China’s online retail market expanded in the first quarter led by rebounds in sectors such as online travel as well as robust cross-border e-commerce trade, the country’s commerce ministry said on Friday.
Online retail sales for the period rose 12.4 per cent year on year to 3.3 trillion yuan (US$456 billion), driven in large part by service-based consumption, according to data published on the official website of China’s Ministry of Commerce.
Online travel led the surge, nearly doubling year-on-year growth in the quarter, while the online food category – including food delivery and restaurant reservation services – grew 27.8 per cent over the same period, as pent-up demand for travel and dining were unleashed as life returned to normal after three years of Covid.
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Sales of smart wearable gadgets were another highlight, jumping 30.9 per cent year on year in the quarter, while online retail sales of agricultural products grew 28.2 per cent.
The commerce ministry also said its initiative to stimulate sales of consumer goods such as home appliances and cars through a trade-in programme coordinated with the country’s major e-commerce platforms has seen preliminary results, as online purchases of trade-in merchandise more than doubled.
As part of its efforts to drive growth in an economy where the post-Covid recovery has been uneven, the Chinese government has tried to boost domestic demand and consumption by encouraging consumers to trade-in and upgrade their existing home appliances and vehicles.
China’s State Council announced a goal of raising the recycling volume of old home appliances by 30 per cent by 2027, promising fiscal and financial policy aids that range from allocating government-backed funds to subsidise new purchases to encouraging financial institutions to lower down payments for car loans.
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China had a total of 336 million cars at the end of 2023, according to data from the Public Security Ministry.
“The replacement of automobiles and home appliances can create a trillion-yuan market space,” Zheng Zhajie, head of the National Development and Reform Commission, said at a press conference during a session of the 14th National People’s Congress.
Cross-border e-commerce expanded 9.6 per cent in the first quarter, reaching 577.6 billion yuan, led by booming trade with partner nations of China’s Digital Silk Road initiative. Beijing is increasingly looking to exports to boost the economy, as post-Covid growth remains shaky.
The National Bureau of Statistics on Tuesday reported better-than-expected economic growth of 5.3 per cent for the first quarter, partially fuelled by “increased overseas demand driving export growth in the industrial sector”, said Ding Shuang, chief Greater China economist at Standard Chartered.
The World Internet Conference (WIC) – a Beijing-based agency promoting China’s vision for digital development – held a forum this week in Xian, the capital of western Shaanxi province, with participants from member nations of China’s Belt and Road Initiative gathering to discuss a range of topics, with a focus on fostering cross-border trade.
Liang Hao, WIC executive deputy secretary general, credited cross-border e-commerce for bolstering China’s economy in a speech at the forum, calling it “the new engine of global economic growth with huge potential”.