Home > > Hong Kong luxury shopping gets updated as travelers venture elsewhere

Hong Kong luxury shopping gets updated as travelers venture elsewhere

10/30/2017| 10:07:56 AM|

Wharf, Hong Kong’s biggest retail landlord, saw 3% sales growth because its Harbour City mall is less reliant on luxury sales.

Gone are the days when Chinese would queue up to get inside Prada, Gucci and Tiffany, and leave laden with luxury handbags and watches. The wealthiest now travel further afield, and even those who visit Hong Kong are cutting back. Average spending per overnight visitor, of whom three quarters come from China, dropped 8.8 percent in the island city last year. Luxury goods have been the hardest hit, with August sales less than a third of their April peak in 2013 before China cracked down on conspicuous consumption.

Buying habits of Chinese shoppers have also evolved, as they have become more comfortable buying luxury brands at home, or online, and have become more price sensitive when shopping abroad. This is having an impact on the USD 390 billion global luxury goods market and nowhere is it being felt more than at Hong Kong’s malls.

For mall owners, broadening their mix of tenants is helping blunt the negative impact of lower retail sales, although a return to the heady times looks unlikely.

No matter how many cups of cold brew Starbucks sells, or shoes Nike flogs, they won’t be enough to offset the drop in sales of $10,000 handbags and glittering diamond necklaces. Landlords earn less through the portion of receipts tenants must share with them, and they’ve had to drop base rents for new tenants as well.

In the first half, retail revenue for Swire dropped 0.2 percent and Hysan’s fell 0.1 percent, said Wong. Meanwhile Wharf, Hong Kong’s biggest retail landlord, saw sales growth of three percent because its mammoth Harbour City mall is less reliant on luxury sales.

Still, performance might have been weaker had Swire left things as they were. “The revamp of our tenant mix has put us in a strong position for 2017, especially with sales at our mall improving since mid-2016, even amidst a very challenging retail market,” Fiona Shiu, general manager of Pacific Place said in an email.

Pacific Place mall has posted sales growth in the first two quarters of 2017. Traffic has been encouraging, with increased car park use, it said. “We are confident that this positive trend will continue,” said Shiu.

While Burberry, Diane von Furstenburg Studio LP and LVMH Moet Hennessy Louis Vuitton have decreased the size of their stores in Pacific Place, they aren’t pulling out altogether. Coach, which no longer has an outlet in the mall, said it is investing to renovate its Hong Kong locations and remains committed to the market.

Last year, the average Chinese tourist traveling overseas spent about 17 percent less on shopping, but more on leisure and entertainment, according to the consultancy Oliver Wyman.

Hong Kong isn’t the only Asian city where things are evolving. Mall operators in Singapore have turned to unique lifestyle or dining concepts to stand out in a competitive landscape. The proportion of food and beverage tenants in Singapore malls has doubled to 40 percent in the last 10 years, according to Desmond Sim, head of research for Singapore and Southeast Asia at real-estate services firm CBRE Ltd.

Read Original Article

TAGS: Chinese tourists | Hong Kong | luxury travel
©2022 广州力矩资讯科技有限公司 粤ICP备06070077号
Tell us more about yourself!