Hong Kong’s malls adapt to fourth wave, tackle bleak Christmas season with dining and shopping offers and promotions

Fourth wave continues to deal a great blow, particularly to F&B tenants, Swire Properties executive says
Retailers, F&B operators and even developers have accepted that this is the fourth wave and that a fifth wave will also come: head of retail at JLL

Hong Kong property

Cheryl Arcibal

Published: 1:00pm, 26 Dec 2020

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Hong Kong mall operators are not sitting back in the face of the city’s fourth wave of coronavirus infections, and have come out with innovative ways to promote their tenants, particularly restaurants.

In what would have been the busiest period of the year for them, restaurants and other F&B businesses have had to make do with containment measures such as shortened dining hours and limits on seating per table as well as the number of diners allowed on their premises at any given time. And the city’s social distancing measures are likely to be extended while its daily Covid-19 caseload continues to rise. Hong Kong reported 71 new cases and two related deaths on Thursday, taking the tally in the city to 8,424 and 135, respectively.

“The fourth wave of Covid-19 continues to deal a great blow across industries – our F&B tenants in particular,” said Fiona Shiu, deputy director of retail (Hong Kong), Swire Properties. “For certain, we will continue to support our tenants by offering tailored assistance targeting their specific business needs. In addition to rental concessions, we’re also rolling out various shopping and dining rewards and cash coupons, e-vouchers with great discounts, parking offers and F&B takeaway promotions, and much more to help give their businesses a push throughout December.”

It is crucial for mall owners that they keep their tenants. Harbour City in Tsim Sha Tsui, a mall frequented mainly by mainland Chinese tourists, serves as a cautionary tale for the sector. It currently has 57 shops sitting empty, according to market research firm Euromonitor International.

The absence of mainland tourists – whose shopping trips to Hong Kong made Russell Street in trendy Causeway Bay the world’s priciest retail strip – has been keenly felt by the retail sector. While visitor arrivals plunged by 92.2 per cent in the first 10 months of the year, retail sales fell 27 per cent in the period, the latest government data shows.

02:02

Fourth wave of coronavirus cases in Hong Kong prompts tougher Covid-19 measures

The latest restrictions have prompted major mall operators and owners such as Swire Properties and New World Development (NWD) to launch various promotions to help their tenants and get people spending money.

Swire’s Pacific Place in Admiralty and Cityplaza in Taikoo Shing have launched discounted e-vouchers for selected F&B and retail brands. Cityplaza and Citygate Outlets are also set to unveil a collaboration with food delivery service Deliveroo to boost spending.

Additionally, the developer has tried to enhance the shopping experience in its malls by tapping augmented reality technology, so shoppers can take photos with Santa Claus, enjoy online storytelling sessions and handicraft workshops. Other events include launching an exclusive Instagram filter for shoppers to take selfies with and a lucky draw.

02:15

Hong Kong tightens social-distancing measures to cope with fourth wave surge of Covid-19 cases

At NWD’s K11 Musea, shoppers can access a 30 per cent discount on food takeaway services through its mobile app. The app also offers various rewards for customer loyalty programme members who spend a certain amount in a day. The mall’s festive sparkling Christmas forest has also been a hit with shoppers.

Such initiatives suggest the industry has been adapting to the pandemic, analysts said.

“What I have observed is that the latest wave is less impactful, with retailers and F&B operators and even developers accepting that this is the fourth wave and that a fifth wave will also come. This is now the new norm and they need to find a way to survive,” said Oliver Tong, head of retail at JLL in Hong Kong.

04:52

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Although the current wave and lockdown are very similar to those back in July and August in terms of restrictions, a lot of shopping malls, especially luxury shopping malls, have launched programmes for Christmas shopping, said Emily Leung, senior analyst at Euromonitor. “These different malls have been trying to use different sorts of Christmas programmes to attract traffic, so I do feel the impact of this lockdown is not as negative for retail stores,” she added.

Moreover, malls and retailers are not alone in adapting to a new normal of lockdowns and social distancing. Consumers have also changed their shopping habits, according to Veronica Wang, partner at consultancy firm OC&C.

“I would not say that this latest round of lockdown measures has the biggest impact,” she said. “It’s been almost a year of this pandemic, and consumers have got used to it so they’re better prepared for this than they were early on this year.”

But, despite the much-vaunted structural shift in the sector, where more retailers are either enhancing or totally moving their operations online, traditional bricks-and-mortar stores are still expected to play a crucial role.

“Some say that retailers may not need a physical space in the future, but I don’t believe that,” said JLL’s Tong. “After going through 14 days of quarantine, all I wanted to do was go out and eat, and exercise. People will be the same, people like interaction. We might even need more retail space in the future, so retailers can provide better customer experience.”