What: Hong Kong's retail sector records fourteenth consecutive month of decline as mainland Chinese visitors prioritise experiences over shopping, despite 13.5% growth in tourist arrivals.

Why it is important: The continued downturn, despite government initiatives and rising visitor numbers, reveals how currency dynamics and changing consumer preferences are reshaping Asia's retail landscape.

Hong Kong's retail sector continues to face significant challenges as sales declined 2.3% to HK$28.9 billion in April 2025, marking the fourteenth consecutive month of decrease. Despite welcoming 3.85 million visitors, a 13.5% increase from the previous year, the retail landscape shows a growing disconnect between tourist arrivals and spending. The jewellery, watches, and valuable gifts sector experienced a 1.7% decline, while clothing and footwear sales fell more sharply by 5.5%. This trend reflects a fundamental shift in consumer behaviour, particularly among mainland Chinese visitors, who increasingly prioritise experiences over traditional shopping. The strong Hong Kong dollar has created a dual impact, deterring tourist spending while encouraging local residents to shop across the border. While the government remains optimistic about tourism promotion and mainland economic growth bolstering consumer sentiment, the sector continues to grapple with evolving consumption patterns and regional competition.

IADS Notes: Hong Kong's April 2025 retail decline of 2.3% represents a slight improvement from more severe previous drops, yet continues a concerning trend. In February 2025, sales plunged 13%, marking the steepest decline in a year, while March 2025 saw a 3.5% fall. This persistent downturn occurs despite increased visitor numbers, with tourist arrivals rising 13.5% year-on-year, highlighting a fundamental shift in consumption patterns. The transformation is particularly evident in the emergence of "special forces travellers" from mainland China, who prioritise experiences over shopping, spending as little as HK$400 per visit. This trend, combined with the strong Hong Kong dollar encouraging cross-border shopping, suggests a structural rather than cyclical challenge for the city's retail sector.

Hong Kong retail sales fall for 14th straight month in April