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Christmas Sales Improve but Caution Remains in Overseas Markets
HKTDC Report Shows Modest Buying Increases in US and UK

29 December 2009 – Christmas sales improved in most parts of the world compared to last year’s worst-ever performance, according to preliminary findings gathered from the global network of the Hong Kong Trade Development Council (HKTDC). 

The HKTDC report reflects signs of worldwide economic recovery, as year-end sales increased slightly in the United States and the United Kingdom and surged on the Chinese mainland. Moderate declines, however, were recorded in other major markets, including Germany, Italy, France and Japan. 

Christmas sales in Hong Kong’s major overseas markets are seen as an effective forecast of export prospects for the city in the coming year, said HKTDC Assistant Chief Economist Daniel Poon. Speaking at a media conference today, Mr Poon said there has been unprecedented attention on seasonal sales, in hopes of determining just how much impact the nascent global recovery is having on consumption. 

Despite the varying performance internationally, overseas consumers largely continue to trade down, said Mr Poon, noting that lavish consumption is being eclipsed by a general tendency to buy practical, durable, value-for-money products. 

Mr Poon said the pace of recovery in the US will remain slow in 2010, although inventory replenishment is expected to contribute to economic growth. He predicted that while consumer sentiment will gradually improve and stimulate spending, consumption will remain more hesitant than usual. 

Discounters and hypermarkets will continue to dominate at the expense of department stores and luxury stores, and a continued preference for staying at home will also impact consumer spending. Mr Poon offered a more encouraging outlook for competitively priced products that are stylish, safe and environmentally friendly – an area in which Hong Kong exporters excel. 

The turnaround is likely to be moderate overall in Europe, and uneven among member states. A strong euro could hamper exports, and continued unemployment will restrain the revival of consumer confidence. Hong Kong exporters could benefit, however, as a strong European currency would enhance the price competitiveness of Hong Kong products in European Union nations. Competitively priced Hong Kong exports are also expected to do well in Japan. There, “cheap” will remain a buzzword, as Japanese shoppers face a sluggish job market and poor income outlook. 

A vibrant consumer market on the Chinese mainland offers the best sales potential among Hong Kong’s traditional overseas and other emerging markets. The HKTDC report indicates that consumer confidence should rise on income growth led by further improvement in the labour market and wealth generated by asset price inflation. 

“Hong Kong suppliers should note that the coastal regions, which are likely to benefit from reviving exports, will witness faster consumption growth,” Mr Poon said. “Yet second- and third-tier cities of inland provinces will gain from the mainland’s continued infrastructure and rural development, in turn opening up lucrative opportunities in relatively uncharted territories.”

Media Enquiries
Please contact the HKTDC's Corporate Communication Department:

Joe Kainz
Tel: (852) 2584 4216
Email: joe.kainz@hktdc.org

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 on 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

Individual Market Findings

In late January 2010, the HKTDC will publish a report offering a more complete picture of year-end sales in Hong Kong’s major markets. The following are some initial findings for individual markets:

United States

  • The US posted a marginal sales increase over last season’s worst performance in decades.
  • Sales began slowly after Thanksgiving and remained sluggish through December despite increasingly intensive retail promotions and one additional shopping day over last year.
  • Sales were further hampered by a severe snowstorm across large portions of the country.
  • Despite improved consumer sentiment, shoppers continue to trade down, with luxury and big-ticket items selling poorly and practical, smaller-ticket items sought after.
  • Retailers are posting higher profit margins by reducing inventories to avoid the heavy markdowns seen last season.
  • Promotional activity, especially early in the season, was less rigorous and discounts were less extensive.
  • More retailers introduced layaway programmes to reserve merchandise for customers until they completed installment payments.
  • The quickie retail operations known as “pop-ups” are visible throughout Southern California and around the nation, filling in the gaps at recession-battered shopping centres for a fraction of the rent.
  • Mass merchandisers and discounters were favoured, though department stores and luxury stores fared slightly better than last year.
  • Many online retailers posted double-digit sales gains as value-conscious consumers were drawn to convenient price comparison, extensive promotions and free delivery offers.
  • Leading retailers launched an innovative sales drive by targeting smart phone users.
  • Gift cards became more popular as must-have gift items ran out of stock, but Christmas sales results are effectively reduced since revenue is not counted until the cards are redeemed.
  • The release of pent-up demand aggregated during the recession drew many buyers to such electronics products as smart phones, laptops and e-readers. Flat-panel TVs and video games were also standouts, as well as established toy brands such as Barbie and Transformers and new favourites, notably Zhu Zhu pets.
  • Clothing, footwear and basic commodities offering comfort and function were well received, while high-fashion items such as upscale timepieces and jewellery were in the doldrums.

European Union

  • Festive spending in the EU remained cautious but less gloomy than last season.
  • Christmas shoppers appeared more willing to spend, but continued to trade down and stick to budgets as they hunted for basic and practical products as well as second-hand items.
  • A strong euro enticed many continental buyers to shop abroad.
  • Cold weather did not substantially affect Christmas shopping, since it only delayed year-end purchases and boosted sales of winter clothes and related merchandise.
  • Most EU retailers continued to rely on discounts and promotions to attract struggling shoppers, but offers were less prevalent than last season as retailers trimmed their inventories.
  • Hypermarkets continued to attract more customers than department stores and luxury stores.
  • Online retailers offering convenient price comparison, wider availability of products and better delivery options were another winner this season.
  • More brick-and-mortar retailers turned to online as well as pop-up stores to bolster sales.
  • Germany’s Christmas sales were estimated to have declined slightly from last season, as consumer confidence there remained weak.
  • Consumer electronics, traditional toys, winter clothes and low-end jewellery sold well.
  • Italy benefited from reviving global demand, but overall consumer sentiment remained flat, as shoppers mostly snapped up consumer electronics and toys. Flat-panel TVs, mobile phones, notebooks, video games and some basic toys were popular with Italian shoppers.
  • French consumer confidence remained cautious despite higher festive spirits, as shoppers primarily opted for electronics and toys as Christmas gifts. France saw strong preference for flat-panel TVs, mobile phones, digital cameras and video games.
  • UK Christmas sales were boosted by a last-minute surge to post a slight rise from last season’s worst showing in 30 years. Part of the increase was driven by advance purchases to avoid a January 2010 VAT increase from 15 per cent to 17.5 per cent. A weak British pound also drew continental bargain hunters, allowing moderate sales growth for most items.


  • As the strong yen cast a long shadow on Japan’s export-led recovery, festive shoppers remained cautious amid fears over job losses and winter bonus cuts.
  • The soaring yen also suppressed year-end retail business, as shoppers headed overseas.
  • To cut costs, holiday shoppers mainly chose basics rather than extravagant gift items and shifted from department stores to discount stores.
  • The performance of jewellery and high-end watches was particularly disappointing, and sales of big-ticket consumer electronics and household appliances were slow.
  • Demand for clothing and footwear was hampered by relatively warm weather, and toys sales were affected by a lack of hit items.

Chinese Mainland

  • More and more retailers put up yuletide decorations and engaged in Christmas promotional activities as the holiday, which is not traditionally celebrated across the mainland, begins to catch on in the more advanced urban cities.
  • The HKTDC network on the mainland reported hearty retail sales for most consumer products, ranging from basic and practical items to upscale and luxury merchandise.
  • Many mainland consumers also thronged to Hong Kong for holiday shopping sprees.




Content provided by Hong Kong Trade Development Council