After the epidemic, which company is the strongest in consumer recovery?

The Bureau of Statistics released the social retail data for the first half of the year today: "The total retail sales of consumer goods in the society was 21.0432 trillion yuan, a year-on-year decrease of 0.7%. Among them, the retail sales of consumer goods other than automobiles was 18.9251 trillion yuan, a decrease of 0.1%."

"The online retail sales of State Grid was 6.3007 trillion yuan, a year-on-year increase of 3.1%. Among them, the online retail sales of physical goods was 5.4493 trillion yuan, an increase of 5.6%, accounting for 25.9% of the total retail sales of consumer goods in the society. In the online retail sales of physical goods, the sales of food, clothing, and daily necessities increased by 15.7%, 2.4%, and 5.1%, respectively."

"Looking at the single month, the total retail sales of consumer goods in the society was 3.8742 trillion yuan, a year-on-year increase of 3.1%, and the online retail sales of physical goods increased by 8.2% year-on-year."

Therefore, overall, after the epidemic, consumption rebounded nicely in June. The following points are worth noting in detail:

1. After the offline unblocking, the growth rate of online physical retail has slowed down. Combining the data of online retail sales and express package volume, the surge in the value of single packages during the epidemic may be caused by local online retail such as community retail and instant delivery, which is not counted in the package volume. After the epidemic, whether users' habits of using local online retail will continue is worth paying attention to.
2. From the pace and strength of recovery, the growth rate of online physical goods is greater than that of offline physical goods, 0, catering, and non-physical goods.
3. In June, the year-on-year growth rate of automobile retail was 18%, which was the main force driving retail recovery. Excluding automobiles, the growth rate of the social retail market was only 1.9%, which was much worse. Whether automobiles can be the main means of long-term government stimulus policies in the face of the real estate dilemma is worth observing.
4. In the second quarter, the overall growth rate of online retail was 7.5%, which was actually not bad. According to the company's external communication and expert research, JD's second-quarter GMV growth rate may be slightly lower than 10%, and Alibaba's core e-commerce GMV may decrease by about 10%. Although Pinduoduo has not communicated externally, a certain expert stated that the company's growth rate in June can reach 30-35%, and the growth rate in April-May should also be higher than the industry.

Overall, the performance of domestic retail in June is satisfactory, and it can be basically determined that the lowest point of the year has been passed. However, this month's performance is a retaliatory release of demand after the unblocking of the blockade, and whether the recovery can continue needs to be continuously tracked.

The following is a detailed analysis:

1. The overall social retail turned positive, and the online physical goods slightly fell back

Since Shanghai fully unblocked at the end of May, the growth rate of the total social retail sales, which had been shrinking year-on-year for three consecutive months, finally turned positive in June, with a year-on-year increase of 3.1%. However, due to the unblocking of offline, compared with the leading role of online retail in May, the growth rate of online retail sales has also fallen back this month, dropping to 8.2%, but this growth rate is still not low.

Combining the express volume data released by the post office, after the obvious deviation between the retail sales growth rate and the parcel volume growth rate in May, the growth rate of retail sales and parcel volume in this month, which is 8% and 5% respectively, have returned to a matching state.

Based on the above two sets of data, the value of a single package calculated has fallen back to 3% growth after experiencing a year-on-year surge of more than 10% during the epidemic.

Dolphin Analyst believes that reasonable speculation can be made from the abnormal changes in the value of a single package: during the epidemic, due to the unsmooth express transportation, residents who were blocked at home used more local delivery (community group buying or Dingdong, JD Daojia and other instant delivery) to purchase goods. However, the above-mentioned local delivery is not recorded in the express volume, which leads to the abnormal increase in the price of a single package.

After the express delivery returned to normal in June, online consumption also flowed back to cross-regional e-commerce, so the value of a single package returned to normal. However, after this epidemic, the acceptance of local delivery by residents in first and second-tier cities has increased, and it is worth paying attention to whether it will bring long-term impact on the online retail pattern in the future.

2. Recovery degree, online physical goods > offline physical goods > catering > online non-physical goods

Although the overall components of social retail in June have improved significantly compared to April and May, from the speed and degree of recovery, it still conforms to Dolphin Analyst's previous judgment: physical retail > catering > virtual goods or service goods. By June, the growth rate of online physical retail has also turned positive, increasing by 1.9%. The decline in catering industry revenue has also narrowed to -4%, while online non-physical retail (movie tickets, entertainment activity tickets, etc.) still fell by about 19% year-on-year. And the current cinemas in Shanghai have not been fully opened, so the recovery of entertainment consumption in China should be the slowest (but it also means that there is greater elasticity after full opening).

3. Cars are the main force driving social retail

In terms of commodity categories, the central government has recently issued a series of policies to stimulate automobile consumption (covering both fuel vehicles and new energy vehicles). Under the strong stimulus of policies and the favorable release of demand that was severely suppressed during the epidemic, the retail sales of automobiles surged by about 18% year-on-year in June, which is the main force driving the overall growth of social retail. If the contribution of automobiles is excluded, the growth rate of social retail this month is only 1.4%, which is still positive but much inferior. (From a more macro perspective, as the real estate market is experiencing great difficulties, whether the automobile industry, which ranks second in terms of industry scale, will be regarded as the main means of stimulating the economy by the government for a long time is worth paying attention to.)

Apart from automobiles, food, grain and oil, medicine, and petroleum products are still the top three growth sectors. Cosmetics, daily necessities, and home appliances are also showing signs of recovery. Clothing and furniture consumption, however, remain quite weak.

4. Recap of Q2 Online Retail

Although online retail sales fell year-on-year in April, after a sharp rise in May and June, physical online retail sales in the second quarter ultimately grew by 7.5% year-on-year, which is a good performance.

From the performance of various companies' external communications, JD's GMV in April was similar to that of the industry, with a low-single-digit decline. In May, the performance was slightly better than in April, and according to expert research, JD's sales during the June promotion increased by about 10% year-on-year. According to the company's communication, the GMV of the promotion accounts for about 50% of 2Q, so JD's GMV growth rate in 2Q should be slightly lower than 10%.

The GMV of Taobao fell by low-teenage in April, improved month-on-month in May, and although Taobao did not disclose sales data for the June promotion, it is definitely better than May. Therefore, the GMV of Alibaba's core e-commerce in 2Q should fall by no more than 10%.

Although Pinduoduo did not communicate its 2Q GMV performance externally, according to research by a certain expert, Pinduoduo's GMV growth in June may be as high as 30-35%, and based on industry growth rates, Pinduoduo's performance in April-May is likely to be better than JD and Alibaba. (The following figure is the sales statistics of various companies compiled by CICC, for reference only).

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