Hong Kong Retail Sales Plummet 21% in January as Coronavirus Worsens Already-Bleak Picture

Hong Kong retail sales slid by more than 20% year-on-year in January as government officials warned that coronavirus has dampened an already-bleak retail picture.

A report released by Hong Kong’s Census and Statistics Department (C&SD) today showed that retail sales for January were provisionally estimated at $37.8 billion  — a 21.4% drop compared with January 2019.

It was the 12th straight month of retail sales declines in Hong Kong. The semi-autonomous territory saw significant sales dips in 2019 amid ongoing pro-democracy protests and social unrest, which have led both tourists and other would-be shoppers to stay home.

The already-unfavorable retail outlook has been worsened by the coronavirus outbreak, according to government officials. A C&SD spokesperson warned today that the virus “has brought inbound tourism almost to a standstill and caused severe disruptions to consumption-related activities.” The government is monitoring the situation and its repercussions on the employment market as well as the overall economy, the official added.

According to the Hong Kong Tourism Board, January tourism arrivals dropped to 3.2 million, a 52.7% decline compared with January 2019. Chinese mainland visitors fell to 2.5 million for January, a 54.2% plunge year-over-year.

Historically, Chinese tourists have been a reliable source of revenues for high-end brands in Hong Kong, with the region estimated to account for between 5% and 10% of global luxury sales. But sales of luxury goods such as jewelry and watches plummeted by 41.6% in January compared with a year prior, according to the C&SD. Meanwhile, clothing sales fell by 28.9% and shoe and accessories sales dropped by 21.6%. The declines came despite the Lunar New Year, which fell on Jan. 25 this year and on Feb. 5 in 2019.

The coronavirus which originated in the central China city of Wuhan in late 2019, has infected more than 89,000 globally, with upwards of 3,000 deaths confirmed. The majority of cases have been confined to mainland China but infections recorded outside China ramped up last week, particularly in South Korea, Italy and Iran.

Despite its close proximity with China’s Guangdong Province, which has had more than 1,300 cases, Hong Kong has seen fewer than 100 confirmed infections since the outbreak began. The semi-autonomous territory has taken a series of seemingly effective containment measures, including shutting down schools and suspending public transit to China. Many businesses have also chosen to temporarily close.

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