Hong Kong smartphone prices fall after competition law comes into force

People buying mobile phones this year can expect to pay as much as 20 per cent less for high-end models than they would have done before ordinance took effect

PUBLISHED : Sunday, 03 January, 2016, 11:31am
UPDATED : Tuesday, 05 January, 2016, 1:13pm

Prices of new smartphones at Hong Kong’s major electronics store chains have fallen by as much as 20 per cent with the entry into law of the city’s first Competition Ordinance.

The legislation, which took effect on December 14, has practically done away with suppliers’ recommended retail prices. Any form of price fixing is now regarded as anti-competitive behaviour and, therefore, deemed unlawful.

Can Hong Kong make the most of its new competition law?

The law will cause a drop in the prices of electronic goods this year, especially those of high-turnover items such as mobile phones. This is good news for consumers who like to keep up with trends and always have the latest models, and for big stores, which should be able to sell popular models more quickly because their prices are lower.

The flip side of this is that smaller phone shops may soon find themselves being priced out of the market because they cannot compete with the big store chains or make enough money from selling at lower prices to pay the high store rents prevalent in Hong Kong. This will, ironically, reduce competition.