Retail in Asia

In Markets

How Nutella and Nike attract Hong Kong shoppers

People queue in a line at a Nutella pop-up shop in Hong Kong, China, on Thursday, Aug. 11, 2016.

With retail sales in Hong Kong declining for 16 straight months, brands such as Nutella and Havaianas are capitalizing on falling rents to open temporary outlets in some of the city’s high-end shopping districts.

At the same time, anchors such as Nike Inc. are trying to generate more traffic by “popping up” in front of mall walkers with new or limited-edition products.

“Retailers are trying more aggressively to adjust to changing consumer demand by providing more ‘special’ and better-quality products,” said Angel Young, managing director of market researcher Nielsen Hong Kong and Macau. “Pop-up stores bring new excitement to customers.”

SEE ALSO: 3 major challenges Nike faces today

Malls like Pacific Place in Admiralty and Wharf Holdings Ltd.’s cavernous Harbour City in Kowloon long relied on a steady stream of mainland Chinese shoppers loading up on Louis Vuitton handbags and Cartier watches.

But now those high spenders are spurning Hong Kong in favor of Tokyo and Paris, while less well-heeled shoppers worry about China’s decelerating economy and the city’s social and political tensions, culminating in the violent Occupy protests.

The number of mainland Chinese visitors to the city declined for a 13th straight month in June to 3.2 million, according to the Hong Kong Tourism Board.

That’s triggering a decline in retail sales, which fell almost 11 percent during the first six months of the year, according to the Hong Kong government. Sales in June fell 8.9 percent, exceeding analysts’ estimates.

To cushion the blow, commercial landlords are searching for new ways to generate foot traffic at the bevy of malls. They’re giving space to brands that typically don’t cater to high-end shoppers, and they’re allowing brands already there to experiment.

(Source: Bloomberg)