Since 2024, China has launched a series of "Consumption Promotion Year" activities to promote the “old for new product trade-in” policy, thereby fostering steady consumption growth. Providing further support for economic recovery, China's total retail sales of consumer goods reached RMB23.6 trillion in H1 2024, up 3.7% y-o-y.
By Q2 2024, the total prime retail property stock in the core markets in the 16 major cities in Greater China we track totaled 112.5 million sq m. The competition in the Chinese retail property market has further intensified. While some well-operated shopping centers continued to upgrade their facilities, their brand mixture and their services to attract consumers, some other underperforming shopping centers continued to see tenant leakage, leading to further divergence in terms of business performance amongst retail shopping center projects.
Meanwhile, the Third Plenary Session of the 20th CPC Central Committee emphasized the importance of actively expanding domestic demand, accelerating the development of a complete domestic consumption demand system, improving the long-term mechanism for expanding consumption, and establishing a sound incentive mechanism for green consumption. In view of this, China's service consumption is expected to maintain sound development momentum into the future as new types of consumption will continue to emerge.
Retailers and landlords of shopping centers are actively embracing these changes by introducing new technologies, new retail formats, and new models to continuously improve service and shopping experiences. In terms of supply and demand, the main focus trends this year are as follows:
- Traditional commercial retail project upgrading
- Retail property C-REITs
- Cultural and tourism consumption
- Green consumption
Looking at the individual major cities in Greater China, many domestic and international brands continued to expand their business lines during the past year.
Global economic weakness and domestic economic slow-down should lead to more cautious spending. However, in consideration of the increasing disposable income and the sustained demand for upgraded goods consumption, the outlook for the level of retail market growth is that it is expected to continue to remain in positive territory.
