Hong Kong retail downturn may be thing of the past, accounting giant says
PricewaterhouseCoopers forecasts growth in retail sales of 3-4 per cent this year as political tensions subside with Carrie Lam becoming chief executive
The protracted retail downturn in Hong Kong could be a thing of the past as fewer cross-border conflicts encourage mainland shoppers to return and spend more in the city, according to a global accounting and consulting firm.
PricewaterhouseCoopers estimated that this year’s retail sales would grow 3-4 per cent to about HK$450 billion and growth would improve further by 6-7 per cent to HK$480 billion next year. Last year’s retail sales totalled about HK$436 billion, the lowest since 2011.
”To generate retail growth, mainland tourists are the most important factor. Even though there may be growth in overseas tourists numbers, they don’t spend much money,” said Michael Cheng, a partner who heads the firm’s retail and consumer section.
Cheng said part of the reason for the weakness of retail sales in the past two years was the hostile and polarised political climate in Hong Kong which deterred mainland visitors.
He said he expected this to improve under new chief executive Carrie Lam Cheng Yuet-ngor.
“I think the government should discuss with the mainland extending the length of stay for mainland tourists in Hong Kong. With the improving political climate, the mainland is more likely to help,” Cheng said.
He did not think online shopping was much of a threat to traditional retailing as it remained very low at 5 per cent of the total. He also did not expect retail workers to lose their jobs, as demand was high.
“The retail sector has turned the corner after over 20 months of decline,” said Shiu Ka-fai, the legislator for the retail sector.
“In these few months, there have been fewer conflicts involving mainland tourists, so they are regaining confidence to come to Hong Kong to shop.”
Meanwhile, some shopping malls are seeking to boost business by leveraging on the popularity of Disney characters.
Harbour City in Tsim Sha Tsui, which is popular with mainland shoppers, is holding a 3D pop-up exhibition of three-metre comic strips featuring Marvel super-heroes like Iron Man, Captain America and Spiderman.
Festival Walk in Kowloon Tong is showcasing characters from the Pixar animation film Cars 3. The centrepiece will be models of three cars from the movie, including Lightning McQueen.