International borders reopening to boost HK’s luxury market

Hong Kong is home to a large number of global luxury retailers. 

Hong Kong’s luxury market will likely be supported by the reopening of international borders to tourism, Fitch Solutions reported. 

In a report, Fitch forecast that spending on clothing will rise by an average of 6.7% to $33.5b in the medium term as Hong Kong eased restrictions on inbound travellers. 

This is higher than the projected average 4.8% household spending, which indicates a “refocus” on fashion spending in the market. 

“The forecasted return of international tourism as inbound restrictions ease will boost the luxury retail sector in Hong Kong as the city was a key global center for luxury shopping before the pandemic and will regain that status as tourists and business travellers return,” the report read in part. 

Read more: China’s luxury market suffers from spending crunch amidst strict COVID measures

The report noted that Hong Kong consumers will likely prioritise essential spending in the near term over non-essential spending amidst inflations. 

Essential spending is expected to increase by 5.7%year-on-year whilst non-essential spending will grow by 5.3%YoY. 

“This trend would carry through the medium term as essential spending by Hong Kong households is projected to grow by an annual average of 5% whereas non-essential spending would see 4.7% annual growth through to 2026,” Fitch noted.