Jian Shi-Cortesi, manager of the Julius Baer Chindonesia Fund, the sector is booming thanks to ever-increasing internet usage and the significant number of listed companies; not something that is common across the Chinese economy.
The Chinese equivalent of eBay, for instance, has over 0.5bn users and purchases from the site account for 50% of all home deliveries. It also boasts 1m full time sellers.
Elsewhere, Shi-Cortesi holds a modest number of consumer stocks, mainly in the small/mid cap range for flexibility purposes. Consumer staples, she said, have high valuations and therefore she does not favour them.
She is also negative on department stores due to overbuilding and over capacity, and because of fierce competition from online sales.
In terms of the general outlook for the country, she said government policy will be critical and the new administration will have to be proactive in dealing with social security issues.
There was undoubtedly overinvestment in infrastructure, she said, and inefficiency issues remain with a lot of production is being moved to Vietnam and Cambodia as a result. She did believe the majority had proved to be beneficial, however.
The government is at a crossroads, she concluded, saying they could continue down the path the previous administration were taking which has resulted in the current crisis or they could try to rebalance to a consumption-driven economy.
