Coronavirus: for Hong Kong’s retailers left reeling from double blow of social unrest and pandemic, pain is proving useful lesson

Businesses that relied on visitors from mainland China were caught off guard when anti-government protests drove them away

The Covid-19 pandemic has only further eroded sales, but some firms are adapting to the tough times and making changes that could help them flourish

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An empty shopping centre in the heart of Hong Kong’s shopping district of Causeway Bay. Photo: Nora Tam

Published: 12:00pm, 5 Apr 2020Updated: 11:21pm, 5 Apr 2020

Hong Kong’s shopping district of Causeway Bay remains bustling with people most days even amid the coronavirus pandemic, but few stop to read the posters plastered along streets advertising sales. Dozens of stores sit empty, their interiors ripped out, leaving behind just a concrete shell.

At the popular G2000 fashion outlet at Jardine's Crescent, spring and summer clothes are selling at a discount, but the place is quiet with just five customers browsing over the course of half an hour.

Company founder Michael Tien Puk-sun said revenue at its 36 outlets had fallen 70 per cent in February against a year ago and the drop widened to 80 per cent in March as the outbreak tightened its grip on the city and people stayed home. Spending by mainland visitors in 2019 accounted for 40 per cent of the company’s business but that figure has sunk to zero.

Business is down across the 36 outlets of Hong Kong clothing chain G2000. Photo Nora Tam

“Hong Kong has changed,” Tien said, referring to the anti-government protests that began last summer and kept visitors away. “In the future, the way Hongkongers welcome mainlanders will never be like [it was] in 2005 and 2006.”

After the outbreak of severe acute respiratory syndrome took a heavy toll on Hong Kong’s economy in 2003, the central government opened the floodgate of mainland visitors with cash to spend.

But with the current health crisis, coming after months of social unrest, tens of thousands of vendors like Tien are being forced to cope with a transformed local retail landscape. Consumer spending in February plummeted a record 44 per cent to HK$22.7 billion (US$2.92 billion) from last year. Businesses are responding with plans to cut back on their number of physical outlets to instead focus more on developing their online presence.

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