HONG KONG – Mainland tourists undaunted by the depreciation of the yuan went on last-minute Christmas splurges in Hong Kong on Saturday, but small local retailers said business was down and offered extra discounts to boost sales.
Shoppers flooded into malls in the popular retail districts of Tsim Sha Tsui, and Causeway Bay, where eye-catching signs promoting sales and discounts were posted inside many shops.
Outside the luxury shops on Canton Road, in Tsim Sha Tsui, there were about 20 people queuing outside each store, waiting to snap up fancy bags and purses.
Shell Li, visiting on a day trip from Shenzhen, was among the crowds. The 28-year-old, who works in the electronics industry, said the fall in the value of the yuan would not effect her spending.
Li said she and her partner planned to spend between 70,000 and 80,000 yuan (330,000-380,000 baht) while in the city.
“We are not that sensitive about the currency exchange rate as we are using credit cards,” Li said.
The Chinese yuan has weakened 9.6% against the Hong Kong dollar since April.
The retail sector, including the 9,000-member Hong Kong Retail Management Association, noted the change in exchange rate, coupled with the effects of the US-China trade war, could contribute to flat Christmas sales compared with last year.
But Li said the factors did not dampen her shopping desire.
“I will buy more things at Christmas because there are sales,” she said.
Another Chinese tourist, Chen Qianyi, 25, from the city of Xiamen, echoed Li’s comments. She said she would still spend between 10,000 and 20,000 yuan on shopping in the city, mostly on cosmetic and skincare products.
Hong Kong banker Benny Li Nok-ki, 26, said he noted a recent drop in the stock markets triggered by the trade war, but he would not cut his spending because of this.
“I earned less, but it has no effect on how much I spend,” he said, referring to his income from stock investments.
Another shopper, Pero Ho See-hwa, 30, who works in sales, said her expenditure for Christmas would be similar to that of last year.
But, small retailers said business was worse in the festive period compared to the same time last year.
Hua Tak-yan, an employee at Duty Free Medicine at the Star House shopping centre in Tsim Sha Tsui said sales were quieter compared with 2017, despite large numbers of people passing through the store. He believed the higher exchange rate could be a factor.
In Causeway Bay, Karen Ng, the owner of Charm Accessories, said she previously knocked 10% off her prices in the lead-up to Christmas, but this year, as well as marking prices lower, was giving a 15% discount when customers bought three items.
“People usually buy Christmas gifts through window shopping,” she said. “Now, they will just go online.”
Hong Kong’s retail sector recorded double-digit growth for five months in a row from February to June, but that slowed to single digits in the following months.
For the first 10 months of this year, official figures estimated that the city’s retail sales revenues rose by 10.6% to HK$401 billion (1.6 trillion baht) on the same period in 2017.
By Kanis Leung
South China Morning Post