Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Packed bars and mask-less catwalks: With Covid curbs fading, China set for consumption rebound

Stock MarketsOct 26, 2020 01:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: A woman eats as people walk in the tourist area surrounding Houhai Lake during Chinese National Day holidays in Beijing 2/2

By Stella Qiu and Ryan Woo

BEIJING (Reuters) - Over the weekend, crowds packed a former industrial warehouse in Beijing as the China Fashion Week got underway, with models strutting mask-less on a square runway and guests oblivious to social distancing norms.

Similarly vibrant scenes are being seen elsewhere in China as consumers return to cinemas, live performances and restaurants.

To many, they indicate a late-summer recovery in Chinese household spending is broadening and propelling the next stage of the economic recovery.

"This August, sales in the domestic (apparel) market turned from negative to positive," Zhang Qinghui, chairman of the China Fashion Designers Committee, told Reuters last week.

"I think the numbers for September, or even the fourth quarter, will be better."

Sales of consumer goods, a proxy for consumption in China, rose across the board at the end of the third quarter, led by auto purchases, as household incomes returned to positive growth and employment conditions improved after being slammed by the COVID-19 pandemic.

The recovery made China a lone bright spot in the retail world and a major source of earnings for global consumer brands from Starbucks (O:SBUX) to Louis Vuitton.

Still, Chinese spending on services lagged that on goods, and sectors such as hospitality and catering sector fared particularly badly due to social distancing rules, restrictions on operating hours, and caps on capacity.

But with the easing of curbs gathering pace in the third quarter, the hospitality sector is poised to accelerate its recovery. Already, its contraction in output narrowed in the third quarter versus the previous three months.

"The services industry had been the most affected by COVID. Now, with restrictions being lifted, the industry is gradually emerging from its downturn, which would provide a strong boost to the broad recovery in the consumer market," said Ernan Cui, analyst at Gavekal Dragonomics.

"We expect growth would return to pre-COVID levels by the end of the year."

LIVE MUSIC

September's retail sales growth was still a third of pre-COVID-19 levels, but economists expect the overall consumer market would stage a sharp rebound in coming months, after entertainment venues from cinemas to KTVs reopened in August.

On Oct. 1, the first day of the "Golden Week" holiday, China's box office raked in 745 million yuan ($111.42 million), the highest single-day sales in 2020 and the second-best ever for the holiday.

And during the eight-day National Day break, China saw 637 million domestic tourists, though the number was only 79% of last year's total.

"We've returned to our old habits," said a 57-year-old Shanghai retiree surnamed Chen, who went on a 22-day self-drive tour in western Xinjiang region with her friends.

In Beijing, local rock bands have been playing to enthusiastic crowds each weekend at the Temple Bar nestled in Beijing's many winding "hutong" alleyways, since the bar resumed such live gigs in September.

"Business is more or less back to pre-COVID levels," said a staff at the bar. "All we need right now is a vaccine. With that, everything can truly return to normal."

The return of spending is as vital to business-to-business companies as it is to consumer-facing businesses.

Benjamin Barthélémy, a Parisian who runs a film production studio in Beijing, said many small entertainment businesses had started recovering from COVID-19 in the past two months.

"Many, many meetings, many projects are coming back - it's like the machine slowly restarts. Commercials for cars and for everything else are really good now," Barthélémy said.

ONLINE BOOM

Next month, Tmall, Alibaba Group's (N:BABA) e-commerce marketplace, expects over 2,600 foreign brands - an all-time high - to take part in the annual online "Double 11" shopping festival with sales set for another record in its 12th year.

The booming online consumption is helped by an improving job market.

In the first nine months, China created 8.98 million urban jobs, nearly hitting the government's full-year target of over 9 million. In the third quarter, household income growth turned positive, up 0.6% year-on-year.

For some sectors, the recovery has taken a different form.

Riviera Events, a Singapore-based event management company with branches across China, did not hold any virtual event before 2020.

Now, half of their events are online.

"For an industry that was so hard-hit, we're lucky in some ways that the industry has rebounded in this way," said Stephane de Montgros, co-founder of Riviera Events.

"We're very hopeful that from the fourth quarter, the event industry in mainland China will be growing year-on-year."

Packed bars and mask-less catwalks: With Covid curbs fading, China set for consumption rebound
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Thomas DeVito
Thomas DeVito Oct 26, 2020 2:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Yeah and this wasn't planned.... Sure....
David David
David9 Oct 26, 2020 2:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Provide evidence that they did...without that you are just a he said she said...
David David
David9 Oct 26, 2020 1:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I told you guys... China is the only country that back to normacy and only China will have growth left...
perplexed76 .
perplexed76 . Oct 26, 2020 1:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
china will be coverd with the third wave
David David
David9 Oct 26, 2020 1:48AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I very much doubt that will happen...from what er learned, China has mastered the vitus containment. They will crush any flare up just like what we saw recently when there was a small spike...
TL Chan
TL Chan Oct 26, 2020 1:40AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If American don't follow their constitution law to prosecute the corrupted media , the corruption rectangle and others involved, the world has no need to follow the lead and rule set by America. And if American votes for the corrupted rectangle and organization, that means CCP won again after its virus deployment strategy. Then the world will look down on American, and American would never have our respect anymore!
David David
David9 Oct 26, 2020 1:40AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Virus was from nature...
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email