Hong Kong’s retail sector closed 2025 on a paradoxical note, with total sales value rising to 6.6 per cent to $35 billion in December, yet the fashion segment witnessed a sharp 10.3 per cent Y-o-Y decline. While a staggering 49.9 million visitors arrived in the city throughout 2025 - a 12 per cent increase - their spending patterns have pivoted decisively away from high-street apparel. Tourist ‘revenge spending’ has transitioned into a preference for ‘hard luxury’ and experiences; while jewelry and watches rose by 14.3 per cent, clothing retailers struggled against a cooling local sentiment and the growing trend of residents traveling across the border to Shenzhen for value-oriented shopping.

Digital resilience and the luxury pivot

The apparel landscape's primary silver lining remains the robust growth of online retail, which grew by 30.9 per cent in December. This digital migration underscores a structural shift in how Hong Kong consumers engage with fashion, moving away from traditional department stores -which saw a 4.6 per cent decline - toward direct-to-consumer platforms. Despite the current footwear and accessory slump, which fell by 10 per cent, the government remains optimistic for 2026. Forecasts suggest a 2 per cent retail growth target, supported by ‘mega-events’ and further integration with the Greater Bay Area. The challenge for 2026 lies in reconciling the massive visitor volume with tangible apparel transactions as global brands reconsider their physical footprint in high-rent districts like Causeway Bay.

Hong Kong is a premier global destination for luxury and fashion retail, serving as a gateway to the Mainland Chinese market. It specializes in high-end apparel, hard luxury, and beauty. Following a modest 1 per cent total sales growth in 2025, the city is executing a ‘mega-event’ strategy to convert 50 million annual visitors into high-value shoppers.