How has tensions in Hong Kong affected the luxury market?

tensions in Hong Kong, The world and luxury corporations are witnessing tensions surrounding the Hong Kong Special Zone issue this year. Economist Nguyen Xuan Nghia said that compared to the Chinese people with an average income per capita only fluctuating about more than 10 thousand dollars per year, Hong Kong people are four times richer at the time and has now suffered half as much as last year due to the loss of tourists’ profits. In addition, Hong Kong prices of the Hong Kong dollar into the US dollar, with foreign currency reserves currently at 430 billion US dollars, the Hong Kong Government is still able to keep the price of the silver but the Prolonged instability is a challenge because shoulder interest rates will rise. Over the past week, the stock index of the Hang Seng market has lost 5% and the payment or cash in Hong Kong has dropped to its lowest level since 1999 and the interbank interest rate has increased making the profits of the banks are reduced.

How has tensions in Hong Kong affected the luxury market?

According to Bernstein analysts, Hong Kong accounts for more than 5% of global luxury spending. The crippling incident in Hong Kong for the luxury retail industry if really affected will cause a significant loss. Representative Brock Silvers, the CEO of Adamas Asset Management, entrenched status in Hong Kong and tourism industry decline if prolonged, Hong Kong’s luxury retail industry will have to adjust to a new reality which is more restrictive. An official data from Hong Kong’s statistics department showed that, by the end of September, retail sales of fashion and accessories were down 8.9%, with jewelry and watches down 16.5% in the first nine months of 2019. And in a report, Prada shares in Hong Kong have dropped about 12% in the past six months. And Chanel announced the postponement of the launch of the tourism collection in this place because of the escalating situation.

In the middle of all the uncertainties on Hong Kong’s streets, the shopping centers where many luxury retail branches are located; which is typical for Kea Musea. Even though the whole city is standing up to struggle, at the center, in recent months, we still have 80 – 85% of local VIP customers visiting and still make a profit of about $ 2 million per month. Local customers are mostly on the average age of 25 years old to 45 years old. Their average spending varies from $ 2,000 to $ 3,000 per purchase during this sensitive period.

Some sources confirm that K11 is still trying to go into normal operation, and actually looks relatively busy on weekends, especially for households who want to get rid of outside fluctuations. Many have taken to the streets demanding a more autonomous future for Hong Kong, but there is still a part of Hong Kong’s middle-class and affluent people – who still need a place to spend time entertaining and buying and shopping. Although Hong Kong in general, suffers from the evaporation of tourists and is at least not conducive to luxury shopping, however, retailer Adrian Cheng believes there is a transitional way for international luxury brands and retailers in the city to be able to provide local consumers with more than just a buying retail market at this time.

American jeweler, Tiffany & Co recently opened Asia’s largest flagship store in Hong Kong with a 10,000-square-foot retail area in the heart of Tsim Sha Tsui. Just last week, Gucci also chose Hong Kong for a global tour of pop-up stores called Gucci-Pin. Asia is Gucci’s fastest growing and largest region, accounting for 37% of total sales and up 18% from the previous year in the third quarter. So, it is no surprise that many of the first pop-up windows opened in this area, including Hong Kong, Fukuoka (Japan) and Seongnam (South Korea).

When asked about the risky development direction for startups in Hong Kong, where the parent company Kering saw overall sales fall 35% in the third quarter of this year, Gucci CEO Marco Bizzarri defended the decision. Now, you cannot compare with the previous retail practice, because you are comparing an apple and an orange. Our customers in Hong Kong represent a very important community for its business. The world’s digital technology brings us together in many ways, and Hong Kong is at the forefront of this new digital world, a focus of innovation. Therefore, Gucci – Pin fit when placed it in the center of Tsim Sha Tsui.

After all, while there is no doubt that this is a difficult time for Hong Kong’s retail industry, that does not mean that luxury retailers are ready to give up the most once attractive market in Asia. A market that, according to the Fraser Institute’s World Economic Freedom Index, ranks as the world’s most free economy, the Chinese economy is ranked at 100th. Currently, retailers and brands are feeling a new strategy with a renewed focus on special events for local consumers – some are eager to get out of the street.

Phong

Photo: Internet

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