Xin Ou
Research expert covering Greater China
Retail in Hong Kong - statistics & facts
The retail industry is one of the most significant contributors to Hong Kong’s economy. There are around 45 thousand retail facilities in the metropolis, with nearly 246 thousand employees. Like other sectors dramatically affected by the COVID-19 pandemic, Hong Kong’s retail market is recovering. However, significant challenges are at the door, both internal and external.
However, since tourists are spending less on shopping but more on recreation and culture, the rising number of visits did not bring much to the retail industry. In addition, more people are leaving Hong Kong than people are coming during holiday seasons. Besides, many residents rush to Shenzhen to shop at warehouse clubs. This explains why the sales value generated at local supermarkets is declining while the overall retail figure is growing.
To satisfy consumers’ expectations of better shopping experience and enhance competitiveness, many merchants have started to embrace the online-merge-offline (OMO) mode, which allows the buyers to obtain detailed product information online, try the item at a physical store, and place a “click & collect” order, and more importantly, facilitates the sellers to keep close track of their customers and build customer loyalty. With technological advancements and increasing government support, OMO is likely to become a blue ocean.
Tourism consumption-inbound or outbound
Tourist consumption used to make up 30 to 40 percent of the total retail sales. Therefore, the tourism breakdown in 2020 also led to a plunge in the retail market. To boost tourism, the local government planned over 210 mega events around the year of 2024, and the central government has raised the duty-free shopping quota for mainland tourists. The first half of 2024 saw a significant increase in the number of visitor arrivals to Hong Kong, of which a majority come from mainland China.However, since tourists are spending less on shopping but more on recreation and culture, the rising number of visits did not bring much to the retail industry. In addition, more people are leaving Hong Kong than people are coming during holiday seasons. Besides, many residents rush to Shenzhen to shop at warehouse clubs. This explains why the sales value generated at local supermarkets is declining while the overall retail figure is growing.
Online-merge-offline (OMO) retail mode
Compared to mainland China, the share of online sales in Hong Kong’s retail industry is exceptionally low. On the one hand, local consumers are more used to shopping at brick-and-mortar stores that are dotted across the region. On the other hand, sky-scraping warehouse rent and high delivery costs discourage retailers from establishing e-stores.To satisfy consumers’ expectations of better shopping experience and enhance competitiveness, many merchants have started to embrace the online-merge-offline (OMO) mode, which allows the buyers to obtain detailed product information online, try the item at a physical store, and place a “click & collect” order, and more importantly, facilitates the sellers to keep close track of their customers and build customer loyalty. With technological advancements and increasing government support, OMO is likely to become a blue ocean.
