Monday, 13 April 2015

Still Business as Usual?

Is the new restriction on visits to Hong Kong going to impact parallel traders?
We now hear the latest measures limiting parallel traders coming to Hong Kong to once a week has become effective immediately, and reaction has been swift.

Some say because there is still such a high demand for goods from Hong Kong across the border that parallel trading businesses will find other ways to get stuff that's in demand, like milk powder, chocolates, shampoo and toothpaste.

"Instead of hiring one person to conduct the trade three times a day, they will probably hire three people to do it once a day," said student Dicky Chung, a North District resident.

An employee at a pharmacy in Sheung Shui suggested that parallel trading ringleaders would recruit Hong Kong people to transport products. "We're talking about a HK$200 profit margin per day, or about HK$5,000 to HK$6,000 a month. Who wouldn't do it?" he said.

We will have to wait and see how this new restriction will affect parallel traders -- will they hire more people to help them bring goods across the border? Is it really that worth it? Or because it's harder to get access to these goods that prices for them in China will increase?

The Hong Kong government claims the latest measures will reduce the number of parallel traders by 30 percent, or about 4.6 million a year, but it is believed parallel traders will have something up their sleeves to keep their lucrative businesses going.

No one has a good idea of how much really is brought across the border to resell and how much profit is made out of parallel trading. Obviously mainlanders are doing a brisk business otherwise they would not be doing this on a daily basis. But it would be interesting to find out exactly what kinds of products are in demand, who buys them and why.

Besides, we need this market research for the shopping malls we're apparently building near the border just for this segment of people who come to Hong Kong...

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