Hong Kong Retail Sluggish Amid New Restrictions

RAPAPORT… Hong Kong’s hard-luxury market saw its weakest growth in a year as the government implemented stronger limitations on business operations during the fifth wave of Covid-19.

Revenue from jewelry, watches, clocks and valuable gifts rose 7% year on year to HKD 3.61 billion ($462.7 million) in January, the municipality’s Census and Statistics Department reported last week. After the category grew 27% in December, the first month of 2022 saw the thinnest rise since January 2021, when Hong Kong was struggling with a fourth coronavirus wave.

The change in the timing of the Chinese New Year helped sales somewhat.

“Local consumer spending normally attains a seasonal high before the festival,” the government noted. “As the Lunar New Year fell on February 1 this year, but on February 12 last year, the year-on-year comparison of the figures for January 2022 with those for January 2021 might have been affected by this factor to a certain extent.”

Sales in all retail categories rose 4% year on year to HKD 33.89 billion ($4.34 billion).

“The [sales] figure has yet to fully reflect the impact of the fifth wave of [the] local epidemic and the further tightening of anti-epidemic measures in the more recent period,” a government spokesperson explained. “Looking ahead, in view of the very austere epidemic situation and the various restrictive measures in place, the retail sector will remain under immense pressure in the near term.”

Image: The central Hong Kong shopping area. (Flickr)