HONG KONG: As rents fell 0.8% q-o-q in Q1 2015, retail market sentiment remained sluggish this quarter, with retail sales falling by 2.0% year-over-year (y-o-y) in the first two months of 2015.
According to a research note from CBRE, a structural shift in tourists’ preferences towards buying more affordable mid-market products, coupled with the rising trend of mainland Chinese tourists to shop overseas resulted in weaker retail sales in certain sectors.
The period saw sales of watch and jewellery items decline by 15.9% y-oy, while sales of other consumer durable goods were down 15.15 y-o-y.
In contrast, demand for products more oriented to local shoppers remained stable, with sales of furniture and fixtures and supermarkets posting 8.9% y-o-y and 3.7% y-o-y growth respectively.
The tourism market remained robust in Q1 2015 in spite of spreading protests against Chinese shoppers in selected retail nodes near the border.
Total tourist arrivals in Hong Kong increased by 11.6% y-o-y in the first two months of 2015, following a rise of 12% y-o-y to 60.8 million in 2014.
Tourist from mainland China increased by 15.8% y-o-y in January and February combined, accounted for 82.1% of the total visitor arrivals.
