopping Festival which drove cosmetics, jewellery and appliance sales. Small-ticket items like food and daily goods also outperformed.
Urban Mainland China retail sales grew 9.8 per cent, ahead of the 8.3 per cent year-to-date figure, reaching RMB2.896 trillion (US$421 billion) in June, while rural retail sales grew by 10.1 per cent, ahead of 9.1 per cent for the half year.
Cosmetics sales grew by 22.5 per cent, cars by 17.2 per cent and daily goods by 12.3 per cent.
“We believe the beauty category is continuing to benefit from functional premiumisation, as consumers – both women and metrosexual men – are willing to pay a premium for a tangible improvement in appearance,” said Wang.
“Most discretionary categories saw improvement as well, including gold and jewellery (up 7.8 per cent), home appliances (up 7.7 per cent) and apparel and footwear (up 5.2 per cent).”
By channel, online retail goods sales kept momentum with a robust 21.6 per cent year-on-year growth during the first half of the year, accounting for 19.6 per cent of Mainland China retail sales.