Hong Kong consumption vouchers ‘gone in a flash’ boosting retail and catering sectors but impact fizzling out fast

Many appear to have spent their vouchers on necessities to help ease financial burden caused by increasing living costs
Retailers, restaurants say business improved as vouchers went out, but buzz did not last for very long

Hong Kong economy

Rachel Yeo

Published: 9:00am, 1 May 2023

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As soon as Hong Kong housewife Chan Tung-wan received HK$3,000 (US$382) worth of consumption vouchers last month, she spent them all in one day on household necessities and clothes for her two toddlers.

The e-vouchers did not go very far but helped to ease the family’s financial burden. “Most of our expenses for our children every month are for tuition,” said Chan, 31, whose husband works in construction and earns HK$16,000 a month.

She was among Hong Kong residents eligible for the latest round of government consumption vouchers, worth HK$5,000, with the first HK$3,000 given away on April 16.

A sign at the door of a shop in Mong Kok tells shoppers it accepts consumption vouchers. Photo: Elson Li

Adult permanent residents and some new arrivals from mainland China aged 18 or above were eligible for vouchers worth HK$5,000.

Individuals arriving through various talent and work admission schemes, or to study, were also entitled to vouchers worth HK$2,500 and received the first instalment of HK$1,500 on April 23.

About 6.4 million people were eligible in total, with the second handout on July 16.

Many appear to have spent their vouchers right away, boosting the city’s retail and catering sectors.

‘Happy Hong Kong’ campaign, consumption vouchers should boost economy: city leader

Retail sector lawmaker Peter Shiu Ka-fai said: “They are a great help to the retail industry because during the Easter break, many people were travelling overseas, so the local retail scene was quieter.

“The vouchers given on April 16 helped retail consumption during those quieter days.”

He said he knew of people who expected this to be the last round of vouchers and were taking their time to make use of them.

Ray Chui Man-wai, chairman of Kam Kee Holdings, which operates 44 restaurants with about 1,000 employees, said business improved slightly in the days after the vouchers went out.

“But the positive impact has fizzled out,” he said.

Trade consumption vouchers for cash? Offers pop up in Hong Kong despite warning

This is the third year of the e-voucher scheme to boost spending since the Covid-19 pandemic battered the economy. The value of the latest round was halved from HK$10,000 last year, with Financial Secretary Paul Chan Mo-po citing tough economic times and the government’s financial position.

Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, said catering businesses reported a boom in business after the vouchers were given out in mid-April.

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Hong Kong consumption vouchers have ‘more psychological than real’ impact on boosting spending

“But after the first three days, business began to slow down. This was probably because many people used their vouchers to buy necessities from supermarkets,” he said.

The Post learned that the government was still compiling the latest information on how many of the e-vouchers were used in the days after they went out.

Gary Ng Cheuk-yan, a senior economist at Natixis Corporate and Investment Bank, said rising inflation, higher interest rates and the return of tourists would all lessen the effect of the latest round of e-vouchers on the economy.

“Still, it is good news for residents given the rising living costs, especially for transport and utilities,” he said.

Lawmaker Shiu said he hoped that along with the e-vouchers, the government’s “Happy Hong Kong” campaign would boost consumption and the retail sector would offer more bargains to encourage spending.

Latest round of Hong Kong consumption vouchers to be disbursed from mid-April

Details of the HK$20 million campaign were revealed last week, with an array of activities including a free food fair offering residents a taste of global cuisine and cinemas citywide showing films at heavily discounted rates.

The six payment platform providers enrolled in the e-voucher scheme are Octopus, Bank of China’s BOC Pay, HSBC’s PayMe, AlipayHK, Tap & Go and WeChat Pay HK.

AlipayHK is owned by Ant Group, an affiliate of Alibaba Group Holding, which owns the South China Morning Post.