E-Commerce to provide support as coronavirus hits China retail sales
HONG KONG -- China's large-scale e-commerce infrastructure may help the country avoid a contraction in quarterly retail sales as coronavirus stalls household spending, S&P Global Ratings says.
S&P believes "offline" retail sales will decline in the first quarter of 2020, but that digital shopping will keep total retail sales from turning red for period.
"China already has one of the most digitalised retail markets in the world," S&P says. "We believe this episode should support a further transition to an e-commerce retail economy."
The ratings agency expects offline retail sales in the first quarter of 2020 to decline compared with the same period last year, as traditional stores lose footfall amid contagion fears and travel restrictions.
But, it says: "We have not changed our pre-virus forecast of annual online sales growth of 17%-22% in 2020 and 2021, in part because we expect some market share in retail sales will shift online.
"Online activity will likely prevent an unprecedented decline in overall retail sales for the first quarter.
"In our base-line assumption, the virus will be globally contained by March, with virtually no new transmission by April.
"However, the negative impact on retail sales in China will likely stretch for two quarters." www.standardandpoors.com (ATI).