Financial News
Written by: Lin Leqian
2020-07-21 16:55
Last update date: 2020-07-21 16:55The third wave of the epidemic broke out locally, and the government tightened the gathering restrictions again, and the retail market was facing challenges. PricewaterhouseCoopers expects that annual retail sales will fall by 19.7% year-on-year to 346 billion yuan. PricewaterhouseCoopers Consumer Markets Asia-Pacific, Mainland China and Hong Kong managing partner Zheng Huanran said that the development of the epidemic will increase the difficulty of estimation. The forecast for the whole year has been relatively pessimistic, and the recovery of the retail market will depend on customs clearance.
He said that as the epidemic hopes to gradually stabilize later this year and fully resume customs clearance and free entry and exit of passengers, Hong Kong retail sales are expected to begin to recover and restart the growth engine after November this year. As the latest iPhone models are expected to be launched within this year, coupled with the expectation that the epidemic will stabilize, and the low base effect, he is more optimistic about the sales data in November and December. However, jewellery, watches and precious gifts are still the most affected categories. The retail sales of this part may fall by more than 70% in the second half of the year. It also points out that its customers have become conservative in their deployment in Hong Kong and have tried their best to reduce costs.
When the brand re-enters, the rent will be reduced by up to 50%
International brands have withdrawn from Hong Kong one after another. Cheng Huanran said that the current retail market is sluggish, and Causeway Bay is the first to surrender rents. He described it as a "shuffle" in the retail market. It is expected that when large brands re-enter in the future, rents can be reduced by 40% to 50%, and it is expected that after the epidemic, other brands will be attracted to Hong Kong again.
He also mentioned that the epidemic has also brought new opportunities for online consumption, prompting local retailers to rethink their business plans, upgrade their business models, increase online business and strengthen online sales. The acceleration of digital transformation will also help Hong Kong's retail industry reduce its dependence on physical store sales and tourism-related sales.
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