What: Inside Retail Asia review the official statistics provided by China and suggest taking them with caution.

Why it is important: The impact of China on the global retail health is simply too big to be ignored or based on misleading figures.

Reporting on retail sales and economic data from developing Asian nations, particularly China, often exhibits an uncritical acceptance of official figures, despite their potential inaccuracies. The National Statistics Office (NSO) of China, for instance, released figures showing a 4.7% increase in retail sales for the first quarter, with consumer goods up by 3.1% and services by 10.0%. Online sales are outpacing offline sales, contributing to 23% of total retail sales, corroborated by data from retailers such as Walmart.

However, skepticism towards these numbers is warranted due to historical discrepancies and potential manipulation for political purposes. China's economic statistics, including retail data, have been suspected of being inflated by local statisticians. The integrity of these figures is critical as retail trade influences consumer spending, a major component of GDP, accounting for up to 45% by some estimates.

Further complicating the accuracy of retail statistics is the challenge of measuring service-oriented expenditures, which now constitute about 40% of household spending in China. The informal sector's significant role in service transactions makes accurate data collection difficult, a common issue across developing Asia. From a retail perspective, Walmart’s performance in China, with a reported 11.3% year-on-year sales increase and significant e-commerce penetration, offers a more tangible metric of consumer behavior. Additionally, food and beverage firms dominate mall leasing activity, indicating robust demand in these sectors.

How is China really doing when it comes to retail?