Hong Kong Retail Sales Still Lagging

RAPAPORT… Hard-luxury sales in Hong Kong showed only a limited recovery in May as Chinese consumers continued to stay away from the important tourist destination.

Revenue from jewelry, watches, clocks and valuable gifts grew 55% year on year to HKD 3.11 billion ($400.3 million), but was still 53% lower than in the same month of 2019, the municipality’s Census and Statistics Department reported Wednesday. Sales across all retail categories increased 10.5% year on year to HKD 29.59 billion ($3.81 billion), and were down 26% from two years earlier.

Covid-19 has hit the territory’s luxury market hard, as the hub is highly reliant on spending by overseas visitors. The number of tourists entering Hong Kong from the mainland — a key source of revenue — fell 94% to 2.7 million in 2020, and declined a further 99% year on year to 19,612 in the first five months of 2021.

“Retail sales volume increased further in May on a year-on-year basis,” a government spokesperson said. “However, it remained far below the pre-pandemic level, as inbound tourism remained frozen amid travel restrictions worldwide.”

The imminent launch of the consumption voucher scheme — a program to stimulate spending by offering citizens electronic vouchers worth HKD 5,000 ($644) — should support local sentiment, the government noted. Still, “the near-term operating environment of the retail sector will remain challenging in the lack of visitor spending,” the spokesperson added.

For the first five months of 2021, sales of jewelry, watches, clocks and valuable gifts jumped 34% year on year to HKD 15.43 billion ($1.99 billion). Revenue from all retail segments increased 9% to HKD 146.31 billion ($18.84 billion).


Image: Jewelry on display at a Chow Tai Fook store in Hong Kong. (Shutterstock)