RECAP | Insights on the current retail trends in China. Apr 11

On the morning of April 11 at Frasca Shanghai, nearly 60 people gathered for the event Retail Insights: Navigating Recent Uncertainties Among China Consumers: Brand Building Versus Short-Term Actions, organized by the China-Italy Chamber of Commerce (CICC), with the support of its Italian Quality and Lifestyle Council (IQLC).

Representatives of the Sino-Italian Business Community had the chance to take part to a morning seminar, accompanied by a delicious breakfast, focused on recent Chinese consumer trends, and the performance of well-known retail companies in China.

Daniel Zipser, Senior Partner and Leader of McKinsey’s Asia Consumer & Retail Practice, shared with the participants the latest edition of McKinsey’s “China Brief” update on Chinese consumption, which revealed that while headwinds remain, and it’s still too early to determine how the rest of 2024 will play out, several indicators are pointing in the right direction:

• Consumer spending surge: China’s GDP saw a notable rise of 5.2% in 2023, driven significantly by an 83% surge in consumer spending.
• Pent-up savings: While average disposable incomes grew by 6% in 2023, a high savings rate of 31.7% indicates a cautious consumer approach. Consumers accumulated an extraordinary 56 trillion renminbi in savings between 2020-2023.
• Travel bounces back: Early 2024 data shows a 44.4% increase in air passengers, underlining a robust recovery in travel, with international travel reaching 77% of pre-COVID-19 levels by February 2024. This revitalization extends to domestic travel, which now exceeds pre-COVID-19 levels, reflecting a strong resurgence in the travel sector. Notably, overseas tax-free spending per person has skyrocketed, with spending in Japan and Singapore rising by 117% and 64%, respectively.
• Electric vehicles take-off: The EV market in China is booming with a 37% sales increase in 2023, claiming 35.6% of the total automotive market. The preference for domestic brands remains strong, capturing 84.5% of the EV market in 2023. Notably, foreign brands have held onto their market share in the internal combustion engine (ICE) segment.

To follow, an insightful roundtable moderated by Mauro Maggioni, CICC Board Member and CEO Asia Pacific at Golden Goose, saw an exchange of opinions and points of view from well-known experts in fashion, luxury and retail: Maggie Chan, Operating Partner, Board of Directors at Wagas Group; Filippo Gori, President Apac at Stella McCartney, and Judy Liu, Farfetch APAC President.

The morning finished off with an active session of Q&A where participants had the chance to further clarify their interests on the topic.

We would like to thank all the guests for coming and Frasca for hosting and catering the event.