Executive Summary

• The value of total retail sales in Hong Kong in March increased by 11.4% year over year, showing signs of momentum picking up after bottoming in 2016, according to the Hong Kong Census and Statistics Department.
• A breakdown of retail sales by category, reveals that jewelry and cosmetics products, typically popular among tourists, showed the strongest pickup. This resonates with the increase in the number of tourists to Hong Kong in the first quarter of 2018.
• The decline of the market for Chinese gifting means that Chinese tourists now purchase items primarily for personal use, likely indicating that the pickup in retail sales is on solid ground.
• We expect this upward trend to continue, and should the favorable conditions persist, we could see the figure break the HK$494 billion annual record set in 2013 in three years.