Retail is on course for a continuous upturn in Hong Kong this year to hit an annual growth rate of 8% to HK$484 billion (US$61.7 billion) this year and surpass its 2013 peak of HK$494 billion (US$63 billion) by 2020, said PwC recently.
“All-time high mainland tourists arrivals in the first four months of 2018—with March and April both individually hitting record high), a robust wealth effect and an improvement in consumer sentiment, as well as new infrastructure initiatives contribute to a positive outlook for the local retail sector,” said Michael Cheng, Asia Pacific and Hong Kong/China Consumer Markets Leader for PwC
Total retail sales for the first four months of 2018 surged 14%, with all sectors recording positive growth, PwC pointed out.
Luxury goods, especially jewelry and watches, along with consumer durable products remain the best-performing areas propelling further recovery this year and onwards, the firm added.
However, retailers still need to be mindful of challenges looming on a global scale that may impact consumption, including the Sino-US trade dispute, strong US dollar against Renminbi, a global interest rate hike, and the imminent end of QE in Europe and Japan, PwC warned.
In addition, changing consumer behaviors and preferences have led to the rise of new shopping experiences and e-commerce in Hong Kong.
With this year’s World Cup, mall operators are taking an experiential approach to capture consumers’ attention by integrating “retailtainment”, PwC observed.
The upward trend in electronic payment will promote wider adoption of mobile retail payments, the firm added.
Mid-tier fashion and beauty retailers, affordable luxury brands, lifestyle and sportswear shops and pop-up stores continue to have a growing presence, the firm predicted.