Hong Kong’s retailers are facing an uphill battle to entice customers into their stores a week before Christmas in the final present buying rush, consumer analysts have said.
The local retail market has been plagued by a dip in sales this year, attributed in part to a plunge in the number of visitors from the mainland, who account for about 75 per cent of tourists to the city.
In October, retail sales fell for the 20th month by 2.9 per cent to HK$36.1 billion. But the slump had levelled slightly, from a 10.5 per cent fall in August to a 4 per cent dip in September.
Many shops brought their Christmas promotions forward by at least two weeks this year to counter the sales decline. The city’s more westernised customer base also meant Christmas remained the annual peak retail season, with sales even higher than during Lunar New Year, the Hong Kong Retail Management Association said.
Retailers have been increasingly trying to target visitors from Thailand and Malaysia because of the drop in the number of mainland visitors.
The overall number of tourists to the city in October this year showed a 5.7 per cent decline compared with October 2015, from 5,073,494 to 4,953,705. Despite the dip in mainland visitors, there was an increase in those from “long haul markets”, including the United States, Britain and Germany, according to the Hong Kong Tourism Board.
Retailers also faced strong competition from online outlets such as Amazon Japan and Taobao, which offer many products at heavily discounted prices.
Cityplaza on Taikoo Shing Road, Quarry Bay was among the malls pulling out all the stops to attract Christmas shoppers. Its “Look Up Live Happy” campaign featured 50 giant teddy bears flying in hot air balloons, a 180-degree photo booth for customers and a symphonic light show.
Consumer analysts said Hong Kong’s retailers needed to work harder to improve the efficiency of the customer experience, boost their overall customer service, come up with more innovative incentives and promotions, as well as develop their own online shops to remain competitive.
Tanya Lau, director and head of consumer and retail practice at Harvey Nash Executive Search APAC, said retailers faced “tough global market conditions” and needed to “keep pace” with changing consumer behaviour.
“For retailers to stay competitive, they need to specifically understand the customer journey and every detail of what they desire,” she said. “They need to [create] a seamless shopping experience … across all platforms. With a week to go until Christmas, making the buying process as easy as possible is essential.”
Lau said businesses also needed to make technological improvements, such as introducing electronic payments, and providing better online buying services.
Meanwhile, Professor Leslie Yip, programme leader of retail management at the Technological and Higher Education Institute of Hong Kong, said many locals would rather use their money for holidays than spend it in local shops. He said retailers needed to work harder to understand shoppers’ behaviours, and improve the variety and price range of products, and the overall efficiency.
“The shopping experience here is kind of inefficient,” he said. “There are not enough self-checkout services; many shoppers are impatient for this. [Some retailers] lack variety due to shop space.
“They should consider that tourists … have limited time yet want to maximise their shopping experience, while local shoppers want to maximise their experience within a given budget.”
Yip suggested mall owners should explore ways to promote “mall hopping” across their different retail outlets, such as online treasure hunts, as many shopping centres were located within a short distance of one another.
But Thomson Cheng, head of the Hong Kong Retail Management Association, said he expected Christmas sales to be “stable” after a “tough year for retailers”.
He said they had made efforts to promote Christmas early this year to beat the slump, and were expecting a boost to sales next month because of an early Lunar New Year. “We are seeing light at the end of the tunnel,” he said.
“Retailers need to look at how they can contain costs now. February and March next year will be the hardest time. Shops need to nurture local spending.”