New Retailing research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 12/12/2013 -- Hong Kong's retail sector is expected to grow steadily over the next few years as its sophisticated urban population continues to spend on non-essential items such as luxury clothing and jewellery. This will result in a strong rise in household spending across all retail subsectors. We are particularly bullish about the future growth prospects for health and education spending; however, we expect housing & utilities and food & non-alcoholic drinks expenditure to remain the highest throughout our forecast period.
The new Hong Kong retail report provides an extensive and comprehensive forecast of various retail indicators including household spending, and headline total spending across each retail subsector, household income and employment forecasts, demographic forecasts, and a detailed breakdown of household and per capita spending across a large number of retail areas including food & drink, healthcare and insurance, consumer electronics, toys, pets, gardens, household goods, and a number of other subsectors.
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Hong Kong's street markets may be a magnet for tourists, but the concept of modern retail is firmly established in the territory, with organised sales accounting for the lion's share of the total. High-end shopping malls and department stores dominate. Overall, we see long-term potential in the local consumer market, particularly for non-essential items and aspirational purchasing by a sophisticated consumer base. We forecast the average net household income will be around US$56,220 in 2013, with a fairly even split between the number of households in the US$5,000+ wage bracket and the US$10,000+ wage bracket.
However, a significant percentage (29.8%) of households falls into the highest US$50,000+ wage bracket, and this is forecast to rise to 37.4% by 2018. This represents the key demographic for increased household spending on luxury items beyond necessities such as food, utilities and transport, and will result in a corresponding increase in household spending on health, education and clothing & footwear.
However, we note downside risks to our forecasts such as short-term concerns about the impact on Hong Kong's economic outlook of the struggling property market as prices become even more overstretched.
Recent developments include:
- Tommy Bahama, the US-based casual wear brand, opened its first store in Hong Kong in January 2013. It is now trying to find further space in a mall on Hong Kong Island or in Kowloon for its second shop.
- Fellow US retailer J Crew is to open its first Hong Kong store in the IFC Shopping Mall in Q214.
- UK supermarket chain Tesco will pay HKD4.33bn to gain 20% of a venture with China Resources Enterprise that will run supermarkets and other stores in Hong Kong as well as in China.
Key BMI Forecasts:
- We expect total household spending to be US$107.17bn in 2013.
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