March online retail sales of goods in China decelerated year on year due to seasonality

Overview

This report tracks March online retail and related consumer categories from China's National Bureau of Statistics. The core conclusion is that year-on-year growth in China’s online retail sales of goods slowed markedly in March versus Jan-Feb, and the report attributes this to seasonal factors; however, on a quarterly basis, online retail of goods and some trade-in-related categories still improved in 1Q26 versus 4Q25.

Core views

China's online retail sales of goods in March grew 2.5% year-on-year, down from Jan-Feb's 10.3%; 1Q26 grew 7.5% year-on-year, above 4Q25's 2.3%. Online retail including goods and services in March grew 5.8% year-on-year, down from Jan-Feb's 9.2%, with 1Q26 at 8.0%. Offline and total goods retail also slowed, with total goods retail sales in March up 1.7% year-on-year, below Jan-Feb's 2.8%. By category, smartphones were the strongest, up 27.3% year-on-year in March; electronics and home appliances weakened, down 5.0% year-on-year in March; fast-moving consumer categories totaled up 7.8% year-on-year, still positive but lower than Jan-Feb.

Analysis framework

The report is based on monthly retail data from China's National Bureau of Statistics and compares year-on-year growth rates for March, Jan-Feb combined, 1Q26 and 4Q25, examining marginal changes in e-commerce, total goods retail, trade-in-related categories and fast-moving consumer categories.

Methodology notes

• industry data trackingNBS online retail sales tracking

  year-on-year growth and sequential deceleration

  By comparing year-on-year growth for March, Jan-Feb, 1Q26 and 4Q25, the relative momentum of online retail and consumption categories is assessed.

• consumer category segmentationtrade-in and FMCG category comparison

  segmentation between policy-related categories and everyday consumer categories

  Smartphones, electronics and home appliances are treated as trade-in-related categories and compared with FMCG-related categories such as apparel, cosmetics, gold jewelry, personal care, food and beverage, and pharmaceuticals.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China's e-commerce platforms

  Online goods retail and online penetration are macro demand indicators for platform transaction volumes and related ad/commission revenues.

  Strengths

  1Q26 year-on-year growth in online retail sales of goods improved versus 4Q25, indicating that quarterly-basis demand was still recovering.

  Weaknesses

  March year-on-year growth was materially below Jan-Feb, showing weaker short-term incremental momentum.

  Comparison

  March online goods retail was +2.5%, below +5.8% for online retail including services, and below March Jan-Feb's +10.3% online goods retail.

  Risks

  Seasonality, promotion timing and category composition shifts can cause large month-to-month data volatility.

• smartphones and consumer electronics chain

  Sales of trade-in-related categories affect demand for online platforms, brands, and channel partners.

  Strengths

  Smartphone sales were +27.3% year-on-year in March and +20.9% in 1Q26, maintaining strong growth.

  Weaknesses

  Electronics and home appliances were down 5.0% year-on-year in March, showing differentiated performance within the same policy-related basket.

  Comparison

  Smartphones were materially stronger than electronics and home appliances; combined basket was +9.0% in March, below Jan-Feb's +10.7%.

  Risks

  Policy subsidy timing, base effects, and front-loaded demand release could affect later growth rates.

• FMCG, apparel, cosmetics and pharmaceutical retail

  Reflects everyday consumer demand and online consumption structure.

  Strengths

  FMCG-related categories totaled +7.8% year-on-year in March and +9.0% in 1Q26, still maintaining positive growth.

  Weaknesses

  Combined growth was below Jan-Feb's +9.6%, and online apparel growth also fell from Jan-Feb's +18.0% to +11.6% in 1Q26.

  Comparison

  Cosmetics were +8.3% in March versus +4.5% in Jan-Feb, but 1Q26's +5.9% was below 4Q25's +8.2%.

  Risks

  Large differences in category growth mean results cannot be straightforwardly extrapolated across all consumer sub-industries.

Key data

• March online retail sales of goods+2.5% yoyBelow Jan-Feb's +10.3%.
• 1Q26 online retail sales of goods+7.5% yoyAbove 4Q25's +2.3%.
• March online retail sales, including goods and expanded-services scope+5.8% yoyBelow Jan-Feb's +9.2%; 1Q26 was +8.0%.
• March total goods retail+1.7% yoyBelow Jan-Feb's +2.8%; 1Q26 was +2.4%.
• Combined sales of smartphones, electronics and home appliances+9.0% yoy in Mar; +10.1% yoy in 1Q261Q26 improved meaningfully from -1.1% in 4Q25.
• Smartphone sales+27.3% yoy in MarAbove Jan-Feb's +17.8%; 1Q26 was +20.9%.
• Electronics and home appliances sales-5.0% yoy in MarBelow Jan-Feb's +3.3%; 1Q26 was roughly flat year-on-year.
• Total sales of FMCG-related categories+7.8% yoy in Mar; +9.0% yoy in 1Q26March was below Jan-Feb's +9.6%, but 1Q26 was above 4Q25's +4.8%.
• Apparel sales+7.0% yoy in Mar; +9.3% yoy in 1Q26Online apparel sales were +11.6% year-on-year in 1Q26, below Jan-Feb's +18.0%.
• Cosmetics sales+8.3% yoy in Mar; +5.9% yoy in 1Q26March was above Jan-Feb's +4.5%, but 1Q26 was below 4Q25's +8.2%.

Impact & implications

The data imply a neutral view for Chinese e-commerce and internet platforms: the March slowdown suggests short-term consumption momentum and seasonal noise should be interpreted with caution, but the 1Q26 improvement versus 4Q25 indicates demand in some categories is still recovering. Strong smartphone growth may support related platforms and the consumer electronics supply chain, while weakness in electronics and home appliances shows that the stimulus effect of trade-in replacement is uneven across subcategories.

Risks

• The March single-month data are influenced by seasonality and may not represent the full-year trend.
• The Jan-Feb combined basis and March single-month basis differ due to Spring Festival and promotion timing differences, so direct comparisons require caution.
• The trade-in replacement policy effect on smartphones, electronics and home appliances is uneven, and the sustainability of follow-through is uncertain.
• Morgan Stanley discloses potential conflicts of interest with several covered companies through investment banking, shareholdings, or market-making; investors should treat this report as one input rather than the sole basis for decisions.

What to watch

• Whether year-on-year growth in online goods retail rebounds from its March low in subsequent months.
• Whether online penetration continues to rise, especially around major promotion months before and after events.
• Whether smartphone strong growth can be sustained and whether electronics and home appliances can recover from the March year-on-year decline.
• How growth in everyday consumption categories such as FMCG, apparel, and cosmetics changes in 2Q26.
• The strength of the impulse to online GMV from policy subsidies, trade-in execution cadence, and promotion campaigns.