Car sales in the world’s largest car market have dropped dramatically, players are buying fewer consoles and people are reluctant to replace their existing smartphones, laptops and TVs as the ongoing COVID boycott undermines purchasing power and puts more people out of work.
“Current blockades in China. coronaviruses.
“We have very large cities that are in full lockdown and that are really concentrating on other important things for the citizens there. So it is affecting our demand.”
In line with China’s zero-COVID approach, Beijing, with a population of 22 million, has a limited presence in the workplace. Shanghai, the country’s commercial center, and several other giant cities have also been chained by partial closures or other containment.
Retail sales fell 11.1% year-on-year in April after falling by 3.5% in March. Earlier this week, UBS and JP Morgan lowered their full-year GDP growth forecasts for China to 3% and 3.7%, respectively.
Prime Minister Li Keqiang said on Wednesday that China will aim for reasonable second-quarter economic growth and curb rising unemployment. The Cabinet also announced wider cuts in tax deductions and deferred social security payments and loan repayments to support the world’s second largest economy.
E-commerce group JD.com Inc said last week that the COVID-19 situation was very different from what China had experienced before, as outbreaks were limited to smaller areas and increased online shopping.
“In April, the number of cancellations was significantly higher than last year due to logistics disruptions. There was an improvement in May, but it was still higher than a year earlier,” said JD.com CEO Xu Lei.
“Consumers are experiencing loss of income and loss of confidence, and overall consumption is slow.”
DELAY CAR, TECHNOLOGY, LUXURY
Car sales in China are faltering after years of explosive growth, and global carmakers in particular have been hit hard.
Tesla’s sales in China – where the company is struggling to bring production back to pre-pandemic levels – were almost wiped out last month.
And while retail sales in the first three weeks of May rose 34% year-over-year in April, they were 16% lower than a year earlier, the China Passenger Car Association said Wednesday, calling for more public support.
The industry association said a drop in revenue related to COVID-19 weighed on sales even in parts of China that are not under lockdown.
Lenovo, the world’s largest PC maker, on Thursday reported its slowest quarterly revenue growth in seven quarters as demand for their personal computers fell after two years of pandemic-driven demand.
China’s PC shipments, including desktops, laptops and workstations, fell 1% in the period January-March, ending the growth streak in the last seven quarters, market data firm Canalys said on Thursday.
Tencent, China’s most valuable company, published its worst quarterly results since being listed on the stock exchange in 2004, blaming cuts in advertising spending by consumer, e-commerce and travel companies.
Apple supplier Foxconn warned that demand for smartphones in China was dwindling, and the country, which has recently been a mecca for luxury goods manufacturers like LVMH, has seen luxury sales lag.
“Even if China comes out of its isolation, the recovery will not be as rapid or as immediate as we have seen in Europe and the United States,” Johann Rupert, president of the Swiss firm Richemont, said last week.