Hong Kong’s retail sales are quiet in the second half of the year.
Hong Kong’s retail sales continued to decline between January and May this year, down 1.8% year-on-year. Even though retail sales remained sluggish in the second quarter, the catering, cosmetics and pharmaceutical/personal care sectors were steadily rising, outperforming the sectors such as apparel and luxury goods. International real estate consultant Savills expects the retail market to remain quiet in the second half of this year.
One too: the rent of the shop fell 1.9% quarter-to-quarter
Savills released a retail leasing report, which indicated that the retail sales growth in Hong Kong slowed down in the second quarter, which caused retail rents to “stay in place”. The rents of shopping malls did not change much, while the sales of high-quality street shops fell by 1.9% quarter-to-quarter. In addition, the Hong Kong-Zhuhai-Macau Bridge and the high-speed rail have increased the number of visitors to and from Hong Kong in the first five months of this year by 20.7%. However, the increase in the number of tourists is not directly reflected in retail sales. As the depreciation of the Renminbi has caused the consumption of mainland tourists to weaken, As well as Sino-US trade tensions, consumers are more conservative in their shopping desires.
Sheng Shimin, head of Hong Kong Research and Consulting at First Pacific Davis, said that the Sino-US trade war is in full swing and that enterprises in South China have been hit, so consumers have come to Hong Kong to buy large items and the amount of luxury goods has declined. Current retail owners tend to renew their leases in a more flexible manner and even reduce rents to retain tenants if necessary.
New Trends in Retail App Enhance Guest Experience
The report also mentioned that new trends in the retail industry have emerged in Hong Kong and Southeast Asia, boosting the market, such as IKEA’s mobile app to help users simulate 3D home furnishings, Thailand Rimping supermarket earlier launched banana leaf packaging vegetables and other fresh Agricultural products are supported by consumers and businesses.
Li Dazhi, managing director and head of the leasing department at Savills Hong Kong, said that the new technology is improving the customer experience and driving the retail industry to change positively.