This month, JD.com, Tencent and Alibaba all disclosed results for Q2, which suggested that consumer spending had stabilized during that period. However, it wasn't clear if the trend carried on afterwards. JD.com reported a rise in electronic sales, but general merchandise decreased for the quarter ended June. Meanwhile, theme parks experienced more activity due to the revived interest in domestic travel.
Corporate earnings releases are offering evidence of some positives in the Chinese consumer market, despite the fact that people are being more judicious with how they spend money. JD.com, Tencent, and Alibaba's financial results for the three months ending June reflect a continuous increase in consumer expenditure, however, its not clear if this trend has continued. Their public disclosures and FactSet transcripts of their earnings calls indicate that there has been a rise in consumer related growth.
Revenues from electronics and home appliances saw an increase of 11.3% to a total of 152.13 billion yuan ($20.98 billion) over the three-month period concluding in June. Meanwhile, revenue from general merchandise dropped by 8.6%, amounting to 81.72 billion yuan. On the other hand, marketing revenues rose by 8.5%, coming to 22.51 billion yuan.
In the second quarter, livestreaming e-commerce experienced an increase of 150% in gross merchandise value (GMV) in comparison to the same period from a year prior, though the exact amount was not disclosed. On an annual basis, GMV for livestreaming was estimated to be in the hundreds of billions of yuan, whereas GMV from WeChat Mini program e-commerce and physical product sales exceeded 1 trillion yuan each. Additionally, advertising revenue, excluding automobile sales, increased double digits in recent weeks. Overall, Tencent's quarterly revenue growth was sustained for the third-consecutive period, albeit earnings were lower than expected.
Revenue from direct China commerce sales, which was primarily from Tmall Supermarket and Tmall Global, rose 21% to 30.17 billion yuan compared to the same period last year.The total Taobao and Tmall Group income recorded an increase of 12%, reaching 114.95 billion yuan.A return to offline events and a boost in the movie theater box office helped Alibaba's ticketing and movie studio businesses. Youku video platform's subscription income also rose. Ultimately, digital media and entertainment revenue went up by 36% year-on-year to 5.38 billion yuan and reaching profitability.Local services revenue soared 30% totaling 14.5 billion yuan due to orders made through food delivery app Ele.me and the growth of Alibaba's Intenet map service Amap, which offers services such as ride-hailing and hotel booking.The management of Alibaba declined to give details about the state of the consumer since the end of June.In conclusion, Alibaba's financial results far exceeded expectations for the quarter.
The information for July has demonstrated a deceleration in China's economy, retail sales only rising 2.5% year-on-year. Nevertheless, theme parks have flourished, as domestic tourism has surged. Shanghai Disney reported a record high in revenue, operating income and margin in the most recent quarter, according to the company.
Explore CNBC Pro for more information on China stocks that could have potential for a bounce. Goldman has identified two that are buy-rated top picks, while Morgan Stanley has highlighted six. China's resilient big spenders have been identified and the stocks that are likely to benefit are being revealed. The chip wars are heating up, and one Chinese stock has already seen a 30% rise over a five-day period.
Goldman Sachs has identified a number of China stocks that might experience a bounce, two of which it has included in its top buy-rated picks. Morgan Stanley, meanwhile, has listed six of its top China equities, one of which it believes could increase in value by 80%. Furthermore, an exploration of what the resilient Chinese consumers are purchasing leads to an understanding of those stocks that may benefit from such steadfast spending. The battle of the chips is growing more intense, as evidenced by the 30% increase in one Chinese stock within a five day timeframe.
Comcast reported that Universal Studios Beijing had its most profitable quarter since opening in September 2021, despite the ongoing pandemic. Although there are listed companies that secure some of the main channels for online consumption in China, ByteDance, which is not listed, is gaining ground as an additional e-commerce platform through its Douyin app, the Chinese version of TikTok.
Chinese customers poured out 1.41 trillion yuan to shops on Douyin in purchases, which signifies a 76% increment compared to the prior year, reported The Information. ByteDance did not immediately respond to a question for feedback. Kuaishou, ByteDance's lesser contender, is due to announce its earnings on Tuesday as the same is the case with Chinese tech stalwart Baidu and video streaming service iQiyi. Pinduoduo, the e-commerce behemoth, is yet to reveal when it plans to disclose its earnings.
Other businesses in China, or those with dealings in the country, have exhibited signs of progress, put off against a weak point in 2022 when Shanghai was closed off for two of the Q2's three months. This is what some have reported so far:
In the second quarter, a 16% rise in revenues was seen in Greater China, leading to double-digit sales increases both in wholesale and its own retail stores.
The Chinese sportswear company announced that their Anta brand store sales were up in the second quarter in comparison to a year ago by a high single-digit percentage. Fila saw a climb of high teens year-on-year. Additionally, the Descente, Kolon Sport, and other brands had an increase of 70-75% compared to the corresponding time in the prior year.
Tim Cook, CEO of Apple, declared an uptick in China activity, with quarterly sales growth of 8% year-on-year, amounting to $15.76 billion. This was in contrast to the 3% year-on-year drop experienced in the earlier quarter. Furthermore, the company reported a June quarter record for wearables, home and accessories in Greater China, with a 2% year-on-year increase in sales to $8.3 billion across all product groups.
The organization declared that retail purchase of Li Ning goods marketed through point of sale (excluding its "young" division) in the June quarter increased by a mid-teen percentage point compared to the same period in the previous year.
China's year-over-year comparable store sales saw a rise of 46%, while the average ticket size saw a slight decrease of 1%. This report was courtesy of Arjun Kharpal from CNBC. It should be noted that Comcast, the owner of NBCUniversal, is also the parent company of CNBC.
댓글