Why Chinese luxury shoppers won’t return to Hong Kong soon – protests, prices and death of the city’s ‘experience’
Resumption of the city’s anti-government protests, and cheaper luxury goods in China, could see many shoppers stay away even if travel restrictions are relaxed
Shopping malls might need to change tack to survive, such as showcase local designers and push events available only in Hong Kong
Designer boutiques the world over rely on tourists from China to keep their brands afloat. While the country’s shopping classes are unlikely to return to Europe or the US this summer, they’ll probably be able to make their way to Hong Kong again soon. But will they return to their lavish spending sprees of the past, or will the pain caused by the coronavirus, and a possible re-emergence of anti-China and anti-government protests in Hong Kong, mean they stay away?
Sales figures in China are surprisingly good. While the global luxury industry is expected to contract by up to 35 per cent this year, the best-performing brands in China are already registering year-on-year sales increases for the first four months of 2020, according to consultancy Bain. And while store traffic has nearly halved from a year ago, shoppers who venture out are far more inclined to buy, and average spend has increased.
Hong Kong, meanwhile, is expected to log its worst full-year retail performance on record and desperately needs Chinese fashion-lovers to cross the border and start spending again. The city is already allowing some business travellers from mainland China to skip quarantine, and could begin doing the same for tourists as soon as the end of May. But doubts exist over whether things will quickly return to normal.
“I’m sorry to say I think it’s going to be a really slow process,” says Wendy Choi, chief operating officer of Chain of Demand, a Hong Kong-based data analysis firm. “Quarantine will be lifted at some point and once it is, there will be a return of Chinese shoppers, but I don’t see them rushing back and spending like they once did.
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“Eateries are closing down and stores are half-empty, so the Hong Kong ‘experience’ isn’t what it once was – and certainly not enough to drive people across the border.”
Anti-government protesters at a shopping mall in Hong Kong on May 13, the birthday of the city’s chief executive Carrie Lam. Photo: AFP
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Last year’s protests won’t be easily forgotten either. Even before the coronavirus, retail sales had plummeted because of the unrest and some luxury stores had announced closures as Chinese visitors turned their backs on Hong Kong. Now, the biggest threat to a post-coronavirus recovery isn’t necessarily a new outbreak, but a possible resumption of the protests ahead of September elections to the Legislative Council.
“I can only speak personally, but I have no doubt that Chinese consumers will return to Hong Kong post-virus,” says Douglas Young, owner and founder of local lifestyle brand G.O.D. “I am far more concerned that the protests will resume after the epidemic, in which case all tourists will be really put off.
