BERLIN (Reuters) - Demand is growing for online retail in Germany, the HDE trade association said on Monday, increasing its forecast for the year despite subdued consumer sentiment, with Chinese retail apps intensifying their focus on Europe amid U.S. trade tensions.

The HDE now expects 2025 online retail revenue in Germany to increase by 4% year-on-year to 92.4 billion euros ($103.6 billion), compared with previously forecast growth of 3%.

Overall, German retail revenue saw 1.1% growth in 2024 in real terms and adjusted for seasonal effects.

"Online retail is once again the clear growth driver in retail in Germany after a number of weak years," HDE deputy head Stephan Tromp said in a statement.

The HDE said particularly strong growth has been seen in online shopping for food and drugstore goods.

German consumer sentiment has improved somewhat in recent months on hopes of economic stimulus under a new government but it remains firmly in negative territory, with trade tensions and a protracted downturn weighing on households.

German consumers have been increasingly embracing Chinese e-retailers like Temu and Shein, which in turn have sharpened their focus on the European market amid U.S. trade tariffs.

"It is clear that the two companies are clearly orientating themselves towards Europe, as the U.S. market has become uninteresting for these companies due to customs policy," Tromp said.

($1 = 0.8916 euros)