People who successfully navigate shifts in the market and consumer behavior when these changes happen rapidly have a greater likelihood of flourishing.

A consistent economic growth rate of 2 to 3 percent keeps Hong Kong as a model of success for many around the globe. This achievement becomes particularly striking when we consider that the city was one of the most severely affected areas during the coronavirus pandemic not long ago.

Nevertheless, numerous signs highlight the difficulties encountered by certain local industries. One such indicator is the alarming decrease in retail sales.

According to official statistics, the city experienced a decline in retail sales for the 12 consecutive months as of February, with a yearly drop of 13% to reach a monthly total of HK$29.4 billion.

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The more significant than anticipated drop can be linked to the early timing of the Lunar New Year at the end of January this year, as opposed to mid-February last year. This resulted in a decrease of almost 40 percent when compared to the peak figure of HK$46.55 billion recorded in the same month back in 2015.

This decline was expected following the disheartening downturn throughout the last year. However, it also indicates that the regional economy may be less robust than previously thought.

The prolonged economic downturn seems at odds with the anticipated yearly expansion of 2.5 percent for the overall economy. This highlights the ongoing challenges faced by numerous retailers due to changes in consumer behavior and travel trends following the pandemic.

Many expressed disappointment over the continued sluggishness of retail spending, even with collaborative promotional efforts by both the government and businesses during key holidays like Christmas and the Lunar New Year.

Several experts think that the subdued mood will persist for the entire year due to alterations in how mainland visitors spend their money. Even with more travelers arriving, their overall expenditure has decreased.

At the same time, the appreciation of the Hong Kong dollar is expected to reduce incoming tourism and expenditure, while also accelerating the current tendency of residents from Hong Kong doing their shopping and dining in mainland China.

The retail industry remains optimistic that upcoming data might show a reduced decrease or even modest growth when contrasted with the weaker baseline from the previous year.

A representative of the government stated that the sector would gain advantages through multiple initiatives implemented by the national administration to stimulate economic growth on the mainland, actions taken by regional administrations to encourage travel and host major events, along with consistent rises in income among workers locally.

However, the sector will still encounter difficulties due to shifts in how both tourists and locals consume goods and services, it noted.

Although the authorities ought to investigate various methods for boosting economic confidence and vigor, companies must likewise adjust and create new ideas.

People who remain at the forefront as the market and customer preferences evolve swiftly have a greater likelihood of flourishing. It is essential to implement robust strategies and innovative ideas to draw in and keep hold of clientele both locally and internationally.

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The article initially appeared on the South China Morning Post (www.scmp.com), which serves as the premier source for news coverage of China and Asia.

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