Daiwa's latest research indicates that August retail sales in mainland China fell short of market expectations, pointing to persistently weak demand.

The communications equipment sector emerged as the standout performer, surging 27.3% year-on-year, driven by rising average selling prices and a product upgrade cycle. Meanwhile, alcohol and tobacco sales accelerated to a 12.5% year-on-year increase, up from 6% in July, potentially benefiting from improved banquet consumption and a lower comparison base.

According to the report, household electronics returned to positive growth, climbing 2.3% year-on-year. Cosmetics rose 4.9% year-on-year, a slight deceleration from the previous month's 6.8% but still outpacing other industries. Beverage sales improved to a 4.9% year-on-year increase, up from 3.5% in July.

On the hotel front, the firm estimates that August revenue per available room (RevPAR) transitioned from a 3% to 4% year-on-year decline in July to low single-digit growth, supported by better weather boosting summer travel demand. However, a higher comparison base is expected from mid-September onward.

Losses in sporting and entertainment goods narrowed to a 4.8% year-on-year decline, compared with 10.6% in July, though demand and competitive conditions remain challenging. In contrast, losses in gold and silver jewelry widened to a 17.5% year-on-year drop, versus 10.1% in July, impacted by spot gold price volatility and a high base in August.