What is Hong Kong’s allure for China’s tourists? Financial service, vaccines, healthcare make up for what luxury shopping once offered, McKinsey says

While 85 per cent of travellers polled by McKinsey & Co cited shopping and sightseeing as reasons for visiting Hong Kong, many added finance and healthcare to their lists

Greater Bay Area

Mia Castagnone

Published: 5:30pm, 9 Mar 2023

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Mainland China’s visitors are increasingly shopping for financial services, healthcare and vaccinations in Hong Kong, allowing the city to offer a broader range of attractions other than luxury retail sales, according to a survey.

While 85 per cent of the 1,000 travellers from the Greater Bay Area (GBA) surveyed by McKinsey & Co cited shopping and sightseeing as their main purpose for coming to Hong Kong, many have added financial services and healthcare to their lists, according to the poll conducted last month, canvassing respondents who plan to visit Hong Kong within 12 months.

GBA visitors are coming to Hong Kong for physical check-ups, vaccinations, dental, ophthalmology, obstetrics and gynaecology examinations, while 23 per cent of women surveyed said they planned to undergo non-invasive cosmetic surgery procedures such as Botox injections.

Some travellers are also coming for financial services such as wealth management products and insurance coverage, with 78 per cent of the surveyed visitors saying they expect higher returns in Hong Kong, compared with products available on the mainland.

A view of retail businesses and people shopping in Hong Kong’s Tsim Sha Tsui district on March 2, 2023. Photo: May Tse

The survey sheds light on how Hong Kong stands to benefit from its reopened borders with China and the rest of the world, after Covid-era controls and quarantines were scrapped. More than 1.1 million mainland visitors arrived in Hong Kong in February, a nearly fourfold increase from a month earlier. Hotels have seen a small revival with rooms and attractions experiencing increased bookings and footfall.

Each GBA tourist is spending 36,400 yuan (US$5,221) on average in Hong Kong, for a trip lasting between three days and up to a week. The average spending power in McKinsey’s survey that canvassed affluent travellers – most with family income surpassing 25,000 yuan per month – was more than the HK$6,961 spent in the city in 2018, before the Covid pandemic.

Visitors from the Guangdong city of Zhongshan at the Tsim Sha Tsui waterfront in Hong Kong on March 1, 2023. Photo: Oscar Liu

Up to 61 per cent of respondents cited attractive interest rates on savings accounts. Earlier this month, Nanyang Commercial Bank in Hong Kong offered 13.88 per cent interest on seven-day deposits denominated in renminbi, compared with yuan deposits at the Industrial & Commercial Bank of China (ICBC), which paid 1.25 per cent per annum for 12 months.

“Perceptions of Hong Kong have changed in the past few years”, said McKinsey’s associate partner Jady Ye, adding that investments are needed in “proactive marketing and branding” to “gain a better understanding of mainland tourists’ needs”.

Still, Hong Kong must improve the online experience and the quality of financial professionals to catch up, said McKinsey’s Hong Kong partner Enoch Chan.

Children at the Golden Bauhinia Square in Hong Kong’s Wan Chai district on February 24, 2023. Photo: Yik Yeung-man

The mainland has caught up to offer attractive investment services and Hong Kong can make itself more of an attractive place for business if companies can work on better understanding the mainland market as well as offering ‘soft service’ like better customer experience, McKinsey said.

“Having better service for GBA consumers, improving professionalism and friendliness to these customers, will help Hong Kong better position itself and compete in the near future,” said Chan.

Luxury shopping in Hong Kong is no longer what it once was, as the professional shoppers called “daigou” have flocked to the island province of Hainan since its duty-free status came into effect in July 2020. With its tropical climate, sandy beaches, direct flights from many Chinese cities and reputation as “China’s Hawaii,” Hainan is offering Hong Kong stiff competition in luxury shopping.

The Sanya International duty-free shopping centre in the Hainan resort city of Sanya on January 25, 2023. Photo: Reuters

That puts pressure on Hong Kong’s luxury retailers to improve their service quality and deliver better digital experiences to continue wooing shoppers, McKinsey said.

“Mainland travellers are increasingly accustomed to a seamless omnichannel shopping experience”, said the consulting firm’s Hong Kong managing partner Arthur Shek. “Retailers that hope to continue to attract business from mainland shoppers should rethink the way they engage with them”.

Ye added that access to the latest trends, better product safety and higher quality products were the top three advantages of shopping in Hong Kong among GBA respondents.

When it came to purchases that were 3,000 yuan or less, 64 per cent of consumers preferred mobile wallet payment such as Alipay or WeChat Pay. Above this, credit card and debit card were the most common payment methods, according to the survey.