Singaporean retailers struggle as Chinese tourists vanish

Watch and jewellery sales hardest hit.

There are a lot fewer “ni haos” on Orchard Road these days. It’s a tough time for luxury retailers as Chinese tourists are thin on the ground and luxury spending has been dramatically affected.

According to Colliers, discretionary spending on items such as watches and jewellery dropped by 11.8% year on year in April, while spending on recreational goods slipped by 9.4%.

“Notably, discretionary consumer categories such as watches and jewellery and recreational goods recorded decreases of 11.8% and 9.4%, respectively in April 2014 over the same period a year ago, curbing any growth momentum in retail spending. The fall in discretionary spending in April could have been partly due to a decline in visitor arrivals, particularly those from China,” Colliers noted.

Here’s more from Colliers:

Although January’s retail sales grew by 9.6% year-on-year (YoY), partly fuelled by the Chinese New Year celebrations, retail spending in the month of February turned negative falling 8.1% (as a result of Chinese New Year occurring in February), before remaining flat in March. This trend continued into April as retail sales fell by 2.2% YoY.

A tentative start to the year characterised Singapore’s tourism industry. Visitor arrivals in Singapore in the first three months of 2014 remained largely unchanged compared to the same period in 2013, starting the year on a similar footing after having achieved a fourth consecutive yearly foreign visitor record at a high of 15.5 million in 2013.