International borders reopening to boost HK’s luxury market
Hong Kong is home to a large number of global luxury retailers.
Hong Kong’s luxury market will likely be supported by the reopening of international borders to tourism, Fitch Solutions reported.
In a report, Fitch forecast that spending on clothing will rise by an average of 6.7% to $33.5b in the medium term as Hong Kong eased restrictions on inbound travellers.
This is higher than the projected average 4.8% household spending, which indicates a “refocus” on fashion spending in the market.
“The forecasted return of international tourism as inbound restrictions ease will boost the luxury retail sector in Hong Kong as the city was a key global center for luxury shopping before the pandemic and will regain that status as tourists and business travellers return,” the report read in part.
The report noted that Hong Kong consumers will likely prioritise essential spending in the near term over non-essential spending amidst inflations.
Essential spending is expected to increase by 5.7%year-on-year whilst non-essential spending will grow by 5.3%YoY.
“This trend would carry through the medium term as essential spending by Hong Kong households is projected to grow by an annual average of 5% whereas non-essential spending would see 4.7% annual growth through to 2026,” Fitch noted.