Has Consumption in the Spring Festival been boom?

Today, the National Bureau of Statistics released the macroeconomic "data package" for January to February 2025. It appears that the bureau has revised historical baselines, resulting in the officially disclosed growth rates being generally about 1 percentage point higher than those calculated based on historical data. The following discussion will primarily reference the growth rates disclosed by the authorities.

1. Is there a marginal recovery in consumption during the Spring Festival?

Overall retail sales in January and February grew by 4% year-on-year ( the growth rate calculated based on historical data is 3% ), slightly accelerating from 3.7% in December and 3.8% for the entire fourth quarter. This suggests that consumption during the Spring Festival period has shown some signs of recovery.

Online physical retail (adjusted) grew by 5% year-on-year, which also represents an improvement from 3.8% in December and 3.5% for the entire fourth quarter. The penetration rate of online retail has slightly increased by 0.3 percentage points year-on-year, ending the relatively poor performance of online retail since last year's Double Eleven shopping festival. Overall, online retail is showing a marginal recovery alongside overall consumption.

In terms of categories, in this round of online retail, food and daily necessities grew by 10.8% and 5.4% respectively, while clothing items decreased by 0.6%. This indicates that residents have a higher preference for experiential consumption such as dining, while discretionary spending represented by clothing remains weak.

2. Retail services such as dining are the main direction for consumption improvement

By consumption type, overall retail sales of goods (including online and offline) grew by 3.9% year-on-year, remaining flat compared to December. However, the growth rate of dining consumption improved significantly from 2.7% in December to 4.3% this time. The main driving force behind the recovery in overall social retail growth is the consumption of services such as dining during the Spring Festival holiday. This aligns with the strong growth of food items in online physical retail.

The separately disclosed service retail sales grew by 4.9% year-on-year. Although this is a decline compared to the 6.2% for the entire year of 2024 (reflecting a retreat in the growth center of service consumption under a high baseline), in a horizontal comparison, the growth rate of service retail still significantly exceeds that of overall social retail, as well as the growth rates of goods retail and dining income. This indicates that service consumption remains in a relatively outperforming direction (though the lead may narrow compared to last year).

3. How is the performance by category?

In terms of product categories, according to retail data above the limit, the absolute growth rate of typical discretionary items such as clothing, cosmetics, and gold and silver jewelry remains relatively weak, generally in the low single digits. However, compared to the negative growth performance in the same period last year over the past two months, there are signs of improvement.

As for the sectors benefiting from national subsidies, the growth rate of home appliances has seen a significant pullback from previous highs, possibly due to the concentrated release of shopping demand for home appliances caused by several months of national subsidies, which may have slightly overstretched. However, since the end of January, the government has expanded the subsidy scope to categories such as mobile phones and tablets, leading to a nearly doubled growth rate of communication products, primarily mobile phones, to 26.2% from January to February. The beneficial effects of national subsidies in this category should continue to be released for some time.

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