HK total retail sales expected to grow by 17% in 2023

Hong Kong’s total retail sales are expected to increase by 17% to HK$408 billion in 2023, while it may take at least 12 to 18 months to recover to pre-pandemic level, according to PwC forecast.

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With Hong Kong and the rest of the world returning to normal and borders re-opening, the number of tourists, especially those from the Chinese mainland, coming to Hong Kong has been gradually increasing, PwC Hong Kong is positive about the outlook for Hong Kong's consumer market in 2023.

Meanwhile, there are also factors that affect Hong Kong's retail sales, such as Hong Kong residents adopting revenge travelling behaviour, which lowers the local consumption. Besides, the distribution of the second installment of consumption vouchers in July also did not seem to have a big stimulus impact on local spending; the number of tourists coming to Hong Kong has not increased as rapidly as expected, and mainland Chinese tourists are not replicating the activities that such visitors had prior to the border closures.

"Tourists will continue to be the key driver of Hong Kong’s retail sales. Campaigns organised by the government and supporting organisations such as ‘World of Winners’ and ‘Happy Hong Kong’, should help drive local consumption and add to the economy. The retail and tourism industries can explore more diverse content, themes and services to enhance the Hong Kong brand and attract more consumers," said Michael Cheng, PwC Asia Pacific, Mainland China and Hong Kong consumer markets leader.

PwC said the government should attract more Southeast Asian tourists, tap into the region’s growing travel demand, diversify its visitor base and leverage the economic opportunities presented by the emerging middle class in Southeast Asia. 

Looking ahead, due to the continuing recovery of Hong Kong's aviation and reception capacity, the number of inbound tourists is expected to increase, PwC predicted mainland Chinese tourists to rebound to about 60% of the level before 2019 by the end of this year, reaching an estimated total of 20 to 25 million visitors over the year. 

Further, benefiting from the gradual recovery in tourism and demand related to a propitious year for marriage, PwC estimated the luxury industry including jewellery, cosmetics, and department stores, to grow by over 40% from last year. It also suggested the Hong Kong government to encourage retailers to step up technology adoption and manpower training by providing subsidies and support while also helping Chinese brands to be promoted globally. 

In terms of online sales, as of June 2023, Hong Kong’s online sales dropped from HK$15.6 billion to HK$14.7 billion, accounting for 7.1% of overall sales, compared with 9.2% in the same period last year and 9.9% of overall sales for the whole of 2022. PwC Hong Kong predicted a slight decline in online retail sales in 2023. 

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