Hong Kong Retail Continues to Decline

RAPAPORT… Sales of jewelry and other luxury items in Hong Kong slid again in January amid a fourth wave of the coronavirus and a later Lunar New Year.

Revenue from jewelry, watches, clocks and other valuable gifts fell 32% year on year to HKD 3.37 billion ($434.3 million) during the month, the municipality’s Census and Statistics Department reported Wednesday. Sales across all retail categories slipped 14% to HKD 32.6 billion ($4.2 billion).

Retail was hit by a fourth rise in the number of coronavirus cases, which hurt consumer sentiment. The ongoing two-week quarantine the Hong Kong government imposed on tourists arriving from mainland China — an important source of luxury sales — has also taken its toll on retail as consumers turn to local purchasing.

Additionally, the Lunar New Year fell in February this year, as opposed to January in 2020, which resulted in an unfavorable comparison, as many consumers had not yet made their holiday purchases in the first month of 2021.

“The figure for January was conceivably distorted by the difference in timing of the Lunar New Year, which fell in mid-February this year, but late January last year,” a government spokesperson noted.

Full figures for the first two months combined — which will become available on March 30 — will give a more accurate picture of the retail performance, the spokesperson continued.

The retail market in Hong Kong will continue to prove challenging until the pandemic is under control and tourism restarts.

“The retail trade will still be difficult in the near term, as the epidemic continues to pose a threat, and inbound tourism remains frozen,” the spokesperson added. “As such, it is pivotal to contain the epidemic. If the Covid-19 vaccination program yields the intended results, it should help lay a firm foundation for the revival of the retail sector and a broader-based recovery of the economy later in the year.”

Image: Chun Yeung Street Market in Hong Kong. (Flickr)