September 23, 2020 at 09:16AM

Chinese fervor for online shopping waned in August, a sign that the world’s second-largest economy still faces many challenges as it tries to boost consumption at home. The Chinese government is trying to develop domestic demand as the primary driver of the country’s growth, rather than relying on exports. The coronavirus pandemic this year has accelerated the growth of online shopping, with its share of overall retail sales rising from about one fifth last year to one quarter this summer. But uncertainty about future income and economic growth are proving to be an overhang.

The EIU predicts the job market this year will be the worst since the 1960s, and that overall retail sales will contract by 4.7%. For January to August, retail sales were down 8.6% from a year ago to 23.8 trillion yuan ($3.5 trillion), according to official data. Retails sales in China managed to eke out a small 0.5% year-on-year increase in August, their first positive print for 2020, according to China’s National Bureau of Statistics last week. The gains came largely from autos, which posted a sales increase of 11.8%. Excluding the category, retail sales of consumer goods contracted 0.6% in August, figures accessed through the Wind Information database showed. Online sales of consumer goods and services grew 13.3% in August, slower than the 18.8% growth in July and down from 19% in June, CNBC analysis of official data showed.

More people are also using popular messaging tool WeChat for shopping through in-app mini programs. The Tencent-owned app disclosed this month its mini program feature now has more than 400 million daily active users. The company said that gross merchandise volume (GMV) of physical products purchased through mini programs more than doubled for the January to August period from a year ago. GMV is a metric most commonly used in e-commerce that measures the total dollar value of goods sold over a certain period of time. Transaction volumes topped 800 billion yuan for all of 2019, according to Tencent’s annual report.

China’s online shopping growth stalls — a sign that economic recovery is slow, CNBC, Sep 23

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From: The FxPro News Team
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