What: Hong Kong's retail sales show modest 0.7% growth in June 2025, marking the second consecutive month of increase despite ongoing structural challenges in the market.

Why it is important: This slight improvement, amid continued transformation of Chinese tourist shopping behavior and currency pressures, signals potential stabilization in Hong Kong's retail sector after fourteen months of decline.

Hong Kong's retail sales recorded a modest 0.7% increase to HK$30.1 billion in June 2025, following May's 2.4% growth. However, sales volume decreased by 0.3% year-on-year, reflecting ongoing market challenges. The first half of 2025 saw total retail sales decline by 3.3% in value and 4.7% in volume compared to 2024. While visitor arrivals rose 11% to 3.48 million in June, with mainland Chinese visitors increasing by 12% to 2.61 million, spending patterns remained subdued. The jewelry, watches, clocks, and valuable gifts sector showed signs of recovery with a 6.8% increase, contrasting with a 4.7% decline in clothing and footwear sales. The government's efforts to stimulate the sector through tourism promotion and mega events continue, though the strong Hong Kong dollar's impact on cross-border shopping patterns remains a significant challenge.

IADS Notes:

The June 2025 results mark a potential turning point after a prolonged downturn. This modest growth follows significant changes in Chinese tourist behavior, with May 2025 data showing the emergence of "special forces travelers" who spend as little as HK$400 per visit . The recovery comes after fourteen consecutive months of decline through April 2025 , despite initiatives like multiple-entry visas for Shenzhen residents . The shift reflects a broader transformation in Chinese consumer behavior, with over 70% now seeking enhanced cultural experiences over traditional shopping .

Hong Kong June retail sales rise 0.7%, up for 2nd straight month