EEKA Market Review for May 2026
Initial Overview of the Economic Landscape
On the demand side, retail sales in April grew by a mere 0.2% year-on-year, while investment for the January-April period turned negative year-on-year, and export growth accelerated.
On the supply side, the value-added of industrial enterprises above designated size increased by 4.1% year-on-year in April, a deceleration of 0.4 percentage points from the January-March period and 2 percentage points lower than the same period last year.
Price levels saw a slight increase in the Consumer Price Index (CPI) year-on-year in April, while the Producer Price Index (PPI) expanded significantly.
Monetary and financial data for April remained generally weak, with low corporate financing appetite and continued household deleveraging.
The Manufacturing Purchasing Managers' Index (PMI) for May fell to the 50-point threshold, while the Non-Manufacturing Business Activity Index rebounded into expansionary territory.
Key Brand Updates
Chanel Group: For 2025, revenue grew 1.8% at constant exchange rates to $19.3 billion, while net profit declined 14% year-on-year to $2.9 billion. The recovery momentum in the China market has continued from the fourth quarter of last year into the current year.
Burberry Group for the full year ending March: Comparable sales returned to growth and the group swung to a significant profit from a loss. The Greater China region returned to growth in the second half of the fiscal year, with full-year growth of 4%.
Ralph Lauren Group for the full year ending March: Revenue grew 12% at constant exchange rates, surpassing $8 billion for the first time. Revenue in the Asian market grew 22%, while net profit increased 26.7% year-on-year.
Retail Sector Insights
All six of Swire Properties' operational retail commercial projects in mainland China achieved positive sales growth in the first quarter of 2026. Sales at Shanghai's HKRI Taikoo Hui and Beijing's Taikoo Li Sanlitun both increased by over 50% year-on-year.
According to a WinShang report, in the top 30 most popular shopping centers in Shenzhen for April, 25 projects saw higher average daily footfall than in March, accounting for 83% of the list. Shenzhen One Avenue maintained its top position with an average daily footfall of 216,000. The siphon effect of leading projects became even more pronounced during holiday periods.
Industry Briefs
Detailed Macroeconomic Analysis
Demand-Side Dynamics
Consumption: Retail sales grew 0.2% year-on-year in April. Retail sales of clothing, shoes, hats, and textiles grew 3.6% year-on-year. In April, retail sales grew 0.2% year-on-year, a deceleration of 1.5 percentage points from March and 4.9 percentage points lower than the growth rate a year ago. Retail sales of consumer goods excluding automobiles grew 1.8% (compared to 3.2% in March). Urban consumer goods retail sales declined 0.1% year-on-year, while rural consumer goods retail sales grew 2.1%. For the January-April period, total retail sales grew 1.9% year-on-year, and retail sales excluding automobiles grew 3.1%. By consumption type, retail sales of goods declined 0.1% in April, while catering revenue grew 2.2%. Retail sales of clothing, shoes, hats, and textiles by enterprises above designated size grew 3.6% (compared to 7.0% in March). By retail format, for the January-April period, convenience stores and supermarkets among enterprises above designated size saw retail sales grow 7.5% and 4.5% year-on-year, respectively. Specialty stores, department stores, and brand exclusive stores saw retail sales decline 0.5%, 1.0%, and 5.9%, respectively. For the January-April period, national online retail sales of goods and services grew 6.6%. Within this, online retail sales of physical goods grew 5.7%, accounting for 25% of total retail sales. Within online retail sales of physical goods, food, apparel, and daily use goods grew 15.6%, 6.8%, and 2.6%, respectively.
Investment: For the January-April period, national fixed-asset investment (excluding rural households) declined 1.6% year-on-year. Within this, private fixed-asset investment declined 5.2%, and investment by foreign-invested enterprises declined 4.9%. Fixed-asset investment (excluding rural households) in April declined 2.36% month-on-month. By sector, for the January-April period, manufacturing investment grew 1.2%, while infrastructure investment (including electricity, heat, gas, and water production and supply) grew 4.3%. Real estate development investment declined 13.7%, with the rate of decline widening by 2.5 percentage points from the January-March period. Residential investment declined 13.1%, with the rate of decline widening by 2.1 percentage points. Investment in the textile industry grew 12.1% year-on-year.
Exports: Exports grew 14.1% year-on-year in April, with exports to the US turning from negative to positive growth. Imports grew 25.3%, maintaining a high growth rate. In April, exports in USD terms grew 14.1%, a significant rebound from 2.5% in March. By region, exports to non-US regions like Hong Kong China, South Korea, and Africa maintained high growth, while exports to the US turned positive. In April, exports to ASEAN, the EU, the US, Hong Kong China, South Korea, Africa, and Latin America grew 15.2%, 13.4%, 11.3%, 44.3%, 24.6%, 17.3%, and 13.7%, respectively. Overall, April's export regional structure showed three characteristics: AI supply chain-related economies maintained high activity, emerging markets showed resilience, and the drag from the US market weakened marginally. Imports grew 25.3% year-on-year in April, maintaining a high growth rate. Structurally, imports of high-tech products and mechanical and electrical products maintained high growth, rising 41.9% and 33.5% year-on-year, respectively, far exceeding overall import growth. Within this, integrated circuit imports grew 54.7%, and imports of automatic data processing equipment and parts grew 90.6%, indicating continued strong demand from the AI industrial chain for processing trade. Secondly, agricultural product imports were strong, and imports of some resource products were supported by price factors. In April, soybean imports grew 89.7%, and grain imports grew 22.3%. The value of crude oil imports grew 13.2%, turning from negative to positive growth.
Supply-Side Dynamics
In April, the value-added of industrial enterprises above designated size grew 4.1% year-on-year, a deceleration of 1.6 percentage points from March and 2 percentage points lower than the same period last year. For the January-April period, it grew 5.6% cumulatively. Among 41 major industrial categories, 29 saw year-on-year growth in value-added in April. Key sectors included coal mining and washing (3.8%), oil and natural gas extraction (4.6%), agricultural and sideline food processing (3.5%), textile industry (2.3%), chemical raw materials and products (5.3%), automobile manufacturing (9.2%), and computer, communication, and other electronic equipment manufacturing (15.6%).
Price Level Analysis
Consumer Price Index (CPI): In April, the CPI rose 1.2% year-on-year, an increase from March, and rose 0.3% month-on-month. For the January-April average, the CPI rose 0.9% year-on-year. Clothing prices rose 1.5% year-on-year but fell 0.3% month-on-month in April.
Producer Price Index (PPI): In April, the PPI rose 2.8% year-on-year, a significant expansion (2.3 percentage points wider than the previous month), and rose 1.7% month-on-month. The purchasing price index for industrial producers rose 3.5% year-on-year and 2.1% month-on-month. For the January-April average, the PPI rose 0.2% year-on-year. The ex-factory price for clothing consumer goods fell 0.4% year-on-year in April, while the purchasing price for textile raw materials rose 1.3%. The ex-factory price for the textile, apparel, and apparel industry fell 0.1%.
Monetary and Financial Conditions
Aggregate financing to the real economy (AFRE) in April was 539.2 billion yuan less than the same period last year. Contributions to the year-on-year change came from credit (-84.3%), non-standard financing (-52.1%), government financing (-12.3%), and direct financing (48.7%). The stock of AFRE grew 7.8% year-end, down 0.1 percentage points from March. New RMB loans in April were weak, with the broad measure (non-AFRE) showing a rare negative figure of -10 billion yuan, 290 billion yuan less than a year ago. Under the AFRE measure, new RMB and foreign currency loans were -381.2 billion yuan, 456.6 billion yuan less than a year ago. Corporate loans continued to be lower than a year ago, with a significant increase in bill financing indicating weak corporate financing demand. New corporate loans were 390 billion yuan, 220 billion yuan less than a year ago. Structurally, bill financing increased sharply, while short-term and medium-to-long-term loans turned negative. New medium-to-long-term loans were 410 billion yuan (660 billion yuan less than a year ago); new short-term loans were -460 billion yuan (20 billion yuan more than a year ago); new bill financing was 1.24 trillion yuan (408.8 billion yuan more than a year ago). Household loans turned negative again in April, significantly lower than a year ago, hitting a record low in absolute terms. This performance appears inconsistent with the year-on-year turn to positive growth in property sales area, possibly related to strong household willingness to prepay loans amid a weak employment environment. New household loans were -786.9 billion yuan, 265.3 billion yuan less than a year ago. Specifically, new short-term household loans were -446.2 billion yuan, 44.3 billion yuan less than a year ago. New medium-to-long-term household loans were -340.8 billion yuan, 217.7 billion yuan less than a year ago. Deposits increased by 270 billion yuan in April, 710 billion yuan less of a decrease than a year ago. The M2 money supply growth rate rebounded to 8.6% year-end. Structurally, household and corporate deposits decreased, while non-bank and fiscal deposits increased. Year-on-year, household deposits decreased more, corporate deposits decreased less, and non-bank and fiscal deposits increased more. Household deposits decreased by 1.94 trillion yuan, 550 billion yuan more of a decrease than a year ago. Corporate deposits decreased by 1.25 trillion yuan, 79.7 billion yuan less of a decrease than a year ago. Non-bank deposits increased by 2.47 trillion yuan, 899 billion yuan more than a year ago. Fiscal deposits increased by 739.4 billion yuan, 368.4 billion yuan more than a year ago. The significant year-on-year increase in new fiscal deposits in April may be due to slower government expenditure and increased tax revenue driven by rising PPI and accelerated corporate profit growth. The M1 money supply growth rate fell slightly to 5.0% in April from March, indicating a slowdown in actual money circulation, corresponding to weak household and corporate financing appetite. The M2-M1 growth spread widened by 0.2 percentage points to 3.6%.
Economic Sentiment Indicators
Manufacturing PMI: The Manufacturing PMI for May fell 0.3 percentage points to 50.0%. Demand contracted while supply expanded. The production index was 51.2%, above the threshold. The new orders index was 49.9%, indicating slowing market demand. High-tech manufacturing and equipment manufacturing PMI were 52.9% and 52.1%, respectively, rising from the previous month and remaining in expansion. Large enterprise PMI rose to 51.1%, while medium and small enterprise PMI fell to 48.6% and 48.5%, respectively. Input and output price indices remained high at 60.5% and 51.9%, respectively, though down from the previous month.
Non-Manufacturing Business Activity Index: This index rebounded to 50.1% in May. The construction business activity index was 48.8%, up 0.8 percentage points. The services business activity index was 50.3%, up 0.7 percentage points. The new orders index was 45.0%, up 0.7 percentage points but still in contraction. The employment index was 45.6%, up 0.1 percentage points.
Composite PMI Output Index: This index rebounded to 50.5% in May, indicating overall expansion in business activity.
In-Depth Brand Performance Analysis
Chanel Group reported 2025 revenue of $19.3 billion, up 1.8% at constant exchange rates, with net profit down 14% to $2.9 billion. The recovery in the China market continued from Q4 2025. CEO Leena Nair cited creative momentum across all business lines. Growth was slower than key rival Hermès but better than LVMH's Fashion & Leather Goods division. The Americas were the core growth driver (+7.2% at constant exchange rates). The Asia-Pacific region, the largest by revenue share, saw a 0.8% decline, with weakness in China offsetting recoveries in Korea and Japan. Europe grew 2.5%. The Middle East showed resilience. Management noted strengthening growth momentum from H2 2025 into 2026, leading to high-single-digit revenue growth. Prices were raised by 3% in 2025, with a similar increase planned for 2026. The brand added 41 stores in 2025 and plans 30 more in 2026. Greater China performance turned positive in Q4 2025. The brand plans to open a second high-end VIP salon in Shanghai and host a cultural exhibition. New Creative Director Matthieu Blazy's designs have revitalized the brand, with strong demand for new items like the Maxi Flap Bag. The design studio underwent its largest restructuring since 1983. The group invested $700 million in supply chain and made several strategic acquisitions in 2025.
Burberry Group for the full year ending March reported revenue of £2.42 billion, down 2% but flat at constant exchange rates, with retail comparable store sales up 2%. Adjusted operating profit surged to £160 million from a £3 million loss the prior year. Greater China sales grew 4% for the full year, with 8% growth in H2 and 10% in Q4. CEO Joshua Schulman called it a pivotal year, with comparable sales growth returning and profitability improving, driven by strong momentum in Greater China and the Americas. The EMEIA region was weak due to geopolitical factors. Growth resumed in Q2 (July-Sept 2025) and improved each quarter. The brand strengthened its position in outerwear and scarves, which saw double-digit growth in H2. It is enhancing in-store experiences with dedicated sections. Schulman's strategy focuses on core classics like trench coats and scarves to attract younger customers while controlling costs. Q4 comparable store sales grew 5%, with 10% growth in both the Americas and China. The brand leveraged local holiday marketing in key markets. China is the largest market, contributing over 30% of retail sales, with strong new customer acquisition, especially among Gen Z. Future plans include more localized marketing and a major brand experience event in Shanghai for its 170th anniversary. By region for the full year: EMEIA comparable store sales were flat; the Americas up 4%; Greater China up 4%; Asia Pacific up 2%. By channel: Retail sales were down 1% (£2.056bn), up 1% at constant rates; Wholesale down 5% (£303m), down 4% at constant rates, but up 3% in H2; Licensing down 7% (£61m).
Ralph Lauren Group for the full year ending March reported revenue exceeding $8 billion for the first time, reaching $8.115bn, up 15% (12% at constant rates). Q4 revenue was $1.979bn, up 17%. Asia led growth, with full-year revenue up 23% to $2.104bn, with strong Q4 growth in China. CEO Patrice Louvet highlighted the brand's enduring appeal and strong execution of its 'Next Great Chapter: Drive' strategy. Strategic highlights included growing new customers, driving core categories like womenswear and outerwear, and expanding in key cities. Q4 key data: Net revenue $1.979bn, up 17% (12% constant). Gross margin 69.7%, up 110 bps. Adjusted operating margin 11.0%, up 70 bps. Adjusted EPS $2.80. By region: North America $763m, up 8%; Europe $620m, up 18% (6% constant); Asia $564m, up 31% (28% constant). By channel: Retail $1.29bn, up 21.8%; Wholesale $656m, up 8.8%. Full-year key data: Net revenue $8.115bn, up 15% (12% constant). Gross margin 69.9%, up 130 bps. Adjusted operating margin 16.0%, up 200 bps. Adjusted EPS $16.59. Net profit was $941m, up 26.7% from $743m in the prior year. By region: North America $3.33bn, up 9%; Europe $2.539bn, up 17% (9% constant); Asia $2.104bn, up 23% (22% constant). By channel: Retail $5.533bn, up 16%; Wholesale $2.439bn, up 12.7%.
Comprehensive Retail Market Analysis
All six of Swire Properties' mainland China retail projects saw positive sales growth in Q1 2026 against a backdrop of moderate consumption recovery. Shanghai HKRI Taikoo Hui led with 81.5% year-on-year growth, followed by Beijing Taikoo Li Sanlitun at 56.2%. Beijing INDIGO saw only 2.7% growth, highlighting a performance gap. Occupancy rates remained robust, averaging 98%, with Guangzhou Taikoo Hui at 100% for five consecutive quarters. Shanghai and Chengdu projects saw occupancy rise. Beijing INDIGO's occupancy dipped slightly, attributed to its ongoing expansion and renovation phase. Sales growth was tiered, driven by brand upgrades and flagship openings. Shanghai HKRI Taikoo Hui's transformation, including the landmark 'Louis Vuitton Ark' installation, elevated it to a national luxury destination. Beijing Taikoo Li Sanlitun's growth was fueled by the completion of its North District renovation with new luxury flagships. Beijing INDIGO's slower growth reflects its community-focused positioning and current disruption from the 'Taikoo Li' redevelopment. Its long-term strategy involves a major mixed-use expansion.
According to WinShang's Shenzhen shopping center popularity ranking for April 2026, 25 of the top 30 projects had higher average daily footfall than in March, indicating a broad post-holiday recovery. Shenzhen One Avenue remained the leader with 216,000 average daily visitors. The top five super-large projects (>150,000 sqm) rankings were unchanged, showing entrenched market leaders. However, differentiation is increasing, with five projects seeing footfall decline. Smaller-scale projects (below 100,000 sqm) showed greater sensitivity to recovery, with some leveraging new supermarket openings to attract family traffic. Regionally, Futian district led with 10 projects on the list, benefiting from business and cross-border traffic. Bao'an district increased its presence. Luohu district had no projects on the list for two consecutive months. Future trends include the continued rise of 'park + retail' models, the normalization of cross-border consumption, and potential reshuffling from newly opened projects ramping up.
Concise Industry News Summary
1) Richemont Group for the full year ending March reported sales up 11% at constant exchange rates, with operating profit up 23%. Greater China demand showed signs of recovery.
2) Capri Holdings (parent of Michael Kors) for the full year ending March reported revenue of $4.37 billion, down 6.2% at constant rates, but returned to operating profit. Asia revenue was $442 million, down 1.8%. Q4 Asia revenue fell 12.7%.
3) Tapestry Group (parent of Coach) for the quarter ending March reported sales up 19% at constant rates. Greater China sales surged 55%.
4) Salvatore Ferragamo Group Q1 2026 revenue declined 1.2% at constant rates. Asia-Pacific revenue fell 5.4%, but its Direct-to-Consumer (DTC) business in the region continued to improve.
5) HUGO BOSS Group Q1 2026 sales fell 6%. The Asia-Pacific market returned to growth, up 1%.
6) VF Corporation for the full year ending March reported revenue up 1%, its first growth in three years. The North Face and Timberland both grew 5% at constant rates. Asia-Pacific revenue fell 1% for the year.
7) On Holding AG Q1 2026 sales grew 26% at constant rates. The Asia-Pacific market grew 61%, with standout performances in China and South Korea.
8) Pinduoduo Q1 2026 revenue grew 11% year-on-year, while net profit attributable to shareholders fell 15%.
9) Vipshop Q1 2026 revenue grew 1.2% year-on-year, with active user count turning positive.
10) Alibaba Group for the fiscal year ending March reported total revenue up 3%, while net profit attributable to shareholders fell 18%.
11) The 13-year-old Galeries Lafayette Beijing store ceased operations on May 27.
12) HLA Group (Hailan Home) has submitted a listing application to the Hong Kong Exchange again.
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