Mon, Oct 06, 2014 - Page 15 News List

Pro-democracy protests hit HK’s core retail sector

AFP, HONG KONG

A man standing on top of a bridge overlooking a pro-democracy protest area in Hong Kong’s Admiralty district threatens to jump, saying he was angry his children’s schools had been shut by the demonstrations. The man, who said his surname was Yau, berated protesters for five hours, at one point brandishing a knife. The “Apple Daily” newspaper claimed he was a professional stuntman hired to disrupt the democracy protests.

Photo: AFP

From bargain fakes and cheap technology to high-end designer wear, Hong Kong is a shopper’s paradise — but retailers have taken a huge hit from the week-long mass protests that have brought the city to a standstill.

Major shopping areas have been barricaded off by protesters who have camped out for the last seven days to pressure Beijing to revoke their decision to limit who can stand in the city’s next leadership election — a move protesters have labeled a “fake democracy.”

Billboards advertising famous international brands — Louis Vuitton, Miu Miu, Burberry — now compete with protest banners demanding full democracy for Hong Kong in some of the city’s busiest shopping areas.

Many of the stores overlooking the protest sites have closed, while others have remained open, but largely empty.

“The retail sector is one of the four pillars of the Hong Kong economy,” financial analyst Francis Lun said — the others being finance, transport and shipping, and real estate.

“The government growth rate [for the year] is already low at 2 percent... so these major disruptions happening in Hong Kong are strongly felt,” Lun added.

Hong Kong’s economy has weakened as China’s economy has slowed and the mainland’s anti-corruption drive has also dampened luxury spending.

GDP slowed to a mere 1.8 percent in the second quarter of this year, down from 2.6 percent growth in the previous three months.

A contraction in the third quarter would push the territory’s economy into recession.

For the first eight months of this year, total retail sales decreased by 1 percent in value over the same period last year, official data show.

According to figures collected by the Hong Kong Retail Management Association, a trade group, if weak retail sales persist, it could lead to the industry’s first full-year contraction since 2003.

Finance secretary John Tsang (曾俊華) said on Friday that the protests threatened to damage Hong Kong’s reputation as one of the world’s premier financial hubs.

“Particularly, our concern is about our reputational risk as well as the confidence in the market system in Hong Kong,” he said.

Shop workers talked about a major drop-off in business as both locals and tourists stay away.

“I’ve seen a 70 percent drop in profit every day this week,” said Chicken Chan, 30, manager of a dispensary in the commercial district of Mong Kok, one of the major protest sites which saw violent attacks by opposition groups on Friday.

“I feel a little conflicted because I support Occupy Central and the students, but I’m losing money,” added Chan, whose shop sells Western medicine, dried seafood and milk powder.

“99 percent of our income is from mainland tourists,” he said.

Hong Kong’s retail sector is heavily reliant on mainland Chinese visitors, who contributed about a third of the terriroty’s retail sales last year, according to Credit Suisse.

The protests have coincided with the Golden Week national holiday that brings large numbers of mainland shoppers to the city, with October the second-biggest retail period after December.

“It really affected business. There have only been two to three customers today,” said Merry Djong, who works at the Mong Kok branch of jewelery and accessories shop Folli Follie that looks over one of the protest sites.

Carrie Chan, who works at Baleno clothing shop, said that they have experienced a 50 percent decline in sales since the start of the protest.

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