Christmas crowds out Lunar New Year shopping, says MasterCard

Lunar New Year retail sales may be hurt this year because the holiday is closer than usual to Christmas, leaving people with less time and money for shopping, MasterCard's senior vice-president for market insights, Sarah Quinlan, said yesterday.

"It's exactly what happened at Christmas [in the US] last year," Quinlan said. "We had six fewer days between Thanksgiving and Christmas. We saw [higher than usual] purchasing the day after Christmas. I think a lot of people got IOUs under the tree. Little Timmy didn't get his whatever [present]. The same thing will happen here. It's not just income but it's just too fast - there's not enough shopping time. It will be a bit hurt."

Data from MasterCard's newly launched Hong Kong Spending Pulse report showed a 6.4 per cent year-on-year increase in retail sales last month, driven by spending on clothing as well as health and beauty products. The index bases its estimates on data from all businesses accredited by MasterCard and other additional cash and cheque transactions. While MasterCard did not break out the growth for each sector, Quinlan identified apparel as the best-performing category last month and added that health and beauty was "way off the charts". She said she expected them to perform well this month.

"That's really discretionary spending. That's somebody who lives here in Hong Kong - that's the good news," she said. Other bright spots for the upcoming holiday include groceries, which "surges because people will dine and entertain at home" and restaurants.

Despite the rising global tide of e-commerce, Hongkongers still prefer to do their purchases offline for now. Quinlan attributes this to the physical density of the city and good weather.

"The US has vast spaces. You don't have that in Hong Kong. It's easy to get to these shops," she said. "The facility and enjoyment of getting there and being able to touch it means e-commerce will continue to grow here but not at the pace I see in the rest of the world. Your weather is good. That's a big part of it. [Poor] weather is really what drives massive spikes [in online sales]."