Retail sales jump 11.4 per cent as Hong Kong shopping recovery rolls on
Industry body optimistic that sales for the whole year could break record of HK$494 billion set five years ago
Hong Kong’s retail sales jumped 11.4 per cent in March, the second-biggest year-on-year upsurge since 2015, as the industry benefited from robust tourism and upbeat consumer sentiment.
Disregarding fluctuations caused by holiday shopping sprees during months in which the Lunar New Year fell, the increase was the biggest since June 2013, further confirming speculation that the sector was on track for a full recovery.
A government spokesman expected the near-term outlook to remain optimistic, while industry body the Retail Management Association even said sales for the whole year could break the record of HK$494 billion (US$63.3 billion), set in 2013.
After years of sharp growth, the retail sector endured a period of contraction starting in 2015, before the decline tapered off last year to show signs of a rebound.
However, association chairman Thomson Cheng Wai-hung believed growth would be more sustainable this time because of shifting consumption patterns.
“In the past, it was not uncommon to see mainland Chinese shoppers snap up watches worth a couple of hundred thousand dollars as gifts,” he said.
But most items on buyers’ shopping lists were now for personal use, he said, likely due to a sweeping anti-corruption campaign in mainland China led by President Xi Jinping.
“The progress made this time will be healthier because the sales are less dependent on luxury transactions and more on value-for-money items,” Cheng said.
The industry veteran expected near double-digit growth for the first half of 2018, after a 14.3 per cent gain between January and March.
But instead of opening new shops to ride on the strong performance, retailers may choose to expand the floor space of current outlets instead, Cheng said, due to a chronic manpower shortage.
Apart from upwards pressure on rents, the performance of the Chinese yuan against other currencies would also greatly affect the inclination of mainland visitors to shop in the city, he said.
Sales of jewellery, watches and valuable gifts performed the best in all categories in March, recording a 23.1 per cent increase, followed by 17.7 per cent for department store commodities, and 16.5 per cent for medicines and cosmetics.
Meanwhile, sales of vehicles and motor parts fell 3.5 per cent, while fish, livestock and poultry shrank 1 per cent.
The performance of Hong Kong’s retail sector has long been tied to the number of inbound visitors, specifically cash-rich shoppers from mainland China who snap up goods ranging from electronic gadgets to designer bags and daily necessities such as medicine and cosmetics.
In 2017 tourism dollars contributed to 11.1 per cent, or HK$296.7 billion, of the city’s gross domestic product.
More than 15 million tourists visited the city in the first three months of this year, a 9.6 per cent rise on the same period last year and in line with the Tourism Board’s full-year prediction of 60 million.