Hong Kong Retail Slow to Recover

RAPAPORT… Hong Kong’s hard-luxury market saw only a partial rebound in June as the lack of tourism kept retail sales well below pre-pandemic levels.

Revenue from jewelry, watches, clocks and valuable gifts grew 32% year on year to HKD 3.31 billion ($452.7 million) but was still 42% lower than in the same month of 2019, the municipality’s Census and Statistics Department reported Monday. The increase was also weaker than May’s 55% growth.

Sales in all retail categories rose 6% year on year to HKD 28.07 billion ($3.61 billion) but were down 20% from two years earlier.

Hong Kong — a key luxury destination for tourists — has been hit hard by the Covid-19 pandemic and the resultant border closures. The number of visitors to the municipality was down 58% year on year in June, and plummeted 99% for the first six months of the year, according to the Hong Kong Tourism Board.

“Retail sales continued to increase in June over a year earlier as consumption demand revived further alongside the stable local epidemic and improved labor market situations,” a government spokesperson said. “Yet, with incoming visitors remaining scant, retail sales stayed far below the prerecession level.”

However, the government plans to launch a consumption voucher scheme — a program to stimulate spending by offering citizens electronic vouchers worth HKD 5,000 ($644) — which should help support local spending and boost the retail sector, the spokesperson added.

For the first six months of 2021, sales of jewelry, watches, clocks and valuable gifts jumped 34% year on year to HKD 18.73 billion ($2.41 billion). Revenue from all retail segments increased 8% to HKD 174.36 billion ($22.43 billion).

Image: The Hong Kong skyline. (Flickr)