China e-commerce market stagnant in September

Nomura notes that China's retail sales (excluding auto) grew 3.9% y-y to CNY3.9tn in September 2026, accelerating from 2.5% in August, while e-commerce sales (excluding services) were flat at 0.1% y-y, decelerating from 2.2% growth in August. Average e-commerce growth in 3Q26 was 1.8% y-y versus 2.3% in 2Q26, and e-commerce penetration dipped 0.3pp y-y to 28.7%, the first decline since July 2025. Weak online sales were in line with platform guidance, as platforms have mostly tightened subsidy spending to preserve cash flows amid cautious consumer sentiment. Online food and beverage sales rose 15.8% y-y in 9M26, online apparel rose 3.4% (down from 4.9% in 8M26), and online household goods rose 0.8%. For the overall retail market, food and daily necessities grew 6.7% and 4.1% y-y respectively in September, beverages grew 5.0%, smart devices accelerated to 31.1%, PCs to 7.9%, cosmetics to 5.4%, apparel returned to 1.2% growth, while home appliances slowed to 1.9%. Top picks in China inter