Hong Kong Retailers Seek to Keep Strength
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Hong Kong has been branded as “shopping paradise” to many for a long time, but the city seems to have lost its attractiveness in recent years, as retail sales have been dragged down by a significant drop in tourist numbers.
Retail sales have declined for 11 consecutive months as of January this year in Hong Kong, while the unemployment rate in the sector is on the rise. Signs of improvement are not in sight at the moment.
Rents in Russell Street, once the most expensive shopping place in the world, has been slashed by half now. Hong Kong General Chamber of Commerce Chairman Y K Pang says it seems that less cost would benefit shop owners as well as customers, but as of now it appears that is not the case.
“The competition is really fierce. Other regions are so eager to share a slice of cake from us. No matter how low the cost is, without customers, there is no money to make. So we should welcome all visitors regardless of where they are from.”
Currently, there are less than 50 mainland cities allowing their residents to visit Hong Kong on an individual basis. Some are suggesting expanding the Individual Visit Scheme to boost Hong Kong’s tourism as well as its retail industry, but C K Chao, Founding Chairman of Federation of Hong Kong brands, has another view.
“When tax lowers on the mainland, and people are better off, they could buy the same products there without paying more, or even less than in Hong Kong, why would they come? Hong Kong should establish our own brands, so visitors are here to buy watches, jewelry, and clothes made in Hong Kong. ”
Chao is hoping the government can establish a specialized department to regulate as well as guide the retail sector for further growth.
“Currently, there are less than 50 mainland cities allowing their residents to visit Hong Kong on an individual basis.”
At the same time, Dr. Szetu Chi Man with the Institute for Entrepreneurship at Polytechnic University of Hong Kong, says local companies should get fully prepared to embrace technology to expand business.
“Small companies in Hong Kong still think that they can make money through traditional channels, so they are not ready to use technology yet. I hope the government could help them improve their service to stay competitive in the market. ”
Raymond Tang is the Managing Director of Kingvic International Limited, a footwear company in Hong Kong. He says manpower is vital to retailers, and more people should have the access to professional training and courses.
“The turnover rate is high. Many young people take retail jobs before they get a formal one, and they only stay for a couple of months. So we are always short of hands and they have no experience to offer good service.”
He admits that it is not easy to transform the business model, and Hong Kong should waste no time to act to save the retail sector; otherwise, this “shopping paradise” could soon lose its glamour.
Questions & Answers
Q.What is the current state of retail sales in Hong Kong?
What is the current state of retail sales in Hong Kong?
Retail sales in Hong Kong have seen a decline for 11 consecutive months as of January this year. This is attributed to a significant drop in tourist numbers and has led to a rising unemployment rate in the sector.
Q.What is suggested as a way to boost tourism and retail in Hong Kong?
What is suggested as a way to boost tourism and retail in Hong Kong?
Some individuals suggest expanding the Individual Visit Scheme, which currently allows residents from fewer than 50 mainland cities to visit Hong Kong individually. This could help increase visitor numbers.
Q.What alternative strategy does C K Chao propose for Hong Kong's retail sector?
What alternative strategy does C K Chao propose for Hong Kong's retail sector?
C K Chao believes Hong Kong should establish its own brands, encouraging visitors to buy local watches, jewellery, and clothes. He hopes the government will create a department to guide this growth.
Q.What challenges do small companies face in Hong Kong's retail market?
What challenges do small companies face in Hong Kong's retail market?
Small companies still tend to rely on traditional business channels and are not yet prepared to embrace technology. Dr. Szetu Chi Man suggests government help is needed to improve their service and stay competitive.
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