Online shopping and much fewer Chinese Mainland shoppers are causing a shift in HK’s retail landscape.
Reports of ghost malls in Hong Kong including at its most popular shopping hotspot Tsim Sha Tsui would send a shudder to any retailer in Hong Kong. From a retail boom three years ago fuelled by Mainland Chinese shopping sprees, the island is now facing its steepest retail downturn since 1999. Stores inside malls are shuttering while luxury retailers are also closing down some of their outlets. The ongoing economic slowdown in Hong Kong is not helping the situation either.
According to Euromonitor, until 2015, retail sales recorded positive year-on-year growth, but 2016 saw a steep decline as affluent Chinese Mainlanders switched to other countries. At the same time, local consumers are increasingly shopping online encouraged by easy electronic payment options, various delivery options and a wide range of products. As a result, internet retailing is seeing a boom as it becomes the fastest growing retail channel in the territory.
In place of luxury retailing and malls is the growth of convenience stores offering groceries, drinks, tobacco and a myriad of other everyday items as well as budget retailing such as off-price stores in discount outlet malls and dollar shops.
For 2017, consumer sentiment is at its lowest and most are tightening their belts with levels of household debt at record highs, and mortgages taking the biggest slice. Even news of more Chinese Mainlanders returning to shop in Hong Kong instead of South Korea is not lifting HK consumers’ pessimism anytime soon.[/ihc-hide-content]