What: Hong Kong’s retail sales rose 3.8% year-on-year in August, marking the fourth consecutive month of growth driven by inbound tourism and government mega-event initiatives.

Why it is important: This growth reflects a tentative stabilization in Hong Kong’s retail sector, but highlights the ongoing disconnect between rising visitor numbers and actual spending.

Hong Kong’s retail sector experienced a notable acceleration in August, with sales rising 3.8% year-on-year to HK$30.3 billion, marking the fourth consecutive month of growth. This upturn is attributed to a surge in inbound tourism, particularly from mainland China, and the government’s proactive promotion of mega-events, which have buoyed consumer sentiment. Despite these positive signals, the sector continues to grapple with fundamental challenges. The increase in visitor arrivals has not fully translated into proportional retail spending, as many tourists now prioritise experiences over shopping, a trend exemplified by the rise of “special forces” travelers who spend minimally during short trips. Luxury retail remains a draw, especially in tax-free districts, but broader spending patterns remain subdued. Online retail continues to expand, accounting for 8.4% of sales in August and growing 8.9% year-on-year, reflecting the sector’s ongoing digital transformation. While October’s “golden week” is expected to further boost consumption, the underlying disconnect between foot traffic and actual sales underscores the need for continued adaptation and innovation.

IADS Notes: As reported in Inside Retail in September 2025, Hong Kong’s retail sector has seen modest growth for several consecutive months, yet the increase in visitor arrivals—largely due to government mega-event initiatives and multiple-entry visas—has not translated into proportional retail spending. Retail Asia in March 2025 highlighted that Shenzhen’s multiple-entry visa policy brought more tourists but failed to boost sales, as many mainland Chinese visitors now prioritise experiences over shopping. The Financial Times in May 2025 documented the rise of “special forces” tourists, whose minimal spending has challenged luxury retail despite high footfall. Fashion Network in September 2025 noted that, although luxury gifting categories showed some resilience, overall spending remains subdued and the gap between traffic and sales persists. Inside Retail in March 2025 further emphasised the ongoing structural changes in the sector, with digital transformation and online sales growth emerging as key adaptive strategies.

Hong Kong’s retail recovery accelerates as August sales rise by 3.8%