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Jolly Christmas for Exporters

Christmas
More and more Christmas shoppers turned to online retailers

Cash registers jingled healthily for retailers in many of the countries importing goods from Hong Kong over the Christmas shopping period, with one big change from previous years – the bells were digital.

Hong Kong Trade Development Council (HKTDC) Deputy Director of Research Billy Wong said the switch from traditional bricks-and-mortar shopping to online retailing had increased in pace over the course of 2018. “The practice of BOPIS – buy online, pick up in-store – is gaining popularity and we may see the retail industry transition more towards the O2O, online-to-offline, model,” Mr Wong said.

Consumer electronics items such as televisions, tablets and smart-home devices were popular across different markets, a study of year-end sales released by the HKTDC showed. Other popular Christmas gifts included clothes, toys, books and cosmetics. In Europe, subscription-based gifts such as music and movie streaming services became a more popular gift option.

Consumer demand in Mainland China remained robust, the research study found, with sales by online retailing giant Alibaba rising to a record US$31 billion on the 10th iteration of its annual digital shopping event, Single’s Day, on 11 Nov. This represented a 27% expansion year on year.

Singles Day

Billy Wong
HKTDC Deputy Director of Research Billy Wong

Consumer demand in Mainland China remained robust, the research study found, with sales by online retailing giant Alibaba rising to a record US$31 billion on the 10th iteration of its annual digital shopping event, Single’s Day, on 11 Nov. This represented a 27% expansion year on year.

Mr Wong said the momentum of economic growth would continue in 2019 but a slowdown is possible. “Given the growing uncertainties in the global environment, Hong Kong exporters should prepare for a possible economic slowdown in the coming year and capture any opportunities arising from the transition to a new retail model,” he said.

The survey found the United States and several emerging markets such as Mexico showed strong sales growth over the festive season, but a number of traditional export destinations showed slower expansion.

“Holiday sales in the US increased by 5.1% to more than US$850 billion, registering the strongest growth in six years,” Mr Wong said. Mexico stood out among the strongly growing emerging markets. “Overall consumer spending in Mexico during the shopping peak increased strongly by 8% to US$5 billion, while Germany’s Christmas sales are expected to increase by 2% to hit a record-high of US$114 billion, although the growth has slowed from 3.8% over the same period in 2017. The retail performance of France and the United Kingdom remained gloomy over the holiday, overshadowed by anti-government protests and Brexit negotiations respectively.”

The survey found Germany’s robust economic indicators, including rising real wages and the highest employment levels since the country’s reunification in 1990, contributed to healthy sales. European consumers snapped up smartphones, electronic gaming consoles, books, clothes and accessories in addition to subscription-based services.

Emerging Strength

pavilion
Sales grew strongly in Poland, where HKTDC had a pavilion at the Warsaw Home exhibition in October

The economic recovery brought a strong performance from emerging markets. In Russia, the prospect of a value-added tax (VAT) rise on 1 Jan 2019 resulted in a rush of consumer purchases in the run up to the New Year. In another Eastern European giant, Poland, a survey by IBRiS on behalf of Bank Millennium estimated household spending in the Christmas season would reach US$6.3 billion, up 8.6% year on year.

In Latin America, Mexico’s Confederation of National Chambers of Commerce (Concanaco Servytur) said overall consumer spending during the country’s version of Black Friday, El Buen Fin (The Good Ending), expanded a strong 8%. In Brazil improving economic conditions are expected to boost seasonal sales about 2.7% – the strongest growth since 2014 – generating US$13.6 billion in revenue, according to the National Confederation of Retailers and SPC Brasil, the Brazilian credit bureau.

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