Hong Kong Retail Market Under Pressure in Q2 2025 — Emerging Business Models Break Through Against the Trend

• Cross-border spending becomes normalised: A study by the Chinese University of Hong Kong shows that among AlipayHK’s 4.5 million active users, over two-thirds (around 3 million people) are now regular mainland shoppers. Nearly half of their spending goes to services, while 28% is spent on retail. The geographic scope of consumption has expanded from Shenzhen and Guangzhou to cities like Zhongshan and Chongqing.
• Wave of store closures continues: Over 300 retail stores shut down in the first half of the year, with the F&B sector accounting for 70% of closures. The cinema industry saw a 16% year-on-year drop in total revenue, with 10 cinemas closing down.
• Budget retail expands against the trend: International and local budget brands (such as 3 Coins and Tao Do Do) are rapidly expanding, while the 'two-dish rice' takeaway model is emerging across multiple districts, reflecting a trend of consumption downgrade.
• Cultural and entertainment economy boosts foot traffic: Major events like ComplexCon and Art Basel drove an 18% increase in high-spending overseas visitors, generating approximately HKD 8.8 million in related spending. Corporate demand was strong, with all 60 corporate boxes at the Hong Kong Sevens sold out.
• Infrastructure projects lay the foundation for long-term recovery: Initiatives such as “Skytopia” development, Hung Hom Promenade revitalisation, and the Victoria Cove waterfront district aim to reshape Hong Kong’s tourism appeal through diverse leisure experiences.