Customers form a long queue outside a luxury goods store in Tsim Sha Tsui, Kowloon, on May 1, 2023. (EDMOND TANG / CHINA DAILY)

Hong Kong retail sales grew for the sixth consecutive month in May as the city's tourism sector rebounded, according to the report released by Census and Statistics Department on Monday.   

The provisional value of total retail sales in May reached HK$34.5 billion ($4.4 billion), growing 18.4 percent from the same period last year. This increase lies in the middle range compared to the percentage increases ranging from 6.9 percent to 40.8 percent in the first half of the year. Additionally, the provisional volume of total retail sales in May 2023 increased by 16.5 percent from the previous year. 

In May 2023, the majority of retail outlets saw an increase in sales value compared to May 2022, with double-digit increases in sales value observed in motor vehicles and parts, jewelry, watches and clocks, high-end gifts, and medicines and cosmetics

In the first five months of the year, the monthly increase of retail volume ranged from 5.1 percent to 39.1 percent. 

The city's retail sales began to rise in December with a 1.1 percent increase after dipping 4.2 percent the previous month. 

READ MORE: Hong Kong retail sales rise 15% in April

A Hong Kong Special Administrative Region government spokesperson said that retail sales continued to increase significantly in May due to the recovery of the tourism industry and positive consumer sentiment.

In May 2023, the majority of retail outlets saw an increase in sales value compared to May 2022, with double-digit increases in sales value observed in motor vehicles and parts, jewelry, watches and clocks, high-end gifts, and medicines and cosmetics. 

Decreases in sales value were observed in fuels, furniture and fixtures, and electrical goods and other consumer durable goods.

The spokesperson pointed out that the retail industry should continue to improve in the coming months. With further expansion of transportation and reception capacity, the number of visitors to Hong Kong is expected to continue to surge. 

The improvements in the labor market and the distribution of the second phase of consumption vouchers, coupled with the efforts of the government and the industry, will continue to support local consumer demand.

However, Bond Law, executive director of Hong Kong Retail Management Association (HKRMA), said “tourism continues to drive retail sales, while the local market has not seen significant growth.”

According to the survey conducted by HKRMA, over 70 percent of the businesses interviewed expect a growth in retail sales in summer this year, with about 40 percent of businesses seeing sales slightly improved, without a strong recovery. 

“The sectors driven by tourists, including jewelry, medicines and cosmetics industries, have seen an increase in retails values, while local consumption-related retail, such as furniture, have seen a decline due to the negative impact of locals traveling overseas during the summer vacation,” added Law.  

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“Hong Kong's retail industry is experiencing a trend of differentiation between local retail and tourism-driven retail, partly caused by locals traveling overseas due to the relaxation of travel restrictions. The temporary gap in the local market will exists in short run and disappear in the long run.” said HKRMA chair Annie Yau.