How The City’s Retail Witnessed A ‘Christmas’ Miracle, And Why Shopping Malls Aren’t Dying

Amid Hong Kong’s retail sales slump since last year’s social unrest, statistics have not shown favor to the city’s economic conditions, owing to the lack of tourism and continued political economy divide. The Census and Statistics Department revealed the total retail sales for August 2020 declined by 13.1% year-on-year, whereby the first eight months of the year saw a 30.2% negative in sales.

The largest category affected was of food and alcoholic drinks due to the third wave’s social distancing measures and dining regulations, which in effect spurred supermarket sales by 10.8% inspiring an additional uplift of 10.1% in electrical and other consumer durable goods for stay-at-home cooking. 

Yet, retailers and landlords have shown resilience as they had become well accustomed to the inevitable waves of Coronavirus cases causing suspension in several trades. Harbour City, the largest shopping mall in Hong Kong, felt the cold absence of Mainland Chinese tourists ever since the protests and the barring of overseas visitors due to COVID restrictions. Being a hot holiday destination for many, Hong Kong saw a staggering drop of 99% in tourism, causing many tourist-dependent locations and retail stores to shutter.

Localization Done Right

To tackle this, Harbour City turned its position around, shedding its tourist reputation with a new ‘Always Rewarding’ shopping campaign targeting residing Hong Kongers. Local shopping malls have had always initiated many promotions to encourage spending, but Harbour City’s strong discount offering was so incentivizing it had drawn over 360,000 shoppers over a weekend and all 2,200 parking lots filled – a figure that is acute to the shopping ambiance of the Christmas holidays.

The two-month campaign works with 300 participating merchants to offer up to 50% shopping and dining coupon rebates. For every $256 (HK$2,000) spent, consumers can receive $38 (HK$300) in coupons, as with every $1,280 (HK$10,000) spent, a $128 (HK$1,000) reward is redeemable – and the rebates doubles particularly for Sunday spending.

Harbour City is well known for its one-stop-shop luxury destination as Canton Road, one of Hong Kong’s most expensive landmarks, are lined with the elitist of brands – from Hermes to Burberry. Despite several luxury players exiting the strip, Chanel was one of the first residents to experience queues of desperate customers awaiting to shop and splurge amidst the pandemic owing to their price hike, but other brands such as Gucci were also swept with local patrons from Harbour City’s promotion.

The mall currently houses over 450 brands and restaurants despite a fair few closures from beleaguered tenants over the past year. In August, Harbour City welcomed 50 new retail brands and restaurants, with another 10 expected to open in the remaining year. 11 of these new tenants debuted with their first launch in Hong Kong, whereas others were opening their largest stores yet – for example, Dominique Ansel’s localized dessert bakery ‘Dang Wen Li’, and Lululemon’s latest Hong Kong flagship.

Mall for the People

Another mall – The Lohas, situated in the residential area of Tseung Kwan O had also opened its doors recently after a decade-long of planning and construction. Owned by Hong Kong’s public transport network the MTR Corporation, the Lohas had only unveiled its first phase spanning over 480,000 square feet of 13 shops and a 20,000 square feet supermarket. The first phase only accounts for 15% of the mall’s total area and had opened at the peak of the third wave, yet Hong Kongers flocked to view the new launch, disregarding social distancing measures.

Adjoined to a residential development, Centaline Property Agency is said to have recorded over 140 rental transactions this month at Lohas Park, compared to around 70 last month as residents seek for the convenience of living. It is expected the second batch of stores will open within the next three months alongside an ice-skating rink and cinema, making it fully operational by Christmas. Granted, many landlords and property developments are currently facing difficulties in attracting tenants amid struggling times, as many international brands are now investing towards the Greater Bay Area and other Mainland China cities where its core target market are situated in.

Key Takeaways

As if retail can get anymore apocalyptic given the current state and time – Asia has proven to be an inspirational source, not only by how it has beaten COVID time and time again but of its retail recovery. 

Hong Kong and other Asia cities such as Singapore and Bangkok are notorious for their high-end and upscale shopping malls, yet without tourists are still able to drive local spending. Though for one, Hong Kong’s urban planning is closely linked to shopping malls (some residencies are also owned by the MTR Corporation as part of the ‘Rail plus Property’ scheme) – making malls a necessity to their lives. 

Coupons and rebates have also proven to be an incentivizing element that has spurred shopper’s spendings with high conversions than untraceable spendings from stimulus cheques as such. But retail in Asia has shown agility and a quick turnaround to reinvent retail – not by drowning consumers in a sea of promotions, but by invigorating and bringing excitement to shopping again – whether it be through thematic installations, or by joining forces with their tenants.

Source Article