Numbers charting retail sales in Hong Kong reveal the greatest fall since records began – 44% down year-on-year in February – while anecdotal evidence points to a growing luxury second-hand market.
The February figure comes on top of a 21.5% plunge in January, and a 19.4% fall in December, Inside Retail Asia reports, and follows the lockdown of Mainland China as it battled to cope with the COVID-19 pandemic, and as Hong Kong restricted travel into its territory from all parts of the world.
A Hong Kong government spokesperson confirmed the spending fall was mainly due to the lack of tourism and collapse in consumer spending in all sectors. Government data provisionally estimated Hong Kong retail sales in February as US$2.9 billion.
Sales of jewellery and luxury goods were down almost 59% in January and February combined, while there was also a 9.3% fall in the sale of food, alcohol and tobacco during the same period.
Meanwhile, the FT reports that Hong Kong’s recession – caused not only by the COVID-19 crisis but also the lengthy anti-government protests that preceded it – is driving consumers to unload expensive items such as designer bags and luxury watches in order to raise ready cash for life’s essentials.
Sales of new luxury goods may be down, but sales of second-hand items are picking up, the publication says.
WP Diamonds, which specialises in pre-owned diamonds, witnessed a 70% pick-up in inquiries about selling diamonds, jewellery and high-end watches on its Hong Kong website during the first two months of 2020. Poignantly, and as a mark of desperation, the number of people asking about selling engagement rings has doubled over the same period.
Similarly, Milan Station Holdings, which sells second-hand luxury bags in Hong Kong, has seen a 30% rise in the number of bags sold to its shops over the past two months.
There is also a rush to buy gold in the territory, always popular as a defensive investment when stock markets are in free fall.
Soourced from Inside Retail Asia, Finanical TImes; additional content by WARC staff