Government Stimulus Spurs Hong Kong Retail

RAPAPORT… Sales of jewelry and other hard-luxury items in Hong Kong continued to rebound in September amid higher employment and increased funds from a government-backed stimulus program.

Revenue from jewelry, watches, clocks and other valuable gifts climbed 16% to HKD 3.18 billion ($408.5 million) during the month, the municipality’s Census and Statistics Department reported Tuesday. Sales across all retail categories rose 7% to HKD 27.99 billion ($3.6 billion).

“The value of total retail sales continued to grow visibly in September over a year earlier,” a government spokesperson explained. “For the third quarter as a whole, it also rose, partly reflecting the boosting effect of the consumption-voucher scheme.”

In August, the Hong Kong government implemented a program to stimulate spending by offering citizens vouchers worth HKD 5,000 ($642) to support domestic purchases. The Covid-19 pandemic and related travel restrictions have severely impacted the luxury market in Hong Kong — a major destination for tourists.

In the first nine months of the year, sales of jewelry, watches, clocks and other valuable gifts jumped 30% to HKD 28.26 billion ($3.63 billion). Sales across all categories for the same period grew 8% to HKD 258.14 billion ($33.17 billion).

“Looking ahead, the stable local [Covid-19 situation], and improving employment and income conditions, together with the consumption-voucher scheme, should remain supportive to the retail sector in the near term,” the spokesperson added. “However, the virtually frozen inbound tourism will continue to constrain the extent of revival.”

Image: Mong Kok shopping district in Kowloon, Hong Kong. (pxfuel)