News / Asia

On Fleeting Hong Kong Trips, Chinese Make Frugal Fashionable

Shoppers walk across Canton Road, famous for its luxury brand stores, at Hong Kong's Tsim Sha Tsui shopping district, May 9, 2013.
Shoppers walk across Canton Road, famous for its luxury brand stores, at Hong Kong's Tsim Sha Tsui shopping district, May 9, 2013.
TEXT SIZE - +
Reuters
— Armed with empty suitcases and same-day return tickets, an army of mainland Chinese is descending on suburban outlet shopping malls and international fashion chains in Hong Kong, turning cheap into the new chic as luxury falls out of favor.
 
Wealthy Chinese used to stop over in Hong Kong for a few days to pick up a Louis Vuitton bag or a wristwatch for up to 40 percent less than in Beijing or Shanghai.
 
These well-heeled tourists have now been overtaken by bargain-hunters that stay for a few hours, spend more at shops like Inditex SA's Zara and malls such as Citygate Outlets, turning Hong Kong into a must-be location for retailers who are braving some of the world's most expensive commercial rents.
 
"There are more mainland consumers than locals," said Tsz Chung, a salesman at a Nike Inc. store in Citygate, located in the satellite town of Tung Chung near the airport. "Typically, mainland consumers look for cheap goods."
 
Foreign retailers treat Hong Kong as a gateway to China, which is poised to become the world's biggest consumer market in three years, and how mainland tourists shop is big business.
 
Sluggish sales growth in Europe and the United States also makes China, with its rapidly expanding middle class and rising incomes, especially attractive.
 
Chinese nationals were the largest single group of tourists to Hong Kong last year. Of the 35 million who visited, 20 million came and left the same day, an increase of more than a third on 2011, according to tourism bureau data.
 
Many short-term visitors come by shuttle bus or train from the southern Chinese province of Guangdong. They often head straight to Citygate, where more than 80 international brands including Levi's jeans, Coach Inc., Polo Ralph Lauren and Burberry are offered at steep discounts.
 
"It's cheaper here and there's a wide range of options," said Chen Yunlong, a 29-year-old tourist from the border town of Shenzhen as he strolled through the mall on a recent Saturday.
 
Visitors like Chen, who said he shops in Hong Kong up to three times a week, made Citygate the best performer among the big malls operated by realtor Swire Properties.
 
First-quarter sales rose 22 percent at the outlet mall, beating a one percent loss at the luxury-focused Pacific Place and a 3.5 percent increase at the mid-tier Cityplaza mall.
 
At the Nike outlet, Chung said all sales staff were now required to be fluent in Mandarin, the most prevalent Chinese dialect. Most Hong Kong residents speak Cantonese.
 
Mass market retailers muscle in

Thrifty Chinese tourists are also proving a boon for New Town Plaza, a shopping mall located in the suburban Sha Tin district and owned by Sun Hung Kai Properties Ltd.
 
Retail rents at New Town, which is miles away from spots frequented by tourists, are among the city's highest. Last month, L Brands Inc. lingerie chain Victoria's Secret chose to locate its first Hong Kong stores at the mall and the prime downtown district of Central.
 
The increase in the number of bargain-seeking Chinese tourists was a factor that attracted 51 international brands to set up their first Asia Pacific stores in Hong Kong last year, about twice as many as in Singapore and Tokyo, according to research recently released by property consultancy CBRE.
 
Affordable retailers already established in the region are also forking out lofty rentals to attract these visitors.
 
Japan's Fast Retailing Co. Ltd., owner of the Uniqlo clothing chain, last month opened a 37,500-square-foot store in the iconic Causeway Bay, which overtook New York's Fifth Avenue as the world's most expensive retail location.
 
British fashion brand Topshop will open a 14,000-square-foot store in Central in June, paying $516,000 a month in rent. Zara is also taking over the space once occupied by H&M.
 
"There are just too many brands looking for shops," said Susan MacLennan, director of retail at property consultants Savills in land-scarce, densely populated Hong Kong. "A lot of international brands are still very interested, but it's quite difficult to find space for them."
 
Frugal and fashionable

The boom in Hong Kong's mass market retail sector comes as luxury goods sales suffer due to a slowdown in China's economic growth, a government crackdown on giving expensive gifts in return for favors and in-your-face displays of wealth.
 
LVMH, the world's biggest luxury goods group, said in April demand in China had been "flattish" for about 10 months. Luxury watch retailers Sincere Watch (Hong Kong) Ltd. and Emperor Watch & Jewellery Ltd. also reported a decline in sales.
 
In a bid to boost business, some upmarket brands are sending clients on all-inclusive shopping trips to Hong Kong.
 
But as the influence of these big-spenders on the global luxury market wanes, the spending power of their less wealthy countrymen is rising and changing Hong Kong's retail scene.
 
"For sure, we will see more big brands opening stores," said Joe Lin, senior director of retail services for CBRE Hong Kong.

You May Like

Analysts Warn of Regional Proxy Conflict in Afghanistan

Analysts warn if Kabul’s neighbors do not start to cooperate, competing desires for influence could deteriorate into a bloody proxy war in the country More

Saudi Intelligence Chief Replaced

Bandar bin Sultan came under criticism for supporting al Qaida, prompting King Abdallah to wrest Syria operations away from him in February, handing them to Interior Minister Prince Mohammed bin Nayef More

Poetry Magazine editor Don Share talks what makes a good poem with VOA's David Byrd

What makes a good poem? And is poetry as viable an art form as it once was? To find out, VOA's David Byrd spoke to Don Share, the editor of Poetry Magazine. More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Google Buys Drone Companyi
|| 0:00:00
...
 
🔇
X
George Putic
April 15, 2014
In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
Video

Video Ray Bonneville Sings the Blues and More on New CD

Singer/songwriter Ray Bonneville has released a new CD called “Easy Gone” with music that reflects his musical and personal journey from French-speaking Canada to his current home in Austin,Texas. The eclectic artist’s fan base extends from Texas to various parts of North America and Europe. VOA’s Greg Flakus reports from Austin.
Video

Video Millions Labor in Pakistan's Informal Economy

The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed. VOA's Sharon Behn reports from Islamabad on how the informal sector impact's the Pakistani economy.
Video

Video Passover Celebrates Liberation from Bondage

Jewish people around the world are celebrating Passover, a commemoration of their liberation from slavery in Egypt more than 3,300 years ago. According to scripture, God helped the Jews, led by Moses, escape bondage in Egypt and cross the Red Sea into the desert. Zlatica Hoke reports that the story of the Jewish Exodus resonates with other people trying to escape slave-like conditions.
Video

Video Police Pursue Hate Crime Charges Against Kansas Shooting Suspect

Prosecutors are sifting through the evidence in the wake of Sunday’s shootings in a suburb of Kansas City, Missouri that left three people dead. A suspect in the shootings taken into custody is a white supremacist. As VOA’s Kane Farabaugh reports, he was well-known to law enforcement agencies and human rights groups alike.
Video

Video In Eastern Ukraine, Pro-unity Activists Emerge from Shadows

Amid the pro-Russian uprisings in eastern Ukraine, there is a large body of activists who support Ukrainian unity and reject Russian intervention. Their activities have remained largely underground, but they are preparing to take on their pro-Moscow opponents, as Henry Ridgwell reports from the eastern city of Donetsk.
Video

Video Basket Maker’s Skills Have World Reach

A prestigious craft show in the U.S. capital offers one-of-a-kind creations by more than 120 artists working in a variety of media. As VOA’s Julie Taboh reports from Washington, one artist lucky enough to be selected says sharing her skills with women overseas is just as significant.
Video

Video UN Report Urges Speedier Action to Avoid Climate Disaster

A new United Nations report says the world must switch from fossil fuels to cleaner energy sources to control the effects of climate change. The Intergovernmental Panel on Climate Change released the report (Sunday) following a meeting of scientists and government representatives in Berlin. The comprehensive review follows two recent IPCC reports that detail the certainty of climate change, its impacts and in this most recent report what to do about it. VOA’s Rosanne Skirble has the details.
AppleAndroid