Smartphone demand slows city retail spending slump

The fall in Hong Kong's retail sales slowed in April, thanks to continuing demand for newly launched smartphones, which partly offset further decline in visitor spending on big-ticket items such as jewellery.

But the retail sector is less upbeat about its performance over the coming months, clouded by worries including uncertainties brought about by the confirmation of the first case of Middle East respiratory syndrome in China.

The value of Hong Kong's total retail sales in April, provisionally estimated at HK$38 billion, dropped by 2.2 per cent year on year, smaller than the 2.9 per cent decrease in March.

But the drop, announced yesterday by the Census and Statistics Department, was still worse than predictions by Hang Seng Bank, which expected an increase of 3.5 per cent from the same period last year.

Although tourist arrivals rebounded by 0.9 per cent in April compared with the same month in 2014, yesterday's figures showed a 19.5 per cent drop in sales of jewellery, watches and valuable gifts for the month, bigger than the 18.6 per cent drop in March.

The overall subdued sales performance, mainly dragged down by the marked fall in sales of jewellery, reflected weaker visitor spending on these expensive items, the government said.

But it added that the launch of certain smartphone models "provided some buffer".