Hong Kong retail sales this year are expected to increase by 3 to 4 per cent from last year, according to PwC.

But with local retailers relying so heavily on Mainland Chinese visitors, the consultancy urges the city’s shops to create a balanced offer to meet the mix of global visitors and local customers.

In a new report on the local retail and consumer market, PwC says both government and retailers need to focus more on e-commerce development and strategy.

Last year had been the hardest period for a decade for the retail and consumer products sector. However, the loss of business experienced by luxury watch and jewellery retailers along main streets had been offset by the growing number of mid-tier fashion and beauty retailers, and shops selling affordable luxury items.

PwC says sales of luxury products, mainly jewellery and watches, were strong during a 10-year golden period between 2004 and 2013, thanks to China’s Individual Visit Scheme which fueled a surge of mainland visitors to Hong Kong.