Online sales of brands from Uniqlo to Zara plunge in China as Covid-19 lockdowns freeze spending

International consumer brands such as Uniqlo and Zara saw a dramatic drop in sales on Chinese e-commerce platforms as the country’s strict lockdowns dampened consumer spending in April, according to data compiled by third-party research firms .

The gross merchandise value (GMV), or revenue, of Japanese clothing brand Uniqlo on Alibaba Group Holding’s Tmall site fell 33% in April from a year ago, while Spanish clothing retailer Zara’s GMV sales plunged 56% in the same month, according to data provided by market research firm YipitData.

French beauty brand Lancome saw its Tmall sales drop 33% over the same period, while Samsung Electronics’ sales on the e-commerce platform fell 23%, according to YipitData.

Do you have questions about the biggest topics and trends around the world? Get the answers with SCMP Knowledge, our new curated content platform with explanations, FAQs, analysis and infographics presented by our award-winning team.

Alibaba, owner of the South China Morning Postdid not immediately respond to a request for comment.

The sharp drop in online sales of these consumer brands reflects the impact of China’s aggressive zero Covid-19 policy on consumer spending. Nationally, total retail sales – considered a barometer of consumer spending – fell 11.1% in April from a year ago.

China’s e-commerce sector has been hit hard by the shutdowns, with delivery disruptions and warehouses locked down, while demand for luxury goods and discretionary items has quickly disappeared as China’s affluent middle class has grown reluctant to spend.

Shanghai resident Lin Caiyi, a well-known economist in China’s investment banking industry, said on her Weibo account that her last monthly credit card bill was only 11.4 yuan ($1.71). ) because she was stuck at home and unable to shop online due to disrupted logistics.

A woman uses Taobao app in Beijing, January 27, 2022. Photo: SCMP/Simon Song alt=A woman uses Taobao app in Beijing, January 27, 2022. Photo: SCMP/Simon Song>

According to data posted on LinkedIn by Josh Gartner, managing director of Kungfu Data, another market research firm, Bulgari’s sales on Taobao and Tmall, both operated by Alibaba, fell more than 90% in April from compared to a year ago, while Hermes sales in the same period fell 53 percent.

Alibaba, the Hangzhou-based e-commerce giant, is due to release its latest quarterly results on Wednesday, with analysts forecasting record low revenue growth.

At Kuaishou, China’s second-largest short video app that has developed its own e-commerce business, general manager Cheng Yixiao said the country’s strict Covid-19 measures have hampered the growth of China’s e-commerce and advertising business. the company.

“It is estimated that more than half of the merchants in Kuaishou are within the pandemic control zone,” Cheng said in a phone call Tuesday. “Affected by control measures, users cannot order on demand and be delivered on time [and] purchase frequency decreased year over year. Merchant livestream activity is also impacted in these areas.”

Jacky Lai, managing director of Hong Kong-based wholesale market Peeba, said the situation “looks increasingly dire” for consumer brands in China and there could be long-term implications for China. if demand dried up due to the closures.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice journal on China and Asia for over a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.

Source link

David A. Albanese