Hong Kong's retail sales are expected to surge up to 8 percent this year to around HK$410 billion, driven by retail innovation, tax efficiency, and leveraging artificial intelligence for cost optimization, according to Deloitte China.
Michael Cheng, Deloitte China Hong Kong consumer markets business leader, said a stronger yuan, more visitors, wealth effect from a steadier real estate market, and an enhanced equity market will strengthen consumer confidence. He expected a few main categories to drive the growth, including jewelry, watches and clocks, and valuable gifts rising 19 percent, clothing and footwear 16 percent, medicines and cosmetics 11 percent, and department stores 10 percent.
Cheng said sales of luxury goods were not ideal last year, falling 30 to 40 percent below the peak in 2013. However, these luxury items offer significant value retention, and as purchasing power recovers, consumers may buy more, leading to a noticeable improvement from a low base.
Winnie Shek, Deloitte China Southern Region business tax services leader, recommended that the government offer tax incentives for retailers through patents registration to access Hong Kong's 5 percent preferential tax rate, provided with eligible, substantiated R&D activities and incur expenditures.
To strengthen the online retail platforms' competitiveness, Shek recommended retailers to integrate digital trade solutions, such as customs declarations and real-time tracking systems, to enhance visibility and compliance.
Deloitte China Hong Kong strategy and business design leader Falcon Chan emphasized the importance of incorporating AI and automation to sharpen local retail competitiveness and build a global platform.
Gloria Leung
