Hong Kong retail has suffered through another tough month as tourist flows from mainland China continue to soften and local consumer sentiment suffers.
The Special Administrative Region of China’s retail sales for the month of April fell 7.5 percent to 35.2 billion Hong Kong dollars, or $4.53 billion, according to Hong Kong’s Census and Statistics Department. While that figure is disappointing for retailers, the drop does represent an improvement over the first part of the year. Sales in March dropped 9.8 percent, with a 13.6 percent slump over January and February combined.
“[Many] types of retail outlet still recorded notable falls in sales, reflecting the continued drag from the slowdown in inbound tourism as well as the more cautious local consumer sentiment amid subpar economic conditions,” Hong Kong’s Census and Statistics Department said Tuesday.
In terms of product categories, the government said sales of apparel fell 5.9 percent while those of jewelry, watches, clocks and valuable gifts fell 16.6 percent. On a brighter note, sales of medicine and cosmetics rose 1.7 percent for the month.
As reported, retailers with heavy exposure to the Hong Kong market are suffering. Earlier this month, Chow Tai Fook warned that its full-year profit will halve and multibrand retailer I.T Limited reported a 33 percent plunge in full-year earnings.
Hong Kong is not the only Asian hotspot that is struggling in terms of retail amidst a global economic slowdown.
Retail sales in Japan fell 0.8 percent in April, the country’s Ministry of Economy, Trade and Industry said Monday.
Last week, the Japan Department Stores Association said its members’ sales to international tourists slid 9.3 percent in April to 17.9 billion yen, or $162.89 million. This marked the first month since January 2013 that sales to international visitors has fallen.
Waves of foreign tourists — particularly those from China — have boosted sales at Japanese retailers over the past few years but the recent appreciation of the yen has made Japan a more expensive shopping destination.