Below is a complimentary institutional research note written by our China analyst Felix WangIf you are an institutional investor interested in accessing our research email

China Online Retail Sales Drop In Growth - ecommerce woman shopping online

Last night, the National Bureau of Statistics reported 15.7% cumulative growth for online retail sales (physical goods) for July 2020. 

Online sales accounted for 25.0% of total retail sales; this is a slight drop from June's 25.2% contribution. By our calculations, this suggests July by itself grew ~24% YoY growth which missed my 25%-27% estimate, and a deceleration from June. 

I worry that government vouchers, which has been a big driver of e-commerce sales growth, will be less in 2H 2020. July total retail sales (including offline) fell 1.1% YoY, again missing consensus of 0.1% growth.

From Jan-July 2020, online food and usable products grew 38.2% (60bps deceleration from June) and 18.6% (130bps acceleration from June), respectively.  During this period, online clothing sales fell 0.9% YoY (200bps improvement from June). 

We had seen evidence of apparel improvement in our GMV database but it's still distressing to see apparel not return to growth yet.  Among the Big 3, BABA has the most exposure to apparel. 

Separately, as expected, BABA will be included in the Hang Seng Index effective September 7th.

China Online Retail Sales Drop In Growth - RETAIL