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Tourism helps boost HK retail sales growth in May
HONG Kong's retail sales posted its fourth month of double-digit growth in May fuelled by strong consumer spending and a rise in visitors from the Chinese mainland.
Retail sales rose 12.9 per cent from a year earlier in value terms to HK$40.5 billion (S$7.1 billion) in May, government data showed on Tuesday, faster than 12.3 per cent in April and its 15th month of expansion.
In volume terms, retail sales grew 11.6 per cent.
For the first five months of 2018, total retail sales rose 13.7 per cent in value terms and 12.2 per cent in volume terms.
"Looking ahead, the near-term outlook for retail sales business should stay positive, given the robust labour market and sustained growth in inbound tourism," the Census and Statistics Department said in a statement.
"The government will monitor the situation closely, in particular how the marked increase in external uncertainties of late may affect consumption sentiment going forward," it added.
Hong Kong's retail sales are thriving at a time when financial markets are being buffeted by global trade tensions and rising borrowing costs. China's economy has also shown signs of slowing with weaker-than-expected industrial output and retail sales growth in May.
May tourist arrivals rose 8 per cent from a year earlier to 4.95 million, according to the Hong Kong Tourism Board. Mainland visitors rose 10.6 per cent, accounting for 77.1 per cent of the total.
For the first five months, total tourist arrivals rose 9.6 per cent, while mainland visitor numbers climbed 12.7 per cent.
Analysts are positive on Hong Kong's retail outlook amid favourable economic conditions and a buoyant tourism sector.
Last month, PwC revised Hong Kong's retail sales growth to 8 per cent in 2018, up from 4-6 per cent growth, thanks to a rebound in mainland tourists and a robust wealth effect led by strength in the city's stock and property markets.
"Hong Kong retail sales growth definitely relies on mainland visitor numbers nowadays," said Michael Cheng, Asia Pacific & Hong Kong/China Consumer Markets Leader at PwC.
Sales of jewellery, watches, clocks and valuable gifts, jumped 23.8 per cent in May, medicines and cosmetics rose 18.7 per cent, and department store sales climbed 16.7 per cent.
Chow Tai Fook Jewellery Group Ltd, China's largest jeweller by market value, said in June that it planned to open about 300 points of sales in mainland China in 2019, with five in Hong Kong and Macau, as a vote of confidence in prospects for the jewellery sector.
Macau has also benefited from increasing mainland visitors.
Gambling revenue in Macau grew 12.5 per cent in June, thanks to solid demand from Chinese betters keen to play in the country's only legal casino hub.
However, the gain undershot analysts' expectations of 17-21 per cent growth.
Cosmetics retailer Sa Sa International plans to optimise store network and retail space to capture growing local consumption, and it will locate more shops near the Chinese border to capture incoming tourists. REUTERS