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Hong Kong’s cash vouchers boost retail sales

HK Consumption voucher

Hong Kong’s retail sales climbed for the seventh straight month in August, helped by a stabilising COVID-19 situation, an improved labour market and economic recovery and thanks to a boost from a consumption voucher scheme (CVS).

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The Hong Kong government began handing out a total of HKD5,000 worth of spending vouchers to eligible residents by instalments in a bid to support local businesses. The first instalment was on 1st August and the second was 1st October.

The value of retail sales in August rose 11.9 percent from a year earlier to US$3.67 billion, a government report said.

“The CVS should continue to bode well for local consumption sentiment in the rest of the year,” a government spokesman said, referring to electronic vouchers given to certain consumers to spend in shops.

In volume terms, retail sales in August grew 10.6 percent from a year earlier compared with a revised 0.7 percent surge the previous month.

For the first eight months of 2021, total retail sales increased 8.1 percent in value terms and rose 6.8 percent in volume.

Online retail sales in August jumped 16.5 percent in value year-on-year compared with a revised growth of 28.8 percent in July.

Sales of jewellery, watches, clocks and valuable gifts, which before the pandemic relied heavily on tourists from mainland China, climbed 28 percent in August. This was followed by sales of electrical goods and other consumer durable goods (+10.1 percent in value); food, alcoholic drinks and tobacco (+1.3 percent); other consumer goods (+30.7 percent); commodities in department stores (+7.5 percent); wearing apparel (+35.7 percent); medicines and cosmetics (+13.6 percent); fuels (+21.0 percent); furniture and fixtures (+6.5 percent); books, newspapers, stationery and gifts (+27.9 percent); footwear, allied products and other clothing accessories (+62.3 percent); Chinese drugs and herbs (+26.7 percent); and optical shops (+60.4% percent).

On the other hand, the value of sales of commodities in supermarkets decreased by 8 percent in August 2021 over a year earlier.

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“Keeping the epidemic under control remains pivotal to a full-fledged recovery of the retail sector and the overall economy,” the spokesman said, adding it was essential to strive towards more widespread coronavirus vaccinations.