What: JD.com sees worrying signs that shoppers are reluctant to reopen their wallets even as major cities emerge from bruising Covid lockdowns, suggesting consumer spending may take months to recover.

Why it is important: The months-long closure of cities like Shanghai has caused a fundamental shift in how people spend their money, with a pullback in discretionary spending continuing even after the lockdown of the financial hub ended a few weeks ago.

The slow recovery now means it will be even harder for China to achieve the full-year economic growth target of around 5.5%, especially if there are further large-scale Covid outbreaks.

Even with policymakers promising more support for private investment and the platform economy to mitigate the Covid shocks, economists have continued to cut their forecasts for growth this quarter and this year. Online retail sales will likely only grow in the low single digits this year after expanding 12.5% last year.

Logistical hurdles have also persisted as various places across China implement Covid Zero policies, including testing and travel restrictions, with varying degrees of aggressiveness. The State Council gave warnings this past weekend to provinces including Hebei, Anhui, and Shaanxi for excessive enforcement of policies that have blocked domestic supply chains.

However, spending from consumers in smaller and less developed cities is picking up, particularly those less affected by Covid shutdowns. Spending growth in smaller tier-five and tier-six cities has greatly outpaced that of tier one and tier two cities like Shanghai and Shenzhen.

JD.com warns consumer recovery is months away