Retail year ends on cheery note with Shenzhen easing

Stacy Shi

The resumption and expansion of the multiple-entry individual travel scheme for Shenzhen residents significantly boosted Hong Kong's retail sector last month.

Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, was citing poll findings that brought a bit of cheer in the wake of the release of November retail sales statistics by the Census and Statistics Department.

That showed a 7.3 percent year-on-year decline, with total sales amounting to HK$31.697 billion - a decrease for the ninth consecutive month.

In comparison, October recorded a 2.8 percent drop. Overall, the first 11 months saw a 7.1 percent reduction compared to the same period in 2023.

An SAR administration spokesman attributed the ongoing decline to shifts in consumption patterns and the strength of the Hong Kong dollar.

However, he expressed optimism, saying the resumption and expansion of the travel scheme would, along with various measures taken by Beijing to stimulate the economy, would positively influence Hong Kong's market.

Tse said yesterday the association's survey found the scheme had brought in more mainlanders.

Lower-priced items such as cosmetics, fast food and clothing benefited the most from this influx.

"Nevertheless, challenges remain, particularly the strong Hong Kong dollar, which may deter visitors from purchasing high-priced items," she said.

Looking ahead to this month, the survey of retailers indicated that over half of the 3,600 respondents expected single to low double-digit growth.

Expectations ranged from single-digit increases in the personal care, apparel and health food sectors to low double-digit growth for cosmetics retailers.

Tse also highlighted concerns regarding Hongkongers' outbound travel during the Lunar New Year holidays, which could impact the retail industry.

Bond Law Chen-pang, the association's executive director, expressed hope for a sales rebound this year.

"The resumption of multiple-entry visas for Shenzhen marks a positive step in driving foot traffic, and the market's recovery starting in December will take time to materialize," he said.

"Looking forward to 2025, we expect the benefits of various supportive measures to gradually enhance all retail categories."