What is the future for Hong Kong’s luxury retailers, as China’s big spenders avoid city of protests
Zhang Zisheng has stopped shopping in Hong Kong. The 24-year-old salesman no longer feels welcome, even if his home in Jiangmen is a mere 90-minutes’ ride away on the high-speed rail, and he speaks the same Cantonese as Hong Kong’s residents.
“I’m worried that I, as a mainland Chinese visitor, may be physically attacked” in Hong Kong amid the city’s anti-government protests, which have taken on a nativist slant in recent months against visitors coming across the southern Chinese border, Zhang said during a recent interview with South China Morning Post. “Hong Kong’s protests have affected my [decision] to visit” the city, he said, adding that he is going to the former Portuguese colony of Macau instead because “there is no sign of riots, so I could rest assured while shopping.”
Zhang’s disquiet matters, because mainland Chinese tourists – and their average spending of HK$7,029 (US$905) per person – made up 78.3 per cent of Hong Kong’s visitors in 2018. Tourism contributed to an estimated 32 per cent of the city’s services output in recent years, up from 21 per cent in 2003.
As Hong Kong shut most of its border checkpoints with mainland China to stop the coronavirus outbreak from spreading in the city, the dearth of visitors is upending the local retail industry. Top-tier designer brands with their loyal legions of customers, fat profit margins and owners with deep pockets may be better placed to weather the slump than second-tier brands that lack the same advantages, retail analysts said. Taken together, this may be the beginning of Hong Kong’s demise as an Asia-Pacific hub for shopping, they said.