China e-commerce: China online goods sales growth slowed in August, while trade-in-supported smartphones accelerated
Morgan Stanley reports that China online retail sales of goods grew 2.2% year on year in August, down from 3.3% in July. Trade-in-related smartphone sales strengthened sharply, but FMCG and cosmetics growth moderated.
Summary
Morgan Stanley reports that China online retail sales of goods grew 2.2% year on year in August, down from 3.3% in July. Trade-in-related smartphone sales strengthened sharply, but FMCG and cosmetics growth moderated.
- Online retail sales of goods rose 2.2% year on year in August, versus 3.3% in July.
- Online retail sales including services grew 3.3%, accelerating from 2.4% in July.
- Trade-in-program sales rose 13.0%, led by 27.3% smartphone growth.
- FMCG sales growth slowed to 2.5%, while cosmetics grew 4.9%.
Report Interpretation
Overview
This update tracks August National Bureau of Statistics retail data for China e-commerce. Morgan Stanley highlights slower growth in online goods sales alongside improved trade-in-related demand, especially for smartphones.
Core views
China's online retail sales of goods increased 2.2% year on year in August, moderating from 3.3% in July and 2.3% in 2Q26. This was slower than total online retail sales including the enlarged scope of services, which rose 3.3% in August after 2.4% in July and 2.6% in 2Q26. Total retail sales of goods rose only 0.3%, compared with 0.6% in July and 0.2% in 2Q26, providing the broader backdrop for the online-goods trend. Trade-in-program sales across smartphones, electronics and home appliances rose 13.0% year on year in August, accelerating from 7.2% in July and reversing a 3.7% decline in 2Q26. Smartphone sales increased 27.3%, up from 20.4% in July and 8.3% in 2Q26. Electronics and home-appliance sales returned to growth at 2.3%, versus a 1.9% decline in July and a 12.7% decline in 2Q26. The data indicate that trade-in-supported categories were the principal area of improving consumer-sales momentum in the update. FMCG sales, covering apparel, cosmetics, gold and jewelry, household and personal care, food and beverage, and pharmaceutical retail, grew 2.5% in aggregate in August, slower than 3.1% in July and 4.0% in 2Q26. Apparel sales remained negative at 0.5%, although less negative than July's 1.0% decline; online apparel sales growth also eased to 4.9% year to date through August from 5.8% through July. Cosmetics sales grew 4.9%, decelerating from 6.8% in July and 6.7% in 2Q26.
Analysis framework
Morgan Stanley compares August year-on-year growth rates with July and 2Q26 across online retail, total goods retail, trade-in-supported categories and FMCG subcategories, using NBS data to identify where consumer-demand momentum strengthened or weakened.
Key data
- Online retail sales of goods+2.2% yoy in AugVersus +3.3% in Jul and +2.3% in 2Q26.
- Online retail sales including services+3.3% yoy in AugVersus +2.4% in Jul and +2.6% in 2Q26.
- Total retail sales of goods+0.3% yoy in AugVersus +0.6% in Jul and +0.2% in 2Q26.
- Trade-in-program sales+13.0% yoy in AugVersus +7.2% in Jul and -3.7% in 2Q26.
- Smartphone sales+27.3% yoy in AugVersus +20.4% in Jul and +8.3% in 2Q26.
- Electronics and home-appliance sales+2.3% yoy in AugVersus -1.9% in Jul and -12.7% in 2Q26.
- FMCG sales+2.5% yoy in AugVersus +3.1% in Jul and +4.0% in 2Q26.
- Cosmetics sales+4.9% yoy in AugVersus +6.8% in Jul and +6.7% in 2Q26.
Impact & implications
The update distinguishes broad moderation in online goods and FMCG growth from improved momentum in trade-in-supported smartphones, electronics and home appliances.