The global pandemic outbreak has had a significant impact on the economic growth of Hong Kong. The Covid-19 outbreak disrupted economic growth due to the heavy reliance on international trade, tourism, and finance. With international borders sealed, the once-thriving tourism industry plummeted, causing hotel occupancy rates to hit record lows. The retail sector, heavily reliant on mainland Chinese tourists, experienced a sharp decline in footfall, resulting in store closures and job losses.
In response to the economic crisis, the Hong Kong government has been running a consumption voucher for the last three years, including 2023. Designed to stimulate consumer spending, this scheme is aimed at uplifting the economy by providing direct financial support to residents. As part of the 2023 consumption voucher scheme, authorities in Hong Kong distributed the second installment of e-vouchers to eligible citizens in July 2023. The second installment of the scheme is expected to inject HK$13 billion into the local market, thus supporting the recovery of the domestic economy.
The authorities disbursed the e-vouchers to eligible residents through their accounts with AlipayHK, BoC Pay, PayMe from HSBC, Tap & Go, WeChat Pay HK, or their Octopus card.
The consumption voucher scheme implemented by the Hong Kong government has been received well by the public. However, residents have not made the use of the e-vouchers in its entirety. More than 1 million Octopus card holders have been unable to receive the second installment of HK$2,000, as they have unused credit from the first round. The authorities have extended the timeline, and those having unused credit have until October to become eligible for the remaining subsidy.
This marks the Hong Kong government's third consecutive year of employing electronic spending vouchers as a strategy to review economic growth. It remains uncertain whether policymakers will once again collaborate to advocate for comparable incentives in the following year.
While the consumption voucher scheme is beneficial for cash-strapped individuals reeling under the impact of inflation, a significant chunk of the population is still not influenced by it. This is evident from the 1 million Octopus card holders who still have unused balances from the first handouts. Consequently, the authorities must look at and explore other options to drive more robust economic growth in Hong Kong.
Having said that, the government also announced an additional travel voucher scheme worth HK$1 million, in July 2023. Each voucher is worth HK$100 and is available for use at more than 3,600 merchants across the city. This campaign is part of the government’s strategy to attract more tourists to Hong Kong, thereby supporting the revival and growth of the local economy from the short-term perspective.
The initiative launched in collaboration with Trip.com will provide vouchers redeemable on hotel accommodations, scenic spots, and sight-seeing routes. Such schemes are gaining increasing prominence among authorities across the region. Taiwan, in H1 2023, announced that the government will give out NT$5,000 worth of travel vouchers to tourists. The consumption voucher scheme was also part of the country's strategy to revive the tourism industry.
Going forward, PayNXT360 expects more government organizations to announce such consumption voucher programs to drive economic growth and boost the tourism sector affected due to the pandemic outbreak. These programs will, subsequently, aid the growth of the global gift card industry from the short to medium-term perspective.
Based on the estimates of PayNXT360, the global gift card market is expected to grow at a compound annual growth rate (CAGR) of 6.9% from 2023 to 2027. During this period, the gift card industry market size will increase from US$472.7 billion in 2022 to reach US$668.4 billion by 2027.
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