Without Mainland Tourists, What Will Happen To The Luxury Industry In Hongkong?

No mainland Chinese tourists, Hongkong.

In particular

What will happen in the industry?

According to the world clothing and shoe net, due to the intensification of Sino Hong Kong conflicts and strong Hong Kong dollar, Chinese tourists began to complain about Hongkong's retail industry since the end of 2014. Since February March 2015, retail sales in Hongkong have been down for 25 consecutive months, while in February 2015 -2017 January, sales of hard and luxurious industries in Hong Kong have been down for 24 consecutive months in January -2017.

Even though Hongkong's retail industry has already started to rebound, Bloomberg said Wednesday that mainland luxury goods consumption in Hongkong is still negligible compared with the peak period. In August, luxury goods sales in Hongkong were less than 1/3 in April 2013.

Many unfavorable factors are affecting the luxury market in Hongkong, partly because mainland customers are more sensitive to prices, while the Hong Kong dollar linked to the US dollar has long been strong, making consumers turn to Europe and Japan.

Consumption is the main destination for mainland tourists to visit overseas. In 2016, 42 million 778 thousand mainland visitors visited Hong Kong, accounting for 75.5% of the total number of visitors to Hong Kong last year, while the total number of outbound tourists in mainland China in 2016 was 122 million.

Mainland customers Hongkong consumption growth but shopping decreases

The decline of Hongkong's luxury industry has also resulted in a decline in the volume of shopping expenditure in addition to the decline of mainland customers.

In 2016, the average cost of mainland visitors to Hong Kong was 20317 yuan, even though it rose by 19635 billion in 2015, but the cost of shopping decreased by 8.8%.

Besides the fact that Hongkong is no longer the cheapest luxury consumer, the change in the way of Chinese affluent tourists also has an impact.

Unlike previous travel modes such as getting on the bus to go to bed, getting off shopping and parking, the demand of Chinese tourists for hotels, food and so on is more intense. Besides the pursuit of quality life, social media WeChat's circle of friends has become a new way of showing off, gradually replacing luxury goods.

The change in Hongkong's luxury market is directly related to the past two years. The luxury industry has been adjusting the retail network in Hongkong on a large scale, closing stores, moving away from tourist areas and reducing sales area.

Although the Louis Vuitton Louis Weedon store in the Golden Bell Plaza was "quietly" pformed into a restaurant, in fact, the "face changing" incident occurred at the end of 2016.

LV rented the three storefront store in Taigu square in 2011, but with the decline of the luxury market in Hongkong, the brand planned to reduce the shop area to one level. However, it coincided with the Swire Properties Ltd. Ltd. (1972.HK) Taigu real estate adjustment structure. Subsequently, LV shop was run by the Commissary Restaurant, which was the main southern California wind flavor. The latter belonged to Hongkong's "rich two generation" Yenn Wong Huang Pien The Inn Boutique and restaurant group Jia Group.

In addition to LV, Ralph Lauren Corp. (NYSE:RL) Ralph Lauren group, Prada SpA (1913.HK) Prada group, and British luxury brand Paul Smith, LVMH Smith (Lu), the largest watch brand in the road of Wei Ming Xuan, and the name of the brand named "Tigger", which is about to rename as "Lauren".

Among them, the Ralph Lauren Tongluowan Garden Garden flagship store opened two years ago and closed at the end of last year. Burberry Boboli closed the second tiers of flagship store at the end of 2015, and Prada Prada closed the Peninsula HK The Peninsula Hotel shopping malls with an area of 3000 square feet, 333 square meters, a flagship store of about 29 million Hong Kong dollars per year, Paul Smith Smith closed the Times Square flagship store, Tag Heuer taiguya and Coach Kochi respectively closed the flagship store in Tongluowan and central respectively.

"Gone are the days when Chinese mainland tourists were queuing up at the gates of Prada, Coach and Tiffany shops, leaving their homes full of luxury handbags and watches."

Bloomberg concluded, adding that wealthy Chinese now fall in love with outbound travel, and even those who come to Hongkong spend less.

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