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.
Photo: AFP
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.
“We never expected Occupy Central to last this long,” she said.
Hong Kong shares have lost around 10 percent since a year high in early September, though ended 0.64 percent higher on Friday.
Retails shares, in particular, have slid since demonstrators took over parts of the territory.
However, some analysts say that the initial market reaction to the protests may have been overblown.
“It is still a powerful financial center,” Woodrow Wilson International Center for Scholars Asia expert Michael Kugelman said.
Some businesses have even experienced protest-driven rises in sales of particular items.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained