COVID-19 has brought turbulence to China’s retail sector, with retail sales declining by 8.7 percent in the first half of 2020. Nevertheless, the top 100 Chinese consumer goods companies managed to keep sales stable during this rocky period. The top 100 retailers also achieved stable sales overall, with the steep decline from offline retailers being negated by the strides seen among online retailers.
Even so, prior to the COVID-19 outbreak, the leading Chinese retail and consumer goods companies had already seen a steady slowdown in revenue growth, from 16 percent in 2018 to 12 percent in 2019. Despite the slowdown in revenue growth, most of these companies managed to improve their operating cost during this time.
Alarmingly, for one third of the top 100 consumer goods companies and top 100 retailers, costs significantly outpaced the growth of revenue. The bottom third of consumer goods companies averagely experienced a 1.1x increase in the operating costs to revenue ratio. Meanwhile, the bottom third of offline retail companies suffered the most, with a 1.3x increase in this ratio on average.
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