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.
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

Video VOA ‘Town Hall’ Shines Light on Ebola Crisis

Experts call for greater speed in identification and treatment of deadly disease More

UN Rights Commission Investigates Eritrea

Three-member commission will start collecting first-hand information from victims and other witnesses in Switzerland and Italy next week More

Funding Program Helps Extremely Poor in Ghana

Broad objective for Ghana's social cash transfer program is to lessen the impact of poverty on the most vulnerable people, elderly, orphans, those with disabilities More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ebola Economic Toll Stirs W. Africa Food Security Concernsi
X
November 19, 2014 11:39 PM
The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.
Video

Video What Jon Stewart Learned About Iran From 'Rosewater'

Jon Stewart, host of the satirical news program "The Daily Show" talks with Saman Arbabi of Voice of America's Persian service about Stewart's directorial debut, "Rosewater."
Video

Video Lebanese Winemakers Thrive Despite War Next Door

In some of the most volatile parts of Lebanon, where a constant flow of refugees crosses the border from Syria, one industry continues to flourish against the odds. Lebanese winemakers say after surviving a brutal civil war in the 1970s and 80s, they can survive anything. Heather Murdock has more for VOA from the Bekaa Valley in Lebanon.
Video

Video China's Rise Closely Watched

China’s role as APEC host this week allowed a rare opportunity for Beijing to showcase its vision for the global economy and the region. But as China’s stature grows, so have tensions with other countries, including the United States. VOA’s Bill Ide in Beijing reports on how China’s rise as a global power is seen among Chinese and Americans.

All About America

AppleAndroid