Date
23 August 2019
Riot police stand on guard in Hong Kong on Tuesday after protesters stormed the Legislative Council building the previous day. As demonstrations continue to rock the city in relation to an extradition bill, the city’s retail sector is watching with growin
Riot police stand on guard in Hong Kong on Tuesday after protesters stormed the Legislative Council building the previous day. As demonstrations continue to rock the city in relation to an extradition bill, the city’s retail sector is watching with growin

Why luxury goods shops have reason to worry

Although I visit Causeway Bay at least three times a week, it’s been a pretty long time since I went to the Times Square mall, not counting the occasional dining trip.

But on Monday I had some free time and walked into the building in the morning, checking out the scene at what is arguably one of the most profitable malls in the city.

Wandering around on the shopping floors, it was a first for me as I found the place almost deserted and the retail outlets without customers for more than an hour.

Sure, summer is the off-peak season for mainland tourists here, so one could expect crowds to be thinner. But how can one explain the near-total absence of shoppers?

Well, as you may have guessed it, the mall was empty because of the July 1 citizens’ rally, which promised to be bigger than usual this year in the wake of the government’s extradition bill fiasco.

Monday’s protest march, the third mass demonstration the city has witnessed in less than a month, saw many people put off plans for leisure and shopping activities that day.

Still, the absolute quietness at Times Square, which boasts several high-end shops and luxury labels, was unexpected. Of course, it made for a relaxing experience for the few who did venture into the mall.

When I finished lunch at 2 pm, there were not many people in the Times Square area, and I could get a taxi with ease and had a smooth ride (because everyone was on the other side of the Causeway Bay district for the annual march).

As I took in news of the handover anniversary rally and the storming of the Legco building by some protesters, I couldn’t help but think that Hong Kong seems to headed in the path of Paris, where “yellow vests” protests took place almost on a weekly basis since late last year.

At the peak, Paris had about 250,000 protesters on the street, almost an eighth of the city’s total population. The demonstrations took a toll on the city’s famed luxury retail sector, and the same could happen in Hong Kong if the extradition bill protests drag on.

The mass rallies, strikes and other protest actions are affecting the tourist districts that house the world’s top luxury brands, dampening business for the labels.

Earlier this year, luxury goods holding firm Richemont confirmed that the yellow vests protests had hurt sales in Europe in the third quarter of its financial year. More evidence will come out soon on how France, the home of many luxury brands, was hurt financially due to the civic unrest.

In Hong Kong, the impact should be much smaller compared to what the high-end retail facilities in Paris had suffered.

Among the bigger losers, however, is the Pacific Place mall in Admiralty, as it sits near the epicenter of the street occupations, and shops located along Hennessy Road which is a key protest route.

Overall, it is too early to tell how Hong Kong’s retail sector will be affected by the latest street protests, strikes and other disturbances. But the luxury goods segment will be concerned the most, especially if opposition groups and activists escalate their actions. 

Retailers will be praying that authorities will do more to pacify the youth so that the youngsters would think of hanging out at the beach or in air-conditioned coffee shops rather than gather in front of Tamar or police headquarters and cause mayhem.

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RC

EJ Insight writer

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