What: China's retail sales grew 3% year-on-year to 4.38 trillion yuan in November, with rural areas outperforming urban regions and household appliances leading category growth at 22.2%.

Why it is important: The success of trade-in programs in driving durable goods sales while luxury categories decline signals a fundamental shift in Chinese consumer priorities, challenging traditional assumptions about the market's development.

China's retail sector demonstrated continued growth in November, with consumer goods sales reaching 4.38 trillion yuan, marking a 3% year-on-year increase. The performance revealed interesting geographical variations, with rural regions growing at 3.2% to reach 616.7 billion yuan, slightly outpacing urban areas which grew 2.9% to 3.76 trillion yuan. The government's trade-in program has significantly influenced consumer behaviour, particularly in durable goods categories. Household appliances and audiovisual equipment led the growth at 22.2%, followed by furniture at 10.5% and automobiles at 6.6%. In contrast, traditional luxury categories showed decline, with cosmetics down 1.3% and gold, silver, and jewelry falling 3.3%. The first eleven months of the year saw total retail sales reach 44.3 trillion yuan, up 3.5%, with online retail sales showing particular strength at 14 trillion yuan, representing a 7.4% increase. These figures reflect a broader transformation in Chinese consumer preferences and spending patterns.

IADS Notes: China's November 2024 retail sales growth of 3% aligns with broader trends observed throughout the year. As noted in October 2024, retail sales showed a more robust 4.8% increase, boosted by government initiatives encouraging consumers to replace old goods , a strategy that continues to drive significant growth in categories like household appliances (22.2%) and furniture (10.5%). The regional dynamics highlighted in November 2024 reveal persistent variations across China, with major cities like Shanghai and Shenzhen demonstrating stronger performance . This urban-rural divide is reflected in the latest figures, showing rural areas slightly outperforming urban regions (3.2% vs 2.9%), suggesting that consumption patterns are evolving differently across geographical segments, influenced by both government stimulus programs and local economic conditions.

China's retail sales up 3 pct in November