Hong Kong’s retail market faces ‘slow recovery’ as surging Covid-19 cases rain on the parade of city’s open border

Name: Chinese shoppers snap up used luxury goods amid economic slowdown
Uploaded: 2023-01-24T03:00:14.000Z
Duration: 2 min 49 s
Description: Chinese shoppers snap up used luxury goods amid economic slowdown

A recent uptick in enquiries from potential shop tenants betting on a flood of mainland visitors returning will be short-lived, says secretary general of commerce group

Retail landlords also face a surge in supply as an estimated 3.9 million square feet of shopping mall space is set to open this year, according to Colliers

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Customers shop at the New Town Plaza in Sha Tin. The holiday week could spell even worse news for the city’s retailers, says chairwoman of the Hong Kong Retail Management Association. Photo: Yik Yeung-man

Lam Ka-sing

Published: 11:00am, 24 Jan 2023Updated: 11:28am, 24 Jan 2023

The recovery of Hong Kong’s retail market is likely to be slow and uncertain, as surging Covid-19 infections in mainland China and a huge supply glut limit any boost from the reopening of the border, according to industry leaders.

A recent uptick in the number of enquiries from potential shop tenants betting on a flood of mainland visitors returning will be short-lived, said John Lee Koon-lam, secretary general of the Hong Kong Industry and Commerce Elite Association, which has close to 200 businessmen and politicians as members.

“Because of the uncertain outlook of the pandemic and high infection numbers in the mainland, cross-border economic activity will be hindered,” said Lee. “Luxury retail shops may see sales remaining at a low level as the three years of lockdown has changed the shopping behaviour of mainlanders.”

Lee pointed to the vacancy levels of high street shops and the fact most tenants are still merely asking rather than committing. However, things could improve by the middle of this year if new Covid-19 drugs emerged that led to a full border reopening, he said.

The vacancy rates in the popular shopping districts of Central, Causeway Bay and Mong Kok stood at 12.9 per cent, 5.8 per cent and 8.9 per cent in December, significantly higher than their pre-pandemic levels.

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Chinese shoppers snap up used luxury goods amid economic slowdown

The holiday week could spell even worse news for the city’s retailers, according to Annie Tse, chairwoman of the Hong Kong Retail Management Association, which has 9,000 members.