Three ways Hong Kong can turn around its retail fortunes
Hong Kong, once a shopper’s paradise, is battling a decline in visitor numbers and retail spending. But it needn’t be that way, says JLL’s James Assersohn
For a long time Hong Kong was a shopper’s paradise, with flagship stores of international brands found nowhere else in Asia backed up by an amazing restaurant scene.
It was cool and had an excitement about it that attracted over 3 million Chinese tourists every month to shop, eat and shop some more. This surge of Chinese money led to a colossal boom to the retail industry, and for many global retailers Hong Kong had the most productive stores globally.
However the last 23 consecutive months have seen retail sales tumble and tourism spending, the lifeblood of the retail economy, down by an estimated HK$3.75 billion a month.
This is a problem not only for retailers’ shareholders but for the 10 per cent of Hong Kong residents who are employed in the retail industry.
The key to Hong Kong’s retail market rebounding is clearly linked to its appeal as a fun and interesting destination to visit for more than just the day
The decline in retail sales is definitely starting to flatten off but in my opinion there are things Hong Kong could be doing to improve the speed of this recovery and spur future growth. Mainland Chinese, who represent close to 80 per cent of all tourists, on average spend HK$2,522 on shopping when they visit for a single day. If they stay overnight, however, that figure triples to HK$7,100. The key to Hong Kong’s retail market rebounding is therefore clearly linked to its appeal as a fun and interesting destination to visit for more than just the day. And as destinations around the globe are vying for this spending power, Hong Kong is facing great competition.