China retail spending to grow up to 5% in 2025

Online retail is projected to grow further.

Retail spending in China is expected to rise 4% to 5% in 2025, matching 2024 growth, according to a new report from S&P Global Ratings titled "China Retail 2025 Outlook: Subsidies Will Further Help Stabilize Spending."

Despite government subsidies and merchant discounts, consumers remain cautious, said S&P credit analyst Sandy Lim.

Average selling prices for retailers and restaurants dropped sharply in early 2024 but stabilized later in the year. Prices are unlikely to decline significantly in 2025 as consumer confidence improves and competition among merchants eases.

Government trade-in programs helped boost sales in 2024, particularly for home appliances and consumer electronics, and similar support is expected in 2025.

Additionally, online retail is projected to grow further as major platforms improve convenience and user experience.

Meanwhile, travel retail, especially in Hainan, may continue to weaken after a sharp decline in 2024.

Risks to growth include reduced government stimulus and oversupply in consumer goods, which could lead to deflation and intense price competition.