March 2025 Retail Sales Volume: With policy support, is the spring of consumption really approaching?

Today, the National Bureau of Statistics released the macroeconomic "data package" for March 2025. Similar to the last disclosure, the growth rate disclosed by the official caliber is still about 1 percentage point higher than the growth rate calculated based on historical data, and we will continue to rely on the officially published data. Overall, with the help of stimulus policies such as national subsidies, the growth rate of social retail has continued to improve and rise since 2025, and the previously relatively weak commodity consumption has accelerated even faster, with the growth rate of social retail surpassing that of service retail. It seems that domestic consumption supported by policies is truly reboosting？

1. Continuous Improvement in Social Retail Growth

According to the data disclosed by the National Bureau of Statistics, the overall social retail sales in March increased by 5.9% year-on-year (the growth rate calculated based on historical data is 4.9%), continuing the trend of marginal recovery in consumption growth since the Spring Festival, with a month-on-month acceleration of 1.9 percentage points. Compared to the entire year of 2024, where the year-on-year growth rate of social retail was between 2% and 4% for 9 months, 2025 has started off well.

Following the overall warming trend in consumption, online physical retail (adjusted) increased by 6.9% year-on-year in March, also accelerating by 1.9 percentage points compared to January-February. In addition, the online penetration rate (the proportion of online retail in the overall market) also shows signs of slow improvement. In March, the online penetration rate increased by 0.6 percentage points year-on-year, and the increase has been rising over the past three reporting periods. Although the absolute value of the year-on-year increase in the online penetration rate is not high, it still demonstrates the relative advantage of online channels being "limited."

In terms of categories, from January to March, food and daily necessities increased by 14% and 5.6% respectively, while clothing decreased by 0.1%. The trend of residents' willingness to consume essential items like food being stronger than discretionary items like clothing remains unchanged. However, compared to the data published for January-February, the cumulative growth rates of the three categories of goods are all improving, with food accelerating the most, reaching 3.2 percentage points.

2. Commodity Consumption Growth Surpasses Service Consumption

By consumption type, the accelerated growth of social retail in March is also attributed to commodity consumption and dining consumption. This month, commodity retail (including online and offline) increased by 5.9% year-on-year, accelerating by 2 percentage points month-on-month, surpassing dining consumption growth. Meanwhile, the growth rate of dining consumption also reached 5.6%, slightly lower than that of commodity consumption, but it also accelerated by 1.3 percentage points month-on-month. According to our calculations, the offline retail sales of goods in March also increased by 3.8% year-on-year, accelerating by 1.5 percentage points compared to January-February. The long-term weakest performance of offline goods sales has also shown improvement this month.

The separately disclosed service retail sales increased by 5% year-on-year in the first quarter of 2025, a limited acceleration compared to 4.9% in January-February. From the absolute value of growth and the trend of growth changes, service retail has underperformed the overall retail market.

On one hand, due to a high base and growth returning to normal, the growth rate of service retail is declining month by month, while commodity consumption, which has a lower base and is stimulated by subsidies, shows signs of improvement. The trend of services outperforming goods that has lasted for about two years may reverse this year? Or at least tend towards consistency.

3. National subsidies continue to benefit strong sectors

From the perspective of commodity categories, according to retail data above the limit, the absolute growth rates of typical discretionary goods such as clothing, cosmetics, and gold and silver jewelry are still lower compared to strong products like 3C, but in terms of trends, the growth of other categories, except for cosmetics, has improved in March compared to January-February.

Due to the expansion of the scope of national subsidies to include tablets and mobile phones at the beginning of the year, in March, the growth of home appliances, furniture, mobile phones, sports and entertainment products, and other electronic or durable household goods continues to lead significantly, with year-on-year growth rates generally exceeding 20%. The growth rates of home appliances and furniture, which had significantly declined in January-February due to the Spring Festival holiday and demand being brought forward, have rebounded again in March. The beneficial effects of national subsidies remain quite significant and have not noticeably declined, and retail channels or brands with advantages in the aforementioned favorable sectors are likely to perform well in the first quarter.

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