Face of Shopping in Hong Kong

Just how many Jewellery & Watch shops can one city have? the amount of money tied up in inventory must be staggering, your average sized jewellery shop or watch shop probably has a shop window display averaging about US$12 Million and there are hundreds of these shops now. Even Prince’s Building (next to Statue Square and opposite the Mandarin Hotel) has had about 10% of it’s retail space taken over by Cartier, I admit I like to window shop but Queens Road Central for example is fast losing its attraction for the average shopper, mind you the shop owners are not complaining, the shops always seem to be pretty busy.

It is a real pity as Queens Road Central has always been a great place to shop for locals and visitors alike but now the landlords are cashing in, the only retailers able to afford the quite frankly stupid rents (a 150 sqft “shop” just of Queens Road Central in a non prime location has just rented for around US$13,000 per month! to a retailer of Chinese Tea) are the jewellery and watch shops.

It is not just jewellery and watches, Luxury Brands such as Louis Vuitton, Chanel, Coach, Gucci, Hermes etc are opening up huge (and I mean huge) flagship stores, in most countries a brand will normally have one flagship store, in Hong Kong, there is a flagship store in every major shopping area! and they are a tourist attractions in their own right and what is even more stunning is that there are queues to get in, even at 11am in the morning.

I hinted at the reason above and I am only now beginning to appreciate just how important Mainland Chinese Tourists are to the well being of Hong Kong and we are becoming increasingly reliant (and perhaps dangerously so) on our brethren from the North, visitor numbers have increased dramatically since 2003 and in 2010 we had 22.7 million visitors from Mainland China, they now represent around 62% of inbound visitors.

Their spending power is staggering and goes a long way to explaining why the watch /jewellery / luxury brand shops are taking over our streets and malls it is no wonder that the HK Government acts quickly to ensure there is no negative publicity with regards to tourism.

High taxes in China are the reason why they flock here and why they consider HK to be a shoppers paradise, many visitors are here on a day trip, a quick tour on a coach and then hit the shops and malls, apparently each visitor spends on average HK$12,000 per trip (US$1,500) which is brilliant news for Hong Kong retailers and budget Hotels and I believe this number to be conservative.

My “worry” is the bubble could burst, Mainland Chinese visitors are here at the largesse of the Chinese Government who issue visas under the Individual Visit Scheme (IVS) which started in 2003, it is not unknown for the Chinese Government to revoke such schemes overnight – given the importance of Hong Kong I doubt this would ever happen but bad things can and do happen if you become overly reliant on one “client” so to speak… for the moment though things are going rather nicely, particularly if you have a shop selling famous brand goods, jewellery, watches and cosmetics.

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