Innovation and fresh strategy keys to lifting battered retail sector in Hong Kong
Continuous 2 to 3 per cent growth in the economy makes Hong Kong the envy of many in the world. It looks even more remarkable considering the city was among the hardest hit by the coronavirus pandemic just a few years ago.
Yet there is no shortage of indicators reflecting the challenges facing some local industries. The disturbing decline in retail sales is one of them.
Official data showed the city's retail sales dipped for the 12th straight month in February, falling by 13 per cent year on year to a total value of HK$29.4 billion for the month.
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The sharper-than-expected decline was attributed to the earlier arrival of Lunar New Year in late January this year, compared with mid-February last year. The total value was down by nearly 40 per cent from the same month's peak of HK$46.55 billion in 2015.
The drop came as little surprise in the wake of a depressing downward trend over the past year. But it also shows the local economy is not as resilient as it seems.
The year-long contraction sits oddly with an expected annual growth rate of 2.5 per cent for the economy. It underlines the post-Covid shift in consumption and tourism patterns with which many retailers are still grappling.
Some lamented that retail spending remained weak despite joint promotions by the government and businesses during traditional peak seasons such as Christmas and Lunar New Year.
Some analysts believe the weak sentiment will prevail throughout this year as a result of changing consumption patterns among mainland tourists. Despite increased arrivals, average spending has declined.
Meanwhile, the stronger Hong Kong dollar is not just likely to dampen inbound travel and spending, but also expedites the recent trend of Hongkongers shopping and dining across the border.
The retail sector has expressed hope that the figures in coming months may see a narrower decline or slight growth when compared to the lower base last year.
A government spokesman said the industry would benefit from various measures by the Central Government to boost the mainland economy, efforts by local authorities to promote tourism and mega-events, as well as sustained increases in employment earnings in the local labour market.
But the industry will continue to face challenges from changes in consumption patterns of visitors and residents, it added.
While the authorities should explore different ways to enhance economic confidence and vitality, it is also incumbent upon businesses to adapt and innovate.
Those who manage to stay ahead when the market and consumer behaviour are changing fast stand a better chance of thriving. There must be good strategies and new thinking to attract and retain customers from near and far.
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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.
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