With Hong Kong already grappling with slower retail sales – projected to grow at 5 percent, down from 13 percent – the protests at Central are driving away any hope of a near term rebound.
The timing of the protests couldn’t be worse given that this week is China’s Golden Week, a week long holiday when many mainland Chinese travel to Hong Kong and abroad for vacation and shopping. Now, Hong Kong is probably off the travel list of some mainlanders and retail sales are expected to slide further.
“Social, political tension is clearly driving a few people away because obviously you have a lot of different options. If you’re a wealthy Chinese individual, the likelihood is that you’ve been to Hong Kong two or three times already and you’ll have more welcoming places to go to,” said Erwan Rambourg of HSBC.
Luxury sales in Hong Kong are already hurt by the current trend of mainland Chinese shopping for more basic goods such as household products in Hong Kong instead of luxury goods, reports Reuters.
Popular with mainland travelers, the jewelry, watches and valuable gifts sector is the hardest-hit, which ING estimated to be down by 15 percent this year so far, reports The Wall Street Journal.
According to Credit Suisse, mainland Chinese travelers account for about one-third of Hong Kong’s retail sales in 2013.
However, some are optimistic that the protests in Central will not impact Hong Kong shopping materially as shoppers and tourists will shop in other parts of Hong Kong.
“There are a lot of shopping malls in Hong Kong; we can just go elsewhere.”
Luxury watchmaker Piaget’s CEO Philippe Léopold-Metzger, for one, remains confident in Hong Kong’s future as well as in China’s luxury watch consumption.
image credit: steve webel