China’s offline retail sales sector inching back to recovery

China’s offline retail sales sector inching back to recovery

Re-opening of businesses a positive harbinger for retail industry undergoing challenging times

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While online consumption surged during the outbreak in Chinaretail offline channels are starting to rebound in full momentum. 

Global measurement and data analytics company Nielsen's tracking of offline retail channels from March to August this year found that most of the offline existing stores had already returned to normal operation.  

Traditional channels, such as cosmetics stores which were hardest hit by the pandemic, have resumed operation by August. The in-business rate of existing stores in Modern Trade (MT) increased from 76% in March to 86% in August, while that of Traditional Trade (TT) increased from 64% to 80% 

The COVID-19 situation inChinathe past months has been largely under control, as enterprises resumed full business operation while life returns to normal. The consumption market has also shown a steady recovery momentum. 

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According to China’s National Bureau of Statistics, total retail sales of social consumer goods in the third quarter grew 0.9% year-on-year, and this is the first positive quarterly growth recorded this year 

Heading into the third quarter, Nielsen said online sales is now growing in a more rational manner while offline sales rebounded strongly. Online channels reached a high of 34% in the second quarter, boosted by the epidemic, as well as the e-commerce shopping festival. However by August, the growth of online sales is down to 27%. Meanwhile, offline channels started to recover in full momentum, and in August was 73%, compared to 66% in the second quarter. 

Leverage power of data, urges Nielsen 

Tina Ding, Chief Commercial Officer ofNielsen China, said: "As seen from China's latest economic data, as well as Nielsen's FMCG data, the overall retail sector is on a path to recovery. During the epidemic, offline channels were severely affected while digital platforms such as online office, online shopping, online education and online entertainment, grew strongly. However, we are now starting to see positive signs of recovery in the offline channels operated by FMCGs." 

Added Justin Sargent, President ofNielsen China, "As we operate in a new normal, retailers and brand owners should focus on omnichannel development including emerging channels such as O2O and pursue innovations that address emerging consumer needs and shopping scenarios. At the same time, they should also leverage the power of data to gain real and valuable insights in order to refine their development strategies in a timely manner to achieve higher ROI resource allocation." 

The global retail industry is facing a challenging time, as COVID-19 continues to spread across the world, with an increasing number of confirmed cases in many countries and regions. As the pandemic continues to unfold, the international consumption market is showing a similar trend as observed inChinaearlier this year: online channels are demonstrating strong growth while retailers are accelerating the adoption of digitalisation. 

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