What: Hong Kong is not yet recovering from its current woes

Why it is important: The city will need a serious retail reinvention to face the increasing competition in the region from other desirable hubs.

Hong Kong's retail sales experienced an 11.5% year-on-year decline in May, continuing a trend of double-digit decreases, with sales totaling HKD 30.5 billion. This downturn followed a 14.7% decline in April and a 7% decrease in March, cumulating in a 6.1% drop for the first five months compared to the previous year. The Census and Statistics Department cited shifts in consumption by visitors and residents and the strong Hong Kong dollar as key factors.

Significant sales declines were seen across various sectors, particularly in motor vehicles and parts (down 29.8%), watches, clocks, and valuable gifts (down 21.4%), commodities in department stores (down 21.1%), and apparel (down 18.8%). Contrarily, sectors like books, newspapers, stationery, and gifts saw a 6.9% increase, and medicines and cosmetics rose by 2.5%.

Online sales reached HKD 2.6 billion, making up 8.7% of total retail sales and showing a 21.9% increase from the previous year. In response to these trends, the government is optimistic that initiatives such as the enhanced Individual Visit Scheme and increased duty-free allowances for Mainland residents will boost retail sectors in the near future.

Hong Kong retail sales see double-digit decline for second straight month