Retail business in the coming year could be set to improve slightly according to a worldwide study of year-end sales released today by the Hong Kong Trade Development Council (HKTDC). The report on preliminary 2016 Christmas sales in both traditional and emerging markets noted that strong performance was observed in the United States as well as the United Kingdom and Germany.
In Asia, Japan performed sluggishly with sales being expected to level off somewhat as a shopping spree by Chinese tourists eases. Meanwhile on the Chinese mainland, the retail atmosphere was more favourable, reflecting an upward consumption trend amid a moderating economy. Other promising markets around the world included Mexico and Chile and emerging European economies such as Hungary, Poland, the Czech Republic and Russia.
HKTDC Principal Economist (Global Research) Daniel Poon said the Christmas sales performance, viewed in light of a rejuvenating but shaky world economic environment, showed mixed fortunes in both traditional and emerging markets.
“Presaging a slightly better outlook for 2017, the continued recovery of the major traditional markets is definitely good news for Hong Kong exporters, who should intensify their sales efforts to tap the renewed business opportunities,” said Mr Poon.
“Yet, they should be aware that as consumers become more willing to spend, a cautious attitude will prevail due mainly to the challenges and uncertainties caused by the new US government, Brexit and increased political instability across the EU,” he added. “Value-for-money will thus remain a vital element for most shoppers, with a still expanding proportion of them using the Internet to find product information and compare prices.”
Electronics and toys among strong sectors
The hottest retail sales categories identified in the report were basically reflected globally, with sustained demand seen for consumer electronic items such as tablets, smartphones and wearables. Toys were another standout sector as smart toys and educational toys, as well as videogames and a number of classic items such as Barbie and Lego performing well at the checkout. Demand was also strong for playthings connected with the release of blockbuster films such as the latest in the Star Wars franchise.
While sales in traditional markets are seen as crucial because of their sustained recovery, Mr Poon said “Hong Kong exporters should continue to hunt for new business opportunities in emerging markets.”
“The holiday sales report pointed to a number of welcome outlets in the developing world, especially for resource-rich countries that are able to piggyback on a bottoming out of oil and commodity prices. Of greater importance, of course, is China, where the government aims to create a moderately prosperous society by 2020 and promote consumption so as to realise a more sustainable and balanced economic expansion,” he said, adding that the trend will “unfold new dimensions for those Hong Kong companies accustomed to exporting to overseas markets.”
– Holiday sales expected to rise by around four per cent year-on-year.
– Generally favourable consumer sentiment reflected solid employment gains, steady wage rises, sturdy property prices, healthier household balance sheets and low energy prices
– With the presidential election over, consumers were more willing to open their wallets on the back of President-elect Donald Trump’s stated plan to boost the economy and based on a recent stock market rally
– US retailers, apart from extending sales promotion periods and store opening hours, offered a flurry of deep discounts and door-buster specials to attract shoppers.
– Strong demand for consumer electronics including mobile devices, wearables, tech accessories and drones as well as home appliances and toys related to blockbuster films like Star Wars and Frozen
– Shoppers continued to use cash or debit cards to keep spending within budgets
– In spite of the spectre of terrorism, an ongoing refugee crisis and adverse political developments, festive spending in Europe was largely in good shape in 2016
– Sales for Germany and the UK were expected to rise by almost four per cent and over three per cent year-on-year, respectively
– Shoppers mostly favoured cash and debit card payment for their purchases, while gift vouchers were popular
– Value retailers continued to outperform department stores and upscale retail outlets
– E-tailers grew in popularity
– Sales were led by consumer electronics, smartphones, other mobile devices and toys
– For garments and footwear, an appetite for winter gear was spoiled by generally mild weather, but demand for jewellery and timepieces strengthened in Germany and the UK
– Retail sales were expected to level off, partly as a shopping spree by Chinese tourists calmed down somewhat
– Local shoppers remained timid, opting for basics as year-end gifts
– Price cuts and promotions were required to attract shoppers, who favoured discount stores and e-tailers
– The retail climate became more favourable, reflecting an upward consumption trend amid a moderating economy
– Following a 10 per cent rise in October, retail sales expanded by 10.8 per cent in November, boosted by Singles’ Day buying
– Retail and online sales grow on the back of intense discounts and promotions
– Strong demand reported for consumer electronics and mobile phones
– Sales of household appliances were firm, with air pollution problems across the mainland stimulating persistent demand for air purifiers and humidifiers
– Sales of clothing and toys remained steady
Other Emerging Economies
– In Latin America, firmer oil and commodity prices lifted the regional economy with Mexico receiving a boost from the US recovery
– In Chile, amid strong fundamentals and a gradual economic recovery, saw Christmas shoppers moderately increasing spending on most products
– In emerging Europe, a reviving EU economy, despite modest and uneven growth, appeared to be a boon to festive spending. Stabilisation of the Russian economy also helped, with growth generally seen in Hungary, Poland and the Czech Republic