Hong Kong – The death of the queue
By Denis Martinet08 juin 2020
A few years back, a scene that would have struck many a visitor to Hong Kong would have been lengthy queues in front of glitzy boutiques, marquee names of Western luxuries, dotted all around the territory, some even within striking distance of each other. How was this possible? Was luxury really that common and pervasive in this cosmopolitan city?
To answer that question, one must travel back to a time before the Chinese Big Bang, before the flood gates of luxury-hungry mainland Chinese were cast open in 2004. Back then, before 2004, things were not quite simpler, having faced a return to China, financial and tech crises and the chillingly foreboding SARS. Nevertheless, luxury business was predictable, fitting simply into neat categories: local market made up of natives and expatriate residents, international tourists attracted by Hong Kong’s allure as a shopping paradise and simply trade, the latter the very DNA of Hong Kong, a trait one admires and loathes possibly in equal measures.
Whereas Singapore, under the impetus of established retail groups and passionate individuals focused on educating and cultivating the local market, the more fragmented Hong Kong concentrated its trading efforts, intent on the immediate satisfaction, and reward, of “luxury-vorous” Japan and the burgeoning appetite of China. The relaxation of traveling visas in early 2004 created a literal flood of Chinese citizens into the SAR, flood which only fed Hong Kong’s trading acumen further. Indeed, who needed branding and education when one required, nay demanded, only products and a place to sell them.
And the queues started
The instant gratification of up to 140'000 Chinese daily visitors was reason enough to acquire more space from ever rapacious landlords, resulting in a decade long spiral which could end only one way, abruptly, with space glut, surplus stock and excess costs.
The protests first and then the pandemic laid bare the monolithic structure of HK’s luxury model. With now only 100 daily visitors, the queues predictably evaporated. The reset button had been firmly pressed.
Some clamor for a more local customer centric approach. The sincerity of that strategy is somewhat dubious considering the constant shunning of local residents. During that golden decade, locals, and anyone not from China, were disregarded as being too demanding and not spending as much. Winning them back will take some time.
Go digital some say. According to the most recent government figures online sales account for only 7% of total over the last decade. Some cynics would argue that this percentage represents the shunned locals!
In any event, can the numbers ever be the same?
Rising defaults on leases, gradual but reluctant easing of rentals and the increasing human cost constitute some daunting challenges for anyone. It does provide however a prospect for reflection. Could a more value driven approach be contemplated, where an educated workforce can interact beyond price and offer guidance and quality service, in a respectful and welcoming environment. Could technological know-how be exploited to set new experiential retail frontiers.
Shouldn’t a realization that HK’s opportunity lies firmly with its relative to the North, taking the lead in the Greater Bay area, building on its unique position as a facilitator between East and West, one it has held for decades and one that legitimizes and validates The Special in SAR.
And what of the queues you ask? Well just a few days ago, I was wandering in a well-known mall in Causeway Bay. Scores of locals were flocking to the various offers being touted about. Deal hunting. That irresistible trading inclination back to the fore, representing HK’s truly remarkable resilience, its ability to start over when the chips are down. It reminded me that one should not underestimate Hong Kong.
Denis Martinet is Executive Chairman at MAD & Associates group of companies Hong Kong - Sydney - Shanghai - La Chaux-de-Fonds
Share the post
The luxury sector is constantly on the lookout for innovative solutions, and the blockchain appears to be one of the most promising avenues to explore. […]
By Vincent Pignon
Canadian hair salons and the luxury industry have one thing in common: both responded to the virus containment strategies by raising their prices. For the […]
By Fabio Bonavita
Be notified of the latest publications and analysesRegister