Hongkong Retail Negative Growth Bid Farewell To Gold For Ten Years: Luxury Consumption Shrinking

In February 2nd, the government of the Hongkong Special Administrative Region announced the retail sales figures for 2014. The annual retail sales price was HK $493 billion 300 million (7.7545,0.0010, 0.01%), down 0.2% from the previous year. This is the first negative growth since the outbreak of SARS in 2003 and the implementation of the "free trade" policy. Of particular concern is the consumption of tourists. Jewelry The sales volume of watches and clocks and expensive gift categories dropped by 13.7% compared with the previous year; two, the figures were obtained on the basis of an increase of 12% over 60 million last year for inbound tourists. This shows that the consumption of Hongkong's retail luxury goods is shrinking, and the trend of the whole consumption mode is becoming more and more obvious.

Sales decline has also made jewelry, Clocks and watches And the category of luxury gifts will reduce the willingness of enterprises to rent, leading to a drop in the rents of the shops in the core area of Hongkong. It is estimated that there will be a 10% drop in the shops in 2015. Judging from the market, the ten year of Hongkong retail gold was officially terminated by "free travel".

Inbound passengers will not be reduced.

During the whole year of 2014, tourism and retail industry in Hongkong were all entangled. The most uncertain factor came from the turbulence caused by "occupy the middle".

"Chung Chung" broke out on the eve of national day. The tourism industry forecast will result in a large number of inbound tourists, especially the number of mainland tourists, which will have a direct impact on the related hotels, restaurants, scenic spots, parks and retail industries. But what is surprising is that the facts are completely contrary to the judgement.

According to the statistics released by the Hongkong tourism board, 60 million 838 thousand and 800 visitors arrived in 2014. For the first time in history, they exceeded 60 million points, an increase of 12% over the same period last year. Most of the driving force of inbound travellers came from the mainland, with a net increase of about 6 million 502 thousand and 400 passengers in mainland China, with a net increase of 6 million 540 thousand passengers. The number of visitors to the mainland reached 47 million 247 thousand and 700, the increase of 16% over the previous year, accounting for 77.66% of the total number of visitors to Hong Kong.

The influence of "Zhong Zhong" on tourists' entry intention was mainly reflected in December. In that month, about 5 million 666 thousand passengers visited Hong Kong, an increase of 8.5% compared with the same period last year, and 4 million 402 thousand mainland tourists, an increase of 13.2% over the same period last year, which is slower than the increase of 15.7% and 24.1% in November.

Although the sales volume of retail industry has declined, the number of actual inbound passengers has not decreased, resulting in a decline in the industry, which is attributed to changes in the consumption structure. Although the total retail sales in 2014 declined by 0.2%, the total sales volume did not decline, but there was an increase of 0.6%. The decline in sales mainly came from luxury goods, while the sales of low and medium priced goods increased. This shows that the consumption structure of tourists has changed. The increase in the number of night travelers is mainly the demand for daily purchases.

However, there are many factors that affect the change of retail sales in Hongkong. Apart from the number of tourists, other places such as the mainland's anti corruption, high consumption tourists give up shopping in Hong Kong, the euro continues to depreciate, the high consumption crowd choose to abandon Hong Kong and buy luxury goods in Europe and America, and Hongkong local people go out to spend, which will affect Hongkong's retail industry. Lin Junhong, senior economist at Hang Seng Bank, thinks that retail sales will rise by 3% to 4% in December, but the final result is quite different from expectations. In his view, first, the slow growth of the number of visitors to Hong Kong in December has a direct impact on the retail market. On the other hand, the supporting role of iPhone launched in December on retail industry is far from expected. Based on these two reasons, he judged that Hongkong did not have to worry too much about the retail market, and the sales volume and sales volume in 2015 would increase by 6% and 5% respectively.

However, the consumption structure has shifted from luxury goods to medium and low priced goods, and the impact on shops has become apparent. The analysis of the commercial real estate research institute Dai tie Liang believes that the expansion of jewelry and watch retailers in 2014 has slowed down significantly, making the activity of rental activities in the core area decreasing, and the rental of the shops has dropped. The price of new tenants of individual shops has fallen by two or three compared with the peak, reflecting the fact that the rent has reached the top. Lin Ying Wei, director of Hongkong commercial department, predicted that the rent of the shops in the core district will drop by 10% in 2015, while the two or three line lots will be even higher. However, he specifically pointed out that the rental of shops in Yuen Long, Tuen Mun and other northern areas near Shenzhen will increase slightly.

According to the analysis, with the increasing participation of Hongkong in the Pearl River Delta sphere of life, more and more residents of the region will purchase their daily necessities in Hong Kong. The new territories north of Hongkong, such as Sheung Shui, Fanling, Tuen Mun and Yuen Long, will be benefited from this trend. Similarly, when the Hong Kong Zhuhai Macao Bridge is officially opened to traffic, Lantau, as the frontier of Hongkong's entry into Guangdong, will benefit from this trend in the future. Near the airport, Tung Chung has developed into a thriving new town, where the discount shopping mall has become one of the shopping destinations for travelers.

Adapt to the new normal shopping market

How should we cope with the decline of the retail industry as a pillar of Hongkong's economy? Hong Kong Mae Lai hung, chairman of the Retail Management Association, believes that the high-end consumption of "free trade" is not the main reason for the decline. Therefore, he suggested that Hongkong should improve its receptionist capacity and open more free cities with high consumption power, perhaps promoting Hongkong's retail market.

However, the view of increasing the freedom of running the city has just been put forward, and it has immediately been called "mercenary". At the beginning of 2014, in the face of more and more malpractices revealed by the "freedom movement", the Hongkong Special Administrative Region government has repeatedly expressed its need to re-examine the policy. At that time, it was once concluded that it was necessary to coordinate with the mainland to reduce the "free running" city, or to change more than one sign. However, the contradiction between the rapid growth of tourists and the reception capacity of Hongkong has not been solved, especially when the public complains that tourists rush to explode and affect their daily lives.

This conflict has recently been concentrated in Tuen Mun. Near the Spring Festival, residents in Shenzhen and the Pearl River Delta flood into Hongkong every day to purchase new year products. Not only do they cross the Dragon every day, but also the buses to Tuen Mun pass for a long time. According to Liang Zhenying, chief executive of Hongkong, this summer, a large border shopping mall will be opened in Hongkong opposite Futian port in Shenzhen this summer. The demand for daily necessities near the mainland residents can be solved here, which will no longer cause congestion to the urban areas and cause inconvenience to the citizens. Border shopping sites like this will plan more for Hongkong in the future.

There is demand and demand, which is the basic law of economy. Sometimes there is no demand or even creation of demand. Although tourists to Hongkong did not have such high consumption power as before, even some tourists heard that restaurants had to collect "tea money" to go away, which led to Hongkong's repeated voice of "free travel". But the demand for daily purchases of Shenzhen residents was still a business opportunity that Hongkong's retail industry could not give up.

In addition to coping with the construction of border shopping centers, the Hongkong SAR government and enterprises are trying to adapt themselves to the new mode of tourist consumption. At the level of the SAR government, Hu Zhaoying, chairman of the Hongkong Tourism Association, said that under the leadership of the Tourism Development Bureau, representatives from hotels, travel agencies and theme parks have been promoting and promoting the Southeast Asian countries, Japan and South Korea to convey all the normal information of Hongkong, and hope that the local counterparts will re recommend Hongkong's tourism products.

At the enterprise level, Ocean Park, Disney, Ngong Ping 360 and other famous scenic spots in Hongkong began to pay more attention to local consumption. From the end of last year to the beginning of this year, a series of preferential measures including free birthday, discount and so on were launched. Retailers are further exploring the new sales norm under the trend of parity. Among them, the Kowloon table, which has been standing in Hongkong clock industry for more than 40 years, is the fastest.

Huang Jincheng, managing director of the Kowloon table, said that the amount of hundreds of thousands or even millions of dollars that had been traded by the hawker in the mainland was basically extinct. At present, the products purchased by passengers have already been "good", and sales have been concentrated in middle and low consumption. Therefore, the Kowloon watch shop has been reduced from 16 to 12. But he judged that the demand for watches and clocks in mainland tourists was still there, so he started to build his own brand products 7 years ago, and the price range was set at HK $1000~20000. Six months ago, the Kowloon watch office opened an online shopping business to widen its sales channels. He believes that in the future, tourists will not travel specially to buy Clocks and watches. They must be on the way to buy while traveling. The problem of Hongkong is that tourism lacks new ideas. How can one or two more high-end customers visit third times?