As little as two years ago, Hong Kong offered limited options for shopping for name-brand fashion at affordable prices. You either had to wait forever for prices to be cut at the official stores, or buy a second-hand item at Milan Station or auction sites. What discount outlets Hong Kong had tended to be faraway warehouses in shabby industrial buildings.
Now, however, there is an alternative. Citygate Outlets, at Tung Chung, is Hong Kong's first mall grouping many high-end brands but carrying discounts of between 30 and 85 per cent year-round.
Originally, Citygate Outlets was just another community mall in Tung Chung. With Tung Chung's population never reaching the original estimates when the town was planned, Citygate struggled and underperformed in the early part of the decade. Only 60 per cent of the mall was occupied, on average, and some stores had never been leased.
Swire management, which operates the mall, took a review and decided to convert the mall into the first and only outlet mall in Hong Kong.
The concept of an outlet mall was different from a conventional sales shop, said Tim Jones, senior portfolio manager of Swire Properties Management. Sales shops tended to be 'dumping grounds' for outdated goods and so kept only basic interior decoration and levels of service, he said. Outlet stores strived to maintain the same appearance and service as other, regular stores. The only difference was that the goods there were much cheaper.
The reason brands can afford to open outlet stores is because they can shorten the sales period of low margin goods, while ensuring that consumers enjoy a quality shopping experience that lives up to and promotes the brand's image. They provide a lower entrance threshold for new customers who may become attracted to the brand through the year-round discounts.