Hong Kong's status threatened by poor customer service, survey says
The city's leading brands must improve how they treat clients, influential luxury survey says
Luxury consumption is predicted to stabilise next year but if Hong Kong wants to retain its place as a high-end global shopping hub in the long run, it should improve the level of its customer services, according to the latest China Luxury Forecast by Ruder Finn and Ipsos.
After a decline in luxury consumption last year, mainland consumers said they would maintain their spending levels on watches, bags, jewellery and shoes in the coming year and spend even more on apparel and beauty. Hong Kong consumers said they would maintain the same spending on all products.
The joint study surveyed over 1,800 people - 300 from Hong Kong and the rest from the mainland across tier-1 to tier-3 cities - about their past and expected luxury spending habits for the coming year. Average annual household income of Hong Kong respondents was HK$970,000, and 290,000 yuan (HK$366,000) for mainland respondents.
"A large percentage of customers are exceedingly unhappy with the services. Consumption is not really growing. It's kind of flat but the brands are not doing themselves a favour," Ipsos executive director Simon Tye said.
Although price was a factor, mainland customers primarily attributed their decision to shop overseas to poor customer service and staff competence in their home country. Ninety-two per cent of mainland consumers were unhappy with services in China .
Forty-five per cent felt that service advisers were not knowledgeable while 40 per cent complained about customer services and said matters were not resolved in a satisfactory manner.
Even in Hong Kong, a significant number of customers felt unhappy at 35 per cent and 34 per cent respectively. The hospitality industry is doing a lot more to introduce these service elements such as using the customers' native language to serve shoppers and demonstrating empathy, Tye said. "If somebody walks into a store and says they want something for the evening, don't show them a sundress."
Duty-Free stores saw a substantial rise in popularity with mainland shoppers. Forty-seven per cent of mainland respondents said it is their preferred place to shop for luxury goods, up 14 per cent since last year.
That compares to just 26 per cent of Hongkongers, a rise of 6 per cent.
"Duty-Free stores have had a huge explosion," Ruder Finn chairman Jean-Michel Dumont, said.
He cited high outbound tourism growth from China and the repositioning of stores to shop-within-a-shop concepts.
"It's interesting to see how Duty Free has made their retail look much more like the brand stores. You get that brand experience which mainland consumers have a preference for."