The shopper demographic has shifted over the past 20 years from Japanese to mainland Chinese tourists. The Japanese used to come because the prices were much more attractive. They shopped differently from the Chinese, though. In general, the Japanese are less gregarious, less ostentatious.
Meanwhile, the introduction of the Individual Visit Scheme in 2003 marked the beginning of a decade of huge growth in mainland Chinese visits to Hong Kong. Before that, a little over 7 million mainland Chinese visited Hong Kong each year. Ten years later that number had grown to 44 million. For the luxury stores, this meant mainland Chinese suddenly made up 70 per cent of your tourist clientele.
The anti-corruption campaign hit every luxury brand in Hong Kong really hard. It was especially bad for watches and jewelry, but everybody has been hit. The effects of that campaign combined with pricing problems greatly reduced the numbers of mainland Chinese shoppers visiting Hong Kong.
There was always going to be a point at which it would level off or maybe dip. It had to happen. It was just ridiculous, conspicuous spending. That said, while the numbers may have declined slightly, I believe we will always have mainland tourist shoppers.
There’s been a massive expansion of stores for high-end brands. Twenty years ago at Chanel we had maybe four shops, and now we’ve got 10 or 11, including Macau. The rate of acceleration Hong Kong has seen on that front is unusual. In the past two years, some brands have been forced to close non-performing stores. I think the lesson is that any business that relies so heavily on tourists for income is at risk.
We didn’t have IFC, Pacific Place, nor Landmark as it is now. Before the handover, the larger stores were mostly Japanese department stores like Daimaru, Sogo, Matsuzakaya, Seibu. Then those businesses went from boom to bust in the early ’90s—in part, I think, due to the Asian financial crisis—and we began to transition to US-style malls.
I love what they’ve done with Soho. I think it’s important that we don’t negate our heritage—which we tend to do—but I think we could do more to encourage local talent, whether it’s fashion or food or crafts, with affordable rents for studios and stores.
There’s been a rise of active wear stores. They’re so much more a part of life these days as it’s become a trend for people to wear gym gear all day. It’s that horrible lifestyle trend we have adopted from America, hence these sportswear brands that have a lot of money—Adidas, Nike and so on—have expanded their footprint.
This article has been written by Chloe Street for Tatler.
(Source: Hong Kong Tatler)