By the end of July 2014, retail sales in Hong Kong had dropped for 5 months in a row, an unusual phenomenon for this "shopping paradise". Since free individual travel was opened to mainland tourists in 2003, retail sales in Hong Kong have multiplied by two and a half. Why has 2014 become a turning point for Hong Kong's retail business?

Sharp contrast to the booming 2013

Shopping is always the highlight of a Hong Kong tour. In recent years, shopping has made up over 70 percent of the spending by mainland tourists in Hong Kong.

In 2013, the total volume of retail sales in Hong Kong increased by 11 percent and the media even called it "the peak of the retail business". However in March 2014 sales declined suddenly, and the situation continued in the following five months. Sales of luxury goods suffered most. According to statistics released by Hong Kong Census and Statistics Department, sales of jewelry, watches and valuable gifts dropped by 28.2 percent this June.

For the plunge in luxury sales, the Hong Kong Media have offered many explanations. One of them is the change of consumption structure of mainland tourists: they are starting to prefer inexpensive products to luxuries. The poor sales of luxuries can also be attributed to China's anti-graft efforts. However, a more direct reason, as many business owners complain, is that many mainland tourists are frightened away by certain extremist phenomena in Hong Kong.

A "lazy" tourism pattern

One of the internal causes of the sales decline is Hong Kong's saturated accommodation. In 2013, about 40.7 million mainland tourists visited Hong Kong, of whom 27 million were free individual tourists – an 18 percent year-on-year increase. But tourist facilities, transport lines, and hotel rooms have not developed accordingly. The Hong Kong tourism industry will face shortages in accommodation in the future as well.

Tourism experts have declared that there is a need to improve Hong Kong's tourism industry. Chen Zhiyuan, who runs a tourist business in Hong Kong, said that the business is "lazy" and "resting on past achievements", so the quality of the industry should be improved.

Chained by "pan-politicalization"　　

Hong Kong people are known for their flexibility and efficiency. People at every level are concerned about the sales decline and have proposed many solutions. The Hong Kong SAR government and business owners have started work on projects such as the construction of the West Kowloon Cultural District and the Kai Tak Cruise Terminal, and the expansion of Disneyland and the Ocean Park. However, some suggestions, such as building a border shopping city, are still stuck at the discussion stage. An article published in Hong Kong Commercial Daily commented that political slogans and operations have undoubtedly obstructed the healthy development of Hong Kong’s tourism. "As long as Hong Kong is still chained by 'pan-politicalizaiton' , the problem of retail sales and tourism will not be solved, and all of Hong Kong's citizens will eventually be the victims."

The article is edited and translated from《香港还是内地客的“购物天堂”吗》, source: People's Daily Overseas Edition, author: Wang Ping.