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Hong Kong economy

New Hong Kong shopping centre on border struggles to draw mainland shoppers – or anyone else

Mainlanders who flood across the border to buy goods say they are unaware of the centre as shop owners at The Boxes are on edge from a lack of sales

PUBLISHED : Friday, 16 February, 2018, 5:02pm
UPDATED : Friday, 16 February, 2018, 5:56pm

After six rounds of mini-karting at The Boxes – Hong Kong’s first shopping centre located close to the Shenzhen border in San Tin, aimed to attract mainland shoppers – young So Fu-kit declared: “It is so boring!”

The nine-year-old boy did not have much fun playing alone, as he was the only one on the racing course that afternoon on February 9, a Friday, when all kindergartens and primary schools were in an early Lunar New Year break in an effort to curb the spread of flu.

Business was so slow that the young man looking after the course was able to join So in a race – much to the boy’s delight.

So, whose mother works in a clothing shop in the shopping centre, said he would not recommend his schoolmates to come, though he wished for more playmates.

“My friends live in Shenzhen and I don’t want them to waste money on transport – how can we have fun here with so few people?” the boy asked.

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The shopping complex has been plagued by delays and a lack tenants to fill its 420,000 square feet of retail space. It is located in northeast Yuen Long between the Lok Ma Chau checkpoint and its next station along the MTR East Rail Line, Sheung Shui, a district crowded by mainland shoppers and parallel traders. It takes about 20 minutes to drive to the complex from either point.

Initiated in 2013 by the import and export sector lawmaker Wong Ting-kwong, the complex was designed to attract mainland shoppers although Hongkongers are a target as well after a recent strategy shift from retailers. The centre was hailed as a “win-win” solution that could satisfy mainlanders’ strong demand of goods – ranging from food, drugs, cosmetics to jewelleries – and keep local communities free from overcrowding to reduce the wrath and anguish increasingly felt by Hongkongers towards their mainland compatriots.

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But the mainland shoppers who crowd into the bustling shopping hub of Sheung Shui seem to have little inkling that a new mall catering to them is located nearby in San Tin.

“I don’t know about the San Tin complex and I am not very interested in it because I can easily buy everything I need here,” said He, 28, who like several people who talked to the Post only gave his surname.

He, who lives in Futian, a border district in Shenzhen near Lok Ma Chau, was carrying a luggage case and two large plastic bags filled with food and necessities for his young child. He said he came to Sheung Shui two to three times a month to shop, each time spending about HK$1,000 (US$130).

A 20-year-old student Zeng, who lives in Lo Wu and comes to Hong Kong four to five times a year, said she heard about the San Tin complex but had never visited.

“If it has more promotion on social media, I may go and take a look,” she said. “And I may be attracted to a cross-border shopping centre that is furnished as a modern shopping centre, presents a great variety of brands and products and has a price level as low as in Sheung Shui.”

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Another mainland shopper in Sheung Shui, Xie, suggested that advertisements about The Boxes placed near checkpoints might draw customers’ attention.

“Where is the San Tin shopping centre? Is it far away from the checkpoint? If I have all its information when I cross the border, it will be more convenient,” said Xie, who spent HK$18,000 in Sheung Shui.

It might be a long way off before the San Tin complex lives up to its billing as a one-stop destination for mainland shoppers.

One week after the San Tin complex’s soft opening on February 3, which was delayed for more than two years, 89 of the 261 retail spaces had tenants, but only 23 were ready for business, including three diners, according to Wong.

And not all of the 23 shops were open.

While So was disappointed by the race he paid HK$30 for, representing 60 per cent of his monthly allowance, a stroll in the shopping centre showed fewer than 20 shops were open and about the same number of visitors wandering by, looking at the empty boxlike storefronts.

“Bonjour was in business for a few days after February 3 but has been closed the past two days,” said Sing, the supervisor of San Tin Carnival, the only gaming business in the complex.

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Bonjour is one of the largest cosmetic chains in Hong Kong and has long been a favourite of mainland shoppers. Its suspension of business has Sing worried.

“We are one of the first to come, opening before last Christmas, but business has never been good. We had days with zero revenue. On ordinary weekdays, we could, at best, make around HK$1,000,” Sing said. The San Tin Carnival has 12 game booths.

“Before the government called for an early break in schools, the complex could be like a dead city sometimes. Most of the visitors were local families, instead of mainland shoppers. There is nothing much to buy here.

“I don’t think it can become a real ‘cross-border shopping centre’,” Sing added.

Chan, 25, who manages a food shop featuring Japanese imports, said the complex had missed the shopping rush before the Lunar New Year in mid-February.

“Most people went to malls and markets they were familiar with,” Chan explained. “And the complex only offers free shuttle buses on weekends or public holidays, which also affects its popularity.”

Since business started on February 1, Chan’s best day in terms of revenue was HK$4,000, which only about half of what similar shops in urban areas make on an average day.

Don't force us to choose sides on mainland shoppers

Lan, 67, runs a fast food booth in the complex and said she dared not hire any employees, not even a part-timer.

“We are losing money every day,” Lan said. “The rental for this 400 sq ft shop place costs ­HK$1,100 per day. With no stable influx of customers, how can we sustain this?”

On February 11, Wong, the so-called Father of the San Tin mall, announced that the complex’s management had agreed to roll out a third round of rent concessions, promising that all shops opened before April 1 could have rents exempted until July 1.

“Even a stall with goods placed on the ground can enjoy the perk,” Wong said.

But that offered little relief to Lan.

“I am not here hoping for rental exemption,” she said. “Under what circumstances will developers agree to exempt tenants’ rents? I want to have more business and pay rent.”

Wong promised that he would work with the advertising agencies on more promotion strategies.

“We have to keep holding on to the site first,” Wong said.

The Town Planning Board allowed the complex to use the land until September 19 on a temporary basis. Wong expressed confidence an extension would be granted by the planning board, and the land owners, Sun Hung Kai Properties and Henderson Land Group, agreed to continue to lease the land at a nominal rent of HK$1.