Hongkong'S Retail Industry Will Fall Into Recession, Luxury Performance Will Fall Into Recession.

It is understood that due to the sharp decline in the number of mainland tourists,

No matter what is happening, Hongkong has also become the pain of many luxury brands. The bad market environment has a serious impact on the purchasing power of luxury goods. Even now, Hermes is unable to sit on the table. It will no longer be held privately for the so-called VIP sale. For the first time, it will face the public's sale of 50 percent off goods.

Some analysts said that the luxury industry collectively fell into a slump in Hongkong's growth and was weak in growth. It was not only a pressure on expected growth, but also a luxury known for its scarcity.

Like other luxury brands,

The international group is facing a slowdown in market demand in the Greater China region. The group said in March that the market dynamism of Hongkong and Macao was declining.

Prior to this, Hermes group lowered its forecast of turnover in 2016 in February. The latest data show that the fourth quarter revenue growth is the lowest level in six years.

The Hermes group said it would continue to maintain its medium-term growth target of earnings growth of less than 8% in 2016, mainly due to the negative impact of global economic and political risks. CEO Axel Dumas emphasized that the current comment on profits or sales growth is premature.

Retail trade in Hongkong has been declining and has been declining for 13 consecutive months.

According to statistics released by the Hongkong Government Statistics Department, the provisional valuation of Hongkong's total retail sales in March was HK $34 billion 700 million, down 9.8% from the same month last year.

In the first quarter of this year, the total retail sales value dropped by 12.5%, and the total sales volume decreased by 11.3%. The performance was the worst in 17 years.

Used to be strong.

Hongkong, due to China's impact on corruption and domestic economic slowdown, coupled with the continuing turbulence in Hongkong's society, has reduced mainland consumers' consumption to the city's consumption, thereby affecting their sales. Hongkong's market has almost become the worst hit of luxury goods groups.

At the end of last year, luxury brands such as Prada, Burberry, Chanel and other rare brands sold at least half off of Hongkong's stores, which is the biggest discount since the opening of visa free travel for mainland tourists in 2003.

Earlier analysts pointed out that Harbour City, as a landmark for mainland tourists to buy luxury goods in Hongkong, the first decline in retail sales in ten years means that Hongkong is losing its status as an Asian luxury centre.

Now, the increasingly frequent sale of luxury brands in Hongkong is mainly aimed at reducing inventories caused by the downturn in consumption over the past two years. Authorities have revealed that the stock of luxury goods is much higher than expected. According to the latest reports of the first quarter of the luxury brands, the performance of the Chinese market is still bad.

In the six months ended March 31st, Burberry's year-on-year sales in Hongkong, the original high profit market, dropped by 20% in the third quarter of the year, mainly because Chinese tourists chose to travel and shop elsewhere.

China is currently the largest consumer of luxury goods, but the high consumption tax on luxury imports has led Chinese rich to buy overseas.

Data show that Chinese tourists bought 47% of the world's luxury goods in 2014, of which 78% occurred overseas.

This led to luxury companies selling large quantities of unsold stocks in retail stores in China, including Hongkong, and high-end brands were rarely discounted.

A boutique consulting firm executive said that even during the financial crisis, luxury stores had not seen such a large discount, and inventory has become a big problem for these luxury brands.

The UBS report predicts that in the next 3 years, the retail rental space of Hongkong shopping centers will increase substantially, and the rent will be substantially lower.

By the end of 2017, the rent of retail outlets in general retail lots may have dropped by 15%. The decline of the highest level shops in Tsim Sha Tsui, Tongluowan and Mong Kok may be 20% to 25%.

Hongkong's retail industry has officially entered a recession. Luxury goods giants such as Gucci, LOUIS VUITTON and other high profile require owners to reduce their rent, otherwise they will close their shops.

The most typical closing shop case last year was that the luxury luxury brand COACH took the lead in losing Hong Kong Island and closed the 4 storey flagship store in central Hongkong.