Out of character

PUBLISHED : Thursday, 22 March, 2007, 12:00am
UPDATED : Thursday, 22 March, 2007, 12:00am

NELSON CHAU Ka-shu hopes to reopen his stereo store in Mong Kok's busiest zones, but his prospects look dim. The relentless gentrification of the sprawling, colourful old district has brought astronomical rents and fierce competition from chains.

'It's impossible to compete with major chain stores for price, variety and the size of their outlets,' says Chau.

Steep rent increases forced him to close his outlets on Sai Yeung Choi Street and Sai Yee Street two years ago - one landlord even doubled the amount. Since then, Chau has run his business from an office space, taking catalogue orders from regular customers.

Mong Kok's image as an idiosyncratic inner-city jumble, where toy shops and old-style bakeries sit cheek-by-jowl with brothels and massage parlours, is giving way to slick shopping precincts. Around Langham Place, shiny new fast-food and fashion chains have moved in to redeveloped streets to milk the heavy pedestrian traffic. Residents welcome the spruced-up surroundings, but spiralling property values are squeezing out many independent businesses, including Chau's Wing Ming Audio and Video Centre, which has been in Mong Kok for a decade.

According to Centaline Property Agency, rents in the area have jumped between 40 per cent and 100 per cent during the past two years. The lease for a 1,500sqft shop lot now goes for about HK$210,000 a month - more than double the 2004 figure of HK$90,000. Such high yields have tempted some entrepreneurs who own their premises to close their businesses and rent out the place instead.

Andrew Chan Wing-kit, an assistant professor in the Polytechnic University's school of hotel and tourism management, says it's almost inevitable traditional businesses and individual stores will be edged out because they lack financial muscle.

'It's a common trend across Hong Kong,' he says. 'You hardly find any individual grocery stores nowadays. Most have been replaced by convenience stores and supermarket chains. So chain eateries that can afford higher rents have taken the place of budget food stalls.

'It wouldn't surprise me if Mong Kok turns into another Causeway Bay swamped with similar stores. It seems to be the way ahead,' says Chan.

The district has been undergoing a facelift since the Urban Renewal Authority and developer Great Eagle Holdings announced plans in 1989 to build the HK$11 billion Langham Place complex. Four city blocks were demolished for the development, encompassing a mall, a five-star hotel and a 59-storey office block, which took 15 years to complete.

In the process, vibrant specialist areas such as Bridal Gown Street, which occupied a chunk of Shanghai Street, vanished. Others such as Bird Street, which was relocated to Prince Edward, became shadows of their former selves.

To ride the property boom, many owners renovated old buildings to rent the upper floors to ventures such as coffee shops, bookstores and hair salons, says Au Yeung Kim-man, an executive member of the Mongkok Residents' Association.

Yet the businesses being nudged out are by no means in decline. Despite being next door to a big chain, Chau carved a niche for his audio-visual business by being a specialist catering to aficionados and professional users seeking top quality or special models. 'We have a reputation for stocking unique models and special parts that mainstream shops don't.

'You can easily get a set of speakers for a few thousand dollars. But our customers look for quality of sound rather than just volume,' says Chau, who recently sold a pair for HK$100,000.

Although audiophiles still seek his expertise, he wasn't able to withstand the rent pressure. Still, Chau hasn't given up. 'I'm still looking for a shop to reopen an outlet in the district,' he says. 'It's important to attract new walk-in customers.'

To stand out from the crowd, individual entrepreneurs must distinguish themselves from big-name rivals. Like Chau, cafe operator Lawrence Law Wai-lun has focused on quality and exclusiveness.

Prices at his A Cup Of eatery, which opened on Portland Street two years ago, are slightly higher than the big chains. It charges HK$18 for a regular coffee and HK$30 for special orders such as lattes, but that's because the brew is made from a special mixture of beans that can't be obtained elsewhere, Law says. 'It is hard to survive in the area without something exclusive about your business,' he says. 'People who enjoy my coffee don't mind paying more for quality.'

Other businesses also realise the value of maintaining individuality.

Of the dozens of sports shops that form Sneaker Street, for example, only about one in five is individually operated. A few entrepreneurs own the remaining outlets, which trade under different names and carry different stock, says Kenny Lee Kim-ching, managing director of Apex Sports Company, which operates 10 stores on Fa Yuen Street. 'We designate a number of brands that are sold in a few shops, but not in our other outlets,' Lee says. 'Otherwise, shoppers would lose their interest if they see the same shops everywhere.'

The Urban Renewal Authority's recent announcement that it plans to redevelop part of Sneaker Street drew criticism from shoe fanciers and some owners, but major players such as Lee are unperturbed. With various outlets scattered along the thoroughfare, he says the impact on Apex will be minimal.

It's individual operators such as Tsang Ming-tai, 60, who feel the most frustrated and helpless. Tsang is among the diehards fighting to maintain their business rather than opt for an easy life by letting their premises. He and his family have been in the sports equipment business for 40 years, and own their 1,000sqft shop.

'We mainly take orders for sports equipment and traditional sports wear from schools and other patrons to avoid competing directly with neighbouring shops which sell more fashionable stuff.'

But with their shop earmarked for redevelopment, Tsang sees no viable alternative. 'Where would be a better place to run our businesses besides Sneaker Street which is a hub for sports shoes?' he asks.

Many lament the loss of character in Mong Kok as it undergoes renewal. 'Twenty years ago, there was a variety of small businesses such as tailors and herbal tea shops,' Tsang says. 'But many have been replaced by chain stores. There's not much left of old Mong Kok besides Ladies Street and Goldfish Street.'

To complement Langham Place's upmarket image, city officials have cleared the area of hawkers, mahjong parlours and anything reminiscent of its grass-roots nature and colourful past.

Polytechnic University lecturer Barry Mak Lui-ming says that although there have long been arguments about whether old districts should be rejuvenated or preserved, the government should strike a balance. 'We need to consider what should be preserved or phased out,' he says. For example, although residents don't want the area infested with vice and gambling dens, most are keen to save the traditional dai pai dongs that offer street-side dining.

Some of the district's most popular stalls were moved into the Mongkok Complex behind Langham Hotel, but although the new indoor venue offers greater comfort it's no different from any other food court. The lively scenes of blazing woks and sizzling dishes have largely vanished from Mong Kok streets.

'The dai pai dong is a feature special to Hong Kong,' Mak says. 'Why can't we clean up the surroundings and make the stalls more hygienic, instead of doing away with them altogether?'

'It wouldn't surprise me if Mong Kok turns into another Causeway Bay swamped with similar stores' Andrew Chan Professor