The Hang Seng Composite Industry Index – Consumer Discretionary (HSSCCD) tracks the performance of companies within the consumer discretionary sector that are listed on the Hong Kong Stock Exchange. It was launched in July 2023.
It is a segment of the broader Hang Seng Composite Index (HSCI), which covers a wide range of industries in Hong Kong’s stock market. The index includes businesses engaged in retail, automotive, leisure, e-commerce, and luxury goods, among other consumer-focused industries.
Consumer discretionary companies are particularly sensitive to economic cycles, as their revenue is driven by consumer confidence, disposable income, and broader market trends. Unlike consumer staples, which include essential goods, discretionary firms depend on consumer willingness to spend on non-essential items such as fashion, travel, entertainment, and high-end electronics.
The index features major names such as BYD, Meituan, Li Auto, XPeng, and Bilibili. As of December 2024, there are 98 companies within the index.
Hang Seng Composite Industry Index – Consumer Discretionary Performance
While 2023 wasn’t a great year for the index, 2024 closed out solidly, with a strong rally between September and October. However, it did end up pulling back from those highs and has since continued to grind lower.
As of January 2025, the index has delivered the following performance:
| Period | Total Return |
|---|---|
| 1-Year Return | +17.66% |
| 3-Year Return | – |
| 5-Year Return | – |
| 10-Year Return | – |
Hang Seng Composite Industry Index – Consumer Discretionary Top 10 Companies
The index is reviewed half yearly.
| Company | Market Cap (As of January 2025) |
|---|---|
| BYD | $107.03 Billion |
| Meituan | $115.01 Billion |
| Techtronic | $24.60 Billion |
| Yum China | $17.14 Billion |
| Kuaishou | $23.24 Billion |
| Li Auto | $25.04 Billion |
| Anta Sports | $29.55 Billion |
| XPeng | $14.06 Billion |
| Geely Auto | $18.49 Billion |
| Galaxy Entertainment | $18.67 Billion |
Hong Kong Consumer Discretionary Forecast
The Bull Argument: Many analysts remain optimistic about the long-term potential of the consumer discretionary sector in Hong Kong. The ongoing recovery in Chinese tourism, coupled with rising middle-class consumption and digital transformation in retail, is expected to drive demand for discretionary goods and services.
A recent report said that “about 56% of luxury consumers in Mainland China plan to increase their spending in 2025.” Additionally, online retail platforms and innovative shopping experiences are expanding, creating potential growth opportunities for businesses in the sector.
The Bear Argument: Despite positive signs, there are still risks that could hinder the sector’s growth in the region. Economic uncertainty may still impact consumer confidence and spending. In addition, regulatory changes could also pose challenges for some more significant names. Additionally, geopolitical tensions may also play a negative role. For example, if US President Trump implements tariffs on Chinese goods flowing into the US, it could have a significant impact on some names in the sector and index.
Our View: The Hang Seng Composite Consumer Discretionary Index provides investors with access to a sector that thrives on economic growth, consumer trends, and technological innovation. However, investors should be aware of the current economic situation in the region, which, at the time of writing, isn’t the strongest. Nevertheless, the sector has demonstrated resilience and long-term growth potential. Looking forward, investors should also be mindful of the potential impact on stocks in the sector if new US President Trump implements strict tariffs.
Who Should Invest in Hong Kong Consumer Discretionary Stocks
Investors looking to gain exposure to the sector can consider exchange-traded funds (ETFs) that track the overall Hang Seng index, such as iShares Core Hang Seng Index ETF. 25.21% of the ETF’s stocks are in the consumer discretionary category. Investors may prefer to opt for the Global X MSCI China Consumer Discretionary ETF, which includes many of the names in the HSSCCD index.
Overall, the sector may be particularly suitable for:
Cyclical investors: Since consumer discretionary stocks are influenced by economic conditions, they may appeal to those looking to capitalise on periods of economic growth.
Growth investors: With rising consumer spending and digital retail innovation, the sector offers long-term growth potential.
China/Hong Kong-focused investors: Given Hong Kong’s role as a financial gateway to China, the index provides exposure to the Hong Kong market and the broader Chinese consumer market, which is a key driver of the region’s economic performance.
