Hong Kong’s hard-luxury market saw its weakest growth figure for six months as the retail sector’s rebound ran out of steam amid a lack of tourism.
Revenue from jewelry, watches, clocks and valuable gifts grew 27% year on year to HKD 3.2 billion ($410.6 million) in July but was still 42% lower than in the same month of 2019, the municipality’s Census and Statistics Department reported Tuesday. The increase was also gentler than June’s 32% year-on-year growth and was the thinnest rise since January, when Hong Kong was struggling with a fourth coronavirus wave.
“Retail sales continued to increase in July over a year earlier as the local epidemic remained stable and labor market situations improved further, although the growth pace moderated somewhat as compared to the preceding month,” a government spokesperson said.
Sales in all retail categories rose 3% year on year to HKD 27.24 billion ($3.5 billion) but were down 21% from two years earlier.
The closure of borders to reduce the spread of Covid-19 has hit Hong Kong — a key luxury destination for tourists. Although the municipality has reduced its border restrictions, tourism has not yet returned to normal levels. The number of visitors was down 58% year on year in July and plummeted 99% for the first seven months of the year, according to the Hong Kong Tourism Board.
However, the government expects sales to pick up in August amid the launch of a consumption voucher scheme — a program to stimulate spending by offering citizens electronic vouchers worth HKD 5,000 ($644).
“The electronic vouchers that the government began to disburse in August have helped stimulate consumption sentiment and will render support to the retail business in the rest of the year,” the spokesperson explained. “Yet, it is essential for the community to keep the epidemic under control and strive towards more widespread vaccination, so as to strengthen the foundation for continued recovery of the retail sector and the overall economy.”
For the first seven months of 2021, sales of jewelry, watches, clocks and valuable gifts climbed 33% year on year to HKD 21.94 billion ($2.81 billion). Revenue from all retail segments increased 8% to HKD 201.6 billion ($25.87 billion).