Demonstrations Led To The "Golden Week" Business Of Luxury Retailers In Hongkong

The "Chung Chung" campaign coincides with the golden week holiday of China's national day.

This period is traditionally crucial to Hongkong's luxury retailers, equivalent to Christmas and New Year holidays in Western markets.

Analysts believe that Hongkong's retail industry has been hit hard by the world's leading luxury market.

According to Bernstein research estimates, Hongkong accounts for 4% of global luxury sales, or about 9 billion 700 million dollars.

During last week's demonstration, police used tear gas bombs, batons and pepper spray against protesters.

Subsequently, according to statistics from travel agencies, the number of mainland visitors to Hong Kong dropped by 30%.

According to European Financial Services Company Kepler Sheng Fu's estimate,

About 75% of local sales are covered by tours from mainland China.

Prada Hongkong shares fell 4.6% on Friday, the lowest in two years.

Luxury brand

The group's Open Cloud declined by about 6% last week.

Hongkong accounts for 10% of Gucci group's global sales.

In the past week, British luxury brand Burberry's turnover dropped by 4%.

The largest market for the Swiss luxury goods company, the peak group, is Hongkong, with a 3.7% decline in turnover and a 2.7% decline in luxury brand Prada's turnover.

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Recently, Australia, Japan, Italy, Singapore and other countries have issued warnings to Hongkong for tourists.

Mainland tourists' willingness to travel to Shenzhen has also declined dramatically. According to mainland media reports, relevant departments in Shenzhen, Shanghai, Kunming and Hainan have announced that they have suspended the endorsement of tour groups to Hong Kong for a week.

This year, thanks to the central government's efforts to strengthen anti-corruption measures, the consumption of mainland tourists in Hongkong is no longer wasteful, especially the consumption of luxury goods, which has already caused Hongkong retail to be affected.

The further proliferation of protests led to the closure of retail outlets in Tongluowan, Tsim Sha Tsui and Mong Kok, which further weakened the desire of mainland customers to come to Hong Kong.

A number of mainland cities also announced the suspension of the endorsement of tour groups to Hongkong, which exacerbated the retail situation in Hong Kong.

Foreign news reports indicate that the number of mainland tourists in the "eleven Golden Week" has dropped by 30%.

Liang Yaolin, President of Hongkong inbound tourism reception Association, said that the number of mainland tourists dropped by 20%-30% was not surprising. In the past, the number of tour groups dropped from about 40 to 20 to 30.

"For overseas tourists, they do not know much about the protest, but they are worried about whether there will be riots or mass gatherings.

If the situation is unstable, they are worried about the refund policy.

In addition, more and more tourist attractions can be selected for mainland tourists, and Hongkong's attractiveness is no longer the same.

Erwan Rambourg of HSBC's research on luxury goods and sports products says that social and political tensions obviously prevent some people from choosing to come to Hongkong, because obviously there are many other options.

"If you are a wealthy mainland tourist, you may have visited Hongkong for the two or three time, so you have other popular places to go."

He believes that cities such as Korea and Japan will become the main tourist destinations for mainland tourists in the future.

According to the latest retail sales figures released by the census and Statistics Department on Sunday (September 28th), the estimated value of total retail sales in Hongkong in August was 40 billion yuan, up 3.4% from the same month last year. However, sales of luxury goods that had been declining in the past few months did not stop.

Among them, the value of jewelry, watches and clocks and precious gifts sales fell by 6.1% year-on-year, electrical appliances and photographic equipment sales value fell by 10.5%.

Credit Suisse statistics indicate that Hongkong's retail industry is heavily dependent on mainland tourists. They contribute to Hongkong's retail sales of about 1/3 in 2013.

The Hongkong Retail Management Association also announced that the growth rate of retail sales in Hongkong will be reduced from 12% to 5% in 2014, and that the Hang Seng Bank's growth forecast has also been reduced from 13% to 5%.

The total retail sales increased by 11% in 2013.