The recent confirmation that Top Shop, one of Britain’s most successful well-known ‘fast fashion’ brands, will open its first Hong Kong store at Asia Standard Tower is the latest commitment from a UK retailer to the SAR and follows a renewed influx of British brands including Jack Wills, House of Holland, Timothy Oulton and Solange Azagury-Patridge who have all entered the market in the past 12 months.
Despite rents in prime locations being four times higher than in London, short lease lengths and no security of tenure, the appeal of Hong Kong amongst UK retailers is showing no signs of abating. In the next 12 months, we expect to see a number of brands that we are currently working with open stores in Hong Kong for the first time.
In the recent past, the motivating factors were simple to understand. Asia’s economy was growing at the same pace that Europe’s was declining, and Hong Kong was seen as a stepping stone to the Mainland. Some brands took comfort from Hong Kong’s historical links with the UK and the sizeable expatriate population.
These factors are still valid today, but the case for market entry has strengthened further.
Well operated shopping malls provide security in terms of proven destinations, strong tenant mix controls and enhanced promotions that those in other Asia markets cannot; the Mainland in particular.
At the same time, the 33 million Mainland tourists that visit Hong Kong every year provide retailers with access to the China market without the time, financial commitment and red tape involved in setting up shop there.
Social media channels, global online purchasing and an increasing number of Hong Kong residents visiting the UK for shopping means that retailers have a better understanding than ever before of how their brand will be received before they commit to bricks and mortar.
Hong Kong has always been attractive to UK retailers, but its status is now elevated, and it is regarded as a strong market in its own right rather than just as a gateway to the Asia region.