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Hong Kong’s luxury retailers are adapting to fewer wealthy Chinese shoppers visiting the city and a shift towards tourists flocking to Instagram-coveted spots in trendy districts rather than splashing out on pricey branded gear.
Because of its appeal to affluent mainland tourists, the Chinese Special Administrative Region has defied worldwide trends prior to the epidemic, indicating a decline in demand for multi-brand department shops and ultra-luxury products.
However, industry experts claim that the emergence of rival shopping destinations like China’s Hainan island, shifting consumer tastes, and an increase in internet shopping have drastically altered Hong Kong’s demand for luxury items and are beginning to disrupt the city’s tourism sector.
According to Tang, the first half of the year saw overnight and same-day tourist shopping expenditure at 55 per cent and 18 per cent of 2018 levels, respectively. This led businesses to concentrate more on food and beverage shops.
Leading the front in these reforms is the upscale British department shop Harvey Nichols. After nearly 20 years, its owner Dickson Concepts announced last month that it would be terminating its lease on its main five-level store in the posh Landmark mall in the heart of the city.
Less tourists arrive as well; arrivals only reached 60 per cent of 2018 levels prior to 2019 anti-government demonstrations and strict regulations during the pandemic.
The government and tourism industry are attempting to entice tourists to nature and leisure areas in an effort to lessen Chinese buyers’ dependency on luxury shopping, even if Hong Kong’s overall retail sales are down almost 20 per cent from 2018 levels.
After tens of thousands of individuals left Hong Kong due to the draconian Covid regulations and the national security law that Beijing imposed in 2020, business chambers and firms are also working to mend fences between the West and Hong Kong.
Harvey Nichols closure comes after brands including Valentino, Burberry and LVMH’s Tiffany shut some of their stores in Hong Kong, where retail rents are the highest in Asia despite having dropped about 40 per cent since 2019.
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