China’s retail sales of consumer goods, a critical barometer of the nation’s consumption strength, achieved a robust 3.5% year-on-year growth in 2024, reaching an impressive ¥48.79 trillion ($6.79 trillion USD), according to official data from the National Bureau of Statistics (NBS).
This growth reflects China’s resilience in consumer spending and its ability to adapt to shifting economic landscapes. The retail sales uptick contributed significantly to the country’s 5% GDP growth in 2024, with the fourth quarter alone delivering a strong 5.4% year-on-year expansion.
December Surge Signals Recovery Momentum
December 2024 witnessed retail sales climbing 3.7% year-on-year, underscoring a consistent recovery in consumer activity. The expansion was bolstered by government-led initiatives like the trade-in program for consumer goods, which has effectively fueled consumption and supported economic revitalization, particularly in the year’s latter half.
Urban vs. Rural Performance
The year’s data revealed balanced growth across urban and rural regions:
- Urban retail sales: Up 3.4% year-on-year, reflecting steady demand in metropolitan areas.
- Rural retail sales: Grew by a more substantial 4.3%, showcasing the rising purchasing power of rural consumers.
Online Retail Sales See Significant Growth
E-commerce remained a cornerstone of China’s retail landscape in 2024, with online retail sales surging 7.2% year-on-year to ¥15.52 trillion. Notably, sales of physical goods through online platforms grew 6.5%, contributing 26.8% of total retail sales. This highlights the increasing integration of digital channels in everyday consumer habits.
Consumption’s Role in Economic Growth
According to Kang Yi, head of the NBS, final consumption expenditure contributed 2.2 percentage points to China’s economic growth in 2024. This indicates that domestic consumption remains a vital driver of the nation’s recovery and future growth.
“The expanded trade-in program for consumer goods has yielded positive effects, particularly in the fourth quarter, driving the sustained recovery of the economy,” Kang noted.
Looking Ahead: Key Drivers for Growth
China’s retail sector is well-positioned for sustained expansion, supported by a combination of favorable factors:
- Pro-Consumption Policies: The government plans to strengthen measures that encourage consumer spending, particularly among middle- and low-income groups.
- Employment Stability: A steady job market will boost disposable incomes, fueling further consumption.
- Innovation in Consumption Scenarios: Emerging business models and digital transformation will create new opportunities for spending.
- Service Sector Expansion: Growth in service consumption will play a vital role in diversifying economic activity.
Policy Focus Areas for 2025
To further boost consumption, China will:
- Promote income growth across all demographics.
- Reduce financial burdens for middle- and low-income households.
- Foster innovative consumption scenarios in sectors like e-commerce, tourism, and smart living solutions.
- Expand service-oriented consumption in areas such as healthcare and education.
Outlook for 2025 and Beyond
China’s retail market in 2024 demonstrated robust growth and resilience, driven by government policies, a thriving e-commerce sector, and increased rural purchasing power. With a focus on innovation, inclusivity, and sustainability, the nation is poised to sustain and accelerate consumption growth in 2025 and beyond.
Businesses targeting the Chinese market should closely watch these trends to tap into the expanding consumer base and capitalize on emerging opportunities.
