China’s 618 shopping festival growth slows sharply as consumer spending malaise persists China’s consumer spending growth slowed significantly during the annual 618 online shopping festival in June, with total sales increasing by only 4% compared to the previous year. This slowdown, alongside a decline in overall retail sales in May, indicates persistent weakness in household spending, a key area for China’s economy. Despite promotional efforts, consumer demand remains subdued, with a notable shift towards lower-cost goods and services like home cleaning, while demand for high-cost items like home appliances has decreased.

• Online sales during China’s 618 shopping festival grew by only 4% year-on-year, a sharp decrease from 15.2% in the previous year.
• This slowdown in consumer spending is a weak spot in China’s economy, contrasting with stronger performance in exports and tech sectors.
• Retail sales in May fell 0.6% year-on-year, the first decline since pandemic restrictions were lifted.
• Consumers are showing a preference for lower-cost goods and services, with secondhand electronics sales up nearly 80% and demand for home cleaning services surging.
• Goldman Sachs lowered its Q2 GDP growth forecast to 4.5% due to these persistent economic trends.