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Christmas Sales Down in Hong Kong’s Traditional Markets
Holiday Sales in Major Markets an Indicator for Hong Kong Exporters

30 December 2008 - Christmas sales were poor in most of Hong Kong's major overseas markets, including the United States, Western Europe and Japan, according to reports from the global office network of the Hong Kong Trade Development Council (HKTDC). Christmas sales in Hong Kong's major overseas markets are generally regarded as an effective indicator in forecasting Hong Kong export prospects for the year ahead.

In the US, the epicenter of the global financial crisis, holiday sales are estimated to have contracted by more than two per cent, its worst showing in decades. Year-end sales also faltered in Western Europe and Japan. Despite discounts and promotions, consumers were cautious about holiday spending. Given the trend of trading down, demand for luxury items decreased.

In contrast, sales results in the Chinese mainland were fairly encouraging, although economic moderation and increasing unemployment have cast a shadow over mainland consumption. Despite the slump in the stock and property markets, most middle class consumers were still capable of spending. Retail sales rose by 20.8 per cent in November, and by 21.9 per cent in the first 11 months of 2008, compared with the same period in 2007. The good news is expected to last, with the Lunar New Year around the corner.

In other parts of the emerging world, year-end sales varied. In Central and Eastern Europe, sales were strong in Russia and Poland. In Latin America, Brazil and Chile fared well.

"Given the continuing global financial crisis, prospects for Hong Kong's traditional markets are grim for 2009," HKTDC Assistant Chief Economist Daniel Poon said at today's press conference.

"Although there will be no decoupling from the world economic meltdown, the mainland looks to hold the best promise. Elsewhere, Russia and Poland are bright spots in Central and Eastern Europe, while Brazil and Chile show better potential in Latin America," said Mr Poon.

While the US will remain a bleak market for Hong Kong exporters, Mr Poon suggests that competitively priced products that are stylish, safe and environmentally friendly - an area in which Hong Kong exporters excel - may find buyers.

Major Observations

United States

  • Christmas sales are estimated to have contracted by more than two per cent
  • Sales got off an unexpectedly firm start after Thanksgiving amid aggressive sales tactics, but then slowed at a pace more significant than over the last few years
  • A shorter Thanksgiving-to-Christmas period (27 days vs 32 days last year) and a severe winter storm worsened the situation
  • Prudence and trading down were generally the watchwords for holiday shoppers
  • Mass merchandisers/discounters were favoured over department stores and luxury shops
  • With some retail chains going bankrupt, gift certificates were less popular, which is likely to depress post-Christmas sales
  • Less expensive brands of some consumer electronics products, including portable media players, digital cameras and GPS systems, were better received
  • With fewer vacationing consumers, flat-panel TVs and video games found buyers
  • Demand for home-related merchandise, luxury items and high-end apparel waned

Western Europe

  • Holiday shoppers generally kept their spending tight because of the poor economic conditions
  • Most EU retailers relied on discounts and promotions to attract Christmas shoppers
  • In Germany, business was comparable to last year's, a good showing by German standards
  • UK sales are expected to range from flat to a decline of up to one per cent, its worst showing in 30 years
  • With consumer confidence down, Christmas sales in Italy and France declined


  • Growing anxiety about job security has dampened consumer confidence, and the purchasing power of consumers was hampered by a general decline in the winter bonus
  • The sharp appreciation of the yen encouraged overseas travel, suppressing year-end sales
  • Although the gift-giving custom remains, cautious holiday shoppers generally opted for basics, shifting their purchases from department stores to discount stores

Chinese Mainland

  • The tradition of celebrating Christmas seems to be catching on in major mainland cities. More retailers put up holiday decorations and undertook related promotional activities
  • Spurred by slower inflation, falling interest rates and discount sales, year-end sales in the mainland were fairly solid
  • With the exception of high-end merchandise, retail sales were robust

Other Emerging Markets

  • Consumer sentiment in Central and Eastern Europe seemed more optimistic, although sales varied from country to country
  • In general, consumers were more cautious. Christmas shoppers favoured hypermarkets, with discounts and promotions widespread
  • While the Russian economy has been hit by the global financial crisis and falling oil prices, year-end sales were brisk, with consumers trimming their spending on food and drink rather than Christmas gifts
  • Polish consumers appear to have purchased at a level similar to the last few years
  • Sales in the Czech Republic and Hungary, however, were less robust, with Christmas shoppers spending more cautiously
  • Aided by deep discounts and special promotions, year-end sales were good in Brazil and Chile, with declines registered in Argentina and Mexico
Media enquiries
Please contact the HKTDC's Corporate Communication Department:
Victor George Paddy Tel: (852) 2584 4517 Email: victor.paddy@tdc.org.hk

About the HKTDC
Established in 1966, the Hong Kong Trade Development Council (HKTDC) is the international marketing arm for Hong Kong-based traders, manufacturers and service providers. With more than 40 offices worldwide, including 11 in the Chinese mainland, the HKTDC promotes Hong Kong as a platform for doing business with China and Asia. The HKTDC also organises trade fairs and business missions to connect companies with opportunities in Hong Kong and the mainland, while providing information via trade publications, research reports and online. For more information, www.hktdc.com


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