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Retail sales in China rose 0.4 per cent in August compared with the same month a year earlier, according to the National Bureau of Statistics, a figure so close to zero that it is difficult to tell whether the market is growing at all. Excluding automobiles, sales were up 2.5 per cent.
The weakness has prompted Chinese retailers to look beyond their home market for growth, but a new report on occupier strategy from property consultancy Savills finds they are opening fewer, better stores rather than expanding at speed.
Domestic carmakers have released a large number of new models, setting off price competition that has pushed vehicle sales down in value terms. Unit volumes have not risen to compensate, held back by the end of some government tax relief, soft household confidence and high fuel costs.
Merchandise sales edged up 0.3 per cent in August, while catering revenue rose 1.1 per cent. For the eight months to August, total retail sales were 1.1 per cent higher than in the same period of 2025, or 2.7 per cent higher once vehicles are excluded.
Telecommunications equipment was the standout category, with sales up 16.3 per cent over the eight months. Lower- and mid-priced handsets from domestic brands, including Huawei, Oppo, Vivo and Xiaomi, have fit neatly into a subsidy scheme that discounts phones, tablets and smartwatches priced below roughly US$860. Tobacco and liquor also recorded double-digit gains, while food, cosmetics, clothing, and office and cultural supplies grew in the mid-single digits.
Motor vehicles, household appliances and audio-visual gear, home improvement products and furniture all fell. The three home-related categories share a common cause. An appliance trade-in programme introduced as part of the government’s stimulus package has supported demand since late 2024, and funding was renewed in 2026, but its pull is fading. The scheme accounted for 192 million appliances and more than 18 million vehicles traded in during 2024 and 2025. With fewer old appliances left to replace, appliance sales dropped 5.6 per cent in the eight months to August. A long slump in house prices and housing transactions continues to weigh on furniture and renovation spending, with no fresh stimulus to offset it.
The Savills report, titled Inside Occupier Strategy – Retail, finds that Chinese brands expanding into Hong Kong and Southeast Asia are now prioritising site quality over the number of outlets. By 2026, weaker locations were being reviewed, property portfolios were being trimmed, and capital was being moved towards better-performing sites and store formats.
The report also cautions against treating Southeast Asia as one market. Cultural, religious, demographic and lifestyle differences between countries mean retailers are opening a flagship store in each market and testing demand before committing further.
The caution follows the retreat of Singapore-based retailer Oh!Some, which expanded quickly into high-rent districts in Vietnam and elsewhere in the region, is now closing operations in Vietnam, Hong Kong, Thailand and Singapore itself.
Property quality shapes how far a retailer can scale. Thailand offers strong potential for large rollouts because high-quality shopping centres are spread across the country. Vietnam and Indonesia are harder, with wealth concentrated in one or two cities, while Singapore has good property but limited room to grow.
For New Zealand exporters and brands with Asian supply chains, the figures point to a Chinese consumer market that is barely expanding, with demand concentrated in subsidised electronics and a few discretionary categories. Suppliers of home goods, furniture and appliances face the toughest conditions.
Retailers entering Southeast Asia should expect country-by-country differences rather than a single regional market, and should budget for flagship-led entry rather than rapid store rollouts. The experience of Oh!Some shows how quickly high-rent expansion can be unwound when competition is strong.
The National Bureau of Statistics compiles its retail figures from more than 3,000 county, prefecture and provincial-level officials who report upwards to Beijing, and publishes a single point estimate without a margin of error.
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