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Caution over luxury item spending amid economic woes (3)

By Sophie He  (China Daily)

13:09, September 07, 2012


"Most luxury brands already have stores in major cities on the mainland, and consumers now can purchase luxury items from next door, so they have fewer reasons to travel to purchase them from Hong Kong," said Shou.

According to Hong Kong's official data, total retail sales value in July increased by only 3.8 percent over a year earlier. The city's retail sales used to grow by double digits during the past one or two years.

In July, the sales for retail outlets of jewelry, watches and clocks, and valuable gifts in Hong Kong only increased by 0.9 percent year-on-year.

"The luxury market in Hong Kong may have nothing to worry for now, as there are so many wealthy people on the mainland, and even if people from first-tier cities stopped coming to Hong Kong for shopping, there are still a lot of people from second and third-tier cities who will," said Shou.

But Hong Kong should be concerned about its future, as the people's purchasing power from smaller cities on the mainland may not be as strong as those from Beijing and Shanghai, she said, adding that if Hong Kong provides nothing but a little discount on luxury items, it will lose its advantages as a "shopping paradise" eventually.

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