Three sub-sectors to drive HK's retail growth in 2024

PwC Hong Kong anticipates a 5% increase in retail sales.

There will be a 5% growth in retail sales for 2024, with an expected uptick to $428b, according to PwC Hong Kong. This growth is anticipated to be powered by three key sub-sectors: department stores, medicines and cosmetics, and the luxury segment.

These areas are poised for significant benefits from major developments such as the Kai Tak Sports Park, anticipated to draw more visitors and increase spending.

Despite ongoing global economic challenges and local market uncertainties, PwC maintains optimism for a potential uplift in the latter half of the year. The firm suggests that easing global interest rates could strengthen Hong Kong's equity and real estate sectors.

Michael Cheng, PwC Asia Pacific, Mainland China, and Hong Kong Consumer Markets Leader, highlighted the importance of enhancing Hong Kong's event economy. He urged the government to organize more regional financial forums, trade fairs, and international sports and cultural events, including art exhibitions, concerts, and luxury brand fashion shows.

Cheng also advised retailers to embrace eco-friendly practices and shift towards online commerce to meet changing consumer preferences and remain competitive in a dynamic market.

This optimistic forecast follows a significant rebound in 2023, with retail sales increasing by 16% to $407b. This growth was spurred by a resurgence in tourism and consumer spending following the reopening of borders with mainland China. The luxury, clothing, and cosmetics sectors saw robust growth, fueled by both returning tourists and local shoppers.