4 July 2017, Hong Kong
Total retail sales in Hong Kong may return to the peak of HK$494.4 billion (around US$63.3 billion) in 2020, a high recorded in 2013, while jewellery and watch sales may also return to a high of HK$118.3 billion recorded in the same year, according to Michael Cheng, PwC Asia Pacific and Hong Kong/China Retail and Consumer Leader.
PwC and Hong Kong government data show that retail sales have increased 86% from HK$234.8 billion (around US$30.1 billion) in 1997 to HK$436.6 billion (around US$56.0) in 2016 in the 20 years since Hong Kong’s return to Chinese rule.
PwC expects Hong Kong’s retail sales to increase 3-4% to HK$450 billion (US$57.6 billion) this year and rise 6-7% to HK$480 billion (around US$61.5 billion) in 2018, driven mainly by luxury sales. The jewellery and watches as well as the medicine and cosmetics segments will see a rebound in sales.
Loosening of the ‘one-trip-per-week’ cap on individual visits by mainland Chinese tourists and the adding of new tourist attractions will help draw mainland and overseas visitors to Hong Kong, and subsequently boost retail sales, according to Michael Cheng. Domestic consumption is not enough to support the retail industry given that population growth has been remained relatively stable over the last 20 years, he added.
The Hong Kong government and retailers should focus more on the development of e-commerce, and strengthening marketing and promoting online, Michael said.