The much-touted biggest retail market of China seems to be wearing off its sheen, as reflected in the latest Beijing's retail figures in the first half of the year serve as the latest evidence that the Chinese capital has witnessed a steeper-than-expected economic slowdown. Meanwhile, they also reflect shoppers' migration from brick-and-mortar shops to online retailers, a significant trend that will change the landscape of the retail industry.
According to the Beijing Municipal Commission of Commerce, a total of 535 major retailers saw their sales grow by 11.7 percent to 183.6 billion Yuan (US$28.8 billion) from January to June. The growth rate of 11.7 percent is nothing to be proud of, given the fact that China's retail sales braved the financial crisis in 2008-09 to register a growth of about 15 percent. To be sure, any growth rate in retail sales that is lower than 15 percent can be called sluggish in China. In that sense, it is safe to conclude that Beijing's consumer demand is very weak. Residents of the Chinese capital are not willing to dig deeper into their pockets amid the economic slowdown. A few other figures also buttress this conclusion.
High-end shopping malls did not fare well. Shops at Shin Kong Place, which is famous for its collection of international brands, saw their sales slip by 14.9 percent in the first half of the year. The growth was down by 27.9 percentage points compared with a year ago. Scitech Plaza, another premium shopping mall in central Beijing, even witnessed a sales decline of 6.2 percent from a year earlier. A year ago, the shopping mall, which is about 10 minutes drive from Tiananmen Square, notched up 3.4 percent growth in sales. Although high-end retailers suffered setbacks, discount shops and supermarkets were doing well.
Beijing Scitech Premium Outlet Mall and Sunrise Duty Free, two well-known discount shops that house many international brand names, both saw their sales jump more than 30 percent in the first six months of the year. Most operators of supermarkets and convenience stores maintained double-digit growth. Those data showed that Beijing residents were not reluctant to spend, but they were spending more cautiously and wisely. That is the typical consumption pattern when the economy is not doing well. People would continue to buy daily necessities and discounted products instead of luxury and high-end brands.