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Hong Kong Marks Full Year of Retail Declines

Mar 3, 2020 8:49 AM   By Rapaport News
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RAPAPORT... Sales of jewelry and other luxury items in Hong Kong fell for the 12th consecutive month in January amid a sharp downturn in tourism and an early Lunar New Year.

Revenue from jewelry, watches, clocks and other valuable gifts slid 42% year on year to HKD 4.92 billion ($632.2 million) during the month, the municipality’s Census and Statistics Department reported last week. Sales across all retail categories slipped 21% to HKD 37.77 billion ($4.85 billion).

Demonstrations against an extradition bill, which have been ongoing since June, have weakened consumer sentiment and affected tourism to the municipality. Although the bill has since been dismissed, violence in the region has continued.

Additionally, the Lunar New Year fell in January, compared with February last year, which impacted sales, with many consumers making their purchases prior to the holiday. Shopping would have occurred in January for the 2019 festival, but in December for the 2020 holiday.

“It should be noted that retail sales tend to show greater volatility in the first two months of a year due to the timing of the Lunar New Year,” a government spokesperson said. “Local consumer spending normally attains a seasonal high before the festival.”

The coronavirus had a limited effect on January sales since the epidemic escalated toward the end of the month. However, it severely impacted sales in February, the government spokesperson added.

“The business environment of retail trade has turned even more austere lately, as the threat of [coronavirus] has brought inbound tourism almost to a standstill and caused severe disruptions to consumption-related activities,” the spokesperson added.

Tourism in Hong Kong was down 53% year on year to 3.2 million visitors in January, the Hong Kong Tourism Board reported. Of those, 2.5 million came from mainland China, 54% fewer than the same period last year.

The government expects weakness in the market to continue as the spread of the virus increases, noting it will closely monitor the situation and its repercussions on the overall economy and the employment market.

Image: Hong Kong skyline. (FlickreviewR)
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Tags: Census and Statistics Department, Coronavirus, hong kong retail, Hong Kong Tourism Board, Rapaport News
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