Ongoing lockdowns cut online sales in China

Amid strict lockdowns as China seeks to keep coronavirus infections down to an absolute minimum, consumers are cutting even their e-commerce spending.

What’s driving it

Lockdowns have hit brands’ abilities to make, distribute, and deliver goods – a new piece in the South China Morning Post (which is owned by Alibaba) puts numbers to the trend.

Ultimately, consumers are wary of spending on non-essentials and luxury items. But by the same token, they are finding that they simply can’t spend money even if they wanted to. While this will look grim on e-commerce firms’ earnings calls, it doesn’t point to poor fundamentals.

The data

Sales of major brands on e-commerce platforms have plunged in April:

• Uniqlo on Alibaba’s Tmall is down 33% year-on year.
• Zara sales on the same platform are down 56%.
• Lancome, the luxury brand, sees sales dip 33%.
• Samsung has seen e-commerce sales drop 23%.
• Bulgari sales are down more than 90%.
• Hermes sales are down 53%.

Meanwhile total retail sales nationally have dropped 11% versus April 2021.

Sourced from SCMP