44% of Chinese Retailers Report Increased Sales Since COVID-19

A Crisis and an Opportunity... Confirming Potential for Structural Reform and Ecosystem Change

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Minwoo Lee] A survey has found that half of Chinese retailers experienced increased sales after the outbreak of the novel coronavirus infection (COVID-19). Despite challenges such as inventory shortages and logistics/delivery restrictions, strengthening online channels is seen as both a challenge and an opportunity.

On the 7th, KB Securities cited the results of a survey by global market research firm Nielsen to analyze this trend. According to Nielsen's report titled "Analysis of Changes and Opportunities in Chinese Retail Industry Amid COVID-19 Impact," which surveyed key Chinese retail companies and over 10,000 traditional channel food and general merchandise stores, 44% of the surveyed companies reported increased sales after the Lunar New Year holiday. This figure exceeds the 42% of companies that reported decreased sales. Notably, 28% of the companies with increased sales indicated a significant growth rate.

By sector, large stores and market-type companies reported particularly favorable sales growth. Leading retail companies showed relatively stable sales flows through large supply chains, while small stores, especially convenience stores, experienced a slowdown in sales growth. Specialty stores such as beauty & care, cosmetics, and baby products were relatively more impacted. However, some baby product companies showed favorable sales growth, which is attributed to effective online sales and social network service (SNS) marketing.

According to China's Ministry of Commerce, as of late last month, the average daily sales of 1,000 key surveyed retail companies increased by 5.6% compared to mid-last month. Although there was a downturn starting in late January, sales rebounded again in late last month. In particular, automobile consumption demand surged by 14.8%, while telecommunications equipment and home appliances increased by 11.7% and 11.1%, respectively.

Therefore, while the industrial shock caused by COVID-19 is inevitable, it is expected to become an opportunity for a strong consumption rebound. Forty-six percent of retailers responded that they are optimistic about their business conditions over the next six months, viewing COVID-19 as both a challenge and an opportunity. Conversely, 36% anticipated relatively significant downward pressure.

Researcher Suhyun Park of KB Securities stated, "Although there are concerns about the impact of COVID-19 on the Chinese retail industry, companies with sufficient response capabilities and rapid adaptation will see this as an opportunity. Retailers that took proactive measures such as organic cooperation with companies within the industry chain, adjusting business hours, and activating online and SNS marketing have actually enhanced customer trust and satisfaction." He added, "With the strengthening of online sales channels by retailers, changes in China's consumer business models and value chain ecosystems are expected to accelerate further." In fact, 67% of surveyed companies said they plan to strengthen online channels over the next year.

This content was produced with the assistance of AI translation services.