Saturday, 6 October 2012

Thinner Wallets

Retailers are bummed this year as mainlanders coming to Hong Kong for the National Day holiday aren't shopping up a storm like they used to.

Things were already looking bad in August, according to figures from the Census and Statistics Department.

Sales in August only rose 4.5 percent in value year-on-year to HK$35.8 billion, while the sales volume increased 3.2 percent.

The value of retail sales just went up 3.9 percent in July and 4.5 percent in August, while the number of tourists from China surged 28 percent year-on-year from the two months.

"I think the figures are shocking," said Hong Kong Retail Management Association chairwoman Caroline Mak Siu-king.

Sales of jewellery, watches, clocks and valuable gifts -- popular items mainlanders usually buy here -- dropped 3.4 percent in value in August.

Mak said name brand clothing and watches had seen an even larger plunge in sales, probably due to the slowdown in the Chinese economy, resulting in visitors spending less.

And with this year's eight-day national day holiday coming to a close, mainlanders were spending less in Hong Kong, partly because of the economy, but also because of tensions with locals.

Stanley Lam Tung-hing, general manager of four Oriental Watch outlets, reported sales dropped 10 percent compared to last year. And purchases over HK$300,000 fell at least 30 percent.

"We're seeing a 12 to 13 percent drop in customers too and I think this is due to the economic slowdown in the mainland," he said.

Now customers came into the shop and had a budget of about HK$50,000 compared with HK$60,000 last year.

With the slowdown in China directly affecting Hong Kong, perhaps the silver lining will be the eventually drop in the property market, particularly retail rents which have gone through the roof.

Do we really need more watch and jewellery stores when the main customers aren't the ones living in Hong Kong?

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