China Retails Numbers up 13.8%. Don’t Get Excited

Sunday, February 1, 2009 8:14
Posted in category Going to Market
Comments Off on China Retails Numbers up 13.8%. Don’t Get Excited

China retailThe Xinhua news release Chinese festive spending remains robust, retail sales up 13.8% would seem to provide a beacon of hope for those looking for some light, but not so fast.

Initially alerted to the article on twitter (h/t @niubi – see recent Danwei interview of Bill Bishop here), the following chat between myself and Niubi occurred:

@niubi: Chinese festive spending remains robust, retail sales up 13.8% wasn’t 1/2 country paralyzed in ice last year?
“he robust spending was helped by sales promotions in major cities as well as government subsidies for farmers to purchase home appliances.”

@allroads: 17 provinces without power is the baseline for this year’s retail success I guess

niubi: 13% doesn’t seem so gr8 an increase does it?

allroads: hmm… an interesting/ relevant comparison would be to view growth of provinces under power last year vs this

For those who were not in China, or do not remember the havoc that was the 2008 snow storm (you can see my posts here), and it is important to consider this as literally hundreds of millions of people who were out spending this year were either stuck at the train station, living on rations, or were otherwise impeded from accessing the market.

If there was one statistics that impressed me tough:

China’s three major telecom operators estimated that a record 18 billion text messages were sent from Jan. 25 to 31.

But from the retail perspective, we are not an accurate comparison, and were the full information is released  I am sure that a few province by province comparison will show that there will be huge gains in the storm affected areas of 2008.. and losses in the unaffected provinces.

Overall – Not as bad as Christmas in the US, but certainly not a statistic we should be celebrating – and we can only hope that the numbers are good enough to avoid any major retailer bankruptcies.  Something US firms were unable to avoid.

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